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Published: 2021-05-05 16:09:05 ET

10-Q 1 pnnt-10q_20210331.htm 10-Q pnnt-10q_20210331.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER: 814-00736

PENNANTPARK INVESTMENT CORPORATION

(Exact name of registrant as specified in its charter)


MARYLAND		20-8250744
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

590 Madison Avenue, 15^th Floor New York, N.Y.		10022
(Address of principal executive offices)		(Zip Code)

(212) 905-1000

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share	PNNT	The Nasdaq Stock Market LLC
5.50% Notes due 2024	PNNTG	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock, $0.001 par value per share, outstanding as of May 5, 2021 was 67,045,105.

PENNANTPARK INVESTMENT CORPORATION

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2021

TABLE OF CONTENTS


PART I. CONSOLIDATED FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

Consolidated Statements of Assets and Liabilities as of March 31, 2021 (unaudited) and September 30, 2020		4

Consolidated Statements of Operations for the three and six months ended March 31, 2021 and 2020 (unaudited)		5

Consolidated Statements of Changes in Net Assets for the three and six months ended March 31, 2021 and 2020 (unaudited)		6

Consolidated Statements of Cash Flows for the six months ended March 31, 2021 and 2020 (unaudited)		7

Consolidated Schedules of Investments as of March 31, 2021 (unaudited) and September 30, 2020		8

Notes to Consolidated Financial Statements (unaudited)		16

Report of Independent Registered Public Accounting Firm		30

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		31

Item 3. Quantitative and Qualitative Disclosures About Market Risk		42

Item 4. Controls and Procedures		43

PART II. OTHER INFORMATION

Item 1. Legal Proceedings		44

Item 1A. Risk Factors		44

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		44

Item 3. Defaults Upon Senior Securities		45

Item 4. Mine Safety Disclosures		45

Item 5. Other Information		45

Item 6. Exhibits		46

SIGNATURES		47

PART I—CONSOLIDATED FINANCIAL INFORMATION

We are filing this Quarterly Report on Form 10-Q, or the Report, in compliance with Rule 13a-13 as promulgated by the Securities and Exchange Commission, or the SEC, under the Securities Exchange Act of 1934, as amended, or the Exchange Act. In this Report, except where context suggest otherwise, the terms “Company,” “we,” “our” or “us” refers to PennantPark Investment Corporation and its consolidated subsidiaries; “PennantPark Investment” refers to only PennantPark Investment Corporation; “our SBIC Fund” refers collectively to our consolidated subsidiaries, PennantPark SBIC II LP, or SBIC II, and its general partner, PennantPark SBIC GP II, LLC; “Funding I” refers to PennantPark Investment Funding I, LLC, a wholly-owned subsidiary prior to deconsolidation on July 31, 2020; “Taxable Subsidiaries” refers to PNNT Cascade Environmental Holdings, LLC, PNNT CI (Galls) Prime Investment Holdings, LLC, PNNT ecoserve, LLC, PNNT Investment Holdings, LLC and PNNT New Gulf Resources, LLC; “PSLF” refers to PennantPark Senior Loan Fund, LLC, an unconsolidated joint venture; “PennantPark Investment Advisers” or “Investment Adviser” refers to PennantPark Investment Advisers, LLC; “PennantPark Investment Administration” or “Administrator” refers to PennantPark Investment Administration, LLC; “SBA” refers to the Small Business Administration; “SBIC” refers to a small business investment company under the Small Business Investment Act of 1958, as amended, or the “1958 Act”; “BNP Credit Facility” refers to our revolving credit facility with BNP Paribas prior to deconsolidation of Funding I; “Truist Credit Facility” refers to our multi-currency, senior secured revolving credit facility with Truist Bank (formerly SunTrust Bank), as amended and restated; “Credit Facilities” refers to the BNP Credit Facility and Truist Credit Facility collectively; “2024 Notes” refers to our 5.50% Notes due 2024; “BDC” refers to a business development company under the Investment Company Act of 1940, as amended, or the “1940 Act”; “SBCAA” refers to the Small Business Credit Availability Act; “Code” refers to the Internal Revenue Code of 1986, as amended; and “RIC” refers to a regulated investment company under the Code. References to our portfolio, our investments and our business include investments we make through SBIC II and other consolidated subsidiaries.

Item 1.

Consolidated Financial Statements

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

	March 31, 2021			September 30, 2020
	(unaudited)
Assets
Investments at fair value
Non-controlled, non-affiliated investments (cost—$646,758,885 and $713,683,209, respectively)	$	773,788,326		$	735,674,666
Non-controlled, affiliated investments (cost—$104,463,115 and $77,628,920, respectively)		71,404,648			27,753,893
Controlled, affiliated investments (cost—$381,150,760 and $374,260,162, respectively)		330,044,569			318,342,859
Total of investments (cost—$1,132,372,760 and $1,165,572,291, respectively)		1,175,237,543			1,081,771,418
Cash and cash equivalents (cost—$33,833,269 and $25,801,087, respectively)		33,855,496			25,806,002
Interest receivable		4,916,119			5,005,715
Distribution receivable		1,452,000			1,393,716
Prepaid expenses and other assets		376,932			376,030
Total assets		1,215,838,090			1,114,352,881
Liabilities
Distributions payable		8,045,413			8,045,413
Payable for investments purchased		18,581,995			5,461,508
Truist Credit Facility payable, at fair value (cost—$375,544,900 and $388,252,000, respectively) (See Notes 5 and 10)		372,867,465			368,701,972
2024 Notes payable, net (par—$86,250,000) (See Notes 5 and 10)		84,170,310			83,837,560
SBA debentures payable, net (par—$108,500,000 and $118,500,000, respectively) (See Notes 5 and 10)		106,128,698			115,772,677
Base management fee payable, net (See Note 3)		4,282,129			4,369,637
Interest payable on debt		2,007,332			2,022,614
Accrued other expenses		507,853			432,648
Total liabilities		596,591,195			588,644,029
Commitments and contingencies (See Note 11)
Net assets
Common stock, 67,045,105 shares issued and outstanding Par value $0.001 per share and 100,000,000 shares authorized		67,045			67,045
Paid-in capital in excess of par value		787,625,031			787,625,031
Accumulated distributable net loss		(168,445,181	)		(261,983,224	)
Total net assets	$	619,246,895		$	525,708,852
Total liabilities and net assets	$	1,215,838,090		$	1,114,352,881
Net asset value per share	$	9.24		$	7.84

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended March 31,						Six Months Ended March 31,
	2021			2020			2021			2020
Investment income:
From non-controlled, non-affiliated investments:
Interest	$	11,668,772		$	22,748,529		$	23,101,282		$	43,133,443
Payment-in-kind		2,011,940			1,978,894			3,470,739			3,863,400
Other income		23,942			751,284			505,067			941,202
From non-controlled, affiliated investments:
Payment-in-kind		380,271			—			456,998			—
From controlled, affiliated investments:
Interest		2,177,259			559,934			4,454,035			1,204,624
Payment-in-kind		1,518,971			1,496,251			3,004,494			4,395,988
Dividend income		1,452,000			—			2,973,000			—
Total investment income		19,233,155			27,534,892			37,965,615			53,538,657
Expenses:
Base management fee (See Note 3)		4,282,129			4,880,699			8,396,558			9,623,129
Performance-based incentive fee (See Note 3)		—			1,913,047			—			2,657,673
Interest and expenses on debt (See Note 10)		4,889,854			8,962,513			9,893,985			17,828,583
Administrative services expenses (See Note 3)		505,020			521,520			1,010,040			1,043,040
Other general and administrative expenses		643,480			648,881			1,286,963			1,292,841
Expenses before performance-based incentive fee waiver and provision for taxes		10,320,483			16,926,660			20,587,546			32,445,266
Performance-based incentive fee waiver (See Note 3)		—			—			—			—
Provision for taxes		150,000			300,000			300,000			600,000
Net expenses		10,470,483			17,226,660			20,887,546			33,045,266
Net investment income		8,762,672			10,308,232			17,078,069			20,493,391
Realized and unrealized gain (loss) on investments and debt:
Net realized gain (loss) on investments on:
Non-controlled, non-affiliated investments		319,431			1,424,778			2,450,389			(10,609,375	)
Non-controlled and controlled, affiliated investments		—			—			(19,708,359	)		—
Net realized gain (loss) on investments		319,431			1,424,778			(17,257,970	)		(10,609,375	)
Net change in unrealized appreciation (depreciation) on:
Non-controlled, non-affiliated investments		11,206,850			(40,710,987	)		87,612,267			(23,658,391	)
Non-controlled and controlled, affiliated investments		21,969,487			(80,260,831	)		39,069,096			(73,690,603	)
Debt (appreciation) depreciation (See Notes 5 and 10)		(3,763,322	)		48,946,105			(16,872,593	)		46,374,785
Net change in unrealized appreciation (depreciation) on investments and debt		29,413,015			(72,025,713	)		109,808,770			(50,974,209	)
Net realized and unrealized gain (loss) from investments and debt		29,732,446			(70,600,935	)		92,550,800			(61,583,584	)
Net increase (decrease) in net assets resulting from operations		38,495,118		$	(60,292,703	)	$	109,628,869		$	(41,090,193	)
Net increase (decrease) in net assets resulting from operations per common share (See Note 7)	$	0.57		$	(0.90	)	$	1.64		$	(0.61	)
Net investment income per common share	$	0.13		$	0.15		$	0.25		$	0.31

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(Unaudited)

	Three Months Ended March 31,						Six Months Ended March 31,
	2021			2020			2021			2020
Net increase (decrease) in net assets resulting from operations:
Net investment income	$	8,762,672		$	10,308,232		$	17,078,069		$	20,493,391
Net realized gain (loss) on investments		319,431			1,424,778			(17,257,970	)		(10,609,375	)
Net change in unrealized appreciation (depreciation) on investments		33,176,337			(120,971,818	)		126,681,363			(97,348,994	)
Net change in unrealized (appreciation) depreciation on debt		(3,763,322	)		48,946,105			(16,872,593	)		46,374,785
Net increase (decrease) in net assets resulting from operations		38,495,118			(60,292,703	)		109,628,869			(41,090,193	)
Distributions to stockholders		(8,045,413	)		(12,068,119	)		(16,090,826	)		(24,136,238	)
Net increase (decrease) in net assets		30,449,705			(72,360,822	)		93,538,043			(65,226,431	)
Net assets:
Beginning of period		588,797,190			589,040,059			525,708,852			581,905,668
End of period	$	619,246,895		$	516,679,237		$	619,246,895		$	516,679,237

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended March 31,
	2021			2020
Cash flows from operating activities:
Net increase (decrease) in net assets resulting from operations	$	109,628,869		$	(41,090,193	)
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Net change in net unrealized (appreciation) depreciation on investments		(126,681,363	)		97,348,994
Net change in unrealized appreciation (depreciation) on debt		16,872,593			(46,374,785	)
Net realized loss on investments		17,257,970			10,609,375
Net accretion of discount and amortization of premium		(1,642,623	)		(1,352,104	)
Purchases of investments		(143,007,958	)		(280,494,214	)
Payment-in-kind income		(7,058,327	)		(8,245,142	)
Proceeds from dispositions of investments		167,585,432			47,535,202
Amortization of deferred financing costs		688,773			1,037,172
Decrease (increase) in interest receivable		89,596			(645,598	)
Increase in distribution receivable		(58,284	)		—
Increase in prepaid expenses and other assets		(902	)		(408,772	)
Increase in payable for investments purchased		13,120,487			—
(Decrease) increase in interest payable on debt		(15,282	)		1,716,995
(Decrease) increase in base management fee payable, net		(87,508	)		239,219
Increase in performance-based incentive fee payable, net		—			1,913,047
Increase (decrease) in accrued other expenses		75,205			(410,647	)
Net cash provided by (used in) operating activities		46,766,678			(218,621,451	)
Cash flows from financing activities:
Distributions paid to stockholders		(16,090,826	)		(24,136,238	)
Proceeds from 2024 Notes issuance		—			10,912,500
Repayments under SBA debentures		(10,000,000	)		(16,500,000	)
Borrowings under BNP Credit Facility		—			90,000,000
Repayments under BNP Credit Facility		—			(16,000,000	)
Borrowings under Truist Credit Facility		91,564,132			273,000,000
Repayments under Truist Credit Facility		(104,271,232	)		(133,000,000	)
Net cash (used in) provided by financing activities		(38,797,926	)		184,276,262
Net increase (decrease) in cash equivalents		7,968,752			(34,345,189	)
Effect of exchange rate changes on cash		80,742			(43,532	)
Cash and cash equivalents, beginning of period		25,806,002			59,516,236
Cash and cash equivalents, end of period	$	33,855,496		$	25,127,515
Supplemental disclosure of cash flow information:
Interest paid	$	9,220,494		$	15,074,416
Taxes paid	$	655,707		$	805,976
Non-cash exchanges and conversions	$	16,515,842		$	91,204,799

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

MARCH 31, 2021

(Unaudited)

Issuer Name	Maturity / Expiration	Industry	Current Coupon			Basis Point Spread Above Index ⁽⁴⁾		Par / Shares		Cost		Fair Value ⁽³⁾
Investments in Non-Controlled, Non-Affiliated Portfolio Companies—125.0 ^{(1), (2)}
First Lien Secured Debt—64.9%
18 Freemont Street Acquisition, LLC	08/11/2025	Hotels, Motels, Inns and Gaming		9.50	%	1M L+800			8,302,303	$	7,545,657	$	8,385,326
Altamira Technologies, LLC (Revolver)	07/24/2025	Aerospace and Defense		8.00	%	3M L+700			50,000		50,000		48,125
Altamira Technologies, LLC (Revolver) ⁽⁷⁾	07/24/2025	Aerospace and Defense		—			—		137,500		—		(5,156	)
American Insulated Glass, LLC	12/21/2023	Building Materials		6.50	%	3M L+550			15,876,189		15,687,356		15,717,427
Apex Service Partners, LLC	07/31/2025	Personal, Food and Miscellaneous Services		6.25	%	1M L+525			1,335,239		1,335,239		1,335,239
Applied Technical Services, LLC	12/29/2026	Environmental Services		6.75	%	3M L+550			7,481,250		7,320,812		7,369,031
Applied Technical Services, LLC ⁽⁷⁾	06/29/2022	Environmental Services		—			—		2,500,000		—		(9,375	)
Applied Technical Services, LLC (Revolver) ⁽⁷⁾	12/29/2026	Environmental Services		—			—		1,000,000		—		(15,000	)
Bottom Line Systems, LLC	02/13/2023	Healthcare, Education and Childcare		6.25	%	1M L+550			6,153,097		6,118,932		6,153,097
Broder Bros., Co.	12/02/2022	Consumer Products		9.75	%	3M L+850			25,620,085		25,620,673		24,210,981
Compex Legal Services, Inc.	02/09/2026	Business Services		6.75	%	3M L+575			3,587,774		3,526,985		3,469,018
Compex Legal Services, Inc. (Revolver)	02/07/2025	Business Services		6.75	%	3M L+575			458,962		458,962		443,771
Compex Legal Services, Inc. (Revolver) ⁽⁷⁾	02/07/2025	Business Services		—			—		196,698		—		(6,511	)
Datalot Inc. (Revolver) ⁽⁷⁾	01/24/2025	Insurance		—			—		1,788,165		—		—
DermaRite Industries LLC	03/03/2022	Manufacturing / Basic Industries		7.75	%	1M L+675			8,441,402		8,410,431		8,441,402
DRS Holdings III, Inc. (Revolver) ⁽⁷⁾	11/03/2025	Consumer Products		—			—		1,528,102		—		15,281
ECL Entertainment, LLC	04/01/2028	Hotels, Motels, Inns and Gaming		8.25	%	1M L+750			8,769,231		8,681,538		8,769,231
ECM Industries, LLC (Revolver)	12/23/2025	Electronics		5.50	%	1M L+450			258,797		258,797		257,503
ECM Industries, LLC (Revolver) ⁽⁷⁾	12/23/2025	Electronics		—			—		258,797		—		(1,294	)
GCOM Software LLC	11/14/2022	Business Services		7.75	%	1M L+625			1,093,898		1,076,285		1,093,898
Hancock Roofing and Construction L.L.C.	12/31/2026	Insurance		6.25	%	3M L+525			5,985,000		5,842,049		5,835,375
Hancock Roofing and Construction L.L.C.⁽⁷⁾	12/31/2022	Insurance		—			—		1,500,000		—		(37,500	)
Hancock Roofing and Construction L.L.C. (Revolver) ⁽⁷⁾	12/31/2026	Insurance		—			—		750,000		—		(18,750	)
HW Holdco, LLC	12/10/2024	Media		5.50	%	3M L+450			2,554,113		2,536,525		2,503,031
HW Holdco, LLC (Revolver) ⁽⁷⁾	12/10/2024	Media		—			—		3,387,097		—		(67,742	)
Impact Group, LLC	06/27/2023	Personal, Food and Miscellaneous Services		8.37	%	1M L+737			19,675,049		19,611,964		19,871,799
Integrity Marketing Acquisition, LLC	08/27/2025	Insurance		6.75	%	3M L+575			16,583,417		16,473,040		16,334,666
Juniper Landscaping of Florida, LLC	12/22/2021	Personal, Food and Miscellaneous Services		6.50	%	1M L+550			2,775,657		2,762,772		2,775,657
K2 Pure Solutions NoCal, L.P.	12/20/2023	Chemicals, Plastics and Rubber		8.00	%	1M L+700			11,860,333		11,754,642		11,607,707
K2 Pure Solutions NoCal, L.P. (Revolver)	12/20/2023	Chemicals, Plastics and Rubber		8.00	%	1M L+700			872,143		872,143		853,566
K2 Pure Solutions NoCal, L.P. (Revolver) ⁽⁷⁾	12/20/2023	Chemicals, Plastics and Rubber		—			—		1,065,952		—		(22,705	)
Kentucky Downs, LLC ⁽⁷⁾	03/07/2025	Hotels, Motels, Inns and Gaming		—			—		827,586		—		—
LAV Gear Holdings, Inc.	10/31/2024	Leisure, Amusement, Motion Pictures, Entertainment		8.50	%	1M L+750			770,596		764,956		714,188
				(PIK 5.00	%)
Lightspeed Buyer Inc.	02/03/2026	Healthcare, Education and Childcare		6.50	%	1M L+550			1,556,373		1,542,426		1,533,027
Lightspeed Buyer Inc. ⁽⁷⁾	08/03/2021	Healthcare, Education and Childcare		—			—		882,075		—		(4,410	)
Lightspeed Buyer Inc. (Revolver)	02/03/2026	Healthcare, Education and Childcare		6.50	%	1M L+550			388,593		388,593		382,765
Lightspeed Buyer Inc. (Revolver) ⁽⁷⁾	02/03/2026	Healthcare, Education and Childcare		—			—		777,187		—		(11,658	)
Lombart Brothers, Inc. (Revolver)	04/13/2023	Healthcare, Education and Childcare		9.25	%	1M L+825			1,773,894		1,773,894		1,702,938
MeritDirect, LLC	05/23/2024	Media		6.50	%	3M L+550			2,832,036		2,803,736		2,768,315
MeritDirect, LLC (Revolver) ⁽⁷⁾	05/23/2024	Media		—			—		2,518,345		—		(56,663	)
Ox Two, LLC	02/27/2023	Building Materials		7.25	%	1M L+625			21,135,496		20,941,838		21,135,496
Ox Two, LLC (Revolver)	02/27/2023	Building Materials		7.25	%	1M L+625			488,000		488,000		488,000
Ox Two, LLC (Revolver) ⁽⁷⁾	02/27/2023	Building Materials		—			—		2,012,000		—		—
PRA Events, Inc.	08/07/2025	Business Services		11.50	%	3M L+1,050			22,349,086		19,095,604		19,723,069
				(PIK 11.50	%)
PRA Events, Inc. (Revolver)	08/07/2025	Business Services		11.50	%	3M L+1,050			2,323,391		1,985,162		2,050,393
				(PIK 11.50	%)
Questex, LLC	09/09/2024	Media		6.75	%	3M L+575			21,937,500		21,658,895		19,963,126
Questex, LLC (Revolver)	09/09/2024	Media		6.75	%	3M L+575			2,632,979		2,632,979		2,396,011
Questex, LLC (Revolver) ⁽⁷⁾	09/09/2024	Media		—			—		957,447		—		(86,170	)
Radius Aerospace, Inc. (Revolver)	03/31/2025	Aerospace and Defense		6.75	%	3M L+575			148,476		148,476		144,289
Radius Aerospace, Inc. (Revolver) ⁽⁷⁾	03/31/2025	Aerospace and Defense		—			—		2,078,666		—		(58,618	)
Rancho Health MSO, Inc.	12/18/2025	Healthcare, Education and Childcare		6.75	%	3M L+575			3,675,000		3,596,984		3,610,688
Rancho Health MSO, Inc. ⁽⁷⁾	12/18/2022	Healthcare, Education and Childcare		—			—		1,050,000		—		(18,375	)
Rancho Health MSO, Inc. (Revolver) ⁽⁷⁾	12/18/2025	Healthcare, Education and Childcare		—			—		525,000		—		(9,187	)
Recteq, LLC	01/29/2026	Consumer Products		7.00	%	3M L+600			10,000,000		9,807,023		9,800,000
Recteq, LLC (Revolver) ⁽⁷⁾	01/29/2026	Consumer Products		—			—		1,126,761		—		(22,535	)
Research Horizons, LLC	06/28/2022	Media		7.25	%	1M L+625			28,360,642		28,212,050		27,793,429
Research Now Group, Inc. and Survey Sampling International LLC	12/20/2024	Business Services		6.50	%	3M L+550			2,898,750		2,898,750		2,864,690
Riverpoint Medical, LLC (Revolver) ⁽⁷⁾	06/20/2025	Healthcare, Education and Childcare		—			—		363,636		—		(2,218	)
Riverside Assessments, LLC	03/10/2025	Education		8.25	%	3M L+725			16,291,343		16,039,357		15,598,961
Sales Benchmark Index LLC (Revolver) ⁽⁷⁾	01/03/2025	Business Services		—			—		731,707		—		(49,390	)
Sargent & Greenleaf Inc. (Revolver) ⁽⁷⁾	12/20/2024	Electronics		—			—		597,943		—		—
Schlesinger Global, Inc.	07/14/2025	Business Services		8.00	%	3M L+700			514,741		509,460		473,561
				(PIK 1.00	%)
Schlesinger Global, Inc. (Revolver)	07/14/2025	Business Services		8.00	%	3M L+700			15,792		15,792		14,529
				(PIK 1.00	%)
Schlesinger Global, Inc. (Revolver) ⁽⁷⁾	07/14/2025	Business Services		—			—		22,248		—		(1,780	)
Sigma Defense Systems, LLC	12/18/2025	Telecommunications		9.75	%	3M L+875			6,602,931		6,448,004		6,470,872
Sigma Defense Systems, LLC ⁽⁷⁾	12/18/2025	Telecommunications		—			—		950,869		—		(19,017	)
Signature Systems Holding Company - Term Loan II	12/31/2021	Chemicals, Plastics and Rubber		8.50	%	3M L+750			806,452		794,399		796,371
Signature Systems Holding Company (Revolver)	05/03/2024	Chemicals, Plastics and Rubber		7.50	%	3M L+650			2,016,129		2,016,129		1,990,927
Solutionreach, Inc. (Revolver) ⁽⁷⁾	01/17/2024	Communications		—			—		1,665,000		—		—
Spear Education, LLC	02/26/2025	Education		6.50	%	3M L+500			14,973,750		14,842,822		14,824,012
Spear Education, LLC ⁽⁷⁾	02/26/2022	Education		—			—		6,875,000		—		(68,750	)

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

MARCH 31, 2021

(Unaudited)

Issuer Name	Maturity / Expiration		Industry	Current Coupon			Basis Point Spread Above Index ⁽⁴⁾		Par / Shares		Cost		Fair Value ⁽³⁾
Spectacle Gary Holdings, LLC	12/23/2025		Hotels, Motels, Inns and Gaming		11.01	%	1M L+900			21,600,000	$	20,976,783	$	23,544,000
TAC LifePort Purchaser, LLC	03/01/2026		Aerospace and Defense		7.00	%	3M L+600			5,017,306		4,918,140		4,936,927
TAC LifePort Purchaser, LLC (Revolver)	03/01/2026		Aerospace and Defense		7.00	%	3M L+600			82,041		82,041		80,727
TAC LifePort Purchaser, LLC (Revolver) ⁽⁷⁾	03/01/2026		Aerospace and Defense		—			—		538,114		—		(8,621	)
TPC Canada Parent, Inc. and TPC US Parent, LLC ⁽⁸^),(¹¹⁾	11/24/2025		Food		6.25	%	3M L+525			1,780,120		1,780,120		1,726,717
TVC Enterprises, LLC	03/26/2026		Transportation		6.75	%	1M L+575			15,584,153		15,393,349		15,428,312
TVC Enterprises, LLC (Revolver) ⁽⁷⁾	03/26/2026		Transportation		—			—		2,702,151		—		(27,022	)
TWS Acquisition Corporation	06/16/2025		Education		7.25	%	1M L+625			4,136,641		4,136,641		4,136,641
TWS Acquisition Corporation (Revolver) ⁽⁷⁾	06/16/2025		Education		—			—		1,643,571		—		—
Tyto Athene, LLC	08/27/2024		Aerospace and Defense		6.25	%	1M L+525			6,012,024		5,986,788		6,012,024
Tyto Athene, LLC (New Issue)	04/01/2028		Aerospace and Defense		6.25	%	1M L+550			10,000,000		9,846,390		9,846,390
Tyto Athene, LLC (New Issue) (Revolver) ⁽⁷⁾	04/01/2026		Aerospace and Defense		—			—		363,610		—		—
US Med Acquisition, Inc.	02/13/2023		Healthcare, Education and Childcare		8.50	%	1M L+750			8,257,813		8,257,813		8,257,813
Walker Edison Furniture Company LLC	09/26/2024		Home and Office Furnishings		6.75	%	3M L+575			25,000,000		24,375,244		24,375,000
Wildcat Buyerco, Inc.	02/27/2026		Electronics		6.25	%	3M L+525			1,636,953		1,619,108		1,621,484
Wildcat Buyerco, Inc. ⁽⁷⁾	02/27/2022		Electronics		—			—		2,573,529		—		3,217
Wildcat Buyerco, Inc. (Revolver) ⁽⁷⁾	02/27/2026		Electronics		—			—		551,471		—		(8,658	)
Total First Lien Secured Debt												402,722,548		402,062,935
Second Lien Secured Debt—20.8%
Confie Seguros Holding Co.	10/31/2025		Insurance		8.62	%	3M L+850			14,500,000		14,301,101		14,137,500
Data Axle, Inc.	04/03/2024		Other Media		10.25	%	3M L+925			20,400,000		20,188,954		20,400,000
DecoPac, Inc.	03/31/2025		Beverage, Food and Tobacco		9.25	%	3M L+825			19,627,143		19,406,995		19,627,143
Halo Buyer, Inc.	07/06/2026		Consumer Products		9.25	%	1M L+825			32,500,000		32,085,316		31,850,000
Inventus Power, Inc.	09/29/2024		Electronics		9.50	%	3M L+850			13,500,000		13,230,497		13,230,000
MBS Holdings, Inc.	01/02/2024		Telecommunications		9.50	%	3M L+850			19,623,649		19,398,565		19,427,413
QuantiTech LLC	02/04/2027		Aerospace and Defense		11.00	%	3M L+1,000			150,000		147,119		147,000
VT Topco, Inc.	08/24/2026		Business Services		7.11	%	3M L+700			10,000,000		9,957,809		9,950,000
Total Second Lien Secured Debt												128,716,356		128,769,056
Subordinated Debt/Corporate Notes—8.7%
Blackhawk Industrial Distribution, Inc.	03/17/2025		Distribution		12.00	%		—		14,192,326		14,003,077		13,979,441
					(PIK 2.00	%)
Cascade Environmental LLC	12/30/2023		Environmental Services		13.00	%		—		39,829,362		39,469,077		40,028,509
					(PIK 13.00	%)
Total Subordinated Debt/Corporate Notes												53,472,154		54,007,950
Preferred Equity/Partnership Interests—3.6% ⁽⁶⁾
AH Holdings, Inc.		—	Healthcare, Education and Childcare		6.00	%		—		211		500,000		146,305
Cascade Environmental LLC		—	Environmental Services		16.00	%				178,304		17,607,478		19,539,097
MeritDirect Holdings, LP ⁽⁹⁾		—	Media		—			—		540		540,000		597,394
NXOF Holdings, Inc. (Tyto Athene, LLC)		—	Aerospace and Defense		—			—		160		159,808		185,151
Signature CR Intermediate Holdco, Inc.		—	Chemicals, Plastics and Rubber		12.00	%		—		1,527		1,527,026		1,662,605
TPC Holding Company, LP ⁽⁸^),(¹¹⁾		—	Food		—			—		219		219,012		249,437
Total Preferred Equity/Partnership Interests												20,553,324		22,379,989
Common Equity/Partnership Interests/Warrants—26.9% ⁽⁶⁾
Affinion Group Holdings, Inc. (Warrants)	04/10/2024		Consumer Products		—			—		77,190		2,126,399		—
AG Investco LP ⁽⁹⁾		—	Business Services		—			—		805,164		805,164		1,107,840
AG Investco LP ^{(7), (9)}		—	Business Services		—			—		194,836		—		—
AH Holdings, Inc. (Warrants)	03/23/2021		Healthcare, Education and Childcare		—			—		753		—		—
Altamira Intermediate Company II, Inc.		—	Aerospace and Defense		—			—		125,000		125,000		79,659
ASP LCG Holdings, Inc. (Warrants)	05/05/2026		Education		—			—		933		586,975		1,927,258
Cascade Environmental LLC ⁽⁹⁾		—	Environmental Services		—			—		33,901		2,852,080		673,015
CI (Allied) Investment Holdings, LLC		—	Business Services		—			—		120,962		1,243,217		272,538
(PRA Events, Inc.) ⁽⁹⁾
CI (Summit) Investment Holdings LLC		—	Buildings and Real Estate		—			—		134,180		1,409,866		2,113,202
(SFP Holdings, Inc.)
Cowboy Parent LLC		—	Distribution		—			—		22,500		2,250,000		1,193,867
(Blackhawk Industrial Distribution, Inc.)
DecoPac Holdings Inc.		—	Beverage, Food and Tobacco		—			—		3,449		3,448,658		4,327,101
Delta InvestCo LP (Sigma Defense Systems, LLC) ⁽⁹⁾		—	Telecommunications		—			—		570,522		570,522		587,029
Delta InvestCo LP (Sigma Defense Systems, LLC) ^{(7), (9)}		—	Telecommunications		—			—		570,522		—		—
ECM Investors, LLC ⁽⁹⁾		—	Electronics		—			—		167,537		167,537		437,342
eCommission Holding Corporation ⁽¹¹⁾		—	Financial Services		—			—		80		1,004,625		827,595
Faraday Holdings, LLC		—	Building Materials		—			—		4,277		217,635		1,463,248
Gauge Lash Coinvest LLC		—	Consumer Products		—			—		889,376		1,053,800		1,669,180
Gauge Schlesinger Coinvest, LLC		—	Business Services		—			—		9		8,896		6,460
Gauge TVC Coinvest, LLC		—	Transportation		—			—		810,645		—		1,536,698
(TVC Enterprises, LLC)
GCOM InvestCo LP ⁽⁷⁾		—	Business Services		—			—		111,574		—		—
Go Dawgs Capital III, LP		—	Building Materials		—			—		675,325		675,325		864,416
(American Insulated Glass, LLC) ⁽⁹⁾
Green Veracity Holdings, LP - Class A		—	Business Services		—			—		15,000		1,500,000		3,673,072
(VT Topco, Inc.)
Hancock Claims Consultants Investors, LLC ⁽⁹⁾		—	Insurance		—			—		450,000		450,000		494,750
Infogroup Parent Holdings, Inc. (Data Axle, Inc.)		—	Other Media		—			—		181,495		2,040,000		3,146,031
Ironclad Holdco, LLC (Applied Technical Services, LLC) ⁽⁹⁾		—	Environmental Services		—			—		3,960		396,000		420,230
ITC Rumba, LLC (Cano Health, LLC) ⁽⁹⁾		—	Healthcare, Education and Childcare		—			—		375,675		2,455,540		72,968,079
JWC-WE Holdings, L.P.		—	Home and Office Furnishings		—			—		1,906,433		1,906,433		16,744,417
(Walker Edison Furniture Company LLC) ⁽⁹⁾
Kadmon Holdings, Inc. ⁽⁵⁾		—	Healthcare, Education and Childcare		—			—		252,014		2,265,639		980,334

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

MARCH 31, 2021

(Unaudited)

Issuer Name	Maturity / Expiration		Industry	Current Coupon			Basis Point Spread Above Index ⁽⁴⁾		Par / Shares		Cost		Fair Value ⁽³⁾
Kentucky Racing Holdco, LLC (Warrants)		—	Hotels, Motels, Inns and Gaming		—			—		161,252	$	—	$	681,840
Lariat ecoserv Co-Invest Holdings, LLC ⁽⁹⁾		—	Environmental Services		—			—		363,656		363,656		780,007
Lightspeed Investment Holdco LLC		—	Healthcare, Education and Childcare		—			—		273,143		273,143		336,625
MeritDirect Holdings, LP ⁽⁹⁾		—	Media		—			—		540		—		—
NEPRT Parent Holdings, LLC (Recteq, LLC) ⁽⁹⁾		—	Consumer Products		—			—		1,299		1,298,701		1,342,636
NXOF Holdings, Inc.		—	Aerospace and Defense		—			—		3,261		3,261		25,350
(Tyto Athene, LLC)
OceanSound Discovery Equity, LP		—	Aerospace and Defense		—			—		98,286		982,857		956,095
(Holdco Sands Intermediate, LLC) ⁽⁹⁾
QuantiTech InvestCo LP ⁽⁹⁾		—	Aerospace and Defense		—			—		700		65,957		424,767
QuantiTech InvestCo LP ^{(7), (9)}		—	Aerospace and Defense		—			—		967		—		—
QuantiTech InvestCo II LP ⁽⁹⁾		—	Aerospace and Defense		—			—		40		24,000		24,000
RFMG Parent, LP ⁽⁹⁾		—	Healthcare, Education and Childcare		—			—		1,050,000		1,050,000		1,050,000
SBI Holdings Investments LLC		—	Business Services		—			—		36,585		365,854		156,798
(Sales Benchmark Index LLC)
Signature CR Intermediate Holdco, Inc.		—	Chemicals, Plastics and Rubber		—			—		80		80,370	-
SSC Dominion Holdings, LLC		—	Electronics		—			—		1,500		1,500,000		1,749,600
Class A (US Dominion, Inc.)
SSC Dominion Holdings, LLC		—	Electronics		—			—		1,500		—		4,949,724
Class B (US Dominion, Inc.)
TAC LifePort Holdings, LLC ⁽⁹⁾		—	Aerospace and Defense		—			—		232,558		232,558		232,914
TPC Holding Company, LP^{(8). (11)}		—	Food		—			—		11,527		11,527		98,210
U.S. Well Services, Inc. - Class A ^{(5), (11)}		—	Oil and Gas		—			—		1,261,201		3,021,880		1,311,649
WBB Equity, LLC		—	Aerospace and Defense		—			—		628,571		628,571		3,916,000
(Whitney, Bradley & Brown, Inc.) ⁽⁹⁾
Wheel Pros Holdings, L.P.		—	Auto Sector		—			—		3,778,704		545,210		26,400,357
(Winter Park Intermediate, Inc.)
Wildcat Parent, LP (Wildcat Buyerco, Inc.)		—	Electronics		—			—		2,314		231,400		342,475
ZS Juniper L.P.		—	Personal, Food and Miscellaneous Services		—			—		1,056		1,056,247		4,275,988
(Juniper Landscaping of Florida, LLC) ⁽⁹⁾
Total Common Equity/Partnership Interests/Warrants												41,294,503		166,568,396
Total Investments in Non-Controlled, Non-Affiliated Portfolio Companies												646,758,885		773,788,326
Investments in Non-Controlled, Affiliated Portfolio Companies—11.5% ^{(1), (2)}
Second Lien Secured Debt—1.7%
Mailsouth Inc.	04/23/2025		Printing and Publishing		15.00	%		—		10,318,353		10,318,353		10,318,353
					(PIK 15.00	%)
Total Second Lien Secured Debt												10,318,353		10,318,353
Preferred Equity/Partnership Interests—5.8% ⁽⁶⁾
ETX Energy, LLC⁽⁹⁾		—	Oil and Gas		—			—		61,732		6,173,200		—
MidOcean JF Holdings Corp.		—	Distribution		—			—		153,922		15,392,189		36,139,140
Total Preferred Equity/Partnership Interests												21,565,389		36,139,140
Common Equity/Partnership Interests/Warrants—4.0% ⁽⁶⁾
ETX Energy, LLC ⁽⁹⁾		—	Oil and Gas		—			—		1,658,389		29,711,576		—
ETX Energy Management Company, LLC		—	Oil and Gas		—			—		1,754,104		1,562,020		—
MidOcean JF Holdings Corp.		—	Distribution		—			—		65,933		24,789,935		7,047,058
MSpark, LLC		—	Printing and Publishing		—			—		51,151		16,515,842		17,900,097
Total Common Equity/Partnership Interests/Warrants												72,579,373		24,947,155
Total Investments in Non-Controlled, Affiliated Portfolio Companies												104,463,115		71,404,648
Investments in Controlled, Affiliated Portfolio Companies—53.3% ^(1), (2)
First Lien Secured Debt—6.7%
AKW Holdings Limited ^{(8), (10), (11)}	03/13/2024		Healthcare, Education and Childcare		7.50	%	3M L+650		£	30,000,000		41,696,550		41,391,000
Total First Lien Secured Debt												41,696,550		41,391,000
Second Lien Secured Debt—9.0%
PT Network Intermediate Holdings, LLC	11/30/2024		Healthcare, Education and Childcare		11.00	%	3M L+1,000			55,471,238		55,136,936		55,471,237
					(PIK 11.00	%)
Total Second Lien Secured Debt												55,136,936		55,471,237
Subordinated Debt—10.4%
PennantPark Senior Loan Fund, LLC ⁽¹¹⁾	07/31/2027		Financial Services		9.00	%	3M L+800			64,154,570		64,154,571		64,154,571
Total Subordinated Debt												64,154,571		64,154,571
Preferred Equity—2.1% ⁽⁶⁾
CI (PTN) Investment Holdings II, LLC		—	Healthcare, Education and Childcare		—			—		36,450		546,750		—
(PT Network, LLC) ⁽⁹⁾
PT Network Intermediate Holdings, LLC ⁽⁹⁾			Healthcare, Education and Childcare		11.00	%	3M L+1,000			833		10,725,000		12,812,316
Total Preferred Equity												11,271,750		12,812,316
Common Equity—25.2% ⁽⁶⁾
AKW Holdings Limited ^{(8), (10), (11)}		—	Healthcare, Education and Childcare		—			—	£	950		132,497		3,303,354
CI (PTN) Investment Holdings II, LLC		—	Healthcare, Education and Childcare		—			—		333,333		5,000,000		—
(PT Network, LLC) ⁽⁹⁾
PennantPark Senior Loan Fund, LLC ⁽¹¹⁾		—	Financial Services		—			—		33,830,005		33,892,823		40,239,290
PT Network Intermediate Holdings, LLC ⁽⁹⁾			Healthcare, Education and Childcare		—			—		621		7,157,560		34,989,451
RAM Energy Holdings LLC		—	Energy and Utilities		—			—		180,805		162,708,073		77,683,350
Total Common Equity												208,890,953		156,215,445
Total Investments in Controlled, Affiliated Portfolio Companies												381,150,760		330,044,569
Total Investments—189.8%												1,132,372,760		1,175,237,543
Cash and Cash Equivalents—5.5%
BlackRock Federal FD Institutional 30												32,327,289		32,327,289
BNY Mellon Cash Reserve and Cash												1,505,980		1,528,207
Total Cash and Cash Equivalents												33,833,269		33,855,496
Total Investments and Cash Equivalents—195.3%											$	1,166,206,029	$	1,209,093,039
Liabilities in Excess of Other Assets—(95.3%)														(589,846,144	)
Net Assets—100.0%													$	619,246,895

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)

The provisions of the 1940 Act classify investments based on the level of control that we maintain in a particular portfolio company. As defined in the 1940 Act, a company is generally presumed to be “non-controlled” when we own 25% or less of the portfolio company’s voting securities and “controlled” when we own more than 25% of the portfolio company’s voting securities.

(2)

The provisions of the 1940 Act classify investments further based on the level of ownership that we maintain in a particular portfolio company. As defined in the 1940 Act, a company is generally deemed as “non-affiliated” when we own less than 5% of a portfolio company’s voting securities and “affiliated” when we own 5% or more of a portfolio company’s voting securities (See Note 6).

(3)	Valued based on our accounting policy (See Note 2).

(4)

Represents floating rate instruments that accrue interest at a predetermined spread relative to an index, typically the applicable London Interbank Offered Rate, or LIBOR or “L,” the Euro Interbank Offered Rate, or EURIBOR or “E,” or Prime rate, or “P.” The spread may change based on the type of rate used. The terms in the Schedule of Investments disclose the actual interest rate in effect as of the reporting period. LIBOR loans are typically indexed to a 30-day, 90-day or 180-day LIBOR rate (1M L, 3M L, or 6M L, respectively), and EURIBOR loans are typically indexed to a 90-day EURIBOR rate (3M E), at the borrower’s option. All securities are subject to a LIBOR or Prime rate floor where a spread is provided, unless noted. The spread provided includes payment-in-kind, or PIK, interest and other fee rates, if any.

(5)	The security was not valued using significant unobservable inputs. The value of all other securities was determined using significant unobservable inputs (See Note 5).

(6)	Non-income producing securities.

(7)	Represents the purchase of a security with delayed settlement or a revolving line of credit that is currently an unfunded investment. This security does not earn a basis point spread above an index while it is unfunded.

(8)	Non-U.S. company or principal place of business outside the United States.

(9)	Investment is held through our Taxable Subsidiaries (See Note 1).

(10)	Par / Shares amount is denominated in British Pounds (£) as denoted.

(11)

The investment is treated as a non-qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, we may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of our total assets. As of March 31, 2021, qualifying assets represent 87% of the Company’s total assets and non-qualifying assets represent 13% of the Company’s total assets.

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2020

Issuer Name	Maturity / Expiration	Industry	Current Coupon				Basis Point Spread Above Index ⁽⁴⁾		Par / Shares		Cost		Fair Value ⁽³⁾
Investments in Non-Controlled, Non-Affiliated Portfolio Companies—139.9 ^{(1), (2)}
First Lien Secured Debt—76.5%
18 Freemont Street Acquisition, LLC	08/11/2025	Hotels, Motels, Inns and Gaming		9.50	%		1M L+800			8,302,303	$	7,543,090	$	7,887,188
Altamira Technologies, LLC (Revolver)	07/24/2025	Aerospace and Defense		7.00	%		3M L+600			125,000		125,000		120,625
Altamira Technologies, LLC (Revolver) ⁽⁷⁾	07/24/2025	Aerospace and Defense		—				—		62,500		—		(2,188	)
American Insulated Glass, LLC	12/21/2023	Building Materials		6.50	%		3M L+550			15,957,113		15,736,757		15,637,971
Apex Service Partners, LLC	07/31/2025	Personal, Food and Miscellaneous Services		6.25	%		1M L+525			178,844		178,844		173,479
Apex Service Partners, LLC ⁽⁷⁾	07/31/2021	Personal, Food and Miscellaneous Services		—				—		1,165,420		—		(34,963	)
Bottom Line Systems, LLC	02/13/2023	Healthcare, Education and Childcare		6.25	%		1M L+550			6,722,525		6,674,529		6,580,680
Broder Bros., Co.	12/02/2022	Consumer Products		9.75	%		3M L+850			25,907,420		25,907,420		23,510,984
Compex Legal Services, Inc.	02/09/2026	Business Services		6.75	%		3M L+575			3,605,894		3,539,582		3,539,906
Compex Legal Services, Inc. ⁽⁷⁾	02/08/2021	Business Services		—				—		1,549,743		—		(12,863	)
Compex Legal Services, Inc. (Revolver)	02/07/2025	Business Services		6.75	%		3M L+575			458,962		458,962		450,563
Compex Legal Services, Inc. (Revolver) ⁽⁷⁾	02/07/2025	Business Services		—				—		196,698		—		(3,600	)
Datalot Inc. (Revolver)	01/24/2025	Insurance		6.25	%		3M L+525			1,788,165		1,788,165		1,790,310
DermaRite Industries LLC	03/03/2022	Manufacturing / Basic Industries		8.00	%		1M L+700			8,975,884		8,924,948		8,975,884
DRS Holdings III, Inc. (Revolver) ⁽⁷⁾	11/03/2025	Consumer Products		—				—		1,528,102		—		(27,964	)
ECM Industries, LLC (Revolver)	12/23/2025	Electronics		5.50	%		1M L+450			517,594		517,594		510,761
HW Holdco, LLC	12/10/2024	Media		5.50	%		3M L+450			2,567,177		2,547,350		2,490,162
HW Holdco, LLC (Revolver) ⁽⁷⁾	12/10/2024	Media		—				—		3,387,097		—		(101,613	)
IMIA Holdings, Inc.	10/26/2025	Aerospace and Defense		7.00	%		3M L+600			5,572,968		5,461,508		5,517,238
Impact Group, LLC	06/27/2023	Personal, Food and Miscellaneous Services		8.37	%		1M L+737			19,888,478		19,811,644		19,987,920
Integrity Marketing Acquisition, LLC	08/27/2025	Insurance		6.50	%		3M L+550			23,574,241		23,403,071		23,338,498
Integrity Marketing Acquisition, LLC ⁽⁷⁾	07/15/2021	Insurance		—				—		592,800		—		(1,482	)
Juniper Landscaping of Florida, LLC	12/22/2021	Personal, Food and Miscellaneous Services		9.50	%		1M L+850			13,516,275		13,430,024		13,516,275
K2 Pure Solutions NoCal, L.P.	12/20/2023	Chemicals, Plastics and Rubber		8.00	%		1M L+700			11,921,000		11,797,407		11,658,738
K2 Pure Solutions NoCal, L.P. (Revolver)	12/20/2023	Chemicals, Plastics and Rubber		8.00	%		1M L+700			1,453,571		1,453,571		1,421,593
K2 Pure Solutions NoCal, L.P. (Revolver) ⁽⁷⁾	12/20/2023	Chemicals, Plastics and Rubber		—				—		484,524		—		(10,660	)
Kentucky Downs, LLC ⁽⁷⁾	03/07/2025	Hotels, Motels, Inns and Gaming		—				—		827,586		—		(12,414	)
LAV Gear Holdings, Inc.	10/31/2024	Leisure, Amusement, Motion Pictures, Entertainment		8.50	%		1M L+750			751,480		744,986		692,188
				(PIK 5.00	%)
Lightspeed Buyer Inc.	02/03/2026	Healthcare, Education and Childcare		6.25	%		1M L+525			1,564,213		1,548,989		1,544,661
Lightspeed Buyer Inc. ⁽⁷⁾	08/03/2021	Healthcare, Education and Childcare		—				—		882,075		—		(2,205	)
Lightspeed Buyer Inc. (Revolver)	02/03/2026	Healthcare, Education and Childcare		6.75	%		1M L+575			1,165,780		1,165,780		1,151,208
Lombart Brothers, Inc. (Revolver)	04/13/2023	Healthcare, Education and Childcare		7.25	%		1M L+625			1,769,912		1,769,912		1,661,947
MeritDirect, LLC	05/23/2024	Media		6.50	%		3M L+550			2,901,820		2,868,498		2,763,983
MeritDirect, LLC (Revolver) ⁽⁷⁾	05/23/2024	Media		—				—		2,518,345		—		(119,621	)
Ox Two, LLC	02/27/2023	Building Materials		7.25	%		1M L+625			21,352,147		21,112,545		21,245,386
Ox Two, LLC (Revolver)	02/27/2023	Building Materials		7.25	%		1M L+625			488,000		488,000		485,560
Ox Two, LLC (Revolver) ⁽⁷⁾	02/27/2023	Building Materials		—				—		2,012,000		—		(10,060	)
Peninsula Pacific Entertainment LLC	11/13/2024	Hotels, Motels, Inns and Gaming		7.40	%		3M L+725			11,437,714		11,219,222		10,637,074
PRA Events, Inc.	08/08/2022	Business Services		—		⁽⁶⁾		—		19,180,820		18,839,885		16,150,251
PRA Events, Inc. (Revolver)	08/08/2022	Business Services		—		⁽⁶⁾		—		2,000,000		2,000,000		1,684,000
Provation Medical, Inc.	03/11/2024	Electronics		7.15	%		3M L+700			26,527,500		26,094,813		26,179,990
Questex, LLC	09/09/2024	Media		6.75	%		3M L+575			22,050,000		21,733,659		20,286,000
Questex, LLC (Revolver)	09/09/2024	Media		6.75	%		3M L+575			1,795,213		1,795,213		1,651,596
Questex, LLC (Revolver) ⁽⁷⁾	09/09/2024	Media		—				—		1,795,213		—		(143,617	)
Radius Aerospace, Inc. (Revolver)	03/31/2025	Aerospace and Defense		6.75	%		3M L+575			1,336,285		1,336,285		1,298,602
Radius Aerospace, Inc. (Revolver) ⁽⁷⁾	03/31/2025	Aerospace and Defense		—				—		890,857		—		(25,122	)
Research Horizons, LLC	06/28/2022	Media		7.25	%		1M L+625			29,546,453		29,334,375		28,364,595
Research Now Group, Inc. and Survey Sampling International LLC	12/20/2024	Business Services		6.50	%		3M L+550			2,913,731		2,913,731		2,752,019
Riverpoint Medical, LLC (Revolver) ⁽⁷⁾	06/20/2025	Healthcare, Education and Childcare		—				—		363,636		—		(12,764	)
Riverside Assessments, LLC	03/10/2025	Education		6.75	%		3M L+575			15,671,250		15,389,332		14,848,509
Sargent & Greenleaf Inc. (Revolver) ⁽⁷⁾	12/20/2024	Electronics		—				—		597,943		—		(10,763	)
Sales Benchmark Index LLC ⁽⁷⁾	07/07/2021	Business Services		—				—		1,829,268		—		(43,902	)
Sales Benchmark Index LLC (Revolver) ⁽⁷⁾	01/03/2025	Business Services		—				—		731,707		—		(17,561	)
Schlesinger Global, Inc.	07/14/2025	Business Services		7.00	%		3M L+600			516,273		510,389		478,844
Schlesinger Global, Inc. (Revolver)	07/14/2025	Business Services		7.00	%		3M L+600			15,759		15,759		14,617
Schlesinger Global, Inc. (Revolver) ⁽⁷⁾	07/14/2025	Business Services		—				—		22,281		—		(1,615	)
Signature Systems Holding Company (Revolver)	05/03/2024	Chemicals, Plastics and Rubber		7.50	%		3M L+650			1,129,032		1,129,032		1,092,339
Signature Systems Holding Company (Revolver)⁽⁷⁾	05/03/2024	Chemicals, Plastics and Rubber		—				—		887,097		—		(28,831	)
Solutionreach, Inc. (Revolver)	01/17/2024	Communications		6.75	%		3M L+575			1,248,750		1,248,750		1,235,014
Solutionreach, Inc. (Revolver) ⁽⁷⁾	01/17/2024	Communications		—				—		416,250		—		(4,579	)
Spear Education, LLC	02/26/2025	Education		6.50	%		3M L+500			15,049,375		14,906,170		14,673,140
Spear Education, LLC ⁽⁷⁾	02/26/2022	Education		—				—		6,875,000		—		(171,875	)

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued)

SEPTEMBER 30, 2020

Issuer Name	Maturity / Expiration		Industry	Current Coupon				Basis Point Spread Above Index ⁽⁴⁾		Par / Shares		Cost		Fair Value ⁽³⁾
Spectacle Gary Holdings, LLC	12/23/2025		Hotels, Motels, Inns and Gaming		11.00	%		1M L+900			20,478,378	$	19,804,843	$	19,864,027
Spectacle Gary Holdings, LLC ⁽⁷⁾	12/23/2025		Hotels, Motels, Inns and Gaming		—				—		1,121,622		—		(33,649	)
TPC Canada Parent, Inc. and TPC US Parent, LLC ⁽⁸^),(¹¹⁾	11/24/2025		Food		6.25	%		3M L+525			1,789,156		1,789,156		1,735,482
TVC Enterprises, LLC	01/18/2024		Transportation		6.50	%		1M L+550			17,660,607		17,410,805		17,528,153
TVC Enterprises, LLC (Revolver) ⁽⁷⁾	01/18/2024		Transportation		—				—		2,702,151		—		(20,267	)
TWS Acquisition Corporation (Revolver)	06/16/2025		Education		7.25	%		1M L+625			1,137,857		1,137,857		1,115,100
TWS Acquisition Corporation (Revolver) ⁽⁷⁾	06/16/2025		Education		—				—		505,714		—		(10,114	)
Tyto Athene, LLC	08/27/2024		Aerospace and Defense		6.25	%		1M L+525			6,027,680		5,998,741		6,008,392
US Med Acquisition, Inc.	08/13/2021		Healthcare, Education and Childcare		9.00	%		1M L+800			8,301,563		8,301,563		8,218,547
Walker Edison Furniture Company LLC	09/26/2024		Home and Office Furnishings		7.25	%		3M L+625			21,515,625		21,203,376		21,515,625
Wildcat Buyerco, Inc.	02/27/2026		Electronics		6.50	%		3M L+550			9,145,221		8,970,259		9,053,770
Wildcat Buyerco, Inc. ⁽⁷⁾	02/27/2022		Electronics		—				—		2,573,529		—		3,217
Wildcat Buyerco, Inc. (Revolver) ⁽⁷⁾	02/27/2026		Electronics		—				—		551,471		—		(10,037	)
Total First Lien Secured Debt													412,081,391		402,168,282
Second Lien Secured Debt—32.0%
Confie Seguros Holding Co.	10/31/2025		Insurance		8.66	%		3M L+850			14,500,000		14,281,633		13,920,000
DecoPac, Inc.	03/31/2025		Beverage, Food and Tobacco		9.25	%		3M L+825			19,627,143		19,382,758		19,627,143
Halo Buyer, Inc.	07/06/2026		Consumer Products		9.25	%		1M L+825			32,500,000		32,062,567		31,460,000
Infogroup, Inc.	04/03/2024		Other Media		10.25	%		3M L+925			20,400,000		20,157,649		20,145,000
MailSouth, Inc.	10/23/2024		Printing and Publishing		—		⁽⁶⁾		—		36,828,975		36,224,201		18,782,777
MBS Holdings, Inc.	01/02/2024		Telecommunications		9.59	%		1M L+850			19,623,649		19,359,314		19,329,294
VT Topco, Inc.	08/24/2026		Business Services		7.15	%		3M L+700			10,000,000		9,956,408		9,800,000
Winter Park Intermediate, Inc.	04/06/2026		Auto Sector		8.65	%		1M L+850			35,300,000		34,816,687		35,300,000
Total Second Lien Secured Debt													186,241,217		168,364,214
Subordinated Debt/Corporate Notes—9.6%
Blackhawk Industrial Distribution, Inc.	03/17/2025		Distribution		12.00	%			—		14,051,843		13,842,572		13,665,417
					(PIK 2.00	%)
Cascade Environmental LLC	12/30/2023		Environmental Services		13.00	%			—		37,371,131		36,938,019		36,903,992
					(PIK 13.00	%)
Total Subordinated Debt/Corporate Notes													50,780,591		50,569,409
Preferred Equity/Partnership Interests—4.1% ⁽⁶⁾
AH Holdings, Inc.		—	Healthcare, Education and Childcare		6.00	%			—		211		500,000		167,083
Cascade Environmental LLC		—	Environmental Services		16.00	%					178,304		17,607,478		17,652,053
Condor Holdings Limited ^{(8), (11)}		—	Business Services		—				—		556,000		64,277		71,233
Condor Top Holdco Limited ^{(8), (11)}		—	Business Services		—				—		556,000		491,723		1,308,363
MeritDirect Holdings, LP ⁽⁹⁾		—	Media		—				—		540		540,000		357,199
NXOF Holdings, Inc. (Tyto Athene, LLC)		—	Aerospace and Defense		—				—		107		106,823		129,098
Signature CR Intermediate Holdco, Inc.		—	Chemicals, Plastics and Rubber		12.00	%			—		1,347		1,346,530		1,409,711
TPC Holding Company, LP ⁽⁸^),(¹¹⁾		—	Food		—				—		219		219,010		237,288
Total Preferred Equity/Partnership Interests													20,875,841		21,332,028
Common Equity/Partnership Interests/Warrants—17.7% ⁽⁶⁾
Affinion Group Holdings, Inc. (Warrants)	04/10/2024		Consumer Products		—				—		77,190		2,126,399		—
AG Investco LP ⁽⁹⁾		—	Business Services		—				—		805,164		805,164		1,002,599
AG Investco LP ^{(7), (9)}		—	Business Services		—				—		194,836		—		—
AH Holdings, Inc. (Warrants)	03/23/2021		Healthcare, Education and Childcare		—				—		753		—		—
Altamira Intermediate Company II, Inc.		—	Aerospace and Defense		—				—		125,000		125,000		81,148
ASP LCG Holdings, Inc. (Warrants)	05/05/2026		Education		—				—		933		586,975		2,236,540
Cascade Environmental LLC ⁽⁹⁾		—	Environmental Services		—				—		33,901		2,852,080		696,346
CI (Allied) Investment Holdings, LLC		—	Business Services		—				—		120,962		1,243,217		—
(PRA Events, Inc.) ⁽⁹⁾
CI (Summit) Investment Holdings LLC		—	Buildings and Real Estate		—				—		122,870		1,270,646		1,647,095
(SFP Holdings, Inc.)
Cowboy Parent LLC		—	Distribution		—				—		22,500		2,250,000		1,165,785
(Blackhawk Industrial Distribution, Inc.)
DecoPac Holdings Inc.		—	Beverage, Food and Tobacco		—				—		3,449		3,448,658		5,072,041
ECM Investors, LLC ⁽⁹⁾		—	Electronics								167,537		167,537		254,307
eCommission Holding Corporation ⁽¹¹⁾		—	Financial Services		—				—		80		1,004,625		1,029,685
Faraday Holdings, LLC		—	Building Materials		—				—		4,277		217,635		1,408,259
Gauge Lash Coinvest LLC		—	Consumer Products		—				—		889,376		1,053,800		1,565,301
Gauge Schlesinger Coinvest, LLC		—	Business Services		—				—		9		8,896		8,662
Gauge TVC Coinvest, LLC		—	Transportation		—				—		810,645		810,645		999,520
(TVC Enterprises, LLC)
GCOM InvestCo LP ⁽⁷⁾		—	Business Services		—				—		111,574		—		—
Go Dawgs Capital III, LP		—	Building Materials		—				—		675,325		675,325		675,325
(American Insulated Glass, LLC) ⁽⁹⁾
Green Veracity Holdings, LP - Class A		—	Business Services		—				—		15,000		1,500,000		2,886,104
(VT Topco, Inc.)
Infogroup Parent Holdings, Inc.		—	Other Media		—				—		181,495		2,040,000		2,522,594
ITC Rumba, LLC (Cano Health, LLC) ⁽⁹⁾		—	Healthcare, Education and Childcare		—				—		375,675		4,317,307		18,761,506
JWC-WE Holdings, L.P.		—	Home and Office Furnishings		—				—		1,906,433		1,906,433		12,010,531
(Walker Edison Furniture Company LLC) ⁽⁹⁾
Kadmon Holdings, Inc. ⁽⁵⁾		—	Healthcare, Education and Childcare		—				—		252,014		2,265,639		987,895

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued)

SEPTEMBER 30, 2020

Issuer Name	Maturity / Expiration		Industry	Current Coupon			Basis Point Spread Above Index ⁽⁴⁾		Par / Shares		Cost		Fair Value ⁽³⁾
Kentucky Racing Holdco, LLC (Warrants)		—	Hotels, Motels, Inns and Gaming		—			—		161,252	$	—	$	417,910
Lariat ecoserv Co-Invest Holdings, LLC ⁽⁹⁾		—	Environmental Services		—			—		363,656		363,656		593,924
Lightspeed Investment Holdco LLC		—	Healthcare, Education and Childcare		—			—		273,143		273,143		313,596
MeritDirect Holdings, LP ⁽⁹⁾		—	Media		—			—		540		—		—
NXOF Holdings, Inc.		—	Aerospace and Defense		—			—		2,180		2,180		5,432
(Tyto Athene, LLC)
OceanSound Discovery Equity, LP		—	Aerospace and Defense		—			—		98,286		982,857		987,611
(Holdco Sands Intermediate, LLC) ⁽⁹⁾
QuantiTech InvestCo LP ⁽⁹⁾		—	Aerospace and Defense		—			—		70,000		70,000		103,995
QuantiTech InvestCo LP ^{(7), (9)}		—	Aerospace and Defense		—			—		96,667		—		—
SBI Holdings Investments LLC		—	Business Services		—			—		36,585		365,854		259,298
(Sales Benchmark Index LLC)
Signature CR Intermediate Holdco, Inc.		—	Chemicals, Plastics and Rubber		—			—		71		70,870		—
SSC Dominion Holdings, LLC		—	Electronics		—			—		1,500		1,500,000		1,749,600
Class A (US Dominion, Inc.)
SSC Dominion Holdings, LLC		—	Electronics		—			—		1,500		—		4,756,165
Class B (US Dominion, Inc.)
TPC Holding Company, LP^{(8). (11)}		—	Food		—			—		11,527		11,527		56,482
U.S. Well Services, Inc. - Class A ^{(5), (11)}		—	Oil and Gas		—			—		1,261,201		3,021,880		341,029
WBB Equity, LLC		—	Aerospace and Defense		—			—		628,571		628,571		2,753,143
(Whitney, Bradley & Brown, Inc.) ⁽⁹⁾
Wheel Pros Holdings, L.P.		—	Auto Sector		—			—		3,778,704		4,450,000		23,022,380
(Winter Park Intermediate, Inc.)
Wildcat Parent, LP (Wildcat Buyerco, Inc.)		—	Electronics		—			—		2,314		231,400		254,847
ZS Juniper L.P.		—	Personal, Food and Miscellaneous Services		—			—		1,056		1,056,250		2,614,078
(Juniper Landscaping of Florida, LLC) ⁽⁹⁾
Total Common Equity/Partnership Interests/Warrants												43,704,169		93,240,733
Total Investments in Non-Controlled, Non-Affiliated Portfolio Companies												713,683,209		735,674,666
Investments in Non-Controlled, Affiliated Portfolio Companies—5.3% ^{(1), (2)}
Preferred Equity/Partnership Interests—5.1% ⁽⁶⁾
ETX Energy, LLC⁽⁹⁾		—	Oil and Gas		—			—		61,732		6,173,200		5,055,851
MidOcean JF Holdings Corp.		—	Distribution		—			—		153,922		15,392,189		21,795,244
Total Preferred Equity/Partnership Interests												21,565,389		26,851,095
Common Equity/Partnership Interests/Warrants—0.2% ⁽⁶⁾
ETX Energy, LLC ⁽⁹⁾		—	Oil and Gas		—			—		1,658,389		29,711,576		—
ETX Energy Management Company, LLC		—	Oil and Gas		—			—		1,754,104		1,562,020		—
MidOcean JF Holdings Corp.		—	Distribution		—			—		65,933		24,789,935		902,798
Total Common Equity/Partnership Interests/Warrants												56,063,531		902,798
Total Investments in Non-Controlled, Affiliated Portfolio Companies												77,628,920		27,753,893
Investments in Controlled, Affiliated Portfolio Companies—60.6% ^(1), (2)
First Lien Secured Debt—7.0%
AKW Holdings Limited ^{(8), (10), (11)}	03/13/2024		Healthcare, Education and Childcare		6.50	%	3M L+600		£	28,500,000		39,682,375		36,844,800
Total First Lien Secured Debt												39,682,375		36,844,800
Second Lien Secured Debt—10.0%
PT Network Intermediate Holdings, LLC	11/30/2024		Healthcare, Education and Childcare		11.00	%	3M L+1,000			52,479,266		52,094,291		52,479,266
					(PIK 11.00	%)
Total Second Lien Secured Debt												52,094,291		52,479,266
Subordinated Debt—12.0%
PennantPark Senior Loan Fund, LLC ⁽¹¹⁾	07/31/2027		Financial Services		9.00	%	3M L+800			63,000,000		63,000,000		63,000,000
Total Subordinated Debt												63,000,000		63,000,000
Preferred Equity—2.3% ⁽⁶⁾
CI (PTN) Investment Holdings II, LLC		—	Healthcare, Education and Childcare		—			—		36,450		546,750		—
(PT Network, LLC) ⁽⁹⁾
PT Network Intermediate Holdings, LLC ⁽⁹⁾			Healthcare, Education and Childcare		11.00	%	3M L+1,000			833		10,725,000		12,215,888
Total Preferred Equity												11,271,750		12,215,888
Common Equity—29.3% ⁽⁶⁾
AKW Holdings Limited ^{(8), (10), (11)}		—	Healthcare, Education and Childcare		—			—	£	950		132,497		927,315
CI (PTN) Investment Holdings II, LLC		—	Healthcare, Education and Childcare		—			—		333,333		5,000,000		—
(PT Network, LLC) ⁽⁹⁾
PennantPark Senior Loan Fund, LLC ⁽¹¹⁾		—	Financial Services		—			—		33,221,176		33,221,176		36,262,577
PT Network Intermediate Holdings, LLC ⁽⁹⁾			Healthcare, Education and Childcare		—			—		621		7,150,000		26,689,495
RAM Energy Holdings LLC		—	Energy and Utilities		—			—		180,805		162,708,073		89,923,518
Total Common Equity												208,211,746		153,802,905
Total Investments in Controlled, Affiliated Portfolio Companies												374,260,162		318,342,859
Total Investments—205.8%												1,165,572,291		1,081,771,418
Cash and Cash Equivalents—4.9%
BlackRock Federal FD Institutional 30												2,277,244		2,277,244
BNY Mellon Cash Reserve and Cash												23,523,843		23,528,758
Total Cash and Cash Equivalents												25,801,087		25,806,002
Total Investments and Cash Equivalents—210.7%											$	1,191,373,378	$	1,107,577,420
Liabilities in Excess of Other Assets—(110.7%)														(581,868,568	)
Net Assets—100.0%													$	525,708,852

(1)

(2)

(3)	Valued based on our accounting policy (See Note 2).

(4)

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(5)	The security was not valued using significant unobservable inputs. The value of all other securities was determined using significant unobservable inputs (See Note 5).

(6)	Non-income producing securities.

(7)	Represents the purchase of a security with delayed settlement or a revolving line of credit that is currently an unfunded investment. This security does not earn a basis point spread above an index while it is unfunded.

(8)	Non-U.S. company or principal place of business outside the United States.

(9)	Investment is held through our Taxable Subsidiaries (See Note 1).

(10)	Par / Shares amount is denominated in British Pounds (£) as denoted.

(11)

The investment is treated as a non-qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, we may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of our total assets. As of September 30, 2020, qualifying assets represent 87% of the Company’s total assets and non-qualifying assets represent 13% of the Company’s total assets.

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2021

(Unaudited)

1. ORGANIZATION

PennantPark Investment Corporation was organized as a Maryland corporation in January 2007. We are a closed-end, externally managed, non-diversified investment company that has elected to be treated as a BDC under the 1940 Act. Our investment objectives are to generate both current income and capital appreciation while seeking to preserve capital through debt and equity investments. We invest primarily in U.S. middle-market companies in the form of first lien secured debt, second lien secured debt, and subordinated debt and, to a lesser extent, equity investments. On April 24, 2007, we closed our initial public offering and our common stock trades on the Nasdaq Global Select Market under the symbol “PNNT.”

We have entered into an investment management agreement, or the Investment Management Agreement, with the Investment Adviser, an external adviser that manages our day-to-day operations. PennantPark Investment, through the Investment Adviser, manages the day-to-day operations of, and provides investment advisory services to, SBIC II under a separate investment management agreement. We have also entered into an administration agreement, or the Administration Agreement, with the Administrator, which provides the administrative services necessary for us to operate. PennantPark Investment, through the Administrator, also provides similar services to SBIC II under a separate administration agreement. See Note 3.

SBIC II, our wholly owned subsidiary, was organized as a Delaware limited partnership in 2012. SBIC II received a license from the SBA to operate as a SBIC under Section 301(c) of the 1958 Act. SBIC II’s objectives are to generate both current income and capital appreciation through debt and equity investments generally by investing with us in SBA-eligible businesses that meet the investment selection criteria used by PennantPark Investment.

Funding I, a wholly-owned subsidiary and a special purpose entity of the Company prior to July 31, 2020, was organized in Delaware as a limited liability company in February 2019. We formed Funding I in order to establish the BNP Credit Facility. The Investment Adviser serves as the servicer to Funding I and, prior to deconsolidation, had irrevocably directed that the management fee owed to it with respect to such services be paid to us so long as the Investment Adviser remains the servicer. This arrangement did not increase our consolidated management fee. The BNP Credit Facility allows Funding I to borrow up to $275 million at LIBOR (or an alternative risk-free floating interest rate index) plus 260 basis points during the reinvestment period. The BNP Credit Facility is secured by all of the assets held by Funding I. Funding I is no longer a subsidiary of PennantPark Investment as result of the joint venture described below.

On July 31, 2020, we and certain entities and managed accounts of the private credit investment manager of Pantheon Ventures (UK) LLP, or Pantheon, entered into a limited liability company agreement to co-manage PSLF, a newly-formed unconsolidated joint venture. In connection with this transaction, we contributed in-kind our formerly wholly-owned subsidiary, Funding I. As a result of this transaction, Funding I became a wholly-owned subsidiary of PSLF and has been deconsolidated from our financial statements. PSLF invests primarily in middle-market and other corporate debt securities consistent with our strategy. PSLF was formed as a Delaware limited liability company. See Note 4.

We have formed and expect to continue to form certain Taxable Subsidiaries, which are subject to tax as corporations. These Taxable Subsidiaries allow us to hold equity securities of certain portfolio companies treated as pass-through entities for U.S. federal income tax purposes while facilitating our ability to qualify as a RIC under the Code.

We are operated by a person who has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act and, therefore, is not subject to registration or regulation as a commodity pool operator under the Commodity Exchange Act.

2. SIGNIFICANT ACCOUNTING POLICIES

The preparation of our Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles, or GAAP, requires management to make estimates and assumptions that affect the reported amount of our assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of income and expenses during the reported periods. In the opinion of management, all adjustments, which are of a normal recurring nature, considered necessary for the fair presentation of financial statements have been included. Changes in the economic and regulatory environment, financial markets, the credit worthiness of our portfolio companies, the global outbreak of the novel coronavirus (“COVID-19”) and any other parameters used in determining these estimates and assumptions could cause actual results to differ from such estimates and assumptions. We may reclassify certain prior period amounts to conform to the current period presentation. We have eliminated all intercompany balances and transactions. References to the Financial Accounting Standards Board’s, or FASB’s, Accounting Standards Codification, as amended, or ASC, serve as a single source of accounting literature. Subsequent events are evaluated and disclosed as appropriate for events occurring through the date the Consolidated Financial Statements are issued.

Our Consolidated Financial Statements are prepared in accordance with GAAP, consistent with ASC Topic 946, Financial Services – Investment Companies, and pursuant to the requirements for reporting on Form 10-K/Q and Articles 6, 10 and 12 of Regulation S-X, as appropriate. In accordance with Article 6-09 of Regulation S-X, we have provided a Consolidated Statement of Changes in Net Assets in lieu of a Consolidated Statement of Changes in Stockholders’ Equity.

Our significant accounting policies consistently applied are as follows:

(a)

Investment Valuations

We expect that there may not be readily available market values for many of the investments which are or will be in our portfolio, and we value such investments at fair value as determined in good faith by or under the direction of our board of directors using a documented valuation policy and a consistently applied valuation process, as described in this Report. With respect to investments for which there is no readily available market value, the factors that our board of directors may take into account in pricing our investments at fair value include, as relevant, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, comparison to publicly traded securities and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we consider the pricing indicated by the external event to corroborate or revise our valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the price used in an actual transaction may be different than our valuation and the difference may be material. See Note 5.

Our portfolio generally consists of illiquid securities, including debt and equity investments. With respect to investments for which market quotations are not readily available, or for which market quotations are deemed not reflective of the fair value, our board of directors undertakes a multi-step valuation process each quarter, as described below:

(1)

Our quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals of the Investment Adviser responsible for the portfolio investment;

(2)

Preliminary valuation conclusions are then documented and discussed with the management of the Investment Adviser;

(3)

Our board of directors also engages independent valuation firms to conduct independent appraisals of our investments for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment. The independent valuation firms review management’s

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

MARCH 31, 2021

(Unaudited)

preliminary valuations in light of their own independent assessment and also in light of any market quotations obtained from an independent pricing service, broker, dealer or market maker;

(4)

The audit committee of our board of directors reviews the preliminary valuations of the Investment Adviser and those of the independent valuation firms on a quarterly basis, periodically assesses the valuation methodologies of the independent valuation firms, and responds to and supplements the valuation recommendations of the independent valuation firms to reflect any comments; and

(5)

Our board of directors discusses these valuations and determines the fair value of each investment in our portfolio in good faith, based on the input of our Investment Adviser, the respective independent valuation firms and the audit committee.

Our board of directors generally uses market quotations to assess the value of our investments for which market quotations are readily available. We obtain these market values from independent pricing services or at the bid prices obtained from at least two brokers or dealers, if available, or otherwise from a principal market maker or a primary market dealer. The Investment Adviser assesses the source and reliability of bids from brokers or dealers. If our board of directors has a bona fide reason to believe any such market quote does not reflect the fair value of an investment, it may independently value such investments by using the valuation procedure that it uses with respect to assets for which market quotations are not readily available.

(b)

Security Transactions, Revenue Recognition, and Realized/Unrealized Gains or Losses

Security transactions are recorded on a trade-date basis. We measure realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, using the specific identification method, without regard to unrealized appreciation or depreciation previously recognized, but considering prepayment penalties. Net change in unrealized appreciation or depreciation reflects, as applicable, the change in the fair values of our portfolio investments and the Credit Facilities during the reporting period, including the reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.

We record interest income on an accrual basis to the extent that we expect to collect such amounts. For loans and debt investments with contractual PIK interest, which represents interest accrued and added to the loan balance that generally becomes due at maturity, we will generally not accrue PIK interest when the portfolio company valuation indicates that such PIK interest is not collectable. We do not accrue as a receivable interest on loans and debt investments if we have reason to doubt our ability to collect such interest. Loan origination fees, original issue discount, or OID, market discount or premium and deferred financing costs on liabilities, which we do not fair value, are capitalized and then accreted or amortized using the effective interest method as interest income or, in the case of deferred financing costs, as interest expense. We record prepayment penalties earned on loans and debt investments as income. Dividend income, if any, is recognized on an accrual basis on the ex-dividend date to the extent that we expect to collect such amounts. From time to time, the Company receives certain fees from portfolio companies, which are non-recurring in nature. Such fees include loan prepayment penalties, structuring fees and amendment fees, and are recorded as other investment income when earned.

Loans are placed on non-accrual status when principal or interest payments are past due 30 days or more and/or if there is reasonable doubt that principal or interest will be collected. Accrued interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current. As of March 31, 2021, we did not have any portfolio companies on non-accrual. As of September 30, 2020, we had two portfolio companies on non-accrual, representing 4.9% and 3.4% of our overall portfolio on a cost and fair value basis, respectively.

(c)

Income Taxes

We have complied with the requirements of Subchapter M of the Code and have qualified to be treated as a RIC for federal income tax purposes. In this regard, we account for income taxes using the asset and liability method prescribed by ASC Topic 740, Income Taxes, or ASC 740. Under this method, income taxes are provided for amounts currently payable and for amounts deferred as tax assets and liabilities based on differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. Based upon our qualification and election to be treated as a RIC for U.S. federal income tax purposes, we typically do not incur material U.S. federal income taxes. However, we may choose to retain a portion of our calendar year income, which may result in the imposition of a U.S. federal excise tax. Additionally, certain of the Company’s consolidated subsidiaries are subject to U.S. federal and state income taxes. For the three and six months ended March 31, 2021, we recorded a provision for taxes of $0.2 million and $0.3 million (approximately one-half of which was for U.S. federal excise tax and the remainder for U.S. federal and state income taxes and franchise taxes related to the Taxable Subsidiaries), respectively. For the three and six months ended March 31, 2020, we recorded a provision for taxes of $0.3 million and $0.6 million (approximately one-half of which was for U.S. federal excise tax and the remainder for U.S. federal and state income taxes and franchise taxes related to the Taxable Subsidiaries), respectively.

We recognize the effect of a tax position in our Consolidated Financial Statements in accordance with ASC 740 when it is more likely than not, based on the technical merits, that the position will be sustained upon examination by the applicable tax authority. Tax positions not considered to satisfy the “more-likely-than-not” threshold would be recorded as a tax expense or benefit. Penalties or interest, if applicable, that may be assessed relating to income taxes would be classified as other operating expenses in the financial statements. There were no tax accruals relating to uncertain tax positions and no amounts accrued for any related interest or penalties with respect to the periods presented herein. The Company’s determinations regarding ASC 740 may be subject to review and adjustment at a later date based upon factors including, but not limited to, an on-going analysis of tax laws, regulations and interpretations thereof. Although the Company files both U.S. federal and state income tax returns, the Company’s major tax jurisdiction is federal.

Because U.S. federal income tax regulations differ from GAAP, distributions characterized in accordance with tax regulations may differ from net investment income and net realized gains recognized for financial reporting purposes. Differences between tax regulations and GAAP may be permanent or temporary. Permanent differences are reclassified among capital accounts in the Consolidated Financial Statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.

(d)

Distributions and Capital Transactions

Distributions to common stockholders are recorded on the ex-dividend date. The amount to be paid, if any, as a distribution is determined by our board of directors each quarter and is generally based upon the earnings estimated by management. Net realized capital gains, if any, are distributed at least annually. The tax attributes for distributions will generally include ordinary income and capital gains, but may also include certain tax-qualified dividends and/or a return of capital.

Capital transactions, in connection with our dividend reinvestment plan or through offerings of our common stock, are recorded when issued and offering costs are charged as a reduction of capital upon issuance of our common stock.

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

MARCH 31, 2021

(Unaudited)

(e)

Foreign Currency Translation

Our books and records are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis:

Fair value of investment securities, other assets and liabilities – at the exchange rates prevailing at the end of the applicable period; and

Purchases and sales of investment securities, income and expenses – at the exchange rates prevailing on the respective dates of such transactions.

Although net assets and fair values are presented based on the applicable foreign exchange rates described above, we do not isolate that portion of the results of operations due to changes in foreign exchange rates on investments, other assets and debt from the fluctuations arising from changes in fair values of investments and liabilities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments and liabilities.

Foreign security and currency translations may involve certain considerations and risks not typically associated with investing in U.S. companies and U.S. government securities. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices to be more volatile than those of comparable U.S. companies or U.S. government securities.

(f)

Consolidation

As permitted under Regulation S-X and as explained by ASC paragraph 946-810-45-3, PennantPark Investment will generally not consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to us. Accordingly, we have consolidated the results of SBIC II and our Taxable Subsidiaries in our Consolidated Financial Statements. We do not consolidate our investment in PSLF. See further description of our investment in PSLF in Note 4.

(g)

Asset Transfers and Servicing

Asset transfers that do not meet ASC Topic 860, Transfers and Servicing, requirements for sale accounting treatment are reflected in the Consolidated Statements of Assets and Liabilities and the Consolidated Schedules of Investments as investments. The creditors of Funding I have received a security interest in all its assets and such assets are not intended to be available to the creditors of PennantPark Investment or any of its affiliates.

3. AGREEMENTS AND RELATED PARTY TRANSACTIONS

The Investment Management Agreement with the Investment Adviser was reapproved by our board of directors, including a majority of our directors who are not interested persons of us or the Investment Adviser, in February 2021. Under the Investment Management Agreement, the Investment Adviser, subject to the overall supervision of our board of directors, manages the day-to-day operations of, and provides investment advisory services to, us. The Investment Adviser serves as the servicer to Funding I and, prior to deconsolidation, had irrevocably directed that the management fee owed to it with respect to such services be paid to the Company so long as the Investment Adviser remains the servicer. SBIC II’s investment management agreement does not affect the management or incentive fees that we pay to the Investment Adviser on a consolidated basis. For providing these services, the Investment Adviser receives a fee from us, consisting of two components— a base management fee and an incentive fee or, collectively, Management Fees.

The base management fee is calculated at an annual rate of 1.50% of our “average adjusted gross assets,” which equals our gross assets (exclusive of U.S. Treasury Bills, temporary draws under any credit facility, cash and cash equivalents, repurchase agreements or other balance sheet transactions undertaken at the end of a fiscal quarter for purposes of preserving investment flexibility for the next quarter and unfunded commitments, if any) and is payable quarterly in arrears. In addition, on November 13, 2018, in connection with our board of directors’ approval of the application of the modified asset coverage requirements under the 1940 Act to the Company, our board of directors also approved an amendment to the Investment Management Agreement reducing the Investment Adviser’s annual base management fee from 1.50% to 1.00% on gross assets that exceed 200% of the Company’s total net assets as of the immediately preceding quarter-end. This amendment became effective on February 5, 2019 with the amendment and restatement of the Investment Management Agreement on April 12, 2019. The base management fee is calculated based on the average adjusted gross assets at the end of the two most recently completed calendar quarters, and appropriately adjusted for any share issuances or repurchases during the current calendar quarter. For example, if we sold shares on the 45th day of a quarter and did not use the proceeds from the sale to repay outstanding indebtedness, our gross assets for such quarter would give effect to the net proceeds of the issuance for only 45 days of the quarter during which the additional shares were outstanding. For the three and six months ended March 31, 2021, the Investment Adviser earned a base management fee of $4.3 million and $8.4 million, respectively, from us. For the three and six months ended March 31, 2020, the Investment Adviser earned a base management fee of $4.9 million and $9.6 million, respectively, from us.

The incentive fee has two parts, as follows:

One part is calculated and payable quarterly in arrears based on our Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter. For this purpose, Pre-Incentive Fee Net Investment Income means interest income, dividend income and any other income, including any other fees (other than fees for providing managerial assistance), such as amendment, commitment, origination, prepayment penalties, structuring, diligence and consulting fees or other fees received from portfolio companies, accrued during the calendar quarter, minus our operating expenses for the quarter (including the base management fee, any expenses payable under the Administration Agreement and any interest expense or amendment fees under any credit facility and distribution paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as OID, debt instruments with PIK interest and zero coupon securities), accrued income not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, computed net of all realized capital losses or unrealized capital appreciation or depreciation. Pre-Incentive Fee Net Investment Income, expressed as a percentage of the value of our net assets at the end of the immediately preceding calendar quarter, is compared to the hurdle rate of 1.75% per quarter (7.00% annualized). We pay the Investment Adviser an incentive fee with respect to our Pre- Incentive Fee Net Investment Income in each calendar quarter as follows: (1) no incentive fee in any calendar quarter in which our Pre-Incentive Fee Net Investment Income does not exceed the hurdle rate of 1.75%, (2) 100% of our Pre-Incentive Fee Net Investment Income with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle rate but is less than 2.1212% in any calendar quarter (8.4848% annualized), and (3) 17.5% of the amount of our Pre-Incentive Fee Net Investment Income, if any, that exceeds 2.1212% in any calendar quarter. These calculations are pro-rated for any share issuances or repurchases during the relevant quarter, if applicable.

Beginning April 1, 2020 and through March 31, 2021, the Investment Adviser has voluntarily agreed, in consultation with our board of directors, to irrevocably waive the performance-based incentive fees. For the three and six months ended March 31, 2021, the Investment Adviser did not earn an incentive fee on net investment income from us. For the three and six months ended March 31, 2020, the Investment Adviser earned $1.9 million and $2.7 million, respectively, in incentive fees on net investment income from us.

The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Management Agreement, as of the termination date) and equals 17.5% of our realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

MARCH 31, 2021

(Unaudited)

realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees. For each of the three and six months ended March 31, 2021 and 2020, the Investment Adviser did not accrue an incentive fee on capital gains as calculated under the Investment Management Agreement (as described above).

Under GAAP, we are required to accrue a capital gains incentive fee based upon net realized capital gains and net unrealized capital appreciation and depreciation on investments held at the end of each period. In calculating the capital gains incentive fee accrual, we considered the cumulative aggregate unrealized capital appreciation in the calculation, as a capital gains incentive fee would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Management Agreement. This accrual is calculated using the aggregate cumulative realized capital gains and losses and cumulative unrealized capital appreciation or depreciation. If such amount is positive at the end of a period, then we record a capital gains incentive fee equal to 17.5% of such amount, less the aggregate amount of actual capital gains related to incentive fees paid in all prior years. If such amount is negative, then there is no accrual for such year. There can be no assurance that such unrealized capital appreciation will be realized in the future. For each of the three and six months ended March 31, 2021 and 2020, the Investment Adviser did not accrue an incentive fee on capital gains as calculated under GAAP.

The Administration Agreement with the Administrator was reapproved by our board of directors, including a majority of our directors who are not interested persons of us, in February 2021. Under the Administration Agreement, the Administrator provides administrative services and office facilities to us. The Administrator provides similar services to SBIC II under its administration agreement with PennantPark Investment. For providing these services, facilities and personnel, we have agreed to reimburse the Administrator for its allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including rent and our allocable portion of the costs of compensation and related expenses of our Chief Compliance Officer, Chief Financial Officer and their respective staffs. The Administrator also offers, on our behalf, significant managerial assistance to portfolio companies to which we are required to offer such assistance. Reimbursement for certain of these costs is included in administrative services expenses in the Consolidated Statements of Operations. For the three and six months ended March 31, 2021, we reimbursed the Investment Adviser approximately $0.5 million and $0.7 million, respectively, including expenses the Investment Adviser incurred on behalf of the Administrator, for the services described above. For the three and six months ended March 31, 2020, we reimbursed the Investment Adviser approximately $0.5 million and $0.8 million, respectively, including expenses the Investment Adviser incurred on behalf of the Administrator, for the services described above.

There were no transactions subject to Rule 17a-7 under the 1940 Act during both the three and six months ended March 31, 2021. For the each of three and six months ended March 31, 2020, the Company purchased $15.0 million in total investments from an affiliated fund managed by our Investment Adviser in accordance with, and pursuant to, procedures adopted under Rule 17a-7 of the 1940 Act.

For the three and six months ended March 31, 2021, we sold $15.5 million $37.8 million in investments to PSLF at fair value, respectively, and recognized $0.1 million and $0.5 million of net realized gains, respectively.

4. INVESTMENTS

Purchases of investments, including PIK interest, for the three and six months ended March 31, 2021 totaled $78.4 million and $150.1 million, respectively. For the same periods in the prior year, purchases of investments, including PIK interest, totaled $110.3 million and $288.7 million, respectively. Sales and repayments of investments for the three and six months ended March 31, 2021 totaled $65.0 million and $167.6 million, respectively. For the same periods in the prior year, sales and repayments of investments totaled $16.4 million and $47.5 million, respectively.

Investments and cash and cash equivalents consisted of the following:

	March 31, 2021				September 30, 2020
Investment Classification	Cost		Fair Value		Cost		Fair Value
First lien	$	444,419,098	$	443,453,935	$	451,763,766	$	439,013,082
Second lien		194,171,645		194,558,646		238,335,508		220,843,480
Subordinated debt / corporate notes		53,472,154		54,007,950