8-K
BCP Investment Corp (BCIC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 8, 2025
Portman Ridge Finance Corporation
(Exact name of registrant as specified in its charter)
| Delaware | 814-00735 | 20-5951150 |
|---|---|---|
| (State or other jurisdiction<br> <br>of incorporation) | (Commission<br> <br>File Number) | (IRS Employer<br> <br>Identification No.) |
| 650 Madison Avenue, 3rd Floor<br> <br>New York, New York | 10022 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code): (212) 891-2880
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Securities registered pursuant to Section 12(b) of the Exchange Act:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange<br> <br>on which registered |
|---|---|---|
| Common Stock, par value $0.01 per share | PTMN | The NASDAQ Global Select<br> <br>Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
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. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On May 8, 2025, Portman Ridge Finance Corporation (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended March 31, 2025. A copy of the press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. Additionally, on May 9, 2025, the Company made available on its website, http://www.portmanridge.com/home, a supplemental investor presentation with respect to the earnings release. A copy of the investor presentation is being furnished as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.
The information disclosed under this Item 2.02, including Exhibits 99.1 and 99.2 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
| Item 9.01. | Financial Statements and Exhibits. |
|---|
(d) Exhibits:
| Exhibit<br> <br>Number | Description |
|---|---|
| 99.1 | Press Release, dated May 8, 2025 |
| 99.2 | Investor Presentation, dated May 9, 2025 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL Document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PORTMAN RIDGE FINANCE CORPORATION | |
|---|---|
| By: | /s/ Brandon Satoren |
| Name: | Brandon Satoren |
| Title: | Chief Financial Officer |
Date: May 9, 2025
EX-99.1
Exhibit 99.1
FOR IMMEDIATE RELEASE
Portman Ridge Finance Corporation Announces
First Quarter 2025 Financial Results
Reports Net Investment Income of $0.47 Per Share and Net Asset Value of $18.85 Per Share
Deployment of Approximately $17.5 Million and Sales and Repayments of Approximately $15.7 Million for Net Deployment of Approximately$1.8 Million
Announces Second Quarter 2025 Quarterly Base Distribution of $0.47 Per Share
Investors are Encouraged to Vote FOR the Acquisition of Logan Ridge Finance Corporation
NEW YORK, May 8, 2025 (GLOBAL NEWSWIRE) – Portman Ridge Finance Corporation (Nasdaq: PTMN) (the “Company” or “Portman Ridge”) announced today its financial results for the first quarter ended March 31, 2025.
First Quarter 2025 Highlights
| • | Total investment income for the first quarter of 2025 was $12.1 million, down from $14.4 million<br>in the fourth quarter of 2024, due to the reversal of previously accrued income after a portfolio company was placed on non-accrual status in the first quarter of 2025. |
|---|---|
| • | Core investment income^1^, excluding the impact of<br>purchase price accounting, for the first quarter of 2025 was $12.1 million, as compared to $14.4 million for the fourth quarter of 2024. |
| --- | --- |
| • | Net investment income (“NII”) for the first quarter of 2025 was $4.3 million ($0.47 per<br>share), inclusive of the reversal of $0.4 million ($0.05 per share) of previously accrued interest income on a loan that was placed on non-accrual in the first quarter of 2025, as compared to<br>$5.5 million ($0.60 per share) in the fourth quarter of 2024. |
| --- | --- |
| • | Net asset value (“NAV”), as of March 31, 2025, was $173.5 million ($18.85 per share),<br>as compared to NAV of $178.5 million ($19.41 per share) as of December 31, 2024. |
| --- | --- |
| • | Deployments of approximately $17.5 million and sales and repayments of approximately<br>$15.7 million, resulting in net deployments of approximately $1.8 million. |
| --- | --- |
| ^1^ | Core investment income represents reported total investment income as determined in accordance with U.S.<br>generally accepted accounting principles, or U.S. GAAP, less the impact of purchase discount accretion in connection with the Garrison Capital Inc. (“GARS”) and Harvest Capital Credit Corporation (“HCAP”) mergers. Portman Ridge<br>believes presenting core investment income and the related per share amount is useful and appropriate supplemental disclosure for analyzing its financial performance due to the unique circumstance giving rise to the purchase accounting adjustment.<br>However, core investment income is a non-U.S. GAAP measure and should not be considered as a replacement for total investment income and other earnings measures presented in accordance with U.S. GAAP. Instead,<br>core investment income should be reviewed only in connection with such U.S. GAAP measures in analyzing Portman Ridge’s financial performance. |
| --- | --- |
Subsequent Events
| • | On May 8, 2025, the Company declared a regular quarterly base distribution of $0.47 per share of common<br>stock. The distribution is payable on May 29, 2025, to stockholders of record at the close of business on May 19, 2025. |
|---|
Management Commentary
Ted Goldthorpe, Chief Executive Officer of Portman Ridge, **** stated, “During the first quarter we continued to execute on our disciplined investment strategy, deploying approximately $17.5 million into strong, defensively positioned portfolio companies. Concurrently, we had $15.7 million in repayments and sales, resulting in our return to net deployers of capital.
Looking ahead, the current macroeconomic backdrop shaped by shifting trade dynamics, inflation, and ever-evolving monetary policy, continues to drive uncertainty in the market. These dynamics highlight the importance of taking a long-term approach, grounded in disciplined credit selection and prudent risk management. That said, we view this as an opportunity to further differentiate through thoughtful deployment and rigorous underwriting, backed by our prudent investment strategy and experienced management team. I remain confident in our ability to drive the best outcome for shareholders.
Finally, we continue to believe in the strategic benefits the combination with Logan Ridge will provide. This merger represents a meaningful step forward for the Company, with the potential to provide increased scale, improved liquidity, and greater operational efficiency, all of which are critical to enhancing long-term shareholder value. We encourage shareholders to vote FOR the proposed merger, as recommended by the Board of Directors of both companies. We are excited about the road ahead and look forward to sharing more updates soon.”
Selected Financial Highlights
| • | Total investment income for the quarter ended March 31, 2025, was $12.1 million, of which<br>$10.3 million was attributable to interest income, inclusive of payment-in-kind income, from the Debt Securities Portfolio. This compares to total investment income<br>of $16.5 million for the quarter ended March 31, 2024, of which $14.2 million was attributable to interest income, inclusive of payment-in-kind income,<br>from the Debt Securities Portfolio. |
|---|---|
| • | Core investment income for the quarter ended March 31, 2025, excluding the impact of purchase<br>discount accretion, was $12.1 million, as compared to core investment income of $16.5 million for the quarter ended March 31, 2024. |
| --- | --- |
| • | Net investment income (“NII”) for the quarter ended March 31, 2025, was $4.3 million<br>($0.47 per share) as compared to $6.2 million ($0.67 per share) for the quarter ended March 31, 2024. |
| --- | --- |
| • | Net asset value (“NAV”) as of March 31, 2025, was $173.5 million ($18.85 per share),<br>as compared to $178.5 million ($19.41 per share) for the fourth quarter of 2024. |
| --- | --- |
| • | Deployment during the quarter was strong, with deployments of approximately $17.5 million and sales<br>and repayments of approximately $15.7 million, resulting in net deployment of approximately $1.8 million. |
| --- | --- |
| • | Investment portfolio at fair value as of March 31, 2025, was $406.4 million, comprised of 93<br>different portfolio companies. Our debt investment portfolio, excluding our investments in the CLO Funds, equities and Joint Ventures, totaled $324.8 million at fair value as of March 31, 2025, and was spread across 24 different industries<br>comprised of 72 different portfolio companies with an average par balance per entity of approximately $2.6 million. This compares to a total investment portfolio at fair value as of December 31, 2024, of $405.0 million, comprised of<br>93 different portfolio companies. Our debt investment portfolio, excluding our investments in the CLO Funds, equities and Joint Ventures, totaled $320.7 million at fair value as of December 31, 2024, spread across 26 different industries<br>and comprised of 71 different portfolio companies, with an average par balance per entity of approximately $2.5 million. |
| --- | --- |
| • | Debt investments on non-accrual, as of March 31, 2025, were<br>six, representing 2.6% and 4.7% of the Company’s investment portfolio at fair value and amortized cost, respectively. This compares to six debt investments representing 1.7% and 3.4% of the Company’s investment portfolio at fair value and<br>amortized cost, respectively, as of December 31, 2024. |
| --- | --- |
| • | Weighted average annualized yield was approximately 11.0% (excluding income from<br>non-accruals and collateralized loan obligations) as of March 31, 2025. |
| --- | --- |
| • | Par value of outstanding borrowings, as of March 31, 2025, was $255.4 million, as compared to<br>$267.5 million as of December 31, 2024, with an asset coverage ratio of total assets to total borrowings of 168% and 167%, respectively. On a net basis, leverage as of March 31, 2025, was 1.3x^2^ compared to 1.3x^2^ as of December 31, 2024.<br> |
| --- | --- |
| ^2^ | Net leverage is calculated as the ratio between (A) debt, excluding unamortized debt issuance costs, less<br>available cash and cash equivalents, and restricted cash and (B) NAV. Portman Ridge believes presenting a net leverage ratio is useful and appropriate supplemental disclosure because it reflects the Company’s financial condition net of<br>$23.5 million and $40.0 million of cash and cash equivalents and restricted cash as of March 31, 2025, and December 31, 2024, respectively. However, the net leverage ratio is a non-U.S.<br>GAAP measure and should not be considered as a replacement for the regulatory asset coverage ratio and other similar information presented in accordance with U.S. GAAP. Instead, the net leverage ratio should be reviewed only in connection with such<br>U.S. GAAP measures in analyzing Portman Ridge’s financial condition. |
| --- | --- |
Results of Operations
Operating results for the three months ended March 31, 2025, and March 31, 2024, were as follows:
| For the Three Months Ended March 31, | ||||||
|---|---|---|---|---|---|---|
| ($ in thousands, except share and per share amounts) | 2025 | 2024 | ||||
| Total investment income | $ | 12,118 | $ | 16,526 | ||
| Total expenses | 7,778 | 10,300 | ||||
| Net Investment Income | **** | 4,340 | **** | **** | 6,226 | **** |
| Net realized gain (loss) on investments | (173 | ) | (2,057 | ) | ||
| Net change in unrealized gain (loss) on investments | (3,903 | ) | 71 | |||
| Tax (provision) benefit on realized and unrealized gains (losses) on investments | (346 | ) | 459 | |||
| Net realized and unrealized appreciation (depreciation) on investments, net of taxes | (4,422 | ) | (1,527 | ) | ||
| Net realized gain (loss) on extinguishment of debt | — | (213 | ) | |||
| Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (82 | ) | $ | 4,486 | **** |
| Net Increase (Decrease) In Net Assets Resulting from Operations per Common Share: | ||||||
| Basic and Diluted: | $ | (0.01 | ) | $ | 0.48 | |
| Net Investment Income Per Common Share: | ||||||
| Basic and Diluted: | $ | 0.47 | $ | 0.67 | ||
| Weighted Average Shares of Common Stock Outstanding — Basic and Diluted | 9,198,223 | 9,344,994 |
Investment Income
The composition of our investment income for the three months ended March 31, 2025, and March 31, 2024, was as follows:
| For the Three Months Ended March 31, | ||||||
|---|---|---|---|---|---|---|
| ($ in thousands) | 2025 | 2024 | ||||
| Interest income, excluding CLO income and purchase discount accretion | $ | 7,522 | $ | 12,088 | ||
| Purchase discount accretion | 16 | 73 | ||||
| PIK income | 3,061 | 2,006 | ||||
| CLO income | 78 | 555 | ||||
| JV income | 1,417 | 1,653 | ||||
| Fees and other income | 24 | 151 | ||||
| Investment Income | $ | 12,118 | $ | 16,526 | ||
| Less: Purchase discount accretion | $ | (16 | ) | $ | (73 | ) |
| Core Investment Income | $ | 12,102 | $ | 16,453 |
Fair Value of Investments
The composition of our investment portfolio as of March 31, 2025, and December 31, 2024, at cost and fair value was as follows:
| ($ in thousands) | March 31, 2025 | December 31, 2024 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Security Type | Cost/Amortized<br>Cost | Fair Value | Fair Value<br>Percentage of<br>Total Portfolio | Cost/Amortized<br>Cost | Fair Value | Fair Value<br>Percentage of<br>Total Portfolio | ||||||||
| First Lien Debt | $ | 318,953 | $ | 294,379 | 72.4 | % | $ | 311,673 | $ | 289,957 | 71.6 | % | ||
| Second Lien Debt | 35,147 | 28,724 | 7.1 | % | 34,892 | 28,996 | 7.2 | % | ||||||
| Subordinated Debt | 8,034 | 1,740 | 0.4 | % | 8,059 | 1,740 | 0.4 | % | ||||||
| Collateralized Loan Obligations | 3,800 | 4,639 | 1.1 | % | 5,318 | 5,193 | 1.3 | % | ||||||
| Joint Ventures | 65,883 | 50,491 | 12.4 | % | 66,747 | 54,153 | 13.4 | % | ||||||
| Equity | 32,098 | 26,218 | 6.5 | % | 31,921 | 24,762 | 6.1 | % | ||||||
| Asset Manager Affiliates^(1)^ | 17,791 | — | — | 17,791 | — | — | ||||||||
| Derivatives | 31 | 232 | 0.1 | % | 31 | 220 | — | |||||||
| Total | $ | 481,737 | $ | 406,423 | 100.0 | % | $ | 476,432 | $ | 405,021 | 100.0 | % | ||
| ^(1)^ | Represents the equity investment in the Asset Manager Affiliates. | |||||||||||||
| --- | --- |
Liquidity and Capital Resources
As of March 31, 2025, the Company had $255.4 million (par value) of outstanding borrowings at a current weighted average interest rate of 5.9%, of which $108.0 million par value had a fixed rate of 4.875% (Notes due 2026), and $147.4 million par value had a floating rate under the JPM Credit Facility.
As of March 31, 2025, and December 31, 2024, the fair value of investments and cash were as follows:
| ( in thousands) | |||
|---|---|---|---|
| Security Type | December 31, 2024 | ||
| Cash and Cash Equivalents | 9,233 | $ | 17,532 |
| Restricted Cash | 14,278 | 22,421 | |
| First Lien Debt | 294,379 | 289,957 | |
| Second Lien Debt | 28,724 | 28,996 | |
| Subordinated Debt | 1,740 | 1,740 | |
| Equity | 26,218 | 24,762 | |
| Collateralized Loan Obligations | 4,639 | 5,193 | |
| Asset Manager Affiliates | — | — | |
| Joint Ventures | 50,491 | 54,153 | |
| Derivatives | 232 | 220 | |
| Total | 429,934 | $ | 444,974 |
All values are in US Dollars.
As of March 31, 2025, the Company had unrestricted cash of $9.2 million and restricted cash of $14.3 million. This compares to unrestricted cash of $17.5 million and restricted cash of $22.4 million as of December 31, 2024. As of March 31, 2025, the Company had $52.6 million of available borrowing capacity under the JPM Credit Facility.
Interest Rate Risk
The Company’s investment income is affected by fluctuations in various interest rates, including SOFR and prime rates.
As of March 31, 2025, approximately 88.5% of our Debt Securities Portfolio at par value were either floating rate with a spread to an interest rate index such as SOFR or the PRIME rate. 84.2% of these floating rate loans contain floors ranging between 0.50% and 5.25%. We generally expect that future portfolio investments will predominately be floating rate investments.
In periods of rising or lowering interest rates, the cost of the portion of debt associated with the 4.875% Notes Due 2026 would remain the same, given that this debt is at a fixed rate, while the interest rate on borrowings under the JPM Credit Facility would fluctuate with changes in interest rates.
Generally, the Company would expect that an increase in the base rate index for floating rate investment assets would increase gross investment income and a decrease in the base rate index for such assets would decrease gross investment income (in either case, such increase/decrease may be limited by interest rate floors/minimums for certain investment assets).
| Impact on net investment income from<br>a change in interest rates at: | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | 1% | 2% | 3% | ||||||
| Increase in interest rate | $ | 1,619 | $ | 3,289 | $ | 4,959 | |||
| Decrease in interest rate | $ | (1,613 | ) | $ | (3,222 | ) | $ | (4,655 | ) |
Conference Call and Webcast
We will hold a conference call on Friday, May 9, 2025, at 10:00 am Eastern Time to discuss our first quarter 2025 financial results. To access the call, stockholders, prospective stockholders and analysts should dial (646) 307-1963 approximately 10 minutes prior to the start of the conference call and use the conference ID 9782758.
A replay of this conference call will be available shortly after the live call through May 16, 2025.
A live audio webcast of the conference call can be accessed via the Internet, on a listen-only basis on the Company’s website www.portmanridge.com in the Investor Relations section under Events and Presentations. The webcast can also be accessed by clicking the following link: https://edge.media-server.com/mmc/p/ovseyk3q. The online archive of the webcast will be available on the Company’s website shortly after the call.
About Portman Ridge Finance Corporation
Portman Ridge Finance Corporation (Nasdaq: PTMN) is a publicly traded, externally managed investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940. Portman Ridge’s middle market investment business originates, structures, finances and manages a portfolio of term loans, mezzanine investments and selected equity securities in middle market companies. Portman Ridge’s investment activities are managed by its investment adviser, Sierra Crest Investment Management LLC, an affiliate of BC Partners Advisors L.P.
Portman Ridge’s filings with the Securities and Exchange Commission (the “SEC”), earnings releases, press releases and other financial, operational and governance information are available on the Company’s website at www.portmanridge.com.
About BC Partners Advisors L.P. andBC Partners Credit
BC Partners is a leading international investment firm in private equity, private credit and real estate strategies. Established in 1986, BC Partners has played an active role in developing the European buyout market for three decades.
Today, BC Partners executives operate across markets as an integrated team through the firm’s offices in North America and Europe. For more information, please visit https://www.bcpartners.com/.
BC Partners Credit was launched in February 2017 and has pursued a strategy focused on identifying attractive credit opportunities in any market environment and across sectors, leveraging the deal sourcing and infrastructure made available from BC Partners.
Cautionary Statement Regarding Forward-LookingStatements
This press release contains forward-looking statements. The matters discussed in this press release, as well as in future oral and written statements by management of Portman Ridge Finance Corporation, that are forward-looking statements are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements.
Forward-looking statements relate to future events or our future financial performance and include, but are not limited to, projected financial performance, expected development of the business, plans and expectations about future investments and the future liquidity of the Company. We generally identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “outlook”, “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words. Forward-looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove to be incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements.
Important assumptions include our ability to originate new investments, and achieve certain margins and levels of profitability, the availability of additional capital, and the ability to maintain certain debt to asset ratios. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this press release should not be regarded as a representation that such plans, estimates, expectations or objectives will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, (1) uncertainty of the expected financial performance of the Company; (2) expected synergies and savings associated with merger transactions effectuated by the Company; (3) the ability of the Company and/or its adviser to implement its business strategy; (4) evolving legal, regulatory and tax regimes; (5) changes in general economic and/or industry specific conditions, including but not limited to the impact of inflation; (6) the impact of increased competition; (7) business prospects and the prospects of the Company’s portfolio companies; (8) contractual arrangements with third parties; (9) any future financings by the Company; (10) the ability of Sierra Crest Investment Management LLC to attract and retain highly talented professionals; (11) the Company’s ability to fund any unfunded commitments; (12) any future distributions by the Company; (13) changes in regional or national economic conditions and their impact on the industries in which we invest; (14) other changes in the conditions of the industries in which we invest and other factors enumerated in our filings with the SEC; (15) the successful completion of the proposed merger with Logan Ridge Finance Corporation (“LRFC”) and receipt of stockholder approval from the Company’s and LRFC’s stockholders; and (16) expectations concerning the proposed merger with LRFC, including the financial results of the combined company. The forward-looking statements should be read in conjunction with the risks and uncertainties discussed in the Company’s filings with the SEC, including the Company’s most recent Form 10-K and other SEC filings. We do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required to be reported under the rules and regulations of the SEC. Although the Company and LRFC undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that they may make directly to you or through reports that the Company and LRFC in the future may file with the SEC, including the Registration Statement and Joint Proxy Statement (in each case, as defined below), annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
Additional Information and Where to Find It
This document relates to the proposed merger of the Company and LRFC and certain related matters (the “Proposals”). In connection with the Proposals, the Company has filed a registration statement (Registration No. 333-285230) with the SEC (the “Registration Statement”) that contains a combined joint proxy statement for the Company and LRFC and a prospectus of the Company (the “Joint Proxy Statement”) and will mail the Joint Proxy Statement to its and LRFC’s respective shareholders. The Registration Statement and Joint Proxy Statement will contain important information about the Company, LRFC and the Proposals. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. SHAREHOLDERS OF THE COMPANY AND LRFC ARE URGED TO READ THE REGISTRATION STATEMENT, JOINT PROXY STATEMENT AND OTHER DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANYAMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, LRFC AND THE PROPOSALS. Investors and security holders will be able to obtain the documents filed with the SEC free of charge at the SEC’s website, http://www.sec.gov or, for documents filed by the Company, from the Company’s website at https://www.portmanridge.com, and, for documents filed by LRFC, from LRFC’s website at https://www.loganridgefinance.com.
PORTMAN RIDGE FINANCE CORPORATION
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(in thousands, except share and per share amounts)
| December 31, 2024 | |||||
| ASSETS | |||||
| Investments at fair value: | |||||
| Non-controlled/non-affiliated<br>investments (amortized cost of 365,539 and 358,153, respectively) | 333,519 | $ | 327,622 | ||
| Non-controlled affiliated investments (amortized cost of<br>67,137 and 68,858, respectively) | 61,523 | 64,384 | |||
| Controlled affiliated investments (amortized cost of 49,061 and 49,421, respectively) | 11,381 | 13,015 | |||
| Total Investments at fair value (amortized cost of 481,737 and 476,432, respectively) | 406,423 | $ | 405,021 | ||
| Cash and cash equivalents | 9,233 | 17,532 | |||
| Restricted cash | 14,278 | 22,421 | |||
| Interest receivable | 4,787 | 6,088 | |||
| Dividend receivable | 1,247 | 1,367 | |||
| Other assets | 2,812 | 1,205 | |||
| Total Assets | 438,780 | $ | 453,634 | ||
| LIABILITIES | |||||
| 4.875% Notes Due 2026 (net of deferred financing costs and original issue discount of 832 and<br>1,017, respectively) | 107,168 | $ | 106,983 | ||
| Great Lakes Portman Ridge Funding LLC Revolving Credit Facility (net of deferred financing costs<br>of 1,198 and 1,322, respectively) | 146,181 | 158,157 | |||
| Accounts payable, accrued expenses and other liabilities | 4,900 | 3,007 | |||
| Accrued interest payable | 4,634 | 3,646 | |||
| Due to affiliates | — | 635 | |||
| Management and incentive fees payable | 2,386 | 2,713 | |||
| Total Liabilities | 265,269 | $ | 275,141 | ||
| COMMITMENTS AND CONTINGENCIES | |||||
| NET ASSETS | |||||
| Common stock, par value 0.01 per share, 20,000,000 common shares authorized; 9,965,480 issued,<br>and 9,202,870 outstanding at March 31, 2025, and 9,960,785 issued, and 9,198,175 outstanding at December 31, 2024 | 92 | $ | 92 | ||
| Capital in excess of par value | 714,398 | 714,331 | |||
| Total distributable (loss) earnings | (540,979 | ) | (535,930 | ) | |
| Total Net Assets | 173,511 | $ | 178,493 | ||
| Total Liabilities and Net Assets | 438,780 | $ | 453,634 | ||
| Net Asset Value Per Common Share | 18.85 | $ | 19.41 |
All values are in US Dollars.
PORTMAN RIDGE FINANCE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
| For the Three Months Ended March 31, | ||||||
|---|---|---|---|---|---|---|
| 2025 | 2024 | |||||
| INVESTMENT INCOME | ||||||
| Interest income: | ||||||
| Non-controlled/non-affiliated<br>investments | $ | 7,300 | $ | 12,621 | ||
| Non-controlled affiliated investments | 316 | 95 | ||||
| Total interest income | 7,616 | 12,716 | ||||
| Payment-in-kind<br>income: | ||||||
| Non-controlled/non-affiliated<br>investments^(1)^ | 2,853 | 1,894 | ||||
| Non-controlled affiliated investments | 208 | 112 | ||||
| Total<br>payment-in-kind income | 3,061 | 2,006 | ||||
| Dividend income: | ||||||
| Non-controlled affiliated investments | 1,417 | 1,653 | ||||
| Total dividend income | 1,417 | 1,653 | ||||
| Fees and other income: | ||||||
| Non-controlled/non-affiliated<br>investments | 24 | 151 | ||||
| Total fees and other income | 24 | 151 | ||||
| Total investment income | 12,118 | 16,526 | ||||
| EXPENSES | ||||||
| Management fees | 1,466 | 1,729 | ||||
| Performance-based incentive fees | 920 | 1,234 | ||||
| Interest and amortization of debt issuance costs | 4,298 | 5,725 | ||||
| Professional fees | 452 | 604 | ||||
| Administrative services expense | 411 | 356 | ||||
| Directors’ expense | 144 | 162 | ||||
| Other general and administrative expenses | 87 | 490 | ||||
| Total expenses | 7,778 | 10,300 | ||||
| NET INVESTMENT INCOME | 4,340 | 6,226 | ||||
| REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS | ||||||
| Net realized gains (losses) from investment transactions: | ||||||
| Non-controlled/non-affiliated<br>investments | (81 | ) | (1,641 | ) | ||
| Non-controlled affiliated investments | (92 | ) | — | |||
| Controlled affiliated investments | — | (416 | ) | |||
| Net realized gain (loss) on investments | (173 | ) | (2,057 | ) | ||
| Net change in unrealized appreciation (depreciation) on: | ||||||
| Non-controlled/non-affiliated<br>investments | (1,501 | ) | (659 | ) | ||
| Non-controlled affiliated investments | (1,140 | ) | 140 | |||
| Controlled affiliated investments | (1,274 | ) | 590 | |||
| Derivatives | 12 | — | ||||
| Net change in unrealized gain (loss) on investments | (3,903 | ) | 71 | |||
| Tax (provision) benefit on realized and unrealized gains (losses) on investments | (346 | ) | 459 | |||
| Net realized and unrealized appreciation (depreciation) on investments, net of taxes | (4,422 | ) | (1,527 | ) | ||
| Net realized gain (loss) on extinguishment of debt | — | (213 | ) | |||
| NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (82 | ) | $ | 4,486 | |
| Net Increase (Decrease) In Net Assets Resulting from Operations per Common Share: | ||||||
| Basic and Diluted: | $ | (0.01 | ) | $ | 0.48 | |
| Net Investment Income Per Common Share: | ||||||
| Basic and Diluted: | $ | 0.47 | $ | 0.67 | ||
| Weighted Average Shares of Common Stock Outstanding — Basic and Diluted | 9,198,223 | 9,344,994 | ||||
| (1) | During the three months ended March 31, 2025, and 2024, the Company received $0.2 million and<br>$0.1 million, respectively, of non-recurring fee income that was paid in-kind and included in this financial statement line item. | |||||
| --- | --- |
EX-99.2
Q1 2025 Earnings Presentation May 9, 2025 Exhibit 99.2
Important Information Cautionary Statement Regarding Forward-Looking Statements This presentation contains forward-looking statements. The matters discussed in this presentation, as well as in future oral and written statements by management of Portman Ridge Finance Corporation (“PTMN”, “Portman Ridge” or the “Company”), that are forward-looking statements are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. Forward-looking statements relate to future events or our future financial performance and include, but are not limited to, projected financial performance, expected development of the business, plans and expectations about future investments, our contractual arrangements and relationships with third parties, the ability of our portfolio companies to achieve their objectives, the ability of the Company’s investment adviser to attract and retain highly talented professionals, our ability to maintain our qualification as a regulated investment company and as a business development company, our compliance with covenants under our borrowing arrangements, and the future liquidity of the Company. We generally identify forward-looking statements by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," “outlook”, "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other similar words. Forward-looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove to be incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Forward-looking statements are subject to change at any time based upon economic, market or other conditions, including with respect to the impact of the COVID-19 pandemic and its effects on the Company and its portfolio companies’ results of operations and financial condition. More information on these risks and other potential factors that could affect the Company’s financial results, including important factors that could cause actual results to differ materially from plans, estimates or expectations included herein, is included in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including in the “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s most recently filed quarterly report on Form 10-Q and annual report on Form 10-K, as well as in subsequent filings. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this presentation should not be regarded as a representation by us that our plans and objectives will be achieved. We do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required to be reported under the rules and regulations of the SEC.
Core investment income represents reported total investment income as determined in accordance with U.S. generally accepted accounting principles, or U.S. GAAP, less the impact of purchase price discount accounting in connection with the Garrison Capital Inc. (“GARS”) and Harvest Capital Credit Corporation (“HCAP”) mergers. Portman Ridge believes presenting core investment income and the related per share amount is useful and appropriate supplemental disclosure for analyzing its financial performance due to the unique circumstance giving rise to the purchase accounting adjustment. However, core investment income is a non-U.S. GAAP measure and should not be considered as a replacement for total investment income and other earnings measures presented in accordance with U.S. GAAP. Instead, core investment income should be reviewed only in connection with such U.S. GAAP measures in analyzing Portman Ridge’s financial performance. Net leverage is calculated as the ratio between (A) debt, excluding unamortized debt issuance costs, less available cash and cash equivalents, and restricted cash and (B) NAV. Portman Ridge believes presenting a net leverage ratio is useful and appropriate supplemental disclosure because it reflects the Company’s financial condition net of $23.5 million and $40.0 million of cash and cash equivalents and restricted cash as of March 31, 2025, and December 31, 2024, respectively. However, the net leverage ratio is a non-U.S. GAAP measure and should not be considered as a replacement for the regulatory asset coverage ratio and other similar information presented in accordance with U.S. GAAP. Instead, the net leverage ratio should be reviewed only in connection with such U.S. GAAP measures in analyzing Portman Ridge’s financial condition. Quarterly Highlights Q1 2025 Selected Highlights Total investment income for the quarter ended March 31, 2025, was $12.1 million, of which $10.3 million was attributable to interest income, inclusive of payment-in-kind income, from the Debt Securities Portfolio. This compares to total investment income of $14.4 million for the quarter ended December 31, 2024, of which $12.2 million was attributable to interest income, inclusive of payment-in-kind income, from the Debt Securities Portfolio and $16.5 million for the quarter ended March 31, 2024, of which $14.2 million was attributable to interest income, inclusive of payment-in-kind income, from the Debt Securities Portfolio. Core investment income for the quarter ended March 31, 2025, excluding the impact of purchase discount accretion, was $12.1 million, as compared to core investment income of $14.4 million for the quarter ended December 31, 2024. This compares to $16.5 million for the quarter ended March 31, 2024. Net investment income (“NII”) for the quarter ended March 31, 2025, was $4.3 million ($0.47 per share) as compared to $5.5 million ($0.60 per share) for the quarter ended December 31, 2024, and $6.2 million ($0.67 per share) for the quarter ended March 31, 2024. Net asset value (“NAV”) as of March 31, 2025, was $173.5 million ($18.85 per share), as compared to $178.5 million ($19.41 per share) as of December 31, 2024. Deployment during the quarter was strong, with deployment of approximately $17.5 million and sales and repayments of approximately $15.7 million, resulting in net deployment of approximately $1.8 million. Investment portfolio at fair value as of March 31, 2025, was $406.4 million, comprised of 93 different portfolio companies. Our debt investment portfolio, excluding our investments in the CLO Funds, equities and Joint Ventures, totaled $324.8 million at fair value as of March 31, 2025, and was spread across 24 different industries comprised of 72 different portfolio companies with an average par balance per entity of approximately $2.6 million. This compares to a total investment portfolio at fair value as of December 31, 2024 of $405.0 million, comprised of 93 different portfolio companies. Our debt investment portfolio, excluding our investments in the CLO Funds, equities and Joint Ventures, totaled $320.7 million at fair value as of December 31, 2024, and was spread across 26 different industries comprised of 71 different portfolio companies, with an average par balance per entity of approximately $2.5 million. Non-accruals on debt investments, as of March 31, 2025, were six debt investments representing 2.6% and 4.7% of the Company’s investment portfolio at fair value and amortized cost, respectively. This compares to six debt investments representing 1.7% and 3.4% of the Company’s investment portfolio at fair value and amortized cost, respectively, as of December 31, 2024, and seven debt investments representing 0.5% and 3.2% of the Company’s investment portfolio at fair value and amortized cost, respectively, as of March 31, 2024. Weighted average annualized yield (excluding income from non-accruals and collateralized loan obligations) was approximately 11.0% as of March 31, 2025. Par value of outstanding borrowings, as of March 31, 2025, was $255.4 million, as compared to $267.5 as of December 31, 2024, with an asset coverage ratio of total assets to total borrowings of 168% and 167%, respectively. On a net basis, leverage as of March 31, 2025, was 1.3x(2) compared to net leverage of 1.3x(2) as of December 31, 2024. Change in Dividend Policy: The Company’s Board of Directors (the “Board”) modified the Company’s dividend policy to introduce a stable base distribution, which is anticipated to be sustainable across market cycles. Additionally, the Board intends to declare a quarterly supplemental distribution going forward, which will approximate 50% of net investment income in excess of the quarterly base distribution to account for fluctuations in rates and spreads. Distribution: Declared a regular quarterly base distribution of $0.47 per share of common stock. The distribution is payable on May 29, 2025, to stockholders of record at the close of business on May 19, 2025. On January 29, 2025, the Company entered into a Proposed Merger agreement with LRFC. Under the agreement, LRFC will merge with and into PTMN, subject to the receipt of certain shareholder approvals and the satisfaction of other closing conditions. Pursuant to the Proposed Merger agreement, Portman Ridge will be the surviving public entity and will continue to trade on the Nasdaq under the symbol “PTMN.” In connection with the Proposed Merger, shareholders of LRFC will receive 1.50 newly issued shares of PTMN common stock in exchange for each share of common stock of LRFC (the “Fixed Exchange Ratio”).
Financial Highlights Core investment income represents reported total investment income as determined in accordance with U.S. generally accepted accounting principles, or U.S. GAAP, less the impact of purchase price discount accounting in connection with the GARS and HCAP mergers. Portman Ridge believes presenting core investment income and the related per share amount is useful and appropriate supplemental disclosure for analyzing its financial performance due to the unique circumstance giving rise to the purchase accounting adjustment. However, core investment income is a non-U.S. GAAP measure and should not be considered as a replacement for total investment income and other earnings measures presented in accordance with U.S. GAAP. Instead, core investment income should be reviewed only in connection with such U.S. GAAP measures in analyzing Portman Ridge’s financial performance.
3-month SOFR per Bloomberg as of April 28, 2025. As of March 31, 2025, substantially all of our floating rate assets were on SOFR contract. If all floating rate assets as of 3/31/25 were reset to current 3-month benchmark rates 4.28%, we would expect to experience an incremental reduction in quarterly income of ~$35k. Impact of Benchmark Rates (1)
Over the last three years, Portman has experienced an average of ~$1.0 million in income related to repayment / prepayment activity as compared to the current quarter of $0.1 million. Limited Repayment Activity
Core Earning Analysis Core net investment income represents reported total net investment income as determined in accordance with U.S. generally accepted accounting principles, or U.S. GAAP, less the impact of purchase price discount accounting in connection with the GARS and HCAP mergers, while also considering the impact of accretion from these mergers on expenses. Portman Ridge believes presenting core net investment income and the related per share amount is useful and appropriate supplemental disclosure for analyzing its financial performance due to the unique circumstance giving rise to the purchase accounting adjustment. However, core net investment income is a non-U.S. GAAP measure and should not be considered as a replacement for total net investment income and other earnings measures presented in accordance with U.S. GAAP. Instead, core net investment income should be reviewed only in connection with such U.S. GAAP measures in analyzing Portman Ridge’s financial performance.
Net Asset Value Rollforward Net leverage is calculated as the ratio between (A) debt, excluding unamortized debt issuance costs, less available cash and cash equivalents, and restricted cash and (B) NAV. Portman Ridge believes presenting a net leverage ratio is useful and appropriate supplemental disclosure because it reflects the Company’s financial condition net of $23.5 million, $40.0 million, $26.8 million, $36.6 million, and $39.6 million of cash and cash equivalents and restricted cash as of March 31, 2025, December 31, 2024, September 30, 2024, June 30, 2024, and March 31, 2024, respectively. However, the net leverage ratio is a non-U.S. GAAP measure and should not be considered as a replacement for the regulatory asset coverage ratio and other similar information presented in accordance with U.S. GAAP. Instead, the net leverage ratio should be reviewed only in connection with such U.S. GAAP measures in analyzing Portman Ridge’s financial condition.
Top 5 Borrowers, 21.5% As of March 31, 2025. Figures shown do not include, CLO Funds, F3C JV or Series A-Great Lakes Funding II LLC, and derivatives. Shown as % of debt and equity investments at fair market value. Current Portfolio Profile(1) Diversified Portfolio of Assets Diversification by Borrower(2) Asset Mix(2) Industry Diversification(2) 93 Debt + Equity Portfolio Investee Companies $2.6mm / 1% Average Debt Position Size U.S Centric Investments: Nearly 100% US-Based Companies Focus on Non-Cyclical Industries with High FCF Generation Credit quality has been stable during the rotation period
For comparability purposes, portfolio trends metrics exclude short-term investments and derivatives. Excludes select investments where the metric is not applicable, appropriate, data is unavailable for the underlying statistic analyzed Includes assets purchased from affiliate of HCAP’s former manager in a separate transaction. CLO holdings and Joint Ventures are excluded from investment count. Excluding income from non-accruals and collateralized loan obligations. Portfolio Trends(1)(2)
Based on fair market value as of the end of the respective period. As of March 31, 2025, six of the Company’s debt investments were on non-accrual status and represented 2.6% and 4.7% of the Company’s investment portfolio at fair value and amortized cost, respectively Credit Quality
At Fair Value at the end of the respective period. Does not include activity in short-term investments. Portfolio Composition(1)
M&A Value Realization M&A Value Realization as of March 31, 2025:
Appendix
Consolidated Statements of Assets and Liabilities
Consolidated Statements of Operations (1) During the three months ended March 31, 2025 and 2024, the Company received $0.2 million and $0.1 million, respectively, of non-recurring fee income that was paid in-kind and included in this financial statement line item.
Cash and Cash Equivalents Unrestricted cash and cash equivalents totaled $9.2 million as of March 31, 2025 Restricted cash of $14.3 million as of March 31, 2025 Debt Summary As of March 31, 2025, par value of outstanding borrowings was $255.4 million with a current weighted average interest rate of 5.9% The $147.4 million of borrowings under the Great Lakes Portman Ridge Funding LLC Revolving Credit Facility was bearing a floating rate. The $108.0 million par value of 4.875% notes due 2026 was bearing a fixed rate As of March 31, 2025, there was $52.6 million of available borrowing capacity under the Great Lakes Portman Ridge Funding LLC Revolving Credit Facility. Corporate Leverage & Liquidity
The Company completed a Reverse Stock Split of 10 to 1 effective August 26, 2021, the distribution per share amounts have been adjusted retroactively to reflect the split for all periods presented. Change in Dividend Policy introduced in March 2025 - regular quarterly base distribution plus supplemental cash distribution. Regular Distribution Information(1) Date Declared Record Date Payment Date Distribution per Share 5/8/2025 5/19/2025 5/29/2025 $0.47 3/13/2025 3/24/2025 3/31/2025 $0.54(2) 11/7/2024 11/19/2024 11/29/2024 $0.69 8/8/2024 8/22/2024 8/30/2024 $0.69 5/8/2024 5/21/2024 5/31/2024 $0.69 3/11/2024 3/20/2024 3/31/2024 $0.69 11/9/2023 11/22/2023 11/31/2023 $0.69 8/9/2023 8/22/2023 8/31/2023 $0.69 5/10/2023 5/22/2023 5/31/2023 $0.69 3/9/2023 3/20/2023 3/31/2023 $0.68 11/8/2022 11/24/2022 12/13/2022 $0.67 8/10/2022 8/16/2022 9/2/2022 $0.63 5/10/2022 5/24/2022 6/7/2022 $0.63 3/10/2022 3/21/2022 3/30/2022 $0.63 11/3/2021 11/15/2021 11/30/2021 $0.62 8/4/2021 1 for 10 Reverse Stock Split effective 8/26/21 8/4/2021 8/17/2021 8/31/2021 $0.60 5/6/2021 5/19/2021 6/1/2021 $0.60 2/12/2021 2/22/2021 3/2/2021 $0.60 10/16/2020 10/26/2020 11/27/2020 $0.60 8/5/2020 8/17/2020 8/28/2020 $0.60 3/17/2020 5/7/2020 5/27/2020 $0.60 2/5/2020 2/18/2020 2/28/2020 $0.60 11/5/2019 11/15/2019 11/29/2019 $0.60 8/5/2019 8/12/2019 8/29/2019 $0.60 Change in Dividend Policy introduced in March 2025: The Company’s Board of Directors modified the Company’s dividend policy to introduce a stable base distribution, which is anticipated to be sustainable across market cycles. Additionally, the Board intends to declare a quarterly supplemental distribution going forward, which will approximate 50% of net investment income in excess of the quarterly base distribution to account for fluctuations in rates and spreads. Regular quarterly base distribution Q1 2025 - $0.47 per share of common stock Q2 2025 - $0.47 per share of common stock Supplemental cash distribution Q1 2025: $0.07 per share of common stock Q2 2025: no supplemental distribution