Q4 2023 Runway Growth Finance Corp Earnings Call
Operator: I'm going to close the recording. Thank you for joining us. We are going to be starting in about 10 minutes. Until then, please take care of yourselves and stay safe.
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Operator: And good luck to everyone. Thank you. We will now begin the closing session. Thank you. Good Ladies and gentlemen, thank you for standing by.
And welcome to the runway growth finance fourth quarter and fiscal year ended 2023 earnings conference call.
Operator: And welcome to the Runway Growth Finance fourth quarter and fiscal year ended 2023 earnings conference call. Please be advised that today's conference is being recorded. I would now like to hand the call over to Quinlan Abel, Assistant Vice President, Investor Relations. Please go ahead.
Please be advised that today's conference is being recorded.
I would now like to hand, the conference over to Quinn unable assistant Vice President Investor Relations. Please go ahead.
Quinlan Abel: Thank you, operator. Good evening, everyone, and welcome to the Runway Growth Finance conference call for the fourth quarter and fiscal year ended December 31st, 2023. Joining us on the call today from Runway Growth Finance are Greg Greifeld, Acting Chief Executive Officer of Runway Growth Finance and Deputy Chief Investment Officer and Head of Credit of Runway Growth Capital, and Tom Raterman, Acting President and Chief Financial Officer and Chief Operating Officer. Runway Growth Finance's fourth quarter and fiscal year ended 2023 financial results were released just after today's market close, and can be accessed from Runway Growth Finance's We have arranged for a replay of the call on the Runway Growth Finance webpage.
Thank you operator, and good evening, everyone and welcome to the runway growth Finance conference call for the fourth quarter and fiscal year ended December 31 2023.
Joining us on the call today from runway gross finance, a Greg Greifeld acting Chief Executive Officer of runway gross finance and Deputy Chief investment Officer, and head of credit a runaway growth capital and Tom Rado, acting President and Chief Financial Officer, and Chief operating Officer.
Runaway growth finances fourth quarter and fiscal year ended 2023 financial results were released just after today's market close and can be accessed from runaway growth finances Investor Relations website.
Investors Doc runway growth dotcom.
We have arranged for a replay of the call at the runway growth finance webpage.
Quinlan Abel: During this call, I want to remind you that we may make forward-looking statements based on current expectations. The statements on this call that are not purely historical are forward looking. These forward-looking statements are not a guarantee of future performance and are subject to uncertainties and other factors that could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, market conditions caused by uncertainty surrounding rising interest rates, changing economic conditions, and other factors we identify in our filings with the SEC. Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions can prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions can be incorrect.
During this call I want to remind you that we may make forward looking statements based on current expectations.
Statements on this call that are not purely historical are forward looking statements.
These forward looking statements are not a guarantee of future performance and are subject to uncertainties and other factors that could cause actual results to differ materially from those expressed in the forward looking statements, including and without limitation market conditions caused by uncertainties surrounding rising interest rates changing economic conditions.
And other factors, we identified in our filings with the SEC.
Although we believe that the assumptions on which these forward looking statements are based are reasonable any of those assumptions can prove to be inaccurate and as a result, the forward looking statements based on those assumptions can be incorrect.
Quinlan Abel: You should not place undue reliance on these forward-looking statements. The forward-looking statements contained in this call are made as of the date hereof, and Runway Growth Finance assumes no obligation to update the forward-looking statements or subsequent events. To obtain copies of SEC-related filings, please visit our website. With that, I will turn the call over to Greg. Thanks, Quinlan.
You should not place undue reliance on these forward looking statements.
Forward looking statements contained on this call are made as of the date hereof and runaway growth Finance assumes no obligation to update the forward looking statements or subsequent events.
To obtain copies of our SEC related filings. Please visit our website with that I will turn the call over to Greg.
Thanks, Quinlan and thanks, everyone for joining us this evening to discuss our fourth quarter results today I'll touch on 2023 highlights provide an overview of the operating environment discuss our key takeaways from the fourth quarter 2023, as a whole and share our outlook for the year ahead.
Greg Greifeld: And thanks, everyone, for joining us this evening to discuss our fourth quarter results. Today, I'll touch on 2023 highlights, provide an overview of the operating environment, discuss our key takeaways from the fourth quarter, and 2023 as a whole, and share our outlook for the year ahead. In 2023, Runway took a measured approach, which delivered on our strategy and set the stage for us to take advantage of more favorable market conditions in 2022. Throughout 2023, Runway generated strong risk-adjusted returns, preserved leading credit quality, and reduced our leverage to free up dry powder for new deals in a more lender-friendly market in 2024, while also supporting its existing portfolio. Since the fourth quarter of 2022, Runway has These strong returns are underpinned by what we believe to be the least risky portfolio in the venture debt space, with 99% senior secured first lien loans.
2023 runway took a measured approach, which delivered on our strategy and set the stage for us to take advantage of more favorable market conditions in 2024 throughout 2023 run rate generated strong risk adjusted returns preserved leading credit quality and reduced our leverage to free up dry powder for new deals.
In a more lender friendly market in 2024, while also supporting existing portfolio companies since the fourth quarter of 2022 runway has expanded its return on equity by 33 basis points to 13, 1% and annualized dividend yield by 186 basis points to 15, 1%.
These strong returns are underpinned by what we believe to be the least risky portfolio in the venture debt space with 99% senior secured first lien loans.
Greg Greifeld: Runway remains committed to driving shareholder value, which is enforced by our strong and consistent base dividend and ongoing supplemental distribution. Turning to investment, 2023 was a transitional year as companies and sponsors adjusted to the new normal of higher interest rates, tighter covenants, lower valuations, and generally lower amounts of both debt and equity capital.
Runway remains committed to driving shareholder value, which is enforced by our strong and consistent base dividend and ongoing supplemental distributions.
Turning to investment activity.
23 was a transitional year as companies and sponsors adjusted to the new normal of higher interest rates tighter covenants lower valuations and generally lower amounts of both debt and equity capital our actionable pipeline remains strong, but few deals met our underwriting criteria as companies held unrealistic.
Greg Greifeld: Our actionable pipeline remains strong, but few deals met our underwriting criteria as companies held unrealistic expectations, particularly in the first half of 2020. As a reminder, we aspire to help the best companies access non-dilutive capital to fuel growth. We are not a lender of last resort to help fix a troubled situation or give management teams one last chance to swing for the fences. We believe our operating results speak to our focus on preserving industry-leading credit quality while safeguarding our shareholders. I remain proud of the team's diligence in evaluating the influx of deals we've been presented with while remaining selective in the pursuit of only the highest quality late-stage companies who have demonstrated a clear path to To that end, we executed eight investments in new and existing portfolio companies in Q4, three of which were new positions for the BDC.
Patients, particularly in the first half of 2023.
As a reminder, we aspire to help the best companies access non dilutive capital to fuel growth. We are not a lender of last resort to help fix a troubled situation or give management teams one last chance to swing for the fences. We believe our operating results speak to our focus on preserving industry, leading credit quality, while safeguarding our share.
Holders I remain proud of the team's diligence in evaluating influx of deals we've been presented while remaining selective in pursuit of only the highest quality late stage companies, who have demonstrated a clear path to sustainable profitability.
And we executed eight investments in new and existing portfolio companies in Q4, three of which were new positions for the BDC.
Greg Greifeld: Amid the dynamic market environment, our team remains focused on mitigating risk and supporting our existing portfolio. In 2023, our strategy was to allow meaningful repayments to occur to reduce our leverage and increase our access to dry powder. Our low leverage ratio and ample dry powder give us the ability to focus on opportunities that meet our high credit bar without having to worry about the terms and restrictions from our lenders. To summarize, we maintain highly selective due diligence processes and credit selection criteria in Q4, positioning us to originate attractive investments in the year ahead. We will continue to prioritize credit quality and manage our balance sheet defenses.
Amid the dynamic market environment, our team remains focused on mitigating risk and supporting our existing portfolio companies in 2023, our strategy was to allow a meaningful repayments to occur to reduce our leverage and increase our access to dry powder, our low leverage ratio and ample dry powder gives us the ability to focus on.
Attunity is that meet our high credit bar without having to worry about the terms and restrictions from our lenders to summarize we maintained highly selective due diligence processes and credit selection criteria in Q4 positioning us to originate attractive investments in the year ahead, we will continue to prioritize credit quality.
And manage our balance sheet defensively.
In addition to investment activity I'd like to mention two other achievements first we increased liquidity for our shareholders through a secondary offering in the fourth quarter, which Tom will provide additional color on in a moment.
Greg Greifeld: In addition to investment activity, I'd like to mention two other achievements. First, we increased liquidity for our shareholders through a secondary offering in the fourth quarter, which Tom will provide additional color on in a minute. Second, subsequent to quarter end, we were pleased to announce our joint venture with Cadma Capital Partners, a credit financing platform for the venture ecosystem that was established in 2023 by Apollo. Runway Cadma One LLC is an equal partnership between Runway and Cadma.
Second subsequent to quarter end, we were pleased to announce our joint venture with <unk> capital partners, a credit financing platform for the venture ecosystem that was established in 2023 by Apollo.
One way tableau, one LLC is an equal partnership between runway in Canada with financing capacity of up to $200 million.
The joint venture will focus on financing private and sponsored back late in growth stage companies. We're thrilled to enter this partnership and look forward to updating you as appropriate in future quarters.
Turning now to a recap of the 2023 operating environment 2023 was a dynamic year in which we experienced a U S regional banking crisis, and the collapse of Silicon Valley Bank, which significantly impacted debenture marketplace. This period of financial stress, coupled with high inflation led to cautious bank lending standards.
Greg Greifeld: With a financing capacity of up to $200 million, the joint venture will focus on financing private and sponsor-backed late and growth stage companies. We're thrilled to enter this partnership and look forward to updating you as appropriate in future quarters. Turning now to a recap of the 2023 operating performance, 2023 was a dynamic year in which we experienced a U.S. regional banking crisis and the collapse of Silicon Valley Bank, which significantly impacted the venture market. This period of financial stress, coupled with high inflation, led to cautious bank lending standards, prolonged hire for longer rates, fluctuating equity markets, and declining valuations, all of which have contributed to a challenging environment for dealmaking across all sectors During this time, we took decisive action to protect our high-quality portfolio of first lien loans through constant communication with management teams and the disciplined evaluation of our portfolio throughout the. Furthermore, as we sought to apply disciplined portfolio management and preserve credit quality, we began to see some green shoots in 2020. According to recent PitchBook data, U.S. late-stage venture equity deal value was approximately $80 billion for fiscal 2023, down from record levels in 20 Further, U.S. late-stage venture capital represented 47 percent of total deal value and 29 percent of total deal count, marking the strongest annual figures we've seen historically.
Prolonged higher for longer rates fluctuating equity markets and declining valuations all of which have contributed to a challenging environment for dealmaking across all stages. During this time, we took decisive action to protect our high quality portfolio of first lien loans through constant communication with management teams and the <unk>.
<unk> evaluation of our portfolio throughout the year.
Further as we sought to apply a disciplined portfolio management and preserve credit quality, we began to see some green shoots in 2023. According to a recent Pittsburgh data U S. Late stage venture equity deal value was approximately 80 billion for fiscal 2023 down from record levels in 2021 and 2022.
But still above 2020 and the years preceding.
Further U S late stage venture equity represented 47% of total deal value and 29% of total deal counts, marking the strongest annual figures we've seen historically.
This is a continuation of the dynamic we have observed in recent quarters higher volumes of late stage deals, but at smaller values.
With borrowers seeking capital against the backdrop of a challenging fundraising environment, we believe the opportunity for runway growth value proposition is clear.
Companies are continuing to seek minimally dilutive capital to extend runway and supplement equity as that market remains challenged.
And with this heightened demand in 2023, we raised the bar on our rigorous and selective investment criteria. We believe our borrowers are among the highest quality in the late stage venture ecosystem. This is demonstrated by their ability to raise capital runway portfolio companies raised approximately $450 million in <unk>.
Greg Greifeld: This is a continuation of the dynamic we've observed in recent quarters, higher volumes of late stage deals, but at smaller values. With borrowers seeking capital against the backdrop of a challenging fundraising environment, we believe the opportunity for Runway Growth's value proposition is, Companies are continuing to seek minimally dilutive capital to extend runway and supplement equity as that market remains challenged. And with this heightened demand in 2023, we have raised the bar on our rigorous and selective investment criteria.
Equity or other junior capital relative to our $1 billion loan portfolio and we continue to deploy prudent underwriting standards that prioritize quality over quantity.
In sum the market was turbulence in 2023, but our proactive strategy and distinctive portfolio architecture enabled us to deliver value to both our portfolio company management teams and shareholders.
Tom will dive deeper into our financial performance, but I want to close with an overview of our outlook for 2024, which is consistent with previous quarters.
Greg Greifeld: We believe our borrowers are among the highest quality in the late stage venture ecosystem. This is demonstrated by their ability to raise capital. Runway portfolio companies raised approximately $450 million in equity or other junior capital relative to our billion-dollar loan portfolio. And we continue to deploy prudent underwriting standards that prioritize quality over quantity.
Companies completed equity funding rounds in 2021, and 2022 at historically high valuations, which provided 24 to 36 months of runway. These companies will soon need to go to market to raise additional capital and we believe we are well positioned to take advantage of these opportunities.
Greg Greifeld: In sum, the market was volatile in 2023, but our proactive strategy and distinctive portfolio architecture enabled us to deliver value to both our portfolio company management teams and shareholders. Tom will dive deeper into our financial performance, but I want to close with an overview of our outlook for 2024, which is consistent with previous quarters. Companies completed equity funding rounds in 2021 and 2022 at historically high valuations, which provided 24 to 36 months of runway. These companies will soon need to go to market to raise additional capital, and we believe we are well positioned to take advantage of these opportunities.
Increasingly management teams turn to runway because we are more than just the lender we offer strategic counsel financial expertise and an operational network that we believe drive optimal results for our borrowers and shareholders. Our team continues to see a robust pipeline of opportunities despite the challenging market and deal activity.
<unk> our pipeline of qualified actionable deals grew relative to 2022.
Demonstrates our increased discipline and tighter credit box in the first quarter of this year, which tends to be our slowest seasonally we have issued multiple term sheets with new borrowers.
2024 is already off to a fast start between our newly formed joint venture with Cadillac and transaction activity. We look forward to sharing more in may with that I'll turn it over to Tom.
Greg Greifeld: Increasingly, management teams turn to Runway because we are more than just a lender. We offer strategic counsel, financial expertise, and an operational network that we believe drives optimal results for our borrowers and shareholders. Our team continues to see a robust pipeline of opportunity. Despite the challenging market and deal activity, our pipeline of qualified, actionable deals grew relative to 2020. This demonstrates our increased discipline and tighter credit box. In the first quarter of this year, which tends to be our slowest seasonally, we have issued multiple term sheets with new borrowers. 2024 is already off to a fast start between our newly formed joint venture with CADMA and the transaction. We look forward to sharing more in May. With that, I'll turn it over to you, Greg. Thanks, Greg, and good evening, everyone.
Thanks, Greg and good evening, everyone, reflecting on 2023, we're proud of runways performance amidst a challenging operating environment for our portfolio companies and fundraising environment across the venture landscape.
We completed eight investments in the fourth quarter, representing $154 6 million in funded loans.
Our weighted average portfolio risk rating increased to $2 39 in the fourth quarter from $2 two four in the third quarter of 2023.
Four portfolio companies moved from category two to category three during the quarter.
Our rating system is based on a scale of one to five where one represents the most favorable credit rating.
Our portfolio continues to be concentrated in first lien senior secured loans focussed on the latest stage highest quality companies in the venture debt market.
With 99% of our portfolio with a weighted average risk rating of three year better we're focused on maintaining a high bar for evaluating investments.
In line with previous quarters, we calculated the loan to value for loans that were in our portfolio at the end of the third quarter and the current quarter. We found that our dollar weighted loan to value ratio slightly increased from 24, 7% in Q3 to 27, 8% in Q4.
Thomas B. Raterman: Reflecting on 2023, we're proud of Runway's performance amidst a challenging operating environment for portfolio companies and a challenging fundraising environment across the venture capital land. We completed eight investments in the fourth quarter representing $154.6 million in funded loans. Our Weighted Average Portfolio Risk Grading increased to 2.39 in the fourth quarter from 2.24 in the third quarter of 2020. Four portfolio companies moved from Category 2 to Category 3 during. Our rating system is based on a scale of 1 to 5, where 1 represents the most favorable credit.
Our total investment portfolio had a fair value of approximately $1 3 billion, excluding treasury bills flat from $1 1 billion in the third quarter of 2023, but a decrease of 9% from $1 3 billion for the comparable prior year period.
As of December 31, 2023 runway had net assets of $547 1 million.
Decreasing from $575 million at the end of third quarter of 2023.
Thomas B. Raterman: Our portfolio continues to be concentrated in first lien senior secured loans focused on the latest stage, highest quality companies in venture debt. With 99% of our portfolio having a weighted average risk rating of three or better, we're focused on maintaining a high bar for evaluating investments. In line with previous quarters, we calculated the loan to value for loans that were in our portfolio at the end of the third quarter and the current. We found that our dollar weighted loan to value ratio slightly increased from 24.7% in Q3 to 27.8%. Our total investment portfolio had a fair value of approximately $1.03 billion, excluding Treasury bills, flat from $1.01 billion in the third quarter of 2023, but a decrease of 9% from $1.13 billion for the comparable prior year period. As of December 31, 2023, Runway had net assets of $547.1 million, decreasing from $570.5 million at the end of the third quarter. Nav4Share was $13.50 at the end of the fourth quarter compared to $14.08 at the end of the third quarter.
NAV per share was $13 50 at the end of fourth quarter compared to $14 eight at the end of the third quarter of 2023.
Included in our Q4 2023 Investor presentation is a detailed NAV bridge.
The decline in NAV is primarily a result of an unrealized loss of $7 seven man on our care cloud preferred stock holdings, which we are electing to hold as we see an opportunity for equity upside in the future as well as the realized loss of $17 million on our.
That investment into the three $6 4 million of which was reflected as an unrealized loss in our Q3 2023 financial statements.
As a reminder, our loan portfolio is comprised of 100% floating rate assets. All loans are currently earning interest at or above the agreed upon interest rate floors, which generally reflect the base rate plus the credit spread set at the time of closing we're signing the term sheet.
In the fourth quarter, we received $63 4 million in principal repayments a decrease from $126 eight in the third quarter of 2023. This.
This was driven primarily by our credit first approach to investing that prioritizes the highest quality late stage companies, which are ideal candidates for a refinancing of our acquisitions in most market environments.
Elevated prepayments for the quarter and year are an indicator of the strength in our approach to underwriting and health of the overall portfolio.
We expect additional prepayment activity throughout 2024 with activity building more significantly in the second half of this year.
Thomas B. Raterman: Included in our 2-4-2023 Investor Presentation is a detailed map. The decline in NAB is primarily a result of an unrealized loss of $7.7 million on our CareCloud Preferred Stock Holdings, which we are electing to hold as we see an opportunity for equity upside in the future, as well as the realized loss of $17 million on our debt investment. 6.4 million of which was reflected as an unrealized loss in our Q3 2020. As a reminder, our loan portfolio is comprised of 100% floating rate assets. All loans are currently earning interest at or above agreed-upon interest rate floors, which generally reflect the base rate plus the credit spread set at the time of closing or signing the term. In the fourth quarter, we received $63.4 million in principal repayments, a decrease from $126.8 million in the third quarter.
Further prepayment activity provides runway with liquidity to deploy in a manner that is fully accretive.
We generated total investment income of $39 2 million and net investment income of $18. Three main in the fourth quarter of 2023 compared to $43 $8 million in 'twenty two man in the third quarter of 2023.
Our debt portfolio generated a dollar weighted average annualized yield of 16, 9% for the fourth quarter of 2023 as compared to 18, 3% for the third quarter of 2023, and 15, 5% from the comparable period last year.
We attribute the spike in the yield in the third quarter of 2023 to an acceleration in prepayments.
Moving to our expenses for the fourth quarter total operating expenses were $20 9 million down 4% from $27 million for the third quarter of 2023.
Runway recorded a net unrealized loss on investments of $5 9 million in the fourth quarter compared to a net unrealized loss of $7 2 million in the third quarter of 2023.
Thomas B. Raterman: This is driven primarily by our credit-first approach to investing that prioritizes the highest quality, late-stage companies, which are ideal candidates for refinancing or acquisition in most market environments. Elevated prepayments for the quarter and year are an indicator of the strength in our approach to underwriting and the health of the overall portfolio. We expect additional prepayment activity throughout 2024 with activity building more significantly in the second half. Further, prepayment activity provides Runway with liquidity to deploy in a manner that is fully Our debt portfolio generated a dollar weighted average annualized yield of 16.9% for the fourth quarter of 2023, as compared to 18.3% for the third quarter of 2020.
We also had a net realized loss of $17 2 million compared to no realized loss in the prior quarter.
The fourth quarter unrealized loss on investments was predominantly due to the loss of $7 7 million, resulting from decreases in the fair value of our preferred equity position in carrier cloud.
We remain confident that our highly selective investment process and diligent monitoring our portfolio companies support our track record of maintaining low levels of non accruals, coupled with generally healthy credit performance.
As of December 31, 2023, we had no loans on non accrual status.
Subsequent to quarter end, we placed our loans to mingle healthcare on non accrual status, representing an outstanding principal balance of $4 3 million at a fair market value of $3 $8 million.
The loan comprised 37% of the total fair value of the investment portfolio, excluding treasury bills as of December 31, 2023.
In the fourth quarter of 2023, our leverage ratio and asset coverage for 95% and two five times, respectively compared to <unk> 79 at two seven times at the end of the third quarter of 2023.
All investments in the fourth quarter were funded with leverage as part of our strategy to generate non dilutive portfolio growth.
Thomas B. Raterman: 15.5% for the comparable period last year. We attribute the spike in the yield in the third quarter of 2023 to an acceleration in pre, Moving to our expenses for the fourth quarter, total operating expenses were $20.9 million, down 4% from $20.7 million for the third quarter. Runway recorded a net unrealized loss on investments of $5.9 million in the fourth quarter, compared to a net unrealized loss of $7.2 million in the third quarter.
Turning to our liquidity at December 31, 2023, our total available liquidity was $281 million, including unrestricted cash and cash equivalents and we had borrowing capacity of $278 million as compared to $312 million and $297 million respectively on September <unk>.
2023.
We were pleased with the completion of a secondary offering of approximately $3 7 million shares of common stock owned by Oak tree in November 2023.
Thomas B. Raterman: We also had a net realized loss of $17.2 million compared to no realized loss in the prior year. The fourth quarter unrealized loss on investments was predominantly due to a loss of $7.7 million resulting from decreases in the fair value of our preferred equity. We remain confident that our highly selective investment process and diligent monitoring of portfolio companies support our track record of maintaining low levels of non-accruals, coupled with generally healthy credit. As of December 31, 2023, we had no loans on non-acquisition.
Important to note that Oaktree has been a great partner to runway since 2016, and this is just part of the natural investment lifecycle.
Ultimately we view this as a positive for the liquidity of our stock and over the long term, we expect a larger public float to attract high quality investors that understand the runway value proposition.
At quarter end, we had unfunded loan commitments to portfolio companies of $201 5 million. The majority of which were subject to specific performance milestones $42 million of these commitments are currently eligible to be funded.
During the quarter, we experienced two prepayments totaling $63 four man and scheduled amortization of <unk> 3 million.
Thomas B. Raterman: Subsequent to quarter end, we placed our loan to Mingle Healthcare on non-accrual status. Representing an outstanding principal balance of 4.3 million at a fair market value of 3.8, the loan comprised 0.37% of the total fair value of the investment portfolio, excluding Treasury, as of December 31. In the fourth quarter of 2023, our leverage ratio and asset coverage were 0.95 and 2.05 times, respectively, compared to 0.79 and 2.27 times at the end of the third quarter. All investments in the fourth quarter were funded with leverage as part of our strategy to generate non-dilutive growth. Turning to our liquidity, at December 31, 2023, our total available liquidity was $281 million, including unrestricted cash and cash equivalents, and we had borrowing capacity of $278 million as compared to $312 million and $297 million, respectively, on September 31. We were pleased with the completion of a secondary offering of approximately 3.7 million shares of common stock owned by Oak Tree in November 2020. It's important to note that Oak Tree has been a great partner to Runway since 2016.
Prepayments included full principal repayment of our senior secured term loan to bureau of biotech for $40 million and a partial principal repayment of our senior secured term loan to <unk> for $23 4 million.
As mentioned on our third quarter earnings call. Our board of directors approved a stock repurchase program, giving us the ability to acquire up to $25 million of runways common stock to.
To date, the company has not repurchased any shares under the stock repurchase program, which expires on November one 2024.
Separately during Q4 through its long term incentive plan management of the external advisor purchased 39473 shares of the company.
Finally on February one 2024, our board declared a regular distribution for the first quarter of <unk> 40 per share as well as a supplemental dividend of <unk> per share payable with a regular dividend.
Looking ahead, we expect the venture market to remain challenged as ongoing uncertainty surrounding fiscal policy weighs on the U S economic trajectory.
While the macro environment will continue to impact our portfolio companies, we remain focused on delivering superior credit performance and preserving capital to maximize risk adjusted returns for our shareholders.
With that operator, please open the line for questions.
Thomas B. Raterman: And this is just part of the natural investment license. Ultimately, we view this as positive for the liquidity of our stock. And over the long term, we expect a larger public float to attract high-quality investors that understand the runway value. At quarter end, we had unfunded loan commitments to portfolio companies of $201.5 million, the majority of which were subject to specific performance milestones. Forty-two million of these commitments are currently eligible. During the quarter, we experienced two prepayments totaling $63.4 million and scheduled amortization of $0.3 million. Prepayments included full principal repayment of our senior secured term loan to Bureau biotech for $40 million and a partial principal repayment of our Senior Secured Term Loan to Brevo for $23,000. As mentioned on our third quarter earnings call, our Board of Directors approved a stock repurchase program giving us the ability to acquire up to $25 million of Runaways Commons. However, to date, the company has not repurchased any shares under this factory purchase program, which expires on November 1, 2024. In separate transactions, during Q4, through its long-term incentive plan, management of the external advisor purchased 39,473 shares.
Thank you.
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We also ask that you wait to hear your name and company be announced before proceeding with your question one moment, while we compile the Q&A roster.
And our first question for today will be coming from.
John O'shea of Wells Fargo. Your line is open.
Hey, everyone. Good afternoon.
Just a question on sort of a higher level on the investment style.
Non accruals.
You've always described the strategy is growth debt.
Where you're lending to more profitable.
Profitable companies that are.
Transitioning or pivoting them to something but.
Which makes them unprofitable, but that.
There is a core business with franchise value that mostly covers you.
So in this sort of cases that are going wrong can you.
I'll touch on it.
Is it more related to the new venture or or the core business.
Sort of.
Falls off from from your underwriting.
Thank you.
Yes.
This is Greg thanks for the question.
And specifically this quarter, we now have the one name on.
Non accrual <unk>.
Ill health as Tom spoke about on the call.
That is a position that has been in our portfolio for quite some time.
It is a smaller portfolio to a smaller company.
Thomas B. Raterman: Finally, on February 1, 2024, our board declared a regular distribution for the first quarter of $0.40 per share, as well as a supplemental dividend of $0.07 per share payable at the rate. Looking ahead, we expect the venture market to remain challenged as ongoing uncertainty surrounding fiscal policy weighs on the US economy. The macro environment will continue to impact our portfolio company. We remain focused on delivering superior credit performance and preserving capital to maximize risk-adjusted returns for our shareholders. With that, Operator, please open the line for questions. Thank you. If you would like to ask a question, please press star 11 on your telephone. You will then hear an automated message on the device when your hand is raised.
Which was in line with our strategy as we were originally building the book.
This one has had some bumps along the road as you can imagine.
Not only in terms of regulatory headwinds dealing with COVID-19, but also some.
Just operational issues, we do believe that there is material value here in excess of what we are owed the situation is very fluid right now, but we are working with them to make sure that we get the right security This company for them to maximize the value.
Okay.
Okay. Thank you very helpful and then also.
We're seeing a lot of them.
<unk>.
Broadly.
Challenge Adventure is this can you talk about the.
Fayon O'Shea: If you would like to remove yourself from the queue, press star 1 again. We also ask that you wait to hear your name and company be announced before proceeding with your question. One moment while we compile the Q&A roster. And our first question for today will be coming from Fayon O'Shea of Wells Fargo. Your line is open. Hey, everyone, good afternoon.
The sort of high level backdrop is there is there sort of a.
Headwind.
The fund raising.
Finally, working its way through.
Impacting companies that way or just more of what we're seeing here is more.
Right up the bill already a C product.
Yes, I think there definitely are overall segment headwinds in terms of funds, having less dry powder than they might have anticipated having to take longer to raise that next fund than they may have anticipated and as we said in our prepared remarks, 2023 really was a transitional year.
Greg Greifeld: Just a question, sort of higher level on the investment style and not accruals. So you've always described this strategy as growth, where you're lending to more, more profitable companies that are transitioning or pivoting into something but which makes them unprofitable, but that there's a core business with franchise value that, you know, mostly covers you. So in the sort of cases that are going wrong, can you touch on, is it more related to the new venture or the core business? That sort of falls off from your underwriting. Thank you. Yeah Hey, this is Greg.
<unk> as the funds and the companies realize that new normal of less plentiful and smaller dollar.
It's available for them, which has led to a lot of internal work.
<unk> sure that cost structures have been changed to meet the new normal in terms of actual available to liquidity as well as making sure that.
Greg Greifeld: Thanks for the question. And, you know, specifically this quarter, we now have one name on non-accrual mixed health, as Tom spoke about on the call. You know, that is a position that has been in our portfolio for quite some time. It is a smaller portfolio to a smaller company, which was in line with our strategy as we were originally building the book. You know, this one has had some bumps along the road, as you can imagine, not only in terms of regulatory headwinds dealing with COVID but also some operational issues. We do believe that there is material value here in excess of what we are owed. The situation is very fluid right now, but we are working with them to make sure that we get the right security for this company for them to maximize. Okay, thank you. Very helpful.
They're engaging in R&D and other look forward projects that they actually will have the ability to fund through to fruition.
So in long and short there definitely are some market headwinds in terms of capital haven't been less available. However on the whole we think that that leads companies to be stronger having to face this and ramped down their burn.
Awesome all for me thanks, so much.
Thank you <unk>.
Mind, you if you would like to ask a question. Please press star one on your telephone.
One moment for the next question.
Okay.
And our next question today will be coming from <unk>.
Greg Greifeld: And then also, you know, we're seeing a lot of broadly challenging ventures. Can you talk about the The sort of high-level backdrop is there is a headwind on VC fundraising that's, you know, finally working its way through and impacting companies that way, or just more of what we're seeing here is more, you know, run-of-the-mill or idiosyncratic. Yeah, I think there definitely are overall segment headwinds in terms of funds having less dry powder than they might have anticipated, having to take longer to raise that next fund than they may have anticipated. And as we said in our prepared remarks, 2023 really was a transitional year as the funds and the companies realized that new normal of less plentiful and smaller dollar amounts available for them, which has led to a lot of internal work, making sure that cost structures have been changed to So in the long and short term, there definitely are some market headwinds in terms of capital having been less available. However, on the whole, we think that that leads companies to be stronger, having to face this and ramp down their burden. Awesome. All for me.
J P. Morgan your line is open.
Thanks for taking my questions today.
Wanted to start with pivot three in particular I know this one has been on non accrual for a while or had been on non accrual for a while.
AD.
Quarter ago, I think you guys had that marked at like 65%.
<unk>.
That card.
I'm trying to understand how that so quickly and ramp up to a full write down in the fourth quarter.
Yes, so speaking specifically about that name.
We had mentioned we are exploring in IP monetization strategy with them, which we believe still has.
The ability and we believe still has.
The chance for success, however, just looking at the timeframe and potential additional capital required.
We realize that we.
We have less confidence.
In that capital being raised in the near term we've been clear from the beginning that we're not in the business of.
Funding.
Risk capital for IP litigation, we're in the business of recovering capital.
So.
Just feedback around the timeframe not the viability of that has led us to revisit the mark as we have transitioned through a credit bid away from the loan.
Greg Greifeld: Thanks so much. Thank you. As a reminder, if you would like to ask a question, please press star 11 on your telephone. One moment for the next question. And our next question today will be coming from Melissa Wedel of J.P. Morgan. Your line is open. Thanks for taking my questions today. I wanted to start with pivot three in particular.
Okay.
Okay.
I also wanted to try to reconcile some of the comments that you're making about expecting elevated prepayment activity, particularly in the back half of 'twenty four but also noting that there were a lot of investments that weren't sort of meeting your threshold.
Melissa Wedel: I know this one has been on non-accrual for a while or had been on non-accrual for a while, but even as of a quarter ago, I think you guys had that marked at like 65% of cost, trying to understand how that so quickly unraveled to a full write-down in the fourth quarter. Yeah, speaking specifically about that name, as we had mentioned, we are exploring an IP monetization strategy with them that we believe still has viability and which we believe still has, you know, the chance for success. However, just looking at the time frame and the potential additional capital required, we realized that, you know, we had less confidence in that capital being raised in the near term. You know, we've been clear from the beginning that we're not in the business of funding, you know, risk capital for IP litigation.
To make it into the portfolio.
Should we be thinking about 2024 is a flat maybe deleveraging year for the portfolio.
Sure. So I think thanks for the question, Melissa and nice to hear from you.
As we think about the pattern and we look forward the pattern of prepayments and we look forward, we have a sense as to what will come the theme for this year really for US is sticking to our knitting not changing the state standards focusing on the portfolio.
We have in place there is obviously a significant number of deals in the pipeline that we could do we always ask should we do them.
So I think in terms of the portfolio.
We'd like it to be flat at least flat if not slightly up we'd like to see our leverage.
Thomas B. Raterman: You know, we're in the business of recovering capital, so just feedback around the time frame, not the viability of that, has led us to revisit the mark as we have transitioned through a credit bid away from the loan. Okay. I also wanted to try to reconcile some of the comments that you're making about expecting elevated prepayment activity, particularly in the back half of 24, but also noting that, you know, there were a lot of investments that weren't sort of meeting your threshold to make it into the portfolio. Should we be thinking about 2024 as a flat, maybe deleveraging, year for the portfolio?
Over.
Slightly over one.
By the end of the year, but we're not going to compromise our credit standards in this environment to get there.
Yes, the only thing I would add to that completely agree to add another IDIOM beyond sticking to our knitting, we really view the portfolio as a marathon not a sprint. Our view is to end goal is to have liquidity and access to capital to make loans.
Best loans to the best companies as the market has the availability for it.
Thomas B. Raterman: Sure. So I think, thanks for the question, Melissa, nice to hear from you. As we think about the pattern, we look forward to the pattern of prepayments, and we look forward, we have a sense as to what will come. The theme for this year, really, for us is sticking to our knitting, not changing the standards, focusing on the portfolio that we have in place.
Thank you.
Thank you one moment for the next question.
Our next.
Zane will be coming from Bryce Rowe of B Riley Your line is open.
Thanks, so much good afternoon.
Wanted to maybe start.
Around the.
Unrealized depreciation in the quarter beyond what you saw from care quality I think Greg you mentioned.
Thomas B. Raterman: There's, you know, obviously, a significant number of deals in the pipeline that we could do. We always ask ourselves, should we do them? So I think in terms of the portfolio, we'd like it to be flat, at least flat, if not slightly up. We'd like to see our leverage, you know, slightly over one by the end of the year, but we're not going to compromise our credit standards in this environment to get there.
Maybe it was Tom you mentioned.
For companies that.
Went from an internal rating of two to three.
And assume that there might have been.
Some fair value Mark associated with that can you can you maybe talk about.
Some of that.
Our value Mark process in the quarter again away from carrier cloud and I guess, the reversal of the unrealized depreciation that you already had on pillar three.
Sure. Thanks Bryce.
Thomas B. Raterman: Yeah, and the only thing I would add to that completely agree is to add another idiom of beyond sticking to our knitting. We really view the portfolio as a marathon, not a sprint. Our view is that the end goal is to have liquidity and access to capital to make loans to the best loans to the best companies as the market has the availability for it. Thank you. Thank you. One moment for the next question. Our next question today will be from Bryce Rowe of B Riley. Your line is open. Thanks so much.
Well by far the two largest components were.
<unk> cloud and pivot three there was also a marked change in the equity portfolio that was roughly a.
$1 million.
On our warrant position.
ARIA and the rest.
We're really nothing significant frankly, even in the names that wet crop.
Two to three.
I would say as a whole we probably adjusted our.
Bryce Wells Rowe: Good afternoon. I wanted to maybe start around the unrealized depreciation in the quarter beyond what you saw from CareCloud. I think Greg, you mentioned, or maybe it was Tom, you mentioned four companies that went from an internal rating of two to three and assumed that there might have been some fair value mark associated with that. Can you maybe talk about some of that fair value mark process in the quarter, again, away from CareCloud and, I guess, the reversal of the unrealized depreciation that you already had on pivot? Sure. Thanks, Bryce. Well, by far, the two largest components were CareCloud and Pivot3. There was also a mark change in the equity portfolio that was roughly a million dollars under our warranty. And the rest were really nothing significant, frankly, even in the names that went from two to three.
Discount rates up just a bit which had that impact that there was nothing that was really.
Monumental were alarming it was just kind of natural drift outside those three that we talked about adding the equity piece scenario.
Okay. That's helpful. Tom.
Maybe maybe just a question or two around around the joint venture.
Yes.
Can you talk about maybe the type of investment that will go into the joint venture is it similar to what you would.
What you would put in your own portfolio.
And then what type of kind of equity debt do you expect.
I guess the capital structure for that joint venture.
Sure well first of all.
We are delighted.
To have the strength venture with with cabinet Okay.
As is run by some Silicon Valley.
Thomas B. Raterman: I would say as a whole, we probably adjusted our... discount rates up just a bit, which had that impact. But there was nothing that was really monumental or alarming; it was just kind of a natural drift outside those three that we talked about by adding the equity piece in our answer. Okay, that's helpful, Tom. Um, maybe, maybe just a question or two around the joint venture. Um, the, can you talk about maybe the type of investment that will go into the joint venture? Is it similar to what you would, what you would, what you would put in your own portfolio?
Trends, who really know the ecosystem in the venture lending.
Market very well.
And then of course being part of Apollo that one of the world's largest.
<unk> managers.
Quite.
Quite significant in terms of the amount that we're putting in initially where each putting in $35 million.
Equity and then we've arranged financing.
Take it up potentially to 200.
We're even more so that's the initial cap structure that we're thinking about in terms of the focus is really.
Largely what we're doing we view this as an opportunity, particularly.
Thomas B. Raterman: And then what type of equity debt do you expect, you know, to, I guess, as a capital structure for that joint? Sure. Well, first of all, I just want to say we are delighted to have the Strength Venture with CADMA. CADMA is run by Silicon Valley veterans who really know the ecosystem and the venture lending market very well.
In a situation where.
We can't and won't go to the equity markets as an opportunity to continue for us to stay in the market with those late stage companies, where the deals tend to be larger diversify the portfolio through that JV through our interest in the JV.
And added new earnings stream.
Great and Tom in terms of.
Kind of helping us think about how that could ramp.
Thomas B. Raterman: And then, of course, being part of Apollo, one of the world's largest investment managers, that's quite significant. In terms of the amount that we're putting in, initially, we're each putting in $35 million in equity, and then we've arranged financing to take it up potentially to $200 million or even more. So that's the initial cap structure that we're thinking about. And in terms of focus, it's really largely what we're doing. We view this as an opportunity, particularly in a situation where, you know, we can't, won't go to the equity markets, an opportunity for us to stay in the market with those late-stage companies where the deals tend to be larger, diversify the portfolio through that JV, through our interest in the JV, and add a new earning. Great. And Tom, in terms of kind of helping us think about how that could ramp up. Like you said, you all will typically underwrite maybe larger deals, dollar volume deals. And so, theoretically, it wouldn't take but a few to really ramp that thing up. Am I thinking about that the right way?
I mean like.
Like you said you all will typically underwrite maybe larger deals.
The dollar dollar value deals and so.
Theoretically wouldnt take but a few to really ramp that thing.
And my thinking about that the right way.
To some extent I think our view is also to build diversification and cameras view to us to build diversification within the JV. So I think you should.
Think of it as an equity ramp.
Through the balance of this year.
We don't intend to sell any loans from our book into that joint venture at this point I don't think thats going to change.
So I would view it as a steady ramp through the year, but.
Keeping diversification.
In that JV rare.
Relative to the size as it grows.
Okay, Alright, that's great I appreciate.
The answers sure.
Sure thing.
Thank you if you would like to ask a question.
Please press star one on your telephone and we see a name to be announced before proceeding with your question.
Thomas B. Raterman: To some extent, I think our view is also to build diversification, and Cadma's view, too, is to build diversification within the JV. So I think you should think of it as an equity ramp through the balance of this year. We don't intend to sell any loans from our book into that joint venture at this point, and I don't think that's going to change. So I would view it as a steady ramp through the year but keeping diversification in that JV relative to its size as it grows.
The next question is coming from Erik Zwick of Howdie Group. Your line is open.
Good afternoon.
Maybe just start with a follow up on kind of <unk> question on the JV just curious if the partnership with Pat and Mike You mentioned that kind of relationship with Apollo as well, we've got broadened the kind of sourcing funnel at all are there any benefits from that partnership as well.
Yes, certainly a strategic partnership for us and we would expect to see many benefits beyond.
Thomas B. Raterman: All right, that's great. Appreciate the answer and the future. Thank you. If you would like to ask a question, please press star 1-1 on your telephone and wait for your name to be announced before proceeding with your question. The next question is coming from Erik Zwick of Hody Group. Your line is open. Good afternoon.
One of expanding sources of capital.
Thanks, and then just.
In regard to the current pipeline.
And can you provide any color in terms of the mix as it kind of pertains to new investments versus add ons.
Are there any particular industries that you're seeing are more active today.
Erik Edward Zwick: Maybe to start with a follow up on kind of Bryce's question on the JV. Just curious if the partnership with Padma, and you mentioned a kind of relationship with Apollo as well, does that broaden the kind of sourcing funnel at all? Are there any benefits from that partnership as well? Yeah, I mean, it's certainly a strategic partnership for us. And we would expect to see many benefits beyond just one of expanding sources of capital.
In the pipeline.
Yes, I'd say the pipeline is definitely.
Weighted more towards.
New investments, we always are mining the portfolio to see opportunities to give more money to the best companies outside of our already scheduled.
Delayed draws.
In terms of sector I think we're seeing a lot of opportunity across the gamut of the three legs of our investing universe.
Greg Greifeld: And then, just with regard to the current pipeline, can you provide any color in terms of the mix as it kind of pertains to new investments versus add-ons, and are there any particular industries that you're seeing are more active today in the pipeline? Yeah, I'd say the pipeline is definitely, you know, weighted more toward new investments. You know, we're always mining the portfolio to see opportunities to give more money to the best companies outside of our already scheduled, delayed draws. In terms of sector, I think we're seeing a lot of opportunity across the gamut of the three legs of our investing universe, you know, technology, life sciences, as well as consumer, and expect the split to remain consistent throughout. Thanks, Greg. And last one for me, just curious about your appetite to use the repurchase authorization, kind of in 24 hours at all. I think that's really a function of where the stock trades in there. There are two ways to return capital to shareholders. One is to build the build the book and www.runway.com under that program to be less significant.
Technology.
Life Sciences, as well as consumer and expect the split to remain consistent throughout this year.
Thanks, Greg and then last one for me just curious about your appetite to use the repurchase authorization.
Kind of in 'twenty four at all.
I think thats really a function of where the stock trades I mean, there are two ways to return capital to shareholders want us to.
The build the book.
And continue to grow the dividend and the other is to repurchase shares.
Ultimately, we'd like to get to the point, where we can raise equity. So if we get trading closer to NAV or at some point hopefully above NAV here I would expect to see usage.
Under that program to be less significant.
I appreciate that I thought Tom Thanks for taking my questions.
Sure thing.
Thank you one moment to the next question.
And our next question will be coming from Mickey schooling.
Linden Baird. Your line is open.
Greg Greifeld: I appreciate that. Thanks for taking my questions. Truthanger, Thank you.
Hi, yes, good afternoon, everyone.
Operator: One moment for the next question. Our next question will be coming from Mickey Schleien, of Lindenburg. Your line is open. Yes, good afternoon, everyone.
Not to beat a dead horse, but I have a few more questions on the JV.
Tom could you repeat what you said was the debt to equity target for the JV.
Mickey Max Schleien: Not to beat a dead horse, but I have a few more questions on the JV. First, Tom, could you repeat what you said was the debt to equity target for the JV? Sure. And Mickey, thanks for joining us today. Initially, it's going to be $70 million in equity, which will be comprised of 50%, so $35 million from each of us. And then we'll grow that equity base up to $200 million, so another $130 million in debt.
Sure. So Mickey thanks for just questioning.
Today.
Initially, it's going to be $70 million in equity, which will be comprised of 50 50.
<unk>, 50%, so $35 million for each of US and then we'll grow to at least with that equity base up to 200 man so another $130 million of debt.
I understand.
Tom what is your target.
Return on invested capital in the JV.
Thomas B. Raterman: I understand. And Tom, what is your target return on invested capital on the JV? And so the asset level returns are really going to be the same as what we're looking at in the core portfolio. They shouldn't vary significantly.
And so the.
Asset level returns are really good.
Going to be the same as what we're looking at in the.
Core portfolio.
The.
They shouldn't vary significantly so you just apply the leverage.
Thomas B. Raterman: So you just apply the leverage, and you know, we would think that you get a very similar return on equity, if not a little greater, because there's so much more leverage. And just want to confirm that Cadillac is 100% owned by Apollo, is that right? That's a question for Apollo. Really, but CADMA is definitely part of Apollo.
You would think that.
We get there.
Very similar.
Return on equity if not a little greater on that.
I understand there were some more leverage.
And.
Just wanted to confirm Ken was 100% owned by Apollo is that right.
That's a question for Apollo.
Got it.
<unk> so but.
Cabinet is definitely part of Apollo.
Thomas B. Raterman: And how does Oaktree feel about Runway working with Apollo given, you know, Oaktree and Apollo are obviously competitors? Oak Tree continues to be a very supportive partner, and they understand that we're going to do things to expand our footprint, our access to capital, and they embrace it. Obviously, Oak Trees is on our board, and they were fully supportive of the program, and it's something that we've talked about and has had a fairly meaningful gestation period, as far as I can tell. And the JV is not going to be competing with any other part of Apollo, is that correct?
And how does oaktree feel about runway working with Apollo given oaktree and Apollo obviously your competitors.
<unk> continues to be a very supportive partner and they understand that we're going to do things too.
<unk>, our footprint, our access to capital and they embrace it obviously oak trees on our board and they were fully supportive of the program and it's something that we've talked about and has had a fairly meaningful gestation period.
I understand.
The JV is not going to be competing with any other part of Apollo is that correct.
Thomas B. Raterman: That's our objective, yes. Okay. And how will you allocate deal flow between the BDC and the JV? So our goal in the BDC is really to increase our diversification in the portfolio. There are certain limitations under our lending agreements that where it drops out. So there's a series of limitations on deals over a certain dollar amount. We lose in our borrowing base for the KeyBank revolver to the extent we hit concentrations in various industries or maturities, things like that.
So thats our objective yet.
Okay, and how will you allocate deal flow between the BDC and the JV.
So our goal in the BDC is really to that.
Increase our diversification in the portfolio.
There are certain limitations under our lending agreements that.
Where it drops out so theres a series of limitations deals over a certain dollar amount we lose in our borrowing base.
For the Keybanc revolver to the extent we hit concentrations.
In various industries.
Or maturities things like that.
Thomas B. Raterman: But those, the JV will pick those up first and allow us to maximize the availability under our revolver and effectively utilize our leverage there. So that's really the focus on the allocation is making sure that we're using our leverage effectively and using the assets effectively to get to understand. And just lastly, last quarter, you gave us a little bit of an update on David's, the expectation for David Spreng to return to day-to-day involvement with the company. Anything you can say on that at this time? Yeah, really no change. We expect David to be back later this year.
The JV will pick those up first.
Allow us to maximize the availability.
Under our revolver and effectively utilize our leverage there so.
That's really the.
Our focus on the allocation is making sure that we're using our leverage effectively using the assets effectively to gain leverage.
Understand and just.
Lastly, last quarter you gave.
You gave us a little bit of an update on David.
The expectation for David Springer returned to day.
Day to day.
Involvement with the company anything you can say on that at this time.
Yes, really no change we expect David to be back later this year I know he certainly appreciates.
Thomas B. Raterman: I know he certainly appreciates all the well wishes he's received. And Greg and I, you know, speak with David quite, quite frequently. Okay, thanks for that. Those are all my questions.
All the well wishes he has received and Greg.
Speak with David quite.
Quite quite frequently.
Okay. Thanks for that those are all my questions I appreciate it.
Mickey Max Schleien: I appreciate it. Thank you. If you would like to ask a question, please press star 1-1 on your telephone. And one moment for the next question.
Thank you if you would like to ask a question. Please press star one on your telephone.
And one moment for the next question.
Operator: Our next question will be coming from Casey Alexander of Compass. Your line is open. Yeah, sorry, I missed quite a bit of this call because I had another conference call that started at 4:45. So I apologize for that. I do want to confirm that, if I read the release correctly, in the fourth quarter, you did not repurchase any shares. That's correct.
Our next question will be coming from Casey Alexander.
Your line is open.
Yes, sorry, I missed quite a bit of this call because I had another conference call that started at 445, so I apologize for that I do want to confirm that that if I read the release correctly in the fourth quarter, you did not repurchase any shares.
That's correct.
Casey Alexander: And I'm curious why, after the oak tree offering in November when the stock was quite weak, why you chose not to repurchase some shares in that window? Well, you know, Casey, we looked at how the stock traded; we looked at the opportunities for us to deploy capital. And the stock really moved back, in our opinion, into a trading range where we felt it could stand on its own and decided to reserve that dry powder, either in the program itself or the dry powder on our balance sheet for a period when there was a greater...
And I'm curious why after the oak tree offering in November when the stock was quite weak how come you chose not to repurchase some shares in that window.
Well Casey we looked at how the stock trade at we looked at the opportunities for us too.
<unk> capital and the stock really moved back in our opinion.
And to a trading range, where we felt it could stand on its own and decided to reserve that dry powder.
That either in the program itself for the dry powder from our balance sheet.
For a period, where there was a greater need.
Thomas B. Raterman: Okay. All right. Well, I'll get the rest of this from the transcript. I'm sorry, I got here late, and I don't want to ask you to repeat anything that you've already said. Casey, we're glad to have you. I'm glad to have the case.
Okay Alright.
Alright, well ill get the rest of this from the transcript I am sorry, I got here of late and I don't want to ask you to repeat anything that you've already said Casey we're glad to have you.
Glad to have you Casey.
Okay.
Greg Greifeld: Thank you, and at this time, there are no more questions in the queue, and I would like to turn the call back over to Greg Greifeld. For closing remarks, please go ahead, sir. Thank you, operator. We see immense opportunity for growth in the year ahead and believe we are well positioned to provide essential support for high quality, late stage companies that are faced with a variety of nuanced funding challenges. Thank you all for joining us today. We look forward to updating you on our first quarter 2024 financial results in May. This concludes today's conference call. Thank you for participating. You may all disconnect at www.globalonenessproject.org
Thank you and at this time there are no more questions in the queue I would like to turn the call back over to Greg Greenville.
For closing remarks. Please go ahead Sir.
Thank you operator, we see immense opportunity for growth in the year ahead, and believe we are well positioned to provide essential support for high quality late stage companies that are faced with a variety of nuanced funding challenges. Thank you all for joining US today, we look forward to updating you on our first quarter 2024 financial results.
Meg.
This.
Today's conference call. Thank you for participating you may all disconnect.
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