Q2 2024 TriplePoint Venture Growth BDC Corp Earnings Call

August 7, 2024

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Operator: Good afternoon, ladies and gentlemen, and welcome to the TriplePoint Venture Growth BDC Corporation 2nd quarter of 2024 earnings conference call. At this time, all lines have been placed in a listen-only mode. After the speakers prepare remarks, there will be an opportunity to ask questions, and instructions will follow at that time.

Speaker Change: Good afternoon, ladies and gentlemen, and welcome to the TriplePoint Venture Growth BDC Corporation second quarter of 2024 earnings conference call.

Speaker Change: At this time, all lines have been placed in a listen-only mode. After the speaker's prepared remarks, there will be an opportunity to ask questions, and instructions will follow at that time. This conference is being recorded, and a replay of the call will be available in an audio webcast on the TriplePoint Venture Growth website.

Operator: This conference is being recorded, and a replay of the call will be available in an audio webcast on the TriplePoint Venture Growth website. Company management is pleased to share with you the company's results for the 2nd quarter of 2024.

Speaker Change: Company Management is pleased to share with you the company's results for the second quarter of 2024.

Operator: Today, representing the company, is Jim Labe, chief executive officer and chairman of the board; Sajal Srivastava, president and chief investment officer; and Chris Mathieu, chief financial officer.

Speaker Change: Today, representing the company is Jim Labe, Chief Executive Officer and Chairman of the Board, Sajal Srivastava, President and Chief Investment Officer, and Chris Mathieu, Chief Financial Officer.

Operator: Before I turn the call over to Mr. Labe, I'd like to direct your attention to the customary safe harbor disclosure in the company's press release regarding forward-looking statements and remind you that during this call, management will make certain statements that relate to future events or the company's future performance or financial condition, which are considered forward-looking statements under federal securities law. You are asked to refer to the company's most recent filings with the Securities and Exchange Commission for important factors that could cause actual results to differ materially from these statements. The company does not undertake any obligation to update any forward-looking statements or projections unless required by law.

Speaker Change: Before I turn the call over to Mr. Labe, I'd like to direct your attention to the Customary Safe Harbor disclosure in the company's press release regarding forward-looking statements.

Speaker Change: And remind you that during this call, management will make certain statements that relate to future events or the company's future performance or financial condition, which are considered forward-looking statements under federal securities law.

Speaker Change: You are asked to refer to the company's most recent filings with the Securities and Exchange Commission for important factors that could cause actual results to differ materially from these statements.

Unnamed Speaker: The company does not undertake any obligation to update any forward-looking statements or projections unless required by law. Investors are cautioned not to place undue reliance on any forward-looking statements made during the call, which reflect management's opinions only as of today.

Unnamed Speaker: does not undertake any obligation to update any forward-looking statements or projections unless

Speaker Change: the company does not undertake any obligation to update any forward-looking statements or projections unless required by law investorsare cautioned not to place undue reliance on any forward-looking statements made during the call which reflect management's opinions only as of today

Unnamed Speaker: Unless required by law, investors.

Operator: Investors are cautioned not to place undue reliance on any forward-looking statements made during the call, which reflect management's opinions only as of today.

Operator: To obtain copies of our latest SEC filings, please visit the company's website at www.tpvgg.com.

Mr. Labe: To obtain copies of our latest SEC filings, please visit the company's website at www.tpvg.com. Now I'd like to turn the conference over to Mr. Labe.

James Labe: Now I'd like to turn the conference over to Mr. Labe. Thank you and good afternoon everyone, and welcome to TPVG 2nd quarter earnings call. During the second quarter, our focus continued to remain on navigating through what the NVCA labels as a generational market shift in the venture capital markets. Given the continued volatility and challenges in the venture capital market, as well as the public markets for technology companies, we stayed on our path of selectively increasing our investment activity to capture growing investment opportunities coming to market. For actively managing our existing investment portfolio, maintaining strong liquidity, and taking the steps that we believe will enable us to position TPVG for the future.

Unnamed Speaker: Investors are cautioned not to place undue reliance on any forward-looking statements made during the call, which reflect management's opinions only as of today. To obtain copies of our latest SEC filings, please visit the company's website at www.tpvg.com. Now I'd like to turn the conference over to Mr. Labe.

James Labe: Thank you and good afternoon everyone, and welcome to TPVG's second quarter earnings call. During the second quarter, our focus continued to remain on navigating through what the NVCA labels as a generational market shift in the venture capital market. Given the continued volatility and challenges in the venture capital market as well as the public markets for technology companies, we stayed on our path of selectively increasing our investment activity to capture growing investment opportunities coming to market, proactively managing our existing investment portfolio, maintaining strong liquidity, and taking the steps that we believe will enable us to position TPZG for the future.

James Labe: Thank you, and good afternoon everyone, and welcome to TPVG's second quarter earnings call. While we're seeing a modest increase in investment activity, we do not believe this marks an inflection point. Private company valuations have not fully reset.

Mr. Labe: Thank you and good afternoon everyone and welcome to TPVG's second quarter earnings call.

Mr. Labe: During the second quarter, our focus continued to remain on navigating through what the NVCA labels as a generational market shift in the venture capital markets.

Mr. Labe: Given the continued volatility and challenges in the venture capital market as well as the public markets for technology companies, we stayed on our path of selectively increasing our investment activity to capture growing investment opportunities coming to market.

Speaker Change: for actively managing our existing investment portfolio, maintaining strong liquidity, and taking the steps that we believe will enable us to position TPZG for the future.

James Labe: While we're seeing a modest increase in investment activity, we do not believe this marks an inflection point. The imbalance continues between the levels of venture capital investment activity and the continuing limited exit opportunities through IPOs, merger acquisitions, for venture capital-backed private technology companies. Private company valuations have not fully reset, and we expect the valuation overhang and venture growth stage companies to continue to be worked through over the coming quarter. VCs continue to be patient with their investment activity, balancing the need to preserve their dry powder, and also growing mindful of the need to generate distributions for the limited partner investors through exit activity.

Mr. Labe: While we're seeing a modest increase in investment activity, we do not believe this marks an inflection point.

Mr. Labe: The imbalance continues between the levels of venture capital investment activity and the continuing limited exit opportunities through IPOs or merger acquisitions for venture capital-backed private technology companies.

Unnamed Speaker: And we expect the evaluation overhang and venture growth stage companies to continue to be worked through over the coming quarter. VCs continue to be patient with their investment activity, balancing the need to preserve their dry powder and also growing mindful of the need to generate distributions for their limited partner investors through exit activity, while all at the same time taking advantage of new investment opportunities they are seeing at investor-friendly terms in today's market.

Mr. Labe: private company valuations have not fully reset and we expect evaluation overhanging adventure growth stage companies to continue to be worked through over the coming quarters

Sajal Srivastava: VCs continue to be patient with their investment activity, balancing the need to preserve their dry powder and also growing mindful of the need to generate distributions for their limited partner investors through exit activity. Combining this continued increase in demand and our previously stated expectation of an increased new investment activity in 2024, signed term sheets for venture growth stage companies at TriplePoint Capital increased 44% over the previous quarter. At the same time, we're encouraged by the strengthening operating performance and improved fundraising activity from a number of our portfolio companies, which are also across several industry sectors. Touching on our warrant and equity positions in our portfolio, we have outstanding warrant positions in 94 portfolio companies and equity positions in 46.

Mr. Labe: VCs continue to be patient with their investment activity, balancing the need to preserve their dry powder and also growing mindful of the need to generate distributions for their limited partner investors through exit activity.

James Labe: While all at the same time taking advantage of new investment opportunities, they are seeing at investor-friendly terms in today's market.

Mr. Labe: While all at the same time taking advantage of new investment opportunities they are seeing at investor-friendly terms in today's market.

James Labe: Turning to the market for debt financing, the demand for venture lending continues. Many from companies who have raised capital in the current market environment, or a meaningful existing cash runway, and are looking to complement that capital with debt financing given their continued operational success. Combining this continued increase in demand and are previously stated expectation of an increased new investment activity in 2024, signed term sheets for venture growth stage companies at TriplePoint Capital increased 44% over the previous quarter, and new debt commitments by 420% and fundings by 186% at TPVG. In terms of the current portfolio, our team continues to monitor and maintain close contact with all of our portfolio companies and their venture investors, and we remain head-down managing through existing credit situations.

Unnamed Speaker: Turning to the market for debt financing, the demand for venture lending continues, many from companies who have raised capital in the current market environment or a meaningful existing cash runway and are looking to complement that capital with debt financing given their continued operational success.

Mr. Labe: Turning to the market for debt financing, the demand for venture lending continues. Many from companies who've raised capital in the current market environment or a meaningful existing cash runway and are looking to complement that capital with debt financing, given their continued operational success.

Unnamed Speaker: Combining this continued increase in demand and our previously stated expectation of an increased new investment activity in 2024, signed term sheets for venture growth stage companies at TriplePoint Capital increased 44% over the previous quarter, and new debt commitments increased by 420% and fundings by 186% at TPVG. In terms of the current portfolio, our team continues to monitor and maintain close contact with all of our portfolio companies and their venture investors, and we remain heads down, managing through existing credit situations.

Mr. Labe: Combining this continued increase in demand and our previously stated expectation of an increased new investment activity in 2024,

Speaker Change: Signed term sheets for venture growth stage companies at TriplePoint Capital increased 44% over the previous quarter, and new debt commitments by 420% and fundings by 186% at TPVG.

Operator: Good afternoon ladies and gentlemen and welcome to the TriplePoint Venture Growth BDC Corporation 2nd quarter of 2024 earnings conference call. At this time, all lines have been placed in a listen only mode. After the speakers prepare remarks, there will be an opportunity to ask questions and instructions will follow at that time.

Mr. Labe: In terms of the current portfolio, our team continues to monitor and maintain close contact with all of our portfolio companies and their venture investors, and we remain heads down managing through existing credit situations.

Operator: This conference is being recorded and a replay of the call will be available in an audio webcast on the TriplePoint Venture Growth website. Company management is pleased to share with you the company's results for the 2nd quarter of 2024.

James Labe: At the same time, we're encouraged by the strengthening operating performance and improved fundraising activity from a number of our portfolio companies, which are also across several industry sectors. An aggregate of almost 1 billion was raised by our debt portfolio companies in the first half of this year. That's more than double that of the previous year. And then include, excuse me, excludes Metropolis, which in itself raised a billion in Q2 as part of the attack position of SP cost. This increased fundraising activity we are seeing continues across multiple sectors, including software, fintech, robotics, cybersecurity, and others that we have been talking about inciting in these calls.

Unnamed Speaker: At the same time, we're encouraged by the strengthening operating performance and improved fundraising activity from a number of our portfolio companies, which are also across several industry sectors. An aggregate of almost $1 billion was raised by our debt portfolio companies in the first half of this year, more than double that of the previous year.

Mr. Labe: At the same time, we're encouraged by the strengthening operating performance and improved fundraising activity from a number of our portfolio companies, which are also across several industry sectors.

Operator: Today representing the company is Jim Labe, chief executive officer and chairman of the board, Sajal Srivastava, president and chief investment officer and Chris Mathieu, chief financial officer. Before I turn the call over to Mr. Labe, I'd like to direct your attention to the customary safe harbor disclosure in the company's press release regarding forward looking statements and remind you that during this call, management will make certain statements that relate to future events or the company's future performance or financial condition which are considered forward looking statements under federal securities law.

Mr. Labe: An aggregate of almost $1 billion was raised by our debt portfolio companies in the first half of this year. That's more than double that of the previous year.

Unnamed Speaker: And it includes, excuse me, excludes Metropolis, which raised a billion in Q2 as part of its acquisition of SP Club. This increased fundraising activity we are seeing continues across multiple sectors, including software, fintech, robotics, cybersecurity, and others that we have been talking about and citing in these calls. Touching on our warrant and equity positions in our portfolio, we have outstanding warrant positions in 94 portfolio companies and equity positions in 46.

Operator: You are asked to refer to the company's most recent filings with the Securities and Exchange Commission for important factors that could cause actual results to differ materially from these statements. The company does not undertake any obligation to update any forward looking statements or projections unless required by law. Investors are caution not to place undue reliance on any forward looking statements made during the call which reflect management's opinions only as of today.

Mr. Labe: And it includes, excuse me, excludes Metropolis, which in itself raised a billion in Q2 as part of its acquisition of SP Cloth.

Mr. Labe: This increased fundraising activity we are seeing continues across multiple sectors including software, fintech, robotics, cybersecurity, and others that we have been talking about and citing in these calls.

James Labe: Touching on our warrant and equity positions in our portfolio, we have outstanding warrant positions in 94 portfolio companies and equity positions in 46. We believe these positions both well for our ability to improve NAV over the long term. I'm also pleased to report that we've made notable progress over the past year and a half in reducing our unfunded commitments, boosting our total liquidity, and reducing our leverage ratio to fall within our target range. Unfunded commitments went from a high of 205 million one year ago to 71 million as of the second quarter. And more importantly, we reduced our gross leverage ratio from the highest 1.76 at the end of last year to 1.15 as of quarter's end.

Mr. Labe: touching on our warrant and equity positions in our portfolio we have outstanding warrant positions in ninety-four portfolio companies and equity positions in forty-six

Unnamed Speaker: We believe these positions bode well for our ability to improve NAV over the long term. I'm also pleased to report that we've made notable progress over the past year and a half in reducing our unfunded commitments, boosting our total liquidity, and reducing our leverage ratio to fall within our target range. Unfunded commitments went from a high of $205 million one year ago to $71 million as of the second quarter.

Mr. Labe: We believe these positions bode well for our ability to improve NAV over the long term.

Sajal Srivastava: I'm also pleased to report that we've made notable progress over the past year and a half in reducing our unfunded commitments. These efforts have provided us with substantial liquidity and will play key roles in positioning TPVG here in the short term and over the long term. We'll also continue to evaluate hold sizes, depth-to-equity ratios, deal structures, and other key metrics. We're encouraged by the progress to date and the recent investments we've made, which continue to reflect these goals and parameters.

Mr. Labe: i'm also pleased to report that we've made notable progress over the past year and a half in reducing our unfunded commitments boosting our total liquidity and reducing our leverage ratio to fall within our target range

Operator: To obtain copies of our latest SEC filings, please visit the company's website at www.TPVG.com.

James Labe: Now I'd like to turn the conference over to Mr. Labe. Thank you and good afternoon everyone and welcome to TPVG 2nd quarter earnings call. During the second quarter, our focus continued to remain on navigating through what the NVCA labels as a generational market shift in the venture capital markets. Given the continued volatility and challenges in the venture capital market, as well as the public markets for technology companies, we stayed on our path of selectively increasing our investment activity to capture growing investment opportunities coming to market. For actively managing our existing investment portfolio, maintaining strong liquidity and taking the steps that we believe will enable us to position TPVG for the future.

Mr. Labe: Unfunded commitments went from a high of $205 million one year ago to $71 million as of the second quarter. And more importantly, we reduced our gross leverage ratio from as high as 1.76 at the end of last year to 1.15 as of quarter's end.

Unnamed Speaker: And more importantly, we reduced our gross leverage ratio from as high as 1.76 at the end of last year to 1.15 at the quarter's end. We also announced earlier today the renewal of our revolving credit facility, which provides us with a meaningful source of capital and financial flexibility for us in our go-forward plan. These efforts have provided us with substantial liquidity and will play key roles in positioning TPVG here in the short term and over the long term. The board took another step on this path forward by reducing our regular distribution this quarter to 30 cents per share.

James Labe: We also announced earlier today the renewal of our revolving credit facility, which provides us a meaningful source of capital and financial flexibility for us in our go-forward Williams. These efforts have provided us with substantial liquidity and will play key roles in positioning TPVG here on the short term and over the long term.

Mr. Labe: we also announced earlier today the renewal of our revolving credit facility which provides us a meaningful source of capital and financial flexibility for us in our go-forward plans

Mr. Labe: these efforts have provided us with substantial liquidity and will'll play key roles in positioning tpvg here on the short term and over the long term

James Labe: The board took another step on this path forward by reducing our regular distribution this quarter to 30 cents per share. This was not an easy decision and reflects a number of considerations, including our higher than expected repayment and prepayment activity during the first quarter. And once again, our higher than expected repayment and prepayments last quarter, but also given the impact of reduced funding, measured investment allocations, the lower level of funding activity relative to prior years, again reducing our leverage to our target leverage range, and factoring in what we think will be expected federal interest rate cuts.

Mr. Labe: The board took another step on this path forward by reducing our regular distribution this quarter to 30 cents per share.

James Labe: While we're seeing a modest increase in investment activity, we do not believe this marks an inflection point. The imbalance continues between the levels of venture capital investment activity and the continuing limited exit opportunities through IPOs, merger acquisitions, for venture capital-backed private technology companies. Private company valuations have not fully reset, and we expect the valuation overhang and venture growth stage companies to continue to be work through over the coming quarter. VCs continue to be patient with their investment activity, balancing the need to preserve their dry powder, and also growing mindful of the need to generate distributions for the limited partner investors through exit activity. While all at the same time taking advantage of new investment opportunities they are seeing at investor-friendly terms in today's market.

Mr. Labe: This was not an easy decision and reflects a number of considerations, including our higher-than-expected repayment and prepayment activity during the first quarter.

Mr. Labe: And once again, our higher-than-expected repayment and prepayments last quarter.

Unnamed Speaker: This was not an easy decision and reflects a number of considerations, including our higher than expected repayment and prepayment activity during the first quarter and, once again, our higher than expected repayment and prepayments last quarter. But also given the impact of reduced funding, measured investment allocations, and the lower level of funding activity relative to prior years, again, reducing our leverage to our target leverage range and factoring in what we think will be expected federal interest rate cuts.

Mr. Labe: But also, given the impact of reduced funding, measured investment allocations, the lower level of funding activity relative to prior years, again, reducing our leverage to our target leverage range, and factoring in what we think will be expected federal interest rate cuts.

James Labe: The dividend is now much better line with the earnings power of our portfolio, our core portfolio yield and other targeted leverage, while still providing size of the distributions to shareholders. Completing these efforts is our continued progress on diversifying the portfolio, including the industry sector and geographic rotation we have been talking about during the last few quarters. Our focus remains to be investing in companies operating in what we believe are attractive investment sectors. And ones that have recently raised capital, have ample cash runways, have backing from our select venture investors, have prudent management teams, and whose business models have attractive unit economics and high retention rates.

Unnamed Speaker: The dividend is now much better aligned with the earnings power of our portfolio, our core portfolio yield, and other targeted leverage, while still providing sizable distributions to shareholders. Complementing these efforts is our continued progress on diversifying the portfolio, including the industry sector and geographic rotation we have been talking about during the last few quarters. Our focus remains to be investing in companies operating in what we believe are attractive investment sectors and ones that have recently raised capital, have ample cash runways, have backing from our select venture investors, have prudent management teams, and whose business models have attractive unit economics and high retention rates. We'll also continue to evaluate hold sizes, depth-to-equity ratios, deal structures, and other key metrics.

Mr. Labe: The dividend is now much better aligned with the earnings power of our portfolio, our core portfolio yield, and other targeted leverage, while still providing sizable distributions to shareholders.

Mr. Labe: Complementing these efforts is our continued progress on diversifying the portfolio, including the industry sector and geographic rotation we have been talking about during the last few quarters.

James Labe: Turning to the market for debt financing, the demand for venture lending continues. Many from companies who have raised capital in the current market environment, or a meaningful existing cash runway and are looking to complement that capital with debt financing given their continued operational success. Combining this continued increase in demand and are previously stated expectation of an increased new investment activity in 2024, signed term sheets for venture growth stage companies at TriplePoint Capital increased 44% over the previous quarter, and new debt commitments by 420% and fundings by 186% at TPVG.

Mr. Labe: Our focus remains to be investing in companies operating in what we believe are attractive investment sectors.

Mr. Labe: and ones that have recently raised capital, have ample cash runways, have backing from our select venture investors, have prudent management teams, and whose business models have attractive unit economics and high retention rates.

James Labe: We'll also continue to evaluate hold sizes, debt equity ratios, deal structures, and other key metrics. We're encouraged by the progress to date in the recent investments we've made, which continue to reflect these goals and parameters.

Mr. Labe: We'll also continue to evaluate hold sizes, debt-to-equity ratios, deal structures, and other key metrics.

Sajal Srivastava: We're encouraged by the progress to date and the recent investments we've made, which continue to reflect these goals and parameters. Further, we're evaluating the potential for broadened investment strategies for TPVG, particularly given our sponsor, TriplePoint Capital, a multi-billion dollar platform-wide venture lending business and the potential increased ways in which TPVG could benefit. TriplePoint Capital manages multiple vehicles and has been underwriting venture loans for almost 20 years, having committed more than $13 billion to more than 1,000 venture-backed companies during that period.

Mr. Labe: We're encouraged by the progress to date and the recent investments we've made which continue to reflect these goals and parameters.

James Labe: Further, we're evaluating the potential for broad and investment strategies for TPVG, particularly given our sponsor, TriplePoint Capital, a multi-billion dollar platform-wide venture lending business, and potential increased ways in which TPVG could benefit. TriplePoint Capital manages multiple vehicles and has been underwriting venture loans for almost 20 years, to date having committed more than 13 billion to more than 1,000 venture-back companies during that period. As a leader in the venture lending market with an exceptional brand name and reputation, TriplePoint Capital continues to grow and capitalize on investment opportunities in today's market, including actively expanding its venture and ongoing increases in originations and investment staffing nationwide.

James Labe: In terms of the current portfolio, our team continues to monitor and maintain close contact with all of our portfolio companies and their venture investors, and we remain head-down managing through existing credit situations. At the same time, we're encouraged by the strengthening operating performance and improved fundraising activity from a number of our portfolio companies which are also across several industry sectors. An aggregate of almost 1 billion was raised by our debt portfolio companies in the first half of this year.

Speaker Change: further we're evaluating the potential for broaden investment strategies for tp vg particularly given our sponsor triple point capital a multibillion dollar platform wide venture lving business and potential increased ways in which tpvg could benefit

Sajal Srivastava: TriplePoint Capital manages multiple vehicles and has been underwriting venture loans for almost 20 years, to date, having committed more than $13 billion to more than 1,000 venture-backed companies during that period. As a leader in the venture lending market with an exceptional brand name and reputation, TriplePoint Capital continues to grow and capitalize on investment opportunities in today's market, including actively expanding its bench and ongoing increases in origination and investment staffing nationwide. We believe the sum of all these efforts positions TPVG well for when the venture capital markets recover and believe it could result in tangible benefits for our stakeholders in the short term as well.

Speaker Change: TriplePoint Capital manages multiple vehicles and has been underwriting venture loans for almost 20 years, to date having committed more than 13 billion to more than a thousand venture-backed companies during that period.

Sajal Srivastava: As a leader in the venture lending market with an exceptional brand name and reputation, TriplePoint Capital continues to grow and capitalize on investment opportunities in today's market, including actively expanding its bench and ongoing increases in origination and investment staffing nationwide. We believe the sum of all these efforts positions TPVG well for when the venture capital markets recover and believe it could result in tangible benefits for our stakeholders in the short term as well.

TriplePoint Capital: As a leader in the venture lending market with an exceptional brand name and reputation, TriplePoint Capital continues to grow and capitalize on investment opportunities in today's market.

James Labe: That's more than double that of the previous year. And then include, excuse me, excludes Metropolis, which in itself raised a billion in Q2 as part of the attack position of SP cost. This increased fundraising activity we are seeing continues across multiple sectors, including software, Fintech, robotics, cybersecurity, and others that we have been talking about inciting in these calls. Touching on our warrant and equity positions in our portfolio, we have outstanding warrant positions in 94 portfolio companies and equity positions in 46. We believe these positions both well for our ability to improve NAV over the long term.

Speaker Change: including actively expanding its bench and ongoing increases in originations and investment staffing nationwide.

James Labe: We believe that some of all these efforts positions TPVG well for when the venture capital markets recover and believe it could result in tangible benefits to our stakeholders, well as well as over the long-term.

Speaker Change: We believe the sum of all these efforts positions TPVG well for when the venture capital markets recover and believe it could result in tangible benefits to our stakeholders as well as over the long term.

James Labe: Finally, I'd like to take a minute to thank Chris Matthew for his efforts over the past five years, not only at TPVG but also at our TriplePoint Capital platform. We wish on the best and is upcoming retirement and appreciate not only as dedication, but the friendship over the many years. As we continue with our search for a CFO, we would like to welcome Matt Goliani, whom we announced earlier this week to serve as our Interim CFO. Matt takes over the reign since Friday and joins the company back in 2019, and he served as a company's controller since December 2022.

Sajal Srivastava: Finally, I'd like to take a minute to thank Chris Mathieu for his efforts over the past five years, not only at TPBG but also on our TriplePoint Capital platform. We wish him the best in his upcoming retirement and appreciate not only his dedication but his friendship over the many years. As we continue with our search for a CFO, we would like to welcome Matt Galiani, whom we announced earlier this week to serve as our interim CFO.

Speaker Change: Finally, I'd like to take a minute to thank Chris Mathieu for his efforts over the past five years, not only at TPVG, but also at our TriplePoint Capital Platform.

Sajal Srivastava: We wish him the best in his upcoming retirement and appreciate not only his dedication but his friendship over the many years. Matt takes over the reins this Friday and joined the company back in 2019, and he served as the company's controller since December 2022. With that, I'll now turn the call over to Sajal to cover our activities and Outlook in more detail.

James Labe: I'm also pleased to report that we've made notable progress over the past year and a half in reducing our unfunded commitments, boosting our total liquidity, and reducing our leverage ratio to fall within our target range. Unfunded commitments went from a high of 205 million one year ago to 71 million as of the second quarter. And more importantly, we reduced our gross leverage ratio from the highest 1.76 at the end of last year to 1.15 as of quarter's end.

Speaker Change: We wish him the best in his upcoming retirement and appreciate not only his dedication, but the friendship over the many years.

Speaker Change: As we continue with our search for a CFO , we would like to welcome Matt Gagliani, whom we announced earlier this week to serve as our interim CFO .

Sajal Srivastava: Matt takes over the reins this Friday and joined the company back in 2019, and he served as the company's controller since December 2022. With that, I'll now turn the call over to Sajal to cover our activity and outlook in more detail.

Speaker Change: Matt takes over the reins this Friday and joined the company back in 2019. And he served as the company's controller since December 2022.

Sajal Srivastava: With that, I'll now turn the call over to Sajal to cover our activity, and I'll look in more detail. Thank you Jim, and good afternoon. Investment pipeline activity increased for the 4th consecutive quarter. The TriplePoint gap will find 188 million turns each to a venture growth stage companies, compared to 130 million Q1, reflecting continued increases in originations by investment teams, referrals from our select venture capital funds, and demand from high quality companies seeking debt financing. Although our investment pipeline activity is increasing, TriplePoint Capital and TPVG continue to be very measured in our approach to new originations in light of market conditions.

Speaker Change: with that i'll now turn the call over to subl to cover our activity and outlook in more detail

Sajal Srivastava: Thank you, Jim, and good afternoon. Investment pipeline activity increased for the fourth consecutive quarter as TriplePoint Capital signed $188 million in term sheets with venture growth stage companies compared to $130 million in Q1, reflecting continued increases in originations by our investment team, referrals from our select venture capital funds, and demand from high-quality companies seeking debt finance. Although our investment pipeline activity is increasing, TriplePoint Capital and TPBG continue to be very measured in our approach to new originations in light of market conditions.

subl: Thank you, Jim, and good afternoon.

Speaker Change: invesestment pipeline activity increased for the fourth conseutive quarter this strimloid capital signed hundred eighty eight millionof term sheetto adventure grow stage companies

subl: compared to $130 million in Q1, reflecting continued increases in originations by our investment team, referrals from our select venture capital funds, and demand from high-quality companies seeking debt financing.

James Labe: The board took another step on this path forward by reducing our regular distribution this quarter to 30 cents per share. This was not an easy decision and reflects a number of considerations including our higher than expected repayment and prepayment activity during the first quarter. And once again, our higher than expected repayment and prepayments last quarter, but also given the impact of reduced funding, measured investment allocations, the lower level of funding activity relative to prior years, again reducing our leverage to our target leverage range, and factoring in what we think will be expected federal interest rate cuts.

Speaker Change: although our investment pipeline activities increasing triplepoint capital and tbvg continue to be very measured in our approach to newer originations in light of market conditions

Sajal Srivastava: With regards to new investment allocation to TPVG during the 2nd quarter, in light of our progress of reducing leverage and mindful of our objectives for portfolio diversification, TriplePoint Capital allocated 52 million in new commitments to five companies to TPVG, including two new portfolio companies, our highest commitment amount over the past 6 quarters. Commitments to new portfolio companies during Q2 included Affinity, the software-based relationship intelligence platform built to expand and evolve traditional CRM, backed by Memo Ventures, Peer Ventures, and other ventures, and Cresta Intelligence, a software company which leverages artificial intelligence to help sales and service agents to improve the quality of their customer service, backed by Sequoia Capital, Greylock Partners, and Regional Horowitz and other investors.

Sajal Srivastava: With regards to new investment allocation to TPBG during the second quarter, in light of our progress of reducing leverage and mindful of our objectives for portfolio diversification, TriplePoint Capital allocated $52 million in new commitments to five companies to TPBG, including two new portfolio companies, our highest commitment amount over the past six quarters. Commitments to new portfolio companies during Q2 included Affinity, a software-based relationship intelligence platform built to expand and involve traditional CRM, backed by Menlo Ventures, Pear Ventures, and other investors, and Cresta Intelligence, a software company which leverages artificial intelligence to help sales and service agents improve the quality of their customer service, backed by Sequoia Capital, Greylock Partners, Andreessen Horowitz, and other investors.

Speaker Change: With regards to new investment allocation to TPBG during the second quarter.

subl: In light of our progress of reducing leverage and mindful of our objectives for portfolio diversification, TriplePoint Capital allocated $52 million in new commitments to five companies to TPBG, including two new portfolio companies, our highest commitment amount over the past six quarters.

Sajal Srivastava: During the quarter, we also made follow-on commitments to two recent portfolio companies, as well as refinance an existing portfolio company in conjunction with an upside. Thus far in Q3, TVBG has closed a total of $11 million in new commitments to one new portfolio company in the software industry and one existing portfolio company. During the quarter, PBBG funded $38.7 million in debt investments to five portfolio companies, which is up from $13.5 million in debt investments to three portfolio companies in Q1, and it is our highest funding amount over the past five quarters.

subl: Commitments to new portfolio companies during Q2 included Affinity, a software-based relationship intelligence platform built to expand and involve traditional CRM, backed by Menlo Ventures, Pair Ventures, and other investors.

subl: And Cresta Intelligence, a software company which leverages artificial intelligence to help sales and service agents improve the quality of their customer service, backed by Sequoia Capital, Greylock Partners, Andreesen Horowitz, and other investors.

Sajal Srivastava: During the quarter, we also made follow-on commitments to two recent portfolio companies, as well as refinance an existing portfolio company in conjunction with an upside. Thus, far in Q3, TPVG has closed a total of 11 million of new commitments to one new portfolio company in the software industry and one existing portfolio company. During the quarter, TPVG funded $38.7 million in debt investments to five portfolio companies, which is up from $13.5 million in debt investments to three portfolio companies in Q1, and is our highest funding amount over the past five quarters. We have funded 52.2 million year-to-date and 89.3 over the past 12 months, which supports our efforts to increase newer portfolio ventures.

subl: During the quarter, we also made follow-on commitments to two recent portfolio companies, as well as refinanced an existing portfolio company in conjunction with an upsize.

Unnamed Speaker: Thus far in Q3, TVBG has closed a total of $11 million in new commitments to one new portfolio company in the software industry and one existing portfolio company. Our quarterly gross funding target continues to be in the $25 to $50 million range. As a reminder, new fundings typically occur at the end of a quarter and don't materially contribute to income in the quarter in which they are funded.

James Labe: And ones that have recently raised capital, have ample cash runways, have backing from our select venture investors, have prudent management teams, and whose business models have attractive unit economics and high retention rates. We'll also continue to evaluate hold sizes, debt equity ratios, deal structures, and other key metrics. We're encouraged by the progress to date in the recent investments we've made which continue to reflect these goals and parameters.

Speaker Change: Thus far in Q3, TVBG has closed a total of 11 million of new commitments to one new portfolio company in the software industry and one existing portfolio company.

Speaker Change: During the quarter, PBBG funded $38.7 million in debt investments to five portfolio companies, which is up from $13.5 million in debt investments to three portfolio companies in Q1, and it is our highest funding amount over the past five quarters.

Sajal Srivastava: We have funded $52.2 million year-to-date and $89.3 million over the past 12 months, which supports our efforts to increase newer portfolio events. The investments funded this quarter carried a weighted average annualized portfolio with 15.5% debt origination, up from 14.3 in Q1. Our quarterly gross funding target continues to be in the $25 to $50 million range. As a reminder, new fundings typically occur at the end of a quarter and don't materially contribute to income in the quarter in which they are funded.

subl: We have funded $52.2 million year-to-date and $89.3 million over the past 12 months, which supports our efforts to increase newer portfolio advantages.

James Labe: Further, we're evaluating the potential for broad and investment strategies for TPVG, particularly given our sponsor, TriplePoint Capital, a multi-billion dollar platform-wide venture lending business, and potential increased ways in which TPVG could benefit. TriplePoint Capital manages multiple vehicles and has been underwriting venture loans for almost 20 years, to date having committed more than 13 billion to more than 1,000 venture back companies during that period. As a leader in the venture lending market with an exceptional brand name and reputation, TriplePoint Capital continues to grow and capitalize on investment opportunities in today's market, including actively expanding its venture and ongoing increases in originations and investment staffing nationwide. We believe that some of all these efforts positions TPVG well for when the venture capital markets recover and believe it could result in tangible benefits to our stakeholders well as well as over the long-term.

Sajal Srivastava: The investments fund of this quarter carried a weighted average annualized portfolio yield of 15.5 percent at origination, up from 14.3 in Q1. Our quarterly gross funding target continues to be in the 25-50 million range. As a reminder, new funding typically occurs at the end of a quarter and don't materially contribute to income in the quarter in which they fund. Durant Q2, we have 51 million of loan prepayments due primarily to large equity capital raises and acquisitions, up from 31 million of loan prepayments in Q1, representing 82 million of prepayments to date and 153 million over the past 12 months.

Speaker Change: The investments funded this quarter carried a weighted average annualized portfolio yield at 15.5% debt origination, up from 14.3 in Q1.

subl: Our quarterly gross funding target continues to be in the $25 to $50 million range. As a reminder, new fundings typically occur at the end of a quarter and don't materially contribute to income in the quarter in which they fund.

Sajal Srivastava: During Q2, we had $51 million of loan prepayments due primarily to large equity capital raises and acquisitions, up from $31 million of loan prepayments in Q1, representing $82 million of prepayments to date and $153 million over the past 12 months. Prepayment-related income this quarter contributes to an overall weighted average portfolio of 15.8%, in line with last quarter's portfolio. Excluding prepayments, the core During Q2, we had $28 million of scheduled principal repayments and $15 million of proceeds from the disposition of loans for a total of $43 million, up from $7 million of scheduled principal repayments and $1 million of proceeds from the disposition of loans for a total of $8 million in Q1.

Speaker Change: During Q2, we had $51 million of loan prepayments.

Speaker Change: Due primarily to large equity capital raises and acquisitions, up from $31 million of loan prepayments in Q1.

Speaker Change: representing 82 million of prepayments to date and 153 million over the past 12 months.

Sajal Srivastava: Prepayment-related income this quarter contributes to an overall weighted average portfolio to 15.8%, in line with last quarter's portfolio. Excluding prepayments, core portfolio was 13.9%, down from 14.7% to Q1. During Q2, we had 28 million of scheduled principal repayments and 15 million of proceeds from the disposition of loans for a total of 43 million, up from 7 million of scheduled principal repayments and 1 million of proceeds from the disposition of loans for a total of 8 million in Q1. Near-to-date, we've had 51 million in total scheduled principal repayments and proceeds from the disposition of loans, and 110 million over the past 12 months.

Speaker Change: Prepayment-related income this quarter contributes to an overall weighted average portfolio yield of 15.8%.

Speaker Change: in line with last quarter's portfolio.

Speaker Change: excluding prepayments, core portfolio was 13.9% down from 14.7% in Q1.

James Labe: Finally, I'd like to take a minute to thank Chris Matthew for his efforts over the past five years, not only at TPVG, but also at our TriplePoint Capital platform.

Speaker Change: During Q2, we had $28 million of scheduled principal repayments and $15 million of proceeds from the disposition of loans.

James Labe: We wish on the best and is upcoming retirement and appreciate not only as dedication, but the friendship over the many years.

Speaker Change: for a total of $43 million.

Speaker Change: Up from $7 million of scheduled principal repayments and $1 million of proceeds from the disposition of loans for a total of $8 million in Q1.

Sajal Srivastava: Nearly to date, we've had $51 million in total scheduled principal repayments and proceeds from the disposition of loans and $110 million over the past 12 months. So, in summary, over the past 12 months, we've had over $260 million of cash received from prepays, principal repayments, and disposition of loans, and, in light of market conditions over that same time period, have had investment funding of only $89 million, contributing to a net portfolio contraction of approximately $170 million.

James Labe: As we continue with our search for a CFO, we would like to welcome Matt Goliani, whom we announced earlier this week to serve as our interim CFO.

Speaker Change: Near to date, we've had $51 million in total scheduled principal repayments and proceeds from the disposition of loans, and $110 million over the past 12 months.

James Labe: Matt takes over the reign since Friday and joins the company back in 2019 and he served as a company's controller since December 2022.

Sajal Srivastava: So in summary, over the past 12 months, we've had over 260 million of cash received from prepay's principal repayments and disposition of loans, and in light of market conditions over that same time period, have had investment funding of only 89 million, contributing to net portfolio contraction of approximately 170 million. As we look to the rest of this year, given how the portfolio has contracted, we expect a pace of prepay and amortization to slow down over the remainder of 2024. The do expect the pace of principal repayments to increase in 2025, given contractual amortization requirements. With regards to fund raising activity, nine portfolio companies with debt outstanding as of quarter's end raised 442 million during the quarter, compared with eight portfolio companies with debt outstanding, raising 584 million during Q1, five portfolio companies raising 157 million Q4, and three portfolio companies raising 47 million in Q3.

Unnamed Speaker: So, in summary, over the past 12 months, we've had over $260 million of cash received from prepays, principal repayments, and disposition of loans. And, in light of market conditions over that same time period, we have had investment funding of only $89 million, contributing to a net portfolio contraction of approximately $170 million. As we look to the rest of this year, given how the portfolio has contracted, we expect the pace of prepay and amortization to slow down over the remainder of 2024, but we do expect the pace of principal repayments to increase in 2025, given contractual amortization requirements.

Speaker Change: So, in summary, over the past 12 months, we've had over $260 million of cash received from prepays, principal repayments, and disposition of loans.

Sajal Srivastava: With that, I'll now turn the call over to Sajal to cover our activity and I'll look in more detail. Thank you Jim, and good afternoon, investment pipeline activity increased for the 4th consecutive quarter, the TriplePoint gap will find 188 million turns each to a venture growth stage companies, compared to 130 million Q1, reflecting continued increases in originations by investment teams, referrals from our select venture capital funds, and demand from high quality companies seeking debt financing. Although our investment pipeline activity is increasing, TriplePoint capital and TPVG continue to be very measured in our approach to new originations in light of market conditions.

Speaker Change: and might of market conditions over that same time period have had investment fundingings of only eighty- nine million contributing to net portfolio contraction of approximately one hundred and seventy million

Sajal Srivastava: As we look to the rest of this year, given how the portfolio has contracted, we expect the pace of prepay and amortization to slow down over the remainder of 2024, but we do expect the pace of principal repayments to increase in 2025, given contractual amortization requirements.

Speaker Change: As we look to the rest of this year,

Speaker Change: Given how the portfolio has contracted, we expect the pace of prepay and amortization to slow down over the remainder of 2024, but do expect the pace of principal repayments to increase in 2025 given contractual amortization requirements.

Unnamed Speaker: With regard to fundraising activity, nine portfolio companies with debt outstanding at their quarter's end raised $442 million during the quarter, compared with eight portfolio companies with debt outstanding raising $584 million during Q1, five portfolio companies raising $157 million in Q4, and three portfolio companies raising $47 million in Q3. Year-to-date, 16 portfolio companies with debt outstanding have raised over $1 billion of capital compared to 14 portfolio companies raising $390 million over the same period last year.

Speaker Change: With regards to fundraising activity, nine portfolio companies with debt outstanding as a quarter's end raised $442 million during the quarter, compared with eight portfolio companies with debt outstanding, raising $584 million during Q1.

Sajal Srivastava: With regards to new investment allocation to TPVG during the 2nd quarter, in light of our progress of reducing leverage and mindful of our objectives for portfolio diversification, TriplePoint capital allocated 52 million in new commitments to five companies to TPVG, including two new portfolio companies, our highest commitment amount over the past 6 quarters. Commitments to new portfolio companies during Q2 included affinity, the software-based relationship intelligence platform built to expand and evolve, traditional CRM, backed by memo ventures, peer ventures, and other ventures, and Cresta Intelligence, a software company which leverages artificial intelligence to help sales and service agents to improve the quality of their customer service, backed by Sequoia Capital, Greylock partners, and Regional Horowitz and other investors.

Speaker Change: five portfolio companies raising $157 million in Q4 and three portfolio companies raising $47 million in Q3.

Sajal Srivastava: Near-to-date, 16 portfolio companies with debt outstanding have raised over 1 billion of capital, compared to 14 portfolio companies raising 390 million over the same period last year. As Jim mentioned, we continue to see capital raising activity within our portfolio picking up, and continue to have several portfolio companies either in active fundraising discussions or expecting to launch a fundraising process shortly. Last week, Flow Health, a consumer-focused portfolio company with 25 million outstanding, announced raising over 200 million at a 1 billion valuation from General Atlantic. We believe this fundraising activity should strengthen the credit quality for these companies and those well for the value of our warrant and equity investments.

Speaker Change: Year-to-date, 16 portfolio companies, with that outstanding, have raised over $1 billion of capital, compared to 14 portfolio companies raising $390 million over the same period last year.

Unnamed Speaker: As Jim mentioned, we continue to see capital raising activity within our portfolio picking up and continue to have several portfolio companies either in active fundraising discussions or expecting to launch a fundraising process shortly. Last week, Flow Health, a consumer-focused portfolio company with $25 million outstanding, announced raising over $200 million at a $1 billion valuation from General Plant. We believe this fundraising activity should strengthen the credit quality for these companies and bodes well for the value of our warrant and equity investment. As of June 30, we held warrants in 94 companies and equity investments in 46 companies, with a total fair value of $98 million, up from $78 million last quarter.

Speaker Change: As Jim mentioned, we continue to see capital raising activity within our portfolio picking up and continue to have several portfolio companies either in active fundraising discussions or expecting to launch a fundraising process shortly.

Unnamed Speaker: Last week, Flow Health, a consumer-focused portfolio company with $25 million outstanding, announced raising over $200 million at a $1 billion valuation from General Plant. As of June 30, we held warrants in 94 companies and equity investments in 46 companies, with a total fair value of $98 million, up from $78 million last quarter.

Speaker Change: Last week, Flow Health, a consumer-focused portfolio company with $25 million outstanding, announced raising over $200 million at a $1 billion valuation from General Atlantic.

Sajal Srivastava: During the quarter, we also made follow-on commitments to two recent portfolio companies, as well as refinance an existing portfolio company in conjunction with an upside. Thus, far in Q3, TPVG has closed a total of 11 million of new commitments to one new portfolio company in the software industry and one existing portfolio company. During the quarter, TPVG funded 38.7 million in debt investments to five portfolio companies, which is up from 13.5 million in debt investments to three portfolio companies in Q1, and is our highest funding amount over the past five quarters.

Speaker Change: We believe this fundraising activity should strengthen the credit quality for these companies and bodes well for the value of our Warren and Equity investments.

Sajal Srivastava: As of June 30th, we held awards in 94 companies in equity investments in 46 companies with a total fair value of 98 million, up from 78 million last quarter.

Speaker Change: As of June 30th, we held warrants in 94 companies and equity investments in 46 companies with a total fair value of 98 million up from 78 million last quarter.

Sajal Srivastava: Oliver. Our Warren Equity portfolio experienced a 12.8 million net unrealized game in fair value, or 33 cents per share for the quarter, primarily driven by an increase in the fair value of revenue, based on its exceptional financial performance, as disclosed in its recently filed financial statements, and the news that it obtained a UK banking license, both of which have positive implications for its continued growth and profitability. We believe there's the potential for a positive impact and an asset value for not only revenue, but other companies currently in our Warren Equity portfolio, particularly as market conditions improve over the long term.

Unnamed Speaker: Our Warren and Equity portfolio experienced a $12.8 million net unrealized gain in fair value, or $0.33 per share for the quarter, primarily driven by an increase in the fair value of Revolute based on its exceptional financial performance as disclosed in its recently filed financial statements and the news that it obtained a UK banking license, both of which have positive implications for its continued growth and profitability. During the quarter, we sold our publicly held shares in HIMS and HERS, resulting in a realized gain of $1.8 million on our warrant and equity investments, representing an over three times multiple on our invested capital. Additionally, one portfolio company with a principal balance of $13 million was downgraded from Category 2 to 3, primarily due to cash runway or financing events underway.

Unnamed Speaker: Our Warren and Equity portfolio experienced a $12.8 million net unrealized gain in fair value, or $0.33 per share, for the quarter. This was primarily driven by an increase in the fair value of Revolute based on its exceptional financial performance as disclosed in its recently filed financial statements and the news that it obtained a UK banking license, both of which have positive implications for its continued growth and profitability. We believe there is the potential for a positive impact on net asset value for not only Revolut but other companies currently in our warm NetReap portfolio, particularly as market conditions improve over the long term. During the quarter, we sold our publicly held shares in HIMS and HERS, resulting in a realized gain of $1.8 million on our warrant and equity investments, representing an over three times multiple on our invested capital.

Speaker Change: Our Warren and Equity portfolio experienced a $12.8 million net unrealized gain in fair value, or $0.33 per share, for the quarter, primarily driven by an increase in the fair value of Revolute.

Speaker Change: based on its exceptional financial performance as disclosed in its recently filed financial statements and the news that it obtained a UK banking license, both of which have positive implications for its continued growth and profitability.

Sajal Srivastava: We have funded 52.2 million year-to-date and 89.3 over the past 12 months, which supports our efforts to increase newer portfolio ventures. The investments fund of this quarter carried a weighted average annualized portfolio yield of 15.5 percent at origination up from 14.3 in Q1. Our quarterly gross funding target continues to be in the 25-50 million range. As a reminder, new funding typically occur at the end of a quarter and don't materially contribute to income in the quarter in which they fund.

Speaker Change: We believe there is the potential for a positive impact and an asset value for not only Revolut, but other companies currently in our worn neck reef portfolio, particularly as market conditions improve over the long term.

Sajal Srivastava: During the quarter, we sold our publicly held shares in Hymns and Hers, resulting in a realized gain of 1.8 million on our Warren Equity investments, representing an over three times multiple on our invested capital. Another portfolio activity during the quarter, mine management was acquired by Roofstock, and our loans were paid off in full, and our warrants were assumed. Existing credit watchless companies Outdoor Voices and TFG completed their acquisitions as well. These two companies had previously been marked down by 13 million, and we recognized an additional 800,000 loss from these events. During the quarter, one portfolio company with the principal balance of 25 million was upgraded from category 2 to category 1.

Speaker Change: During the quarter, we sold our publicly held shares in HIMS and HERS, resulting in a realized gain of $1.8 million on our warrant and equity investments, representing an over three times multiple on our invested capital.

Sajal Srivastava: Durant Q2, we have 51 million of loan prepayments due primarily to large equity capital raises and acquisitions, up from 31 million of loan prepayments in Q1, representing 82 million of prepayments to date and 153 million over the past 12 months. Prepayment-related income this quarter contributes to an overall weighted average portfolio to 15.8% in line with last quarter's portfolio, excluding prepayments, core portfolio was 13.9% down from 14.7% to Q1. During Q2, we had 28 million of scheduled principal repayments and 15 million of proceeds from the disposition of loans for a total of 43 million up from 7 million of scheduled principal repayments and 1 million of proceeds from the disposition of loans for a total of 8 million in Q1. Near-to-date, we've had 51 million in total scheduled principal repayments and proceeds from the disposition of loans and 110 million over the past 12 months.

Unnamed Speaker: In other portfolio activity during the quarter, mine management was acquired by Roofstock, and our loans were paid off in full, and our warrants were assumed. Existing Credit Watch List companies Outdoor Voices and TFG completed their acquisitions as well. These two companies had previously been marked down by $13 million, and we recognized an additional $800,000 loss from these events. During the quarter, one portfolio company with a principal balance of $25 million was upgraded from Category 2 to Category 1.

Speaker Change: And other portfolio activity during the quarter, mine management was acquired by Roofstock and our loans were paid off in full and our warrants were assumed.

Speaker Change: Existing Credit Watch List companies Outdoor Voices and TFG completed their acquisitions as well. These two companies had previously been marked down by $13 million, and we recognized an additional $800,000 loss from these events.

Speaker Change: During the quarter, one portfolio company with a principal balance of $25 million was upgraded from Category 2 to Category 1. One portfolio company with a principal balance of $4.7 million was downgraded from Category 1 to Category 2.

Sajal Srivastava: One portfolio company with the principal balance of 4.7 million was downgraded from category 1 to category 2. One and one portfolio company with the principal balance of 13 million was downgraded from category 2 to 3, primarily due to cash runway for financing events underway. In addition, Good Eggs, which has debt with a fair value of approximately 6.3 million, was downgraded from category 2 to category 4 during Q2, and announced yesterday its sale to Grub Market. Our recovery is expected to be consistent with our mark as of Q2, and the company will be removed from our watchlist in Q3.

Unnamed Speaker: One portfolio company with a principal balance of $4.7 million was downgraded from Category 1 to Category 2, and one portfolio company with a principal balance of $13 million was downgraded from Category 2 to 3, primarily due to a cash runway for financing events underway. In addition, Good Eggs, which has debt with a fair value of approximately $6.3 million, was downgraded from Category 2 to Category 4 during Q2, and announced yesterday its sale to GrubMarket.

Speaker Change: and one portfolio company with a principal balance of $13 million was downgraded from Category 2 to 3, primarily due to cash runway or financing events underway.

Unnamed Speaker: In addition, Good Eggs, which has debt with a fair value of approximately $6.3 million, was downgraded from Category 2 to Category 4 during Q2, and announced yesterday its sale to GrubMarket. Our recovery is expected to be consistent with our mark as of Q2, and the company will be removed from our watch list in Q3. Mind Candy, with a fair value of $16 million, was downgraded from Category 3 to Category 4, reflecting year-to-date performance and other near-term challenges for the company, including additional maturity date extensions of our loan.

Speaker Change: in addition good eggs which has det with a fair value of approximately six point three million was downgraded from category two to category forward during q two and announced yesterday its sale to grub market

Unnamed Speaker: Our recovery is expected to be consistent with our mark as of Q2, and the company will be removed from our watch list in Q3. Mind Candy, with a fair value of $16 million, was downgraded from Category 3 to Category 4, reflecting year-to-date performance and other near-term challenges for the company, including additional maturity date extensions of our loan.

Sajal Srivastava: So in summary, over the past 12 months, we've had over 260 million of cash received from prepay's principal repayments and disposition of loans and in light of market conditions over that same time period, have had investment funding of only 89 million, contributing to net portfolio contraction of approximately 170 million. As we look to the rest of this year, given how the portfolio has contracted, we expect a pace of prepay and amortization to slow down over the remainder of 2024, the do expect the pace of principal repayments to increase in 2025, given contractual amortization requirements.

Speaker Change: Our recovery is expected to be consistent with our mark as of Q2, and the company will be removed from our watch list in Q3.

Sajal Srivastava: Mine candy, with a fair value of 16 million, was downgraded from category 3 to category 4, reflecting year-to-date performance and other near-term challenges for the company, including additional maturity data extensions of our loans. Despite being one of TFG's oldest investments, Mine Candy continues to receive support from its equity investors as it builds and grows its Moshe Kids app. While our total percentage of watchlist investments was relatively flat this quarter, a number of these companies are in the process of completing equity financing or strategic events that are underway, as well as improving operational performance, which has completed or achieved could result in improved credit outcomes.

Speaker Change: Mind Candy, with a fair value of $16 million, was downgraded from Category 3 to Category 4, reflecting year-to-date performance and other near-term challenges for the company, including additional maturity date extensions of our loans.

Unnamed Speaker: Despite being one of TDBG's oldest investments, Mind Candy continues to receive support from its equity investors as it builds and grows its Moshi Kids app. As we look to developments not only over the past six months but also looking forward over the next one to two quarters, our e-commerce and retail-focused companies continue to face challenges. They generally have made the hard decisions to pull back on growth, cut costs, and focus on achieving profitability as soon as possible.

Unnamed Speaker: Despite being one of TDBG's oldest investments, MindCandy continues to receive support from its equity investors as it builds and grows its Moshi Kids app. While our total percentage of watchlist investments was relatively flat this quarter, a number of these companies are in the process of completing equity financing or strategic events that are underway, as well as improving operational performance, which, if completed or achieved, could result in improved credit outcomes. As we look to developments not only over the past six months but also forward over the next one to two quarters, our e-commerce and retail-focused companies continue to face challenges.

Speaker Change: Despite being one of TVBG's oldest investments, Mind Candy continues to receive support from its equity investors as it builds and grows its Moshi Kids app.

Speaker Change: While our total percentage of watchlist investments was relatively flat this quarter, a number of these companies are in the process of completing equity financing or strategic events that are underway, as well as improving operational performance, which if completed or achieved could result in improved credit outlooks.

Sajal Srivastava: With regards to fund raising activity, nine portfolio companies with debt outstanding as of quarter's end raised 442 million during the quarter, compared with eight portfolio companies with debt outstanding, raising 584 million during Q1, five portfolio companies raising 157 million Q4, and three portfolio companies raising 47 million in Q3. Near-to-date, 16 portfolio companies with debt outstanding have raised over 1 billion of capital, compared to 14 portfolio companies raising 390 million over the same period last year.

Sajal Srivastava: As we look to developments not only over the past six months, but also looking forward over the next one to two quarters, our e-commerce and retail focus companies continue to face challenges. They generally have made the hard decisions to pull back on growth, cut firms, and focus on achieving profitability as soon as possible, as they come to market for follow-on financing or strategic processes, including M&A, to enable them to continue the journey. The reception continues to be chilly, as investors and inquiries generally remain on the sidelines, and these companies, their investors, and in many cases, we as lenders, miss all the side if they continue to wait out the market, or transact or whatever price the market will clear, despite the progress that.

Unnamed Speaker: As we look to developments not only over the past six months, but also looking forward over the next one to two quarters, our e-commerce and retail-focused companies continue to face challenges.

Unnamed Speaker: They generally have made the hard decisions to pull back on growth, cut burn, and focus on achieving profitability as soon as possible. However, as they come to market for follow-on financing or strategic processes, including M&A, to enable them to continue the journey, reception continues to be chilly as investors and acquirers generally remain on the sidelines. And these companies are investors, and in many cases, we as lenders must all decide if they continue to wait out the market or transact at whatever price the market will clear, despite the progress they've made. Our teams continue to track these companies as well as other watch list situations.

Unnamed Speaker: They generally have made the hard decisions to pull back on growth.

Unnamed Speaker: As they come to market for follow-on financing or strategic processes, including M&A, to enable them to continue the journey, the reception continues to be chilly as investors and inquirers generally remain on the sidelines. And these companies, they're investors, and in many cases, we as lenders must all decide if they continue to wait out the market or transact at whatever price the market will clear, despite the progress they've made. Our teams continue to track these companies as well as other watch list situations.

Unnamed Speaker: Cut burn and focus on achieving profitability as soon as possible

Sajal Srivastava: As Jim mentioned, we continue to see capital raising activity within our portfolio picking up, and continue to have several portfolio companies either in active fundraising discussions or expecting to launch a fundraising process shortly. Last week, Flow Health, a consumer-focused portfolio company with 25 million outstanding announced raising over 200 million at a 1 billion valuation from general Atlantic. We believe this fundraising activity should strengthen the credit quality for these companies and those well for the value of our warrant and equity investments. As of June 30th, we held awards in 94 companies in equity investments in 46 companies with a total fair value of 98 million, up from 78 million last quarter.

Unnamed Speaker: And in many cases, we as lender must all decide if they continue to wait out the market or transact at whatever price the market will clear, despite the progress they've made.

Sajal Srivastava: Our team continues to track these companies as well as other watchlist situations.

Unnamed Speaker: Our teams continue to track these companies as well as other watchlist situations.

Sajal Srivastava: As we take a step back and assess not only market conditions and our recent performance but also our outlook for the market, our playbook continues to be focused on building a strong foundation for TPBG. We've reduced our net leverage and have access to substantial liquidity that we intend to deploy in a measured fashion to companies and attractive sectors to further diversify portfolio. Our team is continuing to focus on bringing credit situations to a close or positioning companies for the longer term when market conditions are better. We believe that our market conditions improve our worn and equity portfolio will have a positive impact to our net asset value.

Unnamed Speaker: As we take a step back and assess not only market conditions and our recent performance but also our outlook for the market, our playbook continues to be focused on building a strong foundation for TPBG. Our team is continuing to focus on bringing credit situations to a close or positioning companies for the longer term when market conditions are better. We believe that as market conditions improve, our Warren and equity portfolio will have a positive impact on our net asset value.

Unnamed Speaker: As we take a step back and assess not only market conditions and our recent performance but also our outlook for the market, our playbook continues to be focused on building a strong foundation for TPBG. We've reduced our net leverage and have access to substantial liquidity that we intend to deploy in a measured fashion to companies in attractive sectors to further diversify their portfolio. Our team is continuing to focus on bringing credit situations to a close or positioning companies for the longer term when market conditions are better.

Unnamed Speaker: As we take a step back and assess not only market conditions and our recent performance, but also our outlook for the market, our playbook continues to be focused on building a strong foundation for TPBG.

Unnamed Speaker: We've reduced our net leverage and have access to substantial liquidity that we intend to deploy in a measured fashion to companies in attractive sectors to further diversify our portfolio.

Unnamed Speaker: Our team is continuing to focus on bringing credit situations to a close or positioning companies for the longer term when market conditions are better.

Unnamed Speaker: We believe that as market conditions improve, our Warren and equity portfolio will have a positive impact on our net asset value. We are also valuing opportunities to broaden TVBG's investment strategy, as well as its overall size and scale in complementary ways. And finally, we are aligning expectations, including the decision to reduce our distribution to be more consistent with our current portfolio size and earnings power without creating pressure to deploy assets and with the potential to generate excess earnings to stabilize and grow NAB. In summary, we have a plan, and I'm optimistic about our future. And with that, I will now turn the call over to Chris. Thank you.

Unnamed Speaker: We believe that our market conditions improve, our Warren and equity portfolio will have a positive impact to our net asset value.

Sajal Srivastava: We are also valuing opportunities to broaden TPBG's investment strategy as well as its overall size and scale in complementary ways. And finally, we are aligning expectations, including the decision to reduce our distribution to be more consistent with our core portfolio size and earnings power, without creating pressure to deploy assets and with the potential to generate access earnings to stabilize and grow in AB.

Unnamed Speaker: We are also evaluating opportunities to broaden TVBG's investment strategy, as well as its overall size and scale in complementary ways.

Unnamed Speaker: And finally, we are aligning expectations, including the decision to reduce our distribution, to be more consistent with our current portfolio size and earnings power, without creating pressure to deploy assets.

Sajal Srivastava: During the quarter, we sold our publicly held shares in hymns and hers, resulting in a realized gain of 1.8 million on our Warren Equity investments, representing an over three times multiple on our invested capital. Another portfolio activity during the quarter, mine management was acquired by Roofstock, and our loans were paid off in full, and our warrants were assumed. Existing credit watchless companies outdoor voices and TFG completed their acquisitions as well. These two companies had previously been marked down by 13 million, and we recognized an additional 800,000 loss from these events.

Unnamed Speaker: and with the potential to generate excess earnings to stabilize and grow NAB.

Sajal Srivastava: In summary, we have a plan that I'm optimistic for our future, and with that, I will now turn the call over to Chris.

Unnamed Speaker: In summary, we have a plan, and I'm optimistic for our future, and with that, I will now turn the call over to Chris.

Unnamed Speaker: Thank you, Sajal, and hello everyone. For the second quarter, total investment income was $27.1 million, and the portfolio yield was 15.8% as compared to $35 million, or a portfolio yield of 14.7%, for the prior year period. The decrease in total investment income was primarily due to a lower weighted average principal amount outstanding on our income-bearing debt investment portfolio. For the second quarter, total operating expenses were $14.5 million as compared to $16.3 million for the prior year period. $3.8 million in base management fees and $2 million in general and administrative expenses. There were no incentive fees this quarter.

Christopher Mathieu: Thank you, Sajal, and hello everyone. For the second quarter, total investment income was 27.1 million dollars and a portfolio yield of 15.8 percent, as compared to 35 million or a portfolio yield of 14.7 percent for the prior year period. The decrease in total investment income was primarily due to a lower weighted average principal amount outstanding on our income-bearing debt investment portfolio.

Unnamed Speaker: Thank you, Sajal, and hello, everyone. For the second quarter, total investment income was $27.1 million, and a portfolio yield of 15.8%, as compared to $35 million, or a portfolio yield of 14.7% for the prior year period.

Unnamed Speaker: The decrease in total investment income was primarily due to a lower weighted average principal amount outstanding on our income-bearing debt investment portfolio.

Christopher Mathieu: For the second quarter, total operating expenses were 14.5 million dollars as compared to 16.3 million for the prior year period. These expenses consisted of 8.7 million dollars of interest expense, which included 1.8 million dollars, or 5 cents per share, of a one-time fee related to the minimum utilization clause on our credit facility. 3.8 million of base management fees and 2 million dollars of general and administrative expenses. There were no incentive fees this quarter.

Unnamed Speaker: These expenses consisted of $8.7 million of interest expense, which included $1.8 million, or five cents per share, of a one-time fee related to the minimum utilization clause on our credit facility. $3.8 million of base management fees, and $2 million of general and administrative expenses. There were no incentive fees this quarter.

Sajal Srivastava: During the quarter, one portfolio company with the principal balance of 25 million was upgraded from category 2 to category 1. One portfolio company with the principal balance of 4.7 million was downgraded from category 1 to category 2. One and one portfolio company with the principal balance of 13 million was downgraded from category 2 to 3, primarily due to cash runway for financing events underway. In addition, good eggs, which has debt with a fair value of approximately 6.3 million, was downgraded from category 2 to category 4 during Q2, and announced yesterday its sale to grub market.

Unnamed Speaker: For the second quarter, total operating expenses were $14.5 million, as compared to $16.3 million for the prior year period.

Unnamed Speaker: These expenses consisted of $8.7 million of interest expense, which included $1.8 million or 5 cents per share of a one-time fee related to the minimum utilization clause on our credit facility.

Unnamed Speaker: $3.8 million of base management fees, and $2 million of general and administrative expenses. There were no incentive fees this quarter.

Christopher Mathieu: For the second quarter, net investment income total 12.6 million dollars or 33 cents per share compared to 18.8 million dollars or 53 cents per share for the prior year period. During the second quarter, the company recognized net realized losses on investments of 18.8 million dollars, consisting primarily of 20.2 million dollars of net realized losses on the investment portfolio from the write-off and restructuring of investments, and partially offset by 1.3 million dollars of net warrant and equity gains from the sale and disposition of investments. Net change and unrealized gains on the investment portfolio for the second quarter was 14.9 million dollars, consisting of 12.8 million of net unrealized gains on the warrant and equity portfolio and 10.9 million dollars of net unrealized gains from the reversal of previously recorded unrealized losses from investments realized during the period.

Unnamed Speaker: For the second quarter, net investment income totaled $12.6 million, or $0.33 per share, compared to $18.8 million, or $0.53 per share, for the prior year period. During the second quarter, the company recognized net realized losses on investments of $18.8 million, consisting primarily of $20.2 million of net realized losses on the investment portfolio from the write-off and restructuring of investments, and partially offset by $1.3 million of net warrant and equity gains from the sale and disposition of investments.

Unnamed Speaker: For the second quarter, net investment income totaled $12.6 million, or $0.33 per share, compared to $18.8 million, or $0.53 per share for the prior year period.

Sajal Srivastava: Our recovery is expected to be consistent with our mark as of Q2, and the company will be removed from our watchlist in Q3. Mine candy, with a fair value of 16 million, was downgraded from category 3 to category 4, reflecting year-to-date performance and other near-term challenges for the company, including additional maturity data extensions of our loans. Despite being one of TFG's oldest investments, mine candy continues to receive support from its equity investors as it builds and grows its Moshe Kids app.

Unnamed Speaker: During the second quarter, the company recognized

Unnamed Speaker: Net realized losses on investments of $18.8 million.

Speaker Change: consisting primarily of twenty point

Unnamed Speaker: $2 million of net realized losses on the investment portfolio from the write-off and restructuring of investments, and partially offset by $1.3 million of net warrant and equity gains from the sale and disposition of investments.

Unnamed Speaker: Net change and unrealized gains on the investment portfolio for the second quarter were $14.9 million, consisting of $12.8 million of net unrealized gains on the Warren inequity portfolio and $10.9 million of net unrealized gains from the reversal of previously recorded unrealized losses from investments realized during the period, offset by $8.8 million of net unrealized losses on the existing debt investment portfolio. As of quarter end, net asset value, or NAB, was $353 million, or $8.83 per share, compared to $346.3 million, or $9.21 per share, as of year end.

Unnamed Speaker: Net change and unrealized gains on the investment portfolio for the second quarter were $14.9 million, consisting of $12.8 million of net unrealized gains on the warrant and equity portfolio and $10.9 million of net unrealized gains from the reversal of previously recorded unrealized losses from investments realized during the period, offset by $8.8 million of net unrealized losses on the existing debt investment portfolio. As of quarter end, the net asset value, or NAV, was $353 million, or $8.83 per share, compared to $346.3 million, or $9.21 per share, as of year end.

Unnamed Speaker: Net change and unrealized gains on the investment portfolio for the second quarter was $14.9 million, consisting of $12.8 million of net unrealized gains on the warrant and equity portfolio.

Sajal Srivastava: While our total percentage of watchlist investments was relatively flat this quarter, a number of these companies are in the process of completing equity financing or strategic events that are underway, as well as improving operational performance, which has completed or achieved could result in improved credit outcomes.

Unnamed Speaker: and $10.9 million of net unrealized gains from the reversal of previously recorded unrealized losses from investments realized during the period, offset by $8.8 million of net unrealized losses on the existing debt investment portfolio.

Christopher Mathieu: Offset by 8.8 million of net unrealized losses on the existing net investment portfolio.

Christopher Mathieu: As a quarter, net asset value or NAV was 353 million or $8.83 per share compared to 346.3 million or $9.21 per share as a year in. The company declared a regular quarterly distribution of 30 cents per share, with a record date of September 16th, to be paid on September 30th. As of June 30th, the company had estimated undistributed income or spillover income of $39.3 million, or 98 cents per share.

Unnamed Speaker: As of quarter end, net asset value, or NAV, was $353 million, or $8.83 per share, compared to $346.3 million, or $9.21 per share as of year end.

Unnamed Speaker: The company declared a regular quarterly distribution of $0.30 per share with a record date of September 16th to be paid on September 30th. As of June 30th, the company had estimated undistributed income or spillover income of $39.3 million or $0.98 per share.

Unnamed Speaker: The company declared a regular quarterly distribution of $0.30 per share with a record date of September 16th to be paid on September 30th.

Unnamed Speaker: As of June 30th, the company had estimated undistributed income or spillover income of $39.3 million, or $0.98 per share. We are pleased to share that, subsequent to the end of the quarter, the company fully renewed its revolving credit facility. The company elected to reduce total commitments under the facility to $300 million to align better with the company's anticipated utilization while maintaining an appropriate feature that allows the company to increase the size of the credit facility in the future up to $300 million under certain circumstances. And this completes our prepared remarks today. And so Operator, could you please open the line for questions at this time?

Unnamed Speaker: As of June 30th, the company had estimated undistributed income or spillover income of $39.3 million or $0.98 per share.

Sajal Srivastava: The reception continues to be chilly, as investors and inquires generally remain on the sidelines, and these companies, their investors, and in many cases, we as lender, miss all the side if they continue to wait out the market, or transact or whatever price the market will clear, despite the progress that. Our team continues to track these companies as well as other watchlist situations.

Christopher Mathieu: Now just an update on unfunded investment commitments, overall liquidity, and balance sheet leverage. We successfully reduced our unfunded commitments from $118 million a year end to $71 million as of June 30th. Of the $71 million of unfunded commitments, $5 million will expire this year in 2024, and $66 million will expire during 2025. We are pleased to share that, subsequent to the end of the quarter, the company fully renewed its revolving credit facility. The company elected to reduce total commitments under the facility to $300 million to align better with the company's anticipated utilization while maintaining an accordingly feature that allows the company to increase the size of the credit facility in the future up to $300 million under certain circumstances.

Unnamed Speaker: Now, just an update on unfunded investment commitments, overall liquidity, and balance sheet leverage. We successfully reduced our unfunded commitments from $118 million at year-end to $71 million as of June 30th. Of the $71 million of unfunded commitments, $5 million will expire this year in 2024, and $66 million will expire during 2025.

Speaker Change: Of the $71 million of unfunded commitments, $5 million will expire this year in 2024 and $66 million will expire during 2025.

Unnamed Speaker: We are pleased to share that, subsequent to the end of the quarter, the company fully renewed its revolving credit facility. The company elected to reduce total commitments under the facility to $300 million to align better with the company's anticipated utilization while maintaining an appropriate feature that allows the company to increase the size of the credit facility in the future up to $300 million under certain circumstances. After giving effect to the renewal, the company had total liquidity of $340 million, consisting of cash of $50 million and available capacity under the new revolver renewal of $290 million.

Unnamed Speaker: We are pleased to share that subsequent to the end of the quarter, the company fully renewed its revolving credit facility.

Unnamed Speaker: The company elected to reduce total commitments under the facility to $300 million to align better with the company's anticipated utilization while maintaining an according feature that allows the company to increase the size of the credit facility in the future up to $300 million under certain circumstances.

Christopher Mathieu: After giving effect to the renewal, the company had total liquidity of $340 million consisting of cash of $50 million and available capacity under the new revolver. We continue to maintain a diversified capital structure as a quarter, and a total of $405 million of debt was outstanding, consisting of $395 million in fixed rate investment grade term notes and $10 million outstanding on our credit facility, which currently has a $300 million aggregate commitment. Given the $97 million on liquidity events from the portfolio of this quarter and $18 million in proceeds from the ETM program, we pay down our credit facility and continue to improve our leverage levels during the quarter as we enter the quarter with a leverage ratio of 1.15 times.

Unnamed Speaker: After giving effect to the renewal, the company had total liquidity of $340 million, consisting of cash of $50 million and available capacity under the new revolver renewal of $290 million.

Sajal Srivastava: We believe that our market conditions improve our worn and equity portfolio will have a positive impact to our net asset value. We are also valuing opportunities to broaden TPBG's investment strategy as well as its overall size and scale in complementary ways.

Unnamed Speaker: We continue to maintain a diversified capital structure. At quarter end, a total of $405 million of debt was outstanding, consisting of $395 million of fixed-rate investment grade term notes and $10 million outstanding on our credit facility, which currently has a $300 million aggregate commitment. Given the $97 million in liquidity events from the portfolio this quarter and $18 million in proceeds from the ATM program, we paid down our credit facility and continued to improve our leverage levels during the quarter, as we ended the quarter with a leverage ratio of 1.15 times.

Unnamed Speaker: We continue to maintain a diversified capital structure. As of quarter-end, a total of $405 million of debt was outstanding, consisting of $395 million of fixed-rate, investment-grade term notes and $10 million outstanding on our credit facility, which currently has a $300 million aggregate commitment.

Sajal Srivastava: And finally, we are aligning expectations including the decision to reduce our distribution to be more consistent with our core portfolio size and earnings power without creating pressure to deploy assets and with the potential to generate access earnings to stabilize and grow in AB.

Unnamed Speaker: Given the $97 million in liquidity events from the portfolio this quarter and $18 million in proceeds from the ATM program, we paid down our credit facility and continued to improve our leverage levels during the quarter, as we ended the quarter with a leverage ratio of 1.15 times.

Christopher Mathieu: In summary, we have a plan that I'm optimistic for our future and with that, I will now turn the call over to Chris. Thank you, Sajal and hello everyone. For the second quarter total investment income was 27.1 million dollars and a portfolio yield of 15.8 percent as compared to 35 million or a portfolio yield of 14.7 percent for the prior year period. The decrease in total investment income was primarily due to a lower weighted average principal amount outstanding on our income bearing debt investment portfolio.

Christopher Mathieu: Given that we have successfully renewed the revolving credit facility, we are comfortable with our current leverage sources and may look at additional sources should they be presented to us.

Unnamed Speaker: Given that we have successfully renewed the revolving credit facility, we are comfortable with our current leveraged sources and may look at additional sources should they be presented to us. Recall that we have three different maturities of term notes. The first maturity is set to occur early next year. Given the very favorable rates on the existing term notes, we do not currently expect to prepay or refinance these amounts until near their maturity date. So this completes our prepared remarks today. And, Operator, could you please open the line for questions at this time?

Christopher Mathieu: Recall we have three different maturities of term notes. The first maturities set to occur the early next year. Given the very favorable rates on the existing term notes, we do not currently expect to prepay or refinance these amounts until near their maturity dates.

Unnamed Speaker: Given the very favorable rates on the existing term notes, we do not currently expect to prepay or refinance these amounts until near their maturity dates.

Operator: So this completes our prepared remarks today, and so operated.

Operator: Could you please open the line for questions at this time? We will now begin the question and answer session to ask a question. You may press star then one in your telephone keypad. If you're using a speaker phone, please pick up your handset before pressing the keys. And if you would like to withdraw a question, you may press star, then two. At this time, we will take our first question, which will come from Crispin Love with Piper Sandler. Please go ahead.

Christopher Mathieu: For the second quarter total operating expenses were 14.5 million dollars as compared to 16.3 million for the prior year period. These expenses consisted of 8.7 million dollars of interest expense which included 1.8 million dollars or 5 cents per share of a one time fee related to the minimum utilization clause on our credit facility. 3.8 million of base management fees and 2 million dollars of general and administrative expenses. There were no incentive fees this quarter.

Unnamed Speaker: So this completes our prepared remarks today. And so operator, could you please open the line for questions at this time?

Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. And if you would like to withdraw a question, you may press star, then two. At this time, we will take our first question, which will come from Crispin Love with Piper Sandler. Please go ahead.

Operator: We will now begin the question and answer session. If you're using a speakerphone, please pick up your handset before pressing the keys. And if you would like to withdraw a question, you may press star, then two.

Operator: We will now begin the question and answer session.

Speaker Change: To ask a question, you may press star, then 1 on your telephone keypad.

Operator: if you're using a speakeryour phone please pick up your handset before pressing the keys and if you would like to withdraw question you may press star than two

Speaker Change: At this time, we will take our first question, which will come from Crispin Love with Piper Sandler. Please go ahead.

Christopher Mathieu: For the second quarter net investment income total 12.6 million dollars or 33 cents per share compared to 18.8 million dollars or 53 cents per share for the prior year period. During the second quarter the company recognized net realized losses on investments of 18.8 million dollars consisting primarily of 20.2 million dollars of net realized losses on the investment portfolio from the write-off and restructuring of investments and partially offset by 1.3 million dollars of net warrant and equity gains from the sale and disposition of investments.

Crispin Love: Thanks and good afternoon, everyone. Starting off, you reset the dividends with 30 times net investment income; here, decreased to about 33 cents. So curious if you can discuss your outlook for net investment income with the near term, especially with rate cuts coming and your portfolio sitting around $17 million range at quarter end.

Chris: Thanks and good afternoon everyone. Starting off, you reset the dividends at $0.30, and net investment income here decreased to about $0.33. I'm curious if you can discuss your outlook for net investment income over the near term, especially with rate cuts coming and your portfolio sitting at around $715 million at quarter end, and when you think you can get back to an area where you're growing the portfolio again.

Crispin Love: Thanks. Good afternoon, everyone.

Chris: Thanks, and good afternoon, everyone. Starting off, you reset the dividends at $0.30. Net investment income here decreased to about $0.33. I'm curious if you can discuss

Crispin Love: Starting off, you reset the dividend to $0.30. Net investment income here decreased to about $0.33. I'm curious if you can discuss your outlook for net investment income in the near term, especially with rate cuts coming and your portfolio sitting at around $715 million at quarter end, and when you think you can get back to an area where you're growing the portfolio again.

Speaker Change: your outlook for net investment income over the near term, especially with rate cuts coming and your portfolio sitting at around $715 million range at quarter end and when you think you can get back to an area where you're growing the portfolio again.

Crispin Love: And when you think you can get back to an area where you're growing the portfolio again.

Christopher Mathieu: Chris, I'll take that. We have reset the dividend based on our current expectation of the strength of the existing portfolio and maintaining our target leverage ratio, which is where we are sitting now. We've also considered the impact of some near-term Fed rate changes that are expected to come in the near future, as well as looking at the first half of 2025. Some of the other things we're also thinking about are some of the variables we had this quarter.

Unnamed Speaker: Yeah, so Crispin, I'll take that. So, yeah, we have reset the dividend based on our current expectation of the strength of the existing portfolio and maintaining our target leverage ratio, which is where we are sitting now. We've also considered the impact of some near-term Fed rate changes that are expected to come in the near future, as well as looking at the first half of 2025. Some of the other things we're also thinking about are some of the variables we had this quarter. Management fees tend to be quite flat, so we've assumed a pretty flat management fee. Thus, no incentive is expected to be incurred for the rest of this year and for at least the early part of 2025.

Chris: Yeah, so Kristen, I'll take that.

Christopher Mathieu: Net change and unrealized gains on the investment portfolio for the second quarter was 14.9 million dollars consisting of 12.8 million of net unrealized gains on the warrant and equity portfolio and 10.9 million dollars of net unrealized gains from the reversal of previously recorded unrealized losses from investments realized during the period. Offset by 8.8 million of net unrealized losses on the existing net investment portfolio. As a quarter net asset value or nav was 353 million or $8.83 per share compared to 346.3 million or $9.21 per share as a year in.

Speaker Change: So, you know, we have reset the dividend based on our current expectation of the strength of the existing portfolio and maintaining our target leverage ratio, which is where we are sitting now. We've also considered the impact of some near-term Fed rate changes that are expected to come in the future.

Speaker Change: the near future, as well as looking at the first half of 2025.

Speaker Change: Some of the other things we're also thinking about are some of the variables we had this quarter. Management fee tends to be quite flat, so we've assumed a pretty flat management fee.

Christopher Mathieu: Management fee tends to be quite flat, so we assume that a pretty flat management fee, no incentive is expected to be incurred for the rest of this year and for at least the early part of 2025. Admin fees and GNA are pretty well baked and consistent quarter to quarter. So all of that assumed we assume a kind of a consistent portfolio size, but the leverage we have to the extent, such as in referred to NAV appreciation, NAV appreciation would result in additional ability to grow the portfolio. So I think that covers the question, I think.

Speaker Change: No incentive is expected to be incurred for the rest of this year and for at least the early part of 2025.

Christopher Mathieu: The company declared a regular quarterly distribution of 30 cents per share with a record date of September 16th to be paid on September 30th. As of June 30th, the company had estimated undistributed income or spillover income of $39.3 million or 98 cents per share.

Speaker Change: admin fees and G&A are pretty well-baked.

Unnamed Speaker: Admin fees and G&A are pretty well-baked and consistent quarter to quarter. So, all that assumes we assume a kind of a consistent portfolio size with the leverage we have to the extent Sajal referred to NAV appreciation. NAV appreciation would result in additional ability to grow the portfolio. So, I think that covers the question, I think.

Chris: and consistent quarter-to-quarter so all that assumes we assume a kind of a consistent portfolio size with the leverage we have to the extent Sajal referred to

Christopher Mathieu: Now just an update on unfunded investment commitments overall liquidity and balance sheet leverage. We successfully reduced our unfunded commitments from $118 million a year end to $71 million as of June 30th. Of the $71 million of unfunded commitments, $5 million will expire this year in 2024 and $66 million will expire during 2025. We are pleased to share that subsequent to the end of the quarter, the company fully renewed its revolving credit facility.

Speaker Change: Nav Appreciation, Nav Appreciation would result in additional ability to grow the portfolio. So I think that covers the question, I think.

Crispin Love: Great. Thanks for that. That's all helpful.

Crispin Love: Great. Thanks, Chris. That's all very helpful.

Crispin Love: And then just in the last week or so, we've seen plenty of volatility in broader markets; credit spreads widened. There've been more fears of a potential recession. So can you discuss a little bit how you feel about your current credits that are performing as well as new credits you're looking at? It seems like you're taking a cautious approach here.

Chris: Great. Thanks, Chris. That's all helpful.

Crispin Love: And then, just in the last week or so, we've seen plenty of volatility in broader markets. Credit spreads have widened. There have been more fears of a potential recession. So can you discuss a little bit how you feel about your current credits, which are performing, as well as the kind of new credits you're looking at? It seems like you're taking a cautious approach here, but just curious if anything has changed in your outlook recently, or is it pretty stable, or just kind of has anything gotten worse? Just curious in the current environment with the volatility that we've seen more recently. Yeah,

Speaker Change: Just in the last week or so, we've seen plenty of volatility in broader markets, credit spreads have widened.

Christopher Mathieu: The company elected to reduce total commitments under the facility to $300 million to align better with the company's anticipated utilization while maintaining an accordingly feature that allows the company to increase the size of the credit facility in the future up to $300 million under certain circumstances. After giving effect to the renewal, the company had total liquidity of $340 million consisting of cash of $50 million and available capacity under the new revolver.

Speaker Change: There have been more fears of a potential recession, so can you discuss a little bit how you feel about your current credits that are performing, as well as new credits you're looking at? It seems like you're taking a cautious approach here, but just curious if anything has changed in your outlook recently, or is it pretty stable, or just has anything gotten worse? Just curious in the current environment on the...

Crispin Love: But just curious if anything has changed in your outlook recently or is it pretty stable or just had anything gotten worse, just curious in the current environment and the volatility that we've seen more recently.

Christopher Mathieu: Yeah, Chris, you know, our credit rescores obviously reflect our current view and our existing obligations and based on market conditions. And so, you know, I think our perspective is, as we look to the most major impact to our secondary industry, is venture capital fundraising, venture capital investment activity, and I think Jim talked about it. You know, essentially flat Q two Q one, but still up from last year. So I think, you know, we would like to see that activity increase.

Unnamed Speaker: Yeah, Chris, I'll take it. You know, our credit risk scores obviously reflect our current view and our existing obligors and are based on market conditions. And so, you know, I think our perspective is that the most significant impact on our sector and our industry is venture capital fundraising and venture capital investment activity. And I think Jim talked about it, you know, essentially flat in Q2, Q1, but still up from last year. So I think, you know, we would like to see that activity increase.

Sajal Srivastava: Yeah, Chris, I'll take it. You know, our credit risk scores obviously reflect our current view and our existing obligors and are based on market conditions. And so, you know, I think our perspective as we look to the most major impact on our sector and our industry is venture capital fundraising and venture capital investment activity. And I think Jim talked about it, you know, essentially flat in Q2, Q1, but still up from last year.

Sajal Srivastava: the volatility that we've seen more recently

Sajal Srivastava: Yeah, Chris, I'll take it. You know, our credit risk scores obviously reflect our current view and our existing obligors.

Sajal Srivastava: and based on market conditions and so

Christopher Mathieu: We continue to maintain a diversified capital structure as a quarter and a total of $405 million of debt was outstanding consisting of $395 million a fixed rate investment grade term notes and $10 million outstanding on our credit facility, which currently has a $300 million aggregate commitment. Given the $97 million on liquidity events from the portfolio of this quarter and $18 million in proceeds from the ETM program, we pay down our credit facility and continue to improve our leverage levels during the quarter as we enter the quarter with a leverage ratio of 1.15 times. Given that we have successfully renewed the revolving credit facility, we are comfortable with our current leverage sources and may look at additional sources should they be presented to us.

Sajal Srivastava: You know, I think our perspective is we look to the most major impact to our sector and our industry is venture capital fundraising, venture capital investment activity, and I think Jim talked about it, you know, essentially flat Q2, Q1, but still up from last year.

Sajal Srivastava: So I think, you know, we would like to see that activity increase. I don't think the current volatility this week necessarily impacts private market investment activity. As long as the volatility is short, I still think there is that more fundamental mismatch that Jim talked about regarding public valuation multiples and private valuation multiples, and we still need that to clear that imbalance. And so I think it'll take, you know, a few more quarters for that to occur, investment activity to improve, and exit activity to improve as well, which is all, you know, beneficial for not only new investment opportunities but our existing portfolio.

Unnamed Speaker: I don't think the current volatility this week necessarily impacts private market investment activity as long as the volatility is short. I still think there is that more fundamental mismatch that Jim talked about regarding public valuation multiples and private valuation multiples, and we still need that to clear that imbalance. And so I think it'll take, you know, a few more quarters for that to occur, investment activity to improve, and exit activity to improve as well, which is all, you know, beneficial for not only new investment opportunities but our existing portfolio economies.

Christopher Mathieu: I don't think the current this week's volatility necessarily impacts the private market investment activity as long as the volatility is the short. I still think there is that more fundamental mismatch that Jim talked about regarding public valuation multiples and private valuation multiples, and we still need that to clear that imbalance. And so I think it'll take, you know, a few more quarters for that to occur, investment activity to improve and exit activity to improve as well, which are all, you know, beneficial for not only new investment opportunities, but our existing portfolio.

Speaker Change: so i think you know we would like to see that activity increase i don't think the current this week's volatility necessarily in impfacts

Sajal Srivastava: The private market investment activity, as long as the volatility is short, I still think there is that more fundamental mismatch that Jim talked about, about

Sajal Srivastava: regarding public valuation multiples and private valuation multiples and we still need that to clear that imbalance and so I think it'll take you know a few more quarters for that to occur, investment activity to improve and exit activity to improve as well which

Sajal Srivastava: are all beneficial for not only new investment opportunities, but our existing portfolio companies.

Unnamed Speaker: Great. Thank you, Sajal, and I appreciate you both taking the time to answer my questions.

Sajal Srivastava: Great. Thank you, Sajal, and I appreciate you both taking the time to answer my questions.

Crispin Love: Thank you, thank you, Saju, and I appreciate you both take my question.

Speaker Change: Thank you, Sajal, and I appreciate you both taking my questions.

Operator: So this completes our prepared remarks today and so operated.

Phineon O'Shea: And our next question will come from Phineon O'Shea with Wells Fargo. Please go ahead.

Finian O'shea: And our next question will come from Finian O'Shea with Wells Fargo. Please go ahead.

Operator: And our next question will come from Finian O'Shea with Wells Fargo. Please go ahead.

Finian O'shea: Start with me.

Speaker Change: And our next question will come from Finian O'Shea with Wells Fargo. Please go ahead.

Phineon O'Shea: Hi everyone, good afternoon. A follow up on earnings, Chris, can you give us, you know, after the de-leveraging, which has been going on for a few quarters, what would like the exit rate be of NOI? You also said the portfolio and leverage would be stable from here, so where would earnings say be at next quarter all sequel? Yeah, so without giving you specific numbers, certainly what we did was consider the existing portfolio size and steady state. We, so we have hit our leverage target. I know we worked towards that over the last six to nine months, and so we're at our target leverage now. So it's really more about turning the portfolio and building it from there.

Finian O'shea: Hey everyone, good afternoon. A follow-up on earnings, Chris, can you give us, you know, after the deleveraging which has been going on for a few quarters, what would you like the exit rate of NOI to be? You also said the portfolio and leverage would be stable from here, so where would earnings, say, be next quarter, all SQL? be part of it.

Finian O'shea: Hey everyone, good afternoon. A follow-up on earnings, Chris, can you give us

Finian O'shea: you know, after the deleveraging which has been going on for a few quarters. Goodbye.

Finian O'shea: you know, after the deleveraging, which has been going on for a few quarters.

Crispin Love: At this time, we will take our first question, which will come from Crispin Love with Piper Sandler. Please go ahead. Thanks and good afternoon everyone. Starting off, you reset the dividends with 30 times net investment income here decreased to about 33 cents. So curious if you can discuss your outlook for net investment income with the near term, especially with rate cuts coming and your portfolio sitting around $17 million range at quarter end. And when you think you can get back to an area where you're growing the portfolio again.

Finian O'shea: What would the exit rate be of NOI? You also said the portfolio and leverage would be stable from here, so where would earnings, say, be at next quarter, all SQL?

Unnamed Speaker: Yeah, so without giving you specific numbers, certainly what we did was consider the existing portfolio size and steady state. So we have hit our leverage target. I know we worked towards that over the last six to nine months, and so we're at our target leverage now. So it's really more about turning the portfolio around and building it from there. So I think you can build your models, resetting that portfolio size to where we are today. And then some of the comments I made about some of the P&L expenses and items there should help you drive your model.

Speaker Change: Thank you.

Speaker Change: Yeah, so without giving you specific numbers, certainly what we did was consider the existing portfolio size.

Speaker Change: and SteadyState. So we have hit our leverage target. I know we worked

Speaker Change: towards that over the last six to nine months, and so we're at our target leverage now.

Christopher Mathieu: Chris, I'll take that. We have reset the dividend based on our current expectation of the strength of the existing portfolio and maintaining our target leverage ratio, which is where we are sitting now. We've also considered the impact of some near term fed rate changes that are expected to come in near future, as well as looking at the first half of 2025. Some of the other things we're also thinking about are some of the variables we had this quarter.

Speaker Change: So it's really more about turning the portfolio and building it from there.

Christopher Mathieu: So I think you could build your models, resetting that portfolio size to where we are today, and then some of the comments I made about some of the P&L expense and items there should help you try out your models. Okay, so on the level of the dividend, it sounds like earnings power is revisited given the greater than anticipated repays getting you to sort of your destination. You also talked about the base rate curve, but your payout at yield I think is nearly 14%, and a base rate curve normalizing would probably have you a bit below. That's still much higher than you earn historically.

Speaker Change: I think you can build your models resetting that portfolio size to where we are today and then some of the comments I made about some of the P&L expense and items there should help you try out your models.

Unnamed Speaker: Okay, so on the level of the dividend, it sounds like... Earnings power is revisited given the greater than anticipated repay is getting you to sort of your destination. You also talked about the base rate curve. But your payout at yield, I think is nearly 14%, and a base rate curve normalizing would probably have you a bit below, that's still much higher than you earned historically. So is there some sort of, is there another bridge or lever from here? you know, assuming as well normal incentive fees and interest costs. Thanks.

Sajal Srivastava: Okay, so on the level of the dividend to sort of your destination, you also talked about the base rate curve.

Speaker Change: Okay, so on the level of the dividend, it sounds like...

Christopher Mathieu: Management fee tends to be quite flat, so we assume that a pretty flat management fee, no incentive is expected to be incurred for the rest of this year and for at least the early part of 2025 admin fees and GNA are pretty well baked and consistent quarter to quarter. So all of that assumed we assume a kind of a consistent portfolio size, but the leverage we have to the extent, such as in referred to nav appreciation, nav appreciation would result in additional ability to grow the portfolio. So I think that covers the question, I think. Great. Thanks for that. That's all helpful.

Speaker Change: Earnings power is revisited given the greater than anticipated repays getting you to sort of your destination. You also talked about the base rate curve.

Sajal Srivastava: um

Speaker Change: But your payout at yield, I think, is nearly 14%.

Speaker Change: and a base rate curve normalizing would probably have you a bit below, that's still much higher than you earned historically. So is there a sort of, is there another bridge or lever from here?

Christopher Mathieu: So is there a sort of is there another bridge or lever from here, you know assuming as well normal incentives and interest costs.

Speaker Change: assuming as well normal incentive fees and interest costs. Thanks.

James Labe: Thanks. Yeah, what I'll grab that one, but I'd say, you know, as a BDC, we think it's pretty important to have distributions to our shareholders, and myself, Chris, and Sajull are in that mix and not very in a significant way. But yeah, you got to look at the 97 million of liquidity events that we had last quarter. We have been getting back in our targeted leverage range and then the lower court portfolio yield. I mean, it's all lower earnings power. So I guess you could factor in the Fed rate cuts that we may expect that Chris was talking about.

Unnamed Speaker: Yeah, well, I'll grab that one. But I'd say, you know, as a BDC, we think it's pretty important to have distributions to our shareholders, and myself, Chris, and Sajal are in that mix, but not in a very significant way. But yeah, you have to look at the 97 million liquidity events that we had last quarter. We have been getting back into our targeted leverage range, and then the lower core portfolio yield.

Christopher Mathieu: And then just in the last week or so, we've seen plenty of volatility in broader markets, credit spreads widened. There've been more fears of a potential recession. So can you discuss a little bit how you feel about your current credits that are performing as well as new credits you're looking at? It seems like you're taking a cautious approach here. But just curious if anything has changed in your outlook recently or is it pretty stable or just had anything gotten worse, just curious in the current environment and the volatility that we've seen more recently.

Speaker Change: Yeah, well, I'll grab that one, but I'd say, you know, as a BDC, we think it's pretty important to have distributions to our shareholders, and myself, Chris, and Sajal are in that mix, and not very in a significant way.

Speaker Change: But yeah, you've got to look at the $97 million of liquidity events that we had last quarter.

Unnamed Speaker: I mean, it's all lower earnings power, so I guess you could factor in the Fed rate cuts that we may expect that Chris was talking about. And it just boils it down to, it's not an easy decision here, Finn, but it's the right decision. And it realigns the dividend with the size and the yield of this portfolio while still providing some sizable distributions to the shareholders.

Speaker Change: We have been getting back in our targeted leverage range.

Speaker Change: and then the lower core portfolio yield. I mean, it's all lower earnings power. So I guess you could factor in the Fed rate cuts that we may expect that Chris was talking about.

Christopher Mathieu: Yeah, Chris, you know, our credit rescores obviously reflect our current view and our existing obligations and based on market conditions. And so, you know, I think our perspective is, as we look to the most major impact to our secondary industry is venture capital fundraising venture capital investment activity and I think Jim talked about it. You know, essentially flat Q two Q one but still up from last year. So I think, you know, we would like to see that activity increase.

Phineon O'Shea: And it just boils down to it's not an easy decision here, Finn, but it's a right decision and it realigned to do it in with the size and the yield of this portfolio, but still providing some sizeable distributions to the shareholders. Okay, fair enough.

Speaker Change: And it just boils it down to it's not an easy decision here, Finn, but it's the right decision and it realigns the dividend with the size and the yield of this portfolio, but still providing some sizable distributions to the shareholders.

Operator: Okay, fair enough. Thank you. I'll hop back. And our next question will come from Doug Harder with UBS. Please go ahead.

Phineon O'Shea: Thank you. I'll hop back in the queue.

Speaker Change: Okay, fair enough. Thank you. I'll hop back in the queue.

Doug Harder: And our next question will come from Doug Harder with UBS. Please go ahead. Thanks.

Christopher Mathieu: I don't think the current this week's volatility necessarily impacts the private market investment activity as long as the volatility is the short. I still think there is that more fundamental mismatch that Jim talked about about regarding public valuation multiples and private valuation multiples and we still need that to clear that imbalance. And so I think it'll take, you know, a few more quarters for that to occur investment activity to improve and exit activity to improve as well, which are all, you know, beneficial for not only new investment opportunities, but our existing portfolio.

Speaker Change: And our next question will come from Doug Harder with UBS. Please go ahead.

Doug Harder: Thanks. Can you talk about your outlook for portfolio yield, both kind of a base yield, but also kind of as you think about repayments as well in there? Yeah, Doug, Sajal, I'll take it.

Doug Harder: Can you talk about your outlook for the portfolio yield, both kind of a base yield, but also kind of as you think about repayments as well in that?

Finian O'shea: Thanks. Can you talk about your outlook for the portfolio yield, both kind of a base yield but also kind of as you think about repayments as well in there?

Sajal Srivastava: So I believe, as we reported today, core portfolio yield without the benefit of prepayment activity is 13.9%. And so I think, as Crispin said, sorry we're getting a little background on this. 60% of our book is floating rate, 40% is fixed rate. As we, and again we set floors on base rate indices depending on when the assets are originated, so we have the lowest prime rate floor we have is three and a quarter, but obviously going as high as where the current prime rate is on our more recent loan book.

Sajal Srivastava: Yeah, Dr. Sajal, I'll take it. So, I believe, as we reported today, for portfolio without the benefit of pre-payment activity, 13.9 percent. And so, I think as Chris, sorry, we're getting a little background; 60 percent of our book is floating rate, 40 percent is fixed rate. So, as we, and again, we set floors on base rate indices, depending on when the assets are originated. So, we have the lowest primary floor we have is three and a quarter, but obviously going through as high as where the current primary is on our more recent book.

Sajal Srivastava: Yeah, Sajal, I'll take it. So I believe, as we reported today, core portfolio yield without the benefit of prepayment activity is 13.9%. And so, I think, as Crispin said, sorry, we're getting a little background on this, 60% of our book is floating rate, 40% is fixed rate. So, as we, and again, we set floors on base rate indices depending on when the assets are originated. So, the lowest prime rate floor we have is 3 14, but obviously going as high as where the current prime rate is on our more recent loan book.

Speaker Change: yes do i' think it so i believe as we reported today four portfolio without the benefit of prepaying activity thirteen point nnine percent

Crispin: And so, I think it's Crispin.

Sajal Srivastava: Sorry, we're getting a little background noise.

Sajal Srivastava: 60% of our book is floating rate, 40% is fixed rate.

Crispin Love: Thank you, thank you, Saju, and I appreciate you both take my question.

Sajal Srivastava: Floors on base rate indices depending on when the assets are originated. So we have

Phineon O'Shea: And our next question will come from Phineon O'Shea with Wells Fargo. Please go ahead. Hi everyone, good afternoon.

Sajal Srivastava: The lowest prime rate floor we have is three and a quarter, but obviously going to as high as where the current prime rate is on our more recent loan book.

Christopher Mathieu: A follow up on earnings, Chris, can you give us, you know, after the de-leveraging, which has been going on for a few quarters, what would like the exit rate be of NOI? You also said the portfolio and leverage would be stable from here, so where would earnings say be at next quarter all sequel? Yeah, so without giving you specific numbers, certainly what we did was consider the existing portfolio size and steady state.

Sajal Srivastava: So, I would say our perspective is that, you know, generally, this 13.9 is a good starting point and factor in the fact that, again, as the Fed makes changes and reduces rates, you'll see, not on a one-for-one basis, but you'll see the impact of that. Yes, obviously, we're onboarding new investments at higher rates, but we have to factor in, again, the balance of the portfolio. And last point is there is a chart in our queue, obviously, that shows the impact of base rate changes. So, I think you can get some more specific information.

Sajal Srivastava: So, so I would say our perspective is that, you know, generally this 13.9 is a good starting point, and then factor in the fact that, again, as the said makes changes and reduces rates, you'll see on a one-for-one basis, but you'll see the impact of that. Yes, obviously we're onboarding your investments at higher rates, but we have to factor in, again, the balance of the portfolio. And last point is there is a chart in our queue, obviously, that shows the impact of base rate changes. So, I think you can get actually some more specific information.

Sajal Srivastava: So I would say our perspective is that, generally, this 13.9 is a good starting point and factor in the fact that, again, as the Fed makes changes and reduces rates, you'll see, not on a one for one basis, but you'll see the impact of that. Yes, obviously, we're onboarding new investments at higher rates, but we have to factor in again the balance of the portfolio. And last point is, there is a chart in our queue that shows the impact of base rate changes, so I think you can get some more specific information.

Sajal Srivastava: So I would say our perspective is that.

Sajal Srivastava: Generally, this 13.9 is a good starting point and then factor in the fact that.

Sajal Srivastava: Again, as the Fed makes changes and reduces rates, you'll see, not on a one-for-one basis,

Sajal Srivastava: but you'll see the impact of that.

Sajal Srivastava: Yes, obviously, we're onboarding new investments at higher rates, but we have to factor in again the balance of the portfolio. And last point is there is a chart in our queue, obviously, that shows the impact of base rate changes. So, I think you can get actually some more specific information.

Doug Harder: Great, thank you so much.

Sajal Srivastava: Great. Thank you, Sajal.

Christopher Mathieu: We so we have hit our leverage target. I know we worked towards that over the last six to nine months and so we're at our target leverage now, so it's really more about turning the portfolio and building it from there. So I think you could build your models resetting that portfolio size to where we are today and then some of the comments I made about some of the P&L expense and items there should help you try out your models.

Christopher Nolan: And our next question will come from Christopher Nolan, with Lane Bernthalman.

Operator: Great, thank you. And our next question will come from Christopher Nolan with Leidenberg-Thelman. Please go ahead. Hey guys.

Christopher Nolan: And our next question will come from Christopher Nolan with Leidenberg Feldman. Please go ahead. Hey guys. To pick up on Finn's discussion, and I don't mean to beat a horse here, but did you cut the dividend enough?

Christopher Nolan: Please go ahead. Hey, guys, to pick up on Finn's discussion, and I don't mean to be a horse here, but did you cut the divot of enough? Because if you look at it as a percentage of now, it's close to 14%. Yeah, so we think we have. We think that based on the model and we've done in the variance of the revenue that this portfolio generates, we think that we're in the right level.

Christopher Nolan: Hey guys, to pick up on Finn's discussion, and I don't mean to beat a horse here, but did you cut the dividend enough? Because if you look at it as a percentage of nav, it's close to 14%.

Unnamed Speaker: because if you look at it as a percentage of nav, it's close to.

Unnamed Speaker: um

Unnamed Speaker: Because if you look at it as a percentage of NAV, it's close to 14%.

Unnamed Speaker: Yeah, so we think we have. We think that based on the modeling we've done and the variance of the revenue that this portfolio generates, we think that we're at the right level. I think the one thing that I forgot to mention to Finn was one of the variables now that we're at target leverage is the prepayment rate and the vintage of those prepayments. I think we've talked in the past that earlier prepayments generate more income for us.

Unnamed Speaker: yes so we think we have we think that based on the model and we've done

Unnamed Speaker: and the variance of...

Christopher Mathieu: Okay, so on the level of the dividend, it sounds like earnings power is revisited given the greater than anticipated repays getting you to sort of your destination. You also talked about the base rate curve, but your payout at yield I think is nearly 14% and a base rate curve normalizing would probably have you a bit below that's still much higher than you earn historically. So is there a sort of is there another bridge or lever from here, you know assuming as well normal incentives and interest costs.

Unnamed Speaker: of

Unnamed Speaker: The revenue that this portfolio generates, we think that we're in the right level. I think the one thing that I forgot to mention to Finn was one of the variables, now that we're at target leverage, is the prepayment rate.

Christopher Mathieu: I think the one thing that I forgot to mention to Finn was one of the variables. Now that we're at target leverage, is the prepayment rate and the vintage of those prepayments. I think we've talked to the past that earlier prepayments generate more income to us. So that will be one of the variables that you'll have to think about over the coming quarters. But otherwise, we think we have a good handle on the earnings power and the portfolio and some of the variables beyond just the kind of top line revenue.

Unnamed Speaker: and the vintage of those prepayments.

Unnamed Speaker: I think we've talked in the past that earlier prepayments generate more income to us. So that'll be one of the variables that you'll have to think about over the coming quarters. But otherwise, we think we have a good handle on the earnings power of the portfolio and some of the variables beyond just the kind of top line revenue.

Unnamed Speaker: So that will be one of the variables that you'll have to think about over the coming quarters. But, otherwise, we think we have a good handle on the earnings power of the portfolio and some of the variables beyond just the kind of top-line revenue.

Unnamed Speaker: So that'll be one of the variables that you'll have to think about over the coming quarters. But otherwise, we think we have a good handle on the earnings power of the portfolio and some of the variables beyond just the kind of top-line revenue.

Christopher Nolan: Okay, Chris, on the shares on our train below book, should we assume that the ATM will not be utilized when the share price is going down?

Chris: Okay, Chris, on the shares on our train below book, should we assume that the ATM will not be utilized?

Christopher Mathieu: Okay, and Chris, on the, this shares on our tray and below book, should we assume that the ATM will not be utilized when the share price is available?

Chris: Okay, Chris, on the shares on our train below book, should we assume that the ATM will not be utilized?

Unnamed Speaker: Yeah that's a fair question. So we do not have and have never sought the vote to have below share issuance, and so ATM is at the market assuming that we trade above, including any load that we would pay. So yeah that's correct. If it's below NAV, we're not issuing.

Unnamed Speaker: Yeah, that's a fair question. So we do not have and have never sought the vote to have below share issuance, and so ATM is at the market assuming that we trade above, including any load that we would pay. So yeah, that's correct. If it's below NAV, we're not issuing.

Christopher Mathieu: Yeah, that's a fair question.

Christopher Mathieu: So we do not have and have never sought the vote to have below share issuance. And so ATM is at the market, assuming that we trade above, including the any load that we would pay. So yeah, that's correct. If it's below nav, we're not issuing.

Unnamed Speaker: when the share price is going to go down.

Unnamed Speaker: Yeah, that's a fair question. So we do not have and have never sought the vote to have below share issuance. And so ATM is at the market, assuming that we trade above, including the any load that we would pay. So yeah, that's correct. If it's below NAV, we're not issuing.

James Labe: Thanks. Yeah, what I'll grab that one, but I'd say, you know, as a BDC, we think it's pretty important to have distributions to our shareholders and myself, Chris and Sajull are in that mix and not very in a significant way. But yeah, you got to look at the 97 million of liquidity events that we had last quarter. We have been getting back in our targeted leverage range and then the lower court portfolio yield.

Christopher Nolan: And my final question is I'm giving that you guys are sort of in a portfolio reset mode to a certain degree.

Unnamed Speaker: And my final question is, given that you guys are sort of in a... portfolio reset mode to a certain degree, what areas and industries are you liking, and which areas are you not liking in terms of looking at prospective investment?

Unnamed Speaker: And my final question is, given that you guys are sort of in a

Speaker Change: Great. And my final question is, given that you guys are sort of in a portfolio reset mode to a certain degree, what areas, what industries are you liking and which areas are you not liking in terms of looking at prospective investments?

Sajal Srivastava: What areas, what industries are you liking and which areas are you not liking in terms of looking at perspective? Justice. Yeah, I'd say we pretty much are following what the investment categories and favorable sectors are of the select venture investors that we work with. So probably no surprise. And here and there, we've mentioned some of these, but AI for sure. And that goes with a lot of ways of defining that. But cyber security comes to mind. There's a bunch of health tech, space, and government technology. We love recurring software companies and a price software. Interesting enough, robotics.

Unnamed Speaker: Yeah, I'd say we pretty much are following what the investment categories and favorable sectors are of the select venture investors that we work with, so probably no surprise, and here and there we've mentioned some of these, but AI for sure, and that goes, there's a lot of ways of defining that, but cybersecurity comes to mind, there's a bunch of health tech, space and government technology, we love recurring software companies, enterprise software, interesting enough, robotics, and actually semiconductors is making its way back into the mix of the new investment sectors, I throw in a little bit vertical software, some environmental sustainability technologies, and space and GovTech as folks now call it, I think we are de-emphasizing the more consumer focused plays out there, and there's less of them.

Speaker Change: Yeah I'd say we pretty much are following what the investment categories and favorable sectors are of the select venture investors that we work with so

James Labe: I mean, it's all lower earnings power. So I guess you could factor in the Fed rate cuts that we may expect that Chris was talking about. And it just boils down to it's not an easy decision here Finn, but it's a right decision and it realigned to do it in with the size and the yield of this portfolio, but still providing some sizeable distributions to the shareholders.

Phineon O'Shea: Okay, Fair enough. Thank you.

Speaker Change: probably no surprise and here and there we've mentioned some of these but AI for sure and that goes there's a lot of ways of defining that but

Phineon O'Shea: I'll hop back in the queue.

Speaker Change: Cybersecurity comes to mind. There's a bunch of health tech, space and government technology. We love recurring software companies, enterprise software.

Speaker Change: Interesting enough, robotics.

Sajal Srivastava: And actually, semiconductors is making its way back into the mix of the new investment sectors. I throw in a little bit of vertical software, some environmental sustainability technologies, and space, and a growth tech, as folks now call it.

Doug Harder: And our next question will come from Doug Harder with UBS.

Speaker Change: and actually semiconductors is making its way back into the mix of the new investment sectors.

Sajal Srivastava: Please go ahead. Thanks. Can you talk about your outlook for the portfolio yield, both kind of a base yield, but also kind of as you think about repayments as well in that?

Speaker Change: I'd throw in a little bit vertical software, some environmental sustainability technologies and space and GovTech, as folks now call it. I think we are deemphasizing the more consumer-focused plays out there, and there's less of them.

Sajal Srivastava: I think we are de-emphasizing the more consumer-focused plays out there, and there's less of them. Great.

Sajal Srivastava: Yeah, Dr. Sajal, I'll take it. So, I believe as we reported today, for portfolio without the benefit of pre-payment activity, 13.9 percent. And so, I think as Chris, sorry, we're getting a little background, 60 percent of our book is floating rate, 40 percent is fixed rate. So, as we, and again, we set floors on base rate indices, depending on when the assets are originated. So, we have the lowest primary floor we have is three and a quarter, but obviously going through as high as where the current primary is on our more recent book.

Sajal Srivastava: So, so I would say our perspective is that, you know, generally this 13.9 is a good starting point, and then factor in the fact that, again, as the said makes changes and reduces rates, you'll see on a one for one basis, but you'll see the impact of that. Yes, obviously we're onboarding you investments at a higher rates, but we have to factor in again, the balance of the portfolio and last point is there is a chart in our queue, obviously that shows the impact of base rate changes. So, I think you can get actually some more specific information.

Unnamed Speaker: And finally, Chris, I wish you well in your retirement. And, okay, that's it for me, guys.

Christopher Nolan: And finally, Chris, I wish you well in your retirement. I always appreciate working with you, and I appreciate your help and your patience. And okay, that's it for me, guys. Thank you.

Doug Harder: And finally, Chris, hope we should well in your retirement. And I always appreciate working with you, and I appreciate your help and your patience.

Unnamed Speaker: Great. And finally, Chris, I wish you well in your retirement. I always appreciate working with you and I appreciate your help and your patience. Okay, that's it for me guys. Thank you. Thanks for the kind words.

Sajal Srivastava: Great, thank you so much.

Doug Harder: Okay, that's it for me, guys. Thank you. Thanks for the kind of words.

Unnamed Speaker: Thank you. Thank you. Thank you for the kind words.

Unnamed Speaker: Thanks for the kind words.

James Labe: And this will conclude our question in the answer session.

Operator: And that will conclude our question and answer session. I'd like to turn the conference back over to Mr. Jim Labe for any closing remarks.

James Labe: I'd like to turn the conference back over to Mr. Jim LeBae for any closing remarks. As always, I'd like to thank everyone for listening and also participating in today's call. Excuse me. We look forward to updating and talking with you all again next quarter. Thanks again, and have a nice day.

Speaker Change: And this will conclude our question and answer session. I'd like to turn the conference back over to Mr. Jim Labe for any closing remarks.

Unnamed Speaker: As always, I'd like to thank everyone for listening and also participating in today's call. Excuse me.

James Labe: As always, I'd like to thank everyone for listening and also participating in today's show.

Unnamed Speaker: As always, I'd like to thank everyone for listening and also participating in today's call.

Unnamed Speaker: We look forward to updating and talking with you all again next quarter. Thanks again and have a nice day.

Operator: The conference has now concluded. Thank you for attending today's presentation.

Operator: You may now disconnect your line.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

Christopher Nolan: And our next question will come from Christopher Nolan with Lane Bernthalman. Please go ahead. Hey, guys, to pick up on Finn's discussion, and I don't mean to be a horse here, but did you cut the divot of enough? Because if you look at as a percentage of now, it's close to 14%. Yeah, so we think we have. We think that based on the model and we've done in the variance of the revenue that this portfolio generates, we think that we're in the right level.

Christopher Nolan: I think the one thing that I forgot to mention to Finn was one of the variables. Now that we're at target leverage is the prepayment rate and the vintage of those prepayments. I think we've talked to the past that earlier prepayments generate more income to us. So that will be one of the variables that you'll have to think about over the coming quarters. But otherwise, we think we have a good handle on the earnings power and the portfolio and some of the variables beyond just the kind of top line revenue.

Christopher Nolan: Okay, and Chris, on the, this shares on our tray and below book, should we assume that the ATM will not be utilized when the share price is available? Yeah, that's a fair question. So we do not have and have never sought the vote to have below share issuance. And so ATM is at the market, assuming that we trade above, including the any load that we would pay. So yeah, that's correct. If it's below nav, we're not issuing.

Sajal Srivastava: And my final question is I'm giving that you guys are sort of in a portfolio reset mode to a certain degree. What areas, what industries are you liking and which areas are you not liking in terms of looking at perspective? Justice. Yeah, I'd say we pretty much are following what the investment categories and favorable sectors are of the select venture investors that we work with. So probably no surprise. And here and there, we've mentioned some of these, but AI for sure.

Sajal Srivastava: And that goes with a lot of ways of defining that. But cyber security comes to mind. There's a bunch of health tech, space and government technology. We love recurring software companies and a price software. Interesting enough, robotics. And actually, semiconductors is making its way back into the mix of the new investment sectors. I throw in a little bit vertical software, some environmental sustainability technologies and space and a growth tech, as folks now call it. I think we are de-emphasizing the more consumer-focused plays out there and there's less of them. Great.

Christopher Nolan: And finally, Chris, hope we should well in your retirement. And I always appreciate working with you and I appreciate your help and your patience. Okay, that's it for me guys. Thank you. Thanks for the kind of words.

Operator: And this will conclude our question in the answer session.

Operator: The conference has now concluded.

Operator: Thank you for attending today's presentation. You may now disconnect your line.

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