Quarterly report pursuant to Section 13 or 15(d)

Unconsolidated Significant Subsidiaries

v3.23.1
Unconsolidated Significant Subsidiaries
3 Months Ended
Mar. 31, 2023
Unconsolidated Significant Subsidiaries [Abstract]  
UNCONSOLIDATED SIGNIFICANT SUBSIDIARIES

NOTE 9 – UNCONSOLIDATED SIGNIFICANT SUBSIDIARIES

 

The Company’s investments are primarily in private small and lower middle-market companies. In accordance with Rules 3.09 and 4.08(g) of Regulation S-X, the Company must determine which of its unconsolidated controlled portfolio companies are considered “significant subsidiaries”, if any. On May 21, 2020, the U.S. Securities and Exchange Commission adopted rule amendments to be effective on January 1, 2021. Under the new rules, a new definition of “significant subsidiary” was adopted.

 

In evaluating these investments, there are now two tests utilized to determine if any of the Company’s control investments are considered significant subsidiaries; the investment and the income significant tests. The asset significant test was eliminated under the new rules. Rule 3.09 of Regulation S-X, as interpreted by the SEC, requires the Company to include separate audited financial statements of any unconsolidated majority-owned subsidiary in an annual report if the subsidiary investment value exceeds 20% of the Company’s total investments at fair value, the income from the subsidiary investment exceeds 80% of the Company’s change in net assets resulting from operations, or the income from the subsidiary investment exceeds 20% of the Company’s change in net assets resulting from operations and the subsidiary investment value exceeds 5% of the Company’s total investments at fair value. Rule 4.08(g) of Regulation S-X requires summarized financial information of an unconsolidated subsidiary in an annual report where the Company owns more than 25% of the voting securities or is otherwise controlled by the Company if it does not qualify under Rule 3.09 of Regulation S-X and if the subsidiary investment value exceeds 10% of the Company’s total investments at fair value, the income from the subsidiary investment exceeds 80% of the Company’s change in net assets resulting from operations, or the income from the subsidiary investment exceeds 10% of the Company’s change in net assets resulting from operations and the subsidiary investment value exceeds 5% of the Company’s total investments at fair value.

 

Rule 10-01(b)(1) of Regulation S-X requires summarized financial information for interim financial statements, if the Company owns more than 25% of the voting securities or is otherwise controlled by the Company and if the subsidiary investment value exceeds 10% of the Company’s total investments at fair value, the income from the subsidiary investment exceeds 80% of the Company’s change in net assets resulting from operations, or the income from the subsidiary investment exceeds 10% of the Company’s change in net assets resulting from operations and the subsidiary investment value exceeds 5% of the Company’s total investments at fair value.

 

The Company has determined that Rockfish Seafood Grill, Inc., and Advantis Certified Staffing Solutions, Inc., two of the Company’s four majority owned or controlled portfolio companies, were considered a significant subsidiary at March 31, 2023 as prescribed under Rule 10-01(b)(1) of Regulation S-X.

 

The following tables show the summarized financial information for Rockfish Seafood Grill, Inc. and Advantis Certified Staffing Solutions, Inc. (numbers in thousands):

 

    Rockfish Seafood Grill, Inc.     Advantis Certified Staffing Solutions, Inc.  
    Three months Ended
March 31, 2023
    Three months Ended
March 31, 2022
    Three months Ended March 31, 2023     Three months Ended March 31, 2022  
    (unaudited)     (unaudited)     (unaudited)     (unaudited)  
Income Statement                        
Net Revenue   $ 4,086     $ 4,471     $ 2,171     $ 2,898  
Gross Profit   $ 2,866     $ 3,083     $ 465     $ 527  
Net Income (Loss)   $ 438     $ 1,544     $ (190 )   $ (248 )