NEW YORK, May 28 /PRNewswire-FirstCall/ -- GSC Investment
Corp. (NYSE: GNV), a business development company, today announces
financial results for the fiscal fourth quarter and fiscal year
ended February 28, 2010.
Operating Results
For the fiscal year ended February 28,
2010, GSC Investment Corp. reported net investment income of
$5.7 million, or $0.54 per share. Net investment income was offset
by net realized and unrealized losses on investments of
$16.2 million, or $1.52 per share, resulting in a net decrease in
net assets from operations of $10.5
million, or $0.99 per share.
The $16.2 million net loss on
investments was comprised of $9.5
million in net unrealized depreciation on investments and
$6.7 million net realized losses on
investments. Net asset value was $3.27 per share as of February 28, 2010.
For the fiscal quarter ended February 28,
2010, GSC Investment Corp. reported net investment income of
$1.2 million, or $0.07 per share. Net investment income was offset
by net realized and unrealized losses on investments of
$10.1 million or $0.59 per share resulting in a net decrease in
net assets from operations of $8.9
million, or $0.52 per share.
The $10.1 million of the net loss on
investments was comprised of $5.0
million in net unrealized depreciation on investments and
$5.1 million in net realized losses
on investments.
Portfolio and Investment Activity
As of February 28, 2010, the value
of the Company's investment portfolio was $89.4 million, principally invested in 27
portfolio companies and one collateralized loan obligation fund
("CLO"). The overall portfolio composition consisted of 18.6% first
lien term loans, 22.7% second lien term loans, 31.0% senior secured
notes, 6.4% unsecured notes, 18.7% subordinated notes of GSCIC CLO
and 2.6% common stocks and limited partnership interests.
During the fourth quarter, GSC Investment Corp. made no
investments in new or existing portfolio companies. For the
quarter, the Company had $4.2 million
in aggregate amount of exits and repayments, resulting in net
repayments of $4.2 million.
As of February 28, 2010, the
weighted average current yield on the Company's first lien term
loans, second lien term loans, senior secured notes, unsecured
notes and the GSCIC CLO subordinated notes were 8.6%, 8.1%, 11.6%,
12.2% and 8.3%, respectively, which resulted in an aggregate
weighted average current yield of 9.3%.
As of February 28, 2010, 46.9%, or
$33.0 million, of the Company's
interest-bearing portfolio was fixed rate debt with a weighted
average current coupon of 11.6% and 53.1%, or $37.4 million, of its interest-bearing portfolio
was floating rate debt with a weighted average current spread of
LIBOR plus 7.6%.
Liquidity and Capital Resources
At February 28, 2010, the Company
had $37.0 million in borrowings under
its credit facility and an asset coverage ratio of 250%.
On July 30, 2009, an unremedied
borrowing base deficiency became an event of default, which is
currently continuing. During the continuance of an event of
default, the lender has the ability to terminate the facility and
sell the underlying collateral necessary to satisfy outstanding
borrowings. On April 14, 2010, the
Company announced that Saratoga Investment Advisors, LLC and CLO
Partners LLC agreed to purchase a minority stake in the Company as
part of a $55 million
recapitalization plan to enable the Company to cure its existing
event of default. In connection with the proposed transaction, the
Company and its lender entered into a forbearance agreement,
subject to certain milestones. The Company has been in default
under its credit facility since last July. Including $3.2 million of repayments made subsequent to
February 28, 2010, the Company has
repaid $22.0 million of outstanding
borrowings since the event of default consisting of $14.8 million of proceeds from asset sales and
repayments and $7.2 million from cash
interest received in excess of interest expense.
About GSC Investment Corp.
GSC Investment Corp. is a specialty finance company that invests
primarily in leveraged loans and mezzanine debt issued by U.S.
middle-market companies, high yield bonds and collateralized loan
obligations. It has elected to be treated as a business development
company under the Investment Company Act of 1940. The Company may
also opportunistically invest in distressed debt, debt issued by
non-middle market companies, and equity securities issued by middle
and non-middle market companies. The Company draws upon the support
and investment advice of its external manager, GSC Group, an
alternative asset investment manager that focuses on complex,
credit-driven strategies. GSC Investment Corp. is traded on the New
York Stock Exchange under the symbol "GNV."
Contact:
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Debbie
Lombardi
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GSC Group
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973-593-5438
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GSC Investment
Corp.
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Consolidated Statement of Assets
and Liabilities
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As of
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February 28,
2010
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February 28,
2009
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ASSETS
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Investments at fair value
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Non-control/non-affiliate investments
(amortized cost of $117,678,275 and $137,020,449,
respectively)
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$
72,674,847
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$
96,462,919
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Control investments (cost of
$29,233,097 and $29,905,194, respectively)
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16,698,303
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22,439,029
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Affiliate investments (cost of $0 and
$0, respectively)
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-
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10,527
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Total
investments at fair value (amortized cost of $146,911,372 and
$166,925,643, respectively)
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89,373,150
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118,912,475
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Cash
and cash equivalents
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3,352,434
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6,356,225
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Cash
and cash equivalents, securitization accounts
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225,424
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1,178,201
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Outstanding interest rate cap at fair
value (cost of $131,000 and $131,000, respectively)
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42,147
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39,513
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Interest receivable, net of
reserve
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3,473,961
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3,087,668
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Deferred credit facility financing
costs, net
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-
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529,767
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Management fee receivable
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327,928
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237,370
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Other
assets
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140,272
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321,260
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Total
assets
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$
96,935,316
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$
130,662,479
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LIABILITIES
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Revolving credit facility
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$
36,992,222
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$
58,994,673
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Management and incentive fees
payable
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3,071,093
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2,880,667
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Accounts payable and accrued
expenses
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1,111,081
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700,537
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Interest and credit facility fees
payable
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267,166
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72,825
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Due to
manager
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15,602
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-
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Total
liabilities
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$
41,457,164
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$
62,648,702
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NET
ASSETS
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Common
stock, par value $.0001 per share, 100,000,000 common shares
authorized, 16,940,109 and 8,291,384 common shares issued and
outstanding, respectively
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$
1,694
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$
829
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Capital in excess of par
value
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128,339,497
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116,943,738
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Accumulated undistributed net
investment income (loss)
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(2,846,135)
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6,122,492
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Accumulated net realized loss from
investments and derivatives
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(12,389,830)
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(6,948,628)
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Net
unrealized depreciation on investments and derivatives
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(57,627,074)
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(48,104,654)
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Total
Net Assets
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55,478,152
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68,013,777
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Total
liabilities and Net Assets
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$
96,935,316
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$
130,662,479
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NET
ASSET VALUE PER SHARE
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$
3.27
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$
8.20
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GSC Investment
Corp.
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Consolidated Statements of
Operations
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For the year
ended
February 28, 2010
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For the year
ended
February 28, 2009
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For the year
ended
February 29, 2008
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INVESTMENT INCOME
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Interest from investments
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Non-control/Non-affiliate
investments
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$
10,902,482
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$
16,572,973
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$
20,115,301
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Control investments
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2,397,514
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4,393,818
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262,442
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Total interest income
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13,299,996
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20,966,791
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20,377,743
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Interest from cash and cash
equivalents
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23,624
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175,567
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366,312
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Management fee income
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2,057,397
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2,049,717
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599,476
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Other
income
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236,259
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195,135
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42,548
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Total
investment income
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15,617,276
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23,387,210
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21,386,079
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EXPENSES
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Interest and credit facility financing
expenses
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4,096,041
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2,605,367
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5,031,233
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Base
management fees
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1,950,760
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2,680,231
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2,938,659
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Professional fees
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2,071,027
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1,166,111
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1,409,806
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Administrator expenses
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670,720
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960,701
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892,112
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Incentive management fees
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327,684
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1,752,254
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711,363
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Insurance
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869,969
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682,154
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586,784
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Directors fees and expenses
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294,932
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295,017
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313,726
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General &
administrative
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265,575
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289,477
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261,653
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Cost
of acquiring management contract
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-
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-
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144,000
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Organizational expense
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-
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-
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49,542
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Expenses before expense waiver and
reimbursement
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10,546,708
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10,431,312
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12,338,878
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Expense reimbursement
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(670,720)
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(1,010,416)
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(1,789,028)
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Total
expenses net of expense waiver and reimbursement
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9,875,988
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9,420,896
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10,549,850
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NET
INVESTMENT INCOME BEFORE INCOME TAXES
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5,741,288
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13,966,314
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10,836,229
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Income
tax expense, including excise tax
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(27,445)
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(140,322)
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(88,951)
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NET
INVESTMENT INCOME
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5,713,843
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13,825,992
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10,747,278
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REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
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Net
realized gain/(loss) from investments
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Non-Control/Non-Affiliate
investments
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(6,653,983)
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(7,173,118)
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2,707,402
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Control investments
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-
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-
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428,673
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Affiliate investments
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-
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-
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39,147
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Net
realized gain from derivatives
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-
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30,454
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|
732,526
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Net
unrealized depreciation on investments
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(9,525,054)
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(27,961,244)
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(20,051,923)
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Net
unrealized appreciation/(depreciation) on derivatives
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2,634
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(37,221)
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(54,266)
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Net
loss on investments
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(16,176,403)
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(35,141,129)
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(16,198,441)
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NET
DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
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$
(10,462,560)
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$
(21,315,137)
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$
(5,451,163)
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WEIGHTED AVERAGE - BASIC AND DILUTED
EARNINGS (LOSS) PER COMMON SHARE
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$
(0.99)
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$
(2.57)
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$
(0.70)
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WEIGHTED AVERAGE COMMON STOCK
OUTSTANDING - BASIC AND DILUTED
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10,613,507
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8,291,384
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7,761,965
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SOURCE GSC Investment Corp.