AB 2020 Form 10-K

Net Increase (Decrease) in Net Assets Resulting from Operations For the years ended December 31, 2020 and 2019, the net increase in net assets resulting from operations was $8,501,562 and $5,567,442, respectively. Based on the weighted average Shares outstanding for the years ended December 31, 2020 and 2019, the Fund’s per share net increase in net assets resulting from operations was $0.15 and $0.58, respectively. Cash Flows For the year ended December 31, 2020, cash increased by $7,478,831. During the same period, the Fund used $177,285,515 in operating activities, primarily as a result of purchases of investments. During the year ended December 31, 2020, the Fund generated $184,764,346 from financing activities, primarily from borrowings on the Credit Facilities and Secured Borrowings, and issuance of Shares. For the year ended December 31, 2019, cash increased by $12,421,583. During the same period, the Fund used $197,174,227 in operating activities, primarily as a result of purchases of investments. During the year ended December 31, 2019, the Fund generated $209,595,810 from financing activities, primarily from borrowings on the Credit Facilities and CLO Notes, and issuance of Shares. Hedging The Fund may enter into currency hedging contracts, interest rate hedging agreements such as futures, options, swaps and forward contracts, and credit hedging contracts, such as credit default swaps. However, no assurance can be given that such hedging transactions will be entered into or, if they are, that they will be effective. For the year ended December 31, 2020, the Fund did not enter into any hedging contracts. Financial Condition, Liquidity and Capital Resources At December 31, 2020, and December 31, 2019, the Fund had $22,410,622 and $14,931,791 in cash and cash equivalents on hand, respectively. The Fund expects to generate cash primarily from (i) the net proceeds of the Private Offering, (ii) cash flows from the Fund’s operations, (iii) any financing arrangements now existing or that the Fund may enter into in the future and (iv) any future offerings of the Fund’s equity or debt securities. The Fund may fund a portion of its investments through borrowings from banks, or other large global institutions such as insurance companies, and issuances of senior securities. The Fund’s primary use of funds from a credit facility will be investments in portfolio companies, cash distributions to holders of the Fund’s common stock and the payment of operating expenses. In the future, the Fund may also securitize or finance a portion of its investments with a special purpose vehicle. If the Fund undertakes a securitization transaction, it will consolidate its allocable portion of the debt of any securitization subsidiary on its financial statements, and include such debt in its calculation of the asset coverage test, if and to the extent required pursuant to the guidance of the staff of the SEC. Cash and cash equivalents as of December 31, 2020, taken together with the Fund’s uncalled Capital Commitments of $231,023,885, $4,000,000 undrawn amount on the HSBC Credit Facility and $15,300,000 undrawn amount on the Synovus Credit Facility, is expected to be sufficient for the Fund’s investing activities and to conduct the Fund’s operations for at least the next twelve months. As of December 31, 2020, the Fund had $22,410,622 in cash and cash equivalents. During the year ended December 31, 2020, the Fund used $177,285,515 for operating activities. Credit Facilities HSBC Credit Facility On November 15, 2017, the Fund entered into the HSBC Credit Agreement to establish the HSBC Credit Facility with the HSBC Administrative Agent and any other lender that becomes a party to the HSBC Credit Facility in accordance with the terms of the HSBC Credit Agreement, as lenders. The initial maximum commitment amount (the “HSBC Maximum Commitment”) under the HSBC Credit Facility was $30 million. The HSBC Maximum Commitment amount may be increased upon request of the Fund to an amount agreed upon by the Fund and the HSBC Administrative Agent. Such increase may be done in one or more requested increases, each in a minimum amount of $10 million and in $5 million increments thereof, or such lesser amount to be determined by the HSBC Administrative Agent, subject to certain terms and conditions. So long as no request for borrowing is outstanding, the Fund may terminate the Lenders’ (as defined in the HSBC Credit Agreement) commitments (the “HSBC Commitments”) or reduce the HSBC Maximum Commitment by giving prior irrevocable written notice to the HSBC Administrative Agent. Any reduction of the HSBC Maximum Commitment shall be in an amount equal to $10 million or multiples thereof; and in no event shall a reduction by the Fund reduce the HSBC Commitments to $35 million or less (in each case, except for a termination of all the HSBC Commitments). Proceeds under the HSBC Credit Facility may be used for any purpose permitted under the Fund’s organizational documents, including general corporate purposes such as the making of investments. 68