Filed by Portman Ridge Finance Corporation pursuant to Rule 425 under the
Securities Act of 1933 and deemed filed under Rule 14a-12 of the Securities Exchange Act of 1934 Subject Company: Harvest Capital Credit Corporation Commission File No. 814-00985 Harvest Capital Credit Corp. to Merge Into Portman Ridge Investor
Presentation December 24, 2020Filed by Portman Ridge Finance Corporation pursuant to Rule 425 under the Securities Act of 1933 and deemed filed under Rule 14a-12 of the Securities Exchange Act of 1934 Subject Company: Harvest Capital Credit
Corporation Commission File No. 814-00985 Harvest Capital Credit Corp. to Merge Into Portman Ridge Investor Presentation December 24, 2020
Important Information Forward-Looking Statements This Presentation may
contain forward-looking statements that involve substantial risks and uncertainties, including statements regarding the completion of the transaction between Harvest Capital Credit Corporation (“HCAP”) and Portman Ridge Finance
Corporation (“Portman Ridge” or “PTMN”). The use of words such as anticipates, believes, intends, plans, expects, projects, estimates, will, should, may and similar expressions to identify forward-looking statements. These
forward-looking statements are subject to various risks and uncertainties. Certain factors could cause actual results and conditions to differ materially from those projected, including the uncertainties associated with (i) the timing or likelihood
of the transaction closing, (ii) the expected synergies and savings associated with the transaction, (iii) the expected elimination of certain expenses and costs due to the transaction, (iv) the percentage of HCAP stockholders voting in favor of the
transaction, (v) the possibility that competing offers or acquisition proposals for HCAP will be made; (vi) the possibility that any or all of the various conditions to the consummation of the merger may not be satisfied or waived; (vii) risks
related to diverting the respective management’s attention from HCAP’s and PTMN’s ongoing business operations, (viii) the risk that stockholder litigation in connection with the transactions contemplated by the merger agreement may
result in significant costs of defense and liability, (ix) the future operating results of our portfolio companies or the combined company, (x) regulatory factors, (xi) changes in regional or national economic conditions, including but not limited
to the impact of the COVID-19 pandemic, and their impact on the industries in which we invest, and (xii) other changes in the conditions of the industries in which we invest and other factors enumerated in our filings with the SEC. You should not
place undue reliance on such forward-looking statements, which speak only as of the date of this Presentation. PTMN and HCAP undertake no obligation to update any forward-looking statements made herein, unless required by law. You should, therefore,
not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Presentation. You should read this communication and the documents referenced in this communication completely and with the
understanding that actual future results may be materially different from expectations. PTMN and HCAP qualify all forward-looking statements by these cautionary statements. Additional Information and Where to Find It In connection with the proposed
transaction, HCAP plans to file with the SEC and mail to HCAP’s stockholders a proxy statement/prospectus on Schedule 14A (the “Proxy Statement/Prospectus”), and PTMN plans to file with the SEC a registration statement on Form N-14
(the “Registration Statement”, which will include the Proxy Statement/Prospectus therein). The Proxy Statement/Prospectus and the Registration Statement will each contain important information about HCAP, PTMN, the proposed transaction
and related matters. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. No offer of securities shall be made except by means of a prospectus
meeting the requirements of Section 10 of the Securities Act of 1933. STOCKHOLDERS OF HCAP ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND REGISTRATION STATEMENT, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT HCAP, PTMN, THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders will be able to obtain the documents filed with the SEC free of
charge at the SEC’s web site, http://www.sec.gov or, for documents filed by HCAP, from HCAP’ website at http://www.harvestcapitalcredit.com and for document files by PTMN, from PTMN’s website at www.portmanridge.com. Participants
in the Solicitation HCAP, its directors, certain of its executive officers and certain employees and officers of Harvest Advisors, LLC and its affiliates may be deemed to be participants in the solicitation of proxies in connection with the proposed
transaction. Information about the directors and executive officers of HCAP is set forth in its proxy statement for its 2020 Annual Meeting of Stockholders, which was filed with the SEC on April 21, 2020. PTMN, its directors, certain of its
executive officers and certain employees and officers of Sierra Crest Investment Management LLC and its affiliates may be deemed to be participants in the solicitation of proxies in connection with the proposed transaction. Information about the
directors and executive officers of PTMN is set forth in its proxy statement for its 2020 Annual Meeting of Stockholders, which was filed with the SEC on April 29, 2020. Information regarding the persons who may, under the rules of the SEC, be
considered participants in the solicitation of the HCAP stockholders in connection with the proposed transaction will be contained in the Proxy Statement/Prospectus when such document becomes available. This document may be obtained free of charge
from the sources indicated above. No Offer or Solicitation This Presentation is not, and under no circumstances is it to be construed as, a prospectus or an advertisement and the communication of this Presentation is not, and under no circumstances
is it to be construed as, an offer to sell or a solicitation of an offer to purchase any securities in PTMN, HCAP or in any fund or other investment vehicle. Other Important Information All information and statements are stated as of [December 23],
2020 unless, in each case, otherwise indicated. Under no circumstances should a recipient of this Presentation assume that such information has been compiled as of any time subsequent to such date. Certain information contained in this Presentation
may have been obtained from published sources prepared by other parties. Such information is believed to be reliable but has not been independently verified or audited. None of Sierra Crest, any of the other BC Partners entities, any of their
associates or any of their respective directors, officers, employees, partners, members, agents, professional advisers, representatives or consultants (the “BC Partners Parties”) and none of HCAP, HCAP Advisors, LLC (“HCAP
Advisors”), any of their associates or any of their respective directors, officers, employees, partners, members, agents, professional advisers, representatives or consultants (the “Harvest Parties”): (i) makes any representation,
warranty or guarantee, express or implied, as to the fairness, accuracy, completeness, reliability, reasonableness or currency of the information contained in this Presentation; or (ii) undertakes to provide any additional information or updates, or
to correct any information or statements (including, but not limited to, forward looking statements), in this Presentation which it becomes aware were incorrect or incomplete at the date of this Presentation, or which subsequently become incorrect
or incomplete, due to any subsequent event or as a result of new information, future developments or otherwise. No representative of Sierra Crest, BC Partners, or HCAP or HCAP Advisors has authority to represent otherwise. To the maximum extent
permitted by law, none of the BC Partners Parties or Harvest Parties will be responsible or liable whatsoever with respect to any use or reliance by any person upon any of the information contained in this Presentation (other than with respect to
fraud on the part of such BC Partners Party or Harvest Party). For the purposes of this Presentation, references to “BC Partners” mean BC Partners LLP; provided that, where the context requires, such term shall also include reference to
the parent company of the BC Partners group, BC Partners Holdings Ltd and that company’s subsidiaries. Any statement referring to management or investment activity conducted by BC Partners is a reference to the actions of the manager of each
of BC Partners’ funds acting upon the advice of BC Partners and is not a reference to BC Partners LLP or to any other entity which provides advice to such managers and, in particular, in relation to any fund, is a reference to the actions of
Sierra Crest, acting upon the advice of BC Partners. BC Partners LLP is authorized and regulated by the United Kingdom Financial Conduct Authority. Sierra Crest is registered as an investment adviser in the United States of America with the SEC.
Investors and security holders should not construe the contents of this Presentation as legal, tax, accounting, investment or other advice. Each investor should make its own inquires and consult its advisors as to PTMN and HCAP and as to legal, tax,
financial, and other relevant matters. 2Important Information Forward-Looking Statements This Presentation may contain forward-looking statements that involve substantial risks and uncertainties, including statements regarding the completion of the
transaction between Harvest Capital Credit Corporation (“HCAP”) and Portman Ridge Finance Corporation (“Portman Ridge” or “PTMN”). The use of words such as anticipates, believes, intends, plans, expects, projects,
estimates, will, should, may and similar expressions to identify forward-looking statements. These forward-looking statements are subject to various risks and uncertainties. Certain factors could cause actual results and conditions to differ
materially from those projected, including the uncertainties associated with (i) the timing or likelihood of the transaction closing, (ii) the expected synergies and savings associated with the transaction, (iii) the expected elimination of certain
expenses and costs due to the transaction, (iv) the percentage of HCAP stockholders voting in favor of the transaction, (v) the possibility that competing offers or acquisition proposals for HCAP will be made; (vi) the possibility that any or all of
the various conditions to the consummation of the merger may not be satisfied or waived; (vii) risks related to diverting the respective management’s attention from HCAP’s and PTMN’s ongoing business operations, (viii) the risk
that stockholder litigation in connection with the transactions contemplated by the merger agreement may result in significant costs of defense and liability, (ix) the future operating results of our portfolio companies or the combined company, (x)
regulatory factors, (xi) changes in regional or national economic conditions, including but not limited to the impact of the COVID-19 pandemic, and their impact on the industries in which we invest, and (xii) other changes in the conditions of the
industries in which we invest and other factors enumerated in our filings with the SEC. You should not place undue reliance on such forward-looking statements, which speak only as of the date of this Presentation. PTMN and HCAP undertake no
obligation to update any forward-looking statements made herein, unless required by law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Presentation. You
should read this communication and the documents referenced in this communication completely and with the understanding that actual future results may be materially different from expectations. PTMN and HCAP qualify all forward-looking statements by
these cautionary statements. Additional Information and Where to Find It In connection with the proposed transaction, HCAP plans to file with the SEC and mail to HCAP’s stockholders a proxy statement/prospectus on Schedule 14A (the
“Proxy Statement/Prospectus”), and PTMN plans to file with the SEC a registration statement on Form N-14 (the “Registration Statement”, which will include the Proxy Statement/Prospectus therein). The Proxy
Statement/Prospectus and the Registration Statement will each contain important information about HCAP, PTMN, the proposed transaction and related matters. This communication does not constitute an offer to sell or the solicitation of an offer to
buy any securities or a solicitation of any vote or approval. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933. STOCKHOLDERS OF HCAP ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS AND REGISTRATION STATEMENT, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT HCAP, PTMN, THE PROPOSED
TRANSACTION AND RELATED MATTERS. Investors and security holders will be able to obtain the documents filed with the SEC free of charge at the SEC’s web site, http://www.sec.gov or, for documents filed by HCAP, from HCAP’ website at
http://www.harvestcapitalcredit.com and for document files by PTMN, from PTMN’s website at www.portmanridge.com. Participants in the Solicitation HCAP, its directors, certain of its executive officers and certain employees and officers of
Harvest Advisors, LLC and its affiliates may be deemed to be participants in the solicitation of proxies in connection with the proposed transaction. Information about the directors and executive officers of HCAP is set forth in its proxy statement
for its 2020 Annual Meeting of Stockholders, which was filed with the SEC on April 21, 2020. PTMN, its directors, certain of its executive officers and certain employees and officers of Sierra Crest Investment Management LLC and its affiliates may
be deemed to be participants in the solicitation of proxies in connection with the proposed transaction. Information about the directors and executive officers of PTMN is set forth in its proxy statement for its 2020 Annual Meeting of Stockholders,
which was filed with the SEC on April 29, 2020. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the HCAP stockholders in connection with the proposed transaction will be
contained in the Proxy Statement/Prospectus when such document becomes available. This document may be obtained free of charge from the sources indicated above. No Offer or Solicitation This Presentation is not, and under no circumstances is it to
be construed as, a prospectus or an advertisement and the communication of this Presentation is not, and under no circumstances is it to be construed as, an offer to sell or a solicitation of an offer to purchase any securities in PTMN, HCAP or in
any fund or other investment vehicle. Other Important Information All information and statements are stated as of [December 23], 2020 unless, in each case, otherwise indicated. Under no circumstances should a recipient of this Presentation assume
that such information has been compiled as of any time subsequent to such date. Certain information contained in this Presentation may have been obtained from published sources prepared by other parties. Such information is believed to be reliable
but has not been independently verified or audited. None of Sierra Crest, any of the other BC Partners entities, any of their associates or any of their respective directors, officers, employees, partners, members, agents, professional advisers,
representatives or consultants (the “BC Partners Parties”) and none of HCAP, HCAP Advisors, LLC (“HCAP Advisors”), any of their associates or any of their respective directors, officers, employees, partners, members, agents,
professional advisers, representatives or consultants (the “Harvest Parties”): (i) makes any representation, warranty or guarantee, express or implied, as to the fairness, accuracy, completeness, reliability, reasonableness or currency
of the information contained in this Presentation; or (ii) undertakes to provide any additional information or updates, or to correct any information or statements (including, but not limited to, forward looking statements), in this Presentation
which it becomes aware were incorrect or incomplete at the date of this Presentation, or which subsequently become incorrect or incomplete, due to any subsequent event or as a result of new information, future developments or otherwise. No
representative of Sierra Crest, BC Partners, or HCAP or HCAP Advisors has authority to represent otherwise. To the maximum extent permitted by law, none of the BC Partners Parties or Harvest Parties will be responsible or liable whatsoever with
respect to any use or reliance by any person upon any of the information contained in this Presentation (other than with respect to fraud on the part of such BC Partners Party or Harvest Party). For the purposes of this Presentation, references to
“BC Partners” mean BC Partners LLP; provided that, where the context requires, such term shall also include reference to the parent company of the BC Partners group, BC Partners Holdings Ltd and that company’s subsidiaries. Any
statement referring to management or investment activity conducted by BC Partners is a reference to the actions of the manager of each of BC Partners’ funds acting upon the advice of BC Partners and is not a reference to BC Partners LLP or to
any other entity which provides advice to such managers and, in particular, in relation to any fund, is a reference to the actions of Sierra Crest, acting upon the advice of BC Partners. BC Partners LLP is authorized and regulated by the United
Kingdom Financial Conduct Authority. Sierra Crest is registered as an investment adviser in the United States of America with the SEC. Investors and security holders should not construe the contents of this Presentation as legal, tax, accounting,
investment or other advice. Each investor should make its own inquires and consult its advisors as to PTMN and HCAP and as to legal, tax, financial, and other relevant matters. 2
Transaction Overview ▪ Harvest Capital Credit Corporation (NASDAQ:
HCAP) and Portman Ridge Finance Corporation (Nasdaq: PTMN) (the “Company” or “PTMN”) announced today that they have entered into a definitive agreement under which HCAP will merge with and into PTMN, a business development
company managed by Sierra Crest Investment Management LLC (“Sierra Crest”), an affiliate of BC Partners Advisors L.P. (“BC Partners”). ▪ Under the contemplated structure, the transaction will be done on a NAV-for-NAV
basis. – Portman Ridge will deliver to HCAP stockholders aggregate consideration equal to HCAP’s net asset value at closing consisting of (i) newly issued PTMN shares valued at 100% of PTMN’s NAV per share and (ii) if the number of
PTMN shares required to be issued would exceed 19.9% of PTMN’s pre- (1) transaction shares, cash in an amount of such excess (estimated to be $16.9mm of cash based on each company’s most recent NAV) . – Additionally, Sierra Crest
has agreed to pay $2.15mm of cash directly to HCAP stockholders. – Based on PTMN’s closing stock price on December 22, 2020, HCAP stockholders are expected to receive aggregate consideration of $7.71 per share, which represents a 30%
premium to HCAP’s closing stock price of $5.91 on December 22, 2020. – HCAP stockholders are expected to receive approximately 104% of HCAP’s net asset value per share based on the September 30, 2020 net asset values (1) per share
of HCAP’s and PTMN’s stock and the aggregate cash consideration. ▪ PTMN and HCAP stockholders are expected to benefit from the added scale and resources of a large asset management firm: – Access to enhanced sourcing
capabilities; – Ability to speak for larger deals; – Ability to leverage the industry expertise and other resources of a large firm; and – A larger, more liquid stock. ▪ As outlined in the appendix, BCP Credit has an
experienced management team and track record, extensive sourcing platform, and differentiated middle-market lending strategy. ▪ BCP Credit intends to transition the combined asset base into a diversified portfolio of high-quality directly
originated senior secured debt investments, with the goal of delivering strong and sustainable risk-adjusted returns to stockholders. – Post-closing, PTMN expects to target a long-term leverage range of 1.25x – 1.40x through repayment of
investments originated by HCAP and the proactive sale of certain assets. ▪ The proposed merger is expected to close in Q2 2021, subject to approval by HCAP stockholders and other customary closing conditions. 3 1 For purposes of this analysis,
September 30, 2020 NAVs for HCAP and PTMN (adjusted for PTMN’s recent merger with Garrison Capital Inc.) are being used, adjusted for estimated transaction expenses of $0.42 per share and $0.02 per share, respectively.Transaction Overview
▪ Harvest Capital Credit Corporation (NASDAQ: HCAP) and Portman Ridge Finance Corporation (Nasdaq: PTMN) (the “Company” or “PTMN”) announced today that they have entered into a definitive agreement under which HCAP will
merge with and into PTMN, a business development company managed by Sierra Crest Investment Management LLC (“Sierra Crest”), an affiliate of BC Partners Advisors L.P. (“BC Partners”). ▪ Under the contemplated structure,
the transaction will be done on a NAV-for-NAV basis. – Portman Ridge will deliver to HCAP stockholders aggregate consideration equal to HCAP’s net asset value at closing consisting of (i) newly issued PTMN shares valued at 100% of
PTMN’s NAV per share and (ii) if the number of PTMN shares required to be issued would exceed 19.9% of PTMN’s pre- (1) transaction shares, cash in an amount of such excess (estimated to be $16.9mm of cash based on each company’s
most recent NAV) . – Additionally, Sierra Crest has agreed to pay $2.15mm of cash directly to HCAP stockholders. – Based on PTMN’s closing stock price on December 22, 2020, HCAP stockholders are expected to receive aggregate
consideration of $7.71 per share, which represents a 30% premium to HCAP’s closing stock price of $5.91 on December 22, 2020. – HCAP stockholders are expected to receive approximately 104% of HCAP’s net asset value per share based
on the September 30, 2020 net asset values (1) per share of HCAP’s and PTMN’s stock and the aggregate cash consideration. ▪ PTMN and HCAP stockholders are expected to benefit from the added scale and resources of a large asset
management firm: – Access to enhanced sourcing capabilities; – Ability to speak for larger deals; – Ability to leverage the industry expertise and other resources of a large firm; and – A larger, more liquid stock. ▪ As
outlined in the appendix, BCP Credit has an experienced management team and track record, extensive sourcing platform, and differentiated middle-market lending strategy. ▪ BCP Credit intends to transition the combined asset base into a
diversified portfolio of high-quality directly originated senior secured debt investments, with the goal of delivering strong and sustainable risk-adjusted returns to stockholders. – Post-closing, PTMN expects to target a long-term leverage
range of 1.25x – 1.40x through repayment of investments originated by HCAP and the proactive sale of certain assets. ▪ The proposed merger is expected to close in Q2 2021, subject to approval by HCAP stockholders and other customary
closing conditions. 3 1 For purposes of this analysis, September 30, 2020 NAVs for HCAP and PTMN (adjusted for PTMN’s recent merger with Garrison Capital Inc.) are being used, adjusted for estimated transaction expenses of $0.42 per share and
$0.02 per share, respectively.
Key Transaction Highlights ▪ Sierra Crest will continue to be the
investment manager of the combined company Management through its existing investment advisory agreement. Agreement ▪ HCAP stockholders will receive a direct cash payment from Sierra Crest. – The cash payment will be $2.15 million, or
$0.36 per share, of HCAP common Payment to stock. Stockholders ▪ Including the estimated $16.9million of cash for NAV, HCAP stockholders will receive $3.20 per share in cash (assumed shareholders elect cash and stock in a pro rata manner).
▪ BCP Credit previously agreed to use all incentive fees actually paid through March 31, Ongoing Equity Investment by 2021 to purchase newly-issued PTMN common stock at NAV (subject to an aggregate Manager purchase cap of $10 million). ▪
PTMN has implemented a buyback program for up to $10 million of stock and has been Company active in the market subject to blackout periods and other restrictions. Buyback ▪ Company entered into a Rule 10b5-1 stock trading plan to facilitate
the repurchase of Program shares 4Key Transaction Highlights ▪ Sierra Crest will continue to be the investment manager of the combined company Management through its existing investment advisory agreement. Agreement ▪ HCAP stockholders
will receive a direct cash payment from Sierra Crest. – The cash payment will be $2.15 million, or $0.36 per share, of HCAP common Payment to stock. Stockholders ▪ Including the estimated $16.9million of cash for NAV, HCAP stockholders
will receive $3.20 per share in cash (assumed shareholders elect cash and stock in a pro rata manner). ▪ BCP Credit previously agreed to use all incentive fees actually paid through March 31, Ongoing Equity Investment by 2021 to purchase
newly-issued PTMN common stock at NAV (subject to an aggregate Manager purchase cap of $10 million). ▪ PTMN has implemented a buyback program for up to $10 million of stock and has been Company active in the market subject to blackout periods
and other restrictions. Buyback ▪ Company entered into a Rule 10b5-1 stock trading plan to facilitate the repurchase of Program shares 4
Compelling Transaction for PTMN & HCAP Stockholders ▪ The
transaction is expected to be accretive to NII per share, as well as continuing to execute on PTMN’s consolidation plan discussed at the outset of the KCAP externalization transaction. Economic – The combined portfolio can withstand
meaningful realized credit losses and still be earnings accretive. Benefits ▪ Increased scale from the pro forma market capitalization of PTMN has the potential to result in the stock trading at a higher price to book multiple. ▪ The
combined Company will be able to access the full range of resources of a leading asset management firm. ▪ Partnership with a large and growing credit business will enhance sourcing capabilities and provide the ability to access larger Fully
Integrated deals. Platform with BC ▪ Access to industry diligence and expertise from across the firm. Partners ▪ Utilization of BC Partners’ broader resources, including relationships and institutional knowledge from over 30 years
of private market investing. ▪ It is BC Partners’ belief that a BDC focused exclusively on the middle market lending space will lead to better long-term performance, a more stable NAV and a higher trading multiple. Focused ▪ Target
small to medium capital structures which are insufficiently compelling for large funds. Investment Strategy ▪ Core Plus strategy allows the ability to capitalize on opportunities in non-sponsored and niche specialty verticals alongside Core
corporate lending. Demonstrated ▪ BC Partners has shown the ability to negotiate and execute three M&A transactions within its first two years of taking over M&A Ability the management of Portman Ridge. ▪ Ability to speak for
larger deals. ▪ Increased trading liquidity in the stock. Scale Benefits▪ Spreading of the public company costs across a larger AUM base. ▪ Increased capacity for higher yielding, non-eligible assets. ▪ Reduction of
volatility impact of CLO equity. 5Compelling Transaction for PTMN & HCAP Stockholders ▪ The transaction is expected to be accretive to NII per share, as well as continuing to execute on PTMN’s consolidation plan discussed at the
outset of the KCAP externalization transaction. Economic – The combined portfolio can withstand meaningful realized credit losses and still be earnings accretive. Benefits ▪ Increased scale from the pro forma market capitalization of
PTMN has the potential to result in the stock trading at a higher price to book multiple. ▪ The combined Company will be able to access the full range of resources of a leading asset management firm. ▪ Partnership with a large and
growing credit business will enhance sourcing capabilities and provide the ability to access larger Fully Integrated deals. Platform with BC ▪ Access to industry diligence and expertise from across the firm. Partners ▪ Utilization of BC
Partners’ broader resources, including relationships and institutional knowledge from over 30 years of private market investing. ▪ It is BC Partners’ belief that a BDC focused exclusively on the middle market lending space will
lead to better long-term performance, a more stable NAV and a higher trading multiple. Focused ▪ Target small to medium capital structures which are insufficiently compelling for large funds. Investment Strategy ▪ Core Plus strategy
allows the ability to capitalize on opportunities in non-sponsored and niche specialty verticals alongside Core corporate lending. Demonstrated ▪ BC Partners has shown the ability to negotiate and execute three M&A transactions within its
first two years of taking over M&A Ability the management of Portman Ridge. ▪ Ability to speak for larger deals. ▪ Increased trading liquidity in the stock. Scale Benefits▪ Spreading of the public company costs across a larger
AUM base. ▪ Increased capacity for higher yielding, non-eligible assets. ▪ Reduction of volatility impact of CLO equity. 5
Illustrative Transaction Analysis for (1) HCAP Stockholders Transaction
Value At PTMN Current Stock At 9/30/20 PTMN (2) (in millions, except per share) Pro Forma NAV Price PTMN Stock Price per Share $1.80 $2.76 (3) Exchange Ratio 2.503x 2.503x HCAP Shares Acquired / Outstanding 6.0 6.0 Stock Consideration $26.9 $41.2
Cash Consideration 16.9 16.9 Cash Payment by PTMN Manager 2.2 2.2 Total Consideration $45.9 $60.3 Value per Share $7.71 $10.11 Cash per Share $3.20 $3.20 Total Consideration / Pro Forma NAV 79% 104% (2) Total Consideration / Current Stock Price 130%
171% Day 1 Premium with Potential for Significant Upside $10.11 +31% $7.71 $2.41 $5.91 $1.80 +30% HCAP Current Stock Price Premium to HCAP Stock Transaction Value at PTMN Potential Upside if PTMN Transaction Value at PTMN Per Share Price Current
Stock Price Trades to 9/30/20 Pro 9/30/20 Pro Forma NAV Forma NAV 1 For purposes of this analysis, September 30, 2020 NAVs for HCAP and PTMN (adjusted for PTMN’s recent merger with Garrison Capital Inc.) are being used, adjusted for estimated
transaction expenses of $0.42 per share and $0.02 per share, 6 respectively. 2.As of December 22, 2020. 3. Exchange ratio (1) assuming stockholders elect cash and stock in a pro rata manner and (2) as applied to the deal as a whole and not the
exchange ratio to be applied to any one individual stockholder. Illustrative Transaction Analysis for (1) HCAP Stockholders Transaction Value At PTMN Current Stock At 9/30/20 PTMN (2) (in millions, except per share) Pro Forma NAV Price PTMN Stock
Price per Share $1.80 $2.76 (3) Exchange Ratio 2.503x 2.503x HCAP Shares Acquired / Outstanding 6.0 6.0 Stock Consideration $26.9 $41.2 Cash Consideration 16.9 16.9 Cash Payment by PTMN Manager 2.2 2.2 Total Consideration $45.9 $60.3 Value per Share
$7.71 $10.11 Cash per Share $3.20 $3.20 Total Consideration / Pro Forma NAV 79% 104% (2) Total Consideration / Current Stock Price 130% 171% Day 1 Premium with Potential for Significant Upside $10.11 +31% $7.71 $2.41 $5.91 $1.80 +30% HCAP Current
Stock Price Premium to HCAP Stock Transaction Value at PTMN Potential Upside if PTMN Transaction Value at PTMN Per Share Price Current Stock Price Trades to 9/30/20 Pro 9/30/20 Pro Forma NAV Forma NAV 1 For purposes of this analysis, September 30,
2020 NAVs for HCAP and PTMN (adjusted for PTMN’s recent merger with Garrison Capital Inc.) are being used, adjusted for estimated transaction expenses of $0.42 per share and $0.02 per share, 6 respectively. 2.As of December 22, 2020. 3.
Exchange ratio (1) assuming stockholders elect cash and stock in a pro rata manner and (2) as applied to the deal as a whole and not the exchange ratio to be applied to any one individual stockholder.
About Portman Ridge ▪ Focus on direct origination of senior secured
debt investments to the middle market ▪ Experienced, strategic management team centered on execution and delivering NII growth Portman Ridge (NASDAQ: PTMN)▪ Three strategic transactions closed since 2019 with portfolio repositioning
continuing successfully ▪ Strong shareholder alignment with top priority being to generate shareholder value ▪ Externally managed by Sierra Crest Investment Management LLC, an affiliate of BC Partners Advisors L.P. (“BC
Partners”) and its Credit Platform (“BCP Credit”) Affiliation with ▪ Part of BC Partners’ €24 bn platform in private equity, private credit and real estate strategies BC Partners and ― BCP Credit is a $4.2bn
full credit cycle investment platform BCP Credit ▪ Exemptive relief allows for co-investments across the BC Partners platform ▪ $300 million of total assets and $126 million of net asset value ▪ 57% of debt securities portfolio in
first lien investments; weighted average yield on debt investments at par value of 7.9% (excluding non-accrual and partial non-accrual investments) Investment Portfolio ▪ 65 debt portfolio companies and 102 separate securities (at 9/30/20)
▪ Merger with Garrison on October 28, 2020 increased total assets to $638 million and net asset value to $209 million, with substantially all of that increase being in the form of first lien investments. 7About Portman Ridge ▪ Focus on
direct origination of senior secured debt investments to the middle market ▪ Experienced, strategic management team centered on execution and delivering NII growth Portman Ridge (NASDAQ: PTMN)▪ Three strategic transactions closed since
2019 with portfolio repositioning continuing successfully ▪ Strong shareholder alignment with top priority being to generate shareholder value ▪ Externally managed by Sierra Crest Investment Management LLC, an affiliate of BC Partners
Advisors L.P. (“BC Partners”) and its Credit Platform (“BCP Credit”) Affiliation with ▪ Part of BC Partners’ €24 bn platform in private equity, private credit and real estate strategies BC Partners and
― BCP Credit is a $4.2bn full credit cycle investment platform BCP Credit ▪ Exemptive relief allows for co-investments across the BC Partners platform ▪ $300 million of total assets and $126 million of net asset value ▪ 57%
of debt securities portfolio in first lien investments; weighted average yield on debt investments at par value of 7.9% (excluding non-accrual and partial non-accrual investments) Investment Portfolio ▪ 65 debt portfolio companies and 102
separate securities (at 9/30/20) ▪ Merger with Garrison on October 28, 2020 increased total assets to $638 million and net asset value to $209 million, with substantially all of that increase being in the form of first lien investments.
7
Achieving Scale ▪ Portman Ridge has quickly achieved scale since
taking over in April 2019, closing two strategic transactions since then ▪ Following each transaction, Portman Ridge promptly rotated portions of the acquired portfolios into higher quality assets with higher risk-adjusted spreads and
deleveraged as necessary 2006 April 2019 December 2019 October 2020 ▪ Closed merger with Garrison ▪ Closed merger with OHA ▪ Acquired KCAP management ▪ Founded as Kohlberg Capital (“GARS”) Investment Corp
(“OHAI”) contract Capital Corporation (“KCAP”) ▪ GARS shareholders agreed to ▪ OHAI shareholders agreed to ▪ Name changed to Portman receive bulk of consideration in receive bulk of consideration Ridge
Finance Corporation ▪ IPO in December newly issued PTMN shares in newly issued PTMN shares 2006 ▪ Transition to external ▪ Monetized considerable portion ▪ Monetized ~40% of the management through Sierra of acquired book
slightly above acquired book at close to FMV Crest, an affiliate of BC FMV within first 10 days of close shortly after close Partners ▪ Quickly de-risked / deleveraged ▪ Used proceeds to purchase ▪ BC Partners agreed to use up the
overall portfolio during privately originated loans and to $10m in incentive fees COVID-19 market environment a basket of liquid loans at a actually paid to purchase significant discount, resulting PTMN stock at NAV through in higher risk-adjusted
yields March 31, 2021 Pro Forma $293m $310m $638m Total Assets at Close 8Achieving Scale ▪ Portman Ridge has quickly achieved scale since taking over in April 2019, closing two strategic transactions since then ▪ Following each
transaction, Portman Ridge promptly rotated portions of the acquired portfolios into higher quality assets with higher risk-adjusted spreads and deleveraged as necessary 2006 April 2019 December 2019 October 2020 ▪ Closed merger with Garrison
▪ Closed merger with OHA ▪ Acquired KCAP management ▪ Founded as Kohlberg Capital (“GARS”) Investment Corp (“OHAI”) contract Capital Corporation (“KCAP”) ▪ GARS shareholders agreed to
▪ OHAI shareholders agreed to ▪ Name changed to Portman receive bulk of consideration in receive bulk of consideration Ridge Finance Corporation ▪ IPO in December newly issued PTMN shares in newly issued PTMN shares 2006 ▪
Transition to external ▪ Monetized considerable portion ▪ Monetized ~40% of the management through Sierra of acquired book slightly above acquired book at close to FMV Crest, an affiliate of BC FMV within first 10 days of close shortly
after close Partners ▪ Quickly de-risked / deleveraged ▪ Used proceeds to purchase ▪ BC Partners agreed to use up the overall portfolio during privately originated loans and to $10m in incentive fees COVID-19 market environment a
basket of liquid loans at a actually paid to purchase significant discount, resulting PTMN stock at NAV through in higher risk-adjusted yields March 31, 2021 Pro Forma $293m $310m $638m Total Assets at Close 8
AppendixAppendix
BC Partners Credit Platform BC PARTNERS CREDIT: A FULL CREDIT CYCLE
INVESTMENT PLATFORM 1 17 c. $4.2bn 2017 18 AVG. YEARS OF EXPERIENCE OF IN AUM ACROSS FOUNDED PLATFORM INVESTMENT PROFESSIONALS SENIOR INVESTMENT TEAM CREDIT PLATFORM Opportunistic: $950m in AUM Yield: $3.3bn in AUM ▪ Direct lending focused on
less competitive segments of the U.S. middle-▪ Mandate to invest where other capital is retrenching due to limited market duration and regulatory restrictions ▪ Balanced portfolio of sponsor-backed and non-sponsor companies▪
Ability to invest across the capital structure ▪ Proprietary sourcing channels ▪ Price opportunities with adequate compensation for risk and illiquidity ▪ High current income generation▪ Mix of current income and price
appreciation Portman Ridge BC Partners Mount Logan Other Other SOF I SOF II Finance Lending Capital (e.g. SMAs) (e.g. SMAs) (NEO: MLC) Corporation Corporation (Currently Fundraising) (NASDAQ: PTMN) 10 1. Reflects commitments to commingled funds,
IMAs, signed term sheets. Figures are subject to completion of certain agreementsBC Partners Credit Platform BC PARTNERS CREDIT: A FULL CREDIT CYCLE INVESTMENT PLATFORM 1 17 c. $4.2bn 2017 18 AVG. YEARS OF EXPERIENCE OF IN AUM ACROSS FOUNDED
PLATFORM INVESTMENT PROFESSIONALS SENIOR INVESTMENT TEAM CREDIT PLATFORM Opportunistic: $950m in AUM Yield: $3.3bn in AUM ▪ Direct lending focused on less competitive segments of the U.S. middle-▪ Mandate to invest where other capital is
retrenching due to limited market duration and regulatory restrictions ▪ Balanced portfolio of sponsor-backed and non-sponsor companies▪ Ability to invest across the capital structure ▪ Proprietary sourcing channels ▪ Price
opportunities with adequate compensation for risk and illiquidity ▪ High current income generation▪ Mix of current income and price appreciation Portman Ridge BC Partners Mount Logan Other Other SOF I SOF II Finance Lending Capital (e.g.
SMAs) (e.g. SMAs) (NEO: MLC) Corporation Corporation (Currently Fundraising) (NASDAQ: PTMN) 10 1. Reflects commitments to commingled funds, IMAs, signed term sheets. Figures are subject to completion of certain agreements
BC Partners Differentiators While the increasing popularity of direct
lending has gathered many headlines as of late, we believe the BC Partners Credit platform is differentiated on four key aspects Ability to serve as a strategic lender by sharing best practices Stand-alone credit platforms cannot offer the same from
BC Partners’ private equity operations team and existing 1 resources to borrowers as fully integrated firms portfolio companies; 30 years of private market investing provides an edge in sourcing and diligence Many direct lending platforms have
moved Focus on portfolio company 2 1 upmarket as the asset class has matured EBITDA between $10-50 million A majority of direct lending platforms focus BC Partners Lending platform has the capabilities to source and 3 on sponsor-backed lending
opportunities diligence opportunities regardless of company ownership Direct lending platforms may pass on compelling Disciplined approach to fund size allows us to pursue opportunities that may be too small to “move the 4 the best
risk-adjusted return opportunities needle” Views expressed are those of BCP Credit. 1 Anticipated portfolio construction provided for illustrative purposes only. 11BC Partners Differentiators While the increasing popularity of direct lending
has gathered many headlines as of late, we believe the BC Partners Credit platform is differentiated on four key aspects Ability to serve as a strategic lender by sharing best practices Stand-alone credit platforms cannot offer the same from BC
Partners’ private equity operations team and existing 1 resources to borrowers as fully integrated firms portfolio companies; 30 years of private market investing provides an edge in sourcing and diligence Many direct lending platforms have
moved Focus on portfolio company 2 1 upmarket as the asset class has matured EBITDA between $10-50 million A majority of direct lending platforms focus BC Partners Lending platform has the capabilities to source and 3 on sponsor-backed lending
opportunities diligence opportunities regardless of company ownership Direct lending platforms may pass on compelling Disciplined approach to fund size allows us to pursue opportunities that may be too small to “move the 4 the best
risk-adjusted return opportunities needle” Views expressed are those of BCP Credit. 1 Anticipated portfolio construction provided for illustrative purposes only. 11
BC Partners Lending Advantages BC PLATFORM EXPERIENCED INVESTMENT TEAM
▪ Access to deal flow and sourcing through fully integrated model▪ Ted Goldthorpe served as President of Apollo Investment Corporation (one of the largest publicly traded U.S. BDCs) and CIO of the sub-advisor to CION ▪ BCP
Operations team supports our ability to add value to portfolio 1 Investment Corporation (one of the largest private BDCs) companies ▪ Senior team members with strong track record managing assets ▪ Utilization of BC Partners’
broader resources, including relationships and throughout multiple credit cycles at best-in-class institutions including institutional knowledge from over 30 years of private market investing Goldman Sachs, Apollo and TPG ▪ Highly experienced
administrator, custodian and auditor relationships and ▪ Portfolio monitoring processes developed over 15+ years working robust policies concerning third-party valuation with middle-market companies to include serving on corporate boards HIGH
QUALITY UNDERWRITING FLEXIBLE, DIFFERENTIATED STRATEGY ▪ Strong focus on balancing yield while mitigating the risk of ▪ Target smaller capital structures which are insufficiently compelling principal impairment through financial and
structural protection for large funds ▪ Experience with and ability to complete innovative and complex ▪ Core Plus strategy able to capitalize on opportunities in non-sponsored and transactions niche specialty verticals alongside Core
corporate lending ▪ Applies the same private equity style investment process employed for over ▪ Optimize exposures as the opportunity set changes 30 years at BC Partners ▪ Shareholder friendly fee and governance structure
DIVERSIFIED SOURCES OF DEAL FLOW ▪ Proactive sourcing model not reliant on one individual source or type of source ▪ Seek off-the-radar situations for bespoke solutions ▪ Develop proprietary, unbiased viewpoints on credit
performance ▪ Origination and syndication capabilities allow for consideration of a wider range of transactions ▪ Exclusive unitranche partnership with a top lender to sponsor-backed middle- market companies 1 For more information on Mr.
Goldthorpe’s role in respect of AINV and CION, please refer to the Important Information at the end of this presentation. 12BC Partners Lending Advantages BC PLATFORM EXPERIENCED INVESTMENT TEAM ▪ Access to deal flow and sourcing through
fully integrated model▪ Ted Goldthorpe served as President of Apollo Investment Corporation (one of the largest publicly traded U.S. BDCs) and CIO of the sub-advisor to CION ▪ BCP Operations team supports our ability to add value to
portfolio 1 Investment Corporation (one of the largest private BDCs) companies ▪ Senior team members with strong track record managing assets ▪ Utilization of BC Partners’ broader resources, including relationships and throughout
multiple credit cycles at best-in-class institutions including institutional knowledge from over 30 years of private market investing Goldman Sachs, Apollo and TPG ▪ Highly experienced administrator, custodian and auditor relationships and
▪ Portfolio monitoring processes developed over 15+ years working robust policies concerning third-party valuation with middle-market companies to include serving on corporate boards HIGH QUALITY UNDERWRITING FLEXIBLE, DIFFERENTIATED STRATEGY
▪ Strong focus on balancing yield while mitigating the risk of ▪ Target smaller capital structures which are insufficiently compelling principal impairment through financial and structural protection for large funds ▪ Experience
with and ability to complete innovative and complex ▪ Core Plus strategy able to capitalize on opportunities in non-sponsored and transactions niche specialty verticals alongside Core corporate lending ▪ Applies the same private equity
style investment process employed for over ▪ Optimize exposures as the opportunity set changes 30 years at BC Partners ▪ Shareholder friendly fee and governance structure DIVERSIFIED SOURCES OF DEAL FLOW ▪ Proactive sourcing model
not reliant on one individual source or type of source ▪ Seek off-the-radar situations for bespoke solutions ▪ Develop proprietary, unbiased viewpoints on credit performance ▪ Origination and syndication capabilities allow for
consideration of a wider range of transactions ▪ Exclusive unitranche partnership with a top lender to sponsor-backed middle- market companies 1 For more information on Mr. Goldthorpe’s role in respect of AINV and CION, please refer to
the Important Information at the end of this presentation. 12
Integration with BC Partners Platform Full integration with the BC Partners
platform provides an edge at every stage of the investment process BENEFITS OF BC PARTNERS PLATFORM RESOURCES INCLUDE BENEFITS OF BC PARTNERS PLATFORM RESOURCES INCLUDE: 150+ EMPLOYEES Operating advisor and external network DEAL SOURCING &
Industry and company insight from 60+ PE investment professionals including 7-member SCREENING Private Equity deals reviewed Operations Team 12 Investor Relations professionals 41 Support professionals Sector expertise from Investment Professionals,
including Operations Team 10 OPERATING ADVISORS CREDIT REVIEW Rigorous PE-style diligence and underwriting $23 BILLION IN PE AUM across commingled funds and co-investment commitments $37 BILLION INVESTMENT Investment Committee includes in annual
revenue across current PE portfolio Chairman of PE and firm COO APPROVAL BROAD SECTOR EXPOSURE PE DEAL FLOW Access to senior Operational experts 200+ opportunities sourced MONITORING & Ability to provide borrowers with value-add initiatives
including M&A assistance and VALUE- ADD 3-4 investments completed per annum BCP cost synergy programs 13Integration with BC Partners Platform Full integration with the BC Partners platform provides an edge at every stage of the investment
process BENEFITS OF BC PARTNERS PLATFORM RESOURCES INCLUDE BENEFITS OF BC PARTNERS PLATFORM RESOURCES INCLUDE: 150+ EMPLOYEES Operating advisor and external network DEAL SOURCING & Industry and company insight from 60+ PE investment
professionals including 7-member SCREENING Private Equity deals reviewed Operations Team 12 Investor Relations professionals 41 Support professionals Sector expertise from Investment Professionals, including Operations Team 10 OPERATING ADVISORS
CREDIT REVIEW Rigorous PE-style diligence and underwriting $23 BILLION IN PE AUM across commingled funds and co-investment commitments $37 BILLION INVESTMENT Investment Committee includes in annual revenue across current PE portfolio Chairman of PE
and firm COO APPROVAL BROAD SECTOR EXPOSURE PE DEAL FLOW Access to senior Operational experts 200+ opportunities sourced MONITORING & Ability to provide borrowers with value-add initiatives including M&A assistance and VALUE- ADD 3-4
investments completed per annum BCP cost synergy programs 13
BCP Approach to Credit Investing BCP Credit has been formed to take
advantage of attractive risk-adjusted return opportunities and dislocations in the U.S. and European credit markets ▪ Target opportunities across the credit spectrum where other capital is retrenching due to limited duration and regulatory
restrictions ▪ Apply a consistent investment philosophy and underwriting process across different strategies through the credit cycle ▪ Flexibility and patience of capital drives attractive risk-adjusted returns across the credit cycle
Be flexible and ▪ Ability to invest across the liquidity spectrum opportunistic ▪ Seek to generate alpha through market dislocations, structural documentation, relationship advantages and regional expertise ▪ Maximize margin of
safety through both financial and structural protection Focus on capital ▪ Preference for secured debt preservation ▪ Appropriate pricing of opportunities based on assessment of relative risk and illiquidity ▪ Long-term focused
investment philosophy Utilize private equity ▪ Apply the same private equity style investment process employed for over 30 years at BC Partners style investment ▪ Utilize standardized investment diligence to reinforce discipline in
investment analysis and support repeatable process investment processes ▪ Private equity platform sector expertise and knowledge base across consumer & retail, business & financial services, healthcare, industrials, and TMT Leverage
deep niche & ▪ Established credit team background across broad product and sector range including liquid and illiquid credit, industry expertise aircraft finance and renewables ▪ Experience with and ability to complete innovative and
complex niche transactions 14BCP Approach to Credit Investing BCP Credit has been formed to take advantage of attractive risk-adjusted return opportunities and dislocations in the U.S. and European credit markets ▪ Target opportunities across
the credit spectrum where other capital is retrenching due to limited duration and regulatory restrictions ▪ Apply a consistent investment philosophy and underwriting process across different strategies through the credit cycle ▪
Flexibility and patience of capital drives attractive risk-adjusted returns across the credit cycle Be flexible and ▪ Ability to invest across the liquidity spectrum opportunistic ▪ Seek to generate alpha through market dislocations,
structural documentation, relationship advantages and regional expertise ▪ Maximize margin of safety through both financial and structural protection Focus on capital ▪ Preference for secured debt preservation ▪ Appropriate pricing
of opportunities based on assessment of relative risk and illiquidity ▪ Long-term focused investment philosophy Utilize private equity ▪ Apply the same private equity style investment process employed for over 30 years at BC Partners
style investment ▪ Utilize standardized investment diligence to reinforce discipline in investment analysis and support repeatable process investment processes ▪ Private equity platform sector expertise and knowledge base across consumer
& retail, business & financial services, healthcare, industrials, and TMT Leverage deep niche & ▪ Established credit team background across broad product and sector range including liquid and illiquid credit, industry expertise
aircraft finance and renewables ▪ Experience with and ability to complete innovative and complex niche transactions 14
Financial Highlights * * ($ in ‘000s) Q3 2019 Q4 2019 Q1 2020 Q2 2020
Q3 2020 Total investment income $7,076 $6,705 $7,754 $7,314 $7,787 Management fees 1,026 1,077 1,012 1,008 1,044 Performance-based incentive fees -- -- 102 455 572 Interest and amortization of debt issuance costs 2,281 2,197 2,350 2,395 2,240
Operating expenses 1,527 1,284 1,627 1,311 1,235 Total expenses 4,834 4,559 5,090 5,169 5,090 Management and performance-based incentive fees waived -- -- (102) (455) -- Net expenses 4,834 4,559 4,988 4,714 5,090 Net investment income 2,242 2,147
2,766 2,600 2,696 Net realized gain/(loss) on investments (1,176) 1,177 (1,048) (882) (1,890) Net change in unrealized (loss)/gain on investments (5,317) 1,269 (30,925) 1,565 7,512 Realized loss on debt extinguishment - (1,055) - - - Net
(decrease)/increase in net assets resulting from operations $(6,493) $3,517 $(29,059) $3,283 $8,319 Per Share Net Investment Income $0.06 $0.06 $0.06 $0.06 $0.06 Net Realized and Unrealized Gain / (Loss) ($0.17) $0.06 ($0.71) $0.02 $0.13 Net
Earnings ($0.11) $0.09 ($0.65) $0.07 $0.19 Distributions declared $0.06 $0.06 $0.06 $0.06 $0.06 Net Asset Value $3.55 $3.40 $2.69 $2.71 $2.85 * Year over year comparisons with Q3 2019 may not be directly comparable. The OHAI merger was completed on
December 18, 2019. 15 1. Net of incentive fee waivers of $102 thousand and $459 thousand in Q1 and Q2 2020, respectively.Financial Highlights * * ($ in ‘000s) Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Total investment income $7,076 $6,705 $7,754
$7,314 $7,787 Management fees 1,026 1,077 1,012 1,008 1,044 Performance-based incentive fees -- -- 102 455 572 Interest and amortization of debt issuance costs 2,281 2,197 2,350 2,395 2,240 Operating expenses 1,527 1,284 1,627 1,311 1,235 Total
expenses 4,834 4,559 5,090 5,169 5,090 Management and performance-based incentive fees waived -- -- (102) (455) -- Net expenses 4,834 4,559 4,988 4,714 5,090 Net investment income 2,242 2,147 2,766 2,600 2,696 Net realized gain/(loss) on investments
(1,176) 1,177 (1,048) (882) (1,890) Net change in unrealized (loss)/gain on investments (5,317) 1,269 (30,925) 1,565 7,512 Realized loss on debt extinguishment - (1,055) - - - Net (decrease)/increase in net assets resulting from operations $(6,493)
$3,517 $(29,059) $3,283 $8,319 Per Share Net Investment Income $0.06 $0.06 $0.06 $0.06 $0.06 Net Realized and Unrealized Gain / (Loss) ($0.17) $0.06 ($0.71) $0.02 $0.13 Net Earnings ($0.11) $0.09 ($0.65) $0.07 $0.19 Distributions declared $0.06
$0.06 $0.06 $0.06 $0.06 Net Asset Value $3.55 $3.40 $2.69 $2.71 $2.85 * Year over year comparisons with Q3 2019 may not be directly comparable. The OHAI merger was completed on December 18, 2019. 15 1. Net of incentive fee waivers of $102 thousand
and $459 thousand in Q1 and Q2 2020, respectively.
Net Asset Value Rollforward ($ in ‘000s) Q3 2019 Q4 2019 Q1 2020 Q2
2020 Q3 2020 NAV, Beginning of Period $139,178 $132,723 $152,199 $120,370 $120,714 (1) Realized Gains (Losses) from Investments (1,176) (1,326) (1,048) (882) (1,890) (1) Unrealized Gains (Losses) (5,317) (2,649) (30,924) 1,565 7,512 Net Investment
Income 2,242 2,147 2,766 2, 600 2,697 Net Decrease in Assets Resulting from Distributions (2,242) (2,242) (2,653) (2,656) (2,631) Realized Gains (Losses) from Extinguishment of Debt -- (1,076) 154 0 -- (2) Impact of OHAI Transaction -- 25,824 -- --
-- Share Repurchase -- -- (123) (284) (456) OHAI Transaction Expenses -- (1,238) -- -- -- Other Equity Changes 38 36 -- -- -- NAV, End of Period $132,723 $152,199 $120,370 $120,714 $125,946 Leverage and Asset Coverage Debt / Equity 0.9x 1.0x 1.0x
1.3x 1.4x Asset Coverage 204% 195% 188% 167% 172% 1. Excluding gains from OHAI merger 2. Including gains from OHAI merger 16Net Asset Value Rollforward ($ in ‘000s) Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 NAV, Beginning of Period $139,178
$132,723 $152,199 $120,370 $120,714 (1) Realized Gains (Losses) from Investments (1,176) (1,326) (1,048) (882) (1,890) (1) Unrealized Gains (Losses) (5,317) (2,649) (30,924) 1,565 7,512 Net Investment Income 2,242 2,147 2,766 2, 600 2,697 Net
Decrease in Assets Resulting from Distributions (2,242) (2,242) (2,653) (2,656) (2,631) Realized Gains (Losses) from Extinguishment of Debt -- (1,076) 154 0 -- (2) Impact of OHAI Transaction -- 25,824 -- -- -- Share Repurchase -- -- (123) (284)
(456) OHAI Transaction Expenses -- (1,238) -- -- -- Other Equity Changes 38 36 -- -- -- NAV, End of Period $132,723 $152,199 $120,370 $120,714 $125,946 Leverage and Asset Coverage Debt / Equity 0.9x 1.0x 1.0x 1.3x 1.4x Asset Coverage 204% 195% 188%
167% 172% 1. Excluding gains from OHAI merger 2. Including gains from OHAI merger 16
(1) Portfolio Composition Investment Portfolio ($ in ‘000s) Q4 2019
Q1 2020 Q2 2020 Q3 2020 First Lien Debt $87,522 $105,379 $117,265 $114,022 Second Lien Debt 95,188 83,926 78,366 79,851 First Lien Last Out 500 8,050 7,619 7,583 Equity Securities 9,864 8,046 9,538 9,703 CLO Fund Securities 31,968 19,671 16,892
18,792 Joint Ventures 45,088 41,475 43,926 46,832 Other 3,559 3,313 5,050 2,077 Ending Balance $273,690 $269,859 $278,655 $278,860 Investment Portfolio (% of total) 32.0% 39.0% 42.1% 40.9% First Lien Debt 34.8% 31.1% 28.1% 28.6% Second Lien Debt
0.2% 3.0% 2.7% 2.7% First Lien Last Out 3.6% 3.0% 3.4% 3.5% Equity Securities 11.7% 7.3% 6.1% 6.7% CLO Fund Securities Joint Ventures 16.5% 15.4% 15.8% 16.8% 1.3% 1.2% 1.8% 0.7% Other Total 100.0% 100.0% 100.0% 100.0% 1. At Fair Value. Does not
include activity in short-term investments. 17(1) Portfolio Composition Investment Portfolio ($ in ‘000s) Q4 2019 Q1 2020 Q2 2020 Q3 2020 First Lien Debt $87,522 $105,379 $117,265 $114,022 Second Lien Debt 95,188 83,926 78,366 79,851 First
Lien Last Out 500 8,050 7,619 7,583 Equity Securities 9,864 8,046 9,538 9,703 CLO Fund Securities 31,968 19,671 16,892 18,792 Joint Ventures 45,088 41,475 43,926 46,832 Other 3,559 3,313 5,050 2,077 Ending Balance $273,690 $269,859 $278,655 $278,860
Investment Portfolio (% of total) 32.0% 39.0% 42.1% 40.9% First Lien Debt 34.8% 31.1% 28.1% 28.6% Second Lien Debt 0.2% 3.0% 2.7% 2.7% First Lien Last Out 3.6% 3.0% 3.4% 3.5% Equity Securities 11.7% 7.3% 6.1% 6.7% CLO Fund Securities Joint Ventures
16.5% 15.4% 15.8% 16.8% 1.3% 1.2% 1.8% 0.7% Other Total 100.0% 100.0% 100.0% 100.0% 1. At Fair Value. Does not include activity in short-term investments. 17
(1) Portfolio Trends ($ in ‘000s) Q4 2019 Q1 2020 Q2 2020 Q3 2020
Portfolio Sourcing (at Fair Value): Sierra Crest Investment Management 104,223 133,315 149,246 148,289 Legacy KCAP 133,686 106,241 100,653 104,023 Legacy OHAI 35,781 30,303 28,757 26,547 Portfolio Summary: Total portfolio, at fair value $273,690
$269,859 $278,655 $278,860 Total number of debt portfolio companies 60 65 68 65 2 Total number of investments 88 102 108 102 Average size of debt portfolio company investment, at fair value $3,133 $3,088 $3,072 $3,147 Average size of investment, at
fair value $2,234 $2,046 $2,017 $2,091 Portfolio Yields and Spreads: 3 Weighted average yield on debt investments at par value 9.0% 8.2% 7.7% 7.9% Average Spread to LIBOR 700 bps 685 bps 681 bps 715 bps Portfolio Activity: Beginning Balance $264,211
$273,690 $269,859 $278,655 Purchases / Draws 73,612 44,959 37,920 5,852 Exits / Repayments / Amortization (60,155) (16,818) (29,807) (11,133) Gains / (Losses) (3,977) (31,973) 683 5,485 Ending Balance $273,690 $269,859 $278,655 $278,860 1. For
comparability purposes, portfolio trends metrics exclude short-term investments 2. CLO holdings and Joint Ventures are excluded from investment count. 18 3. Excluding non-accrual and partial non-accrual investments and excluding CLO holdings and
Joint Ventures.(1) Portfolio Trends ($ in ‘000s) Q4 2019 Q1 2020 Q2 2020 Q3 2020 Portfolio Sourcing (at Fair Value): Sierra Crest Investment Management 104,223 133,315 149,246 148,289 Legacy KCAP 133,686 106,241 100,653 104,023 Legacy OHAI
35,781 30,303 28,757 26,547 Portfolio Summary: Total portfolio, at fair value $273,690 $269,859 $278,655 $278,860 Total number of debt portfolio companies 60 65 68 65 2 Total number of investments 88 102 108 102 Average size of debt portfolio
company investment, at fair value $3,133 $3,088 $3,072 $3,147 Average size of investment, at fair value $2,234 $2,046 $2,017 $2,091 Portfolio Yields and Spreads: 3 Weighted average yield on debt investments at par value 9.0% 8.2% 7.7% 7.9% Average
Spread to LIBOR 700 bps 685 bps 681 bps 715 bps Portfolio Activity: Beginning Balance $264,211 $273,690 $269,859 $278,655 Purchases / Draws 73,612 44,959 37,920 5,852 Exits / Repayments / Amortization (60,155) (16,818) (29,807) (11,133) Gains /
(Losses) (3,977) (31,973) 683 5,485 Ending Balance $273,690 $269,859 $278,655 $278,860 1. For comparability purposes, portfolio trends metrics exclude short-term investments 2. CLO holdings and Joint Ventures are excluded from investment count. 18
3. Excluding non-accrual and partial non-accrual investments and excluding CLO holdings and Joint Ventures.
Credit Quality As shown below, the percentage of non-accrual assets (both
on a cost and fair value basis) as a percentage of total has been decreasing on a quarter over quarter basis ($ in ‘000s) Q4 2019 Q1 2020 Q2 2020 Q3 2020 Investments on Non-Accrual Status Number of Non-Accrual Investments 7 9 9 8 Non-Accrual
Investments at Cost $22,691 $24,674 $21,458 $11.764 Non-Accrual Investments as a % of Total Cost 6.8% 6.9% 5.9% 3.2% Non-Accrual Investments at Fair Value $15,880 $13,816 $10,325 $3,788 Non-Accrual Investments as a % of Total Fair Value 5.7% 4.8%
3.7% 1.3% Investments on Non-Accrual Status as of September 30, 2020 ($ in ‘000s) Industry Cost Fair Value Advanced Lighting Second Lien Notes Consumer Goods: Durable $951 $3 Digitran First Lien Term Loan High Tech Industries 1,044 489 GI Advo
Opco Healthcare 165 -- GK Holdings Services: Business 1,494 820 Grupo HIMA Second Lien Term Loan Healthcare 7,146 1,927 Ravn Air Group Aerospace & Defense 272 248 Tank Partners Equipment Holdings Energy: Oil & Gas 620 302 TRSO II Energy: Oil
& Gas 71 -- Total $11,764 $3,788 19Credit Quality As shown below, the percentage of non-accrual assets (both on a cost and fair value basis) as a percentage of total has been decreasing on a quarter over quarter basis ($ in ‘000s) Q4 2019
Q1 2020 Q2 2020 Q3 2020 Investments on Non-Accrual Status Number of Non-Accrual Investments 7 9 9 8 Non-Accrual Investments at Cost $22,691 $24,674 $21,458 $11.764 Non-Accrual Investments as a % of Total Cost 6.8% 6.9% 5.9% 3.2% Non-Accrual
Investments at Fair Value $15,880 $13,816 $10,325 $3,788 Non-Accrual Investments as a % of Total Fair Value 5.7% 4.8% 3.7% 1.3% Investments on Non-Accrual Status as of September 30, 2020 ($ in ‘000s) Industry Cost Fair Value Advanced Lighting
Second Lien Notes Consumer Goods: Durable $951 $3 Digitran First Lien Term Loan High Tech Industries 1,044 489 GI Advo Opco Healthcare 165 -- GK Holdings Services: Business 1,494 820 Grupo HIMA Second Lien Term Loan Healthcare 7,146 1,927 Ravn Air
Group Aerospace & Defense 272 248 Tank Partners Equipment Holdings Energy: Oil & Gas 620 302 TRSO II Energy: Oil & Gas 71 -- Total $11,764 $3,788 19
Corporate Leverage & Liquidity Cash and Short-term Investments ▪
Unrestricted cash and short-term investments totaled $10.9 million at September 30, 2020 ▪ Restricted cash of $4.9 million at September 30, 2020 represents cash held in our revolving credit facility Debt Summary ▪ Balanced mix between
unsecured and secured borrowings with no near-term maturities Total Committed Principal Amount Maturity ($ millions) Amount Outstanding Date Corporate Unsecured Revolving Facility $115 $94.3 12/18/23 6.125% Secured Notes (publicly traded: KCAPL) n/a
$76.7 9/30/22 Total Debt $171.0 20Corporate Leverage & Liquidity Cash and Short-term Investments ▪ Unrestricted cash and short-term investments totaled $10.9 million at September 30, 2020 ▪ Restricted cash of $4.9 million at
September 30, 2020 represents cash held in our revolving credit facility Debt Summary ▪ Balanced mix between unsecured and secured borrowings with no near-term maturities Total Committed Principal Amount Maturity ($ millions) Amount
Outstanding Date Corporate Unsecured Revolving Facility $115 $94.3 12/18/23 6.125% Secured Notes (publicly traded: KCAPL) n/a $76.7 9/30/22 Total Debt $171.0 20
Corporate Information Board of Directors Senior Management Research
Coverage Ted Goldthorpe Ted Goldthorpe Ryan Lynch Chairman of the Board Chief Executive Officer Keefe Bruyette & Woods Graeme Dell Edward “Ted” Gilpin Chris Nolan Director Chief Financial Officer Ladenburg Thalmann Robert Warshauer
Patrick Schafer Chief Investment Officer Independent Director Alex Duka Andrew Devine Chief Compliance Officer Independent Director George Grunebaum Independent Director Christopher Lacovara Independent Director Investor Relations Security Listings
Dean Kehler Common Stock Jeehae Linford Independent Director Nasdaq: PTMN The Equity Group, Inc. (212) 836-9615 Matthew Westwood 6.125% Notes due 2022 jlinford@equityny.com Independent Director Nasdaq: KCAPL Joseph Morea Independent Director
Transfer Agent Corporate Headquarters American Stock Transfer & Trust 650 Madison Avenue - 23rd Floor Company, LLC New York, NY 10022 USA Independent Audit Firm KPMG LLP 21Corporate Information Board of Directors Senior Management Research
Coverage Ted Goldthorpe Ted Goldthorpe Ryan Lynch Chairman of the Board Chief Executive Officer Keefe Bruyette & Woods Graeme Dell Edward “Ted” Gilpin Chris Nolan Director Chief Financial Officer Ladenburg Thalmann Robert Warshauer
Patrick Schafer Chief Investment Officer Independent Director Alex Duka Andrew Devine Chief Compliance Officer Independent Director George Grunebaum Independent Director Christopher Lacovara Independent Director Investor Relations Security Listings
Dean Kehler Common Stock Jeehae Linford Independent Director Nasdaq: PTMN The Equity Group, Inc. (212) 836-9615 Matthew Westwood 6.125% Notes due 2022 jlinford@equityny.com Independent Director Nasdaq: KCAPL Joseph Morea Independent Director
Transfer Agent Corporate Headquarters American Stock Transfer & Trust 650 Madison Avenue - 23rd Floor Company, LLC New York, NY 10022 USA Independent Audit Firm KPMG LLP 21
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