Filed pursuant to Rule 424(b)(7)
Registration No. 333-274351
PROSPECTUS SUPPLEMENT
(to Prospectus dated October 31, 2023)
3,750,000 shares
Runway Growth Finance Corp.
Common Stock
The selling stockholder named in this prospectus supplement are offering 3,750,000 shares of our common stock, par value $0.01. See “Selling Stockholder”. We are not selling any shares under this prospectus supplement and we will not receive any proceeds from the sale of the shares of the common stock by the selling stockholder.
Our common stock is traded on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “RWAY”. On May 8, 2024, the last reported sales price on the Nasdaq for our common stock was $12.32 per share. We are required to determine the net asset value per share of our common stock on a quarterly basis. Our net asset value per share of our common stock as of March 31, 2024 was $13.36.
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended. As a result, we are subject to reduced public company reporting requirements and intend to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act.
Investing in our securities is highly speculative and involves a high degree of risk, and you could lose your entire investment if any of the risks occur. Before buying any common stock offered by the selling stockholder, you should read the material risks described in the “Supplementary Risk Factors” section beginning on page S-11 of this prospectus supplement and “Risk Factors” beginning on page 19 of the accompanying prospectus and in our most recent Annual Report on Form 10-K, as well as any of our subsequent SEC filings incorporated by reference herein. The individual securities in which we invest will not be rated by any rating agency. If they were, they would be rated as below investment grade or “junk.” Indebtedness of below investment grade quality has predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal.
This prospectus supplement, the accompanying prospectus, any free writing prospectus, and the documents incorporated by reference in this prospectus supplement and the accompanying prospectus contain important information you should know before investing in the shares of our common stock offered by the selling stockholder, including information about risks. Please read these documents before you invest and retain them for future reference. Additional information about us, including our annual, quarterly and current reports and proxy statements, has been filed with the Securities and Exchange Commission (the “SEC”), and can be accessed free of charge at its website at www.sec.gov. We maintain a website at https://investors.runwaygrowth.com and make all of the foregoing information available, free of charge, on or through our website. This information is also available free of charge by contacting us in writing at 205 N. Michigan Ave., Suite 4200, Chicago, IL 60601, calling us at (312) 281-6270 or visiting our corporate website located at https://runwaygrowth.com/document-center. The SEC also maintains a website at http://www.sec.gov that contains such information.
Information contained on our website is not incorporated by reference into this prospectus supplement or the accompanying prospectus, and you should not consider information contained on our website to be part of this prospectus supplement or the accompanying prospectus.
Neither the SEC nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense.
| | | | | | | |
| | Per Share | | Total | |
Public offering price | | $ | 11.50 | | $ | 43,125,000 | |
Underwriting discount (sales load) | | $ | 0.46 | | $ | 1,725,000 | |
Proceeds to the selling stockholder, before expenses(1) | | $ | 11.04 | | $ | 41,400,000 | |
(1)The selling stockholder estimates that it will incur approximately $350,000 in offering expenses in connection with this offering.
The underwriters have the option to purchase up to an additional 562,500 shares of the common stock offered by the selling stockholder at the offering price, less the underwriting discount and less an amount per share equal to any dividends or distributions declared by the Company and payable on the shares of common stock offered by the selling stockholder, within 30 days from the date of this prospectus supplement. If the option to purchase additional shares is exercised in full, the total public offering price will be $49,593,750, the total underwriting discount will be $1,983,750, and the total proceeds to the selling stockholder, before deducting estimated expenses payable by the selling stockholder of $350,000, will be $47,610,000.
The underwriters expect to deliver the shares against payment on or about May 14, 2024 through the book-entry facilities of the Depository Trust Company.
Joint Book-Running Managers
| | | |
Wells Fargo Securities | Morgan Stanley | BofA Securities | UBS Investment Bank |
| | | |
Keefe, Bruyette & Woods | RBC Capital Markets | B. Riley Securities |
A Stifel Company | | |
| | |
Co-Managers |
| | |
Oppenheimer & Co. | Compass Point |
The date of this prospectus supplement is May 9, 2024.
PROSPECTUS SUPPLEMENT SUMMARY
The following summary highlights some of the information included elsewhere, or incorporated by reference, in this prospectus supplement or the accompanying prospectus. It is not complete and may not contain all the information that you may want to consider before making any investment decision regarding the common stock offered by the selling stockholder hereby. To understand the terms of the common stock offered by the selling stockholder hereby before making any investment decision, you should carefully read this entire prospectus supplement and the accompanying prospectus, including the documents incorporated by reference herein or therein, and any free writing prospectus related to the offering of the common stock offered by the selling stockholder , including “Supplementary Risk Factors,” “Risk Factors,” “Available Information,” “Incorporation by Reference,” and “Use of Proceeds” and the financial statements contained elsewhere or incorporated by reference in this prospectus supplement and the accompanying prospectus. Together, these documents describe the specific terms of the common stock offered by the selling stockholder. Throughout this prospectus we refer to Runway Growth Finance Corp. as “we,” “us,” “our” or the “Company,” and to “Runway Growth Capital LLC,” our investment adviser, as “Runway Growth Capital” or the “Adviser.”
Runway Growth Finance Corp.
We are a specialty finance company focused on providing senior secured loans to high growth-potential companies in technology, life sciences, healthcare information and services, business services, select consumer services and products and other high-growth industries. Our goal is to create significant value for our stockholders and the entrepreneurs we support by providing high growth-potential companies with hybrid debt and equity financing that is more flexible than traditional credit and less dilutive than equity. We are managed by Runway Growth Capital, an experienced provider of growth financing for dynamic, late and growth stage companies. Our investment objective is to maximize our total return to our stockholders primarily through current income on our loan portfolio and secondarily through capital gains on our warrants and other equity positions. As of March 31, 2024, we had an investment portfolio of $1.02 billion at fair value, and a net asset value of $13.36 per share. We and Runway Growth Capital have a strategic relationship with Oaktree Capital Management, L.P. (“Oaktree”), a leading global investment management firm headquartered in Los Angeles, California, focused on less efficient markets and alternative investments.
We are structured as an externally managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). We have also elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), have qualified, and intend to continue to qualify annually for treatment as a RIC. See “Material United States Federal Income Tax Consequences.”
Our Adviser
We are externally managed by Runway Growth Capital. Runway Growth Capital was formed in 2015 to pursue an investment strategy focused on providing growth financing for dynamic, late and growth stage companies. David Spreng, our Chairman, Chief Executive Officer and President, formed Runway Growth Capital following a more than 25-year career in venture capital investing and lending. Runway Growth Capital has 28 employees across four offices in the United States, including five investment professionals focused on origination activities and nine focused on underwriting and managing our investment portfolio. Runway Growth Capital consistently demonstrates a credit first culture while maintaining, what we believe, is an admirable reputation among borrowers for industry knowledge, creativity, and understanding of the challenges often faced by late and growth stage companies.
Runway Growth Capital’s senior executive team has on average more than 30 years of experience, and its investment professionals, including origination and underwriting, have on average 21 years of experience. Runway Growth Capital has built its team with investment professionals who have deep industry experience, a track record of successful originations and outcomes across the venture debt and venture and private equity spectrums, along with rich experience in working with and understanding high-growth companies from both an investor’s and an operator’s perspective.
Runway Growth Capital is registered as an investment adviser with the U.S. Securities and Exchange Commission (the “SEC”) under the Investment Advisers Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Advisers Act”). Subject to the overall supervision of our board of directors (the “Board”), our Adviser manages our day-to-day operations and provides us with investment advisory services pursuant to the second amended and restated investment advisory agreement, dated May 27, 2021 (the “Advisory Agreement”). Pursuant to the Advisory Agreement, we pay Runway Growth Capital a fee for its investment advisory and management services consisting of two components: a base management fee and an incentive fee.
Many of the factors listed above are beyond our control. These factors may cause the market price of our common stock to decline, regardless of our financial performance and condition and prospects. In addition, the stock market has recently experienced extreme volatility that, in some cases, has been unrelated or disproportionate to the operating performance of particular companies. These broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance. As a result, it is impossible to provide any assurance that the market price of our common stock will not fall in the future, and it may be difficult for holders to resell shares of our common stock at prices they find attractive, or at all.
Future sales of our common stock, or the perception of future sales of our common stock, by us or our existing stockholders in the public market following this offering could cause the market price for our common stock to decline.
After this offering, the sale of a substantial number of shares of our common stock in the public market by us or our existing stockholders, including the selling stockholder, or the perception that such sales could occur, could harm the prevailing market price of shares of our common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.
The number of shares being registered for sale is significant in relation to the number of our outstanding shares of common stock.
We have filed a registration statement of which this prospectus is a part to register 21,054,668 shares offered hereunder for sale into the public market by certain selling stockholders, which, at the time of filing, represented approximately 51.9% of our issued and outstanding common stock. Prior to this offering, 15,492,168 shares remained available for sale under the registration statement, which represents approximately 39.28% of our issued and outstanding common stock. If these shares are sold in the market all at once or at about the same time, the sale could depress the market price of our common stock during the period the registration statement remains effective and could also affect our ability to raise equity capital.
There can be no assurance that we will continue to pay dividends on our common stock.
Payment of cash dividends on our common stock is subject to our compliance with applicable law and depends on, among other things, our results of operations, financial condition, level of indebtedness, capital requirements, contractual restrictions, business prospects and other factors that our board of directors may deem relevant. For more information, see “Dividend Policy” in this prospectus supplement and “Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” in our Annual Report on Form 10-K for the year ended December 31, 2023 incorporated by reference herein. Although we have declared a quarterly cash dividend since 2018, there can be no assurance that we will continue to pay any dividends in the future.
If securities or industry research analysts do not publish or cease publishing research or reports about our business or if they issue unfavorable commentary or downgrade our common stock, our share price and trading volume could decline.
The trading market for our common stock relies in part on the research and reports that securities and industry research analysts publish about us, our industry, our competitors and our business. We do not have any control over these analysts. Our share price and trading volumes could decline if one or more securities or industry analysts downgrade our common stock, issue unfavorable commentary about us, our industry or our business, cease to cover our company or fail to regularly publish reports about us, our industry or our business.
The underwriters of this offering may waive or release parties to the lock-up agreements entered into in connection with this offering, which could adversely affect the price of our common stock.
The Company, our directors and officers, and the selling stockholder have entered into lock-up agreements with respect to the common stock offered by the selling stockholder, pursuant to which the selling stockholder and such other persons and entities are subject to certain resale restrictions for a period of 60 days following the date of this prospectus supplement. Pursuant to the foregoing lock-up agreements, Wells Fargo and Morgan Stanley may waive the restrictions under the lock-up agreements, is such waiver occurs, then the common stock subject to such restrictions will be available for sale into the public markets, which could cause the market price of our common stock to decline and impair our ability to raise capital.
In general, non-U.S. stockholders that are not otherwise engaged in a U.S. trade or business will not be subject to U.S. federal income on distributions paid by us. However, distributions of our “investment company taxable income” generally are subject to withholding of U.S. federal tax at a 30% rate (or lower rate provided by an applicable treaty) to the extent of our current or accumulated earnings and profits unless an applicable exception applies. If the distributions are effectively connected with a U.S. trade or business of the non-U.S. stockholder (and, if a treaty applies, are attributable to a U.S. permanent establishment of the non-U.S. stockholder), we will not be required to withhold U.S. federal tax if the non-U.S. stockholder complies with applicable certification and disclosure requirements, although the distributions will be subject to U.S. federal income tax at the rates applicable to U.S. persons. Special certification requirements apply to a non-U.S. stockholder that is a foreign partnership or a foreign trust, and such entities are urged to consult their own tax advisers.
No withholding is required with respect to dividends paid by us that are properly reported as “interest-related dividends” or “short-term capital gain dividends.” We anticipate that a significant amount of our dividends will qualify as “interest-related dividends” or “short-term capital gain dividends.” Therefore, our distributions of our investment company taxable income generally will not be subject to withholding of U.S. federal tax. To the extent that we make a distribution of dividends that do not qualify as “interest-related dividends” or “short-term capital gain dividends” we will specifically identify the distribution as it will be subject to U.S withholding tax at a 30% rate (or lower rate provided by an applicable treaty) to the extent of our current or accumulated earnings and profits unless an applicable exception applies, as described above.
Actual or deemed distributions of our net capital gains to a non-U.S. stockholder, and gains realized by a non-U.S. stockholder upon the sale or redemption of our common stock, will not be subject to U.S. federal income tax if properly reported by us as capital gain dividends unless the distributions or gains, as the case may be, are effectively connected with a U.S. trade or business of the non-U.S. stockholder (and, if an income tax treaty applies, are attributable to a permanent establishment maintained by the non-U.S. stockholder in the United States) or, in the case of an individual, the non-U.S. stockholder was present in the United States for 183 days or more during the taxable year and certain other conditions are met.
If we distribute our net capital gains in the form of deemed rather than actual distributions, a non-U.S. stockholder will be entitled to a U.S. federal income tax credit or tax refund equal to the non-U.S. stockholder’s allocable share of the corporate-level U.S. federal income tax we pay on the capital gains deemed to have been distributed; however, in order to obtain the refund, the non-U.S. stockholder must obtain a U.S. taxpayer identification number and file a U.S. federal income tax return even if the non-U.S. stockholder would not otherwise be required to obtain a U.S. taxpayer identification number or file a U.S. federal income tax return
If any actual or deemed distributions of our net capital gains, or any gains realized upon the sale or redemption of our common stock, are effectively connected with a U.S. trade or business of the non-U.S. stockholder (and, if an income tax treaty applies, are attributable to a U.S. permanent establishment maintained by the non-U.S. stockholder), such amounts will be subject to U.S. income tax, on a net income basis, in the same manner, and at the graduated rates applicable to, a U.S. stockholder. For a corporate non-U.S. stockholder, the after-tax amount of distributions (both actual and deemed) and gains realized upon the sale or redemption of our common stock that are effectively connected to a U.S. trade or business (and, if a treaty applies, are attributable to a U.S. permanent establishment), may, under certain circumstances, be subject to an additional “branch profits tax” at a 30% rate (or at a lower rate if provided for by an applicable treaty). Accordingly, investment in shares of our common stock may not be appropriate for certain non-U.S. stockholders.
Non-U.S. stockholders will not generally be subject to U.S. federal income or withholding tax with respect to gain recognized on the sale or other disposition of shares of our common stock.
Under the dividend reinvestment plan, our non-U.S. stockholders who have not “opted out” of our dividend reinvestment plan will have their cash distributions automatically reinvested in additional shares of our common stock, rather than receiving the cash distributions. If the distribution is a distribution of our investment company taxable income and is not properly reported by us as a short-term capital gains dividend or interest-related dividend (assuming an extension of the exemption discussed above), the amount
distributed (to the extent of our current and accumulated earnings and profits) will be subject to U.S. federal withholding tax as described above and only the net after-tax amount will be reinvested in our common stock. If the distribution is effectively connected with a U.S. trade or business of the non-U.S. stockholder (and, if a treaty applies, is attributable to a U.S. permanent establishment), generally the full amount of the distribution will be reinvested in the plan and will nevertheless be subject to U.S. federal income tax at the ordinary income rates applicable to U.S. persons. The non-U.S. stockholder will have an adjusted basis in the additional common stock purchased through the plan equal to the amount reinvested. The additional shares will have a new holding period commencing on the day following the day on which the shares are credited to the non-U.S. stockholder’s account.
Notwithstanding the provisions set forth in the immediately preceding paragraph, we, our directors and officers, and the selling stockholder may, without the prior written consent of Wells Fargo and Morgan Stanley and subject certain procedural requirements, transfer any Common Stock or other Capital Stock or any securities convertible into or exchangeable or exercisable for Common Stock or other Capital Stock: (i) if the transferor is a natural person, as a bona fide gift or gifts or by will, by intestate succession or pursuant to a so-called “living trust” or other revocable trust established to provide for the disposition of property on the transferor’s death, to any member of their immediate family, or as a bona fide gift or gifts to a charity or educational institution, (ii) if the transferor is a partnership or a limited liability company, to a partner or member, as the case may be, of such partnership or limited liability company if, in any such case, such transfer is not for value, (iii) to a nominee or custodian of a person or entity to whom a disposition or transfer would be permissible under clauses (ii) through (iii) above, (iv) if the transferor is a corporation, partnership, limited liability company, trust or other business entity, (a) to another corporation, partnership, limited liability company, trust or other business entity that is an affiliate (as defined in Rule 405 promulgated under the Securities Act) of the transferor, or to any investment fund or other entity controlling, controlled by, managing or managed by or under common control with the transferor or affiliates of the transferor (including, for the avoidance of doubt, where the transferor is a partnership, to its general partner or a successor partnership or fund, or any other funds managed by such partnership), or (b) as part of a distribution to members or shareholders of the transferor, (v) by operation of law, such as pursuant to a qualified domestic order, divorce settlement, divorce decree or separation agreement, (vi) to the Company from an employee of the Company upon death, disability or termination of employment, in each case, of such employee, (vii) pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction that is approved by the Company’s board of directors and made to all holders of the Company’s capital stock involving a Change of Control of the Company (for purposes hereof, “Change of Control” shall mean the transfer (whether by tender offer, merger, consolidation or other similar transaction), in one transaction or a series of related transactions, to a person or group of affiliated persons, of shares of capital stock if, after such transfer, such person or group of affiliated persons would hold more than 90% of the outstanding voting securities of the Company (or the surviving entity)) and (viii) to the Company pursuant to the redemption of fractional shares by the Company; provided that in the event that such tender offer, merger, consolidation or other similar transaction is not completed, the transferor’s restricted securities shall remain subject to the provisions of this agreement.
Further, and notwithstanding the foregoing, at any time beginning 30 days after the date of this prospectus, 400,000 of OCM Growth Holdings, LLC’s shares of Common Stock will be automatically released from such transfer restrictions. For the avoidance of doubt, the remainder of the selling stockholder’s shares subject to the transfer restrictions shall be released from such transfer restrictions 60 days after the date of this prospectus, in accordance with the first paragraph in this subsection.
Underwriting Discounts
The underwriters initially propose to offer the shares directly to the public at the public offering price set forth on the cover page of this prospectus supplement and to certain dealers at a price that represents a concession not in excess of $0.30 per share below the offering price. After the offering of the shares, the offering price and other selling terms may be changed by the underwriters.
The following table provides information regarding the per share and total underwriting discount that the selling stockholder is to pay to the underwriters. These amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase up to 562,500 additional shares from the selling stockholder.
| | | | | | | | | |
| | | | | | | | Total with |
| | | | | Total without | | Full Exercise of |
| | Per Share | | Exercise of Option | | | Option |
Underwriting discount payable by the selling stockholder on shares sold to the public | | $ | 0.46 | | $ | 1,725,000 | | $ | 1,983,750 |
The selling stockholder will pay all expenses incident to the offering and sale of shares of the common stock by the selling stockholder in this offering. The selling stockholder estimates that the total expenses of the offering, excluding the underwriting discount will be approximately $350,000.
A prospectus supplement in electronic format may be made available on the web sites maintained by one or more of the underwriters, or selling group members, if any, participating in this offering. The representatives may agree to allocate a number of shares to underwriters and selling group members for the sale to their online brokerage account holders. Internet distributions will be allocated by the underwriters and selling group members that will make Internet distributions on the same basis as other allocations. The representatives may agree to allocate a number of shares to underwriters for sale to their online brokerage account holders.
Price Stabilization, Short Positions and Penalty Bids
In connection with this offering, the underwriters may purchase and sell shares of our common stock in the open market. These transactions may include over- allotment, syndicate covering transactions and stabilizing transactions. An over-allotment involves syndicate sales of shares in excess of the number of shares to be purchased by the underwriters in the offering, which creates a syndicate short position. Syndicate covering transactions involve purchases of shares in the open market after the distribution has been completed in order to cover syndicate short positions.
Stabilizing transactions consist of some bids or purchases of shares of our common stock made for the purpose of preventing or slowing a decline in the market price of the shares while the offering is in progress.
In addition, the underwriters may impose penalty bids, under which they may reclaim the selling concession from a syndicate member when the shares of our common stock originally sold by that syndicate member are purchased in a stabilizing transaction or syndicate covering transaction to cover syndicate short positions.
Similar to other purchase transactions, these activities may have the effect of raising or maintaining the market price of the common stock or preventing or slowing a decline in the market price of the common stock. As a result, the price of the common stock may be higher than the price that might otherwise exist in the open market. Except for the sale of shares of our common stock in this offering, the underwriters may carry out these transactions on the Nasdaq Global Select Market, in the over-the-counter market or otherwise.
Neither the underwriters, the selling stockholder nor we make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the shares. In addition, neither the underwriters, the selling stockholder nor we make any representation that the underwriters will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.
Conflicts of Interest
The underwriters and/or their affiliates from time to time provide and may in the future provide investment banking, commercial banking, corporate trust, custodial, treasury, 401(k) and financial advisory services to us, for which they have received and may receive customary compensation. The underwriters and/or their affiliates from time to time provide and may in the future provide similar services to our portfolio companies.
In addition, the underwriters and/or their affiliates may from time to time refer investment banking clients to us as potential portfolio investments and the referring underwriter or its affiliate may receive placement fees from its client in connection with such referral.
The principal business address of Wells Fargo Securities, LLC is 550 South Tyron Street, Charlotte, North Carolina 28202.
The principal business address of Morgan Stanley & Co. LLC is 1585 Broadway, New York, New York 10036.
The principal business address of BofA Securities, Inc. is One Bryant Park, New York, New York 10036.
The principal business address of UBS Securities LLC is 1285 Avenue of the Americas, New York, New York 10019.
PROSPECTUS SUMMARY
This summary highlights some of the information included elsewhere in this prospectus or incorporated by reference. It is not complete and may not contain all of the information that you may want to consider before investing in our securities. You should carefully read the entire prospectus, the applicable prospectus supplement and any related free writing prospectus, including the risks of investing in our securities discussed in the section titled “Risk Factors”, in the applicable prospectus supplement and any related free writing prospectus, and under similar headings in the other documents that are incorporated by reference into this prospectus and the applicable prospectus supplement. Before making your investment decision, you should also carefully read the information incorporated by reference into this prospectus, including our financial statements and related notes, and the exhibits to the registration statement of which this prospectus is a part. Throughout this prospectus we refer to Runway Growth Finance Corp. as “we,” “us,” “our” or the “Company,” and to “Runway Growth Capital LLC,” our investment adviser, as “Runway Growth Capital” or “Adviser,” “selling stockholders” refers to the stockholders listed herein in the section titled “Selling Stockholders.”.
Runway Growth Finance Corp.
We are a specialty finance company focused on providing senior secured loans to high growth-potential companies in technology, life sciences, healthcare information and services, business services, select consumer services and products and other high-growth industries. Our goal is to create significant value for our stockholders and the entrepreneurs we support by providing high growth-potential companies with hybrid debt and equity financing that is more flexible than traditional credit and less dilutive than equity. We are managed by Runway Growth Capital, an experienced provider of growth financing for dynamic, late and growth stage companies. Our investment objective is to maximize our total return to our stockholders primarily through current income on our loan portfolio and secondarily through capital gains on our warrants and other equity positions. As of June 30, 2023, we had an investment portfolio of $1.1 billion at fair value, and a net asset value of $14.17 per share. We and Runway Growth Capital have a strategic relationship with Oaktree Capital Management, L.P. (“Oaktree”), a leading global investment management firm headquartered in Los Angeles, California, focused on less efficient markets and alternative investments.
We are structured as an externally managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). We have also elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). While we currently qualify and intend to qualify annually to be treated as a RIC, no assurance can be provided that we will be able to maintain our tax treatment as RIC. See “Certain U.S. Federal Income Tax Considerations.”
Our Adviser
We are externally managed by Runway Growth Capital. Runway Growth Capital was formed in 2015 to pursue an investment strategy focused on providing growth financing for dynamic, late and growth stage companies. David Spreng, our Chairman, Chief Executive Officer and President, formed our Adviser following a more than 25-year career in venture capital investing and lending. Runway Growth Capital has 27 employees across four offices in the United States, including five investment professionals focused on origination activities and nine focused on underwriting and managing our investment portfolio. Our Adviser consistently demonstrates a credit first culture while maintaining, what we believe, is an admirable reputation among borrowers for industry knowledge, creativity, and understanding of the challenges often faced by late and growth stage companies.
Runway Growth Capital’s senior executive team has on average more than 30 years of experience, and its senior investment professionals, including origination and underwriting, have on average 21 years of experience. Our Adviser has built its team with investment professionals who have deep industry experience, a track record of successful originations and outcomes across the venture debt and venture and private equity spectrums, along with rich experience in working with and understanding high-growth companies from both an investor’s and an operator’s perspective.
Runway Growth Capital is registered as an investment adviser with the U.S. Securities and Exchange Commission (the “SEC”) under the Investment Advisers Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Advisers Act”). Subject to the overall supervision of our board of directors (the “Board”), our Adviser manages our day-to-day operations and provides us with investment advisory services pursuant to the second amended and restated investment advisory agreement, dated May 27, 2021 (the “Advisory Agreement”). Pursuant to the Advisory Agreement, we pay Runway Growth Capital a fee for its investment advisory and management services consisting of two components: a base management fee and an incentive fee. The cost of the base management fee and incentive fee are each borne by our stockholders. See “Management and Other Agreements.”
Our Administrator
We have entered into an amended and restated administration agreement (the “Administration Agreement”) with Runway Administrator Services LLC (the “Administrator”), a wholly-owned subsidiary of Runway Growth Capital, pursuant to which our Administrator is responsible for furnishing us with office facilities and equipment and provides us with clerical, bookkeeping, recordkeeping and other administrative services at such facilities. Pursuant to the Administration Agreement, we pay our Administrator an amount equal to our allocable portion (subject to the review of our Board) of our Administrator’s overhead resulting from its obligations under the Administration Agreement, including rent and the allocable portion of the cost of our Chief Compliance Officer and Chief Financial Officer and their respective staffs associates with performing compliance functions. For more information, see “Management and Other Agreements.”
Oaktree Strategic Relationship
In December 2016, we and Runway Growth Capital entered into a strategic relationship with Oaktree. Oaktree is a leading global investment management firm focused on less efficient markets and alternative investments. Oaktree, together with its affiliates, emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in distressed debt, corporate debt (including high-yield debt and senior loans), control investing, real estate, convertible securities and listed equities. In 2019, Brookfield Corporation (f/k/a Brookfield Asset Management Inc.) (“Brookfield”) acquired a majority economic interest in the business of Oaktree and its affiliates. Oaktree and its affiliates operate as an independent business with Brookfield, with their own product offerings and investment, marketing and support teams. Brookfield is a leading global alternative asset manager with over a 100 year history and over $750 billion of assets under management (inclusive of Oaktree and its affiliates) across a broad portfolio of real estate, infrastructure, renewable power, credit and private equity assets.
OCM Growth Holdings, LLC (“OCM Growth”) and Oaktree Opportunities Fund Xb Holdings (Delaware), L.P. (together with OCM Growth, the “OCM Holders”), each an affiliate of Oaktree and a selling stockholder, own 21,030,568 shares and 24,100 shares of our common stock, respectively, or approximately 52% of our outstanding common stock as of October 24, 2023. Pursuant to an irrevocable proxy, shares of our common stock held by OCM Growth must be voted in the same proportion that the Company’s other stockholders vote their shares. As a result, the 21,030,568 shares of the Company’s common stock owned by OCM or approximately 52% of the Company’s outstanding common stock, as of October 24, 2023, are subject to this proxy voting arrangement. OCM Growth has a right to nominate a member of our Board for election for so long as OCM Growth holds shares of our common stock in an amount equal to, in the aggregate, at least one-third (33.33%) of OCM Growth’s initial $125 million capital commitment, which percentage shall be determined based on the dollar value of the shares of common stock owned by OCM Growth. OCM Growth holds the right to appoint a nominee to the Board, subject to the conditions previously described, regardless of the Company’s size (e.g., assets under management or market capitalization) or the beneficial ownership interests of other stockholders. Further, to the extent OCM Growth’s share ownership falls below one-third of its initial $125 million capital commitment under any circumstances, OCM Growth will no longer have the right to appoint a director nominee and will use reasonable efforts to cause such nominee to resign immediately (subject to his or her existing fiduciary duties). Gregory M. Share, a managing director of Oaktree’s Global Opportunities Group, serves on our Board as OCM Growth’s director nominee and is considered an interested director.
In addition, OCM Growth owns a minority interest in Runway Growth Capital and has the right to appoint a member of Runway Growth Capital’s board of managers as well as a member of Runway Growth Capital’s Investment Committee (the “Investment Committee”). Mr. Share serves on Runway Growth Capital’s board of managers and Investment Committee on behalf of OCM Growth. See “Related Party Transactions and Certain Relationships.”
We believe our strategic relationship with Oaktree provides us with access to additional resources and relationships that are incremental to our already expansive network of venture backed companies and venture capital sponsors and additive to our operations.
Our Portfolio
From the commencement of operations in December 2016 through June 30, 2023, we made total commitments of $2.3 billion to fund investments in 71 portfolio companies, invested $1.9 billion in debt and equity investments, and realized 32 investments. Of the $2.3 billion total commitments since inception, 30% are related to upsizes from existing borrowers. As of June 30, 2023, our debt investment portfolio consisted of 32 debt investments in 31 portfolio companies with an aggregate fair value of $1.0 billion, while our equity portfolio consisted of 51 warrant positions in 40 portfolio companies, three preferred stock positions in three portfolio companies and four common stock positions in four portfolio companies with an aggregate fair value of $51.1 million.
industries can often be characterized as having asset-light business models, attractive recurring revenue streams and strong growth trajectories.
We invest across industries to diversify risk and deliver more stable returns. The investment professionals at Runway Growth Capital have extensive experience investing in the industries on which we focus, including technology, life sciences, healthcare information and services, business services, select consumer services and products and other high-growth industries. Our ability to invest across diverse industries is supported by our Sponsored Growth Lending strategy and relationships with leading venture firms, who are generally industry experts in the areas in which they invest. We are able to leverage our relationships across equity providers, lenders, and advisers to source deals within the venture industry.
We believe we are able to access opportunities to finance companies that are both backed by venture capital sponsors as well as through direct lead generation and other relationships. While many growth lenders focus solely on sponsored lending, we believe we are differentiated in our approach by offering both sponsored growth lending and non-sponsored growth lending that are secured by the assets of many of the most dynamic, innovative and fastest growing companies in the United States.
Robust Disciplined Investment Process and Credit Analysis.
Runway Growth Capital’s senior investment professionals draw upon their substantial experience, including operating, lending, venture capital and growth investing, to manage the underwriting investment process. Credit analysis, which is a fundamental part of our investment process, is driven by our credit-first philosophy and utilizes the core competencies the team has developed. A strong assessment of underwriting transactions often enables development of structure and pricing terms to win deals and produce strong returns for risks taken versus other lenders that take a more formulaic approach to the business.
We believe the focused and disciplined approach that Runway Growth Capital applies to our lending strategy enables us to deliver strong, consistent returns to our investors. Our debt portfolio is 99% first lien senior secured. Of our $2.3 billion total funded commitments since inception, our cumulative gross loss rate, as a percentage of total commitments since inception, has been 0.34% and our net losses, as a percentage of total commitments since inception, has been 0.12%. On average, our portfolio companies have raised $108.9 million of equity proceeds relative to our average loan size of $26.8 million. To achieve this, we do not follow an “index” strategy or a narrowly focused approach, and we do not lend only to those companies that are backed by a specific set of sponsors. We believe that careful selection among many opportunities will yield the optimal portfolio results within both sponsored and non-sponsored lending opportunities – although we do expect the sponsored segment to represent the majority of the portfolio for the foreseeable future.
We maintain rigorous underwriting, monitoring and risk management processes across our portfolio, which is underpinned by our two main lending principles, first the ability to price risk and second the ability to measure and track enterprise value. Our investment process differs from many of our competitors in that we have a dedicated credit team, separate from the origination team that manages the underwriting process. Unlike many of our competitors, we underwrite the company and the loan separately and spend significant time analyzing the enterprise value of the company and potential upside from the equity component of the transaction.
Proprietary Risk Analytics Return Optimization.
Over the past 20 years, Runway Growth Capital’s senior investment professionals have iterated upon and built out an extensive due diligence process, which has resulted in the proprietary risk analysis used today. Mr. Spreng has overseen the development of a risk management model that helps to identify, analyze and mitigate risk within individual portfolio companies in the venture capital space. The model utilized by us today examines a consistent set of 30 quantitative and qualitative variables in four main risk areas (market, technology, management and financing) to generate a composite risk ranking for each portfolio company.
Flexible, Opportunity-Specific Pricing and Structure.
Runway Growth Capital’s comprehensive analysis assesses all factors and does not rely on any one criterion above or more than others. For example, we do not seek to provide financing to every early-stage company backed by top-tier venture firms, but only to those companies that, in our opinion, possess the most favorable risk and return characteristics for our investments. We seek to understand the attractiveness of each opportunity on its own merits. The quality of the venture investors involved is important, but it is only one component of our decision-making process. Within our Non-Sponsored Growth Lending strategy, we expect that most companies will have positive earnings before interest expense, income tax expenses, depreciation and amortization (“EBITDA”) but have been unable to access sufficient capital to fund current growth opportunities. We believe that gaining a comprehensive picture of
an opportunity based on Runway Growth Capital’s defined assessment factors allows us to be more flexible, to identify price and structure inefficiencies in the debt market, better support our portfolio companies, and to maximize loan and warrant returns, while minimizing losses. In our Sponsored and Non-Sponsored Growth Lending strategies, we target our loans to be less than 25% of enterprise value at inception.
Strong Reputation and Deep Relationships.
Runway Growth Capital’s senior investment professionals enjoy reputations as innovative thought leaders, ingrained in the fabric of the venture community. Runway Growth Capital’s senior investment professionals have been active in venture capital investing, private lending, growth equity investing, corporate finance, and investment banking for more than two decades and are viewed as trustworthy partners to both management and venture investors as well as entrepreneurs. Our investment professionals’ experience has often encouraged private companies prefer to work with a lender that can manage challenges and deviations from plans that often arise in developing companies.
Runway Growth Capital’s senior investment professionals also have established a network of relationships over two decades with various venture capital firms, venture banks, institutional investors, entrepreneurs and other venture capital market participants, which has allowed Runway Growth Capital to develop a variety of channels for investment originations and referrals. These investment professionals maintain ongoing dialogue with a number of venture capital firms across the country, leverage a suite of technologies to identify potential borrowers and often seek to be the first contact for new investment opportunities.
In addition, our strategic relationship with Oaktree provides us with access to additional resources and relationships that are incremental to our already broad network of venture backed companies and venture capital sponsors.
Use of Leverage
As a BDC, we are generally required to meet an asset coverage ratio, defined under the 1940 Act as the ratio of our gross assets (less all liabilities and indebtedness not represented by senior securities) to our outstanding senior securities, of at least 150% after each issuance of senior securities, subject to certain requirements. On October 28, 2021, the Board approved a proposal that permits us to reduce our asset coverage ratio to 150%. On June 16, 2022, our stockholders approved the reduced asset coverage ratio at our 2022 annual meeting of stockholders. The reduced asset coverage ratio of 150% became effective upon receiving stockholder approval.
Credit Agreement
On May 31, 2019, the Company entered into a Credit Agreement with KeyBank National Association, acting as administrative agent and syndication agent and the other lenders party thereto, which initially provided the Company with a $100.0 million commitment, subject to borrowing base requirements (as amended and restated from time to time, the “Credit Facility”). As of June 30, 2023, the Company had $500.0 million in total commitments available under the Credit Facility. The availability period under the Credit Facility expires on April 20, 2025 and is followed by a one-year amortization period. The stated maturity date under the Credit Facility is April 20, 2026, unless extended.
Borrowings under the Credit Facility bear interest on a per annum rate equal to the Adjusted Term Secured Overnight Financing Rate (“SOFR”) plus an applicable margin rate that ranges from 2.95% to 3.35% per annum depending on the Company’s leverage ratio and number of eligible loans in the collateral pool. The Credit Facility provides for a variable advance rate of up to 65% on eligible term loans. The Company also pays an unused commitment fee that ranges from 0.25% to 1.00% per annum based on the total unused lender commitments under the Credit Facility.
The Credit Facility is collateralized by all eligible investment assets held by the Company. The Credit Facility contains representations and warranties and affirmative and negative covenants customary for secured financings of this type, including certain financial covenants such as a consolidated tangible net worth requirement and a required asset coverage ratio.
For the three and six months ended June 30, 2023, the weighted average outstanding principal balance was $311.4 million and $322.3 million, respectively, and the weighted average effective interest rate was 8.10% and 7.95%, respectively. For the three and six months ended June 30, 2022, the weighted average outstanding principal balance was $86.7 million and $64.3 million, respectively, and the weighted average effective interest rate was 4.03% and 3.38%, respectively.
2026 Notes
On December 10, 2021, the Company entered into a master note purchase agreement, completing a private debt offering of $70.0 million in aggregate principal amount of 4.25% interest-bearing unsecured Series 2021A Senior Notes due 2026 (the “December 2026 Notes”) to institutional accredited investors (as defined in Regulation D under the Securities Act). The December 2026 Notes were issued in two closings; the initial issuance of $20.0 million closed on December 10, 2021 and the second issuance of $50.0 million closed on February 10, 2022. On April 13, 2023, the Company completed the first supplement to the master note purchase agreement, resulting in an additional private debt offering of $25.0 million in aggregate principal amount of 8.54% interest-bearing unsecured Series 2023A Senior Notes due 2026 (the “April 2026 Notes”) to institutional accredited investors (as defined in the Securities Act). The December 2026 Notes and the April 2026 Notes (collectively the "2026 Notes") are subject to a 1.00% increase in the respective interest rates in the event that, subject to certain exceptions, the 2026 Notes cease to have an investment grade rating or receive an investment grade rating below the Investment Grade (as defined in the master note purchase agreement). The 2026 Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.
December 2026 Notes
The December 2026 Notes bear an interest rate of 4.25% per year and are due on December 10, 2026, unless redeemed, purchased or prepaid prior to such date by the Company or its affiliates in accordance with their terms. Interest on the December 2026 Notes will be due semiannually in arrears on June 10 and December 10 of each year, commencing on June 10, 2022.
Aggregate costs in connection with the December 2026 Notes issuance were $1.0 million, and were capitalized and deferred. As of June 30, 2023 and December 31, 2022, unamortized deferred debt costs related to the December 2026 Notes were $0.7 million and $0.8 million, respectively.
April 2026 Notes
The April 2026 Notes bear an interest rate of 8.54% per year and are due on April 13, 2026, unless redeemed, purchased or prepaid prior to such date by the Company or its affiliates in accordance with their terms. Interest on the April 2026 Notes will be due semiannually in arrears on April 13 and October 13 of each year, commencing on October 13, 2023.
Aggregate costs in connection with the April 2026 Notes issuance were $0.3 million, and were capitalized and deferred. As of June 30, 2023 , unamortized deferred debt costs related to the April 2026 Notes were $0.3 million.
2027 Notes
July 2027 Notes
On July 28, 2022, the Company issued and sold $80.5 million in aggregate principal amount of 7.50% interest-bearing unsecured Notes due 2027 (the “July 2027 Notes”) under its shelf Registration Statement on Form N-2. The July 2027 Notes were issued pursuant to the Base Indenture dated July 28, 2022 and First Supplemental Indenture, dated July 28, 2022, between the Company and the Trustee, U.S. Bank Trust Company, National Association.
The July 2027 Notes bear an interest rate of 7.50% per year and are due on July 28, 2027. Interest on the 2027 Notes will be due quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, commencing September 1, 2022. The July 2027 Notes may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after July 28, 2024, at a redemption price of $25 per July 2027 Note plus accrued and unpaid interest payments otherwise payable for the then-current quarterly interest period accrued to the date fixed for redemption. The July 2027 Notes are general unsecured obligations of the Company that rank pari passu with the Company's existing and future unsecured, unsubordinated indebtedness.
Aggregate costs in connection with the July 2027 Notes issuance, including the underwriter’s discount and commissions, were $2.6 million, and were capitalized and deferred. As of June 30, 2023 and December 31, 2022, unamortized deferred debt costs related to the July 2027 Notes were $2.2 million and $2.4 million, respectively.
maximum extent permitted by Maryland law and subject to the requirements of the 1940 Act, to indemnify any present or former director or officer or any individual who, while serving as our director or officer and at our request, serves or has served another corporation, real estate investment trust, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner, trustee, member or manager and who is made, or threatened to be made, a party to the proceeding by reason of his or her service in that capacity from and against any claim or liability to which that person may become subject or which that person may incur by reason of his or her service in any such capacity and to pay or reimburse his or her reasonable expenses in advance of final disposition of a proceeding. The charter and bylaws also permit us to indemnify and advance expenses to any person who served a predecessor of us in any of the capacities described above and any of our employees or agents or any employees or agents of our predecessor. In accordance with the 1940 Act, we will not indemnify any person for any liability to which such person would be subject by reason of such person’s willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.
Maryland law requires a corporation (unless its charter provides otherwise, which our charter does not) to indemnify a director or officer who has been successful in the defense of any proceeding to which he or she is made, or threatened to be made, a party by reason of his or her service in that capacity. Maryland law permits a corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made, or threatened to be made, a party by reason of their service in those or other capacities unless it is established that (a) the act or omission of the director or officer was material to the matter giving rise to the proceeding and (1) was committed in bad faith or (2) was the result of active and deliberate dishonesty, (b) the director or officer actually received an improper personal benefit in money, property or services or (c) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. However, under Maryland law, a Maryland corporation may not indemnify for an adverse judgment in a suit by or in the right of the corporation or for a judgment of liability on the basis that a personal benefit was improperly received unless, in either case a court orders indemnification, and then only for expenses. In addition, Maryland law permits a corporation to advance reasonable expenses to a director or officer in advance of final disposition of a proceeding upon the corporation’s receipt of (a) a written affirmation by the director or officer of his or her good-faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation and (b) a written undertaking by him or her or on his or her behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the standard of conduct was not met.
We have entered into indemnification agreements with our directors and executive officers. The indemnification agreements provide our directors and executive officers the maximum indemnification permitted under Maryland law and the 1940 Act.
Certain Provisions of the Maryland General Corporation Law and Our Charter and Bylaws
The MGCL and our charter and bylaws contain provisions that could make it more difficult for a potential acquirer to acquire us by means of a tender offer, proxy contest or otherwise, the material ones of which are discussed below. These provisions are expected to discourage certain coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to negotiate first with our Board. We expect the benefits of these provisions to outweigh the potential disadvantages of discouraging any such acquisition proposals because, among other things, the negotiation of such proposals may improve their terms.
Classified Board of Directors
Our Board is divided into three classes of directors serving staggered three-year terms. Upon expiration of their terms, directors of each class will be elected to serve for three-year terms and until their successors are duly elected and qualify, and each year one class of directors will be elected by the stockholders. A classified Board may render a change in control of us or removal of our incumbent management more difficult. We believe, however, that the longer time required to elect a majority of a classified Board will help to ensure the continuity and stability of our management and policies.
Election of Directors
Our bylaws, as authorized by our charter, provide that the affirmative vote of the holders of a plurality of the outstanding shares of stock entitled to vote in the election of directors cast at a meeting of stockholders duly called, and at which a quorum is present, will be required to elect a director. Pursuant to our charter our Board may amend the bylaws to alter the vote required to elect directors.
N-2 - USD ($)
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1 Months Ended |
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6 Months Ended |
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| Cover [Abstract] |
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| Entity Central Index Key |
0001653384
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| Amendment Flag |
false
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| Document Type |
424B7
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| Entity Registrant Name |
Runway Growth Finance Corp.
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| Fee Table [Abstract] |
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| Shareholder Transaction Expenses [Table Text Block] |
| | | | Selling stockholder transaction expenses: | | | | Sales load (as a percentage of offering price) | | | (1) | Offering expenses (as a percentage of offering price) | | | (2) | Dividend reinvestment plan expenses | | — | (3) | Total shareholder transaction expenses (as a percentage of offering price): | | | | Annual expenses (as a percentage of net assets attributable to common stock): | | | | Management Fee payable under the Investment Advisory Agreement | | 2.90 | %(4) | Incentive Fee payable under the Investment Advisory Agreement | | 3.33 | %(5) | Interest payments and fees paid on borrowed funds | | 7.45 | %(6) | Other expenses | | 1.17 | %(7)(8) | Total annual expenses | | 14.85 | %(8) |
| (1) | The sales load (underwriting discount and commission) with respect to the shares of our common stock sold by the selling stockholders, which is a fee paid to the underwriters by the selling stockholders, shall be disclosed in a related prospectus supplement. |
| (2) | A related prospectus supplement will disclose the estimated amount of offering expenses, the offering price and the estimated amount of offering expenses borne by the selling stockholders as a percentage of the offering price. |
| (3) | The expenses of the dividend reinvestment plan are included in “other expenses” in the table above. For additional information, see “Dividend Reinvestment Plan.” |
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| Other Transaction Expenses [Abstract] |
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| Annual Expenses [Table Text Block] |
| | | | Selling stockholder transaction expenses: | | | | Sales load (as a percentage of offering price) | | | (1) | Offering expenses (as a percentage of offering price) | | | (2) | Dividend reinvestment plan expenses | | — | (3) | Total shareholder transaction expenses (as a percentage of offering price): | | | | Annual expenses (as a percentage of net assets attributable to common stock): | | | | Management Fee payable under the Investment Advisory Agreement | | 2.90 | %(4) | Incentive Fee payable under the Investment Advisory Agreement | | 3.33 | %(5) | Interest payments and fees paid on borrowed funds | | 7.45 | %(6) | Other expenses | | 1.17 | %(7)(8) | Total annual expenses | | 14.85 | %(8) |
| (4) | Assumes the base management fee will be an amount equal to 0.375% (1.50% annualized) of our average daily Gross Assets during the most recently completed calendar quarter. See “Management and Other Agreements.” |
(5) | The incentive fee, which provides Runway Growth Capital with a share of the income that Runway Growth Capital generates for us, consists of an Investment Income Fee and a Capital Gains Fee. Under the Income Incentive Fee, we pay Runway Growth Capital each quarter an incentive fee with respect to our Pre-Incentive Fee net investment income. The Income Incentive Fee is calculated and payable quarterly in arrears based on the Pre-Incentive Fee net investment income for the immediately preceding fiscal quarter. Payments based on Pre-Incentive Fee net investment income will be based on the Pre-Incentive Fee net investment income earned for the quarter. Pre-Incentive Fee net investment income, expressed as a rate of return on the value of our net assets (defined as total assets less liabilities) at the end of the immediately preceding fiscal quarter, will be compared to a “hurdle rate” of 2.0% per quarter (8.0% annualized). We will pay Runway Growth Capital an Income Incentive Fee with respect to the our Pre-Incentive Fee net investment income in each calendar quarter as follows: (1) no Income Incentive Fee in any calendar quarter in which our Pre-Incentive Fee net investment income does not exceed the hurdle rate of 2.0%; (2) 80% of our Pre-Incentive Fee net investment income with respect to that portion of such Pre-Incentive Fee net investment income, if any, that exceeds the hurdle rate but is less than 2.667% in any calendar quarter (10.668% annualized) (the portion of our Pre-Incentive Fee net investment income that exceeds the hurdle but is less than 2.667% is referred to as the “catch-up”; the “catch-up” is meant to provide Runway Growth Capital with 20.0% of our Pre-Incentive Fee net investment income as if a hurdle did not apply if our Pre-Incentive Fee net investment income exceeds 2.667% in any calendar quarter (10.668% annualized)); and (3) 20.0% of the amount of our Pre-Incentive Fee net investment income, if any, that exceeds 2.667% in any calendar quarter (10.668% annualized) payable to Runway Growth Capital (once the hurdle is reached and the catch-up is achieved, 20.0% of all Pre-Incentive Fee net investment income thereafter is allocated to Runway Growth Capital). Under the Capital Gains Fee, we will pay Runway Growth Capital, as of the end of each calendar year, 20.0% of our aggregate cumulative realized capital gains, if any, from the date of our election to be regulated as a BDC through the end of that calendar year, computed net of our aggregate |
cumulative realized capital losses and aggregate cumulative unrealized capital depreciation through the end of such year, less the aggregate amount of any previously paid Capital Gains Fee. See “Management and Other Agreements.” (6) | Interest payments and fees paid on borrowed funds represents an estimate of our annualized interest expense and fees based on borrowings under the Credit Agreement, the 2027 Senior Notes and the 2026 Senior Notes. We may borrow additional funds from time to time to make investments to the extent we determine that the economic situation is conducive to doing so. We may also issue additional debt securities or preferred stock, subject to our compliance with applicable requirements under the 1940 Act. |
(7) | Includes our overhead and other expenses, such as payments under the Investment Management Agreement for certain expenses incurred by the Adviser and Administration Agreement for certain expenses incurred by the Adminstrator. See “Management and Other Agreements.” We based these expenses on estimated amounts for the current fiscal year. |
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| Management Fees [Percent] |
2.90%
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| Interest Expenses on Borrowings [Percent] |
7.45%
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| Incentive Fees [Percent] |
3.33%
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| Other Annual Expenses [Abstract] |
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| Other Annual Expenses [Percent] |
1.17%
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| Total Annual Expenses [Percent] |
14.85%
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| Expense Example [Table Text Block] |
Example The following example demonstrates the projected dollar amount of total cumulative expenses over various periods with respect to a hypothetical investment in our common stock. In calculating the following expense amounts, we have assumed we would have no additional leverage and that our annual operating expenses would remain at the levels set forth in the table above. Transaction expenses are included in the following example. | | | | | | | | | | | | | | | 1 year | | 3 years | | 5 years | | 10 years | You would pay the following expenses on a $1,000 investment, assuming a 5% annual return from realized capital gains | | $ | 149 | | $ | 403 | | $ | 610 | | $ | 973 |
The foregoing table is to assist you in understanding the various costs and expenses that an investor in our common stock will bear directly or indirectly. While the example assumes, as required by the SEC, a 5% annual return, our performance will vary and may result in a return greater or less than 5%. Because the Income Incentive Fee under the Advisory Agreement is unlikely to be significant assuming a 5% annual return, the example assumes that the 5% annual return will be generated entirely through the realization of capital gains on our assets and, as a result, will trigger the payment of the Capital Gains Fee under the Advisory Agreement. The Income Incentive Fee under the Advisory Agreement, which, assuming a 5% annual return, would either not be payable or have an immaterial impact on the expense amounts shown above, is not included in the example. If we achieve sufficient returns on our investments, including through the realization of capital gains, to trigger an Income Incentive Fee of a material amount, our expenses, and returns to our investors, would be higher. In addition, while the example assumes reinvestment of all dividends and distributions at net asset value, if our Board authorizes and we declare a cash dividend, participants in our dividend reinvestment plan who have not otherwise elected to receive cash will receive a number of shares of our common stock, determined by dividing the total dollar amount of the dividend payable to a participant by the market price per share of our common stock at the close of trading on the valuation date for the dividend. See “Dividend Reinvestment Plan” for additional information regarding our dividend reinvestment plan. This example and the expenses in the table above should not be considered a representation of our future expenses, and actual expenses (including the cost of debt, if any, and other expenses) may be greater or less than those shown.
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| Expense Example, Year 01 |
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$ 149
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| Expense Example, Years 1 to 3 |
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403
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| Expense Example, Years 1 to 5 |
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610
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| Expense Example, Years 1 to 10 |
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$ 973
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| Purpose of Fee Table , Note [Text Block] |
Selling stockholders will pay any underwriting discounts and commissions and expenses incurred by them for brokerage, accounting, tax or legal services or any other expenses incurred by them in selling their shares of our common stock. We will not bear any expenses associated with any offering by the selling stockholders. The following table is intended to assist you in understanding the costs and expenses associated with the offering. We caution you that some of the percentages indicated in the table below are estimates and may vary. The expenses shown in the table under “Annual expenses” are based on estimated amounts for our current fiscal year. The following table should not be considered a representation of our future expenses. Actual expenses may be greater or less than shown.
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| Other Transaction Fees, Note [Text Block] |
| (2) | A related prospectus supplement will disclose the estimated amount of offering expenses, the offering price and the estimated amount of offering expenses borne by the selling stockholders as a percentage of the offering price. |
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| Other Expenses, Note [Text Block] |
| (3) | The expenses of the dividend reinvestment plan are included in “other expenses” in the table above. For additional information, see “Dividend Reinvestment Plan.” |
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| Management Fee not based on Net Assets, Note [Text Block] |
| (4) | Assumes the base management fee will be an amount equal to 0.375% (1.50% annualized) of our average daily Gross Assets during the most recently completed calendar quarter. See “Management and Other Agreements.” |
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| Acquired Fund Incentive Allocation, Note [Text Block] |
(5) | The incentive fee, which provides Runway Growth Capital with a share of the income that Runway Growth Capital generates for us, consists of an Investment Income Fee and a Capital Gains Fee. Under the Income Incentive Fee, we pay Runway Growth Capital each quarter an incentive fee with respect to our Pre-Incentive Fee net investment income. The Income Incentive Fee is calculated and payable quarterly in arrears based on the Pre-Incentive Fee net investment income for the immediately preceding fiscal quarter. Payments based on Pre-Incentive Fee net investment income will be based on the Pre-Incentive Fee net investment income earned for the quarter. Pre-Incentive Fee net investment income, expressed as a rate of return on the value of our net assets (defined as total assets less liabilities) at the end of the immediately preceding fiscal quarter, will be compared to a “hurdle rate” of 2.0% per quarter (8.0% annualized). We will pay Runway Growth Capital an Income Incentive Fee with respect to the our Pre-Incentive Fee net investment income in each calendar quarter as follows: (1) no Income Incentive Fee in any calendar quarter in which our Pre-Incentive Fee net investment income does not exceed the hurdle rate of 2.0%; (2) 80% of our Pre-Incentive Fee net investment income with respect to that portion of such Pre-Incentive Fee net investment income, if any, that exceeds the hurdle rate but is less than 2.667% in any calendar quarter (10.668% annualized) (the portion of our Pre-Incentive Fee net investment income that exceeds the hurdle but is less than 2.667% is referred to as the “catch-up”; the “catch-up” is meant to provide Runway Growth Capital with 20.0% of our Pre-Incentive Fee net investment income as if a hurdle did not apply if our Pre-Incentive Fee net investment income exceeds 2.667% in any calendar quarter (10.668% annualized)); and (3) 20.0% of the amount of our Pre-Incentive Fee net investment income, if any, that exceeds 2.667% in any calendar quarter (10.668% annualized) payable to Runway Growth Capital (once the hurdle is reached and the catch-up is achieved, 20.0% of all Pre-Incentive Fee net investment income thereafter is allocated to Runway Growth Capital). Under the Capital Gains Fee, we will pay Runway Growth Capital, as of the end of each calendar year, 20.0% of our aggregate cumulative realized capital gains, if any, from the date of our election to be regulated as a BDC through the end of that calendar year, computed net of our aggregate |
cumulative realized capital losses and aggregate cumulative unrealized capital depreciation through the end of such year, less the aggregate amount of any previously paid Capital Gains Fee. See “Management and Other Agreements.”
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| Financial Highlights [Abstract] |
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| Senior Securities [Table Text Block] |
| | | | | | | | | | | | | Total Amount | | | | | | | | | | Outstanding | | | | | Involuntary | | | | | Exclusive of | | Asset | | Liquidating | | Average | | | Treasury | | Coverage | | Preference | | Market Value | Class and Period | | Securities(1) | | per Unit(2) | | per Unit(3) | | per Unit(4) | 2027 Notes | | | | | | | | | | | June 30, 2023 (unaudited) | | $ | 152,250 | | $ | 4,769 | | — | | N/A | December 31, 2022 | | $ | 152,250 | | $ | 4,784 | | — | | N/A | December 31, 2021 | | $ | — | | $ | — | | — | | N/A | December 31, 2020 | | $ | — | | $ | — | | — | | N/A | December 31, 2019 | | $ | — | | $ | — | | — | | N/A | December 31, 2018 | | $ | — | | $ | — | | — | | N/A | 2026 Notes | | | | | | | | | | | June 30, 2023 (unaudited) | | $ | 95,000 | | $ | 7,041 | | — | | N/A | December 31, 2022 | | $ | 70,000 | | $ | 9,229 | | — | | N/A | December 31, 2021 | | $ | 20,000 | | $ | 31,310 | | — | | N/A | December 31, 2020 | | $ | — | | $ | — | | — | | N/A | December 31, 2019 | | $ | — | | $ | — | | — | | N/A | December 31, 2018 | | $ | — | | $ | — | | — | | N/A | Credit Facility | | | | | | | | | | | June 30, 2023 (unaudited) | | $ | 310,000 | | $ | 2,851 | | — | | N/A | December 31, 2022 | | $ | 337,000 | | $ | 2,709 | | — | | N/A | December 31, 2021 | | $ | 61,000 | | $ | 10,938 | | — | | N/A | December 31, 2020 | | $ | 99,000 | | $ | 5,710 | | — | | N/A | December 31, 2019 | | $ | 61,000 | | $ | 7,169 | | — | | N/A | December 31, 2018 | | $ | — | | $ | — | | — | | N/A | Credit Facility - CIBC(5) | | | | | | | | | | | June 30, 2023 (unaudited) | | $ | — | | $ | — | | — | | N/A | December 31, 2022 | | $ | — | | $ | — | | — | | N/A | December 31, 2021 | | $ | — | | $ | — | | — | | N/A | December 31, 2020 | | $ | — | | $ | — | | — | | N/A | December 31, 2019 | | $ | — | | $ | — | | — | | N/A | December 31, 2018 | | $ | 59,500 | | $ | 3,813 | | — | | N/A | Total | | | | | | | | | | | June 30, 2023 (unaudited) | | $ | 557,250 | | $ | 2,030 | | — | | N/A | December 31, 2022 | | $ | 559,250 | | $ | 2,030 | | — | | N/A | December 31, 2021 | | $ | 81,000 | | $ | 8,484 | | — | | N/A | December 31, 2020 | | $ | 99,000 | | $ | 5,710 | | — | | N/A | December 31, 2019 | | $ | 61,000 | | $ | 7,169 | | — | | N/A | December 31, 2018 | | $ | 59,500 | | $ | 3,813 | | — | | N/A |
| (1) | Total amount of each class of senior securities outstanding. |
| (2) | Asset coverage per unit is the ratio of the carrying value of total assets, less all liabilities excluding indebtedness represented by senior securities in this table divided by senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness. |
| (3) | The amount to which such class of senior security would be entitled upon the Company’s involuntary liquidation in preference to any security junior to it. The “-“ in this column indicates information that the SEC expressly does not require to be disclosed for certain types of senior securities. |
| (4) | Not applicable because the senior securities are not registered for public trading. |
| (5) | On June 22, 2018, the Company entered into the credit facility with CIBC. On May 31, 2019, in conjunction with securing and entering into the new Credit Facility, the Company terminated the credit facility with CIBC. |
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| Senior Securities Amount |
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$ 557,250
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$ 559,250
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$ 81,000
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$ 99,000
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$ 61,000
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$ 59,500
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| Senior Securities Coverage per Unit |
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$ 2,030
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$ 2,030
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$ 8,484
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$ 5,710
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$ 7,169
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$ 3,813
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| Senior Securities, Note [Text Block] |
SENIOR SECURITIES Information about our senior securities as of the fiscal years ended December 31, 2022, December 31, 2021, December 31, 2020, December 31, 2019 and December 31, 2018 is located in Part II, Item 15, Note 11 – Borrowings in our most recent annual report on Form 10-K and is incorporated by reference into the registration statement of which this prospectus, any accompanying prospectus supplement and any related free writing prospectus is part. The report of RSM US, LLP, our independent registered public accounting form, on the audited consolidated financial statements as of December 31, 2022, December 31, 2021, December 31, 2020, December 31, 2019 and December 31, 2018 is included in our most recent annual report on Form 10-K and is incorporated by reference into the registration statement of which this prospectus, any accompanying prospectus supplement and any related free writing prospectus is part. Information about our senior securities is shown in the following table as of June 30, 2023 (unaudited) and December 31, 2022 (in thousands). | | | | | | | | | | | | | Total Amount | | | | | | | | | | Outstanding | | | | | Involuntary | | | | | Exclusive of | | Asset | | Liquidating | | Average | | | Treasury | | Coverage | | Preference | | Market Value | Class and Period | | Securities(1) | | per Unit(2) | | per Unit(3) | | per Unit(4) | 2027 Notes | | | | | | | | | | | June 30, 2023 (unaudited) | | $ | 152,250 | | $ | 4,769 | | — | | N/A | December 31, 2022 | | $ | 152,250 | | $ | 4,784 | | — | | N/A | December 31, 2021 | | $ | — | | $ | — | | — | | N/A | December 31, 2020 | | $ | — | | $ | — | | — | | N/A | December 31, 2019 | | $ | — | | $ | — | | — | | N/A | December 31, 2018 | | $ | — | | $ | — | | — | | N/A | 2026 Notes | | | | | | | | | | | June 30, 2023 (unaudited) | | $ | 95,000 | | $ | 7,041 | | — | | N/A | December 31, 2022 | | $ | 70,000 | | $ | 9,229 | | — | | N/A | December 31, 2021 | | $ | 20,000 | | $ | 31,310 | | — | | N/A | December 31, 2020 | | $ | — | | $ | — | | — | | N/A | December 31, 2019 | | $ | — | | $ | — | | — | | N/A | December 31, 2018 | | $ | — | | $ | — | | — | | N/A | Credit Facility | | | | | | | | | | | June 30, 2023 (unaudited) | | $ | 310,000 | | $ | 2,851 | | — | | N/A | December 31, 2022 | | $ | 337,000 | | $ | 2,709 | | — | | N/A | December 31, 2021 | | $ | 61,000 | | $ | 10,938 | | — | | N/A | December 31, 2020 | | $ | 99,000 | | $ | 5,710 | | — | | N/A | December 31, 2019 | | $ | 61,000 | | $ | 7,169 | | — | | N/A | December 31, 2018 | | $ | — | | $ | — | | — | | N/A | Credit Facility - CIBC(5) | | | | | | | | | | | June 30, 2023 (unaudited) | | $ | — | | $ | — | | — | | N/A | December 31, 2022 | | $ | — | | $ | — | | — | | N/A | December 31, 2021 | | $ | — | | $ | — | | — | | N/A | December 31, 2020 | | $ | — | | $ | — | | — | | N/A | December 31, 2019 | | $ | — | | $ | — | | — | | N/A | December 31, 2018 | | $ | 59,500 | | $ | 3,813 | | — | | N/A | Total | | | | | | | | | | | June 30, 2023 (unaudited) | | $ | 557,250 | | $ | 2,030 | | — | | N/A | December 31, 2022 | | $ | 559,250 | | $ | 2,030 | | — | | N/A | December 31, 2021 | | $ | 81,000 | | $ | 8,484 | | — | | N/A | December 31, 2020 | | $ | 99,000 | | $ | 5,710 | | — | | N/A | December 31, 2019 | | $ | 61,000 | | $ | 7,169 | | — | | N/A | December 31, 2018 | | $ | 59,500 | | $ | 3,813 | | — | | N/A |
| (1) | Total amount of each class of senior securities outstanding. |
| (2) | Asset coverage per unit is the ratio of the carrying value of total assets, less all liabilities excluding indebtedness represented by senior securities in this table divided by senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness. |
| (3) | The amount to which such class of senior security would be entitled upon the Company’s involuntary liquidation in preference to any security junior to it. The “-“ in this column indicates information that the SEC expressly does not require to be disclosed for certain types of senior securities. |
| (4) | Not applicable because the senior securities are not registered for public trading. |
| (5) | On June 22, 2018, the Company entered into the credit facility with CIBC. On May 31, 2019, in conjunction with securing and entering into the new Credit Facility, the Company terminated the credit facility with CIBC. |
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| General Description of Registrant [Abstract] |
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| Share Price [Table Text Block] |
Prior to our initial public offering, the shares of our common stock were offered and sold in transactions exempt from registration under the Securities Act. As such there was no public market for shares of our common stock during the year ended December 31, 2020. The following table sets forth the most recent fiscal quarter’s NAV per share of our common stock, the high and low closing sales prices of our common stock, such sales prices as a percentage of NAV per share and quarterly distribution per share. | | | | | | | | | | | | | | | | | | | | | | | | | | | | High | | Low | | | | | | | | | | | | | | | Sale Price | | Sale Price | | | | | | | | | | | | | | | Premium | | Premium | | | | | | | | | | | | | | | (Discount) | | (Discount) | | Cash | | | Net Asset | | Price Range | | to Net Asset | | to Net Asset | | Dividend | Class and Period | | Value(1) | | High | | Low | | Value(2) | | Value(2) | | Per Share(3) | Year ending December 31, 2023 | | | | | | | | | | | | | | | | | (through October 24, 2023) | | | * | | $ | 12.64 | | $ | 11.90 | | * | | * | | $ | 0 | Third Quarter | | | * | | | 13.55 | | | 12.15 | | * | | * | | | 0.45 | Second Quarter | | $ | 14.17 | | | 12.63 | | | 10.60 | | (10.9) | % | (25.2) | % | | 0.45 | First Quarter | | | 14.07 | | | 13.85 | | | 10.89 | | (1.6) | | (22.6) | | | 0.45 | Year ending December 31, 2022 | | | | | | | | | | | | | | | | | Fourth Quarter | | | 14.22 | | | 13.52 | | | 11.31 | | (4.9) | | (20.5) | | | 0.36 | Third Quarter | | | 14.12 | | | 13.81 | | | 11.24 | | (2.2) | | (20.4) | | | 0.33 | Second Quarter | | | 14.14 | | | 14.51 | | | 10.98 | | 2.6 | | (22.3) | | | 0.30 | First Quarter | | | 14.45 | | | 14.77 | | | 12.21 | | 2.2 | | (15.5) | | | 0.27 | Year ending December 31, 2021 | | | | | | | | | | | | | | | | | Fourth Quarter(4) | | | 14.65 | | | 13.92 | | | 12.04 | | (5.0) | | (17.8) | | | 0.25 |
* | Not determined at time of filing. |
| (1) | NAV per share is generally determined as of the last day in the relevant quarter and therefore may not reflect the NAV per share on the date of the high and low sales prices. |
| (2) | Represents the dividend or distribution declared in the relevant quarter. |
| (3) | Shares of our common stock began trading on Nasdaq on October 21, 2021 under the trading symbol “RWAY”. |
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| Lowest Price or Bid |
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$ 11.90
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$ 12.15
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$ 10.60
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$ 10.89
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$ 11.31
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$ 11.24
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$ 10.98
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$ 12.21
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$ 12.04
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| Highest Price or Bid |
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$ 12.64
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$ 13.55
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$ 12.63
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$ 13.85
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$ 13.52
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$ 13.81
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$ 14.51
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$ 14.77
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$ 13.92
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| Highest Price or Bid, Premium (Discount) to NAV [Percent] |
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(10.90%)
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(1.60%)
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(4.90%)
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(2.20%)
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2.60%
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2.20%
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(5.00%)
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| Lowest Price or Bid, Premium (Discount) to NAV [Percent] |
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(25.20%)
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(22.60%)
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(20.50%)
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(20.40%)
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(22.30%)
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(15.50%)
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(17.80%)
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| Latest Share Price |
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$ 12.32
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$ 12.02
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| Latest Premium (Discount) to NAV [Percent] |
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15.20%
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| Latest NAV |
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$ 13.36
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$ 14.17
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$ 14.07
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$ 14.22
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$ 14.12
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$ 14.14
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$ 14.45
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$ 14.65
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$ 14.17
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| Capital Stock, Long-Term Debt, and Other Securities [Abstract] |
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| Outstanding Securities [Table Text Block] |
The following presents our outstanding classes of securities as of October 24, 2023: | | | | | | | | | | | | | Amount | | | | | | | Outstanding | | | | | Amount Held | | Exclusive of | | | Amount | | by Us or for | | Amount Held by Us | Title of Class | | Authorized | | Our Account | | or for Our Account | Common Stock | | 100,000,000 | | 871,345 | | 40,509,269 |
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| Outstanding Security, Title [Text Block] |
common stock
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| Outstanding Security, Authorized [Shares] |
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100,000,000
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| Outstanding Security, Held [Shares] |
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871,345
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| Outstanding Security, Not Held [Shares] |
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40,509,269
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| 2027 Notes |
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| Financial Highlights [Abstract] |
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| Senior Securities Amount |
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$ 152,250
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$ 152,250
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| Senior Securities Coverage per Unit |
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$ 4,769
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$ 4,784
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| 2026 Notes |
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| Financial Highlights [Abstract] |
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| Senior Securities Amount |
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$ 95,000
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$ 70,000
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$ 20,000
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| Senior Securities Coverage per Unit |
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$ 7,041
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$ 9,229
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$ 31,310
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| Credit Facility |
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| Financial Highlights [Abstract] |
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| Senior Securities Amount |
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$ 310,000
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$ 337,000
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$ 61,000
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$ 99,000
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$ 61,000
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| Senior Securities Coverage per Unit |
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$ 2,851
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$ 2,709
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$ 10,938
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$ 5,710
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$ 7,169
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| Credit Facility - CIBC |
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| Financial Highlights [Abstract] |
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| Senior Securities Amount |
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$ 59,500
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| Senior Securities Coverage per Unit |
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$ 3,813
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| Common Stock |
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| Capital Stock, Long-Term Debt, and Other Securities [Abstract] |
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| Capital Stock [Table Text Block] |
Common Stock All shares of our common stock have equal rights as to earnings, assets, voting, and dividends and, when they are issued, will be duly authorized, validly issued, fully paid and nonassessable. Distributions may be paid to the holders of our common stock if, as and when authorized by our Board and declared by us out of assets legally available therefor. Shares of our common stock have no preemptive, conversion or redemption rights and are freely transferable, except where their transfer is restricted by federal and state securities laws or by contract. In the event of our liquidation, dissolution or winding up, each share of our common stock would be entitled to share ratably in all of our assets that are legally available for distribution after we pay all debts and other liabilities and subject to any preferential rights of holders of our preferred stock, if any preferred stock is outstanding at such time. Each share of our common stock is entitled to one vote on all matters submitted to a vote of stockholders, including the election of directors. Except as provided with respect to any other class or series of stock, the holders of our common stock will possess exclusive voting power. There is no cumulative voting in the election of directors, which means that holders of a majority of the outstanding shares of common stock can elect all of our directors, and holders of less than a majority of such shares will be unable to elect any director.
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| Security Title [Text Block] |
Common Stock
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| Security Dividends [Text Block] |
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Distributions may be paid to the holders of our common stock if, as and when authorized by our Board and declared by us out of assets legally available therefor.
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| Security Voting Rights [Text Block] |
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Each share of our common stock is entitled to one vote on all matters submitted to a vote of stockholders, including the election of directors. Except as provided with respect to any other class or series of stock, the holders of our common stock will possess exclusive voting power. There is no cumulative voting in the election of directors, which means that holders of a majority of the outstanding shares of common stock can elect all of our directors, and holders of less than a majority of such shares will be unable to elect any director.
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| Security Liquidation Rights [Text Block] |
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In the event of our liquidation, dissolution or winding up, each share of our common stock would be entitled to share ratably in all of our assets that are legally available for distribution after we pay all debts and other liabilities and subject to any preferential rights of holders of our preferred stock, if any preferred stock is outstanding at such time.
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| Security Preemptive and Other Rights [Text Block] |
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Shares of our common stock have no preemptive, conversion or redemption rights and are freely transferable, except where their transfer is restricted by federal and state securities laws or by contract.
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