UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _______________

Commission file number: 814-00672




	OHA Investment Corporation
	(Exact name of registrant as specified in its charter)

Maryland		20-1371499
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

1114 Avenue of the Americas, 27th Floor		10036
New York, New York		(Zip Code)
(Address of principal executive offices)

(212) 852-1900

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer o	Accelerated filer o	Non-accelerated filer x	Smaller reporting company o	Emerging growth company o
		(Do not check if smaller reporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading symbol	Name of each exchange on which registered
Common stock, $0.001 par value	OHAI	Nasdaq Global Select Market

As of November 12, 2019, there were 20,172,392 shares of the registrant’s common stock outstanding.

Table of Contents



PART I – FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements	3

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3. Quantitative and Qualitative Disclosures About Market Risk	39

Item 4. Controls and Procedures	39

PART II – OTHER INFORMATION

Item 1. Legal Proceedings	40

Item 1A. Risk Factors	40

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	41

Item 3. Defaults Upon Senior Securities	41

Item 4. Mine Safety Disclosures	41

Item 5. Other information	41

Item 6. Exhibits	41

SIGNATURES	42

PART I – FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

OHA INVESTMENT CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)



	September 30, 2019			December 31, 2018
	(unaudited)
Assets
Investments in portfolio securities at fair value
Affiliate investments (cost: $26,028 and $26,028, respectively)	$	2,422		$	2,271
Non-affiliate investments (cost: $80,722 and $85,306, respectively)	59,982			63,335
Total portfolio investments (cost: $106,750 and $111,334, respectively)	62,404			65,606
Investments in U.S. Treasury Bills at fair value (cost: $9,999 and $14,989, respectively)	9,999			14,989
Total investments	72,403			80,595
Cash and cash equivalents	4,497			3,124
Accounts receivable and other current assets	492			499
Interest receivable	425			224
Other prepaid assets	34			19
Deferred tax asset	158			316
Total current assets	5,606			4,182
Total assets	$	78,009		$	84,777

Liabilities
Current liabilities
Due to broker	$	199		$	3,251
Distributions payable	403			403
Accounts payable and accrued expenses	1,697			683
Due to affiliate (Note 4)	122			571
Management and incentive fees payable (Note 4)	351			366
Income taxes payable	39			39
Repurchase agreement	9,800			14,689
Short-term debt, net of debt issuance costs	29,894			—
Total current liabilities	42,505			20,002
Long-term debt, net of debt issuance costs	—			28,866
Total liabilities	42,505			48,868
Commitments and contingencies (Note 6)
Net assets
Common stock, $.001 par value, 250,000,000 shares authorized; 20,172,392 and 20,172,392 shares issued and outstanding, respectively	20			20
Paid-in capital in excess of par	211,907			211,907
Total distributable earnings (loss)	(176,423		)	(176,018		)
Total net assets	35,504			35,909
Total liabilities and net assets	$	78,009		$	84,777
Net asset value per share	$	1.76		$	1.78

(See accompanying notes to consolidated financial statements)

OHA INVESTMENT CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)



	For the three months ended September 30,						For the nine months ended September 30,
	2019			2018			2019			2018
Investment income:
Interest income:
Affiliate investments	$	—		$	(209	)	$	—		$	43
Payment-in-kind from affiliate investments	—			668			—			2,722
Non-affiliate investments	1,496			1,360			4,499			3,807
Money market interest	18			50			50			190
Other income	4			17			18			34
Total investment income	1,518			1,886			4,567			6,796
Operating expenses:
Interest expense and bank fees	620			767			1,860			2,391
Management fees (Note 4)	305			397			925			1,181
Incentive fees (Note 4)	(32		)	6			46			6
Costs related to strategic alternatives review	754			—			1,063			75
Professional fees	(31		)	260			406			1,120
Allocation of administrative expenses from advisor (Note 4)	371			298			1,113			962
Other general and administrative expenses	29			40			161			210
Directors' fees	62			61			184			184
Total operating expenses	2,078			1,829			5,758			6,129
Waived incentive fees (Note 4)	—			(6		)	—			(6		)
Income tax provision, net	—			7			15			45
Net investment income (loss)	(560		)	56			(1,206		)	628
Realized and unrealized gain (loss) on investments:
Net realized capital gain (loss) on investments
Control investments	—			—			178			—
Non-affiliate investments	—			—			451			(55,952		)
Provision for taxes	—			3			—			(39		)
Total net realized capital gain (loss) on investments	—			3			629			(55,991		)
Net unrealized appreciation on investments
Affiliate investments	(110		)	(7,812		)	151			(10,064		)
Non-affiliate investments	(429		)	1,804			1,231			62,218
Total net unrealized appreciation (depreciation) on investments	(539		)	(6,008		)	1,382			52,154

Net increase (decrease) in net assets resulting from operations	$	(1,099	)	$	(5,949	)	$	805		$	(3,209	)

Net increase (decrease) in net assets resulting from operations per common share	$	(0.05	)	$	(0.29	)	$	0.04		$	(0.16	)

Distributions declared per common share	$	0.02		$	0.02		$	0.06		$	0.06
Weighted average shares outstanding - basic and diluted	20,172			20,172			20,172			20,172

(See accompanying notes to consolidated financial statements)

OHA INVESTMENT CORPORATION

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS

(in thousands, except share data)

(unaudited)



	Common Stock			Paid in Capital in Excess of Par		Distributable Earnings (Loss)			Total Net Assets
	Shares	Par Amount		Paid in Capital in Excess of Par		Distributable Earnings (Loss)			Total Net Assets
Balance at December 31, 2018	20,172,392	$	20	$	211,907	$	(176,018	)	$	35,909
Net investment loss	—	—		—		(145		)	(145		)
Net realized and unrealized gain	—	—		—		1,692			1,692
Distributions to common stockholders	—	—		—		(404		)	(404		)
Balance at March 31, 2019	20,172,392	20		211,907		(174,875		)	37,052
Net investment loss	—	—		—		(501		)	(501		)
Net realized and unrealized gain	—	—		—		858			858
Distributions to common stockholders	—	—		—		(403		)	(403		)
Balance at June 30, 2019	20,172,392	20		211,907		(174,921		)	37,006
Net investment loss	—	—		—		(560		)	(560		)
Net realized and unrealized loss	—	—		—		(539		)	(539		)
Distributions to common stockholders	—	—		—		(403		)	(403		)
Balance at September 30, 2019	20,172,392	$	20	$	211,907	$	(176,423	)	$	35,504

	Common Stock			Paid in Capital in Excess of Par		Distributable Earnings (Loss)			Total Net Assets
	Shares	Par Amount		Paid in Capital in Excess of Par		Distributable Earnings (Loss)			Total Net Assets
Balance at December 31, 2017	20,172,392	$	20	$	234,553	$	(186,802	)	$	47,771
Net investment loss	—	—		—		(95		)	(95		)
Net realized and unrealized gain	—	—		—		1,827			1,827
Distributions to common stockholders	—	—		—		(404		)	(404		)
Balance at March 31, 2018	20,172,392	20		234,553		(185,474		)	49,099
Net investment income	—	—		—		667			667
Net realized and unrealized gain	—	—		—		340			340
Distributions to common stockholders	—	—		—		(403		)	(403		)
Balance at June 30, 2018	20,172,392	20		234,553		(184,870		)	49,703
Net investment income	—	—		—		56			56
Net realized and unrealized loss	—	—		—		(6,004		)	(6,004		)
Distributions to common stockholders	—	—		—		(403		)	(403		)
Balance at September 30, 2018	20,172,392	$	20	$	234,553	$	(191,221	)	$	43,352

(See accompanying notes to consolidated financial statements)

OHA INVESTMENT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)



	For the nine months ended September 30,
	2019			2018
Cash flows from operating activities:
Net increase (decrease) in net assets resulting from operations	$	805		$	(3,209	)
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:
Payment-in-kind interest	—			(3,550		)
Net amortization of premiums, discounts and fees	(203		)	(371		)
Net realized capital (gain) loss on investments	(629		)	55,952
Net unrealized depreciation (appreciation) on investments	(1,382		)	(52,153		)
Purchase of investments in portfolio securities	(12,014		)	(25,599		)
Proceeds from redemption or sale of investments in portfolio securities	15,173			20,686
Proceeds from revolving loans, net of draws	369			16
Purchase of investments in U.S. Treasury Bills	(30,000		)	(52,000		)
Proceeds from redemption of investments in U.S. Treasury Bills	34,990			50,001
Proceeds from ATP production payments applied to cost basis	1,889			860
Amortization of debt issuance costs on Credit Facility	103			226
Effects of changes in operating assets and liabilities:
Accounts receivable and other current assets	9			(7		)
Interest receivable	(201		)	227
Prepaid assets	(15		)	(4		)
Payables and accrued expenses	999			(477		)
Deferred tax asset	158			39
Due from broker	(3		)	—
Due to broker	(3,052		)	—
Due to affiliate	(449		)	(434		)
Net cash provided by (used in) operating activities	6,547			(9,797		)
Cash flows from financing activities:
Borrowings under credit facilities	3,000			—
Borrowings under repurchase agreement	29,394			50,942
Debt issuance cost paid	(75		)	(174		)
Repayments on Credit Facility	(2,000		)	(7,000		)
Repayments on repurchase agreement	(34,283		)	(48,982		)
Distributions to common stockholders	(1,210		)	(1,210		)
Net cash used in financing activities	(5,174		)	(6,424		)
Net change in cash and cash equivalents	1,373			(16,221		)
Cash and cash equivalents, beginning of period	3,124			19,939
Cash and cash equivalents, end of period	$	4,497		$	3,718

(See accompanying notes to consolidated financial statements)

OHA INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2019

(in thousands, except share amounts and percentages)

(unaudited)



Portfolio Company	Industry Segment	Investment⁽¹⁾	Acquisition Date⁽¹⁵⁾	Principal		Cost		Fair Value

Affiliate Investments - (5% to 25% owned)
OCI Holdings, LLC	Home Health Services	Subordinated Note (1M LIBOR+19.0% PIK with a 1.0% floor), 21.05%, due 2/29/2020^(2)(6)(11)		$	30,187	$	23,528	$	2,422
OCI Holdings, LLC	Home Health Services	100% of Class A Units in OHA/OCI Investments, LLC representing 20.8% diluted ownership of OCI Holdings, LLC⁽²⁾⁽⁸⁾				2,500		—
Subtotal Affiliate Investments - (5% to 25% owned)						$	26,028	$	2,422

Non-affiliate Investments - (Less than 5% owned)
Equinox Holdings, Inc.	Leisure Goods, Activities, Movies	Second Lien Term Loan (1M LIBOR+7.00% with a 1.0% floor), 9.04%, due 9/6/2024⁽³⁾	3/8/2017	$	7,000	$	6,962	$	7,053
PAE Holding Corporation	Aerospace and Defense	Second Lien Term Loan (3M LIBOR+9.50% with a 1.0% floor), 11.60%, due 10/20/2023⁽³⁾	10/20/2016	6,888		6,766		6,802
Ministry Brands, LLC	Business Services	Second Lien Term Loan (2M LIBOR+8.00% with a 1.0% floor), 10.09%, due 6/2/2023⁽²⁾	5/30/2018	6,000		5,953		6,000
NAVEX	Software	Second Lien Term Loan (3M LIBOR+7.00%), 9.13%, due 9/5/2026⁽³⁾	8/9/2018	4,700		4,659		4,659
PowerSchool	Business Services	Second Lien Term Loan (3M LIBOR+6.75%), 8.96%, due 8/1/2026⁽³⁾	6/12/2018	3,800		3,766		3,781
ATP Oil & Gas Corporation/Bennu Oil & Gas, LLC	Oil & Natural Gas Production and Development	Limited Term Royalty Interest (notional rate of 13.2%)^(2)(7)(11)	9/30/2014	—		24,561		3,672
Sedgwick	Insurance	Unsecured Term Loan, 9.00%, due 12/31/2026⁽³⁾	12/31/2018	3,300		3,254		3,300
DexKo Global, Inc.	Automotive	Second Lien Term Loan (3M LIBOR+8.25% with a 1.0% floor), 10.35%, due 7/24/2025⁽³⁾	7/13/2017	2,935		2,917		2,935
WASH Multifamily Acquisition, Inc.	Industrials - Laundry Equipment	Second Lien Term Loan (1M LIBOR+7.00% with a 1.0% floor), 9.04%, due 5/14/2023⁽³⁾	5/14/2015	2,978		2,966		2,908
Coinamatic Canada, Inc.⁽⁵⁾	Industrials - Laundry Equipment	Second Lien Term Loan (1M LIBOR+7.00% with a 1.0% floor), 9.04%, due 5/14/2023⁽³⁾	5/14/2015	522		520		509
Hayward Industries, Inc.	Consumer Goods	Second Lien Term Loan (1M LIBOR+8.25%), 10.29%, due 8/4/2025⁽³⁾	7/18/2017	2,159		2,162		2,051

OHA INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS - Continued

September 30, 2019

(in thousands, except share amounts and percentages)

(unaudited)



Portfolio Company	Industry Segment	Investment⁽¹⁾	Acquisition Date⁽¹⁵⁾	Principal		Cost			Fair Value

Non-affiliate Investments - (Less than 5% owned) - Continued
CentralSquare Technologies	Software	Second Lien Term Loan (1M LIBOR+7.50%), 9.54%, due 8/31/2026⁽³⁾	8/15/2018	$	2,000	$	1,953		$	1,903
Ensono	Telecommunications	Second Lien Term Loan (1M LIBOR+9.25%), 11.29%, due 6/27/2026⁽³⁾	5/3/2018	1,700		1,639			1,677
Blackboard Transact	Software	Second Lien Term Loan (3M LIBOR+8.50%), 10.76%, due 4/30/2027⁽²⁾	3/7/2019	1,455		1,405			1,425
Aptean	Software	Second Lien Term Loan (3M LIBOR+8.50%), 10.60%, due 4/23/2027⁽²⁾	2/25/2019	1,400		1,359			1,372
MW Industries (Helix Acquisition)	Industrials	Second Lien Term Loan (3M LIBOR+8.00%), 10.10%, due 9/29/2025⁽³⁾	9/28/2017	1,400		1,389			1,340
JS Held	Business Equipment and Services	First Lien Term Loan (LIBOR+6.00%), 8.31%, due 7/1/2025⁽²⁾	5/16/2019	1,248		1,218			1,235
JS Held	Business Equipment and Services	Revolver (Funded: Prime+5.00%, Unfunded: 0.5%), 10.00%, due 7/1/2025^(2)(12)	5/16/2019	10		7			9
JS Held	Business Equipment and Services	Delayed Draw Term Loan (Funded: LIBOR+6.00%, Unfunded: 1.0%), 8.31%, due 7/1/2025^(2)(13)	5/16/2019	—		(6		)	(3		)
PharMerica	Healthcare	Second Lien Term Loan (1M LIBOR+8.50% with a 1.0% floor), 10.54%, due 3/5/2027⁽³⁾	2/19/2019	1,200		1,171			1,212
Caliber Collision	Automotive	Second Lien Term Loan (1M LIBOR+7.25%), 9.29%, due 2/5/2027⁽³⁾	12/19/2018	1,100		1,082			1,100
Vertafore, Inc.	Business Services	Second Lien Term Loan (1M LIBOR+7.25%), 9.29%, due 7/2/2026⁽³⁾	6/4/2018	900		892			888
Imperial Dade	Food Services	Second Lien Term Loan (1M LIBOR+8.00%), 10.04%, due 6/11/2027⁽²⁾	5/20/2019	833		813			825
Imperial Dade	Food Services	Delayed Draw Term Loan (Funded: LIBOR+8.00%), 10.04%, due 6/11/2027^(2)(14)	5/20/2019	—		(2		)	(2		)
Safe Fleet Holdings, LLC	Industrials	Second Lien Term Loan (1M LIBOR+6.75% with a 1.0% floor), 8.79%, due 2/1/2026⁽³⁾	1/23/2018	700		697			679

OHA INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS - Continued

September 30, 2019

(in thousands, except share amounts and percentages)

(unaudited)



Portfolio Company	Industry Segment	Investment⁽¹⁾	Acquisition Date	Principal		Cost			Fair Value

Non-affiliate Investments - (Less than 5% owned) - Continued
Ardonagh⁽⁵⁾	Insurance	Senior Secured Notes 8.63%, due 7/15/2023⁽³⁾	11/2/2018	$	600	$	549		$	573
ClearChoice (CC Dental Implants Intermediate)	Healthcare	First Lien Term Loan (Last Out) (1M LIBOR+6.50% with a 1.0% floor), 8.90%, due 1/2/2023^(2)(10)	3/21/2018	500		496			500
ClearChoice (CC Dental Implants Intermediate)	Healthcare	First Lien Revolver (Last Out) (Funded: 1M LIBOR+6.50% with a 1.0% floor, Unfunded: 0.75%), 8.55%, due 1/2/2023^(2)(9)(10)	3/21/2018	—		(11		)	—
MedRisk, LLC	Healthcare	Second Lien Term Loan (1M LIBOR+6.75%), 8.79%, due 12/28/2025⁽³⁾	1/25/2018	500		498			494
FirstLight Fiber	Telecommunications	Second Lien Term Loan (1M LIBOR+7.50%), 9.54%, due 7/23/2026⁽³⁾	6/19/2018	400		396			397
EaglePicher Technologies, LLC	Aerospace and Defense	Second Lien Term Loan (1M LIBOR+7.25%), 9.29% due 3/9/2026⁽³⁾	2/23/2018	400		392			388
Edelman Financial Services, LLC	Financial Services	Second Lien Term Loan (1M LIBOR+6.75%), 8.81%, due 7/20/2026⁽³⁾	6/26/2018	300		299			300
Subtotal Non-affiliate Investments - (Less than 5% owned)						$	80,722		$	59,982
Subtotal Portfolio Investments (86.2% of total investments)						$	106,750		$	62,404

GOVERNMENT SECURITIES
U.S. Treasury Bills (CUSIP 912796SL4)⁽⁴⁾		1.66%	9/30/2019	$	10,000	$	9,999		$	9,999
Subtotal Government Securities (13.8% of total investments)						$	9,999		$	9,999

TOTAL INVESTMENTS						$	116,749		$	72,403

NOTES TO CONSOLIDATED SCHEDULE OF INVESTMENTS

⁽¹⁾

The Company generally acquires its investments in private transactions exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"). These investments are generally subject to certain limitations on resale, and may be deemed to be "restricted securities" under the Securities Act. We pledged all of our portfolio investments, except our investments in U.S. Treasury Bills, as collateral for obligations under our Credit Facility. See Note 3 to Consolidated Financial Statements. The majority of the investments bear interest at a rate that maybe determined by reference to London Interbank Offered Rate ("LIBOR") or Prime and which reset daily, monthly, quarterly, semiannually or annually. For each, the Company has provided the spread over LIBOR or Prime and the weighted average current interest rate in effect as of September 30, 2019. Certain investments are subject to a LIBOR or Prime interest rate floor. For fixed rate investments, a spread above a reference rate is not applicable. As of September 30, 2019, the index rates for 1M LIBOR, 2M LIBOR , and 3M LIBOR are 2.02%, 2.07%, and 2.09%, respectively. The actual index rate for each investment listed may not be the applicable index rate outstanding as of September 30, 2019, as the loan may have priced or repriced based on an index rate prior to September 30, 2019. Due dates represent the contractual maturity dates. Common stock and units are non-income producing securities, unless otherwise stated.

OHA INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS - Continued

September 30, 2019

(in thousands, except share amounts and percentages)

NOTES TO CONSOLIDATED SCHEDULE OF INVESTMENTS - Continued


⁽²⁾	The Audit Committee recommends fair values of each asset to our Board of Directors, which in good faith determines the final fair value for each investment. Fair value is determined using unobservable inputs (Level 3 hierarchy), unless otherwise stated. See Note 7 to the Consolidated Financial Statements.


⁽³⁾	Fair value is determined using prices with observable market inputs (Level 2 hierarchy). See Note 7 to the Consolidated Financial Statements.


⁽⁴⁾	Fair value is determined using prices for identical securities in active markets (Level 1 hierarchy). See Note 7 to the Consolidated Financial Statements.

⁽⁵⁾

We have determined that this investment is not a “qualifying asset” under Section 55(a) of the Investment Company Act of 1940, or the 1940 Act. Under the 1940 Act, we may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of our total assets. The status of these assets under the 1940 Act is subject to change. We monitor the status of these assets on an ongoing basis. As of September 30, 2019, 1.73% of our investment portfolio was deemed not to be "qualifying assets" under Section 55(a) of the 1940 Act.

⁽⁶⁾

During the fourth quarter of 2016, we executed a series of amendments to our note purchase and security agreement with OCI Holdings, LLC, or OCI, to allow the company to PIK its LIBOR+12% cash interest for November and December 2016. Also, default interest of $0.1 million and current unpaid interest of $0.4 million was added to the principal balance in the fourth quarter 2016. OCI remains in financial covenant default. During 2017, we executed a number of amendments to our note purchase and security agreement with OCI that allows the company to continue to PIK its LIBOR+12% cash interest during 2017. Through June 30, 2018, we have allowed the company to continue to PIK its 12% cash interest while paying the 2% default interest in cash. In June 2018, we executed an amendment to our note purchase and security agreement with OCI to extend its maturity date to August 31, 2019. In September 2018, we executed an amendment to our note purchase and security agreement whereby we exchanged $217,625 of cash default interest previously paid to us by the company in 2018 for PIK interest, which was added to the principal outstanding balance of the note, on and as of the date the default interest payment was originally made. This amendment also allows the company to PIK its default interest through December 31, 2018. In 2019, OCI continues to be in default and continues to PIK all of its interest, including default interest. Beginning in the 4th quarter of 2018, OCI subordinated note was placed on non-accrual status. In October 2019, we executed an amendment to our note purchase and security agreement with OCI to extend its maturity date to February 29, 2020.

⁽⁷⁾

Effective April 1, 2018, we discontinued income recognition on this investment and it remains on non-accrual status. All production payments received after April 1, 2018 are being applied to our cost basis and considered return of capital. Previously, ATP was on non-accrual status where income was recognized to the extent production payments were received. For more information on ATP, refer to the discussion of the ATP litigation in Note 6 to the Consolidated Financial Statements.


⁽⁸⁾	Non-income producing equity security.

⁽⁹⁾

Represents a revolving line of credit of which $1.7 million of the $1.7 million total commitment is unfunded at September 30, 2019. The revolving line of credit includes a 0.75% unused fee applied to the unfunded amount. In February 2019, ClearChoice executed an amendment to the financing agreement which increased the amount committed by OHAI under the revolving line of credit from $1.6 million to $1.7 million and modified certain other loan covenants.


⁽¹⁰⁾	Investment is entitled to skim interest which results in a higher interest rate spread of approximately 30 basis points.


⁽¹¹⁾	Investment on non-accrual status and therefore non-income producing.


⁽¹²⁾	Represents a revolving line of credit of which $133 thousand of the $143 thousand total commitment is unfunded at September 30, 2019. The revolving line of credit includes a 0.5% unused fee.


⁽¹³⁾	Represents a delayed draw term loan with a total commitment of $306 thousand all of which is unfunded at September 30, 2019. The delayed draw term loan includes a 1.0% unused fee.


⁽¹⁴⁾	Represents a delayed draw term loan with a total commitment of $167 thousand all of which is unfunded at September 30, 2019.


⁽¹⁵⁾	Acquisition date represents the date of initial investment in the portfolio investment.

(See accompanying notes to consolidated financial statements)

OHA INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2018

(in thousands, except share amounts and percentages)



Portfolio Company	Industry Segment	Investment⁽¹⁾	Acquisition Date⁽¹²⁾	Principal		Cost		Fair Value

Affiliate Investments - (5% to 25% owned)
OCI Holdings, LLC	Home Health Services	Subordinated Note (1M LIBOR+ 19.0% PIK with a 1.0% floor ), 21.51%, due 8/31/2019^(2)(6)(11)		$	25,711	$	23,528	$	2,271
OCI Holdings, LLC	Home Health Services	100% of Class A Units in OHA/OCI Investments, LLC representing 20.8% diluted ownership of OCI Holdings, LLC⁽²⁾⁽⁸⁾				2,500		—
Subtotal Affiliate Investments - (5% to 25% owned)						$	26,028	$	2,271

Non-affiliate Investments - (Less than 5% owned)
Equinox Holdings, Inc.	Leisure Goods, Activities, Movies	Second Lien Term Loan (1M LIBOR+7.0% with a 1.0% floor), 9.52%, due 9/6/2024⁽³⁾	3/8/2017	$	7,000	$	6,957	$	7,018
PAE Holding Corporation	Aerospace and Defense	Second Lien Term Loan (2M LIBOR+9.50% with a 1.0% floor), 12.12%, due 10/20/2023⁽³⁾	10/20/2016	6,888		6,749		6,785
Ministry Brands, LLC	Business Services	Second Lien Term Loan (1M LIBOR+8.0% with a 1.0% floor), 10.52%, due 6/2/2023⁽²⁾	5/30/2018	6,000		5,945		5,880
Avantor Performance Materials, Inc.	Chemicals	Senior Unsecured Notes, 9.00%, due 10/1/2025⁽³⁾	9/22/2017	5,000		5,000		5,000
ATP Oil & Gas Corporation/Bennu Oil & Gas, LLC	Oil & Natural Gas Production and Development	Limited Term Royalty Interest (notional rate of 13.2%)^(2)(7)(11)	9/30/2014	—		26,450		4,778
CVS Holdings I, LP (MyEyeDr)	Retail	Second Lien Term Loan (1M LIBOR+6.75% with a 1.0% floor), 9.28%, due 2/6/2026⁽³⁾	2/1/2018	5,000		4,977		4,725
PowerSchool	Business Services	Second Lien Term Loan (1M LIBOR+6.75%), 9.13%, due 8/1/2026⁽³⁾	6/12/2018	3,800		3,763		3,762
WASH Multifamily Acquisition, Inc.	Industrials - Laundry Equipment	Second Lien Term Loan (1M LIBOR+7.0% with a 1.0% floor), 9.52%, due 5/14/2023⁽³⁾	5/14/2015	3,404		3,388		3,293
Sedgwick	Insurance	Unsecured Term Loan, 9.00%, due 12/31/2026⁽³⁾	12/31/2018	3,300		3,251		3,251
DexKo Global, Inc.	Automotive	Second Lien Term Loan (3M LIBOR+8.25% with a 1.0% floor), 11.05%, due 7/24/2025⁽³⁾	7/13/2017	3,000		2,979		3,000

OHA INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS - Continued

December 31, 2018

(in thousands, except share amounts and percentages)



Portfolio Company	Industry Segment	Investment⁽¹⁾	Acquisition Date⁽¹²⁾	Principal		Cost		Fair Value

Non-affiliate Investments - (Less than 5% owned) - Continued
TIBCO Software, Inc.	Software	Senior Unsecured Notes, 11.38%, due 12/1/2021⁽³⁾	7/7/2015	$	2,100	$	1,995	$	2,200
Hayward Industries, Inc.	Consumer Goods	Second Lien Term Loan (1M LIBOR+8.25%), 10.77%, due 8/04/2025⁽³⁾	7/18/2017	2,159		2,163		2,127
CentralSquare Technologies	Software	Second Lien Term Loan (1M LIBOR+7.50%), 10.02%, due 8/31/2026⁽³⁾	8/15/2018	2,000		1,950		2,000
Ensono	Telecommunications	Second Lien Term Loan (1M LIBOR+9.25%), 11.77%, due 6/27/2026⁽³⁾	5/3/2018	1,700		1,635		1,653
MW Industries (Helix Acquisition)	Industrials	Second Lien Term Loan (3M LIBOR+8.0%), 10.80%, due 9/29/2025⁽³⁾	9/28/2017	1,400		1,388		1,379
Allied Universal Holdco, LLC	Business Services	Second Lien Term Loan (1M LIBOR+8.50% with a 1.0% floor), 11.02%, due 7/28/2023⁽³⁾	3/15/2018	1,250		1,250		1,191
Vertafore, Inc.	Business Services	Second Lien Term Loan (3M LIBOR+7.25%), 10.05%, due 7/2/2026⁽³⁾	6/4/2018	900		891		865
Safe Fleet Holdings, LLC	Industrials	Second Lien Term Loan (1M LIBOR+6.75% with a 1.0% floor), 9.13%, due 2/1/2026⁽³⁾	1/23/2018	700		697		665
Coinamatic Canada, Inc.⁽⁵⁾	Industrials - Laundry Equipment	Second Lien Term Loan (1M LIBOR+7.0% with a 1.0% floor), 9.52%, due 5/14/2023⁽³⁾	5/14/2015	596		593		577
Ardonagh⁽⁵⁾	Insurance	Senior Secured Notes, 8.625%, due 7/15/2023⁽³⁾	11/2/2018	600		541		513
MedRisk, LLC	Healthcare	Second Lien Term Loan (1M LIBOR+6.75%), 9.27%, due 12/28/2025⁽³⁾	1/25/2018	500		498		491
ClearChoice (CC Dental Implants Intermediate)	Healthcare	First Lien Term Loan (Last Out) (1M LIBOR+6.50% with a 1.0% floor), 9.13%, due 1/2/2023^(2)(10)	3/21/2018	500		496		487
ClearChoice (CC Dental Implants Intermediate)	Healthcare	First Lien Revolver (Last Out) (Funded: 1M LIBOR+6.50% with a 1.0% floor, Unfunded: 0.75%), 9.29%, due 1/2/2023^(2)(9)(10)	3/21/2018	375		361		336
FirstLight Fiber	Telecommunications	Second Lien Term Loan (1M LIBOR+7.50%), 10.02%, due 7/23/2026⁽³⁾	6/19/2018	400		396		393

OHA INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS - Continued

December 31, 2018

(in thousands, except share amounts and percentages)



Portfolio Company	Industry Segment	Investment⁽¹⁾	Acquisition Date⁽¹²⁾	Principal		Cost		Fair Value

Non-affiliate Investments - (Less than 5% owned) - Continued
NAVEX	Software	Second Lien Term Loan (1M LIBOR+7.00%), 9.53%, due 9/5/2026⁽³⁾	8/9/2018	$	400	$	396	$	386
EaglePicher Technologies, LLC	Aerospace and Defense	Second Lien Term Loan (1M LIBOR+7.25%), 9.77%, due 3/9/2026⁽³⁾	2/23/2018	300		298		294
Edelman Financial Services, LLC	Financial Services	Second Lien Term Loan (3M LIBOR+6.75%), 9.19%, due 7/20/2026⁽³⁾	6/26/2018	300		299		286
Subtotal Non-affiliate Investments - (Less than 5% owned)						$	85,306	$	63,335
Subtotal Portfolio Investments (81.4% of total investments)						$	111,334	$	65,606

GOVERNMENT SECURITIES
U.S. Treasury Bills (CUSIP 912796LC1)⁽⁴⁾		2.28%	12/21/2018	$	15,000	$	14,989	$	14,989
Subtotal Government Securities (18.6% of total investments)						$	14,989	$	14,989

TOTAL INVESTMENTS						$	126,323	$	80,595

NOTES TO CONSOLIDATED SCHEDULE OF INVESTMENTS

⁽¹⁾

The Company generally acquires its investments in private transactions exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"). These investments are generally subject to certain limitations on resale, and may be deemed to be "restricted securities" under the Securities Act. We pledged all of our portfolio investments, except our investments in U.S. Treasury Bills, as collateral for obligations under our Credit Facility. See Note 3 to Consolidated Financial Statements. For each, the Company has provided the spread over LIBOR or Prime and the weighted average current interest rate in effect as of December 31, 2018. Certain investments are subject to a LIBOR or Prime interest rate floor. For fixed rate investments, a spread above a reference rate is not applicable. As of December 31, 2018, the index rates for 1M LIBOR, 2M LIBOR , and 3M LIBOR are 2.50%, 2.61%, and 2.81%, respectively . The actual index rate for each investment listed may not be the applicable index rate outstanding as of December 31, 2018, as the loan may have priced or repriced based on an index rate prior to December 31, 2018. Due dates represent the contractual maturity dates. Common stock and units are non-income producing securities, unless otherwise stated.


⁽²⁾	The Audit Committee recommends fair values of each asset to our Board of Directors, which in good faith determines the final fair value for each investment. Fair value is determined using unobservable inputs (Level 3 hierarchy), unless otherwise stated. See Note 10 to the Consolidated Financial Statements.


⁽³⁾	Fair value is determined using prices with observable market inputs (Level 2 hierarchy). See Note 10 to the Consolidated Financial Statements.


⁽⁴⁾	Fair value is determined using prices for identical securities in active markets (Level 1 hierarchy). See Note 10 to the Consolidated Financial Statements.

⁽⁵⁾

We have determined that this investment is not a “qualifying asset” under Section 55(a) of the Investment Company Act of 1940, or the 1940 Act. Under the 1940 Act, we may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of our total assets. The status of these assets under the 1940 Act is subject to change. We monitor the status of these assets on an ongoing basis. As of December 31, 2018, 1.4% of our investment portfolio was deemed not to be "qualifying assets" under Section 55(a) of the 1940 Act.

OHA INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS - Continued

December 31, 2018

(in thousands, except share amounts and percentages)

NOTES TO CONSOLIDATED SCHEDULE OF INVESTMENTS - Continued

⁽⁶⁾

During the fourth quarter of 2016, we executed a series of amendments to our note purchase and security agreement with OCI Holdings, LLC, or OCI, to allow the company to PIK its LIBOR+12% cash interest for November and December 2016. Also, default interest of $0.1 million and current unpaid interest of $0.4 million was added to the principal balance in the fourth quarter 2016. OCI remains in financial covenant default. During 2017, we executed a number of amendments to our note purchase and security agreement with OCI that allows the company to continue to PIK its LIBOR+12% cash interest during 2017. Through June 30, 2018, we have allowed the company to continue to PIK its 12% cash interest while paying the 2% default interest in cash. In June 2018, we executed an amendment to our note purchase and security agreement with OCI to extend its maturity date to August 31, 2019. In September 2018, we executed an amendment to our note purchase and security agreement whereby we exchanged $217,625 of cash default interest previously paid to us by the company in 2018 for PIK interest, which was added to the principal outstanding balance of the note, on and as of the date the default interest payment was originally made. This amendment also allows the company to PIK its default interest through December 31, 2018. Beginning in the 4th quarter of 2018, OCI subordinated note was placed on non-accrual status.

⁽⁷⁾


⁽⁸⁾	Non-income producing equity security.


⁽⁹⁾	Represents a revolving line of credit of which $1.2 million of the $1.6 million total commitment is unfunded at December 31, 2018. The revolving line of credit includes a 0.75% unused fee applied to the unfunded amount.


⁽¹⁰⁾	Investment is entitled to skim interest which results in a higher interest rate spread of approximately 28 basis points.


⁽¹¹⁾	Investment on non-accrual status and therefore non-income producing.


⁽¹²⁾	Acquisition date represents the date of the initial investment in the portfolio investment.

(See accompanying notes to consolidated financial statements)

OHA INVESTMENT CORPORATION

CONSOLIDATED FINANCIAL HIGHLIGHTS

(unaudited)



	For the nine months ended September 30,
Per Share Data⁽¹⁾	2019			2018
Net asset value, beginning of period	$	1.78		$	2.37
Net investment income (loss), net of tax	(0.06		)	0.03
Net realized and unrealized gain (loss) on investments	0.10			(0.19		)
Net increase (decrease) in net assets resulting from operations⁽⁵⁾	0.04			(0.16		)
Distributions to common stockholders
Distributions from distributable earnings	—			(0.06		)
Return of capital	(0.06		)	—
Net decrease in net assets from distributions⁽⁵⁾	(0.06		)	(0.06		)
Net asset value, end of period⁽⁵⁾	$	1.76		$	2.15

Market value, beginning of period	$	1.01		$	1.15
Market value, end of period	$	1.30		$	1.53
Market value return⁽²⁾⁽³⁾	36.6		%	38.0		%
Net asset value return⁽³⁾	4.9		%	(5.7		)%

Ratios and Supplemental Data
($ and shares in thousands)
Net assets, end of period	$	35,504		$	43,352
Average net assets	$	36,670		$	48,462
Common shares outstanding, end of period	20,172			20,172
Total operating expenses and taxes/average net assets⁽⁴⁾	21.0		%	17.0		%
Net investment income (loss)/average net assets⁽⁴⁾	(4.4		)%	1.7		%
Portfolio turnover rate	18.9		%	32.9		%

Expense Ratios (as a percentage of average net assets)⁽⁴⁾
Interest expense and bank fees	6.7		%	6.6		%
Management fees	3.4		%	3.2		%
Incentive fees	0.2		%	—		%
Costs related to strategic alternatives review	3.9		%	0.2		%
Other operating expenses, including provision for income taxes	6.8		%	7.0		%
Total operating expenses, including provision for income taxes	21.0		%	17.0		%


⁽¹⁾	Per share data is based on weighted average number of common shares outstanding for the period. Per share data may not total due to rounding.


⁽²⁾	Total return based on market value is calculated as the change in market value per share during the respective periods, assuming dividends and distributions, if any, are reinvested in accordance with our dividend reinvestment plan.


⁽³⁾	Not annualized.


⁽⁴⁾	Annualized.


⁽⁵⁾	Totals may not sum due to rounding.

(See accompanying notes to consolidated financial statements)

OHA INVESTMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2019

(unaudited)

Note 1: Organization

These consolidated financial statements present the financial position, results of operations and cash flows of OHA Investment Corporation and its consolidated subsidiaries (collectively “we,” “us,” “our” and “OHAI”). We are a specialty finance company that was organized in July 2004 as a Maryland corporation. Our investment objective is to generate both current income and capital appreciation primarily through debt investments, some of which include equity components. We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company, or a BDC, under the 1940 Act. For federal income tax purposes we operate so as to be treated as a regulated investment company, or RIC, under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code. We have several direct and indirect subsidiaries that are single-member limited liability companies and wholly-owned limited partnerships established to hold certain portfolio investments or provide services to us in accordance with specific rules prescribed for a company operating as a RIC. We consolidate the financial results of our wholly-owned subsidiaries for financial reporting purposes, and we do not consolidate the financial results of our portfolio companies.

On September 30, 2014, our stockholders approved the appointment of Oak Hill Advisors, L.P., or OHA, as our investment advisor, replacing NGP Investment Advisor, LP, which had been our investment advisor since our inception. In connection with this change in investment advisor, we changed our name from NGP Capital Resources Company to OHA Investment Corporation. OHA is a registered investment adviser under the Investment Advisers Act of 1940, or the Advisers Act. OHA acts as our investment advisor and administrator pursuant to an investment advisory agreement and an administration agreement, respectively, each dated as of September 30, 2014, which we refer to as the Investment Advisory Agreement and the Administration Agreement, respectively. See Note 4.

On July 31, 2019, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Portman Ridge Finance Corporation (“PTMN”), Storm Acquisition Sub Inc. (“Acquisition Sub”), and Sierra Crest Investment Management LLC, the investment adviser to PTMN and an affiliate of BC Partners Advisors L.P. and LibreMax Capital LLC. (“PTMN Adviser”). The transaction is the result of OHAI’s previously announced review of strategic alternatives and has been approved by a unanimous vote of the Special Committee of the Board of Directors of OHAI, the Board of Directors of OHAI (other than directors affiliated with Oak Hill Advisors, L.P., the external adviser to OHAI, who abstained from voting) and the Board of Directors of PTMN.

Under the terms of the proposed transaction, OHAI stockholders will receive a combination of (i) a minimum of $8 million in cash (approximately $0.40 per share) from PTMN (as may be adjusted as described below); (ii) PTMN shares valued at 100% of PTMN’s net asset value per share at the time of closing of the transaction in an aggregate number equal to OHAI’s net asset value at closing minus the $8 million PTMN cash merger consideration (as may be adjusted as described below); and (iii) an additional cash payment from the PTMN Adviser, of $3 million in the aggregate, or approximately $0.15 per share.

If the aggregate number of shares of PTMN stock to be issued in connection with the merger would exceed 19.9% of the issued and outstanding shares of PTMN common stock immediately prior to the transaction closing, then the cash consideration payable by PTMN will be increased to the minimum extent necessary such that the aggregate number of shares of PTMN common stock to be issued in connection with the merger does not exceed such threshold. The exact exchange ratio for the stock component of the merger will be determined by the net asset value of OHAI and PTMN as of the closing, calculated as of 5:00 p.m. New York City time on the day prior to the closing of the transaction. In addition to approval by OHAI’s stockholders, the closing of the merger is subject to customary conditions. The parties currently expect the transaction to be completed in the fourth calendar quarter of 2019.

The Merger Agreement contains representations, warranties and covenants, including, among others, covenants relating to the operation of each of PTMN’s and OHAI’s businesses during the period prior to the closing of the Merger. OHAI has agreed to convene and hold a stockholder meeting for the purpose of obtaining the approval for the First Merger by OHAI’s stockholders, and has agreed to recommend that the stockholders approve the proposal.

The Merger Agreement provides that OHAI may not solicit proposals relating to alternative transactions, or, subject to certain exceptions, enter into discussions or negotiations or provide information in connection with any proposal for an alternative transaction. However, the OHAI board of directors (“OHAI Board”) may, subject to certain conditions and payment of a termination fee of approximately $1.3 million, terminate the Merger Agreement and enter into an agreement with respect to a bona fide, unsolicited, written and binding competing proposal that is fully financed or has fully committed financing made by a third party if it determines in good faith, after consultation with its financial advisors and outside legal advisors, and considering all legal, financial, regulatory and other material aspects of, and the identity of the third party making, the competing proposal and such factors as the OHAI Board considers in good faith to be appropriate, (1) is more favorable to stockholders of OHAI from a financial point of view than the transactions contemplated by the Merger Agreement (including any revisions to the terms and conditions of the Merger

OHA INVESTMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

September 30, 2019

(unaudited)

Agreement proposed by PTMN to OHAI in writing in response to such competing proposal) and (2) is reasonably likely of being completed on the terms proposed on a timely basis (the “Superior Proposal”).

Consummation of the Merger is subject to certain closing conditions, including (1) requisite approval of OHAI stockholders, (2) approval for listing on The Nasdaq Global Select Market of the shares of PTMN common stock to be issued in the Merger, (3) effectiveness of the registration statement on Form N-14, which will include a proxy statement of OHAI and a prospectus of PTMN, (4) the absence of certain legal impediments to the consummation of the First Merger, (5) subject to certain exceptions, the accuracy of the representations and warranties and compliance with the covenants of each party to the Merger Agreement, and (6) a requirement that, as of the Determination Date, each of OHAI and PTMN deliver to each other a calculation of the net asset value as of the day prior to the closing date of OHAI and PTMN, as applicable.

The Merger Agreement also contains certain termination rights in favor of PTMN and OHAI, including if the Merger is not completed on or before January 31, 2020 or if the requisite approval of OHAI’s stockholders are not obtained. The Merger Agreement also provides that, upon the termination of the Merger Agreement under certain circumstances, OHAI may be required to pay PTMN, a termination fee of approximately $1.3 million or, at PTMN’s option, pay PTMN for damages subject to certain caps. Similarly, the Merger Agreements provides that, upon the termination of the Merger Agreement under certain circumstances, PTMN may be required to pay OHAI, a termination fee of approximately $1.3 million or, at OHAI’s option, pay OHAI for damages subject to certain caps. If this Merger Agreement is terminated by OHAI or PTMN under certain circumstances, including when the requisite approval of OHAI’s stockholders are not obtained, and no termination fee is otherwise required to be paid by OHAI in connection therewith, then OHAI will be required to reimburse PTMN and its affiliates for half of their reasonable and documented out-of-pocket fees and expenses incurred and payable by PTMN or Acquisition Sub or on their behalf in connection with or related to the Merger Agreement or the transactions contemplated thereby, subject to a cap of $500,000.

On November 4, 2019, PTMN filed an amended registration statement on Form N-14, which included a joint prospectus and proxy statement of OHAI and PTMN. The registration statement on Form N-14 was declared effective by the SEC on November 6, 2019. The special meeting for our stockholders is scheduled for December 12, 2019 to vote on the matters described in the proxy statement as required by the Merger Agreement.

Note 2: Basis of Presentation

These interim unaudited consolidated financial statements include the accounts of OHAI and its consolidated subsidiaries. The effects of all intercompany transactions between OHAI and its subsidiaries have been eliminated in consolidation. We prepare the interim consolidated financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). OHAI is an investment company following the accounting and reporting guidance in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 946, Financial Services - Investment Company ("ASC 946"). Under the investment company rules and regulations pursuant to Article 6 of Regulation S-X and ASC 946, we are precluded from consolidating portfolio company investments, including those in which it has a controlling interest, unless the portfolio company is another investment company. An exception to the general principle occurs if OHAI holds a controlling interest in an operating company that provides all or substantially all of its services directly to us or to our portfolio companies. None of the portfolio investments made by OHAI qualify for this exception. Therefore, our investment portfolio is carried on the Consolidated Balance Sheets at fair value.

We omit certain information and footnote disclosures normally included in audited financial statements prepared in accordance with GAAP pursuant to such rules and regulations. We believe we include all adjustments which are of a normal recurring nature, so that these financial statements fairly present our financial position, results of operations and cash flows. Interim results are not necessarily indicative of results for a full year or any other interim period. You should read these unaudited consolidated financial statements in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2018.

Preparing interim consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes thereto, including the estimated fair values of our investment portfolio discussed in Note 7. Although we believe our estimates and assumptions are reasonable, actual results could differ materially from these estimates. Certain prior period information has been reclassified to conform to the current period presentation. The reclassification has no effect on the company's consolidated financial position or the consolidated results of operations as previously reported.

OHA INVESTMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

September 30, 2019

(unaudited)

Cash and Cash Equivalents

Cash and cash equivalents include short-term, liquid investments with an original maturity of three months or less in accounts such as demand deposit accounts, money market accounts, certain overnight investment sweep accounts and money market fund accounts. We record cash and cash equivalents at cost, which approximates fair value. As of September 30, 2019, OHAI held $0.5 million in bank demand deposits and $4.0 million in money market funds.

Payment-in-Kind Interest and Dividends

We have investments in our portfolio that contain payment-in-kind, or PIK, interest provisions. We compute PIK interest income at the contractual rate specified in each investment agreement, and we add that amount to the principal balance of the investment. For investments with PIK interest, we calculate our income accruals on the principal balance plus any PIK amounts. If the portfolio company’s projected cash flows, further supported by estimated total enterprise value, are not sufficient to cover the contractual principal and interest, as applicable, we do not accrue PIK interest income on the investment. To maintain our RIC status, we must pay out this non-cash income to stockholders in the form of distributions, even though we have not yet collected the cash. We did not record any PIK interest income for the three months ended September 30, 2019 and we recorded $0.7 million for the three months ended September 30, 2018 related to our investment in OCI subordinated notes. We did not record any PIK interest income for the for the nine months ended September 30, 2019, and we recorded $2.7 million for the nine months ended September 30, 2018 related to our investment in OCI subordinated notes. Beginning in October 2018, we discontinued recognizing any PIK interest income on our investment in OCI's subordinated notes from a tax and GAAP perspective.

Distributions

We record distributions to stockholders on the ex-dividend date. We have historically made distributions each year in an amount sufficient to maintain our status as a RIC for federal income tax purposes and to eliminate federal excise tax liability. We currently intend to consider making quarterly distributions to stockholders through the closing of the Merger. Each quarter, we estimate our annual taxable earnings. The Board of Directors considers this estimate and determines the distribution amount, if any. We generally declare our distributions each quarter and pay them shortly thereafter. The following table summarizes our recent distribution history:



Declaration Date	Per Share Amount		Record Date	Payment Date
May 8, 2018	$	0.02	June 30, 2018	July 9, 2018
September 13, 2018	0.02		September 30, 2018	October 9, 2018
December 12, 2018	0.02		December 31, 2018	January 9, 2019
March 13, 2019	0.02		March 28, 2019	April 9, 2019
May 7, 2019	0.02		June 28, 2019	July 9, 2019
September 11, 2019	0.02		September 30, 2019	October 9, 2019

Note 3: Credit Facilities and Borrowings

We are party to a Credit Agreement (the "Credit Facility"), dated September 9, 2016, with MidCap Financial Trust, as administrative agent. The initial size of the Credit Facility was $56.5 million with a maturity date of March 9, 2018, with an option to extend for a six-month period, subject to certain conditions. The initial proceeds of $40.5 million from the Credit Facility were used to pay off the $38.5 million outstanding balance of our previous credit facility with SunTrust Bank, pay transaction expenses and provide balance sheet cash. The remaining $16.0 million consisted of a delayed draw term loan and was committed for one year.

On November 10, 2017, we entered into an amendment to the Credit Facility whereby we agreed to make a voluntary principal prepayment in the amount of $4.5 million, reducing the total principal amount outstanding to $36.0 million, and the lenders agreed not to test certain covenants at certain determination dates.

On February 2, 2018, we exercised the option to extend the Credit Facility through September 9, 2018, as permitted in our existing Credit Agreement.

On September 7, 2018, we entered into an amendment to extend the maturity date of the Credit Facility to September 9, 2019, which can be extended for an additional six-month period at our option. In connection with the extension, we made a repayment of principal of $7.0 million of its Credit Facility, reducing the principal amount outstanding to $29.0 million. The $7.0 million principal repayment was available to us to be re-borrowed as a delayed draw term loan, which is committed until September 9, 2019. In addition, the interest rate for the borrowings under the Credit Facility was reduced to LIBOR plus 4.95% for Eurodollar Loans and prime plus 3.95% for Base Rate Loans. Certain financial covenants were also amended.

On January 7, 2019 we borrowed an additional $3.0 million under the Credit Facility as a delayed draw term loan. On February 11, 2019 we repaid $2.0 million on our delayed draw term loan leaving $4.0 million available to draw.

On August 5, 2019, we exercised our option to extend the credit facility through March 9, 2020, as permitted in our existing Credit Agreement.

As of September 30, 2019, the total amount outstanding under the Credit Facility was $30.0 million. As of December 31, 2018, the total amount outstanding under the Credit Facility was $29.0 million with $7.0 million available to draw. The total amount outstanding on the Credit Facility is shown net of unamortized debt issuance costs of $0.1 million and $0.1 million on our Consolidated Balance Sheet as of September 30, 2019 and December 31, 2018, respectively. Substantially all of our assets, except our investments in U.S. Treasury Bills, are pledged as collateral for the obligations under the Credit Facility. The Credit Facility bears an interest rate of Adjusted LIBOR plus 4.95% for Eurodollar Loans, subject to a 1% LIBOR floor, and Base Rate plus 3.95% for Base Rate Loans. As of September 30, 2019, the interest rate on our outstanding principal balance of $30.0 million was 7.05%.

The Credit Facility contains affirmative and reporting covenants and certain financial ratio and restrictive covenants, including prohibiting us from repurchasing our common stock. We have complied with the covenants from the date of the Credit Agreement through September 30, 2019, and had no existing defaults or events of default under the Credit Facility. The financial covenants, with terms as defined in the Credit Agreement, are:


•	maintain a Debt to Tangible Net Worth Ratio of not more than 1.00:1.00 as determined on the last day of each calendar month,


•	maintain at all times a minimum liquidity in the form of Cash or Cash Equivalents of at least $1.0 million,


•	maintain a Debt to Fair Market Value Ratio of not more than 0.50:1.00 at any time, and


•	maintain the Fair Market Value of Liquid Portfolio Investments as a percentage of outstanding aggregate principal balance to not be less than 100%.

In connection with the Merger, PTMN will pay off the outstanding principal and accrued interest under the Credit Facility.

At the end of each quarter, we may take proactive steps to preserve investment flexibility for the next quarter by investing in cash equivalents, which includes purchasing U.S. Treasury Bills, by utilizing repurchase agreements on a temporary basis. On September 30, 2019, we purchased $10.0 million of U.S. Treasury Bills and contemporaneously entered into a $9.8 million repurchase arrangement with a global financial institution to finance such purchase. Under the repurchase arrangement, we transferred $10.0 million of U.S. Treasury Bills and $0.2 million of cash as collateral was returned to us, under the repurchase agreement. We repaid the $9.8 million borrowed under the repurchase agreement, and the $0.2 million cash collateral was returned to us, net of a $1 thousand financing fee, upon maturity of the U.S. Treasury Bills on October 3, 2019. We account for the transfer of the U.S. Treasury Bills under the repurchase agreement as a secured borrowing in accordance with GAAP. As a result, the U.S. Treasury Bills are recorded on our books as investments in U.S. Treasury Bills, and the amount outstanding under the repurchase agreement is recorded as a current liability at September 30, 2019.

On December 21, 2018, we purchased $15.0 million of U.S. Treasury Bills and contemporaneously entered into a $14.7 million repurchase arrangement with a global financial institution to finance such purchase. Under the repurchase arrangement, we transferred $15.0 million of U.S. Treasury Bills and $0.3 million of cash as collateral under the repurchase agreement. We repaid the $14.7 million borrowed under the repurchase agreement, and the $0.3 million cash collateral was returned to us, net of a $14 thousand financing fee, upon maturity of the U.S. Treasury Bills on January 2, 2019. We account for the transfer of the U.S. Treasury Bills under the repurchase agreement as a secured borrowing in accordance with GAAP. As a result, the U.S. Treasury Bills are recorded on our books as investments in U.S. Treasury Bills, and the amount outstanding under the repurchase agreement is recorded as a current liability December 31, 2018.

Note 4: Investment Management

Investment Advisory Agreement

On September 30, 2014, we entered into the Investment Advisory Agreement with OHA, an investment adviser registered under the Advisers Act pursuant to which OHA replaced NGP Investment Advisor, LP as our investment advisor. The Investment Advisory Agreement was most recently re-approved by our Board of Directors, a majority of whom are not “interested” persons (as defined in the 1940 Act) of us, on August 6, 2019. Pursuant to the Investment Advisory Agreement, OHA implements our business strategy on a day-to-day basis and performs certain services for us, subject to the supervision of our Board of Directors. Under the Investment Advisory Agreement, we pay OHA a fee consisting of two components — a base management fee and an incentive fee.

Base Management Fee: The base management fee is paid quarterly in arrears, and is calculated by multiplying the average value of our total assets (excluding cash, cash equivalents and U.S. Treasury Bills that are purchased with borrowed funds solely for the purpose of satisfying quarter-end diversification requirements related to our election to be taxed as a RIC under the Code or to

OHA INVESTMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

September 30, 2019

(unaudited)

preserve future investment flexibility), as of the end of the two immediately prior fiscal quarters, by a rate of 1.75% per annum. For the three months ended September 30, 2019 and 2018, we incurred $0.3 million and $0.4 million, respectively, in base management fees. For the nine months ended September 30, 2019 and 2018, we incurred $0.9 million and $1.2 million, respectively, in base management fees.

Incentive Fee: The incentive fee consists of two parts. The first part, the investment income incentive fee, is calculated and payable quarterly in arrears based on our pre-incentive fee net investment income for the fiscal quarter for which the fee is being calculated. Pre-incentive fee net investment income means interest income, dividend income, royalty payments, net profits interest payments, and any other income (including any other fees, such as commitment, origination, syndication, structuring, diligence, monitoring and consulting fees or other fees that we receive from portfolio companies) accrued during the fiscal quarter, minus our operating expenses for the quarter (including the base management fee, expenses payable under the Administration Agreement, and any interest expense and distributions paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with payment-in-kind interest and zero coupon securities), accrued income that we have not yet received in cash. Accordingly, we may pay an incentive fee based partly on accrued investment income, the collection of which is uncertain or deferred. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses, or unrealized capital appreciation or depreciation. 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) is compared to a “hurdle rate” of 1.75% per quarter (7% annualized). OHA receives no incentive fee for any fiscal quarter in which our pre-incentive fee net investment income does not exceed the hurdle rate. OHA receives an incentive fee equal to 100% of our pre-incentive fee net investment income for any fiscal quarter in which our pre-incentive fee net investment income exceeds the hurdle rate but is less than 2.1875% (8.75% annualized) of net assets (also referred to as the “catch up” provision) plus 20% of our pre-incentive fee net investment income for such fiscal quarter greater than 2.1875% (8.75% annualized) of net assets.

The second part of the incentive fee, the capital gains incentive fee, is determined and payable in arrears as of the end of each fiscal year (or, upon termination of the Investment Advisory Agreement, as of the termination date). The capital gains incentive fee is equal to 20% of our cumulative aggregate realized capital gains from September 30, 2014 through the end of that fiscal year, computed net of our cumulative aggregate realized capital losses and cumulative aggregate unrealized depreciation on investments for the same time period. The aggregate amount of any previously paid capital gains incentive fees to OHA is subtracted from the capital gains incentive fee calculated. If such amount is negative, then there is no capital gains fee for such year. For the purposes of the capital gains incentive fee, any gains and losses associated with our investment portfolio as of September 30, 2014 shall be excluded from the capital gains incentive fee calculation. For the three months ended September 30, 2019 we reduced our capital gains incentive fee accrual by $32 thousand to $46 thousand and for the three months ended September 30, 2018 we did not accrue any capital gains incentive fees. For the nine months ended September 30, 2019 we accrued $46 thousand in capital gains incentive fees and for the nine months ended September 30, 2018 we did not accrue any capital gains incentive fees.

On November 10, 2017, we entered into an Incentive Fee Waiver Agreement with OHA whereby OHA agreed to waive any incentive fees earned relating to fiscal years 2017 and 2018. Under the Incentive Fee Waiver Agreement, any capitalized gains fees that would have been earned and accrued during 2017 and 2018, which under our Investment Advisory Agreement would not have been paid until 2018 and 2019, respectively, has been waived. The Incentive Fee Waiver Agreement with OHA expired on December 31, 2018.

The Investment Advisory Agreement may be terminated at any time, without the payment of any penalty, by a vote of our Board of Directors or a vote of the holders of at least a majority of our outstanding voting securities (within the meaning of the 1940 Act) on 60 days’ written notice to OHA, and would automatically terminate in the event of its “assignment” (within the meaning of the 1940 Act). OHA may terminate the Investment Advisory Agreement without penalty by providing us at least 60 days’ written notice. Pursuant to the Investment Advisory Agreement, OHA pays the compensation expense of its investment professionals, who provide management and investment advisory services to us. We bear all other costs and expenses of our operations and transactions.

Administration Agreement

Under the Administration Agreement, OHA furnishes us with certain administrative services, personnel and facilities. The Administration Agreement was most recently re-approved by our Board of Directors on August 6, 2019. Payments under the Administration Agreement are equal to our allocable portion of OHA’s overhead in performing its obligations under the Administration Agreement, including all administrative services necessary for our operation and the conduct of our business. The Administration Agreement may be terminated at any time, without penalty, by a vote of our Board of Directors or by OHA upon 60 days’ written notice to the other party.

OHA INVESTMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

September 30, 2019

(unaudited)

We owed $0.1 million and $0.6 million to OHA under the Administration Agreement as of September 30, 2019 and December 31, 2018, respectively, for expenses incurred on our behalf for the final month of the respective quarterly period. We include these amounts in accounts payable and due to affiliate on our Consolidated Balance Sheets.

Note 5: Federal Income Taxes

We operate so as to qualify, for tax purposes, as a RIC under Subchapter M of Chapter 1 of the Code. As a RIC, we are generally not subject to corporate-level U.S. federal income taxes on the portion of our investment company taxable income and net capital gain (i.e., realized net long-term capital gains in excess of realized net short-term capital losses) that we distribute to our stockholders. To qualify as a RIC, we are required, among other things, to distribute to our stockholders each year at least 90% of investment company taxable income, as defined by the Code, and to meet certain asset-diversification requirements.

Certain of our wholly owned subsidiaries, or Taxable Subsidiaries, have elected to be taxed as corporations for federal income tax purposes. The Taxable Subsidiaries hold certain of our portfolio investments and are consolidated for financial reporting purposes, but not for income tax reporting purposes. These Taxable Subsidiaries permit us to hold equity investments in portfolio companies that are “pass through” entities for tax purposes, in order to comply with the “source-of-income” requirements that must be satisfied to maintain our qualification as a RIC. The Taxable Subsidiaries may generate income tax expense or benefit, which is reflected on our Consolidated Statements of Operations.

On December 22, 2017, the U.S. government enacted significant tax legislation commonly referred to as the Tax Act and Job Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including but not limited to, (1) reducing the U.S. federal corporate income tax rate from 35 percent to 21 percent, (2) repealing the Corporate Alternative Minimum Tax (AMT), (3) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries, (4) creating a new limitation on deductible interest expense, (5) changing rules related to the use and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017 and (6) the requirement to pay a one-time transition tax on all undistributed earnings of foreign subsidiaries.

In connection with our analysis of the impact of the Tax Act, we recorded a net tax expense of approximately $12.2 million in the period ending December 31, 2017 which consisted of a reduction of deferred tax assets previously valued at 34%. This tax expense and reduction in deferred tax assets was fully offset by a simultaneous reduction in our valuation allowance. The reduction in the U.S. federal rate is expected to positively impact our future U.S. after tax earnings.

In addition, due to the Tax Act, we are eligible for a full refund of our AMT credit carryforward. Accordingly, the valuation allowance related to this AMT credit carryforward has been released in the amount of $632,000, or $0.03 per share. The valuation allowance related to other net deferred tax assets remains. Therefore, the associated valuation allowance has been released for the full AMT credit carryforward at this time.

Tax years from 2014 forward remain open to examination by the major taxing jurisdictions to which OHAI is subject; however, net operating losses originating in prior years are subject to examination when utilized. Our Taxable Subsidiaries have federal net operating loss carryforwards of $88.2 million of which $79.7 million expire in various years through 2037 and the remaining $8.5 million may be carried forward indefinitely as per the Tax Act. Federal and state laws impose limitations on the utilization of capital losses and NOLs in the event of an "ownership" change for tax purposes, as defined by Sections 382 and 383 of the Internal Revenue Code. An ownership change at either the RIC entity or Taxable Subsidiary level, if one were to occur, would limit our ability to use pre-ownership change NOLs to offset post-ownership change taxable income. An ownership change would also limit our ability to use pre-ownership change capital losses to offset post-ownership change capital gains.

Note 6: Commitments and Contingencies

As of September 30, 2019, we had investments in 28 active portfolio companies totaling $106.8 million (cost basis). Of these 28 active portfolio companies, OHAI had already funded investments in the amount of $106.8 million. We had $0.2 million due to a broker for unsettled trades in U.S. Treasury Bills. As of September 30, 2019 there were outstanding unfunded commitments of $2.3 million related to our investments in the ClearChoice revolving credit facility, Imperial Dade delayed draw term loan, JS Held delayed draw term loan, and JS Held revolving credit facility. As of December 31, 2018, we had investments in 26 active portfolio companies totaling $111.3 million. Of these 26 active portfolio companies, we had already funded investments in the amount of $108.1 million and there were outstanding unfunded commitments of $1.2 million related to our investment in ClearChoice revolving credit facility, $1.1 million related to an investment we committed to in December of 2018, and $3.3 million due to broker for unsettled trades.

OHA INVESTMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

September 30, 2019

(unaudited)

We have continuing obligations under the Investment Advisory Agreement and the Administration Agreement with OHA. See Note 4. The agreements provide that, absent willful misfeasance, bad faith or gross negligence in the performance of its duties or the reckless disregard of its duties and obligations, OHA and its officers, managers, agents, employees, controlling persons, members and any other person or entity affiliated with OHA will be entitled to indemnification from us for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of services under the agreements or otherwise as our investment advisor or administrator. The agreements also provide that OHA and its affiliates will not be liable to us or any stockholder for any error of judgment, mistake of law, any loss or damage with respect to any of our investments or any action taken or omitted to be taken by OHA in connection with the performance of any of its duties or obligations under the agreements or otherwise as investment advisor or administrator to us, except to the extent specified in Section 36(b) of the 1940 Act concerning loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services.

In the normal course of business, we enter into a variety of undertakings containing a variety of representations that may expose us to some risk of loss. We do not expect significant losses, if any, from such undertakings.

In the quarter ended June 30, 2018, we wrote off our investment in Castex Energy 2005, L.P., or Castex. Previously, Castex filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code on October 16, 2017. According to the filing, Castex and its affiliates in bankruptcy entered into a restructuring support agreement with pre-petition lenders holding approximately 86% in principal amount of claims under the pre-petition credit facility. On February 26, 2018, we agreed to a settlement and agreed to withdraw our confirmation objections to the Debtors' Joint Plan of Reorganization under Chapter 11 of the Bankruptcy code in exchange for the potential to receive some amount of cash and warrants in the reorganized company. This agreement was approved by the Bankruptcy court on February 27, 2018. At this time we are unable to determine the value of a recovery, if any, resulting from the settlement which will be dependent upon the ultimate pool of unsecured claims.

Legal Proceedings

From time to time, we are involved in various legal proceedings arising in the normal course of business. While we cannot predict the outcome of these proceedings with certainty, we do not believe that an adverse result in any pending legal proceeding would be material to our business, financial condition or cash flows.

Status of Investment. As of September 30, 2019, our unrecovered investment was $43.5 million, and we had received aggregate royalty payments of $41.0 million since the date of ATP’s bankruptcy filing. As of September 30, 2019, we had incurred legal and consulting fees totaling $6.5 million in connection with the enforcement of our rights under the ORRIs. On various occasions, we have provided notice that such legal expenses will be added to our unrecovered investment balance to the extent they are not reimbursed. To date, we have not received any payments on account of legal expenses aside from our receipt of regular monthly production payments. As a result, we added our legal expenses to the unrecovered investment balance in accordance with our transaction documents. As of September 30, 2019, substantially all of the $6.5 million in legal and consulting fees have been added to, and are thus included in, the unrecovered investment balance under the terms of our transaction documents. Legal expenses of $1.2 million have been added to our unrecovered investment balance during the nine months ended September 30, 2019. Production recommenced on the MC941 and MC 942 wells in April 2018. Previously, these wells ceased production in November 2016 as a result of the Bennu Chapter 7 bankruptcy. In August 2017, the bankruptcy court authorized the sale of certain assets including MC 941 and MC 942 to Equinor, formerly known as StatOil USA E&P, Inc. Equinor recommenced production on these wells in April 2018. Equinor disputes that legal fees are eligible to be included in our unrecovered investment balance, but given that current production is not expected to be sufficient to pay the primary sum and notional interest accruing (which Equinor does not dispute), this legal fee issue is not ripe for debate and efforts are not currently ongoing to resolve it. We note that the fair value of our investment in ATP ORRI is $3.7 million as of September 30, 2019.

OHA INVESTMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

September 30, 2019

(unaudited)

Note 7: Fair Value

Our investments consisted of the following as of September 30, 2019 and December 31, 2018:



	September 30, 2019										December 31, 2018
(Dollar amounts in thousands)	Cost			% of total		Fair Value			% of total		Cost		% of total		Fair Value		% of total

Portfolio investments
First lien secured debt	$	1,714		1.5	%	$	1,735		2.4	%	$	496	0.4	%	$	487	0.6	%
Revolving loan facilities	(4		)	—	%	9			—	%	361		0.3	%	336		0.4	%
Unsecured term loan	3,254			2.8	%	3,300			4.6	%	3,251		2.5	%	3,251		4.0	%
Second lien debt	50,656			43.4	%	50,698			70.0	%	47,212		37.4	%	46,770		58.0	%
Subordinated debt	23,528			20.2	%	2,422			3.4	%	30,523		24.2	%	9,471		11.8	%
Limited term royalties	24,561			21.0	%	3,672			5.0	%	26,450		20.9	%	4,778		6.0	%
Senior secured note	549			0.4	%	573			0.8	%	541		0.4	%	513		0.6	%
Delayed draw term loan	(8		)	—	%	(5		)	—	%	—		—	%	—		—	%
Equity securities	2,500			2.1	%	—			—	%	2,500		2.0	%	—		—	%
Total portfolio investments	106,750			91.4	%	62,404			86.2	%	111,334		88.1	%	65,606		81.4	%
Government securities
U.S. Treasury Bills	9,999			8.6	%	9,999			13.8	%	14,989		11.9	%	14,989		18.6	%
Total investments	$	116,749		100.0	%	$	72,403		100.0	%	$	126,323	100.0	%	$	80,595	100.0	%

We account for all of the assets in our investment portfolio at fair value, following the provisions of the FASB ASC Fair Value Measurements, or ASC 820. ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements.

On a quarterly basis, the investment team of our investment advisor prepares fair value recommendations for all of the assets in our portfolio in accordance with ASC 820 and presents them to the Audit Committee of our Board of Directors. The Audit Committee recommends fair values of each asset for which market quotations are not readily available to our Board of Directors, which in good faith determines the final fair value for each investment.


•	Investment Team Valuation. The investment professionals of our investment advisor prepare fair value recommendations for each investment.


•	Investment Team Valuation Documentation. The investment team documents and discusses its preliminary fair value recommendations with the investment committee and senior management of our investment advisor.

•

Third Party Valuation Activity. We may, at our discretion, retain an independent valuation firm to review any or all of the valuation analyses and fair value recommendations provided by the investment team of our investment advisor. Our general practice is that we have an independent valuation firm review all Level 3 investments (those whose value is determined using significant unobservable inputs) with recommended fair values in excess of $10 million on a quarterly basis, and review all Level 3 investments with recommended fair values greater than zero at least annually to provide positive assurance on our valuations.


•	Presentation to Audit Committee. Our investment advisor and senior management present the valuation analyses and fair value recommendations to the Audit Committee of our Board of Directors.


•	Board of Directors and Audit Committee. The Board of Directors and the Audit Committee review and discuss the valuation analyses and fair value recommendations provided by the investment team of our investment advisor and the independent valuation firm, if applicable.


•	Final Valuation Determination. Our Board of Directors discusses the fair values recommended by the Audit Committee and determines the fair value of each investment in our portfolio for which market quotations are not readily available, in good

OHA INVESTMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

September 30, 2019

(unaudited)

faith, based on the input of the investment team of our investment advisor, our Audit Committee and the independent valuation firm, if applicable.

ASC 820 defines fair value as the price that a seller would receive for an asset or pay to transfer a liability in an orderly transaction between independent, knowledgeable and willing market participants at the measurement date. The fair value definition focuses on exit price in the principal, or most advantageous, market and prioritizes the use of observable market inputs over unobservable entity-specific inputs. In accordance with ASC 820, we categorize our investments based on the inputs to our valuation methodologies as follows:


•	Level 1 — Quoted unadjusted prices for identical instruments in active markets to which we have access at the date of measurement.

•

Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers.


•	Level 3 — Model-derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect our own assumptions regarding what market participants would use to price the asset or liability based on the best available information.

Fair value accounting classifies financial assets and liabilities in their entirety based on the lowest level of input that is significant to the estimated fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment that may affect the valuation of assets and liabilities and their placement within the fair value hierarchy levels. We did not have any liabilities measured at fair value as of September 30, 2019 or December 31, 2018. Amounts outstanding under our Credit Facility are carried at amortized cost in the Consolidated Balance Sheets. As of September 30, 2019, the estimated fair value of our Credit Facility approximated its carrying value of $29.9 million. As of December 31, 2018, the fair value of our Credit Facility approximated its carrying value of $28.9 million. The estimated fair value of the Credit Facility is determined by discounting projected remaining payments using market interest rates for borrowings of OHAI.

The following tables set forth the fair value of our investments by level within the fair value hierarchy as of September 30, 2019 and December 31, 2018 (in thousands):



September 30, 2019	Total			Level 1		Level 2		Level 3
Portfolio investments
Affiliate investments
Subordinated debt	$	2,422		$	—	$	—	$	2,422
Total affiliate investments	2,422			—		—		2,422
Non-affiliate investments
First lien secured debt	1,735			—		—		1,735
Second lien debt	50,698			—		41,076		9,622
Limited term royalties	3,672			—		—		3,672
Senior secured notes	573			—		573		—
Delayed draw term loan	(5		)	—		—		(5		)
Revolving loan facilities	9			—		—		9
Unsecured term loan	3,300			—		3,300		—
Total non-affiliate investments	59,982			—		44,949		15,033
Total portfolio investments	62,404			—		44,949		17,455
Government securities
U.S. Treasury Bills	9,999			9,999		—		—
Total investments	$	72,403		$	9,999	$	44,949	$	17,455

OHA INVESTMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

September 30, 2019

(unaudited)



December 31, 2018	Total		Level 1		Level 2		Level 3
Portfolio investments
Affiliate investments
Subordinated debt	$	2,271	$	—	$	—	$	2,271
Total affiliate investments	2,271		—		—		2,271
Non-affiliate investments
First lien secured debt	487		—		—		487
Second lien debt	46,770		—		40,890		5,880
Subordinated debt	7,713		—		7,713		—
Limited term royalties	4,778		—		—		4,778
Revolving loan facility	336		—		—		336
Unsecured term loan	3,251		—		3,251		—
Total non-affiliate investments	63,335		—		51,854		11,481
Total portfolio investments	65,606		—		51,854		13,752
Government securities
U.S. Treasury Bills	14,989		14,989		—		—
Total investments	$	80,595	$	14,989	$	51,854	$	13,752

OHA INVESTMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

September 30, 2019

(unaudited)

The following tables present roll-forwards of the changes in fair value for all investments for which we determine fair value using unobservable (Level 3) factors for the periods indicated (in thousands):



	First Lien Secured Debt and Limited Term Royalties			Revolving Loan Facilities			Second Lien Debt			Subordinated Debt and Redeemable Preferred Units			Delayed Draw Term Loan			Total Investments
For the three months ended September 30, 2019
Fair value at June 30, 2019	$	6,100		$	326		$	9,622		$	2,532		$	(6	)	$	18,574
Total gains, (losses) and amortization:
Net realized gains (losses)	—			—			—			—			—			—
Net unrealized gains (losses)	(158		)	(1		)	(5		)	(110		)	1			(273		)
Net amortization of premiums, discounts and fees	1			—			5			—			—			6
New investments, repayments and settlements, net:
New investments	50			823			—			—			23			896
Payment-in-kind	—			—			—			—			—			—
Repayments and settlements	(586		)	(1,139		)	—			—			(23		)	(1,748		)
Fair value at September 30, 2019	$	5,407		$	9		$	9,622		$	2,422		$	(5	)	$	17,455

For the nine months ended September 30, 2019
Fair value at December 31, 2018	$	5,265		$	336		$	5,880		$	2,271		$	—		$	13,752
Total gains, (losses) and amortization:
Net realized gains (losses)	—			—			—			—			—			—
Net unrealized gains (losses)	812			39			156			151			3			1,161
Net amortization of premiums, discounts and fees	(724		)	(1		)	(102		)	—			—			(827		)
New investments, repayments and settlements, net:
New investments	1,251			1,587			3,688			—			15			6,541
PIK	—			—			—			—			—			—
Repayments and settlements	(1,197		)	(1,952		)	—			—			(23		)	(3,172		)
Fair value at September 30, 2019	$	5,407		$	9		$	9,622		$	2,422		$	(5	)	$	17,455

OHA INVESTMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

September 30, 2019

(unaudited)



	First Lien Secured Debt and Limited Term Royalties			Revolving Loan Facility			Second Lien Debt			Subordinated Debt and Redeemable Preferred Units			Equity Securities			CLO Residual Interests			Total Investments
For the three months ended September 30, 2018
Fair value at June 30, 2018	$	1,875		$	360		$	5,940		$	18,015		$	—		$	181		$	26,371
Total gains, (losses) and amortization:
Net realized losses	—			—			—			—			—			—			—
Net unrealized gains (losses)	1,501			(1		)	57			(7,812		)	—			14			(6,241		)
Net amortization of premiums, discounts and fees	(708		)	1			3			(819		)	—			—			(1,523		)
New investments, repayments and settlements, net:
New investments	—			813			—			—			—			—			813
PIK	—			—			—			1,496			—			—			1,496
Repayments and settlements	—			(1,188		)	—			—			—			—			(1,188		)
Fair value at September 30, 2018	$	2,668		$	(15	)	$	6,000		$	10,880		$	—		$	195		$	19,728

For the nine months ended September 30, 2018
Fair value at December 31, 2017	$	—		$	—		$	—		$	18,015		$	164		$	209		$	18,388
Total gains, (losses) and amortization:
Net realized losses	—			—			—			(56,315		)	—			—			(56,315		)
Net unrealized gains (losses)	3,033			(1		)	57			46,415			(164		)	(14		)	49,326
Net amortization of premiums, discounts and fees	(865		)	(14		)	(57		)	(785		)	—			—			(1,721		)
New investments, repayments and settlements, net:
New investments	500			1,875			6,000			—			—			—			8,375
PIK	—			—			—			3,550			—			—			3,550
Repayments and settlements	—			(1,875		)	—			—			—			—			(1,875		)
Fair value at September 30, 2018	$	2,668		$	(15	)	$	6,000		$	10,880		$	—		$	195		$	19,728

During the nine months ended September 30, 2019 and 2018, none of our investments in portfolio companies changed among the categories of Control Investments, Affiliate Investments and Non-Affiliate Investments, and there were no transfers among Levels 3, 2 or 1.

We present net unrealized gains (losses) on our consolidated statements of operations as “Net unrealized appreciation (depreciation) on investments.”

OHA INVESTMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

September 30, 2019

(unaudited)

The following table summarizes the significant unobservable inputs in the fair value measurements of our Level 3 investments by category of investment and valuation technique as of September 30, 2019 (dollars in thousands):

Type of Investment

Fair Value

Valuation Technique

Significant Unobservable Inputs

Range of Inputs

Weighted Average

Non-Energy Investments:

First lien debt

1,735

Private transaction comparables

Market yield

8.0% - 10.0%

8.4%

Second lien debt

9,622

Private transaction comparables

Market Yield

9.2% - 12.0%

10.6%

Subordinated debt

2,422

Market comparables

EBITDA multiples

4.0x - 6.0x

5.0x

Revolving loan facilities

Market comparables

Market yield

8.0% - 11.0%

8.1%

Delayed draw term loans

)

Market comparables

Precedent transaction

N/A

13,783

Energy Investments:

Limited term royalties

3,672

Discounted cash flow⁽¹⁾

Discount rate

10.0% - 20.0%

15.0%

3,672

Total Level 3 investments

17,455

⁽¹⁾ Cash flows are based on Proved Developed Producing reserves only. Estimated production volumes are based on January 1, 2019 engineer's reserve report.

As noted above, the income and market approaches were used in the determination of fair value of certain Level 3 assets as of September 30, 2019. The significant unobservable inputs used in the income approach are the discount rate or market yield used to discount the estimated future cash flows expected to be received from the underlying investment, which include future principal and interest payments. An increase in the discount rate or market yield would result in a decrease in the fair value. The significant unobservable inputs used in the market approach are based on market comparable transactions and market multiples of publicly traded comparable companies. Increases or decreases in market multiples would result in an increase or decrease, respectively in the fair value.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following analysis of our financial condition and results of operations in conjunction with management’s discussion and analysis contained in our 2018 Annual Report on Form 10-K, as well as our consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q. The terms “we,” “us,” “our” and “OHAI” refer to OHA Investment Corporation and its consolidated subsidiaries. The term "OHA" refers to Oak Hill Advisors, L.P., our investment adviser.

Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q that relate to estimates or expectations of our future performance or financial condition may constitute “forward-looking statements.” These forward-looking statements are subject to various risks and uncertainties, which could cause actual results and conditions to differ materially from those projected, including, but not limited to:

•changes in interest rates;


•	the future operating results of our portfolio companies and their ability to achieve their objectives;


•	changes in regional, national or international economic conditions and their impact on the industries in which we invest;


•	disruptions in the credit and capital markets;


•	changes in the conditions of the industries in which we have invested;


•	the adequacy of our cash resources and working capital;


•	the timing of cash flows, if any, from our portfolio companies;


•	our expectations regarding the timetable for completing a transaction with Portman Ridge Finance Corporation ("PTMN"), future financial and operating results, benefits of the transaction and future opportunities of the combined company;


•	disruption to our business as a result of the transaction with PTMN;


•	other factors enumerated in our filings with the SEC; and


•	effects of current and pending legislation.

We may use words such as “anticipates,” “believes,” “intends,” “plans,” “expects,” “projects,” “estimates,” “will,” “should,” “may” and similar expressions to identify forward-looking statements. These forward-looking statements are subject to various risks and uncertainties. Certain factors could cause actual results and conditions to differ materially from those projected and our historical experience. You should not place undue reliance on such forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update our forward-looking statements made herein, unless required by law.

Overview

We are a specialty finance company with an investment objective to generate both current income and capital appreciation primarily through debt investments, some of which include equity components. We focus primarily on providing creative direct lending solutions to middle market private companies across industry sectors. Our investment activities are managed by OHA and supervised by our Board of Directors, the majority of whose members are independent of OHA and its affiliates.

We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a BDC under the 1940 Act. For federal income tax purposes, we operate so as to be treated as a RIC, under Subchapter M of the Code. As a BDC and a RIC, we are required to comply with certain investment diversification and other regulatory requirements.

On September 30, 2014, our stockholders approved the appointment of OHA as our investment advisor, replacing NGP Investment Advisor, LP, which had been our investment advisor since our inception. In connection with this change in investment advisor, we changed our name from NGP Capital Resources Company to OHA Investment Corporation. OHA is a registered investment adviser under the Advisers Act. OHA acts as our investment advisor and administrator pursuant to the Investment Advisory Agreement and the Administration Agreement.

The aggregate fair value of our investment portfolio at September 30, 2019 was $62.4 million, with such value comprised of 28 active portfolio investments. Under our previous investment advisor, we focused our investments primarily on small and mid-size companies engaged in the upstream sector of the energy industry, which includes businesses that find, develop and extract energy resources, including natural gas, crude oil and coal.

Part of OHA's investment strategy has been to reduce our historical portfolio concentration in the energy industry and to diversify our portfolio with investments in debt securities of U.S. private and small public middle market companies across industry sectors. The exposure of our investment portfolio to the energy sector was 6% at September 30, 2019 compared to 74% at September 30, 2014, on a fair value basis.

Our level of investment activity can and does vary substantially from period to period depending on many factors. Some of these factors are the amount of debt and equity capital available to middle market companies, the level of acquisition and divestiture activity for such companies, the general economic environment and the competitive environment for the types of investments we make, and our own ability to raise capital to fund our investments, both through the issuance of debt and equity securities. If a substantial portion of our investment portfolio were to be realized in the near term, OHA may not be able to source sufficient appropriate investments for us to timely replace the investment income from the realized investments.

On April 11, 2018, our Board of Directors, including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) thereof, approved the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act, as amended by the Small Business Credit Availability Act. As a result, OHAI’s asset coverage requirements for senior securities was changed from 200% to 150% effective one year after the date of the Board of Directors’ approval, or April 11, 2019. Starting from April 11, 2019, under the 150% asset coverage standard, we may borrow debt or issue senior securities in the amount of $2.00 for every $1.00 of equity in OHAI. Notwithstanding the modified asset coverage requirement under the 1940 Act described above, we are separately subject to a Debt to Tangible Net Worth Ratio of not more than 1.00:1.00 (200% minimum asset coverage) with respect to certain provisions of our Credit Facility.

Portfolio and 2019 Investment Activity

In January 2019, we purchased $0.1 million of EaglePicher Technologies, or EaglePicher, adding to our $0.3 million position which was previously acquired in February 2018. The $0.1 million EaglePicher second lien term loan add-on was purchased at a 6% discount to par, earns interest payable in cash at a rate of LIBOR+7.25%, and matures in March 2026.

Also in January 2019, we sold $2.0 million of our senior unsecured notes of Avantor Performance Materials, Inc., or Avantor, at a price of 102.5% of par, resulting in a realized capital gain of $50,000 or $0.00 per share. In February 2019, we sold $3.0 million of our remaining Avantor investment at a price of 105.75% of par, resulting in a realized capital gain of $117,500 or $0.01 per share. This investment was initiated in September 2017 and generated a gross unlevered internal rate of return of 12.5% and a return on investment of 1.17x.

In February 2019, we purchased $1.1 million of second lien term loan in Caliber Collision, or Caliber, a leading provider of automobile collision repair. The Caliber second lien term loan was purchased at a 1.75% discount to par, earns interest payable in cash at a rate of LIBOR+7.25% and matures in February 2027.

Also in February 2019, we purchased $1.2 million of second lien term loan in PharMerica, a leading provider of health and pharmacy services to assisted living, skilled nursing, public health, long-term care, and post-acute care settings. The PharMerica second lien term loan was purchased at a 2.5% discount to par, earns interest payable in cash at a rate of LIBOR+8.50% with a 1% LIBOR floor and matures in March 2027.

In March 2019, we sold $0.4 million of our second lien term loan in WASH Multifamily Laundry, or WASH, at a price of 99.0% of par.

In March 2019, we sold $0.1 million of our second lien term loan in Coinamatic Canada, Inc., or Coinamatic, at a price of 99.0% of par.

In April 2019, we purchased $1.4 million of second lien term loan in Aptean, a global leader in enterprise business software. The Aptean second lien term loan was purchased at a 2.0% discount to par, included a commitment fee of 1.0%, earns interest payable in cash at a rate of LIBOR+8.50% and matures in April 2027.

Also April 2019, we purchased $1.5 million of second lien term loan in Blackboard Transact, an educational technology company. The Blackboard Transact second lien term loan was purchased at a 2.0% discount to par, included a commitment fee of 1.5%, earns interest payable in cash at a rate of LIBOR+8.50% and matures in April 2027.

Also in April 2019, we sold our remaining investment in TIBCO Software, Inc., or TIBCO at a price of 106.375% to par, resulting in a realized capital gain of $0.2 million or $0.01 per share and generated a gross internal rate of return of 18.6% and return on investment of 1.38x.

In May 2019, we purchased $0.6 million of second lien term loan in Allied Universal Holdco LLC., or Allied Universal, adding to our $1.25 million position which was previously acquired in March 2018. The $0.6 million loan was purchased at a 0.75% discount to par, earns interest payable in cash at a rate of LIBOR+8.50% with a 1% floor and matures in July 2023.

In June 2019, we purchased $0.8 million of second lien term loan and $0.2 million of delayed draw term loan in Imperial Dade (BDPE Empire Holdings), or Imperial Dade, a leading independently owned distributor of food service packaging, facilities maintenance supplies and equipment. The Imperial Dade second lien term loan was purchased at a 1% discount to par, included a commitment fee of 1.5%, earns interest payable in cash at a rate of LIBOR+8.0%, and matures in June 2027.

Also in June 2019, we purchased $1.2 million of first lien term loan, $0.4 million of delayed draw term loan, and $0.1 million of revolving loan facility in JS Held, a global consulting firm with expertise in construction, environmental health and safety equipment, forensic architecture and engineering services. The JS Held first lien term loan was purchased at a 1% discount to par, included a commitment fee of 1.5%, earns interest payable in cash at a rate of LIBOR+6.0%, and matures in July 2025.

In July 2019, Allied Universal fully repaid its second lien term loan in the amount of $1.9 million. We recorded previously unamortized discount of $5 thousand as additional interest income as a result of this repayment. This investment was initiated in March 2018 and generated a gross unlevered internal rate of return of 12.0% and a return on investment of 1.10x.

In August 2019, CVS Holdings, I, LP., or MyEyeDr., repaid its remaining second lien term loan in the amount of $5.0 million. We recorded previously unamortized discount of $22 thousand as additional interest income as a result of this repayment. This investment was initiated in February 2018 and generated a gross unlevered internal rate of return of 10.6% and a return on investment of 1.11x.

In September 2019, we purchased $4.3 million of NAVEX Global Inc., or NAVEX. adding to our $0.4 million position that was previously acquired in August 2018. The $4.3 million NAVEX second lien term loan add-on was purchased at a 0.875% discount to par, earns interest payable in cash at a rate of LIBOR +7.00%, and matures in September 2026.

The table below shows our portfolio investments by type for the periods indicated. We compute yields on investments using interest rates as of the balance sheet date and include amortization of original issue discount and market premium or discount, royalty income and other similar investment income, weighted by their respective costs when averaged. Such weighted average yields are not necessarily indicative of expected total returns on a portfolio.



	September 30, 2019						December 31, 2018
	Weighted Average Yields⁽¹⁾						Weighted Average Yields⁽¹⁾
			Percentage of Portfolio						Percentage of Portfolio
			Cost		Fair Value				Cost		Fair Value
First lien secured debt	8.9	%	1.6	%	2.8	%	9.4	%	0.5	%	0.7	%
Second lien debt	10.2	%	47.5	%	81.2	%	10.5	%	42.4	%	71.3	%
Subordinated debt	—	%	22.0	%	3.9	%	10.3	%	27.4	%	14.4	%
Revolving loan facility	—	%	—	%	—	%	10.5	%	0.3	%	0.5	%
Unsecured term loan	9.3	%	3.1	%	5.3	%	9.1	%	2.9	%	5.0	%
Limited term royalties	—	%	23.0	%	5.9	%	—	%	23.8	%	7.3	%
Senior secured note	11.4	%	0.5	%	0.9	%	9.6	%	0.5	%	0.8	%
Delayed draw term loan	—	%	—	%	—	%	—	%	—	%	—	%
Equity securities
Membership and partnership units	—	%	2.3	%	—	%	—	%	2.2	%	—	%
Total equity securities	—	%	2.3	%	—	%	—	%	2.2	%	—	%
Total portfolio investments	10.1	%	100.0	%	100.0	%	10.4	%	100.0	%	100.0	%

⁽¹⁾ Weighted average yield based on cost and excludes non-yielding assets. Yields are based on the most current interest rates in effect at the end of the period.

As of September 30, 2019 and December 31, 2018, the total fair value of our portfolio investments was $62.4 million and $65.6 million, respectively. Of those fair value totals, approximately $17.5 million, or 28.0%, as of September 30, 2019, and $13.8 million, or 21.0%, as of December 31, 2018 are determined using significant unobservable (i.e., Level 3) inputs.

Results of Operations

Investment Income

Investment income includes interest on our investments and dividend income. Other income includes prepayment fees and modification fees we receive in connection with certain of our investments. These fees are recognized as earned.



Investment Income	For the three months ended September 30,				For the nine months ended September 30,
(in thousands)	2019		2018		2019		2018

Interest income	$	1,496	$	1,819	$	4,499	$	6,572
Other income	22		67		68		224
Total investment income	$	1,518	$	1,886	$	4,567	$	6,796

For the three months ended September 30, 2019, total investment income was $1.5 million, a 20% decrease from $1.9 million of total investment income for the three months ended September 30, 2018. The decrease in investment income was primarily attributable to placing our investment in OCI subordinated notes on full non-accrual in the fourth quarter of 2018. This decrease was partially offset by an increase of $0.1 million in non-affiliate investment interest income.

For the nine months ended September 30, 2019, total investment income was $4.6 million, a 33% decrease from $6.8 million of total investment income for the nine months ended September 30, 2018. The decrease in investment income was primarily attributable to placing our investment in OCI subordinated notes on full non-accrual in the fourth quarter of 2018 and $0.1 million decrease in other income from money market income due to lower cash balances. This decrease was partially offset by an increase of $0.7 million in non-affiliate investment interest income.

Operating Expenses

Operating expenses include interest expense and our allocable portion of operating expenses incurred on our behalf by our investment advisor and our administrator. Other general and administrative expenses include our allocated share of employee, facilities, and stockholder services incurred by our administrator.



Operating Expenses	For the three months ended September 30,		For the nine months ended September 30,
(in thousands)	2019	2018	2019	2018

OHA Investment Corp 10-Q