Company: NMFCZ
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001496099-25-000010
Chunk: 118

Company: New Mountain Finance Corp
Filing Date: 2025-02-26
Form: 10-K
Item: Item 1
Chunk 118
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 Adviser incentive compensation even if we incur a loss.

•The incentive fee we pay to the Investment Adviser with respect to capital gains may be effectively greater than 20.0%.

10

•We borrow money, which could magnify the potential for gain or loss on amounts invested in us and increase the risk of investing in us.

•If we are unable to comply with the covenants or restrictions in our borrowings, our business could be materially adversely affected.

•The terms of our credit facilities may contractually limit our ability to incur additional indebtedness.

•If we are unable to obtain additional debt financing, or if our borrowing capacity is materially reduced, our business could be materially adversely affected.

•A renewed disruption in the capital markets and the credit markets could adversely affect our business.

•SBIC I and SBIC II are licensed by the SBA and are subject to SBA regulations.

Risks Related to Our Operations

•Because we intend to distribute substantially all of our income to our stockholders to maintain our status as a RIC, we will continue to need additional capital to finance our growth. If additional funds are unavailable or not available on favorable terms, our ability to grow may be impaired.   

•SBIC I and SBIC II may be unable to make distributions to us that will enable us to meet or maintain our RIC tax treatment.

•Our ability to enter into transactions with our affiliates is restricted.

•The Investment Adviser has significant potential conflicts of interest with us and, consequently, your interests as stockholders which could adversely impact our investment returns.

•The valuation process for certain of our portfolio holdings creates a conflict of interest.

•Conflicts of interest may exist related to other arrangements with the Investment Adviser or its affiliates.

•The Investment Management Agreement with the Investment Adviser and the Administration Agreement with the Administrator were not negotiated on an arm’s length basis.

•The Investment Adviser’s liability is limited under the Investment Management Agreement, and we have agreed to indemnify the Investment Adviser against certain liabilities, which may lead the Investment Adviser to act in a riskier manner than it would when acting for its own account.

•If we fail to maintain our status as a BDC, our business and operating flexibility could be significantly reduced.

•If we do not invest a sufficient portion of our assets in qualifying assets, we could be precluded from investing in certain assets or could be required to dispose of certain assets, which could have a material adverse effect on our business, financial condition and results of operations