Good afternoon, and welcome to the PennantPark Investment Corporation's Third Fiscal Quarter 2022 Earnings Conference Call. Today's conference is being recorded. At this time, all participants have been placed in a listen-only mode. The call will be open for a question-and-answer session following the speaker's remarks. If you'd like to ask a question at that time, simply press star one on your telephone keypad. If you would like to withdraw your question, press star two on your telephone keypad. It is now my pleasure to turn the call over to Mr. Art Penn, Chairman and Chief Executive Officer of PennantPark Investment Corporation. Mr. Penn, you may begin your conference. Good afternoon, everyone. I'd like to welcome you to PennantPark Investment Corporation's Third Fiscal Quarter 2022 Earnings Conference Call. I'm joined today by Richard Allorto, our Chief Financial Officer. Rick, please start off by disclosing some general conference call information and include a discussion about forward-looking statements. Thank you, Art. I'd like to remind everyone that today's call is being recorded. Please note that this call is the property of PennantPark Investment Corporation, and that any unauthorized broadcast of this call in any form is strictly prohibited. Audio replay of the call will be available by using the telephone numbers and PIN provided in our earnings press release as well as on our website. I'd also like to call your attention to the customary safe harbor disclosure in our press release regarding forward-looking information. Today's conference call may also include forward-looking statements and projections, and we ask that you refer to our most recent filings with the SEC for important factors that could cause actual results to differ materially from these projections. We do not undertake to update our forward-looking statements unless required by law. To obtain copies of our latest SEC filings, please visit our website at pennantpark.com or call us at 212-905-1000. At this time, I'd like to turn the call back to our Chairman and Chief Executive Officer, Art Penn. Thanks, Rick. I'd like to welcome you as the new CFO of our BDCs. We're going to spend a few minutes and comment on our target market environment, provide a summary of how we fared in the quarter ending June 30, how the portfolio is positioned for the upcoming quarters, our capital structure and liquidity, a detailed review of the financials, then open it up for Q&A. From an overall perspective, in this era of inflation, rising interest rates, and geopolitical risk, we believe we are well-positioned as a lender focused on the United States, where floating interest rates on our loans can protect against rising interest rates and inflation. We are pleased to be lending into the core middle market, where we are important strategic capital to our borrowers. We believe we are well-positioned as a company that has a clear game plan for growth of net investment income and dividends. We continue to execute on our plan to increase long-term shareholder value, and I'm pleased to announce that the board of directors has approved another increase of our quarterly dividend to $0.15 per share, payable on October 3rd to shareholders of record as of September 19th. Additionally, we continued buying shares under our stock buyback program and purchased approximately 718,000 shares during the quarter for $5 million. The purchases were accretive to NAV by $0.03 per share. In total, we have bought back 12 million or 1.6 million shares. Some highlights for the quarter ending June 30 were as follows. We recorded an additional net unrealized gain of $12 million or $0.19 per share on our equity investment in RAM Energy. RAM Energy continues to expand operations and drilling, and our equity investment increased in value from the prior quarter. We expect RAM Energy to explore strategic options in the coming quarters. Number two, after quarter end, we completed the amendment, extension, and expansion of the Truist credit facility. The size increased from $465 million to $500 million, and the maturity was extended three years until 2027. Thank you to our lending partners for their confidence and support of the company. Number three, we continue to grow our PSLF JV. The JV grew from $446 million to $608 million during the quarter and continues to generate an attractive double-digit ROE for PNNT. Subsequent to quarter end, the JV has continued investing and growing its investment portfolio, and PNNT and Pantheon Ventures increased their capital commitments to the JV by $76 million. We are targeting a $1 billion vehicle over time, which can drive substantial growth in NII at PNNT. With the rise in base interest rates, PNNT is well positioned to grow NII, as 96% of the debt portfolio is in floating rate assets. Holding everything else constant in the portfolio, a 1% increase in base rates should increase NII by $0.02 per share per quarter, and a 2% base rate increase would result in a $0.04 per share per quarter increase. Choppier market is creating what looks to be an attractive vintage of new loans for the remainder of 2022 and 2023. In the last couple of months, we have seen spreads widen out approximately 100 basis points, an increase in upfront fees or original issue discount, lower leverage, and tighter covenant packages. Now to review the operating results. For the quarter ending June 30th, the net investment income was $0.16 per share, including $0.02 per share in other income. During the quarter, we placed our investment in MailSouth on nonaccrual as a result of continued underperformance. Our GAAP NAV decreased by 4%, driven primarily by a decrease in investment valuations. The decrease was largely attributed to mark-to-market adjustments resulting from the overall choppy market as opposed to specific credit-driven items within the portfolio. We increased the investment portfolio by $101 million during the quarter, and our leverage ratio or debt to equity increased from 1.16x up from 0.8x. With regard to increasing net investment income, our strategy remains focused on, number one, optimizing the portfolio and balance sheet at PNNT as we move towards our target leverage ratio of 1.25x debt to equity. Number two, growing our PSLF JV with Pantheon to $1 billion of assets from approximately $680 million of assets at quarter end. Number three, rotating out of our equity investments over time and redeploying the capital in the cash pay yield instruments. We have a long-term track record of generating value by successfully financing high-growth middle market companies in five key sectors. These are sectors where we have substantial domain expertise, know the right questions to ask, and have an excellent track record. They are business services, consumer, government services and defense, healthcare, and software technology. These sectors have also been resilient and tend to generate strong free cash flow. As an aside, government services and defense is approximately 10% of the portfolio inclusive of the JV and should be a beneficiary of the geopolitical environment. In many cases, we are typically part of the first institutional capital into a company where a founder, entrepreneur, or family is selling their company to a middle market private equity firm. In these situations, there's typically a defined game plan in place with substantial equity support from the private equity firm to significantly grow the company through add-on acquisitions or organic growth. The loans that we provide are important strategic capital that fuels the growth and helps that $10 million-$20 million EBITDA company grow to $30 million, $40 million, $50 million of EBITDA or more. We typically participate in the upside by making an equity co-investment. Our returns on these equity co-investments have been excellent over time. Overall, for the platform, from inception through June 30th, our $335 million of equity co-investments have generated an IRR of 28% at a multiple on invested capital of 2.5x. Because we are an important strategic lending partner, the process and package of terms we receive is attractive. We have many weeks to do our diligence with care. We thoughtfully structure transactions with sensible credit statistics, meaningful covenants, substantial equity cushions to protect our capital, attractive upfront fees and spreads, and equity co-investment. Additionally, from a monitoring perspective, we receive monthly financial statements to help us stay on top of the companies. With regard to covenants, virtually all of our originated first lien loans have meaningful covenants which help protect our capital. This is one reason why our default rate and performance during COVID was so strong. This sector of the market, companies with $10 million-$50 million of EBITDA, is the core middle market. Within the core middle market, we think our capital can add the most value, and we believe the opportunity to get the strongest package of risk return is in the $10 million-$30 million of EBITDA range. The core middle market is below the threshold and does not compete with the broadly syndicated loan or high yield markets. As many of you know, there's been an enormous amount of capital raised by some of our large peers. As such, they are forced to focus on the upper middle market, which are companies with over $50 million of EBITDA. Those upper middle market companies can typically also efficiently access the broadly syndicated loan market. As a result, in the upper middle market, our large peers need to aggressively compete with the broadly syndicated loan market and among themselves. This results in transactions where leverage is high, covenants are light or nonexistent, spreads and upfront fees are compressed, and decisions need to be made quickly. Additionally, from a monitoring perspective, they generally receive financial statements quarterly. The argument you will hear is that bigger companies are less risky. That is a perception and may make some intuitive sense, but the reality is different. According to S&P, loans to companies with less than $50 million of EBITDA have a lower default rate and higher recovery rate than loans to companies with higher EBITDA. We believe that the meaningful covenant protections of core middle market loans, more careful diligence, and tighter monitoring have been an important part of this differentiated performance. Borrowers in our investment portfolio are performing well and we believe are well positioned for future quarters. As of June 30th, the weighted average debt-to-EBITDA on the portfolio was 4.4x, and the average interest coverage ratio, the amount by which cash income exceeds cash interest expense, was 3.7x. This provides substantial cushion to support stable investment income even when interest rates rise. Based on this substantial cushion, even with a 350 basis point rise in base rates and flat EBITDA, our portfolio companies would cover their interest 2.2x on average. As of June 30th, we had one non-accrual in our books in PNNT. This represents 0.9% of the portfolio cost and 0.5% of the portfolio market value. Since inception, PNNT has invested $7.2 billion at an average yield of 11%. This compares to a loss ratio of approximately nine basis points annually. This strong track record includes our energy investments, primarily subordinated debt investments made prior to the financial crisis and recently the pandemic. With regard to the outlook, our new loans in our target market are attractive, and this vintage should be particularly attractive. Our experienced and talented team and our wide origination funnel is producing active deal flow. Our continued focus remains on capital preservation and being patient investors. We want to reiterate our mission, our goal is to generate attractive risk-adjusted returns through income coupled with long-term preservation of capital. Everything we do is aligned to that goal. We seek to find investment opportunities in growing middle-market companies that have high free cash flow conversion. We capture that free cash flow primarily through debt instruments, and we pay out those contractual cash flows in the form of dividends to our shareholders. Let me now turn the call over to Rick, our CFO, to take us through the financial results. Thank you, Art. For the quarter ended June 30th, net investment income totaled $0.16 per share, including $0.02 per share of other income. Operating expenses for the quarter were as follows. Base management fees were $4.9 million. Interest expense was $6.7 million. General and administrative expenses were $1 million. And provision for taxes were $0.2 million. For the quarter ended June 30th, net realized and unrealized change on investments, including provision for taxes, was a loss of $29 million or $0.44 per share. Provision for taxes of $8 million or $0.12 per share was due primarily to the increase in the value of RAM Energy. Change in the value of our credit facility increased our NAV by $0.14 per share. Our net investment income was in excess of our dividend by $0.015 per share. We repurchased approximately 718,000 shares during the quarter at an average purchase price of $6.91, resulting in accretion to NAV of $0.03 per share. As of June 30th, our NAV per share was $9.65, which is down 4% from $10.05 per share from the prior quarter. Our GAAP debt-to-equity ratio, net of cash, was 1.16x. As of June 30th, our key portfolio statistics were as follows. Our portfolio remains highly diversified with 118 companies across 31 different industries. The portfolio was invested in 55% first lien secured debt, 10% in second lien secured debt, 9% in subordinated debt, including 6% in PSLF, and 26% in preferred and common equity, including 4% in PSLF. The weighted average yield on debt investments was 9.3%. 96% of the debt portfolio is floating rate with an average LIBOR floor of 1%. As base interest rates rise, we are well positioned to participate on the upside. Holding everything else constant in the portfolio, a 1% increase in base rates translates into $0.08 per share of NII upside per year. A 2% increase translates into $0.16 per share increase in NII per year. Now let me turn the call back to Art. Thanks, Rick. In closing, I'd like to thank our extremely talented team of professionals for their commitment and dedication. Thank you all for your time today and for your continued investment and confidence in us. That concludes our remarks. At this time, I'd like to open up the call for questions. Thank you. As a reminder, if you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We will pause for just a moment to allow everyone an opportunity to signal for questions. We will go to our first question, from Paul Johnson of KBW. Yeah, good afternoon, guys. Thanks for taking my questions. As far as RAM Energy goes, I'm just curious, when you say you're exploring, excuse me, strategic alternatives for the company, I'm just curious, what's the difference between, I guess, what you're doing now with the company versus prior, you know, getting the company ready for sale? Well, thanks, Paul, for the question. It's a good one. You know, RAM has been performing very well. Recently, the well performance has been good. They've got an excellent track record in their geography in East Texas. With the environment that we're seeing with oil and gas prices, natural gas prices, and the company's operations, we think it's an appropriate time to explore strategic options. I just really wanted to, in particular, drill these last two wells and have the good results that we've had on those two wells, you know, reaffirming the quality of the acreage, the quality of the opportunity. We think with these last two wells, it's, you know, you're creating a package that's even more attractive for potential buyers. Got it. Does that mean, have you guys retained, like, any firm to assist in that sale and look for options? Or is this just more essentially that it's basically officially on the block for sale? Yeah. You know, I think I'll just reiterate, we're gonna explore strategic options over the coming quarters. I think I wanna just leave it at that at this point. Got it. Thanks. Appreciate that. My next question, just on interest income this quarter. I'm just curious why it was actually down, or roughly flat, I guess, with the prior quarter, given all the net growth this quarter. Why? Was that due to a timing issue or perhaps the non-accrual? What drove that? Well, we did have the one non-accrual. We were very active, as you saw. Most of that probably came in towards the tail end of the quarter. I think those two items probably offset each other. We are well positioned. The portfolio is, you know, we are kind of getting to a kind of our target 1.25x debt to equity ratio at PNNT. The JV is growing and of course, you know, the base rates, LIBOR, SOFR are growing nicely. We think from a revenue standpoint, from an interest income standpoint, you know, we're well positioned to see some upside, you know, this quarter. Got it. Appreciate that. You mentioned that you get monthly financial statements from your portfolio companies, gives you a snapshot into you know, ongoing performance, I guess, for the year. I'm curious, do you also receive any sort of updated forecasts for the businesses throughout the year? Have you had you know, conversations, I guess, with sponsors? I'm just curious how those conversations, if you've had them, how they've gone and you know, have things changed? You know, is there more pressure on businesses to cut costs, that sort of thing? Anything that you've seen there? Yeah. Look, clearly we're in a different economic environment than we were kind of in that post-COVID, I don't know what you call it, a honeymoon period. Clearly our management teams are seeing an environment where the economic landscape is different. Putting interest rates aside, it's what elements of the economy are gonna be under more of a microscope. I think good executives are very sober-minded about the environment and working hard to optimize their revenues and their cost structures. Again, we're lenders. Flat's okay. We're still seeing obviously reasonable growth. You know, from the standpoint of where we sit, where we're kind of, you know, three times cash interest coverage, and have plenty of cushion and are, you know, generally in debt securities primarily first lien and some second lien. You know, we feel like it's a fine environment. We're also excited about the vintage. You know, the vintage, this upcoming vintage that we're headed into, late 2022 and 2023 should be a good one. You know, leverage levels are coming down, spreads are widening, capital's getting scarcer, so covenants can be, you know, even more meaningful. Our diligence path can be even more thorough. You know, the whole package of risk-adjusted return that we are getting and can get in this newer environment is a very good. Prior vintages roll off inevitably. You know, if we're doing our underwriting well, we get paid off and that we still get payoffs. Even in this environment, we're still getting taken out, and we'll rotate those proceeds into this kind of upcoming vintage, which should be a really good one. Got it. Thanks for that. Last question from me. Just asking, one loan in the portfolio popped out to me that was marked a little bit lower, still at 88% of cost, AKW Holdings. I'm just curious if you just, given the size of the loan, if you can, give me any color on that? Yeah. -description. I think that mark is really just because it's in British pounds sterling, so it's like our one U.K. company. I think you probably would have seen somewhere in there an offsetting gain from, you know, the currency. You know, when we have a U.K. company, we borrow in pounds, so it's kinda hedged. But the credits, if you were to take out currency, it's a par credit. Got it. Understood. Thanks for that, Art, and thanks for taking my questions. Thanks, Paul. We'll hear next from Robert Dodd with Raymond James. Hi, guys. Going back to one of Paul's questions a little bit. In terms of timing of deployments or anything like that, I mean, the portfolio did grow, but to Paul's point, I mean, the interest income didn't move that much. Were the deployments timed late in the quarter or maybe the repayments early in the quarter, or was there anything unusual about that, or was it just kinda normal inter-quarter activity this quarter? Yeah. Look, we think it was kind of a normal active quarter. You know, clearly base rates, LIBOR, SOFR started spiking towards the end of the quarter and, you know, I think we ended up with a very healthy, you know, underlying LIBOR or underlying base rate of 1.8% or 1.9%, which is I think up from the 1% floors that we had last quarter. That's clicking in and more so, you know, due to the movement since quarter end. You know, there's nothing really else notable to talk about. You know, the one non-accrual, which is not a big one, the activity we had, and then the rise in the base rates. Got it. Okay, thank you. On the JV, I mean, two- Kind of two questions. One, I mean, obviously it's $600 million in assets now. I mean, you've got a plan to get it to $1 billion ultimately, you own, you know, 60% of that. Anyway, you know, it's grown pretty, you know, it's almost doubled in size over the last two years. Is that the kind of pace, I mean, not doubling again from here, obviously, but is that the kind of pace you're comfortable with growing that thing or when would you necessarily potentially expect it to get to that target size, especially in a wider spread environment where maybe deploying capital is even more attractive right now? Yeah. Yeah, it's a good point, and we do like the vintage that we're experiencing. I'd say at the tight end, it's probably a year. At the wide end, it's probably two years. Sometime I'd say we're hoping to optimize to get to that $1 billion, you know, between 12 and 24 months. Got it. Another one on that. I mean, looking at it, I mean, the dividend was flat sequentially, but I think if I've done the math right, that the dividend to you versus the NII, that the PSLF is actually in is about 75%, but you only own 60. So it seems to be at the moment, at least this year, overdistributing versus earnings. I mean, is that math right? Can you give us any explanation about why it may be doing that? Maybe it's got retained earnings for the past, or is that gonna continue? Yeah. Going forward? Yeah. No. We had some big early wins. You know, the way we think about it is the junior capital we're putting in, which is the combination of the sub debt and the equity, that should be getting a 13-ish% return, the combination of the debt instrument and the equity. Certainly we're looking for that to grow over time, hence why we're now over $600 million. We've grown it since quarter end, and why we and Pantheon have agreed to commit more junior capital to the enterprise, really to be able to optimize that ROE. Yeah, to get to $1 billion, we're probably gonna need to use some CLO technology again to do so, which we like for these first lien low risk assets. We like the efficiency of the financing. We like the long-term nature of the financing. We already have one middle market CLO in there. We may want to do another at some point in time. I think again, over the next 12-24 months, we're gonna leg into it. It could be sooner. You're right. The vintage is looking attractive. We might accelerate, but we now have the capital to do so. The strong partnership from our JV partner, Pantheon. Hopefully, as PNNT is getting more optimized from a debt equity standpoint, then PNNT just becomes a, as we rotate out of older deals, we put them into newer deals in this new vintage. It becomes about rotating the equity investments, and it becomes about how we can optimize, you know, that joint venture. You know, those are the levers. We have multiple ways of growing income. We obviously got LIBOR and so forth going up. There's, you know, we think of the basically as like four different ways to grow income in PNNT, which, you know, gives us, you know, real confidence. Hopefully all four, you know, happen. We're pretty sure that the base rates going up are definitely happening. We're pretty sure that spread widening is happening. We're hoping we can rotate equity, and we're pretty sure that the JV can grow. You know, those are the levers and the tools and how we think about it, and we should be able to hit on a few of these and bring NII up over time. Got it. Thank you. Appreciate it. Congrats on the quarter and the dividend increase again. Thank you. As a reminder, please press star one if you have a question at this time. We will go next to Mickey Schleien of Ladenburg Thalmann. Yes, good morning, or I should say good afternoon, everyone. Art, just as a housekeeping question, did you reverse any previous accruals of income for MailSouth this quarter? No. Okay. Bigger picture question, Art. Given, you know, your tenure in the credit markets, I just wanna ask you sort of a 30,000-foot high level question. You know, we have loan prices weak, credit spreads gapping out. Obviously, GDP growth has been negative. You know, lot of headwinds from that perspective. But when I look back and think about all the earnings calls I've been through so far and just looking at, you know, published numbers on leveraged loans, you know, credit is just not really deteriorating from a very high level. Certainly, there's idiosyncratic things going on. So it almost feels like there's a big head fake occurring in the markets, or these credit problems are going to come up, you know, perhaps later this year or next year. You know, the spreads that we're seeing now and the NAVs that we're seeing now make more sense. You know, what's your gut telling you in terms of the outlook for the rest of this year and going into next year? Good question. I think it turns to kind of, you know, obviously what's in the underlying books of our BDC, other BDC. You know, most of us in the industry who've been around a while tend to focus on recession-resistant, recession-resilient industries. Of course, anybody worth their salt in our industry, you know, in their underwriting analysis puts a recession case in. You know, these loans are five to seven years. Of course, you have to model a recession. Of course, you have to try to create a portfolio that's recession resilient and recession-resistant. You know, why do we like healthcare? Why do we like defense government services, et cetera, et cetera? Because we believe these to be industries that are, you know, steady, stable, even in a recessionary environment. Yeah, if you go to the leveraged loan index or the high yield index, and there's gonna be industries that are gonna be more cyclical by definition. You know, by definition, you know, you saw it during COVID. Why did BDC credits perform or direct lending credits perform better than the high yield index? Well, we don't do a lot in airlines, right? We don't do a lot in energy. We don't do a lot in other, you know, big cyclicals, pulp, paper, chemicals, lodging, you know, hospitality. You know, and if you looked at the leveraged loan and high yield index, you had a lot of hospitality, you had a lot of hotels, you had a lot of airlines. One of the reasons we and others in our industry perform better than the overall credit markets is because we specifically are focused and try to stay away from the fray on stuff that's more cyclical. That was COVID. We're now going into what looks to be more of a garden variety recession. This one, too, will be different in some way that's different than the other ones, but we are potentially going into an economic slowdown. You know, we look at these things and say, "Gee, you know, if EBITDA goes down, you know, X%, what does that mean?" You know, for us, at the recession after the global financial crisis, EBITDA went down 7%. That was our most draconian scenario, is the recession after the GFC. This recession may be that draconian. I doubt it will be, but it could be. You know, we build these books with substantial cushion, with real thought that we want them to be recession-resistant. That's perhaps why you're probably sensing a little bit of confidence from us and our colleagues in this industry because we specifically play for this kind of environment. Yeah, I appreciate that and agree with you. I guess my follow-up would be that, given your remarks just now, a lot of the depreciation we've seen in NAVs this quarter, maybe the previous quarter, have just been technical because of spreads widening. It sounds to me that we may see some of that impedance case reverse over time as these credits mature and you're paid back at par. Is that a reasonable assumption on our behalf? Yeah. as it relates to PNNT? That's right. You know, the credit book is down kind of in line with the industry. The loans were marked down a point or two based on the market, not necessarily on credit performance. The bigger moves in NAV were due to our equity portfolio, which by definition should be a little bit more up and down because it's equity, you know. The big movers in our portfolio, PNNT, were mostly some of our equity investments. Understand. That's it for me this afternoon, Art. Thanks for your time. Thank you. We'll go next to Casey Alexander with Compass Point. Hi. Good afternoon, Art. Let me ask, sort of get at Mickey's question maybe in a little bit different way here. I mean, this upcoming or period of economic uncertainty that we're in or call it a recession, seems to be quite different from the last two. I mean, the Great Financial Crisis was a massive, system-wide shock. COVID was sprung upon all of us virtually overnight with wholesale business shutdowns. This is more of a Fed-inspired slowdown to combat inflation. Does this give your portfolio companies with this sort of telegraphing from the Fed a better opportunity to prepare by bolstering their balance sheets, managing down their expenses, and keeping their inventories at levels of expected demand for a period of economic slowdown? Is that an advantage that your companies have in this particular cycle? Yeah. Absolutely. I mean, COVID was a shock. You know, was it a real recession or was it a shock? We can debate that, but it was quick. You know, we had such a decent and such a good performance during COVID precisely because, you know, the sponsors and the management teams who lived through the global financial crisis, which was also a shock, but less of an immediate shock, but still that looked like a slow-moving train wreck, which became a shock in the middle of September of 2008. You know, one of the big lessons drawn from that shock and/or recession was move with speed, you know, kinda cut what you need to cut expense-wise, CapEx, manage your working capital appropriately, you know, roll up your sleeves quickly. Those who moved slowly during both the recession after the GFC as well as COVID got hurt. To a company really during COVID, the speed with which our companies moved was really interesting and positive. You're right, this is a well-telegraphed, like maybe it's a slow-moving situation, and you could see. It absolutely does give these companies you know time to foresee and to project and if they need to tighten the belt and cut some costs and manage their working capital, manage their CapEx, and do so in an appropriate fashion. I think you're right that it's different. This one may be consumer, you know. We'll see. I mean, it seems like they're very much trying to. You know, kind of, get the consumer to calm down a bit. The consumer is still spending a lot of money on travel and experiences and spending less money now on goods. The consumer, consumers are the majority of the economy in the United States. Ultimately, it filters through, you know, everywhere else, or not everywhere else, but a lot of other places. May not filter through to our defense, government services, less so to healthcare, whatever. You know, kind of consumer is a big part of the economy. You know, we'll see how it plays through. You know, we're on top of it with our monthly numbers. We're talking to the companies every month, staying on top of it. It also gives us a chance to prepare and to try to be helpful, you know, in these situations. Secondly, you know, I appreciate your comments about the strategic option for RAM. I think most of us who are listening to the call are centered pretty much on the sale of RAM. Maybe you could outline what some of the other potential strategic options are for RAM and how those might benefit shareholders. That's a great question. Now RAM is generating good cash flow. It you know kind of the wells have been successful. The prices that you can get for oil and natural gas are attractive. You know, there's other options. You can continue to run the company, churn out cash flow, pay down the Main Street loan. You know, if warranted, you know, drill more wells, because the wells seem to have a good you know return on investment. You know, cash flow begets cash flow, and that cash flow can beget cash flow to our shareholders, you know, in many different ways. You know, clearly, you know, there's a focus on strategic options with a potential exit, but, you know, there's also other options that can be attractive, just based on the returns that the company can get on its CapEx these days, which should generate value and cash flow for our shareholders. Yeah. Okay. Well, lastly, you know, I think shareholders do appreciate certainly the return of capital and share repurchase programs when the stock is trading at 65% of book. It's hard to replicate that in your own investing opportunities. I would wonder if the board would at least reload the plan when it fills up, or if not even that, at 65% of book accelerate the plan. You've done a lot of good things in terms of working down some of the equity portions of the portfolio. Certainly, if RAM comes off, you know, what are the hopes of perhaps accelerating that to some extent? Yeah. That's a great point. You know, we're not shy about this kind of programs and now our third buyback. You know, we're in it to win it, and we've done it before. We'll do it again if need be. Certainly you're right, if we can get some nice exits, that could accelerate. All right, great. Thanks for taking my questions, Art. Appreciate it. Thank you. We'll hear next from Melissa Wedel of J.P. Morgan. Good morning. Thanks for taking my questions today. Following on the equity rotation theme, is it fair to say that RAM would represent the sort of low- to the extent there is any low-hanging fruit on the equity rotation side, would that be sort of the most obvious candidate, or are there some other things happening in the background that were or haven't really surfaced on this call? Yeah. You know, it's a good question. Anyone can look in, you know, we can do this offline or anyone can look at our statement of investments and go into that equity piece of the SOI. Where you see, you know, markups of equity versus costs that are substantial, knowing that many of our equity co-investments are in line with financial sponsors, by definition, at some point, you know, those sponsors indeed may be looking at strategic options, you know, themselves. I'm just kind of looking at some of these, you know. There's a company called LashCo Invest That's what's called Lilly Lashes. It's a cosmetics type company. Big, nice markup there as one example. There's a company called Green Veracity. Underlying company there is called Veritext. It's a court reporting business. You know, been a nice embedded markup, you know, there. None of these by themselves are amazingly transformational, but they're singles and doubles that can certainly add to the stream of income that's you know coming out of PNNT. So those are just two examples. You know, we got, I don't know, some 30 equity co-investments, and it's easy enough to look and see where the embedded gains are. Okay. Appreciate that, context, Art. I think just as a follow-up, I apologize if I missed it. Could you elaborate a little bit on Cascade? I think that was restructured in the quarter. Could you just walk us through that briefly? I know we Yeah. You touched on it last quarter. Yeah. We'd just like to- Yeah. Understand that from through the finish line. Yeah, sure. Yeah. Cascade completed its restructuring this past quarter. Our securities were converted into equity securities. We're now a relatively large equity investor in this. New financiers came in as a first lien, second lien package. The new capital gives the company the ability to do add-on acquisitions. For this company to grow its equity value, that's very important. You know, I think it's a nice roll-up strategy. It was hurt by COVID. The numbers more recently post-COVID have been strong. Those numbers have come in kind of post-restructuring. We'll see. We're optimistic. This company's an environmental drilling company, and the states and the cities kind of put a lot of that on hold during COVID, and they're now turning back on the switch. Now with the capital structure, that can allow the company to do add-on acquisitions. We'll see. We're optimistic of course, that with this new capital structure, new fresh capital, and with the support of us as an equity shareholder as well as the original sponsor, who is a major equity shareholder, that you know, together, we can drive value for the company over time and hopefully do relatively well on the equity investment that we retain. Okay. Thanks, Art. With no further questions in queue, I will now turn the conference back over to Art Penn for any additional or closing remarks. Just wanna thank everybody for being on the call today. Reminder that this next quarter is our fiscal year-end. September thirtieth is our fiscal year-end, so we'll be filing our 10-K, and that will happen kind of in mid-November, so a little later than our normal 10-Qs. Our 10-K will be filed in mid-November. We look forward to talking to everybody at that point in time. Again, thanks everybody for participating. Hope everyone has a great rest of the summer. That does conclude this call. Thank you for your participation. You may now disconnect.