Item 1.01 Entry into a Material Definitive Agreement
On August 1, 2022, pursuant to Section 15(c) of the Investment Company Act of
1940, as amended, the Board of Trustees (the "Board") approved the Fourth
Amended and Restated Investment Advisory Agreement between Apollo Investment
Corporation (the "Registrant") and Apollo Investment Management, L.P (the "New
Advisory Agreement"). Under the New Advisory Agreement, the base management fee
will be reduced to 1.75% of the Registrant's net assets from 1.50% on the
Registrant's gross assets (and 1.00% on gross assets exceeding a 200% of net
assets), effective as of January 1, 2023. The incentive fee on income will also
be reduced to 17.5% from 20%, effective as of January 1, 2023. The performance
threshold will remain 7% and there will be no change to the total return
requirement, other than accounting for the change in the incentive fee for the
period following January 1, 2023, or catch-up provision. The incentive fee on
capital gains will also be reduced to 17.5% from 20% effective January 1, 2023.
On August 2, 2022, the Registrant entered into a share subscription agreement
("Purchase Agreement") with MFIC Holdings, LP, a subsidiary of MidCap FinCo
Designated Activity Company (together with its subsidiaries, "MidCap
Financial"), a middle-market specialty finance firm discretionarily managed by
an affiliate of the Registrant's investment adviser, in connection with the
issuance and sale of the Registrant's common stock, par value $0.001 per share
(the "Offering"). Pursuant to the Purchase Agreement, the Registrant will issue
1,932,641 shares of its common stock at a purchase price of $15.5228 per share,
which is the net asset value per share of the Registrant's common stock as of
June 30, 2022. The shares will be subject to a two-yearlock-up period. The total
proceeds of the offering excluding expenses was approximately $30,000,000. The
investor has agreed to bear any expenses that the Registrant may incur in
connection with the offering of its shares of common stock in connection with
the Offering greater than $300,000. The Registrant expects to use the net
proceeds from the Offering to repay a portion of the indebtedness owed under its
senior secured credit facility.
The Offering was made pursuant to the Registrant's effective shelf registration
statement on Form N-2 (Registration No. 333-238518) previously filed with the
Securities and Exchange Commission, as supplemented by a final prospectus
supplement dated August 2, 2022.
On August 2, 2022, the Registrant entered into a trademark license agreement
(the "Trademark Agreement") with Apollo Capital Management, L.P. to give the
Registrant the right to use and display the trademark "MIDCAP FINANCIAL."
The foregoing descriptions of the New Advisory Agreement, the Purchase Agreement
and the Trademark Agreement do not purport to be complete and are qualified in
their entirety by reference to the full text of the New Advisory Agreement,
Purchase Agreement and Trademark Agreement filed with this report as Exhibits
1.1, 1.2 and 1.3, respectively, and which are incorporated herein by reference.
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Item 2.02 Results of Operations and Financial Condition
On August 2, 2022, the Registrant issued a press release announcing its
financial results for the quarter ended June 30, 2022. The text of the press
release is included as Exhibit 99.1 to this Form 8-K.
The information disclosed under this Item 2.02, including Exhibit 99.1 hereto,
is being furnished and shall not be deemed to be "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934 and shall not be deemed
incorporated by reference into any filing made under the Securities Act of 1933,
except as expressly set forth by specific reference in such filing.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
On August 1, 2022, the Board of the Registrant appointed Howard T. Widra to
serve as Executive Chairman of the Registrant's Board.
Prior to his appointment as Executive Chairman, Mr. Widra, 53, served as the
Registrant's Chief Executive Officer from May 2018 to August 2022 and as
President from June 2016 to May 2018. Mr. Widra will continue to serve as Apollo
Global Management's ("Apollo") Head of Direct Origination. Mr. Widra has been
with Apollo and/or its affiliates since 2013. Mr. Widra was a co-founder of
MidCap Financial, a middle-market specialty finance firm with $21.4 billion of
annual originations and was formerly its Chief Executive Officer. Prior to
MidCap Financial, Mr. Widra was the founder and President of Merrill Lynch
Capital Healthcare Finance. Prior to Merrill Lynch, Mr. Widra was President of
GE Capital Healthcare Commercial Finance and held senior roles in its
predecessor entities including President of Heller Healthcare Finance, and COO
of Healthcare Financial Partners. Mr. Widra holds a J.D., Cum Laude, from the
Harvard Law School and a BA from the University of Michigan.
On August 1, 2022, John Hannan, 69, who served as Chairman of the Registrant's
Board from August 2006 to August 2022, was appointed Vice Chairman of the Board.
On August 1, 2022, the Board of the Registrant appointed Tanner Powell to serve
as Chief Executive Officer of the Registrant's Board.
Prior to his appointment as Chief Executive Officer, Mr. Powell, 42, served as
President of the Registrant from May 2018 to August 2022 and served as Chief
Investment Officer for the Registrant's investment adviser from June 2016 to
August 2022. Mr. Powell is a Partner and Portfolio Manager in Apollo's Direct
Origination business. He holds leadership roles in Apollo's Credit Business,
including its aircraft leasing and lending businesses. From 2004 to 2006, he
served as an analyst in Goldman Sachs' Principal Investment Area (PIA). From
2002 to 2004, Mr. Powell was an Analyst in the Industrials group at Deutsche
Bank. He graduated from Princeton University with a BA in political economy.
On August 1, 2022, the Board of the Registrant appointed Ted McNulty to serve as
President of the Registrant.
Mr. McNulty, 47, is a Managing Director in Apollo's Credit business. Prior to
joining Apollo, Mr. McNulty ran the mezzanine and later merchant banking
business for a subsidiary of Mitsubishi UFJ and was a director at Haland before
that. Previously, he held various roles at JPMorgan and its predecessor
institutions, primarily in leveraged finance. Mr. McNulty received an MBA from
the Kellogg School of Management and a BA in Government from Harvard University.
On August 1, 2022, the Board of the Registrant appointed Kristin Hester to serve
as the Registrant's Chief Legal Officer and Corporate Secretary.
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Prior to her appointment as Chief Legal Officer, Ms. Hester, 41, served as the
Registrant's General Counsel and Assistant Secretary since 2021. Ms. Hester has
served as Senior Counsel for Apollo since 2015 and also serves as Chief Legal
Officer for Apollo Debt Solutions BDC, Apollo Senior Floating Rate Fund Inc.,
Apollo Tactical Income Fund Inc, Apollo Diversified Credit Fund and Redding
Ridge Asset Management LLC. Prior to joining Apollo, Ms. Hester was associated
with the law firms of Dechert LLP from 2009-2015 and Clifford Chance US LLP from
2006-2009. In each case she primarily advised U.S. registered investment
companies, their investment advisers, and boards of directors on various matters
under the Investment Company Act of 1940. Ms. Hester received her JD from Duke
University School of Law and graduated cum laude from Bucknell University with a
BS in Business Administration.
Joseph Glatt, 48, who served as the Registrant's Chief Legal Officer and
Secretary since 2014, was promoted to a new role as Partner in Apollo's U.S.
Financial Institutions Group.
Item 8.01. Other Events.
On August 1, 2022, the Board of Directors approved changing the Registrant's
name from Apollo Investment Corporation to MidCap Financial Investment
Corporation effective August 12, 2022. The Registrant's common stock will begin
to trade under the ticker "MFIC" on the NASDAQ Global Stock Market on or about
August 12, 2022.
On August 2, 2022, the Registrant issued a press release announcing the
Offering, the New Advisory Agreement, the officer changes, its name change and
ticker symbol change. This press release is included as Exhibit 99.2 to this
Form 8-K and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
1.1 Fourth Amended and Restated Investment Advisory Agreement,
dated August 1, 2022
1.2 Purchase Agreement, dated August 2, 2022
1.3 Trademark License Agreement, dated August 2, 2022
99.1 Press Release, dated August 2 , 2022
99.2 Press Release, dated August 2, 2022
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