BCP Investment (BCIC) risk factors, 2026 10-K

Other

1. 01Regulations governing our operation as a BDC affect our ability to, and the way in which we, raise additional capital
2. 02We borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us35% rewritten
3. 03The lack of liquidity in our investments may adversely affect our business
4. 04We may be unable to realize the benefits anticipated by our prior strategic acquisitions, including estimated cost savings, or it may take longer than anticipated to realize such benefits36% rewritten
5. 05Major public health issues, such as pandemics, could have an adverse impact on our financial condition and results of operations and other aspects of our businessnew

Risks Related to Our Business and Structure

1. 06Ineffective internal controls could impact our business and operating results
2. 07The Adviser and its affiliates, including our officers and some of our directors, face conflicts of interest caused by compensation arrangements with us and our affiliates, which could result in actions that are not in the best interests of our stockholders
3. 08Our Advisory Agreement entitles the Adviser to receive incentive compensation on income regardless of any capital losses. In such case, we may be required to pay the Adviser incentive compensation for a fiscal quarter even if there is a decline in the value of our portfolio or if we incur a net loss for that quarter
4. 09There may be conflicts of interest related to obligations that the Adviser’s senior management and investment team has to other clients
5. 10The time and resources that individuals employed by the Adviser devote to us may be diverted and we may face additional competition due to the fact that individuals employed by the Adviser are not prohibited from raising money for or managing other entities that make the same types of investments that we target
6. 11Our base management and incentive fees may induce the Adviser to make speculative investments or to incur leverage
7. 12The Adviser relies on key personnel, the loss of any of whom could impair its ability to successfully manage us
8. 13The Adviser may retain additional consultants, advisors and/or operating partners to provide services to us, and such additional personnel will perform similar functions and duties for other organizations which may give rise to conflicts of interest
9. 14The Adviser’s influence on conducting our operations gives it the ability to increase its fees, which may reduce the amount of cash flow available for distribution to our stockholders
10. 15The Adviser’s liability is limited under the Advisory Agreement, and we are required to indemnify the Adviser against certain liabilities, which may lead the Adviser to act in a riskier manner on our behalf than it would when acting for its own account
11. 16The Adviser is able to resign upon 60 days’ written notice, and we may not be able to find a suitable replacement within that time, resulting in a disruption in our operations that could adversely affect our financial condition, business and results of operations
12. 17We operate in a highly competitive market for investment opportunities
13. 18If the Adviser is unable to source investments effectively, we may be unable to achieve our investment objectives and provide returns to stockholders
14. 19We may have difficulty paying distributions required to maintain our RIC status if we recognize income before or without receiving cash equal to such income
15. 20Any unrealized losses we experience on our loan portfolio may be an indication of future realized losses, which could reduce our resources available to make distributions
16. 21We may experience fluctuations in our quarterly and annual operating results and credit spreads
17. 22We are exposed to risks associated with changes in interest rates and spreads
18. 23We may from time to time expand our business through acquisitions, which could disrupt our business and harm our financial condition
19. 24the potential disruption and strain on our existing business and resources that could result from our planned growth and continuing integration of our acquisitions
20. 25We may invest through joint ventures, partnerships or other special purpose vehicles and our investments through these vehicles may entail greater risks, or risks that we otherwise would not incur, if we otherwise made such investments directly
21. 26Our Board may change our investment objective, operating policies and strategies without prior notice or stockholder approval
22. 27The application of the risk retention rules under Section 941 of the Dodd-Frank Act to CLOs may have broader effects on the CLO and loan markets in general, potentially resulting in fewer or less desirable investment opportunities for us
23. 28Our ability to enter into transactions with our affiliates is restricted
24. 29A failure on our part to maintain our status as a BDC or the application of additional regulatory burdens would significantly reduce our operating flexibility
25. 30Our business and operations could be negatively affected if we become subject to any securities litigation or stockholder activism, which could cause us to incur significant expense, hinder execution of investment strategy and impact our stock price
26. 31We will be subject to corporate-level U.S. federal income taxes if we are unable to qualify as a RIC under Subchapter M of the Code
27. 32The source income requirement will be satisfied if we obtain at least 90% of our income for each year from dividends, interest, gains from the sale of stock or securities or similar sources
28. 33Corresponding return to common stockholder81% rewritten
29. 34Our indebtedness could adversely affect our financial health and our ability to respond to changes in our business
30. 35our ability to obtain additional financing in the future may be impaired21% rewritten
31. 36Provisions in the Revolving Credit Facility or any other future borrowing facility may limit our discretion in operating our business
32. 37We hold investments in a collateralized loan obligation vehicle, which investments are subject to a number of significant risks
33. 38Because we intend to continue to distribute substantially all of our income and net realized capital gains to our stockholders, we will need additional capital to finance our growth
34. 39Risks Associated with Our Information Technology Systems
35. 40Disruptions in current systems or difficulties in integrating new systems
36. 41Internal and external cyber threats, as well as other disasters, affecting us or our third-party service providers could impair our ability to conduct business effectively

Risks Related to Our Investments

1. 42Inflation may adversely affect the business, results of operations and financial condition of our portfolio companies
2. 43Our investments may be risky, and you could lose all or part of your investment66% rewritten
3. 44the fact that a loan is secured does not guarantee that we will receive principal and interest payments according to the loan’s terms, or at all, or that we will be able to collect on the loan should we be forced to exercise our remediesnew
4. 45generally less publicly available information about their businesses, operations and financial condition
5. 46non-investment grade debt involves a greater risk of default and higher price volatility than investment grade debt
6. 47Our portfolio investments for which there is no readily available market, including our investment in our Joint Ventures and our investments in CLO Funds, are recorded at fair value. As a result, there is uncertainty as to the value of these investments44% rewritten
7. 48ready market for these securities existed. Our net asset value could be adversely affected if our Adviser’s determinations regarding the fair value of our illiquid investments were materially higher than the values that we ultimately realize upon the disposal of such securitiesnew
8. 49Defaults by our portfolio companies could harm our operating results
9. 50When we are a debt or minority equity investor in a portfolio company, which generally is the case, we may not be in a position to control the entity, and its management may make decisions that could decrease the value of our investment
10. 51We may have limited access to information about privately held companies in which we invest
11. 52Prepayments of our debt investments by our portfolio companies could negatively impact our operating results
12. 53Our portfolio companies may incur debt that ranks equal with, or senior to, our investments in such companies
13. 54Second priority liens on collateral securing loans that we make to our portfolio companies may be subject to control by senior creditors with first priority liens. If there is a default, the value of the collateral may not be sufficient to repay in full both the first priority creditors and us
14. 55There may be circumstances where our debt investments could be subordinated to claims of other creditors or we could be subject to lender liability claims
15. 56Our investments in equity securities involve a substantial degree of risk
16. 57Our investments in foreign securities may involve significant risks in addition to the risks inherent in U.S. investments
17. 58The disposition of our investments may result in contingent liabilities
18. 59We may not receive any return on our investment in the CLO Funds in which we have invested

Risks Related to Our Common Stock

1. 60We may not be able to pay distributions to our stockholders, our distributions may not grow over time, and a portion of distributions paid to our stockholders may be a return of capital
2. 61Investing in shares of our common stock may involve an above average degree of risk
3. 62Shares of closed-end investment companies, including BDCs, frequently trade at a discount to their net asset value, and we cannot assure you that the market price of our common stock will not decline below the net asset value of the stock
4. 63Our share price may be volatile and may fluctuate substantially
5. 64Certain provisions of the Delaware General Corporation Law and our certificate of incorporation and bylaws could deter takeover attempts and have an adverse impact on the price of our common stock

Risks Related to Our Notes

1. 65The 2026 Notes, 2028 Notes, 2030 Notes and 2032 Convertible Notes are structurally subordinated to the indebtedness and other liabilities of our subsidiaries78% rewritten
2. 66There is no active trading market for the 2026 Notes, 2028 Notes, 2030 Notes or 2032 Convertible Notes. If an active trading market for the 2026 Notes, 2028 Notes, 2030 Notes or 2032 Convertible Notes does not develop , you may not be able to sell them86% rewritten
3. 67An increase in market interest rates could result in a decrease in the market value of the 2026 Notes, 2028 Notes, 2030 Notes or 2032 Convertible Notes66% rewritten
4. 68The indentures governing the 2026 Notes, 2028 Notes, 2030 Notes and 2032 Convertible Notes contain limited protection for holders of the 2026 Notes, 2028 Notes, 2030 Notes and 2032 Convertible Notesnew
5. 69create restrictions on the payment of dividends or other amounts to us from our subsidiaries67% rewritten
6. 70We may choose to redeem the 2026 Notes, 2028 Notes, 2030 Notes or 2032 Convertible Notes when prevailing interest rates are relatively lownew
7. 71We may not be able to repurchase the 2026 Notes, 2028 Notes, 2030 Notes or 2032 Convertible Notes upon a Change of Control Repurchase Event79% rewritten

Risks Relating to Acquisitions

1. 72If we sell investments acquired as a result of our prior strategic acquisitions, it may result in capital gains and increase the incentive fees payable to the Adviser
2. 73Economic recessions or downturns could have a material adverse effect on our business, financial condition and results of operations, and could impair the ability of our portfolio companies to repay loans
3. 74Events outside of our control, including public health crises, could negatively affect our portfolio companies, our investment adviser and the results of our operations
4. 75Global economic, political and market conditions, including downgrades of the U.S. credit rating, may adversely affect our business, results of operations and financial condition70% rewritten
5. 76The ongoing Russian invasion of Ukraine and related sanctions have increased global political and economic uncertainty, which may have a material adverse impact on us and our portfolio companies
6. 77Our businesses may be adversely affected by litigation and regulatory proceedings
7. 78Technological developments in artificial intelligence could disrupt the markets in which we operate and subject us to increased competition, legal and regulatory risks and compliance costsnew