Trinity Capital Inc. (NASDAQ: TRIN), a leading specialty lending company that provides debt, including loans and equipment financing, to growth stage companies backed by technology banks, venture capital and private equity firms, today announced an adjustment to the conversion rate of its 6.00% Convertible Notes due 2025 (the “Convertible Notes”) as a result of the Company’s cash dividend of $0.36 per share, payable on January 14, 2022 to stockholders of record as of December 31, 2021. The ex-dividend date for such dividend is December 30, 2021.
Effective immediately after the close of business on December 31, 2021, the conversion rate of the Convertible Notes will be adjusted to 67.0278 shares of the Company’s common stock per $1,000 principal amount of Convertible Notes from the prior conversion rate of 66.7960 shares of the Company’s common stock per $1,000 principal amount of Convertible Notes, which had been in effect since October 1, 2021. As a result, effective as of such time, the conversion price applicable to the Convertible Notes will be adjusted to $14.92 per share of common stock from $14.97 per share of common stock.
The adjustment to the conversion rate of the Convertible Notes is being made pursuant to the second supplemental indenture, dated as of December 11, 2020, governing the Convertible Notes as a result of the Company’s cash dividend discussed above exceeding the initial dividend threshold of $0.30 per share of common stock set forth in the second supplemental indenture.
Notice of the conversion rate adjustment will be delivered to the holders of the Convertible Notes and U.S. Bank National Association, as trustee, in accordance with the terms of the second supplemental indenture governing the Convertible Notes.
Certain Information Regarding Distributions
The Company’s objective is to distribute four quarterly distributions in an amount that approximates 90% to 100% of its taxable quarterly income or potential annual income for a particular year in order to qualify for tax treatment as a regulated investment company under the Internal Revenue Code of 1986. In addition, during any particular year, the Company may pay additional supplemental distributions, so that the Company distributes approximately all its annual taxable income in the year it was earned, or it may spill over the excess taxable income into the coming year for future distribution payments.
Distributions are paid from taxable earnings and may include a return of capital and/or capital gains. The specific tax characteristics of the distributions will be reported to stockholders on Form 1099-DIV after the end of the calendar year and in the Company’s periodic reports filed with the Securities and Exchange Commission.
