10-K: TriLinc Global Impact Fund Reports NAV Decline, Liquidity Challenges

TriLinc Global Impact Fund, LLC reported a decrease in its net asset value per unit for the year ended December 31, 2025, alongside ongoing liquidity constraints and a suspension of regular distributions.

Summary

• The Net Asset Value (NAV) per unit decreased from $5.89 as of December 31, 2024, to $5.71 as of December 31, 2025, a decline of $0.18 per unit.
• Net investment income significantly decreased to $4,962,433 for the year ended December 31, 2025, from $12,202,266 in the prior year.
• Total investment income declined to $18,506,243 in 2025 from $25,856,989 in 2024, primarily due to reclassification of income from certain investments and more investments being placed on non-accrual status.
• The company recorded net change in unrealized depreciation on investments of $(7,361,847) in 2025, a reversal from net change in unrealized appreciation of $1,737,905 in 2024.
• Net realized losses on investments increased to $(6,094,524) in 2025 from $(1,471,793) in 2024.
• No distributions were paid to unitholders during the year ended December 31, 2025; only two special distributions totaling $4,181,278 were paid in February and March 2024, with regular monthly distributions suspended since June 2023.
• The unit repurchase program remains suspended for general requests, with repurchases limited solely to requests made in connection with the death or disability of a unitholder, and further limited by proceeds from the Distribution Reinvestment Plan (DRP), which are currently zero due to no distributions.
• The company faces significant liquidity constraints due to ongoing challenges with borrowers' ability to repay amounts owed.
• The largest investment, Blue Arrow Biojet Holdings, LLC, represents 27.0% of the total portfolio's fair value ($70,740,611) and accrues paid-in-kind (PIK) interest.
• The number of Watch List investments increased to 22 companies (57.1% of the total portfolio's fair value) in 2025, from 19 companies (57.2%) in 2024.
• 19 portfolio companies were on non-accrual status (51.3% of the total portfolio's fair value) as of December 31, 2025, up from 14 companies (37.4%) in 2024.
• A portion of the investment in TriLinc Peru S.A.C. was sold to an affiliated entity for $1.0 million, resulting in a realized loss of approximately $74,000.
• Total debt outstanding as of December 31, 2025, was approximately $2.9 million, solely related to a repurchase obligation, resulting in a debt to equity ratio of 1.0%.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this as a very negative report due to the significant decline in NAV, substantial unrealized and realized losses, suspension of distributions, severe liquidity constraints, and a high percentage of investments on Watch List and non-accrual status, indicating deep-seated portfolio issues.

Positives

• The restructuring plan for Compania Argentina de Granos (CAGSA) was approved by the court on July 31, 2025, with the first settlement payment received in October 2025 and the second in February 2026, leading to an increase in fair value of approximately $884,000.
• A UK judgment in favor of Helios against Trustco Group Holdings Ltd. was recognized and enforced in Namibia on September 24, 2025, contributing to an increase in fair value of approximately $1.5 million due to the appreciation of the Namibian dollar.
• The restructuring for Maritime One Limited was completed, and the borrower has continued servicing the debt, resulting in an increase in fair value of approximately $425,000.
• Cevher International B.V. Netherlands recognized an increase in fair value of approximately $893,000 based on a settlement framework.
• Management concluded that the company's internal control over financial reporting was effective as of December 31, 2025.
• The company was in compliance with all concentration limits (maximum 45% regional exposure, 20% country exposure, and 5% individual investment exposure) as of December 31, 2025 and 2024.

Negatives

• Net asset value per unit decreased by $0.18, from $5.89 to $5.71, for the year ended December 31, 2025.
• Net investment income declined significantly from $12.2 million in 2024 to $4.96 million in 2025.
• Total investment income decreased by $7.35 million year-over-year, primarily due to reclassification of income and more investments on non-accrual status.
• The company recorded $7.36 million in net unrealized depreciation on investments in 2025, a significant shift from $1.74 million in appreciation in 2024.
• Net realized losses on investments increased from $1.47 million in 2024 to $6.09 million in 2025.
• No distributions were paid in 2025, and regular monthly distributions have been suspended since June 2023.
• The unit repurchase program remains largely suspended, severely limiting liquidity for unitholders.
• The company faces significant liquidity constraints due to borrower repayment challenges, with a critically low cash balance of $54,612 as of December 31, 2025.
• The number of Watch List investments increased to 22 (57.1% of portfolio fair value), and non-accrual investments increased to 19 (51.3% of portfolio fair value).
• The value of the equity warrant for Blue Arrow Biojet Holdings, LLC declined to zero as of December 31, 2025, due to continued interest accrual.
• Sancor Cooperativas Unidas Limitada is facing ongoing uncertainty, failed to fulfill installment obligations, and filed for bankruptcy protection, resulting in a fair value decrease of approximately $144,000.
• Producam SA experienced ongoing delays in recovery from legal claims, leading to a decrease in fair value of approximately $994,000.
• Ecsponent Holdings, Ltd. is pursuing liquidation, resulting in a decrease in fair value of approximately $660,000.
• Agilis Partners experienced ongoing delays in restructuring, leading to a decrease in fair value of approximately $762,000.
• Surpapelcorp S.A. faced significant challenges due to an energy crisis and liquidity constraints, leading to a $4.3 million decrease in fair value.
• Dock Brasil Engenharia E Servicos S.A. experienced decreased revenues and operational issues, with a settlement resulting in a decrease in fair value of approximately $4.3 million.
• Multiple ICD (Kenya) Limited's restructuring stalled, increasing the probability of liquidation and leading to a decrease in fair value of approximately $775,000.
• Limas Commodities House Limited experienced continued impact from COVID-19, slow trading activity ramp-up, and delays in collateral proceeds, resulting in a decrease in fair value of approximately $528,000.
• PT Citra Labuantirta's supplier filed a bankruptcy claim, introducing uncertainty and leading to a decrease in fair value of approximately $3.4 million.
• Equity Participation in Cocoa Transaction saw cocoa prices decline, reducing expected proceeds and resulting in a decrease in fair value of approximately $276,000.
• The sale of TriLinc Peru S.A.C. to an affiliate resulted in a $74,000 realized loss.
• Amounts due to affiliates increased significantly to $917,251 in 2025 from $240,100 in 2024.

Risks

• The lack of liquidity of privately held investments may adversely affect the business.
• As a debt or minority equity investor, the company may not control portfolio companies, and management decisions could decrease investment value.
• Investments with PIK interest expose the company to higher risks, including increased loss exposure and valuation difficulties.
• The company operates in a highly competitive market for investment opportunities, potentially limiting attractive options.
• An investment strategy focused on privately held companies presents challenges due to limited available information, dependence on key personnel, and greater vulnerability to economic downturns.
• The company may not realize gains from equity instruments (warrants) granted as return enhancement vehicles.
• Actions or ineffectiveness of sub-advisors and other investment partners could negatively impact performance, as seen with IIG's fraud.
• Borrowers may incur debt that ranks equally with, or senior to, the company's investments, reducing recovery in default scenarios.
• There is a risk that unitholders may not receive distributions, or that distributions may be reduced or not grow over time.
• Dependence on key management personnel of the Advisor and affiliates, who face conflicts of interest relating to time management.
• Non-U.S. investments involve significant legal, geopolitical, investment, repatriation, and transparency risks.
• Fluctuations in currency exchange rates may negatively affect borrowers' ability to pay U.S. dollar-denominated loans.
• The company's ESG and impact investment strategy may limit available investment opportunities or lead to underperformance.
• Exposure to increasing shifts in climate patterns or unpredictable climate-driven events may have adverse financial and operational implications.
• Economic and trade sanctions laws may prohibit transactions with certain countries or individuals.
• Lack of compliance with the U.S. Foreign Corrupt Practices Act (FCPA) could subject the company to penalties.
• The company is subject to the risk of discontinuation of the Advisor's operations or termination of the Advisory Agreement.
• The company may compete with other Sponsor-affiliated entities for investment opportunities, potentially impacting its operations.
• Small and medium-sized businesses may have limited financial resources, less predictable operating results, dependence on one or two persons, and greater exposure to economic downturns.
• Lack of minimum requirements when lending to small and medium-sized businesses could increase the risk of default.
• Floating rate investments are subject to risks related to the discontinuation of LIBOR and the use of alternative rates like SOFR.
• Hedging activities could expose the company to risks or artificially limit investment income.
• Reliance on external financing exposes the company to risks associated with leverage, including inability to obtain funds or restrictive covenants.
• Financing arrangements may involve balloon payment obligations, affecting distribution ability.
• The company may be unable to invest a significant portion of its raised capital on acceptable terms or within anticipated timeframes, impairing performance.
• Non-payment by borrowers and acts/omissions by sub-advisors have prevented and may continue to prevent expected income realization and decrease NAV.
• Prepayments by borrowers could adversely impact operating results by reducing total income and increasing the need for new investments.
• Investments may be long-term, requiring several years to realize liquidation events.
• Allocation of substantially all fixed-income investment capital to unrated instruments is highly speculative.
• Internalizing management functions could incur adverse effects and significant costs.
• Failure to be taxed as a partnership may result in adverse tax consequences for the company and unitholders.
• Transfer restrictions imposed to avoid publicly traded partnership status may adversely impact unitholders' ability to transfer or sell units.
• Unitholders may be allocated taxable income in excess of cash available for distribution (e.g., PIK interest).
• An audit or tax adjustment by the IRS may result in additional taxes or costs.
• Legislative or regulatory action could adversely affect unitholders.
• Operations may result in reportable transactions for the company and unitholders.
• Unitholders may be required to obtain U.S. federal income tax return filing extensions and file tax returns in multiple jurisdictions.
• The company's operations may result in unrelated business taxable income (UBTI) for tax-exempt investors.
• The company's operations may result in being subject to foreign income taxes.
• Non-U.S. unitholders may be subject to U.S. federal, state, and local income and withholding tax and filing requirements.
• The company is not registered as an investment company under the Investment Company Act, thus not subject to its requirements and protections.
• If the company's assets are deemed to be plan assets for ERISA purposes, the Advisor and company may be exposed to liabilities.
• Units are not listed on an exchange and are generally illiquid, making sales difficult and likely at a substantial discount.
• Unitholders do not have the opportunity to evaluate investments before they are made, increasing speculative risk.
• Unitholders will experience substantial dilution in the net tangible book value of their units due to offering costs.
• Unitholders may experience dilution through subsequent offerings.
• The estimated NAV per unit may not equal the actual NAV per unit at the time of repurchase or reinvestment.
• The company does not have research analysts reviewing its performance, limiting independent review.
• Terrorist attacks, military conflicts, acts of war, or national disasters may affect the market for units and impact businesses.
• Cyber incidents or deficiencies in cybersecurity could negatively impact the business.

Future Outlook

Global growth expectations were modestly revised downward in 2025. Many borrowers continue to struggle to recover from the compound impact of economic hardship stemming from the COVID-19 pandemic and the Russia-Ukraine conflict, with current macroeconomic conditions not strong enough for rapid recovery. Geopolitical tensions and trade restrictions create significant uncertainty and could adversely affect global economic conditions and financial markets. The company expects additional significant constraints on its liquidity in the near term and anticipates not being able to pay regular monthly distributions in the coming quarters. Management intends to continue exploring and pursuing multiple strategies to address liquidity needs, including the sale of investments and seeking new credit facilities. Several investment restructurings and sales are expected to finalize in 2026, which could provide liquidity.

Management Comments

• The Company believes that the central issue driving results is the fact that many borrower companies continue to struggle to recover from the compound impact of approximately three years of economic hardship stemming from the COVID-19 pandemic from 2020 to 2022, while current macroeconomic conditions are not strong enough for borrower companies to achieve a rapid and significant recovery in operating performance.
• The Company intends to continue exploring and pursuing multiple strategies in order to address its liquidity needs, which may include the sale of all or a portion of certain investments and seeking to obtain new credit facilities.
• Although these settlements negatively impacted the net asset value, after consideration of potential alternative outcomes, the Company determined to proceed with these settlements because the Company believed that it was in the best interest of the unitholders.

Industry Context

StockSavvy.ai notes that the challenges faced by TriLinc Global Impact Fund, particularly with SME borrowers in developing economies, reflect broader vulnerabilities in impact investing sectors to global macroeconomic shocks and geopolitical instability. The persistent struggles of borrowers post-pandemic, exacerbated by inflation and supply chain issues, highlight the inherent risks in these markets, often characterized by less robust financial infrastructure and greater sensitivity to external factors compared to developed markets. The reliance on PIK interest and the high percentage of Watch List investments suggest a systemic stress within the portfolio that may be indicative of broader difficulties for similar funds operating in high-risk, high-impact regions.

Comparison to Industry Standards

• The filing does not explicitly compare its performance to specific comparable companies or projects within the impact investing sector.
• The company operates in 'impact investing,' which J.P. Morgan Global Research and Rockefeller Foundation in a 2010 report called an 'emerging alternative asset class,' implying a nascent and less standardized industry compared to traditional asset classes.
• The high percentage of Watch List investments (57.1% of fair value) and non-accrual status (51.3% of fair value) suggests a significantly higher risk profile and underperformance compared to typical diversified debt portfolios in more stable, developed markets.

Management Changes

Corporate Governance

Legal Proceedings

• As of December 31, 2025, the Company was not a defendant in any material litigation.
• IIG TOF B.V. was declared bankrupt in the Netherlands in January 2020, and the Company is seeking recovery of amounts due through the bankruptcy proceedings.
• Sancor Cooperativas Unidas Limitada filed for concurso preventivo protection (comparable to a U.S. Chapter 11 bankruptcy filing) in Argentina in February 2025. The Company, as part of the lender group, filed claims in June 2025.
• PT Citra Labuantirta: A supplier filed a Penundaan Kewajiban Pembayaran Utang (PKPU) claim (comparable to a U.S. Chapter 11 bankruptcy filing) in Indonesia in September 2025. The Company has filed a claim in connection with that proceeding.
• Trustco Group Holdings Ltd.: An initial judgment was issued in Helios' favor in the UK, and Trustco's appeal was dismissed. The judge granted Helios' application to have the UK judgment recognized and enforced in Namibia in September 2025, though Trustco filed an appeal.
• Worldwide Investments and Representations Winrep S.A. and Vannapack S.A. (WinRep): The Company filed a hecho relevante (relevant fact) notification with the Superintendencia de Compaas (SIC) to formally inform the authority about the existence of its defaulted debt. The SIC initiated an internal investigation.

Related Party Transactions

• The Advisor earned $5,641,735 in asset management fees for the year ended December 31, 2025, and $5,562,244 for the year ended December 31, 2024. No incentive fees were earned in either period.
• On February 7, 2025, the Company sold a portion of its investment in TriLinc Peru S.A.C. for $1.0 million to TriLinc Global Impact Fund II, Master, Ltd., an entity whose advisor is under common ownership with the Company's Advisor. This transaction resulted in a realized loss of approximately $74,000.
• Amounts due from affiliates totaled $10,015 as of December 31, 2025, reflecting the payment of certain operating expenses of an affiliate of the Advisor by the Company, which had not yet been reimbursed.
• Amounts due to affiliates totaled $917,251 as of December 31, 2025, reflecting the Company's obligation to reimburse affiliates of the Advisor for certain operating expenses paid on the Company's behalf.

Stakeholder Impact

• Shareholders (Unitholders): Experience significant negative impact due to a declining NAV, suspension of distributions, and severely limited liquidity for their units. The potential for further capital impairment is high.
• Employees: The company has no direct employees; operations are managed by the Advisor's staff.
• Customers (Borrowers): Many borrowers are in financial distress, undergoing restructuring, or facing bankruptcy, indicating significant challenges in their operations and ability to meet obligations.
• Creditors: The company has a binding repurchase obligation of approximately $2.9 million. Several investments are in bankruptcy or default, affecting potential recovery for other creditors involved in those facilities.
• Advisor/Affiliates: Continues to receive asset management fees despite the company's poor performance. Involved in related party transactions, including the sale of an investment and expense reimbursements.

Next Steps

• Continue exploring and pursuing multiple strategies to address liquidity needs, including asset sales and seeking new credit facilities.
• Negotiate definitive documentation for Agilis Partners restructuring, which is expected to close in 2026.
• Finalize the sale transaction for Dock Brasil Engenharia E Servicos S.A., expected during the first quarter of 2026.
• Monitor the progress of Ecsponent Holdings, Ltd. liquidation filing.
• Continue to pursue the enforcement process and corresponding options for Trustco Group Holdings Ltd.
• Await the SIC report on WinRep during the second quarter of 2026.
• Evaluate Sancor's restructuring proposal and coordinate with other creditors regarding next steps.
• Counsel to the lender group intends to meet in-person with the judge and bankruptcy trustee for Sancor.
• Cevher International B.V. Netherlands continues to evaluate strategic alternatives and pursue a potential initial public offering in Türkiye.

Key Dates

Recommendation

The filing reveals a deteriorating financial position with a declining NAV, substantial unrealized and realized losses, and a complete suspension of distributions, indicating severe operational and liquidity challenges. The high proportion of Watch List and non-accrual investments, coupled with ongoing legal and restructuring complexities for many borrowers, points to significant and persistent credit risk. The lack of a public trading market and the suspended unit repurchase program severely limit unitholder liquidity. While management is exploring strategies, the current financial health and outlook suggest a high probability of further capital impairment for investors.

Keywords

Impact Investing, SME Finance, Developing Economies, Private Debt, Trade Finance, Term Loans, SEC Filing, 10-K, Financial Performance, Net Asset Value, Liquidity, Distributions, Risk Management, Cybersecurity, Corporate Governance, Investment Portfolio, Watch List, Unrealized Losses, Realized Losses, Sub-advisors, Related Party Transactions, Non-accrual loans, PIK interest