| Summary of the Significant Unobservable Inputs to Determine the Fair Value of Level 3 Portfolio Investments |
The following table provides a summary of the significant unobservable inputs used to determine the fair value of the Corporation’s Level 3 portfolio investments as of September 30, 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Type
|
|
Market Approach EBITDA Multiple |
|
|
Market Approach Liquidation Seniority |
|
|
Market Approach
Revenue Multiple |
|
|
Market Approach Transaction Pricing |
|
|
Totals |
|
Non-Control/Non-Affiliate Equity |
|
$ |
300,000 |
|
|
$ |
— |
|
|
$ |
700,000 |
|
|
$ |
200,063 |
|
|
$ |
1,200,063 |
|
Non-Control/Non-Affiliate Loan and Debt |
|
|
6,641,504 |
|
|
|
2,212,326 |
|
|
|
— |
|
|
|
2,250,000 |
|
|
|
11,103,830 |
|
Total Non-Control/Non-Affiliate |
|
$ |
6,941,504 |
|
|
$ |
2,212,326 |
|
|
$ |
700,000 |
|
|
$ |
2,450,063 |
|
|
$ |
12,303,893 |
|
Affiliate Equity |
|
$ |
4,262,324 |
|
|
$ |
— |
|
|
$ |
3,223,984 |
|
|
$ |
11,550,000 |
|
|
$ |
19,036,308 |
|
Affiliate Loan and Debt |
|
|
18,357,414 |
|
|
|
— |
|
|
|
2,090,000 |
|
|
|
11,613,593 |
|
|
|
32,061,007 |
|
Total Affiliate |
|
$ |
22,619,738 |
|
|
$ |
— |
|
|
$ |
5,313,984 |
|
|
$ |
23,163,593 |
|
|
$ |
51,097,315 |
|
Control Equity |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Control Loan and Debt |
|
|
— |
|
|
|
4,083,489 |
|
|
|
— |
|
|
|
— |
|
|
|
4,083,489 |
|
Total Control |
|
$ |
— |
|
|
$ |
4,083,489 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,083,489 |
|
Total Level 3 Investments |
|
$ |
29,561,242 |
|
|
$ |
6,295,815 |
|
|
$ |
6,013,984 |
|
|
$ |
25,613,656 |
|
|
$ |
67,484,697 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Range |
|
4X - 7X |
|
|
1X |
|
|
1X - 3X |
|
|
Not Applicable |
|
|
|
|
Unobservable Input |
|
EBITDA Multiple |
|
|
Asset Value |
|
|
Revenue Multiple |
|
|
Transaction Price |
|
|
|
|
Weighted Average |
|
5.4X |
|
|
1X |
|
|
1.7X |
|
|
Not Applicable |
|
|
|
|
|
| summary of the components of Assets Measured at Fair Value |
The following table provides a summary of the components of Level 1, 2 and 3 Assets Measured at Fair Value at September 30, 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at Reported Date Using |
|
Description
|
|
September 30, 2023 |
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
|
Significant
Observable Inputs
(Level 2) |
|
|
Other Significant
Unobservable
Inputs
(Level 3) |
|
Loan investments |
|
$ |
12,170,088 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
12,170,088 |
|
Debt investments |
|
|
35,078,238 |
|
|
|
— |
|
|
|
— |
|
|
|
35,078,238 |
|
Equity investments |
|
|
27,435,959 |
|
|
|
7,199,588 |
|
|
|
— |
|
|
|
20,236,371 |
|
Total |
|
$ |
74,684,285 |
|
|
$ |
7,199,588 |
|
|
$ |
— |
|
|
$ |
67,484,697 |
|
The following table provides a summary of the components of Level 1, 2 and 3 Assets Measured at Fair Value at December 31, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at Reported Date Using |
|
Description
|
|
December 31, 2022 |
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
|
Significant
Observable Inputs
(Level 2) |
|
|
Other Significant
Unobservable
Inputs
(Level 3) |
|
Loan investments |
|
$ |
14,578,351 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
14,578,351 |
|
Debt investments |
|
|
19,582,616 |
|
|
|
— |
|
|
|
— |
|
|
|
19,582,616 |
|
Equity investments |
|
|
27,343,292 |
|
|
|
6,407,548 |
|
|
|
— |
|
|
|
20,935,744 |
|
Total |
|
$ |
61,504,259 |
|
|
$ |
6,407,548 |
|
|
$ |
— |
|
|
$ |
55,096,711 |
|
|
| Summary of changes in Assets Measured at Fair Value Using Significant Unobservable Inputs (Level 3) |
The following table provides a summary of changes in Assets Measured at Fair Value Using Significant Unobservable Inputs (Level 3) for the nine months ended September 30, 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements Using Significant
Unobservable Inputs (Level 3) |
|
Description |
|
Loan Investments |
|
|
Debt
Investments |
|
|
Equity
Investments |
|
|
Total |
|
Ending balance December 31, 2022, of Level 3 Assets |
|
$ |
14,578,351 |
|
|
$ |
19,582,616 |
|
|
$ |
20,935,744 |
|
|
$ |
55,096,711 |
|
Realized gains (losses) included in net change in net assets from
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
ClearView Social, Inc. (Clearview Social) |
|
|
— |
|
|
|
— |
|
|
|
10,432 |
|
|
|
10,432 |
|
DSD Operating, LLC (DSD) |
|
|
— |
|
|
|
— |
|
|
|
2,537,765 |
|
|
|
2,537,765 |
|
Microcision, LLC (Microcision) |
|
|
— |
|
|
|
— |
|
|
|
58,329 |
|
|
|
58,329 |
|
Rheonix, Inc. (Rheonix) |
|
|
— |
|
|
|
— |
|
|
|
(2,802,731 |
) |
|
|
(2,802,731 |
) |
SocialFlow, Inc. (Social Flow) |
|
|
— |
|
|
|
— |
|
|
|
(4,941 |
) |
|
|
(4,941 |
) |
Somerset Gas Transmission Company, LLC (Somerset) |
|
|
— |
|
|
|
— |
|
|
|
(448,717 |
) |
|
|
(448,717 |
) |
Total realized losses, net |
|
|
— |
|
|
|
— |
|
|
|
(649,863 |
) |
|
|
(649,863 |
) |
Unrealized gains (losses) included in net change in net assets
from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
DSD |
|
|
— |
|
|
|
— |
|
|
|
(886,698 |
) |
|
|
(886,698 |
) |
Open Exchange, Inc. (Open Exchange) |
|
|
— |
|
|
|
— |
|
|
|
(701,940 |
) |
|
|
(701,940 |
) |
Rheonix |
|
|
— |
|
|
|
— |
|
|
|
2,802,731 |
|
|
|
2,802,731 |
|
Somerset |
|
|
— |
|
|
|
— |
|
|
|
594,097 |
|
|
|
594,097 |
|
Total unrealized gains (losses) |
|
|
— |
|
|
|
— |
|
|
|
1,808,190 |
|
|
|
1,808,190 |
|
Purchases of securities/changes to securities/non-cash
conversions: |
|
|
|
|
|
|
|
|
|
|
|
|
BMP Food Service Supply Holdco, LLC (FSS) |
|
|
— |
|
|
|
2,320,000 |
|
|
|
— |
|
|
|
2,320,000 |
|
BMP Swanson Holdco, LLC (Swanson) |
|
|
100,115 |
|
|
|
— |
|
|
|
— |
|
|
|
100,115 |
|
Caitec, Inc. (Caitec) |
|
|
55,822 |
|
|
|
— |
|
|
|
— |
|
|
|
55,822 |
|
DSD |
|
|
31,652 |
|
|
|
— |
|
|
|
— |
|
|
|
31,652 |
|
FCM Industries Holdco LLC (First Coast Mulch) |
|
|
— |
|
|
|
3,807,147 |
|
|
|
— |
|
|
|
3,807,147 |
|
Filterworks Acquisition USA, LLC (Filterworks) |
|
|
— |
|
|
|
204,489 |
|
|
|
— |
|
|
|
204,489 |
|
GoNoodle, Inc. (GoNoodle) |
|
|
— |
|
|
|
10,614 |
|
|
|
— |
|
|
|
10,614 |
|
HDI Acquisition LLC (Hilton Displays) |
|
|
— |
|
|
|
17,182 |
|
|
|
— |
|
|
|
17,182 |
|
Highland All About People Holdings, Inc. (All About People) |
|
|
— |
|
|
|
3,018,000 |
|
|
|
1,000,000 |
|
|
|
4,018,000 |
|
Inter-National Electronic Alloys LLC (INEA) |
|
|
— |
|
|
|
3,321,071 |
|
|
|
1,011,765 |
|
|
|
4,332,836 |
|
ITA Acquisition, LLC (ITA) |
|
|
547,282 |
|
|
|
— |
|
|
|
— |
|
|
|
547,282 |
|
Mattison Avenue Holdings LLC (Mattison) |
|
|
28,300 |
|
|
|
— |
|
|
|
— |
|
|
|
28,300 |
|
Pressure Pro, Inc. (Pressure Pro) |
|
|
— |
|
|
|
3,038,446 |
|
|
|
30,000 |
|
|
|
3,068,446 |
|
Seybert’s Billiards Corporation (Seybert’s) |
|
|
— |
|
|
|
93,720 |
|
|
|
— |
|
|
|
93,720 |
|
SciAps, Inc. (Sciaps) |
|
|
— |
|
|
|
5,000 |
|
|
|
— |
|
|
|
5,000 |
|
Social Flow |
|
|
— |
|
|
|
— |
|
|
|
4,941 |
|
|
|
4,941 |
|
Tilson Technology Management, Inc. (Tilson) |
|
|
— |
|
|
|
— |
|
|
|
250,000 |
|
|
|
250,000 |
|
Total purchases of securities/changes to securities/non-cash
conversions |
|
|
763,171 |
|
|
|
15,835,669 |
|
|
|
2,296,706 |
|
|
|
18,895,546 |
|
Repayments and sales of securities: |
|
|
|
|
|
|
|
|
|
|
|
|
Clearview Social |
|
|
— |
|
|
|
— |
|
|
|
(10,432 |
) |
|
|
(10,432 |
) |
DSD |
|
|
(3,171,434 |
) |
|
|
— |
|
|
|
(3,605,265 |
) |
|
|
(6,776,699 |
) |
FSS |
|
|
— |
|
|
|
(40,047 |
) |
|
|
(210,000 |
) |
|
|
(250,047 |
) |
Hilton Displays |
|
|
— |
|
|
|
(300,000 |
) |
|
|
— |
|
|
|
(300,000 |
) |
Microcision |
|
|
— |
|
|
|
— |
|
|
|
(58,329 |
) |
|
|
(58,329 |
) |
Somerset |
|
|
— |
|
|
|
— |
|
|
|
(270,380 |
) |
|
|
(270,380 |
) |
Total repayments and sales of securities |
|
|
(3,171,434 |
) |
|
|
(340,047 |
) |
|
|
(4,154,406 |
) |
|
|
(7,665,887 |
) |
Ending balance September 30, 2023, of Level 3 Assets |
|
$ |
12,170,088 |
|
|
$ |
35,078,238 |
|
|
$ |
20,236,371 |
|
|
$ |
67,484,697 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in unrealized appreciation/depreciation included in earnings
related to Level 3 investments still held at reporting date |
|
|
|
|
|
|
|
|
|
|
$ |
(701,940 |
) |
The following table provides a summary of changes in Assets Measured at Fair Value Using Significant Unobservable Inputs (Level 3) for the nine months ended September 30, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements Using Significant
Unobservable Inputs (Level 3) |
|
Description
|
|
Loan Investments |
|
|
Debt
Investments |
|
|
Equity
Investments |
|
|
Total |
|
Ending Balance December 31, 2021, of Level 3 Assets |
|
$ |
15,503,404 |
|
|
$ |
14,030,078 |
|
|
$ |
20,633,935 |
|
|
$ |
50,167,417 |
|
Realized gains (losses) included in net change in net assets
from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
ClearView Social, Inc. (Clearview Social) |
|
|
— |
|
|
|
— |
|
|
|
38,881 |
|
|
|
38,881 |
|
GiveGab, Inc. (Givegab) |
|
|
— |
|
|
|
— |
|
|
|
1,919 |
|
|
|
1,919 |
|
Microcision, LLC (Microcision) |
|
|
— |
|
|
|
— |
|
|
|
190,000 |
|
|
|
190,000 |
|
New Monarch Machine Tool, Inc. (New Monarch) |
|
|
— |
|
|
|
— |
|
|
|
(22,841 |
) |
|
|
(22,841 |
) |
SocialFlow, Inc. (Social Flow) |
|
|
— |
|
|
|
— |
|
|
|
(1,481,498 |
) |
|
|
(1,481,498 |
) |
Total realized (losses), net |
|
|
— |
|
|
|
— |
|
|
|
(1,273,539 |
) |
|
|
(1,273,539 |
) |
Unrealized gains included in net change in net assets
from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
Microcision |
|
|
— |
|
|
|
— |
|
|
|
25,000 |
|
|
|
25,000 |
|
New Monarch |
|
|
— |
|
|
|
— |
|
|
|
22,841 |
|
|
|
22,841 |
|
Social Flow |
|
|
— |
|
|
|
— |
|
|
|
1,628,000 |
|
|
|
1,628,000 |
|
Total unrealized gains |
|
|
— |
|
|
|
— |
|
|
|
1,675,841 |
|
|
|
1,675,841 |
|
Purchases of securities/changes to securities/non-cash
conversions: |
|
|
|
|
|
|
|
|
|
|
|
|
Caitec, Inc. (Caitec) |
|
|
54,704 |
|
|
|
— |
|
|
|
— |
|
|
|
54,704 |
|
DSD Operating, LLC (DSD) |
|
|
364,633 |
|
|
|
— |
|
|
|
— |
|
|
|
364,633 |
|
Filterworks Acquisition USA, LLC (Filterworks) |
|
|
— |
|
|
|
146,723 |
|
|
|
86,213 |
|
|
|
232,936 |
|
GoNoodle, Inc. (GoNoodle) |
|
|
— |
|
|
|
10,622 |
|
|
|
— |
|
|
|
10,622 |
|
HDI Acquisition LLC (Hilton Displays) |
|
|
— |
|
|
|
19,835 |
|
|
|
— |
|
|
|
19,835 |
|
ITA Acquisition, LLC (ITA) |
|
|
52,475 |
|
|
|
— |
|
|
|
623,810 |
|
|
|
676,285 |
|
Mattison Avenue Holdings LLC (Mattison) |
|
|
27,734 |
|
|
|
— |
|
|
|
— |
|
|
|
27,734 |
|
Seybert’s Billiards Corporation (Seybert’s) |
|
|
— |
|
|
|
2,279,234 |
|
|
|
— |
|
|
|
2,279,234 |
|
SciAps, Inc. (Sciaps) |
|
|
— |
|
|
|
11,250 |
|
|
|
— |
|
|
|
11,250 |
|
Total purchases of securities/changes to securities/non-cash
conversions |
|
|
499,546 |
|
|
|
2,467,664 |
|
|
|
710,023 |
|
|
|
3,677,233 |
|
Repayments and sale of securities: |
|
|
|
|
|
|
|
|
|
|
|
|
Clearview Social |
|
|
— |
|
|
|
— |
|
|
|
(38,881 |
) |
|
|
(38,881 |
) |
Givegab |
|
|
— |
|
|
|
— |
|
|
|
(1,919 |
) |
|
|
(1,919 |
) |
GoNoodle |
|
|
— |
|
|
|
(90,175 |
) |
|
|
— |
|
|
|
(90,175 |
) |
Microcision |
|
|
— |
|
|
|
— |
|
|
|
(300,000 |
) |
|
|
(300,000 |
) |
Social Flow |
|
|
— |
|
|
|
— |
|
|
|
(268,502 |
) |
|
|
(268,502 |
) |
Total repayments and sale of securities |
|
|
— |
|
|
|
(90,175 |
) |
|
|
(609,302 |
) |
|
|
(699,477 |
) |
Ending Balance September 30, 2022, of Level 3 Assets |
|
$ |
16,002,950 |
|
|
$ |
16,407,567 |
|
|
$ |
21,136,958 |
|
|
$ |
53,547,475 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in unrealized appreciation/depreciation included in earnings
related to Level 3 investments still held at reporting date |
|
|
|
|
|
|
|
|
|
|
$ |
— |
|
|