| 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 December 31, 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 |
|
$ |
72,522 |
|
|
$ |
— |
|
|
$ |
700,000 |
|
|
$ |
100,063 |
|
|
$ |
872,585 |
|
Non-Control/Non-Affiliate Loan and Debt |
|
|
6,829,263 |
|
|
|
4,465,882 |
|
|
|
— |
|
|
|
— |
|
|
|
11,295,145 |
|
Total Non-Control/Non-Affiliate |
|
$ |
6,901,785 |
|
|
$ |
4,465,882 |
|
|
$ |
700,000 |
|
|
$ |
100,063 |
|
|
$ |
12,167,730 |
|
Affiliate Equity |
|
$ |
5,889,991 |
|
|
$ |
— |
|
|
$ |
3,223,984 |
|
|
$ |
10,550,000 |
|
|
$ |
19,663,975 |
|
Affiliate Loan and Debt |
|
|
26,177,241 |
|
|
|
— |
|
|
|
2,090,000 |
|
|
|
5,568,156 |
|
|
|
33,835,397 |
|
Total Affiliate |
|
$ |
32,067,232 |
|
|
$ |
— |
|
|
$ |
5,313,984 |
|
|
$ |
16,118,156 |
|
|
$ |
53,499,372 |
|
Control Equity |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Control Debt |
|
|
— |
|
|
|
4,148,960 |
|
|
|
— |
|
|
|
— |
|
|
|
4,148,960 |
|
Total Control |
|
$ |
— |
|
|
$ |
4,148,960 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,148,960 |
|
Total Level 3 Investments |
|
$ |
38,969,017 |
|
|
$ |
8,614,842 |
|
|
$ |
6,013,984 |
|
|
$ |
16,218,219 |
|
|
$ |
69,816,062 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Range |
|
4-7X |
|
|
1X |
|
|
1X-3X |
|
|
Not Applicable |
|
|
|
|
Unobservable Input |
|
EBITDA Multiple |
|
|
Asset Value |
|
|
Revenue Multiple |
|
|
Transaction Price |
|
|
|
|
Weighted Average |
|
5.4 X |
|
|
1X |
|
|
1.7X |
|
|
Not Applicable |
|
|
|
|
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 December 31, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
$ |
125,000 |
|
|
$ |
1,401,940 |
|
|
$ |
200,063 |
|
|
$ |
2,027,003 |
|
Non-Control/Non-Affiliate Loan and Debt |
|
|
6,840,200 |
|
|
|
2,201,712 |
|
|
|
— |
|
|
|
2,250,000 |
|
|
|
11,291,912 |
|
Total Non-Control/Non-Affiliate |
|
$ |
7,140,200 |
|
|
$ |
2,326,712 |
|
|
$ |
1,401,940 |
|
|
$ |
2,450,063 |
|
|
$ |
13,318,915 |
|
Affiliate Equity |
|
$ |
4,784,757 |
|
|
$ |
— |
|
|
$ |
3,223,984 |
|
|
$ |
10,900,000 |
|
|
$ |
18,908,741 |
|
Affiliate Loan and Debt |
|
|
12,997,848 |
|
|
|
— |
|
|
|
2,085,000 |
|
|
|
4,250,000 |
|
|
|
19,332,848 |
|
Total Affiliate |
|
$ |
17,782,605 |
|
|
$ |
— |
|
|
$ |
5,308,984 |
|
|
$ |
15,150,000 |
|
|
$ |
38,241,589 |
|
Control Equity |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Control Debt |
|
|
— |
|
|
|
3,536,207 |
|
|
|
— |
|
|
|
— |
|
|
|
3,536,207 |
|
Total Control |
|
$ |
— |
|
|
$ |
3,536,207 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
3,536,207 |
|
Total Level 3 Investments |
|
$ |
24,922,805 |
|
|
$ |
5,862,919 |
|
|
$ |
6,710,924 |
|
|
$ |
17,600,063 |
|
|
$ |
55,096,711 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Range |
|
5-6.5X |
|
|
1X |
|
|
1X-4X |
|
|
Not Applicable |
|
|
|
|
Unobservable Input |
|
EBITDA Multiple |
|
|
Asset Value |
|
|
Revenue Multiple |
|
|
Transaction Price |
|
|
|
|
Weighted Average |
|
5.5 X |
|
|
1X |
|
|
2.0X |
|
|
Not Applicable |
|
|
|
|
|
| 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 year ended December 31, 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) |
|
|
— |
|
|
|
— |
|
|
|
2,459,819 |
|
|
|
2,459,819 |
|
Mercantile Adjustment Bureau, LLC (Mercantile) |
|
|
— |
|
|
|
— |
|
|
|
3,440 |
|
|
|
3,440 |
|
Microcision, LLC (Microcision) |
|
|
— |
|
|
|
— |
|
|
|
115,010 |
|
|
|
115,010 |
|
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 gains (losses) |
|
|
— |
|
|
|
— |
|
|
|
(667,688 |
) |
|
|
(667,688 |
) |
Unrealized gains (losses) included in net change in net assets from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
BMP Food Service Supply Holdco, LLC (FSS) |
|
|
— |
|
|
|
— |
|
|
|
610,000 |
|
|
|
610,000 |
|
BMP Swanson Holdco, LLC (Swanson) |
|
|
— |
|
|
|
— |
|
|
|
266,667 |
|
|
|
266,667 |
|
Caitec, Inc. (Caitec) |
|
|
— |
|
|
|
— |
|
|
|
(300,000 |
) |
|
|
(300,000 |
) |
Carolina Skiff LLC (Carolina Skiff) |
|
|
— |
|
|
|
— |
|
|
|
(249,000 |
) |
|
|
(249,000 |
) |
DSD |
|
|
— |
|
|
|
— |
|
|
|
(886,698 |
) |
|
|
(886,698 |
) |
Open Exchange, Inc. (Open Exchange) |
|
|
— |
|
|
|
— |
|
|
|
(701,940 |
) |
|
|
(701,940 |
) |
Post Process Technologies, Inc. (Post Process) |
|
|
— |
|
|
|
— |
|
|
|
(100,000 |
) |
|
|
(100,000 |
) |
Rheonix |
|
|
— |
|
|
|
— |
|
|
|
2,802,731 |
|
|
|
2,802,731 |
|
Somerset |
|
|
— |
|
|
|
— |
|
|
|
594,097 |
|
|
|
594,097 |
|
Total unrealized gains (losses) |
|
|
— |
|
|
|
— |
|
|
|
2,035,857 |
|
|
|
2,035,857 |
|
Purchases of securities/changes to securities/non-cash conversions: |
|
|
|
|
|
|
|
|
|
|
|
|
Caitec |
|
|
228,606 |
|
|
|
— |
|
|
|
72,522 |
|
|
|
301,128 |
|
DSD |
|
|
31,652 |
|
|
|
— |
|
|
|
— |
|
|
|
31,652 |
|
FCM Industries Holdco LLC (First Coast Mulch) |
|
|
— |
|
|
|
3,818,156 |
|
|
|
— |
|
|
|
3,818,156 |
|
Filterworks Acquisition USA, LLC (Filterworks) |
|
|
— |
|
|
|
247,841 |
|
|
|
— |
|
|
|
247,841 |
|
FSS |
|
|
— |
|
|
|
4,535,000 |
|
|
|
— |
|
|
|
4,535,000 |
|
GoNoodle, Inc. (GoNoodle) |
|
|
— |
|
|
|
14,170 |
|
|
|
— |
|
|
|
14,170 |
|
HDI Acquisition LLC (Hilton Displays) |
|
|
— |
|
|
|
22,523 |
|
|
|
— |
|
|
|
22,523 |
|
Highland All About People Holdings, Inc. (All About People) |
|
|
— |
|
|
|
3,049,187 |
|
|
|
1,000,000 |
|
|
|
4,049,187 |
|
Inter-National Electronic Alloys LLC (INEA) |
|
|
— |
|
|
|
3,338,074 |
|
|
|
1,011,765 |
|
|
|
4,349,839 |
|
ITA Acquisition, LLC (ITA) |
|
|
612,753 |
|
|
|
— |
|
|
|
— |
|
|
|
612,753 |
|
Mattison Avenue Holdings LLC (Mattison) |
|
|
37,934 |
|
|
|
— |
|
|
|
— |
|
|
|
37,934 |
|
Pressure Pro, Inc. (Pressure Pro) |
|
|
— |
|
|
|
3,063,436 |
|
|
|
30,000 |
|
|
|
3,093,436 |
|
SciAps, Inc. (Sciaps) |
|
|
— |
|
|
|
5,000 |
|
|
|
— |
|
|
|
5,000 |
|
Seybert’s Billiards Corporation (Seybert’s) |
|
|
— |
|
|
|
125,569 |
|
|
|
— |
|
|
|
125,569 |
|
Social Flow |
|
|
— |
|
|
|
— |
|
|
|
4,941 |
|
|
|
4,941 |
|
Swanson |
|
|
100,115 |
|
|
|
— |
|
|
|
— |
|
|
|
100,115 |
|
Tilson Technology Management, Inc. (Tilson) |
|
|
— |
|
|
|
— |
|
|
|
250,000 |
|
|
|
250,000 |
|
Total purchases of securities/changes to securities/non-cash conversions |
|
|
1,011,060 |
|
|
|
18,218,956 |
|
|
|
2,369,228 |
|
|
|
21,599,244 |
|
Repayments and sale of securities: |
|
|
|
|
|
|
|
|
|
|
|
|
Clearview Social |
|
|
— |
|
|
|
— |
|
|
|
(10,432 |
) |
|
|
(10,432 |
) |
DSD |
|
|
(3,171,434 |
) |
|
|
— |
|
|
|
(3,527,319 |
) |
|
|
(6,698,753 |
) |
FSS |
|
|
— |
|
|
|
(640,047 |
) |
|
|
(210,000 |
) |
|
|
(850,047 |
) |
Hilton Displays |
|
|
— |
|
|
|
(300,000 |
) |
|
|
— |
|
|
|
(300,000 |
) |
Mercantile |
|
|
— |
|
|
|
— |
|
|
|
(3,440 |
) |
|
|
(3,440 |
) |
Microcision |
|
|
— |
|
|
|
— |
|
|
|
(115,010 |
) |
|
|
(115,010 |
) |
Somerset |
|
|
— |
|
|
|
— |
|
|
|
(270,380 |
) |
|
|
(270,380 |
) |
Total repayments and sale of securities |
|
|
(3,171,434 |
) |
|
|
(940,047 |
) |
|
|
(4,136,581 |
) |
|
|
(8,248,062 |
) |
Transfers within Level 3 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Transfers out of Level 3 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Ending Balance December 31, 2023, of Level 3 Assets |
|
$ |
12,417,977 |
|
|
$ |
36,861,525 |
|
|
$ |
20,536,560 |
|
|
$ |
69,816,062 |
|
Change in unrealized appreciation/depreciation included in earnings related to Level 3 investments still held at reporting date |
|
|
|
|
|
|
|
|
|
|
$ |
(474,273 |
) |
The following table provides a summary of changes in Assets Measured at Fair Value Using Significant Unobservable Inputs (Level 3) for the year ended December 31, 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) |
|
|
— |
|
|
|
— |
|
|
|
53,783 |
|
|
|
53,783 |
|
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 gains (losses) |
|
|
— |
|
|
|
— |
|
|
|
(1,258,637 |
) |
|
|
(1,258,637 |
) |
Unrealized gains (losses) included in net change in net assets from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
Carolina Skiff LLC (Carolina Skiff) |
|
|
— |
|
|
|
— |
|
|
|
657,000 |
|
|
|
657,000 |
|
DSD Operating, LLC (DSD) |
|
|
— |
|
|
|
— |
|
|
|
886,698 |
|
|
|
886,698 |
|
ITA Acquisition, LLC (ITA) |
|
|
— |
|
|
|
— |
|
|
|
(748,810 |
) |
|
|
(748,810 |
) |
Knoa Software, Inc. (Knoa) |
|
|
— |
|
|
|
— |
|
|
|
(379,155 |
) |
|
|
(379,155 |
) |
Microcision |
|
|
— |
|
|
|
— |
|
|
|
25,000 |
|
|
|
25,000 |
|
New Monarch |
|
|
— |
|
|
|
— |
|
|
|
22,841 |
|
|
|
22,841 |
|
OnCore Golf Technology, Inc. (OnCore) |
|
|
— |
|
|
|
— |
|
|
|
(200,000 |
) |
|
|
(200,000 |
) |
Open Exchange, Inc. (Open Exchange) |
|
|
— |
|
|
|
— |
|
|
|
(4,168,060 |
) |
|
|
(4,168,060 |
) |
Post Process Technologies, Inc. (Post Process) |
|
|
— |
|
|
|
— |
|
|
|
(248,875 |
) |
|
|
(248,875 |
) |
SciAps, Inc. (Sciaps) |
|
|
— |
|
|
|
— |
|
|
|
2,152,984 |
|
|
|
2,152,984 |
|
Social Flow |
|
|
— |
|
|
|
— |
|
|
|
1,628,000 |
|
|
|
1,628,000 |
|
Somerset Gas Transmission Company, LLC (Somerset) |
|
|
— |
|
|
|
— |
|
|
|
(375,000 |
) |
|
|
(375,000 |
) |
Tilson Technology Management, Inc. (Tilson) |
|
|
— |
|
|
|
— |
|
|
|
1,374,985 |
|
|
|
1,374,985 |
|
Total unrealized gains (losses) |
|
|
— |
|
|
|
— |
|
|
|
627,608 |
|
|
|
627,608 |
|
Purchases of securities/changes to securities/non-cash conversions: |
|
|
|
|
|
|
|
|
|
|
|
|
BMP Food Service Supply Holdco, LLC (FSS) |
|
|
— |
|
|
|
2,500,000 |
|
|
|
600,000 |
|
|
|
3,100,000 |
|
Caitec, Inc. (Caitec) |
|
|
73,326 |
|
|
|
— |
|
|
|
— |
|
|
|
73,326 |
|
DSD |
|
|
380,599 |
|
|
|
— |
|
|
|
— |
|
|
|
380,599 |
|
Filterworks Acquisition USA, LLC (Filterworks) |
|
|
— |
|
|
|
186,488 |
|
|
|
139,232 |
|
|
|
325,720 |
|
GoNoodle, Inc. (GoNoodle) |
|
|
— |
|
|
|
14,142 |
|
|
|
— |
|
|
|
14,142 |
|
HDI Acquisition LLC (Hilton Displays) |
|
|
— |
|
|
|
26,587 |
|
|
|
— |
|
|
|
26,587 |
|
ITA |
|
|
99,595 |
|
|
|
— |
|
|
|
623,810 |
|
|
|
723,405 |
|
Mattison Avenue Holdings LLC (Mattison) |
|
|
37,175 |
|
|
|
— |
|
|
|
— |
|
|
|
37,175 |
|
Sciaps |
|
|
— |
|
|
|
605,000 |
|
|
|
— |
|
|
|
605,000 |
|
Seybert’s Billiards Corporation (Seybert’s) |
|
|
— |
|
|
|
2,310,496 |
|
|
|
194,000 |
|
|
|
2,504,496 |
|
Total purchases of securities/changes to securities/non-cash conversions |
|
|
590,695 |
|
|
|
5,642,713 |
|
|
|
1,557,042 |
|
|
|
7,790,450 |
|
Repayments and sale of securities: |
|
|
|
|
|
|
|
|
|
|
|
|
Clearview Social |
|
|
— |
|
|
|
— |
|
|
|
(53,783 |
) |
|
|
(53,783 |
) |
Empire Genomics, Corp. (Empire) |
|
|
(1,444,915 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1,444,915 |
) |
Givegab |
|
|
— |
|
|
|
— |
|
|
|
(1,919 |
) |
|
|
(1,919 |
) |
GoNoodle |
|
|
— |
|
|
|
(90,175 |
) |
|
|
— |
|
|
|
(90,175 |
) |
Microcision |
|
|
— |
|
|
|
— |
|
|
|
(300,000 |
) |
|
|
(300,000 |
) |
Social Flow |
|
|
— |
|
|
|
— |
|
|
|
(268,502 |
) |
|
|
(268,502 |
) |
Lumious (Tech 2000, Inc.) |
|
|
(70,833 |
) |
|
|
— |
|
|
|
— |
|
|
|
(70,833 |
) |
Total repayments and sale of securities |
|
|
(1,515,748 |
) |
|
|
(90,175 |
) |
|
|
(624,204 |
) |
|
|
(2,230,127 |
) |
Transfers within Level 3 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Transfers out of Level 3 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Ending Balance December 31, 2022, of Level 3 Assets |
|
$ |
14,578,351 |
|
|
$ |
19,582,616 |
|
|
$ |
20,935,744 |
|
|
$ |
55,096,711 |
|
Change in unrealized appreciation/depreciation included in earnings related to Level 3 investments still held at reporting date |
|
|
|
|
|
|
|
|
|
|
$ |
(1,048,233 |
) |
|