| 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 March 31, 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
$ |
364,608 |
|
|
$ |
1,137,130 |
|
Non-Control/Non-Affiliate Loan and Debt |
|
|
10,582,253 |
|
|
|
4,469,447 |
|
|
|
— |
|
|
|
2,943,000 |
|
|
|
17,994,700 |
|
Total Non-Control/Non-Affiliate |
|
$ |
10,654,775 |
|
|
$ |
4,469,447 |
|
|
$ |
700,000 |
|
|
$ |
3,307,608 |
|
|
$ |
19,131,830 |
|
Affiliate Equity |
|
$ |
5,889,991 |
|
|
$ |
— |
|
|
$ |
3,123,984 |
|
|
$ |
10,550,000 |
|
|
$ |
19,563,975 |
|
Affiliate Loan and Debt |
|
|
31,234,625 |
|
|
|
— |
|
|
|
2,090,000 |
|
|
|
1,750,000 |
|
|
|
35,074,625 |
|
Total Affiliate |
|
$ |
37,124,616 |
|
|
$ |
— |
|
|
$ |
5,213,984 |
|
|
$ |
12,300,000 |
|
|
$ |
54,638,600 |
|
Control Equity |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Control Loan and Debt |
|
|
— |
|
|
|
4,537,435 |
|
|
|
— |
|
|
|
— |
|
|
|
4,537,435 |
|
Total Control |
|
$ |
— |
|
|
$ |
4,537,435 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,537,435 |
|
Total Level 3 Investments |
|
$ |
47,779,391 |
|
|
$ |
9,006,882 |
|
|
$ |
5,913,984 |
|
|
$ |
15,607,608 |
|
|
$ |
78,307,865 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Range |
|
4X - 7X |
|
|
1X |
|
|
1.5X - 3.5X |
|
|
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 March 31, 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at Reported Date Using |
|
Description
|
|
March 31, 2024 |
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
|
Significant
Observable Inputs
(Level 2) |
|
|
Other Significant
Unobservable
Inputs
(Level 3) |
|
Loan investments |
|
$ |
16,554,132 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
16,554,132 |
|
Debt investments |
|
|
41,052,628 |
|
|
|
— |
|
|
|
— |
|
|
|
41,052,628 |
|
Equity investments |
|
|
25,167,365 |
|
|
|
4,466,260 |
|
|
|
— |
|
|
|
20,701,105 |
|
Total |
|
$ |
82,774,125 |
|
|
$ |
4,466,260 |
|
|
$ |
— |
|
|
$ |
78,307,865 |
|
The following table provides a summary of the components of Level 1, 2 and 3 Assets Measured at Fair Value at December 31, 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at Reported Date Using |
|
Description
|
|
December 31, 2023 |
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
|
Significant
Observable Inputs
(Level 2) |
|
|
Other Significant
Unobservable
Inputs
(Level 3) |
|
Loan investments |
|
$ |
12,417,977 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
12,417,977 |
|
Debt investments |
|
|
36,861,525 |
|
|
|
— |
|
|
|
— |
|
|
|
36,861,525 |
|
Equity investments |
|
|
27,846,210 |
|
|
|
7,309,650 |
|
|
|
— |
|
|
|
20,536,560 |
|
Total |
|
$ |
77,125,712 |
|
|
$ |
7,309,650 |
|
|
$ |
— |
|
|
$ |
69,816,062 |
|
|
| 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 three months ended March 31, 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements Using Significant
Unobservable Inputs (Level 3) |
|
Description |
|
Loan Investments |
|
|
Debt
Investments |
|
|
Equity
Investments |
|
|
Total |
|
Ending balance December 31, 2023, of Level 3 Assets |
|
$ |
12,417,977 |
|
|
$ |
36,861,525 |
|
|
$ |
20,536,560 |
|
|
$ |
69,816,062 |
|
Unrealized losses included in net change in net assets
from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
Knoa Software, Inc. (Knoa) |
|
|
— |
|
|
|
— |
|
|
|
(100,000 |
) |
|
|
(100,000 |
) |
Total unrealized losses |
|
|
— |
|
|
|
— |
|
|
|
(100,000 |
) |
|
|
(100,000 |
) |
Purchases of securities/changes to securities/non-cash
conversions: |
|
|
|
|
|
|
|
|
|
|
|
|
Caitec, Inc. (Caitec) |
|
|
139,094 |
|
|
|
— |
|
|
|
— |
|
|
|
139,094 |
|
FCM Industries Holdco LLC (First Coast Mulch) |
|
|
— |
|
|
|
11,169 |
|
|
|
— |
|
|
|
11,169 |
|
Filterworks Acquisition USA, LLC (Filterworks) |
|
|
— |
|
|
|
14,565 |
|
|
|
— |
|
|
|
14,565 |
|
GoNoodle, Inc. (GoNoodle) |
|
|
— |
|
|
|
3,565 |
|
|
|
— |
|
|
|
3,565 |
|
HDI Acquisition LLC (Hilton Displays) |
|
|
— |
|
|
|
5,310 |
|
|
|
— |
|
|
|
5,310 |
|
Highland All About People Holdings, Inc. (All About People) |
|
|
— |
|
|
|
30,831 |
|
|
|
— |
|
|
|
30,831 |
|
Inter-National Electronic Alloys LLC (INEA) |
|
|
— |
|
|
|
16,904 |
|
|
|
— |
|
|
|
16,904 |
|
ITA Acquisition, LLC (ITA) |
|
|
388,475 |
|
|
|
— |
|
|
|
— |
|
|
|
388,475 |
|
Mattison Avenue Holdings LLC (Mattison) |
|
|
5,503,056 |
|
|
|
— |
|
|
|
— |
|
|
|
5,503,056 |
|
Mountain Regional Equipment Solutions (MRES) |
|
|
— |
|
|
|
2,943,000 |
|
|
|
264,545 |
|
|
|
3,207,545 |
|
Pressure Pro, Inc. (Pressure Pro) |
|
|
— |
|
|
|
21,515 |
|
|
|
— |
|
|
|
21,515 |
|
Seybert’s Billiards Corporation (Seybert’s) |
|
|
— |
|
|
|
1,831,680 |
|
|
|
— |
|
|
|
1,831,680 |
|
Total purchases of securities/changes to securities/non-cash
conversions |
|
|
6,030,625 |
|
|
|
4,878,539 |
|
|
|
264,545 |
|
|
|
11,173,709 |
|
Repayments and sales of securities: |
|
|
|
|
|
|
|
|
|
|
|
|
Mattison |
|
|
(1,894,470 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1,894,470 |
) |
Pressure Pro |
|
|
— |
|
|
|
(687,436 |
) |
|
|
— |
|
|
|
(687,436 |
) |
Total repayments and sales of securities |
|
|
(1,894,470 |
) |
|
|
(687,436 |
) |
|
|
— |
|
|
|
(2,581,906 |
) |
Ending balance March 31, 2024, of Level 3 Assets |
|
$ |
16,554,132 |
|
|
$ |
41,052,628 |
|
|
$ |
20,701,105 |
|
|
$ |
78,307,865 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in unrealized appreciation/depreciation included in earnings related to Level 3 investments still held at reporting date |
|
|
|
|
|
|
|
|
|
|
$ |
(100,000 |
) |
The following table provides a summary of changes in Assets Measured at Fair Value Using Significant Unobservable Inputs (Level 3) for the three months ended March 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: |
|
|
|
|
|
|
|
|
|
|
|
|
Microcision, LLC (Microcision) |
|
|
— |
|
|
|
— |
|
|
|
58,329 |
|
|
|
58,329 |
|
SocialFlow, Inc. (Social Flow) |
|
|
— |
|
|
|
— |
|
|
|
(4,941 |
) |
|
|
(4,941 |
) |
Total realized gains, net |
|
|
— |
|
|
|
— |
|
|
|
53,388 |
|
|
|
53,388 |
|
Purchases of securities/changes to securities/non-cash
conversions: |
|
|
|
|
|
|
|
|
|
|
|
|
Caitec, Inc. (Caitec) |
|
|
18,310 |
|
|
|
— |
|
|
|
— |
|
|
|
18,310 |
|
DSD Operating, LLC (DSD) |
|
|
15,699 |
|
|
|
— |
|
|
|
— |
|
|
|
15,699 |
|
Filterworks Acquisition USA, LLC (Filterworks) |
|
|
— |
|
|
|
72,410 |
|
|
|
— |
|
|
|
72,410 |
|
BMP Food Service Supply Holdco, LLC (FSS) |
|
|
— |
|
|
|
2,320,000 |
|
|
|
— |
|
|
|
2,320,000 |
|
GoNoodle, Inc. (GoNoodle) |
|
|
— |
|
|
|
3,529 |
|
|
|
— |
|
|
|
3,529 |
|
HDI Acquisition LLC (Hilton Displays) |
|
|
— |
|
|
|
6,639 |
|
|
|
— |
|
|
|
6,639 |
|
ITA Acquisition, LLC (ITA) |
|
|
44,387 |
|
|
|
— |
|
|
|
— |
|
|
|
44,387 |
|
Mattison Avenue Holdings LLC (Mattison) |
|
|
9,283 |
|
|
|
— |
|
|
|
— |
|
|
|
9,283 |
|
Pressure Pro, Inc. (Pressure Pro) |
|
|
— |
|
|
|
2,989,250 |
|
|
|
30,000 |
|
|
|
3,019,250 |
|
Seybert’s Billiards Corporation (Seybert’s) |
|
|
— |
|
|
|
30,781 |
|
|
|
— |
|
|
|
30,781 |
|
SciAps, Inc. (Sciaps) |
|
|
— |
|
|
|
3,750 |
|
|
|
— |
|
|
|
3,750 |
|
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 |
|
|
87,679 |
|
|
|
5,426,359 |
|
|
|
284,941 |
|
|
|
5,798,979 |
|
Repayments and sales of securities: |
|
|
|
|
|
|
|
|
|
|
|
|
FSS |
|
|
— |
|
|
|
— |
|
|
|
(210,000 |
) |
|
|
(210,000 |
) |
Hilton Displays |
|
|
— |
|
|
|
(300,000 |
) |
|
|
— |
|
|
|
(300,000 |
) |
Microcision |
|
|
— |
|
|
|
— |
|
|
|
(58,329 |
) |
|
|
(58,329 |
) |
Total repayments and sales of securities |
|
|
— |
|
|
|
(300,000 |
) |
|
|
(268,329 |
) |
|
|
(568,329 |
) |
Ending balance March 31, 2023, of Level 3 Assets |
|
$ |
14,666,030 |
|
|
$ |
24,708,975 |
|
|
$ |
21,005,744 |
|
|
$ |
60,380,749 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in unrealized appreciation/depreciation included in earnings related to investments still held at reporting date |
|
|
|
|
|
|
|
|
|
|
$ |
— |
|
|