| 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, 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 |
|
|
$ |
125,000 |
|
|
$ |
1,401,940 |
|
|
$ |
200,063 |
|
|
$ |
2,027,003 |
|
Non-Control/Non-Affiliate Loan and Debt |
|
|
6,574,432 |
|
|
|
2,205,241 |
|
|
|
— |
|
|
|
2,250,000 |
|
|
|
11,029,673 |
|
Total Non-Control/Non-Affiliate |
|
$ |
6,874,432 |
|
|
$ |
2,330,241 |
|
|
$ |
1,401,940 |
|
|
$ |
2,450,063 |
|
|
$ |
13,056,676 |
|
Affiliate Equity |
|
$ |
4,784,757 |
|
|
$ |
— |
|
|
$ |
3,223,984 |
|
|
$ |
10,970,000 |
|
|
$ |
18,978,741 |
|
Affiliate Loan and Debt |
|
|
13,116,738 |
|
|
|
— |
|
|
|
2,088,750 |
|
|
|
9,559,250 |
|
|
|
24,764,738 |
|
Total Affiliate |
|
$ |
17,901,495 |
|
|
$ |
— |
|
|
$ |
5,312,734 |
|
|
$ |
20,529,250 |
|
|
$ |
43,743,479 |
|
Control Equity |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Control Loan and Debt |
|
|
— |
|
|
|
3,580,594 |
|
|
|
— |
|
|
|
— |
|
|
|
3,580,594 |
|
Total Control |
|
$ |
— |
|
|
$ |
3,580,594 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
3,580,594 |
|
Total Level 3 Investments |
|
$ |
24,775,927 |
|
|
$ |
5,910,835 |
|
|
$ |
6,714,674 |
|
|
$ |
22,979,313 |
|
|
$ |
60,380,749 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Range |
|
5X - 6.5X |
|
|
1X |
|
|
1X - 4X |
|
|
Not Applicable |
|
|
|
|
Unobservable Input |
|
EBITDA Multiple |
|
|
Asset Value |
|
|
Revenue Multiple |
|
|
Transaction Price |
|
|
|
|
Weighted Average |
|
5.4X |
|
|
1X |
|
|
2.0X |
|
|
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, 2023:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at Reported Date Using |
|
Description
|
|
March 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 |
|
$ |
14,666,030 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
14,666,030 |
|
Debt investments |
|
|
24,708,975 |
|
|
|
— |
|
|
|
— |
|
|
|
24,708,975 |
|
Equity investments |
|
|
28,815,265 |
|
|
|
7,809,521 |
|
|
|
— |
|
|
|
21,005,744 |
|
Total |
|
$ |
68,190,270 |
|
|
$ |
7,809,521 |
|
|
$ |
— |
|
|
$ |
60,380,749 |
|
The following table provides a summary of the components of Level 1, 2 and 3 Assets Measured at Fair Value at December 31, 2022:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 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 |
|
|
|
|
|
|
|
|
|
|
$ |
— |
|
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, 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 |
|
SocialFlow, Inc. (Social Flow) |
|
|
— |
|
|
|
— |
|
|
|
(1,482,498 |
) |
|
|
(1,482,498 |
) |
Total realized (losses), net |
|
|
— |
|
|
|
— |
|
|
|
(1,443,617 |
) |
|
|
(1,443,617 |
) |
Unrealized gains included in net change in net assets from
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
Social Flow |
|
|
— |
|
|
|
— |
|
|
|
1,628,000 |
|
|
|
1,628,000 |
|
Total unrealized gains |
|
|
— |
|
|
|
— |
|
|
|
1,628,000 |
|
|
|
1,628,000 |
|
Purchases of securities/changes to securities/non-cash
conversions: |
|
|
|
|
|
|
|
|
|
|
|
|
Caitec, Inc. (Caitec) |
|
|
17,944 |
|
|
|
— |
|
|
|
— |
|
|
|
17,944 |
|
DSD Operating, LLC (DSD) |
|
|
333,115 |
|
|
|
— |
|
|
|
— |
|
|
|
333,115 |
|
Filterworks Acquisition USA, LLC (Filterworks) |
|
|
— |
|
|
|
61,165 |
|
|
|
— |
|
|
|
61,165 |
|
GoNoodle, Inc. (GoNoodle) |
|
|
— |
|
|
|
3,607 |
|
|
|
— |
|
|
|
3,607 |
|
HDI Acquisition LLC (Hilton Displays) |
|
|
— |
|
|
|
6,506 |
|
|
|
— |
|
|
|
6,506 |
|
ITA Acquisition, LLC (ITA) |
|
|
17,211 |
|
|
|
— |
|
|
|
223,810 |
|
|
|
241,021 |
|
Mattison Avenue Holdings LLC (Mattison) |
|
|
9,097 |
|
|
|
— |
|
|
|
— |
|
|
|
9,097 |
|
Seybert’s Billiards Corporation (Seybert’s) |
|
|
— |
|
|
|
19,279 |
|
|
|
— |
|
|
|
19,279 |
|
SciAps, Inc. (Sciaps) |
|
|
— |
|
|
|
3,750 |
|
|
|
— |
|
|
|
3,750 |
|
Total purchases of securities/changes to securities/non-cash
conversions |
|
|
377,367 |
|
|
|
94,307 |
|
|
|
223,810 |
|
|
|
695,484 |
|
Repayments and sale of securities: |
|
|
|
|
|
|
|
|
|
|
|
|
Clearview Social |
|
|
— |
|
|
|
— |
|
|
|
(38,881 |
) |
|
|
(38,881 |
) |
GoNoodle |
|
|
— |
|
|
|
(90,175 |
) |
|
|
— |
|
|
|
(90,175 |
) |
Social Flow |
|
|
— |
|
|
|
— |
|
|
|
(267,502 |
) |
|
|
(267,502 |
) |
Total repayments and sale of securities |
|
|
— |
|
|
|
(90,175 |
) |
|
|
(306,383 |
) |
|
|
(396,558 |
) |
Ending Balance March 31, 2022, of Level 3 Assets |
|
$ |
15,880,771 |
|
|
$ |
14,034,210 |
|
|
$ |
20,735,745 |
|
|
$ |
50,650,726 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in unrealized appreciation/depreciation included in earnings
related to investments still held at reporting date |
|
|
|
|
|
|
|
|
|
|
$ |
— |
|
|