| 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 June 30, 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 |
|
|
10,801,511 |
|
|
|
4,473,021 |
|
|
|
— |
|
|
|
2,946,000 |
|
|
|
18,220,532 |
|
Total Non-Control/Non-Affiliate |
|
$ |
10,874,033 |
|
|
$ |
4,473,021 |
|
|
$ |
700,000 |
|
|
$ |
3,310,608 |
|
|
$ |
19,357,662 |
|
Affiliate Equity |
|
$ |
18,582,384 |
|
|
$ |
— |
|
|
$ |
8,710,000 |
|
|
$ |
— |
|
|
$ |
27,292,384 |
|
Affiliate Loan and Debt |
|
|
30,646,635 |
|
|
|
— |
|
|
|
2,090,000 |
|
|
|
1,750,000 |
|
|
|
34,486,635 |
|
Total Affiliate |
|
$ |
49,229,019 |
|
|
$ |
— |
|
|
$ |
10,800,000 |
|
|
$ |
1,750,000 |
|
|
$ |
61,779,019 |
|
Control Equity |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Control Loan and Debt |
|
|
— |
|
|
|
4,598,046 |
|
|
|
— |
|
|
|
— |
|
|
|
4,598,046 |
|
Total Control |
|
$ |
— |
|
|
$ |
4,598,046 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,598,046 |
|
Total Level 3 Investments |
|
$ |
60,103,052 |
|
|
$ |
9,071,067 |
|
|
$ |
11,500,000 |
|
|
$ |
5,060,608 |
|
|
$ |
85,734,727 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Range |
|
5X - 12.3X |
|
|
1X |
|
|
3X - 3.5X |
|
|
Not Applicable |
|
|
|
|
Unobservable Input |
|
EBITDA Multiple |
|
|
Asset Value |
|
|
Revenue Multiple |
|
|
Transaction Price |
|
|
|
|
Weighted Average |
|
6.9X |
|
|
1X |
|
|
3.0X |
|
|
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 June 30, 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at Reported Date Using |
|
Description
|
|
June 30, 2024 |
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
|
Significant
Observable Inputs
(Level 2) |
|
|
Other Significant
Unobservable
Inputs
(Level 3) |
|
Loan investments |
|
$ |
16,828,665 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
16,828,665 |
|
Debt investments |
|
|
40,476,548 |
|
|
|
— |
|
|
|
— |
|
|
|
40,476,548 |
|
Equity investments |
|
|
29,765,754 |
|
|
|
1,336,240 |
|
|
|
— |
|
|
|
28,429,514 |
|
Total |
|
$ |
87,070,967 |
|
|
$ |
1,336,240 |
|
|
$ |
— |
|
|
$ |
85,734,727 |
|
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 six months ended June 30, 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 |
|
Realized gains (losses) included in net change in net assets
from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
Knoa Software, Inc. (Knoa) |
|
|
— |
|
|
|
— |
|
|
|
(1,229,155 |
) |
|
|
(1,229,155 |
) |
Tilson Technology Management, Inc. (Tilson) |
|
|
— |
|
|
|
— |
|
|
|
397,264 |
|
|
|
397,264 |
|
Total realized losses, net |
|
|
— |
|
|
|
— |
|
|
|
(831,891 |
) |
|
|
(831,891 |
) |
Unrealized gains (losses) included in net change in net assets
from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
Filterworks Acquisition USA, LLC (Filterworks) |
|
|
— |
|
|
|
— |
|
|
|
(196,226 |
) |
|
|
(196,226 |
) |
Knoa |
|
|
— |
|
|
|
— |
|
|
|
1,129,155 |
|
|
|
1,129,155 |
|
Pressure Pro, Inc. (Pressure Pro) |
|
|
— |
|
|
|
— |
|
|
|
470,000 |
|
|
|
470,000 |
|
SciAps, Inc. (SciAps) |
|
|
— |
|
|
|
— |
|
|
|
5,586,016 |
|
|
|
5,586,016 |
|
Tilson |
|
|
— |
|
|
|
— |
|
|
|
1,761,000 |
|
|
|
1,761,000 |
|
Total unrealized gains, net |
|
|
— |
|
|
|
— |
|
|
|
8,749,945 |
|
|
|
8,749,945 |
|
Purchases of securities/changes to securities/non-cash
conversions: |
|
|
|
|
|
|
|
|
|
|
|
|
BMP Food Service Supply Holdco, LLC (FSS) |
|
|
— |
|
|
|
— |
|
|
|
107,619 |
|
|
|
107,619 |
|
Caitec, Inc. (Caitec) |
|
|
283,170 |
|
|
|
— |
|
|
|
— |
|
|
|
283,170 |
|
FCM Industries Holdco LLC (First Coast Mulch) |
|
|
— |
|
|
|
22,623 |
|
|
|
— |
|
|
|
22,623 |
|
Filterworks |
|
|
— |
|
|
|
102,396 |
|
|
|
— |
|
|
|
102,396 |
|
GoNoodle, Inc. (GoNoodle) |
|
|
— |
|
|
|
7,139 |
|
|
|
— |
|
|
|
7,139 |
|
HDI Acquisition LLC (Hilton Displays) |
|
|
— |
|
|
|
10,646 |
|
|
|
— |
|
|
|
10,646 |
|
Highland All About People Holdings, Inc. (All About People) |
|
|
— |
|
|
|
61,973 |
|
|
|
— |
|
|
|
61,973 |
|
Inter-National Electronic Alloys LLC (INEA) |
|
|
— |
|
|
|
25,392 |
|
|
|
— |
|
|
|
25,392 |
|
ITA Acquisition, LLC (ITA) |
|
|
449,086 |
|
|
|
— |
|
|
|
— |
|
|
|
449,086 |
|
Mattison Avenue Holdings LLC (Mattison) |
|
|
5,572,902 |
|
|
|
— |
|
|
|
— |
|
|
|
5,572,902 |
|
Mountain Regional Equipment Solutions (MRES) |
|
|
— |
|
|
|
2,946,000 |
|
|
|
264,545 |
|
|
|
3,210,545 |
|
Pressure Pro |
|
|
— |
|
|
|
37,637 |
|
|
|
— |
|
|
|
37,637 |
|
Seybert’s Billiards Corporation (Seybert’s) |
|
|
— |
|
|
|
1,863,507 |
|
|
|
— |
|
|
|
1,863,507 |
|
Total purchases of securities/changes to securities/non-cash
conversions |
|
|
6,305,158 |
|
|
|
5,077,313 |
|
|
|
372,164 |
|
|
|
11,754,635 |
|
Repayments and sales of securities: |
|
|
|
|
|
|
|
|
|
|
|
|
FSS |
|
|
— |
|
|
|
(34,838 |
) |
|
|
— |
|
|
|
(34,838 |
) |
Mattison |
|
|
(1,894,470 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1,894,470 |
) |
Pressure Pro |
|
|
— |
|
|
|
(1,427,452 |
) |
|
|
— |
|
|
|
(1,427,452 |
) |
Tilson |
|
|
— |
|
|
|
— |
|
|
|
(397,264 |
) |
|
|
(397,264 |
) |
Total repayments and sales of securities |
|
|
(1,894,470 |
) |
|
|
(1,462,290 |
) |
|
|
(397,264 |
) |
|
|
(3,754,024 |
) |
Ending balance June 30, 2024, of Level 3 Assets |
|
$ |
16,828,665 |
|
|
$ |
40,476,548 |
|
|
$ |
28,429,514 |
|
|
$ |
85,734,727 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in unrealized appreciation/depreciation included in earnings related to Level 3 investments still held at reporting date |
|
|
|
|
|
|
|
|
|
|
$ |
7,620,790 |
|
The following table provides a summary of changes in Assets Measured at Fair Value Using Significant Unobservable Inputs (Level 3) for the six months ended June 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 |
|
SocialFlow, Inc. (Social Flow) |
|
|
— |
|
|
|
— |
|
|
|
(4,941 |
) |
|
|
(4,941 |
) |
Somerset Gas Transmission Company, LLC (Somerset) |
|
|
— |
|
|
|
— |
|
|
|
(448,717 |
) |
|
|
(448,717 |
) |
Total realized gains, net |
|
|
— |
|
|
|
— |
|
|
|
2,152,868 |
|
|
|
2,152,868 |
|
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 |
) |
Somerset |
|
|
— |
|
|
|
— |
|
|
|
594,097 |
|
|
|
594,097 |
|
Total unrealized losses, net |
|
|
— |
|
|
|
— |
|
|
|
(994,541 |
) |
|
|
(994,541 |
) |
Purchases of securities/changes to securities/non-cash
conversions: |
|
|
|
|
|
|
|
|
|
|
|
|
Caitec, Inc. (Caitec) |
|
|
36,916 |
|
|
|
— |
|
|
|
— |
|
|
|
36,916 |
|
DSD |
|
|
31,652 |
|
|
|
— |
|
|
|
— |
|
|
|
31,652 |
|
Filterworks Acquisition USA, LLC (Filterworks) |
|
|
— |
|
|
|
147,638 |
|
|
|
— |
|
|
|
147,638 |
|
BMP Food Service Supply Holdco, LLC (FSS) |
|
|
— |
|
|
|
2,320,000 |
|
|
|
— |
|
|
|
2,320,000 |
|
GoNoodle, Inc. (GoNoodle) |
|
|
— |
|
|
|
7,067 |
|
|
|
— |
|
|
|
7,067 |
|
HDI Acquisition LLC (Hilton Displays) |
|
|
— |
|
|
|
11,868 |
|
|
|
— |
|
|
|
11,868 |
|
Inter-National Electronic Alloys LLC (INEA) |
|
|
— |
|
|
|
3,304,154 |
|
|
|
1,011,765 |
|
|
|
4,315,919 |
|
ITA Acquisition, LLC (ITA) |
|
|
495,528 |
|
|
|
— |
|
|
|
— |
|
|
|
495,528 |
|
Mattison Avenue Holdings LLC (Mattison) |
|
|
18,716 |
|
|
|
— |
|
|
|
— |
|
|
|
18,716 |
|
Pressure Pro, Inc. (Pressure Pro) |
|
|
— |
|
|
|
3,013,635 |
|
|
|
30,000 |
|
|
|
3,043,635 |
|
Seybert’s Billiards Corporation (Seybert’s) |
|
|
— |
|
|
|
62,019 |
|
|
|
— |
|
|
|
62,019 |
|
SciAps, Inc. (SciAps) |
|
|
— |
|
|
|
5,000 |
|
|
|
— |
|
|
|
5,000 |
|
Social Flow |
|
|
— |
|
|
|
— |
|
|
|
4,941 |
|
|
|
4,941 |
|
BMP Swanson Holdco, LLC (Swanson) |
|
|
49,026 |
|
|
|
— |
|
|
|
— |
|
|
|
49,026 |
|
Tilson Technology Management, Inc. (Tilson) |
|
|
— |
|
|
|
— |
|
|
|
250,000 |
|
|
|
250,000 |
|
Total purchases of securities/changes to securities/non-cash
conversions |
|
|
631,838 |
|
|
|
8,871,381 |
|
|
|
1,296,706 |
|
|
|
10,799,925 |
|
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 June 30, 2023, of Level 3 Assets |
|
$ |
12,038,755 |
|
|
$ |
28,113,950 |
|
|
$ |
19,236,371 |
|
|
$ |
59,389,076 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in unrealized appreciation/depreciation included in earnings related to Level 3 investments still held at reporting date |
|
|
|
|
|
|
|
|
|
|
$ |
(701,940 |
) |
|