| 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, 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 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
700,000 |
|
|
$ |
100,063 |
|
|
$ |
800,063 |
|
Non-Control/Non-Affiliate Loan and Debt |
|
|
13,619,638 |
|
|
|
2,230,196 |
|
|
|
— |
|
|
|
— |
|
|
|
15,849,834 |
|
Total Non-Control/Non-Affiliate |
|
$ |
13,619,638 |
|
|
$ |
2,230,196 |
|
|
$ |
700,000 |
|
|
$ |
100,063 |
|
|
$ |
16,649,897 |
|
Affiliate Equity |
|
$ |
7,061,384 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
9,875,000 |
|
|
$ |
16,936,384 |
|
Affiliate Loan and Debt |
|
|
30,475,441 |
|
|
|
— |
|
|
|
— |
|
|
|
4,256,319 |
|
|
|
34,731,760 |
|
Total Affiliate |
|
$ |
37,536,825 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
14,131,319 |
|
|
$ |
51,668,144 |
|
Control Equity |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Control Debt |
|
|
— |
|
|
|
2,500,000 |
|
|
|
— |
|
|
|
— |
|
|
|
2,500,000 |
|
Total Control |
|
$ |
— |
|
|
$ |
2,500,000 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,500,000 |
|
Total Level 3 Investments |
|
$ |
51,156,463 |
|
|
$ |
4,730,196 |
|
|
$ |
700,000 |
|
|
$ |
14,231,382 |
|
|
$ |
70,818,041 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Range |
|
4-10X |
|
|
1X |
|
|
3.5X |
|
|
Not Applicable |
|
|
|
|
Unobservable Input |
|
EBITDA Multiple |
|
|
Asset Value |
|
|
Revenue Multiple |
|
|
Transaction Price |
|
|
|
|
Weighted Average |
|
5.5 X |
|
|
1X |
|
|
3.5X |
|
|
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, 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 |
|
|
|
|
|
| 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, 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: |
|
|
|
|
|
|
|
|
|
|
|
|
DSD Operating, LLC (DSD) |
|
|
— |
|
|
|
— |
|
|
|
23,699 |
|
|
|
23,699 |
|
Knoa Software, Inc. (Knoa) |
|
|
— |
|
|
|
— |
|
|
|
(1,229,155 |
) |
|
|
(1,229,155 |
) |
Mezmeriz, Inc. (Mezmeriz) |
|
|
— |
|
|
|
— |
|
|
|
(742,850 |
) |
|
|
(742,850 |
) |
SciAps, Inc. (SciAps) |
|
|
— |
|
|
|
— |
|
|
|
7,716,461 |
|
|
|
7,716,461 |
|
Tilson Technology Management, Inc. (Tilson) |
|
|
— |
|
|
|
— |
|
|
|
397,264 |
|
|
|
397,264 |
|
Total realized gains (losses) |
|
|
— |
|
|
|
— |
|
|
|
6,165,419 |
|
|
|
6,165,419 |
|
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) |
|
|
— |
|
|
|
— |
|
|
|
250,000 |
|
|
|
250,000 |
|
Caitec, Inc. (Caitec) |
|
|
— |
|
|
|
— |
|
|
|
(72,522 |
) |
|
|
(72,522 |
) |
Carolina Skiff LLC (Carolina Skiff) |
|
|
— |
|
|
|
— |
|
|
|
(500,000 |
) |
|
|
(500,000 |
) |
Filterworks Acquisition USA, LLC (Filterworks) |
|
|
— |
|
|
|
— |
|
|
|
(396,226 |
) |
|
|
(396,226 |
) |
FCM Industries Holdco LLC (First Coast Mulch) |
|
|
— |
|
|
|
(484,837 |
) |
|
|
— |
|
|
|
(484,837 |
) |
Highland All About People Holdings, Inc. (All About People) |
|
|
— |
|
|
|
— |
|
|
|
(400,000 |
) |
|
|
(400,000 |
) |
ITA Acquisition, LLC (ITA) |
|
|
(2,565,130 |
) |
|
|
— |
|
|
|
— |
|
|
|
(2,565,130 |
) |
Knoa |
|
|
— |
|
|
|
— |
|
|
|
1,129,155 |
|
|
|
1,129,155 |
|
Mezmeriz |
|
|
— |
|
|
|
— |
|
|
|
742,850 |
|
|
|
742,850 |
|
Mountain Regional Equipment Solutions (MRES) |
|
|
— |
|
|
|
(452,000 |
) |
|
|
(264,545 |
) |
|
|
(716,545 |
) |
Pressure Pro, Inc. (Pressure Pro) |
|
|
— |
|
|
|
— |
|
|
|
720,000 |
|
|
|
720,000 |
|
Tilson |
|
|
— |
|
|
|
— |
|
|
|
950,000 |
|
|
|
950,000 |
|
Total unrealized gains (losses) |
|
|
(2,565,130 |
) |
|
|
(936,837 |
) |
|
|
1,548,712 |
|
|
|
(1,953,255 |
) |
Purchases of securities/changes to securities/non-cash conversions: |
|
|
|
|
|
|
|
|
|
|
|
|
All About People |
|
|
— |
|
|
|
125,904 |
|
|
|
— |
|
|
|
125,904 |
|
Caitec |
|
|
590,424 |
|
|
|
— |
|
|
|
— |
|
|
|
590,424 |
|
Filterworks |
|
|
— |
|
|
|
253,952 |
|
|
|
— |
|
|
|
253,952 |
|
First Coast Mulch |
|
|
— |
|
|
|
46,681 |
|
|
|
— |
|
|
|
46,681 |
|
FSS |
|
|
— |
|
|
|
177,911 |
|
|
|
107,619 |
|
|
|
285,530 |
|
GoNoodle, Inc. (GoNoodle) |
|
|
— |
|
|
|
14,314 |
|
|
|
— |
|
|
|
14,314 |
|
HDI Acquisition LLC (Hilton Displays) |
|
|
— |
|
|
|
21,519 |
|
|
|
— |
|
|
|
21,519 |
|
Inter-National Electronic Alloys LLC (INEA) |
|
|
— |
|
|
|
33,995 |
|
|
|
— |
|
|
|
33,995 |
|
ITA |
|
|
916,170 |
|
|
|
— |
|
|
|
— |
|
|
|
916,170 |
|
Mattison Avenue Holdings LLC (Mattison) |
|
|
5,572,902 |
|
|
|
— |
|
|
|
— |
|
|
|
5,572,902 |
|
Mobile RN Holdings LLC (Mobile IV Nurses) |
|
|
— |
|
|
|
2,506,319 |
|
|
|
375,000 |
|
|
|
2,881,319 |
|
MRES |
|
|
— |
|
|
|
2,952,000 |
|
|
|
264,545 |
|
|
|
3,216,545 |
|
Pressure Pro |
|
|
— |
|
|
|
66,721 |
|
|
|
— |
|
|
|
66,721 |
|
Seybert’s Billiards Corporation (Seybert’s) |
|
|
— |
|
|
|
1,928,257 |
|
|
|
— |
|
|
|
1,928,257 |
|
Total purchases of securities/changes to securities/non-cash conversions |
|
|
7,079,496 |
|
|
|
8,127,573 |
|
|
|
747,164 |
|
|
|
15,954,233 |
|
Repayments and sale of securities: |
|
|
|
|
|
|
|
|
|
|
|
|
DSD |
|
|
— |
|
|
|
— |
|
|
|
(23,699 |
) |
|
|
(23,699 |
) |
Filterworks |
|
|
— |
|
|
|
(206,250 |
) |
|
|
— |
|
|
|
(206,250 |
) |
FSS |
|
|
— |
|
|
|
(34,838 |
) |
|
|
— |
|
|
|
(34,838 |
) |
Mattison |
|
|
(1,894,470 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1,894,470 |
) |
Nailbiter, Inc. (Nailbiter) |
|
|
— |
|
|
|
(2,250,000 |
) |
|
|
— |
|
|
|
(2,250,000 |
) |
Pressure Pro |
|
|
— |
|
|
|
(1,427,452 |
) |
|
|
— |
|
|
|
(1,427,452 |
) |
SciAps |
|
|
— |
|
|
|
(2,090,000 |
) |
|
|
(10,840,445 |
) |
|
|
(12,930,445 |
) |
Tilson |
|
|
— |
|
|
|
— |
|
|
|
(397,264 |
) |
|
|
(397,264 |
) |
Total repayments and sale of securities |
|
|
(1,894,470 |
) |
|
|
(6,008,540 |
) |
|
|
(11,261,408 |
) |
|
|
(19,164,418 |
) |
Transfers within Level 3 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Transfers out of Level 3 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Ending Balance December 31, 2024, of Level 3 Assets |
|
$ |
15,037,873 |
|
|
$ |
38,043,721 |
|
|
$ |
17,736,447 |
|
|
$ |
70,818,041 |
|
Change in unrealized appreciation/depreciation included in earnings related to Level 3 investments still held at reporting date |
|
|
|
|
|
|
|
|
|
|
$ |
(3,825,260 |
) |
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 |
) |
|