v3.25.0.1
FAIR VALUE OF FINANCIAL INSTRUMENTS
 12 Months Ended
Dec. 31, 2024
FAIR VALUE OF FINANCIAL INSTRUMENTS  
FAIR VALUE OF FINANCIAL INSTRUMENTS

NOTE 6 — FAIR VALUE OF FINANCIAL INSTRUMENTS

 

Level 3 valuation information:  Due to the inherent uncertainty in the valuation process, the estimate of the fair value of our investment portfolio as of December 31, 2024 and 2023 may differ materially from values that would have been used had a readily available market for the securities existed. 

The following table presents the fair value measurements of our portfolio investments by major class, as of December 31, 2024, according to the fair value hierarchy:

 

 

 

As of December 31, 2024

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

 

 

 

 

 

 

Short-term Non-banking Loans

 

$—

 

 

$—

 

 

$13,006,231

 

 

$13,006,231

 

Common Stock

 

 

447,330

 

 

 

—

 

 

 

—

 

 

 

447,330

 

Other Equity

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$447,330

 

 

$—

 

 

$13,006,231

 

 

$13,453,561

 

 

The following table presents the fair value measurements of our portfolio investments by major class, as of December 31, 2023, according to the fair value hierarchy:

 

 

 

As of December 31, 2023

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

 

 

 

 

 

 

Short-term Non-banking Loans

 

$—

 

 

$—

 

 

$16,961,766

 

 

$16,961,766

 

Preferred Stock

 

 

—

 

 

 

—

 

 

 

265,000

 

 

 

265,000

 

Common Stock

 

 

47,910

 

 

 

—

 

 

 

—

 

 

 

47,910

 

Warrants

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Other Equity

 

 

—

 

 

 

—

 

 

 

10,000

 

 

 

10,000

 

Total

 

$47,910

 

 

$—

 

 

$17,236,766

 

 

$17,284,676

 

 

The following table presents a reconciliation of the beginning and ending fair value balances for our Level 3 portfolio investment assets for the year ended December 31, 2024:

 

 

 

For the year ended December 31, 2024

 

 

 

ST Non-banking Loans

 

 

Preferred Stock

 

 

Common Stock

 

 

Other Equity

 

 

 

 

 

 

 

 

 

 

Balance as of January 1, 2024

 

$16,961,766

 

 

$265,000

 

 

$—

 

 

$10,000

 

Net change in unrealized appreciation (depreciation)

 

 

401,966

 

 

 

785,000

 

 

 

(150,000)

 

 

(10,000)

Purchases and other adjustments to cost

 

 

4,623,437

 

 

 

—

 

 

 

—

 

 

 

—

 

Sales and redemptions

 

 

(8,720,000)

 

 

—

 

 

 

—

 

 

 

—

 

Realized loss

 

 

(100,000)

 

 

(900,000)

 

 

—

 

 

 

—

 

Conversion from preferred to common stock

 

 

—

 

 

 

(150,000)

 

 

150,000

 

 

 

—

 

Transfers between level 3 and level 1

 

 

(160,938)

 

 

—

 

 

 

—

 

 

 

—

 

Balance as of December 31, 2024

 

$13,006,231

 

 

$—

 

 

$—

 

 

$—

 

 

The net change in unrealized depreciation for the year ended December 31, 2024 attributable to Level 3 portfolio investments still held as of December 31, 2024 is $83,496, and is included in net change in unrealized depreciation on investments on the statement of operations.

 

The following table presents a reconciliation of the beginning and ending fair value balances for our Level 3 portfolio investment assets for the year ended December 31, 2023:

 

 

 

For the year ended December 31, 2023

 

 

 

ST Non-banking Loans

 

 

Preferred Stock

 

 

Other Equity

 

 

 

 

 

 

 

Balance as of January 1, 2023

 

$15,285,932

 

 

$1,200,000

 

 

$222,500

 

Net change in unrealized appreciation (depreciation)

 

 

(195,041)

 

 

(935,000)

 

 

600,000

 

Purchases and other adjustments to cost

 

 

12,900,500

 

 

 

—

 

 

 

—

 

Sales and redemptions

 

 

(11,029,625)

 

 

—

 

 

 

—

 

Realized loss

 

 

—

 

 

 

—

 

 

 

(600,000)

Transfers between level 3 and level 1

 

 

—

 

 

 

—

 

 

 

(212,500)

Balance as of December 31, 2023

 

$16,961,766

 

 

$265,000

 

 

$10,000

 

The net change in unrealized depreciation for the year ended December 31, 2023 attributable to Level 3 portfolio investments still held as of December 31, 2023 is 1,126,877, and is included in net change in unrealized depreciation on investments on the statement of operations.

 

The following table lists our Level 3 investments held as of December 31, 2024 and the unobservable inputs used to determine their valuation:

 

Security Type

 

 

12/31/24 FMV

 

Valuation Technique

 

Unobservable Inputs

 

Range

ST Non-banking Loans

 

$

13,006,231   

 

discounted cash flow

 

determining private company interest rate based on changes in market rates of instruments with comparable creditworthiness

 

15-24%

Other Equity

 

—    

 

last secured funding known by company

 

economic changes since last funding

 

 

Common Stock

 

—    

 

last funding secured by company

 

economic changes since last funding

 

 

 

 

$

13,006,231   

 

 

 

 

 

 

 

The following table presents a reconciliation of the beginning and ending fair value balances for our Level 3 portfolio investment assets for the year ended December 31, 2023:

 

Security Type

 

 

12/31/23 FMV

 

Valuation Technique

 

Unobservable Inputs

 

Range

ST Non-banking Loans

 

$

16,961,766   

 

discounted cash flow

 

determining private company interest rate based on changes in market rates of instruments with comparable creditworthiness

 

12-23%

Other Equity

 

10,000   

 

last secured funding known by company

 

 

 

 

Preferred Stock

 

265,000   

 

last funding secured by company

 

economic changes since last funding

 

 

 

 

$

17,236,766   

 

 

 

 

 

 

 

There was one transfer between levels during 2023 due to an initial public offering of a previously privately held security. The shares of that security are now free trading. There were no transfers between levels during the years ended December 31, 2024.