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RELATED PARTY TRANSACTIONS | 6 Months Ended
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Jun. 30, 2023
RELATED PARTY TRANSACTIONS [Abstract] |
RELATED PARTY TRANSACTIONS | NOTE 5 — RELATED PARTY TRANSACTIONS Pursuant to the investment advisory agreement between the Company and SSC (the “Investment Advisory Agreement”), fees payable to SSC are equal to (a) a base management fee of 1.75% of the average value of the Company’s gross assets at the end of the two most recent quarters (i.e., total assets held before deduction of any liabilities), which includes investments acquired with the use of leverage and excludes cash and cash equivalents and (b) an incentive fee based on the Company’s performance. The incentive fee consists of two parts. The first part is calculated and payable quarterly in arrears and equals 20% of the Company’s “Pre-Incentive Fee Net Investment Income” for the quarter, subject to a preferred return, or “hurdle,” of 1.75% per quarter (7% annualized), and a “catch-up” feature. The second part is determined and payable in arrears as of the end of each fiscal year (or upon termination of the Investment Advisory Agreement) and equals 20% of the Company’s realized capital gains on a cumulative basis from inception through the end of the fiscal year, if any, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fee (the “Incentive Fee on Capital Gains”). While the Investment Advisory Agreement neither includes nor contemplates the inclusion of unrealized gains in the calculation of the Incentive Fee on Capital Gains, as required by U.S. GAAP, we accrue the Incentive Fee on Capital Gains on unrealized capital appreciation exceeding unrealized depreciation. This accrual reflects the Incentive Fee on Capital Gains that would be payable to SSC if the Company’s entire investment portfolio was liquidated at its fair value as of the balance sheet date even though SSC is not entitled to an Incentive Fee on Capital Gains with respect to unrealized capital appreciation unless and until such gains are actually realized. The management fee is payable quarterly in arrears. For the three and six months ended June 30, 2023, the Company incurred management fee expenses of $257,489 and $495,908, respectively. For the three and six months ended June 30, 2022, the Company incurred management fee expenses of $55,041 and $55,041, respectively. As of June 30, 2023 and December 31, 2022, $257,489 and $170,965, respectively, remained payable. For the three and six months ended June 30, 2023, the Company incurred income-based incentive fee expenses of $442,673 and $646,494, respectively. For the three and six months ended June 30, 2022, the Company did not incur any income-based incentive fee expenses. As of June 30, 2023 and December 31, 2022, $646,494 and $0, respectively, remained payable. For the three and six months ended June 30, 2023, the Company incurred capital gains incentive fee expenses of $(137,602) and $5,000, respectively. For the three and six months ended June 30, 2022, the Company did not incur any capital gains incentive fee expenses. As of June 30, 2023 and December 31, 2022, $5,000 and $0, respectively, remained payable. Pursuant to the administration agreement between the Company and SSC (the “Administration Agreement”), the Company is to reimburse the administrator, SSC, for the costs and expenses incurred by SSC in performing its obligations, including but not limited to maintaining and keeping all books and records and providing personnel and facilities. This includes costs and expenses incurred by SSC in connection with the delegation of its obligations to SS&C, the sub-administrator. The Company is generally not responsible for the compensation of SSC’s employees or any overhead expenses. However, we may reimburse SSC for an allocable portion of the compensation paid by SSC to our CCO and CFO and their respective staffs (based on a percentage of time such individuals devote, on an estimated basis, to our business affairs). For the three and six months ended June 30, 2023 and 2022, the Adviser has waived any expense reimbursement, other than those associated with the delegation of its obligations to the sub-administrator. Due to affiliate in the accompanying Statements of Assets and Liabilities in the amount of $2,534 and $37 as of June 30, 2023 and December 31, 2022, respectively, is due to SSC for expenses paid on the Company’s behalf. For the three and six months ended June 30, 2023, the Company paid $984 and $1,198, respectively, as reimbursement to SSC for expenses paid on the Company’s behalf. For the three and six months ended June 30, 2022, the Company paid $387,373 and $387,484, respectively, for expenses on SSC’s behalf. For the three and six months ended June 30, 2023, there were no amounts receivable or received by the Company that were due from affiliates. SSC was the seed investor of the Company and provided initial funding to the Company by purchasing approximately $63 million of the Company’s common stock in the Company’s initial public offering. SSC provided this “seed capital” to the Company for the purpose of facilitating the launch and initial operation of the Company, as opposed to for long term investment purposes. SSC does not expect to hold the Company’s common stock indefinitely, and may sell the Company’s common stock at a future point in time. In order for SSC’s sales of the shares of the Company not to be deemed to have been made “on the basis of” material nonpublic information, such sales may be made pursuant to a pre-approved trading plan that complies with Rule 10b5-1 under the Exchange Act and that may obligate SSC to make recurring sales of the Company’s common stock on a periodic basis. Sales of substantial amounts of the Company’s common stock, including by SSC or other large stockholders, or the availability of such common stock for sale, could adversely affect the prevailing market prices for the Company’s common stock. If this occurs and continues for a sustained period of time, it could impair the Company’s ability to raise additional capital through the sale of securities, should the Company desire to do so. SSC holds approximately 72% of the Company’s voting stock and has the ability to exercise substantial control over all corporate actions requiring stockholder approval, including the election and removal of directors, certain amendments of the Company’s charter, the Company’s ability to issue its common stock at a price below NAV per share, and the approval of any merger or other extraordinary corporate action. SSC has agreed to absorb $2.07 million, the cost of the sales load (i.e., underwriting discounts and commissions) incurred by the Company in connection with the initial public offering of its common stock.

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