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INCOME TAXES | 6 Months Ended
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Jun. 30, 2023
INCOME TAXES [Abstract] |
INCOME TAXES | NOTE 10 — INCOME TAXES The Company adopted a tax year end of March 31, with March 31, 2022 being the first tax period end for this elected tax year end. The Company elected to be treated as a regulated investment company (“RIC”) for U.S. federal income tax purposes under Subchapter M of the Code for the tax period January 1, 2022 through March 31, 2022, and intends to maintain such election in future taxable years, including the tax year from April 1, 2022 to March 31, 2023. However, there is no guarantee that the Company will qualify to make such an election for any taxable year. As a RIC, the Company generally will not pay corporate-level income tax if it distributes to stockholders at least 90% of its investment company taxable income (“ICTI”) (which is generally its net ordinary taxable income and realized net short-term capital gains in excess of realized net long-term capital losses) and 90% of its tax-exempt income to maintain its RIC status. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of the current year distribution into the next tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI. The amount to be paid out as a distribution is determined by the Company’s Directors each quarter and is based upon the annual earnings estimated by the management of the Company. To the extent the Company’s earnings fall below the amount of dividend distributions declared, however, a portion of the total amount of the Company’s distributions for the tax year may be deemed a return of capital for tax purposes to the Company’s stockholders. The Company’s taxable income for each period is an estimate and will not be finally determined until the Company files its tax return for each tax year. Therefore, the final taxable income earned in each tax year and carried forward for distribution in the following tax year may be different than this estimate. Because federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Differences may be permanent or temporary in nature. Permanent differences are reclassified among the capital accounts in the financial statements to reflect their appropriate tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized in different periods for book and tax purposes. As of March 31, 2023, the Company’s most recent tax year end, the Company had no capital loss carryforwards for federal income tax purposes. For income tax purposes, distributions paid to shareholders are reported as ordinary income, return of capital, long-term capital gains, or a combination thereof. There were no distributions paid for the three month period and tax year ended June 30, 2023 and March 31, 2023, respectively. For the tax year ended March 31, 2023, the Company reclassified $121,099 from distributable earnings to additional paid-in-capital on the Statement of Assets and Liabilities arising from permanent book to tax differences primarily related to prior year post-financial statement updates and non-deductible excise tax. As of March 31, 2023, the components of distributable earnings on a tax basis detailed below differ from the amounts reflected in the Company’s Statements of Assets and Liabilities by temporary book or tax differences primarily arising from the tax treatment of organizational costs.
|  | March 31, 2023 |
Undistributed ordinary income |  | $ | 3,418,714 |
Net unrealized appreciation (depreciation) on investments |  |  | 713,009 |
Other temporary differences |  |  | (399,948 | )
Total |  | $ | 3,731,775 |
The following table sets forth the tax cost basis and the estimated aggregate gross unrealized appreciation and depreciation from investments and cash equivalents for federal income tax purposes as of June 30, 2023, March 31, 2023, and December 31, 2022:
|  | June 30, 2023 |  |  | March 31, 2023 |  |  | December 31, 2022 |
Tax cost of investments and cash equivalents |  | $ | 89,465,059 |  |  | $ | 87,454,317 |  |  | $ | 85,653,218 |
Unrealized appreciation |  | $ | 394,377 |  |  | $ | 713,009 |  |  | $ | - |
Unrealized depreciation |  |  | (158,609 | ) |  |  | - |  |  |  | (273,348 | )
Net unrealized appreciation (depreciation) from investments and cash equivalents |  | $ | 235,768 |  |  | $ | 713,009 |  |  | $ | (273,348 | )

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