XML 23 R13.htm IDEA: XBRL DOCUMENT
v3.23.2

FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended
--- | ---
Jun. 30, 2023
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 4 — FAIR VALUE OF FINANCIAL INSTRUMENTS ASC 820 defines fair value, establishes a framework for measuring fair value, and establishes a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements. The Company accounts for its investments at fair value. As of June 30, 2023 and December 31, 2022, the Company’s portfolio investments consisted of investments in secured loans and secured notes. The fair value amounts have been measured as of the reporting date and have not been reevaluated or updated for purposes of these financial statements subsequent to that date. As such, the fair values of these financial instruments subsequent to the reporting date may be different than amounts reported. In accordance with ASC 820, the Company has categorized its investments based on the priority of the inputs to the valuation technique into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical investments (Level 1) and the lowest priority to unobservable inputs (Level 3). As required by ASC 820, when the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, the fair value related to such investments categorized within the Level 3 tables below may include components of the fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3). The fair value determination of each portfolio investment categorized as Level 3 required one or more unobservable inputs. The use of significant unobservable inputs creates uncertainty in the measurement of fair value as of the reporting date. The significant unobservable inputs used in the fair value measurement of the Company’s investments may vary and may include debt investments’ yield (i.e. discount rate) and volatility assumptions. The Company’s investments measured at fair value by investment type on a recurring basis as of June 30, 2023 were as follows:
|  | Fair Value Measurements at June 30, 2023 Using |
Assets |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |  |  | Total |
Senior Secured First Lien Term Loan |  | $ | - |  |  | $ | - |  |  | $ | 49,731,544 |  |  | $ | 49,731,544 |
Senior Secured Notes |  |  | - |  |  |  | - |  |  |  | 7,937,500 |  |  |  | 7,937,500 |
Total |  | $ | - |  |  | $ | - |  |  | $ | 57,669,044 |  |  | $ | 57,669,044 |
The Company’s investments measured at fair value by investment type on a recurring basis as of December 31, 2022 were as follows:
|  | Fair Value Measurements at December 31, 2022 Using |
Assets |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |  |  | Total |
Senior Secured First Lien Term Loan |  | $ | - |  |  | $ | - |  |  | $ | 40,660,663 |  |  | $ | 40,660,663 |
Senior Secured Notes |  |  | - |  |  |  | - |  |  |  | 9,593,917 |  |  |  | 9,593,917 |
Total |  | $ | - |  |  | $ | - |  |  | $ | 50,254,580 |  |  | $ | 50,254,580 |
The following tables provide a summary of the significant unobservable inputs used to fair value the Level 3 portfolio investments as of June 30, 2023 and December 31, 2022. The methodology for the determination of the fair value of the Company’s investments is discussed in “Note 2 – Significant Accounting Policies”. Discount Rate ranges are shown as spread over PRIME and Treasuries, respectively, for Senior Secured First Lien Term Loans as of June 30, 2023 and December 31, 2022.
Investment Type |  | Fair Value as of June 30, 2023 |  | Valuation Techniques/ Methodologies |  | Unobservable Input |  | Range |  |  | Weighted Average (1) |
Senior Secured First Lien Term Loan |  | $ | 49,731,544 |  | Discounted Cash Flow |  | Discount Rate |  |  | 8.4% - 11.4 | % |  |  | 9.9 | %
Senior Secured Notes |  |  | 7,937,500 |  | Discounted Cash Flow |  | Discount Rate |  |  | 12.2% - 17.6 | % |  |  | 14.8 | %
Total |  | $ | 57,669,044 |  |  |  |  |  |  |  |  |  |  |  |
Investment Type |  | Fair Value as of December 31, 2022 |  | Valuation Techniques/ Methodologies |  | Unobservable Input |  | Range |  |  | Weighted Average (1) |
Senior Secured First Lien Term Loan |  | $ | 40,660,633 |  | Discounted Cash Flow |  | Discount Rate |  |  | 7.2% - 9.6 | % |  |  | 8.4 | %
| Volatility |  |  | 20.0% - 20.0 | % |  |  | 20.0 | %
Senior Secured Notes |  |  | 9,593,917 |  | Discounted Cash Flow |  | Discount Rate |  |  | 11.6% - 18.7 | % |  |  | 14.3 | %
| Volatility |  |  | 7.0% - 20.0 | % |  |  | 12.4 | %
Total |  | $ | 50,254,550 |  |  |  |  |  |  |  |  |  |  |  |
(1) The weighted average is calculated based on the fair value of each investment. Significant increases (decreases) in discount rate in isolation would result in a significantly higher (lower) fair value assessment. Significant increases (decreases) in volatility in isolation would result in a significantly lower (higher) fair value assessment. The following table provides a summary of changes in the fair value of the Company’s Level 3 portfolio investments for the six months ended June 30, 2023:
|  | Senior Secured First Lien Term Loan |  |  | Senior Secured Notes |  |  | Total Investments |
Fair Value as of December 31, 2022 |  | $ | 40,660,633 |  |  | $ | 9,593,917 |  |  | $ | 50,254,550 |
Purchases |  |  | 8,442,000 |  |  |  | - |  |  |  | 8,442,000 |
Accretion of discount and fees (amortization of premium), net |  |  | 158,740 |  |  |  | 142,818 |  |  |  | 301,558 |
PIK interest |  |  | 62,587 |  |  |  | - |  |  |  | 62,587 |
Proceeds from sales of investments and principal repayments |  |  | (90,000 | ) |  |  | (1,600,000 | ) |  |  | (1,690,000 | )
Net realized gain (loss) on investments |  |  | - |  |  |  | (210,767 | ) |  |  | (210,767 | )
Net change in unrealized appreciation (depreciation) on investments |  |  | 497,584 |  |  |  | 11,532 |  |  |  | 509,116 |
Balance as of June 30, 2023 |  | $ | 49,731,544 |  |  | $ | 7,937,500 |  |  | $ | 57,669,044 |
Net change in unrealized appreciation/depreciation on Level 3 investments still held as of June 30, 2023 |  | $ | 497,584 |  |  | $ | 11,532 |  |  | $ | 509,116 |
The following table provides a summary of changes in the fair value of the Company’s Level 3 portfolio investments for the six months ended June 30, 2022:
|  | Senior Secured First Lien Term Loan |  |  | Total Investments |
Fair Value as of December 31, 2021 |  | $ | - |  |  | $ | - |
Purchases |  |  | 24,417,500 |  |  |  | 24,417,500 |
Accretion of discount and fees (amortization of premium), net |  |  | 9,508 |  |  |  | 9,508 |
PIK interest |  |  | - |  |  |  | - |
Proceeds from sales of investments and principal repayments |  |  | - |  |  |  | - |
Net realized gain (loss) on investments |  |  | - |  |  |  | - |
Net change in unrealized appreciation (depreciation) on investments |  |  | (9,508 | ) |  |  | (9,508 | )
Balance as of June 30, 2022 |  | $ | 24,417,500 |  |  | $ | 24,417,500 |
Net change in unrealized appreciation/depreciation on Level 3 investments still held as of June 30, 2022 |  | $ | (9,508 | ) |  | $ | (9,508 | )

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration