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INCOME TAXES | 12 Months Ended
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Dec. 31, 2024
INCOME TAXES [Abstract] |
INCOME TAXES | NOTE 10 — INCOME TAXES The Company adopted a tax year end of March 31 and elected to be treated as a regulated investment company (“RIC”) for U.S. federal income tax purposes under Subchapter M of the Code. 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 Board 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 amounts and sources of distributions reported are only estimates and are not being provided for U.S. federal income tax reporting purposes. The timing and character of distributions for U.S. federal income tax purposes will be determined in accordance with the U.S. federal tax rules which may differ from GAAP. The final determination of the source of all distributions in 2024 will be made after the tax year-end and the amounts represented may be materially different from the amounts disclosed in the final Form 1099-DIV notice. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Company’s investment performance and may be subject to change based on tax regulations. Because federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income (loss) 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. The Company has not recorded a liability for any uncertain tax positions pursuant to the provisions of ASC 740, Income Taxes as of December 31, 2024 and December 31, 2023. In the normal course of business, the Company is subject to examination by federal and certain state and local tax regulators. For tax purposes, net realized capital losses may be carried over to offset future capital gains, if any. RICs are permitted to carry forward capital losses for an indefinite period, and such losses will retain their character as either short-term or long-term capital losses. As of March 31, 2024, the Company’s most recent tax year end, the Company had $210,767 of capital loss carryforwards, all of which is short-term. 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 year. Therefore, the final taxable income earned in each year and carried forward for distribution in the following year may be different than this estimate. During the years ended December 31, 2024 and December 31, 2023, the Company reclassified for book purposes amounts arising from permanent book to tax differences primarily related to net operating loss forfeiture and non-deductible excise tax paid for income tax purposes.
|  | December 31, 2024 |  |  | December 31, 2023 |
Increase (decrease) in additional paid in capital |  | $ | (10,676 | ) |  | $ | 121,099 |
Increase (decrease) in distributable earnings (accumulated loss) |  |  | 10,676 |  |  |  | (121,099 | )
For income tax purposes, distributions paid to shareholders are reported as ordinary income, return of capital, long-term capital gains, or a combination thereof. The tax character of distributions paid for the period from April 1, 2024 through December 31, 2024, and the tax year from April 1, 2023 through March 31, 2024, were as follows:
|  | For the period from April 1, 2024 through December 31, 2024 |  |  | For the tax year from April 1, 2023 through March 31, 2024 |
Ordinary income |  | $ | 10,866,404 |  |  | $ | 9,819,273 |
Long-term capital gain |  |  | - |  |  |  | - |
Return of capital |  |  | - |  |  |  | - |
Total Distributions |  | $ | 10,866,404 |  |  | $ | 9,819,273 |
As of March 31, 2024 and 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, the tax treatment of transaction expenses related to the Loan Portfolio Acquisition, and the tax treatment of uncrystallized capital gain incentive fees.
|  | March 31, 2024 |  |  | March 31, 2023 |
Undistributed ordinary income |  | $ | 1,782,017 |  |  | $ | 3,418,714 |
Net unrealized appreciation (depreciation) on investments |  |  | 1,248,303 |  |  |  | 713,009 |
Capital loss carry forwards |  |  | (210,767 | ) |  |  | - |
Other temporary differences |  |  | (3,393,536 | ) |  |  | (399,948 | )
Total |  | $ | (573,983 | ) |  | $ | 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 for the fiscal years ended December 31, 2024 and December 31, 2023.
|  | December 31, 2024 |  |  | December 31, 2023 |
Tax cost of investments and cash equivalents |  | $ | 298,279,117 |  |  | $ | 86,082,952 |
Unrealized appreciation |  |  | 1,285,099 |  |  |  | 784,052 |
Unrealized depreciation |  |  | (390,412 | ) |  |  | (135,369 | )
Net unrealized appreciation (depreciation) from investments and cash equivalents |  | $ | 894,687 |  |  | $ | 648,683 |
There were no differences between book-basis and tax-basis unrealized appreciation (depreciation) from investments.

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