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Investments

12 Months Ended

Sep. 30, 2023

Investments [Abstract]

Investments

Note 3. Investments

The composition of our investments as of September 30, 2023 as a percentage of our total portfolio, at amortized cost and fair value were as follows (dollars in thousands):

		Amortized Cost				Percentage				Fair Value				Percentage
Senior Secured First Lien Term Loans		$	139,103				52.5	%		$	103,004				45.6	%
Senior Secured Notes			9,512				3.6				8,922				3.9
Fund Investment			1,027				0.4				792				0.3
Equity/Warrants			115,369				43.5				113,743				50.2
Total Investments		$	265,011				100.0	%		$	226,461				100.0	%

The composition of our investments as of September 30, 2022 as a percentage of our total portfolio, at amortized cost and fair value were as follows (dollars in thousands):

		Amortized Cost				Percentage				Fair Value				Percentage
Senior Secured First Lien Term Loans		$	128,482				48.7	%		$	88,248				45.6	%
Senior Secured Second Lien Term Loans			2,603				1.0				2,607				1.4
Senior Secured Notes			2,252				0.9				1,659				0.9
Unsecured Debt			182				0.1				-				-
Equity/Warrants			129,929				49.3				100,443				52.1
Total Investments		$	263,448				100.0	%		$	192,957				100.0	%

In connection with certain of the Company’s investments, the Company receives warrants that are obtained for the objective of increasing the total investment returns and are not held for hedging purposes. At September 30, 2023 and 2022, the total fair value of warrants was $206.5 thousand and $62.6 thousand, respectively, and were included in investments at fair value on the Consolidated Statements of Assets and Liabilities. During the year ended September 30, 2023, the Company acquired additional warrants in one existing portfolio company. During the year ended September 30, 2022, the Company did not acquire any additional warrants in an existing portfolio company. During the year ended September 30, 2021, the Company acquired additional warrants in one existing portfolio company.

Total unrealized depreciation related to warrants for the years ended September 30, 2023, 2022 and 2021 was $143.9 thousand, $299.1 thousand and $981.4 thousand, respectively, and was recorded on the Consolidated Statements of Operations as net unrealized appreciation/(depreciation) on investments. The warrants are received in connection with individual investments and are not subject to master netting arrangements.

The following table shows the portfolio composition by industry grouping at fair value at September 30, 2023 (dollars in thousands):

		Fair Value				Percentage
Services: Business		$	47,083				20.7	%
Banking, Finance, Insurance & Real Estate			43,755				19.3
Hotel, Gaming & Leisure			34,158				15.1
Services: Consumer			18,292				8.1
High Tech Industries			15,472				6.8
Construction & Building			14,676				6.5
Metals & Mining			12,517				5.5
Media: Broadcasting & Subscription			11,665				5.2
Automotive			9,520				4.2
Consumer Discretionary			6,920				3.1
Energy: Oil & Gas			5,384				2.4
Packaging			3,396				1.5
Aerospace & Defense			2,645				1.2
Retail			978				0.4
Total		$	226,461				100.0	%

The following table shows the portfolio composition by industry grouping at fair value at September 30, 2022 (dollars in thousands):

		Fair Value				Percentage
Services: Business		$	52,851				27.5	%
Hotel, Gaming & Leisure			31,947				16.7
Banking, Finance, Insurance & Real Estate			31,910				16.5
Services: Consumer			21,243				11.0
Construction & Building			17,724				9.1
Automotive			8,075				4.2
Consumer Discretionary			6,208				3.2
High Tech Industries			5,465				2.8
Media: Broadcasting & Subscription			4,220				2.2
Energy: Oil & Gas			4,152				2.2
Packaging			3,361				1.7
Metals & Mining			3,073				1.6
Aerospace & Defense			2,607				1.4
Retail			121				0.1
Total		$	192,957				100.0	%

The Company invests in portfolio companies principally located in the United States. The geographic composition is determined by the location of the corporate headquarters of the portfolio company, which may not be indicative of the primary source of the portfolio company’s business.

The following table shows the portfolio composition by geographic location at fair value at September 30, 2023 (dollars in thousands):

		Fair Value				Percentage
Northeast		$	92,081				40.7	%
Southeast			60,116				26.5
Midwest			32,782				14.5
West			25,608				11.3
Southwest			7,661				3.4
Mid-Atlantic			201				0.1
International			8,012				3.5
Total		$	226,461				100.0	%

The following table shows the portfolio composition by geographic location at fair value at September 30, 2022 (dollars in thousands):

		Fair Value				Percentage
Northeast		$	92,939				48.2	%
Southeast			51,797				26.8
West			20,196				10.5
Midwest			16,023				8.3
Southwest			6,288				3.3
Mid-Atlantic			265				0.1
International			5,449				2.8
Total		$	192,957				100.0	%

Transactions With Affiliated/Controlled Companies

The Company had investments in portfolio companies designated as Affiliated Investments and Controlled Investments under the 1940 Act. Transactions with Affiliated Investments and Controlled Investments during the years ended September 30, 2023 and 2022 were as follows:

Name of Investment⁽¹⁾⁽²⁾		Type of Investment		Fair Value at September 30, 2022				Purchases/ (Sales) of or Advances/ (Distributions)				Transfers In/(Out) of Affiliates				Unrealized Gain/(Loss)				Realized Gain/(Loss)				Fair Value at September 30, 2023				Earned Income
Affiliated Investments
1888 Industrial Services, LLC		Senior Secured First Lien Term Loan C		$	-			$	-			$	-			$	751,479			$	-			$	751,479			$	84,559
		Revolving Credit Facility			4,151,562				215,622				-				264,993				-				4,632,177				553,233
Black Angus Steakhouses, LLC		Senior Secured First Lien Delayed Draw Term Loan			758,929				116,820				-				-				-				875,749				232,614
		Senior Secured First Lien Term Loan			1,547,918				-				-				(88,669	)			-				1,459,249				159,780
		Senior Secured First Lien Super Priority Delayed Draw Term Loan			1,500,000				420,960				-				-				-				1,920,960				360,670
FST Holdings Parent, LLC		Equity		$	-			$	10,000,000			$	-			$	3			$	-			$	10,000,003			$	121,385
Kemmerer Operations, LLC		Senior Secured First Lien Term Loan			2,378,510			$	-				(2,378,510	)			-				-				-				89,743
		Equity			694,702			$	-				(962,717	)			268,015				-				-				-
Maritime Wireless Holdings LLC		Senior Secured First Lien Term Loan A		$	-			$	(5,000,704	)		$	4,900,000			$	-			$	100,704			$	-			$	218,788
		Senior Secured First Lien Term Loan B		$	-			$	23,166			$	7,350,000			$	126,834			$	-			$	7,500,000			$	565,377
		Equity		$	-			$	-			$	5,000,000			$	5,150,000			$	-			$	10,150,000			$	-
US Multifamily, LLC		Equity			1,282,571				(1,018,344	)			-				854,744				(1,118,971	)			-				-
Total Affiliated Investments				$	12,314,192			$	4,757,520			$	13,908,773			$	7,327,399			$	(1,018,267	)		$	37,289,617			$	2,386,149

Name of Investment⁽¹⁾⁽²⁾		Type of Investment		Fair Value at September 30, 2022				Purchases/ (Sales) of or Advances/ (Distributions)				Transfers In/(Out) of Controlled				Unrealized Gain/(Loss)				Realized Gain/(Loss)				Fair Value at September 30, 2023				Earned Income
Controlled Investments
FlexFIN, LLC		Equity Interest		$	47,136,146			$	(8,265,435	)		$	-			$	-				-			$	38,870,711			$	3,716,676
Kemmerer Operations, LLC		Senior Secured First Lien Term Loan			-				981,911				2,378,510				-				23,456				3,383,877				557,981
		Equity			-				873,440				962,717				7,296,895				-				9,133,052				-
NVTN LLC		Senior Secured First Lien Delayed Draw Term Loan			7,192,927				-				-				21,929				-				7,214,856				667,312
		Senior Secured First Lien Term Loan B			3,697,109				-				-				1,340,438				-				5,037,547				-
Total Controlled Investments				$	58,026,182			$	(6,410,084	)		$	3,341,227			$	8,659,262			$	23,456			$	63,640,043			$	4,941,969

Name of Investment⁽¹⁾⁽²⁾		Type of Investment		Fair Value at September 30, 2021				Purchases/ (Sales) of or Advances/ (Distributions)				Transfers In/(Out) of Affiliates				Unrealized Gain/(Loss)				Realized Gain/(Loss)				Fair Value at September 30, 2022				Earned Income
Affiliated Investments
1888 Industrial Services, LLC		Senior Secured First Lien Term Loan B		$	-			$	-			$	-			$	19,468,870			$	(19,468,870	)		$	-			$	-
		Senior Secured First Lien Term Loan C			24,639				-				-				(24,639	)			-				-				79,084
		Revolving Credit Facility			3,554,069				862,486				-				(264,993	)			-				4,151,562				235,755
		Equity			-				-				-				-				-				-				-
Black Angus Steakhouses, LLC		Senior Secured First Lien Delayed Draw Term Loan			758,929				-				-				-				-				758,929				79,375
		Senior Secured First Lien Term Loan			2,279,814				-				-				(731,896	)			-				1,547,918				-
		Senior Secured First Lien Super Priority DDTL			1,500,000				-				-				-				-				1,500,000				156,885
		Equity			-				-				-				-				-				-				-
Caddo Investors Holdings 1 LLC		Equity			3,454,786				(3,448,219	)			-				(925,960	)			919,393				-				-
Dynamic Energy Services International LLC		Senior Secured First Lien Term Loan			-				(4,910,671	)			-				7,328,568				(2,417,897	)			-				12
JFL-NGS Partners, LLC		Equity			26,862,813				(26,807,520	)			-				(26,805,513	)			26,750,220				-				-
JFL-WCS Partners, LLC		Equity			8,099,949				(8,084,639	)			-				(7,970,361	)			7,955,051				-				-
Kemmerer Operations, LLC		Senior Secured First Lien Term Loan			2,360,547				(3,475	)			-				21,438				-				2,378,510				368,331
		Senior Secured First Lien Delayed Draw Term Loan			162,441				(163,915	)			-				1,474				-				-				6,601
		Equity			553,746				-				-				140,956				-				694,702				-
Path Medical, LLC		Senior Secured First Lien Term Loan A			2,249,835				(2,460,448	)			-				3,556,057				(3,345,444	)			-				(1,693	)
		Senior Secured First Lien Term Loan B			-				-				-				6,483,741				(6,483,741	)			-				(2,974	)
		Warrants			-				-				-				499,751				(499,751	)			-				-
URT Acquisition Holdings Corporation		Warrants			920,000				(1,000,000	)			-				(920,000	)			1,000,000				-				-
US Multifamily, LLC		Senior Secured First Lien Term Loan			2,577,416				(2,577,418	)			-				2				-				-				93,338
		Equity			2,236,261				(1,192,685	)			-				238,995				-				1,282,571				-
Total Affiliated Investments				$	57,595,245			$	(49,786,504	)		$	-			$	96,490			$	4,408,961			$	12,314,192			$	1,014,714

Name of Investment⁽¹⁾⁽²⁾		Type of Investment		Fair Value at September 30, 2021				Purchases/ (Sales) of or Advances/ (Distributions)				Transfers In/(Out) of Affiliates				Unrealized Gain/(Loss)				Realized Gain/(Loss)				Fair Value at September 30, 2022				Earned Income
Controlled Investments
FlexFIN, LLC		Equity Interest		$	2,500,000			$	44,636,146			$	-			$	-			$	-			$	47,136,146			$	3,505,220
NVTN LLC		Senior Secured First Lien Delayed Draw Term Loan			6,414,860				744,010				-				34,057				-				7,192,927				1,124,346
		Super Priority Senior Secured First Lien Term Loan			977,000				(1,000,000	)			-				21,150				1,850				-				173,822
		Senior Secured First Lien Term Loan B			-				1,610,990				-				2,086,119				-				3,697,109				-
		Senior Secured First Lien Term Loan C			-				-				-				-				-				-				-
		Equity			-				-				-				-				-				-				-
Total Controlled Investments				$	9,891,860			$	45,991,146			$	-			$	2,141,326			$	1,850			$	58,026,182			$	4,803,388

(1)	The par amount and additional detail are shown in the Consolidated Schedules of Investments.

(2)	Securities with a zero value at the beginning and end of the period, and those that had no transaction activity were excluded from the roll forward.

Purchases/(sales) of or advances to/(distributions) from Affiliated Investments and Controlled Investments represent the proceeds from sales and settlements of investments, purchases, originations and participations, investment increases due to PIK interest as well as net amortization of premium/(discount) on investments and are included in the purchases and sales presented on the Consolidated Statements of Cash Flows for the years ended September 30, 2023, 2022 and 2021. Transfers in/(out) of Affiliated Investments and Controlled Investments represent the fair value for the month an investment became or was removed as an Affiliated Investment or a Controlled Investment. Income received from Affiliated Investments and Controlled Investments is included in total investment income on the Consolidated Statements of Operations for the years ended September 30, 2023, 2022 and 2021.

Unconsolidated Significant Subsidiaries

In accordance with the SEC’s Regulation S-X and GAAP, the Company evaluated and determined that it had one subsidiary, FlexFIN, LLC, that is deemed to be a “significant subsidiary” as of September 30, 2023. In accordance with Rule 3-09, separate audited financial statements of FlexFIN, LLC for the year ended September 30, 2023 are being filed herewith as Exhibit 99.2.