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Investments

3 Months Ended

Dec. 31, 2022

Investments, Debt and Equity Securities [Abstract]

Note 3. Investments

The composition of our investments as of December 31, 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	$	129,910		51.6	%	$	88,691		48.4	%
Senior Secured Notes		2,252		0.9			1,617		0.9
Unsecured Debt		182		0.1			-		-
Equity/Warrants		119,127		47.4			92,963		50.7
Total Investments	$	251,471		100.0	%	$	183,271		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 December 31, 2022 and September 30, 2022, the total fair value of warrants was $0.0 and $62.6 thousand, respectively, and were included in investments at fair value on the Consolidated Statements of Assets and Liabilities. During the three months ended December 31, 2022, the Company did not acquire any additional warrants in an existing portfolio company. During the three months ended December 31, 2021, the Company did not acquire any additional warrants in an existing portfolio company.

For the three months ended December 31, 2022, there was no unrealized appreciation/(depreciation) related to warrants. For the three months ended December 31, 2021, there was no unrealized appreciation/(depreciation) related to warrants. 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 December 31, 2022 (dollars in thousands):

	Fair Value		Percentage

Services: Business	$	42,167		23.0	%
Banking, Finance, Insurance & Real Estate		35,012		19.1
Hotel, Gaming & Leisure		32,073		17.5
Services: Consumer		17,618		9.6
Construction & Building		17,404		9.4
Media: Broadcasting & Subscription		10,356		5.7
Automotive		7,514		4.1
High Tech Industries		5,342		2.9
Consumer Discretionary		4,916		2.7
Energy: Oil & Gas		4,755		2.6
Packaging		3,353		1.8
Metals & Mining		2,640		1.4
Retail		121		0.1
Total	$	183,271		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		27.4	%
Hotel, Gaming & Leisure		31,947		16.6
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 North America. 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 December 31, 2022 (dollars in thousands):

	Fair Value		Percentage
Northeast	$	85,952		46.9	%
Southeast		51,451		28.1
West		19,453		10.6
Midwest		14,869		8.1
Southwest		6,049		3.3
Mid-Atlantic		162		0.1
Other⁽¹⁾		5,335		2.9
Total	$	183,271		100.0	%

⁽¹⁾

As of December 31, 2022, comprised of our investments in foreign investments.

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
Other⁽¹⁾		5,449		2.8
Total	$	192,957		100.0	%

⁽¹⁾	As of September 30, 2022, comprised of our investments in foreign investments.

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 three months ended December 31, 2022 and 2021 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 December 31, 2022		Earned Income
Affiliated Investments
1888 Industrial Services, LLC	Senior Secured First Lien Term Loan C	$	-	$	-		$	-	$	123,193		$	-	$	123,193	$	27,308
	Revolving Credit Facility		4,151,562		215,622			-		264,993			-		4,632,177		97,647
Black Angus Steakhouses, LLC	Senior Secured First Lien Delayed Draw Term Loan		758,929		-			-		-			-		758,929		24,693
	Senior Secured First Lien Term Loan		1,547,918		-			-		117,776			-		1,665,694		-
	Senior Secured First Lien Super Priority DDTL		1,500,000		-			-		-			-		1,500,000		48,805
Kemmerer Operations, LLC	Senior Secured First Lien Term Loan		2,378,510		(813,559	)		-		-			-		1,564,951		89,743
	Equity		694,702		-			-		380,742			-		1,075,444		-
US Multifamily, LLC	Equity		1,282,571		-			-		(171,167	)		-		1,111,404		-
Total Affiliated Investments		$	12,314,192	$	(597,937	)	$	-	$	715,537		$	-	$	12,431,792	$	288,196

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 December 31, 2022		Earned Income
Controlled Investments
FlexFIN, LLC	Equity Interest	$	47,136,146	$	(10,467,262	)	$	-	$	1,627	$	-	$	36,670,511	$	1,210,200
NVTN LLC	Senior Secured First Lien Delayed Draw Term Loan		7,192,927		-			-		51,169		-		7,244,096		194,627
	Senior Secured First Lien Term Loan B		3,697,109		-			-		-		-		3,697,109		-
Total Controlled Investments		$	58,026,182	$	(10,467,262	)	$	-	$	52,796	$	-	$	47,611,716	$	1,404,827

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 December 31, 2021		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	)		-			-		-
	Revolving Credit Facility		3,554,069		-			-		-			-			3,554,069		-
Black Angus Steakhouses, LLC	Senior Secured First Lien Delayed Draw Term Loan		758,929		-			-		-			-			758,929		19,395
	Senior Secured First Lien Term Loan		2,279,814		-			-		(529,994	)		-			1,749,820		-
	Senior Secured First Lien Super Priority DDTL		1,500,000		-			-		-			-			1,500,000		38,333
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	)		-		-
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		91,309			-		4,125			-			2,455,981		91,347
	Senior Secured First Lien Delayed Draw Term Loan		162,441		(129,875	)		-		(4,442	)		-			28,124		5,665
	Equity		553,746		-			-		(62,347	)		-			491,399		-
Path Medical, LLC	Senior Secured First Lien Term Loan A		2,249,835		-			-		(31,984	)		-			2,217,851		-
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		-			-		-			-			2,577,416		64,435
	Equity		2,236,261		-			-		(166	)		-			2,236,095		-
Total Affiliated Investments		$	57,595,245	$	(44,289,615	)	$	-	$	(10,473,843	)	$	14,737,897		$	17,569,684	$	219,175

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 December 31, 2021		Earned Income
Controlled Investments
FlexFIN, LLC	Equity Interest	$	2,500,000	$	28,000,000		$	-	$	-	$	-	$	30,500,000	$	398,844
NVTN LLC	Senior Secured First Lien Delayed Draw Term Loan		6,414,860		-			-		6,566		-		6,421,426		-
	Super Priority Senior Secured First Lien Term Loan		977,000		(500,000	)		-		11,075		925		489,000		154,794
Total Controlled Investments		$	9,891,860	$	27,500,000		$	-	$	17,641	$	925	$	37,410,426	$	553,638

(1)	The par amount and additional detail are shown in the Consolidated Schedule 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 three months ended December 31, 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 three months ended December 31, 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 December 31, 2022 for which summarized financial information is presented below (dollars in thousands):

Balance Sheet	December 31, 2022 (Unaudited)		September 30, 2022 (Audited)
Total Assets	$	36,670	$	47,168
Total Liabilities		54		12

Income Statement	For the Three Months Ended December 31, 2022 (Unaudited)		For the Year Ended September 30, 2022 (Audited)
Total Income	$	1,085	$	3,855
Total Expenses		75		202
Net Income	$	1,010	$	3,653