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Investments
 12 Months Ended
Sep. 30, 2024
Investments [Abstract]  
Investments

Note 3. Investments

 

The composition of our investments as of September 30, 2024 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  $129,957    49.8%  $113,990    50.0%
Senior Secured Notes   18,127    7.0    18,476    8.1 
Fund Investment   1,746    0.7    1,525    0.7 
Equity/Warrants   110,930    42.5    93,925    41.2 
Total Investments  $260,760    100.0%  $227,916    100.0%

 

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%

 

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, 2024 and 2023, the total fair value of warrants was $82.7 thousand and $206.5 thousand, respectively, and were included in investments at fair value on the Consolidated Statements of Assets and Liabilities. During the year ended September 30, 2024, the Company did not acquire any additional warrants in an existing portfolio company. During the year ended September 30, 2023, the Company acquired additional warrants in an existing portfolio company. During the year ended September 30, 2022, the Company did not acquire any additional warrants in any existing portfolio companies.

 

Total change in unrealized depreciation related to warrants for the years ended September 30, 2024, 2023 and 2022 was $123.7 thousand, $143.9 thousand and $299.1 thousand, respectively, and was recorded on the Consolidated Statements of Operations as net change in 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, 2024 (dollars in thousands):

 

   Fair Value   Percentage 
         
Real Estate  $50,162    22.0%
Services: Business   46,706    20.5 
Services: Consumer   28,121    12.3 
Hotel, Gaming & Leisure   24,253    10.6 
Construction & Building   17,095    7.5 
High Tech Industries   12,352    5.5 
Automotive   12,316    5.4 
Metals & Mining   12,161    5.3 
Media: Broadcasting & Subscription   9,003    4.0 
Energy: Oil & Gas   4,333    1.9 
Packaging   3,505    1.5 
Consumer Discretionary   3,456    1.5 
Aerospace & Defense   2,827    1.2 
Banking   1,525    0.7 
Insurance   101    0.1 
Total  $227,916    100.0%

 

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 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, 2024 (dollars in thousands):

 

   Fair Value   Percentage 
Northeast  $87,269    38.3%
Southeast   61,276    26.9 
Midwest   34,648    15.2 
West   31,951    14.0 
Southwest   2,749    1.2 
Mid-Atlantic   375    0.2 
International   9,648    4.2 
Total  $227,916    100.0%

 

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%

 

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, 2024 and 2023 were as follows:

 

Name of Investment (1) (2)  Type of Investment  Fair Value at
September 30, 2023		   Purchases/(Sales)
of or Advances/
(Distributions)		   Transfers In/(Out)
 of Affiliates		   Unrealized Gain/(Loss)   Realized
Gain/(Loss)		   Fair Value at
September 30, 2024		   Earned
Income		 
Affiliated Investments                                      
All Around Roustabout, LLC  Senior Secured First Lien Term Loan C  $751,479   $(1,096,561)  $(196,411)  $439,778   $101,715   $-   $123,326 
   Senior Secured First Lien Term Loan A   -    -    -    9,473,068    (9,473,068)   -    - 
   Revolving Credit Facility   4,632,177    (5,112,074)   -    -    479,897    -    158,704 
Black Angus Steakhouses, LLC  Senior Secured First Lien Delayed Draw Term Loan   875,749    -    -    (124,542)   -    751,207    - 
   Senior Secured First Lien Term Loan   1,459,249    -    -    (1,459,249)   -    -    - 
   Senior Secured First Lien Super Priority DDTL   1,920,960    -    -    (273,184)   -    1,647,776    - 
FST Holdings Parent, LLC  Equity   10,000,003    -    -    2,351,799    -    12,351,802    199,388 
Maritime Wireless Holdings LLC  Senior Secured First Lien Term Loan B   7,500,000    (7,373,166)   -    (126,834)   -    -    535,851 
   Equity   10,150,000    (11,900,000)   -    (5,150,000)   6,900,000    -    - 
Total Affiliated Investments     $37,289,617   $(25,481,801)  $(196,411)  $5,130,836   $(1,991,456)  $14,750,785   $1,017,269 

 

Name of Investment(1)(2)  Type of Investment  Fair Value at
September 30, 2023		   Purchases/(Sales)
of or Advances/
(Distributions)		   Transfers In/(Out)
 of Controlled		   Unrealized
Gain/(Loss)		   Realized
Gain/(Loss)		   Fair Value at
September 30, 2024		   Earned
Income		 
Controlled Investments                               
ECC Capital Corp.  Senior Secured First Lien Term Loan   -    7,422,012    -    -    -    7,422,012    962,959 
   Equity   -    4,257,002    -    614,998    -    4,872,000    33,280 
FlexFIN, LLC  Equity Interest   38,870,711    (2,187,665)   -    -    -    36,683,046    3,972,352 
Kemmerer Operations, LLC  Senior Secured First Lien Term Loan   3,383,877    5,769,816    (9,153,693)   -    -    -    268,831 
   Equity   9,133,052    (10,378,988)   -    (7,296,895)   8,542,831    -    - 
NSG Captive, Inc.  Equity   -    101,000    -    -    -    101,000    - 
NVTN LLC  Senior Secured First Lien Delayed Draw Term Loan   7,214,856    (1,693,577)   -    (21,279)   -    5,500,000    1,035,741 
   Senior Secured First Lien Term Loan B   5,037,547    -    -    11,316,042    -    16,353,589    423,013 
   Equity   -    11,900,000    -    (11,900,000)   -    -    - 
Total Controlled Investments  $63,640,043   $15,189,600   $(9,153,693)  $(7,287,134)  $8,542,831   $70,931,647   $6,696,176 

 

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 

 

(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, 2024, 2023 and 2022. Transfers in/(out) of Affiliated Investments and Controlled Investments represent the fair value for the quarter 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, 2024, 2023 and 2022.

 

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, 2024. In accordance with Rule 3-09, separate audited financial statements of FlexFIN, LLC for the year ended September 30, 2024 are being filed herewith as Exhibit 99.2.