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Investments
 3 Months Ended
Dec. 31, 2023
Investments [Abstract]  
Investments

Note 3. Investments

 

The composition of our investments as of December 31, 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  $137,419    53.2%  $102,392    46.1%
Senior Secured Notes   9,512    3.7    8,997    4.0 
Fund Investment   1,027    0.4    783    0.4 
Equity/Warrants   110,219    42.7    110,050    49.5 
Total Investments  $258,177    100.0%  $222,222    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 December 31, 2023 and September 30, 2023, the total fair value of warrants was $228.6 thousand and $206.5 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, 2023 and 2022, the Company did not acquire any additional warrants in an existing portfolio company.

 

For the three months ended December 31, 2023, there was $22,149 in unrealized appreciation related to warrants and was recorded on the Consolidated Statements of Operations as net unrealized appreciation/(depreciation) on investments. For the three months ended December 31, 2022, there was no unrealized appreciation 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, 2023 (dollars in thousands):

 

   Fair Value   Percentage 
         
Services: Business  $44,875    20.1%
Banking, Finance, Insurance & Real Estate   41,470    18.7 
Hotel, Gaming & Leisure   38,656    17.4 
Services: Consumer   18,330    8.2 
Construction & Building   13,719    6.2 
Metals & Mining   13,371    6.0 
Media: Broadcasting & Subscription   11,056    5.0 
High Tech Industries   10,000    4.5 
Automotive   9,862    4.4 
Energy: Oil & Gas   7,684    3.5 
Consumer Discretionary   7,052    3.2 
Packaging   3,536    1.6 
Aerospace & Defense   2,611    1.2 
Total  $222,222    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 December 31, 2023 (dollars in thousands):

 

   Fair Value   Percentage 
Northeast  $82,168    36.9%
Southeast   65,073    29.3 
Midwest   33,990    15.3 
West   25,453    11.5 
Southwest   7,073    3.2 
Mid-Atlantic   376    0.2 
International   8,089    3.6 
Total  $222,222    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 three months ended December 31, 2023 and 2022 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
December 31,
2023		   Earned
Income		 
Affiliated Investments                            
1888 Industrial Services, LLC  Senior Secured First Lien Term Loan C  $751,479   $
-
   $
-
   $678,794   $
-
   $1,430,273   $40,558 
   Revolving Credit Facility   4,632,177    1,141,365    
-
    479,897    
-
    6,253,439    152,744 
Black Angus Steakhouses, LLC  Senior Secured First Lien Delayed Draw Term Loan   875,749    
-
    
-
    
-
    
-
    875,749    
-
 
   Senior Secured First Lien Term Loan   1,459,249    
-
    
-
    (470,800)   
-
    988,449    
-
 
   Senior Secured First Lien Super Priority DDTL   1,920,960    
-
    
-
    
-
    
-
    1,920,960    (20,809)
FST Holdings Parent, LLC  Equity   10,000,003    
-
    
-
    (3)   
-
    10,000,000    
-
 
Maritime Wireless Holdings LLC  Senior Secured First Lien Term Loan B   7,500,000    6,625    
-
    (6,625)   
-
    7,500,000    283,199 
   Equity   10,150,000    
-
    
-
    1,750,000    
-
    11,900,000    
-
 
Total Affiliated Investments     $37,289,617   $1,147,990   $
-
   $2,431,263   $
-
   $40,868,870   $455,692 

 

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
December 31,
2023		   Earned
Income		 
Controlled Investments                            
FlexFIN, LLC  Equity Interest  $38,870,711   $(2,460,565)  $
-
   $
-
    
-
   $36,410,146   $1,348,200 
Kemmerer Operations, LLC  Senior Secured First Lien Term Loan   3,383,877    (216,704)   
-
    
-
    
-
    3,167,173    149,967 
   Equity   9,133,052    2,300,000    
-
    (1,229,110)   
-
    10,203,942    
-
 
NVTN LLC  Senior Secured First Lien Delayed Draw Term Loan   7,214,856    3,190,114    
-
    (41,470)   
-
    10,363,500    286,238 
   Senior Secured First Lien Term Loan B   5,037,547    
-
    
-
    70,207    
-
    5,107,754    
-
 
Total Controlled Investments     $63,640,043   $2,812,845   $
-
   $(1,200,373)  $
-
   $65,252,515   $1,784,405 

 

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 Delayed Draw Term Loan   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 Controlled		   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 

 

(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 three months ended December 31, 2023 and 2022. 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, 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 December 31, 2023 for which summarized financial information is presented below (dollars in thousands):

 

Balance Sheet  December 31,
2023
(Unaudited)		   September 30,
2023
(Audited)		 
Total Assets  $36,460   $38,871 
Total Liabilities   245    279 

 

Income Statement  For the
Three Months
Ended
December 31,
2023
(Unaudited)		   For the Year
Ended
September 30,
2023
(Audited)		 
Total Income  $965   $4,385 
Total Expenses   94    815 
Net Income  $871   $3,570