XML 23 R12.htm IDEA: XBRL DOCUMENT v3.24.1.1.u2
Investments
 6 Months Ended
Mar. 31, 2024
Investments [Abstract]  
Investments

Note 3. Investments

 

The composition of our investments as of March 31, 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  $119,674    48.0%  $106,607    48.4%
Senior Secured Notes   12,495    5.0    12,372    5.6 
Fund Investment   1,027    0.4    783    0.4 
Equity/Warrants   116,217    46.6    100,287    45.6 
Total Investments  $249,413    100.0%  $220,049    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 March 31, 2024 and September 30, 2023, the total fair value of warrants was $133.1 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 and six months ended March 31, 2024, the Company did not acquire any additional warrants in an existing portfolio company. During the three and six months ended March 31, 2023, the Company acquired warrants in one existing portfolio company.

 

For the three and six months ended March 31, 2024, there was $95.5 thousand and $73.3 thousand, respectively, in unrealized depreciation related to warrants and was recorded on the Consolidated Statements of Operations as net unrealized appreciation/(depreciation) on investments. For the three and six months ended March 31, 2023, there was $210.2 thousand and $147.6 thousand, respectively, in 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 March 31, 2024 (dollars in thousands):

 

   Fair Value   Percentage 
         
Services: Business  $45,281    20.5%
Hotel, Gaming & Leisure   26,635    12.1 
Real Estate   39,293    17.9 
Services: Consumer   20,854    9.5 
Construction & Building   14,671    6.7 
Metals & Mining   15,452    7.0 
Media: Broadcasting & Subscription   11,681    5.3 
High Tech Industries   10,726    4.9 
Automotive   10,056    4.6 
Energy: Oil & Gas   6,330    2.9 
Consumer Discretionary   6,960    3.2 
Banking   5,831    2.6 
Packaging   3,527    1.6 
Aerospace & Defense   2,652    1.2 
Insurance   100    
-
 
Total  $220,049    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 March 31, 2024 (dollars in thousands):

 

   Fair Value   Percentage 
Northeast  $85,267    38.7%
Southeast   61,506    28.0 
Midwest   36,360    16.5 
West   19,487    8.9 
International   10,175    4.6 
Southwest   6,878    3.1 
Mid-Atlantic   376    0.2 
Total  $220,049    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 six months ended March 31, 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
March 31, 2024		   Earned
Income		 
Affiliated Investments                            
1888 Industrial Services, LLC  Senior Secured First Lien Term Loan C  $751,479   $(1,096,561)  $(196,411)  $439,778   $101,715   $
-
   $37,645 
   Senior Secured First Lien Term Loan A   
-
    
-
    
-
    9,473,068    (9,473,068)   
-
    
-
 
   Revolving Credit Facility   4,632,177    (5,112,074)   
-
    
-
    479,897    
-
    158,674 
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    
-
    
-
    (648,417)   
-
    810,832    
-
 
   Senior Secured First Lien Super Priority DDTL   1,920,960    
-
    
-
    
-
    
-
    1,920,960    
-
 
FST Holdings Parent, LLC  Equity   10,000,003    
-
    
-
    726,323    
-
    10,726,326    
-
 
Maritime Wireless Holdings LLC  Senior Secured First Lien Term Loan B   7,500,000    (7,373,166)   
-
    (126,834)   
-
    
-
    535,857 
   Equity   10,150,000    (11,900,000)   
-
    (5,150,000)   6,900,000    
-
    
-
 
Total Affiliated Investments     $37,289,617   $(25,481,801)  $(196,411)  $4,713,918   $(1,991,456)  $14,333,867   $732,176 

 

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
March 31, 2024		   Earned
Income		 
Controlled Investments                            
FlexFIN, LLC  Equity Interest  $38,870,711   $(4,141,486)  $
      -
   $
-
    
       -
   $34,729,225   $2,233,395 
Kemmerer Operations, LLC  Senior Secured First Lien Term Loan   3,383,877    (97,841)   
-
    
-
    
-
    3,286,036    268,831 
   Equity   9,133,052    2,300,000    
-
    733,122    
-
    12,166,174    
-
 
NSG Captive, Inc.  Equity   
-
    100,000    
-
    
-
    
-
    100,000    
-
 
NVTN LLC  Senior Secured First Lien Delayed Draw Term Loan   7,214,856    (1,705,081)   
-
    (9,775)   
-
    5,500,000    580,266 
   Senior Secured First Lien Term Loan B   5,037,547    
-
    
-
    12,488,543    
-
    17,526,090    
-
 
   Equity   
-
    11,900,000    
-
    (11,900,000)   
-
    
-
    
-
 
Total Controlled Investments     $63,640,043   $8,355,592   $
-
   $1,311,890   $
-
   $73,307,525   $3,082,492 

 

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
March 31, 2023		   Earned
Income		 
Affiliated Investments                            
1888 Industrial Services, LLC  Senior Secured First Lien Term Loan C  $
-
   $
-
   $
-
   $566,689   $
      -
   $566,689   $(96,875)
   Revolving Credit Facility   4,151,562    215,622    
-
    264,993    
-
    4,632,177    406,160 
Black Angus Steakhouses, LLC  Senior Secured First Lien Delayed Draw Term Loan   758,929    
-
    
-
    
-
    
-
    758,929    50,500 
   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    99,696 
Kemmerer Operations, LLC  Senior Secured First Lien Term Loan   2,378,510    
-
    (2,378,510)   
-
    
-
    
-
    
-
 
   Equity   694,702    
-
    (962,717)   268,015    
-
    
-
    
-
 
US Multifamily, LLC  Equity   1,282,571    (131,465)   
-
    (227,873)   
-
    923,233    
-
 
Total Affiliated Investments     $12,314,192   $84,157   $(3,341,227)  $989,600   $
-
   $10,046,722   $459,481 

 

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
March 31, 2023		   Earned
Income		 
Controlled Investments                            
FlexFIN, LLC  Equity Interest  $47,136,146   $(9,085,316)  $
-
   $
-
    
-
   $38,050,830   $1,927,203 
Kemmerer Operations, LLC  Senior Secured First Lien Term Loan   
-
    3,630,773    2,378,510    182    23,273    6,032,738    245,738 
   Equity   
-
    873,440    962,717    4,237,819    
-
    6,073,976    
-
 
NVTN LLC  Senior Secured First Lien Delayed Draw Term Loan   7,192,927    
-
    
-
    14,620    
-
    7,207,547    251,814 
   Senior Secured First Lien Term Loan B   3,697,109    
-
    
-
    469,476    
-
    4,166,585    
-
 
Total Controlled Investments     $58,026,182   $(4,581,103)  $3,341,227   $4,722,097   $23,273   $61,531,676   $2,424,755 

 

(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 six months ended March 31, 2024 and 2023. 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 six months ended March 31, 2024 and 2023.

 

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, for which the Company owned 50%, that is deemed to be a “significant subsidiary” as of March 31, 2024 for which summarized financial information is presented below (dollars in thousands):

 

Balance Sheet  March 31,
2024
(Unaudited)		   September 30,
2023
(Audited)		 
Total Assets  $35,929   $38,871 
Total Liabilities   1,852    279 

 

Income Statement 

For the
Six Months

Ended
March 31,
2024
(Unaudited)

   For the
Year Ended
September 30,
2023
(Audited)		 
Total Income  $2,173   $4,385 
Total Expenses   448    815 
Net Income  $1,725   $3,570