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Investments
 9 Months Ended
Jun. 30, 2024
Investments [Abstract]  
Investments

Note 3. Investments

 

The composition of our investments as of June 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  $130,842    48.2%  $117,200    50.2%
Senior Secured Notes   22,917    8.5    23,029    9.9 
Fund Investment   1,027    0.4    807    0.3 
Equity/Warrants   116,328    42.9    92,645    39.6 
Total Investments  $271,114    100.0%  $233,681    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 June 30, 2024 and September 30, 2023, the total fair value of warrants was $98.4 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 nine months ended June 30, 2024, the Company did not acquire any additional warrants in an existing portfolio company. During the three and nine months ended June 30, 2023, the Company acquired and/or added on one and two, respectively, of additional warrants in an existing portfolio company.

 

For the three and nine months ended June 30, 2024, there was $34.8 thousand and $108.1 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 nine months ended June 30, 2023, there was $194.4 thousand and $404.6 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 June 30, 2024 (dollars in thousands):

 

   Fair Value   Percentage 
         
Real Estate  $52,967    22.7%
Services: Business   45,264    19.4 
Services: Consumer   29,967    12.8 
Hotel, Gaming & Leisure   25,659    11.0 
Construction & Building   16,085    6.9 
Automotive   12,479    5.3 
High Tech Industries   11,161    4.8 
Metals & Mining   9,154    3.9 
Media: Broadcasting & Subscription   7,528    3.2 
Consumer Discretionary   6,784    2.9 
Banking   6,007    2.6 
Energy: Oil & Gas   4,338    1.9 
Packaging   3,527    1.5 
Aerospace & Defense   2,661    1.1 
Insurance   100    
-
 
Total  $233,681    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 June 30, 2024 (dollars in thousands):

 

   Fair Value   Percentage 
Northeast  $90,456    38.7%
Southeast   61,804    26.3 
Midwest   35,217    15.1 
West   32,717    14.0 
Southwest   

2,931

    

1.3

 
Mid-Atlantic   

375

    

0.2

 
International   10,181    4.4 
Total  $233,681    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 nine months ended June 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
June 30,
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   $
-
   $48,327 
   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    
-
    
-
    (1,008,883)   
-
    450,366    
-
 
   Senior Secured First Lien Super Priority DDTL   1,920,960    
-
    
-
    
-
    
-
    1,920,960    
-
 
FST Holdings Parent, LLC  Equity   10,000,003    
-
    
-
    1,160,749    
-
    11,160,752    
-
 
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)  $

4,787,878

   $(1,991,456)  $

14,407,827

   $

742,858

 

 

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
June 30,
2024		   Earned Income 
Controlled Investments                               
ECC Capital Corp.  Senior Secured Promissory Note 
-
   10,422,012  
-
  
-
  
-
   10,422,012   482,173 
   Equity 
-
   4,251,084  
-
   (1,311,084) 
-
  2,940,000  
-
 
FlexFIN, LLC  Equity Interest   38,870,711    (4,162,202)   
-
    
-
    
-
    34,708,509    3,216,298 
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   
-
    100,000    
-
    
-
    
-
    100,000    
-
 
NVTN LLC  Senior Secured First Lien Delayed Draw Term Loan   7,214,856    (1,693,577)   
-
    (21,279)   
-
    5,500,000    868,449 
   Senior Secured First Lien Term Loan B   5,037,547    
-
    
-
    11,874,210    
-
    16,911,757    214,286 
   Equity   
-
    11,900,000    
-
    (11,900,000)   
-
    
-
    
-
 
Total Controlled Investments     $63,640,043   $16,208,145   $(9,153,693)  $(8,655,048)  $8,542,831   $70,582,278   $

5,050,037

 

 

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
June 30,
2023		   Earned Income 
Affiliated Investments                               
1888 Industrial Services, LLC  Senior Secured First Lien Term Loan C  $
-
   $
-
   $
-
   $763,798   $
-
   $763,798   $25,765 
   Revolving Credit Facility   4,151,562    215,622    
-
    264,993    
-
    4,632,177    336,502 
Black Angus Steakhouses, LLC  Senior Secured First Lien Delayed Draw Term Loan   758,929    9,915    
-
    75,893    
-
    844,737    94,376 
   Senior Secured First Lien Term Loan   1,547,918    
-
    
-
    (100,951)   
-
    1,446,967    
-
 
   Senior Secured First Lien Super Priority DDTL   1,500,000    19,796    
-
    166,667    
-
    1,686,463    224,616 
FST Holdings Parent, LLC  Equity   
-
    8,000,000    
-
    
-
    
-
    8,000,000    
-
 
Kemmerer Operations, LLC  Senior Secured First Lien Term Loan   2,378,510    
-
    (2,378,510)   
-
    
-
    
-
    
-
 
   Equity   694,702    
-
    (962,717)   268,015    
-
    
-
    
-
 
Maritime Wireless Holdings LLC  Senior Secured First Lien Term Loan A   
-
    (1,500,703)   4,900,000    61,742    30,211    3,491,250    163,403 
   Senior Secured First Lien Term Loan B   
-
    (1,055)   7,350,000    132,305    
-
    7,481,250    267,124 
   Convertible Promissory Note   
-
    
-
    5,000,000    1,925,000    
-
    6,925,000    
-
 
US Multifamily, LLC  Equity   1,282,571    (972,483)   
-
    (244,952)   
-
    65,136    
-
 
Total Affiliated Investments     $12,314,192   $5,771,092   $13,908,773   $3,312,510   $30,211   $35,336,778   $1,111,786 

 

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
June 30,
2023		   Earned Income 
Controlled Investments                               
FlexFIN, LLC  Equity Interest  $47,136,146   $(13,012,069)  $
-
   $
-
    
-
   $34,124,077   $2,637,115 
Kemmerer Operations, LLC  Senior Secured First Lien Term Loan   
-
    2,329,641    2,378,510    (1)   24,131    4,732,281    245,738 
   Equity   
-
    873,440    962,717    7,319,045    
-
    9,155,202    
-
 
NVTN LLC  Senior Secured First Lien Delayed Draw Term Loan   7,192,927    
-
    
-
    14,620    
-
    7,207,547    416,974 
   Senior Secured First Lien Term Loan B   3,697,109    
-
    
-
    199,532    
-
    3,896,641    
-
 
   Senior Secured First Lien Term Loan C   
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Total Controlled Investments     $58,026,182   $(9,808,988)  $3,341,227   $7,533,196   $24,131   $59,115,748   $3,299,827 

 

(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 nine months ended June 30, 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 nine months ended June 30, 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 June 30, 2024 for which summarized financial information is presented below (dollars in thousands):

 

Balance Sheet  June 30,
2024
(Unaudited)		   September 30, 2023
(Audited)		 
Total Assets  $35,909   $38,871 
Total Liabilities   1,935    279 

 

Income Statement  For the Nine
Months Ended
June 30,
2024
(Unaudited)		   For the
Year Ended September 30, 2023
(Audited)		 
Total Income  $3,324   $4,385 
Total Expenses   614    815 
Net Income  $2,710   $3,570