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Investments
 6 Months Ended
Mar. 31, 2025
Investments [Abstract]  
Investments

Note 3. Investments

 

The composition of our investments as of March 31, 2025 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  $133,693    41.8%  $117,838    41.0%
Senior Secured Notes   12,914    4.0    13,099    4.6 
Fund Investment   1,746    0.5    1,600    0.6 
Equity/Warrants   172,132    53.7    154,306    53.8 
Total Investments  $320,485    100.0%  $286,843    100.0%

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%

 

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, 2025 and September 30, 2024, the total fair value of warrants was $1,685.7 thousand and $82.7 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, 2025 and 2024, the Company acquired one warrant in an existing portfolio company.

 

For the three and six months ended March 31, 2025, there was $228.7 thousand and $493.7 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, 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. 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, 2025 (dollars in thousands):

 

   Fair Value   Percentage 
         
Services: Business  $55,636    19.4%
Insurance   48,397    16.9 
Services: Consumer   39,044    13.6 
Real Estate   35,533    12.5 
Hotel, Gaming & Leisure   26,469    9.2 
High Tech Industries   18,344    6.4 
Construction & Building   17,743    6.2 
Metals & Mining   12,161    4.2 
Aerospace & Defense   11,021    3.8 
Automotive   10,716    3.7 
Consumer Discretionary   5,256    1.8 
Media: Broadcasting & Subscription   4,923    1.7 
Banking   1,600    0.6 
Total  $286,843    100.0%

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 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, 2025 (dollars in thousands):

 

   Fair Value   Percentage 
Northeast  $107,939    37.7%
Southeast   106,030    37.0 
West   32,231    11.2 
Midwest   25,505    8.9 
Southwest   2,547    0.9 
Mid-Atlantic   411    0.1 
International   12,180    4.2 
Total  $286,843    100.0%

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%

 

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 and six months ended March 31, 2025 and 2024 were as follows:

 

Name of Investment(1)(2)  Type of Investment  Fair Value at September 30,
2024		   Purchases/
(Sales)
of or
Advances/
(Distributions)		   Transfers In/(Out)
of
Affiliates		   Unrealized Gain/(Loss)   Realized
Gain/(Loss)		   Fair Value at
March 31,
2025		   Earned
Income		 
Affiliated Investments                               
Black Angus Steakhouses, LLC  Senior Secured First Lien Delayed Draw Term Loan  $751,207   $
                -
   $
                -
   $(302,288)  $
           -
   $448,919   $
-
 
   Senior Secured First Lien Super Priority DDTL   1,647,776    
-
    
-
    (663,070)   
-
    984,706    
-
 
FST Holdings Parent, LLC  Equity   12,351,802    8,289    
-
    (16,195)   
-
    12,343,896    254,231 
Total Affiliated Investments  $14,750,785   $8,289   $
-
   $(981,553)  $
-
   $13,777,521   $254,231 

 

Name of Investment(1)(2)  Type of Investment  Fair Value at September 30,
2024		   Purchases/
(Sales)
of or
Advances/
(Distributions)		   Transfers In/(Out)
of
Controlled		   Unrealized Gain/(Loss)   Realized
Gain/(Loss)		   Fair Value at
March 31,
2025		   Earned
Income		 
Controlled Investments                            
ECC Capital Corp.  Senior Secured First Lien Term Loan  $7,422,012   $
                  -
   $
             -
   $
-
   $
              -
   $7,422,012   $391,510 
   Equity   4,872,000    
-
    
-
    159,600    
-
    5,031,600    
-
 
FlexFIN, LLC  Equity Interest   36,683,045    92,290    
-
    
-
    
-
    36,775,335    2,979,966 
NSG Captive, Inc.  Equity   101,000    49,145,255    
-
    (849,113)   
-
    48,397,142    
-
 
NVTN LLC  Senior Secured First Lien Delayed Draw Term Loan   5,500,000    4,300,000    
-
    
-
    
-
    9,800,000    294,649 
   Senior Secured First Lien Term Loan B   16,353,590    
-
    
-
    (1,118,089)   
-
    15,235,501    528,826 
Total Controlled Investments  $70,931,647   $53,537,545   $
-
   $(1,807,602)  $
-
   $122,661,590   $4,194,951 
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 

 

(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, 2025 and 2024. 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 and six months ended March 31, 2025 and 2024.

  

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, 2025 for which summarized financial information is presented below (dollars in thousands):

 

Balance Sheet  March 31,
2025
(Unaudited)		   September 30,
2024
(Audited)		 
Total Assets  $50,622   $51,634 
Total Liabilities   14,348    15,206 

 

Income Statement  For the
Six Months Ended
March 31,
2025
(Unaudited)		   For the
Year Ended
September 30,
2024 (Audited)		 
Total Income  $3,592   $4,955 
Total Expenses   899    1,028 
Net Income  $2,693   $3,927