Fair Value Measurements

12 Months Ended

Sep. 30, 2025

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 4. Fair Value Measurements

The Company follows ASC 820 for measuring the fair value of portfolio investments. Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity. The Company’s fair value analysis includes an analysis of the value of any unfunded loan commitments. Financial investments recorded at fair value in the consolidated financial statements are categorized for disclosure purposes based upon the level of judgment associated with the inputs used to measure their value. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the investment as of the measurement date. Investments which are valued using NAV as a practical expedient are excluded from this hierarchy, and certain prior period amounts have been reclassified to conform to the current period presentation. The three levels are defined below: 

● Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities at the measurement date.

● Level 2 - Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

● Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

In addition to using the above inputs in investment valuations, the Company continues to employ a valuation policy approved by the board of directors that is consistent with ASC 820 (see Note 2). Consistent with our valuation policy, we evaluate the source of inputs, including any markets in which our investments are trading, in determining fair value.

The following table presents the fair value measurements of our investments, by major class according to the fair value hierarchy, as of September 30, 2025 (dollars in thousands):

	Fair Value Hierarchy as of September 30, 2025
Investments:	Level 1		Level 2		Level 3		Total
Senior Secured First Lien Term Loans	$	-	$	27,586	$	88,981	$	116,567
Senior Secured Notes		-		10,460		6,997		17,457
Equity/Warrants		37,812		-		128,209		166,021
Total	$	37,812	$	38,046	$	224,187	$	300,045
Investments measured at net asset value(1)								2,227
Total Investments, at fair value							$	302,272

(1) Certain investments that are measured at fair value using NAV have not been categorized in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amount presented in the Consolidated Statements of Assets and Liabilities.

The following table presents the fair value measurements of our investments, by major class according to the fair value hierarchy, as of September 30, 2024 (dollars in thousands):

	Fair Value Hierarchy as of September 30, 2024
Investments:	Level 1		Level 2		Level 3		Total
Senior Secured First Lien Term Loans	$	-	$	45,003	$	68,987	$	113,990
Senior Secured Notes		-		11,054		7,422		18,476
Equity/Warrants		30,044		-		63,881		93,925
Total	$	30,044	$	56,057	$	140,290	$	226,391
Investments measured at net asset value(1)								1,525
Total Investments, at fair value							$	227,916

(1) Certain investments that are measured at fair value using NAV have not been categorized in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amount presented in the Consolidated Statements of Assets and Liabilities.

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the year ended September 30, 2025 (dollars in thousands):

	Senior Secured First Lien Term Loans			Senior Secured Notes			Equities/ Warrants			Total
Balance as of September 30, 2024	$	68,987		$	7,422		$	63,881		$	140,290
Purchases and other adjustments to cost		68,553			-			84,494			153,047
Sales (including repayments or maturities)		(36,901	)		(425	)		(15,764	)		(53,090	)
Net realized gains/(losses) from investments		(11,601	)		-			(1,771	)		(13,372	)
Net unrealized gains/(losses)		7,826			-			(2,519	)		5,307
Transfer in/(out)		(7,883	)		-			(112	)		(7,995	)
Balance as of September 30, 2025	$	88,981		$	6,997		$	128,209		$	224,187

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the year ended September 30, 2024 (dollars in thousands):

	Senior Secured First Lien Term Loans			Senior Secured Notes			Equities/ Warrants			Total
Balance as of September 30, 2023	$	82,499		$	-		$	82,817		$	165,316
Purchases and other adjustments to cost		31,590			34,000			50,146			115,736
Sales (including repayments or maturities)		(32,879	)		(26,578	)		(63,578	)		(123,035	)
Net realized gains/(losses) from investments		(8,728	)		-			15,331			6,603
Net unrealized gains/(losses)		19,634			-			(20,835	)		(1,201	)
Transfer in/(out)		(23,129	)		-			-			(23,129	)
Balance as of September 30, 2024	$	68,987		$	7,422		$	63,881		$	140,290

Net change in unrealized gain (loss) for the years ended September 30, 2024 and 2023 included in earnings related to Level 3 investments still held as of September 30, 2025 and 2024 was approximately $(5.7) million and $2.1 million, respectively.

Purchases and other adjustments to cost include purchases of new investments at cost, effects of refinancing/restructuring, accretion/amortization of income from discount/premium on debt securities, and PIK.

Sales represent net proceeds received from investments sold, including any repayments or maturities.

A review of the fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in/out of the Level 3 category as of the beginning of the quarter in which the reclassifications occur. During the year ended September 30, 2025, $7.9 million of investments were transferred out of Level 3 and no investments were transferred into Level 3. During the year ended September 30, 2024, $23.1 million of investments were transferred out of Level 3 and no investments were transferred into Level 3.

The following table presents the quantitative information about Level 3 fair value measurements of our investments, as of September 30, 2025 (dollars in thousands):

	Fair Value		Valuation Methodology	Unobservable Input	Range (Weighted Average)	Impact to Valuation From An Increase In Input
Senior Secured First Lien Term Loans	$	74,485	Income Approach	Market Yield	3.3% - 14.5% (10.0%)	Decrease
Senior Secured First Lien Term Loans		13,428	Market Approach	EBITDA Multiple	1.8x - 2.8x (2.3x)	Increase
Senior Secured First Lien Term Loans		997	Market Approach	Market Spread	4.8% - 5.5% (5.1%)	Increase
Senior Secured First Lien Term Loans		71	Recent Purchase	Purchase Price	N/A	N/A
Senior Secured Notes		6,997	Cost Approach	Collateral Value	N/A	N/A
Equity/Warrants		78,255	Market Approach	EBITDA Multiple	1.3x - 13.0x (11.0x)	Increase
Equity/Warrants		37,181	Cost Approach	Replacement Cost	N/A	N/A
Equity/Warrants		3,948	Market Approach	Market Quote	N/A	N/A
Equity/Warrants		6,000	Market Approach	Revenue Multiple	2.5x-3.0x (2.8x)	Increase
Equity/Warrants		2,725	Income Approach	Market Yield	28.3%-28.8% (28.5%)	Decrease
Equity/Warrants		100	Cost Approach	Collateral Value	N/A	N/A
Total	$	224,187

The following table presents the quantitative information about Level 3 fair value measurements of our investments, as of September 30, 2024 (dollars in thousands):

	Fair Value		Valuation Methodology	Unobservable Input	Range (Weighted Average)	Impact to Valuation From An Increase In Input
Senior Secured First Lien Term Loans	$	65,236	Income Approach	Market Yield	3.5% - 42.5% (15.3%)	Decrease
Senior Secured First Lien Term Loans		2,399	Market Approach	EBITDA Multiple	1.8x - 2.3x (2.0x)	Increase
Senior Secured First Lien Term Loans		1,002	Market Approach	Market Spread	4.5% - 5.0% (4.75%)	Decrease
Senior Secured First Lien Term Loans		350	Cost Approach	Collateral Value	N/A	N/A
Senior Secured Notes		7,422	Recent Purchase	Purchase Price	N/A	N/A
Equity/Warrants		36,683	Cost Approach	Collateral Value	N/A	N/A
Equity/Warrants		27,014	Market Approach	EBITDA Multiple	4.3x - 10.3x (8.4x)	Increase
Equity/Warrants		101	Recent Purchase	Purchase Price	N/A	N/A
Equity/Warrants		83	Income Approach	DLOM (Discount for lack of Marketability)	27.0% - 31.0% (29.0%)	Decrease
Total	$	140,290

The significant unobservable inputs used in the fair value measurement of the Company’s debt and derivative investments are market yields. Increases in market yields would result in lower fair value measurements.

The significant unobservable inputs used in the fair value measurement of the Company’s equity/warrants investments are comparable company multiples of revenue or EBITDA for the latest twelve months (“LTM”), next twelve months (“NTM”) or a reasonable period a market participant would consider. Increases in EBITDA multiples in isolation would result in higher fair value measurement.