PORTFOLIO INVESTMENTS AND FAIR VALUE

12 Months Ended

Dec. 31, 2024

PORTFOLIO INVESTMENTS AND FAIR VALUE

PORTFOLIO INVESTMENTS AND FAIR VALUE

NOTE 6 — PORTFOLIO INVESTMENTS AND FAIR VALUE

In accordance with the authoritative guidance on fair value measurements and disclosures under U.S. GAAP, the Company discloses the fair value of its investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The guidance establishes three levels of the fair value hierarchy as follows:

Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 — Quoted prices in markets that are not considered to be active or financial instruments for which significant inputs are observable, either directly or indirectly; and

Level 3 — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

The level of an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by management.

The Company considers whether the volume and level of activity for the asset or liability have significantly decreased and identifies transactions that are not orderly in determining fair value. Accordingly, if the Company determines that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value. Valuation techniques such as an income approach might be appropriate to supplement or replace a market approach in those circumstances.

At December 31, 2024, the Company had investments in 105 portfolio companies. The total cost and fair value of the investments were $961,788,706 and $953,497,688, respectively. The composition of the Company’s investments as of December 31, 2024 is as follows:

	Cost		Fair Value
Senior Secured – First Lien(1)	$	884,322,462	$	856,096,255
Senior Secured – Second Lien		12,073,732		11,948,850
Unsecured Debt		6,755,866		6,612,493
Equity		58,636,646		78,840,090
Total Investments	$	961,788,706	$	953,497,688

(1) Includes unitranche investments, which accounted for 2.0% of the Company’s portfolio at fair value. Unitranche structures may combine characteristics of first lien senior secured as well as second lien and/or subordinated loans. The Company’s unitranche loans will expose it to the risks associated with the second lien and subordinated loans to the extent it invests in the “last-out” tranche.

At December 31, 2023, the Company had investments in 93 portfolio companies. The total cost and fair value of the investments were $902,143,550 and $874,460,683, respectively. The composition of the Company’s investments as of December 31, 2023 is as follows:

	Cost		Fair Value
Senior Secured – First Lien(1)	$	793,819,152	$	774,789,320
Senior Secured – Second Lien		42,269,568		21,957,500
Unsecured Debt		6,138,183		5,956,280
Equity		59,916,647		71,757,583
Total Investments	$	902,143,550	$	874,460,683

(1) Includes unitranche investments, which accounted for 4.5% of the Company’s portfolio at fair value. Unitranche structures may combine characteristics of first lien senior secured as well as second lien and/or subordinated loans. The Company’s unitranche loans will expose it to the risks associated with second lien and subordinated loans to the extent it invests in the “last-out” tranche.

The Company’s investment portfolio may contain loans that are in the form of lines of credit or revolving credit facilities, which require the Company to provide funding when requested by portfolio companies in accordance with the terms of the underlying loan agreements. As of December 31, 2024 and December 31, 2023, the Company had 71 and 57 such investments with aggregate unfunded commitments of $41,286,752 and $37,021,242, respectively. The Company maintains sufficient liquidity (through cash on hand and available borrowings under the Credit Facility) to fund such unfunded loan commitments should the need arise.

The fair values of the Company’s investments disaggregated into the three levels of the fair value hierarchy based upon the lowest level of significant input used in the valuation as of December 31, 2024 were as follows:

	Quoted Prices
	in Active
	Markets		Significant Other		Significant
	for Identical		Observable		Unobservable
	Securities		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Senior Secured – First Lien	$	—	$	—	$	856,096,255	$	856,096,255
Senior Secured – Second Lien		—		—		11,948,850		11,948,850
Unsecured Debt		—		—		6,612,493		6,612,493
Equity		—		—		78,840,090		78,840,090
Total Investments	$	—	$	—	$	953,497,688	$	953,497,688

The fair values of the Company’s investments disaggregated into the three levels of the fair value hierarchy based upon the lowest level of significant input used in the valuation as of December 31, 2023 were as follows:

	Quoted Prices
	in Active
	Markets		Significant Other		Significant
	for Identical		Observable		Unobservable
	Securities		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Senior Secured – First Lien	$	—	$	—	$	774,789,320	$	774,789,320
Senior Secured – Second Lien		—		—		21,957,500		21,957,500
Unsecured Debt		—		—		5,956,280		5,956,280
Equity		—		—		71,757,583		71,757,583
Total Investments	$	—	$	—	$	874,460,683	$	874,460,683

The aggregate values of Level 3 portfolio investments changed during the year ended December 31, 2024 as follows:

	Senior Secured		Senior Secured
	Loans-First		Loans-Second		Unsecured
	Lien		Lien		Debt		Equity		Total
Fair value at beginning of period	$	774,789,320	$	21,957,500	$	5,956,280	$	71,757,583	$	874,460,683
Purchases of investments		213,545,132		—		117,066		7,492,735		221,154,933
PIK interest		2,824,403		—		485,708		—		3,310,111
Sales and redemptions		(126,924,841)		(9,782,348)		—		(14,985,096)		(151,692,285)
Realized (losses) gains		(1,580,768)		(20,475,000)		—		6,212,362		(15,843,406)
Change in unrealized (depreciation) appreciation included in earnings(1)		(9,026,597)		20,187,185		40,312		8,369,509		19,570,409
Change in unrealized depreciation on foreign currency included in earnings		(169,778)		—		(1,778)		(7,003)		(178,559)
Amortization of premium and accretion of discount, net		2,639,384		61,513		14,905		—		2,715,802
Fair value at end of period	$	856,096,255	$	11,948,850	$	6,612,493	$	78,840,090	$	953,497,688

(1) Includes reversal of positions during the year ended December 31, 2024.

There were no Level 3 transfers during the year ended December 31, 2024.

The aggregate values of Level 3 portfolio investments changed during the year ended December 31, 2023 as follows:

	Senior Secured		Senior Secured
	Loans-First		Loans-Second		Unsecured
	Lien		Lien		Debt		Equity		Total
Fair value at beginning of period	$	735,555,508	$	45,304,300	$	4,823,898	$	59,049,932	$	844,733,638
Purchases of investments		174,156,432		—		62,086		13,251,090		187,469,608
PIK interest		3,185,845		—		613,998		—		3,799,843
Sales and redemptions		(125,442,776)		(9,882,105)		(211,627)		(2,280,087)		(137,816,595)
Realized losses		(11,200,184)		(17,979,749)		—		(702,093)		(29,882,026)
Change in unrealized (depreciation) appreciation included in earnings(1)		(4,667,866)		4,373,111		651,997		2,434,910		2,792,152
Change in unrealized appreciation on foreign currency included in earnings		610,523		—		166		3,831		614,520
Amortization of premium and accretion of discount, net		2,591,838		141,943		15,762		—		2,749,543
Fair value at end of period	$	774,789,320	$	21,957,500	$	5,956,280	$	71,757,583	$	874,460,683

(1) Includes reversal of positions during the year ended December 31, 2023.

There were no Level 3 transfers during the year ended December 31, 2023.

The following is a summary of geographical concentration of the Company’s investment portfolio as of December 31, 2024:

					% of Total
					Investments at
	Cost		Fair Value		Fair Value
Texas	$	159,028,754	$	154,041,942	16.15	%
California		160,285,777		152,583,692	16.00	%
Florida		108,434,730		104,718,969	10.98	%
Illinois		66,486,029		56,591,435	5.94	%
Pennsylvania		53,271,774		54,438,594	5.71	%
Arizona		43,552,887		46,839,063	4.91	%
New York		36,116,358		36,306,098	3.81	%
Ohio		33,645,676		35,847,804	3.76	%
Canada		32,107,256		32,375,749	3.40	%
Colorado		31,283,806		28,218,186	2.96	%
Wisconsin		27,935,159		23,352,084	2.45	%
District of Columbia		22,711,852		26,654,283	2.80	%
Georgia		12,391,680		23,345,077	2.45	%
North Carolina		20,946,327		22,314,018	2.34	%
Tennessee		20,490,429		20,703,772	2.17	%
Massachusetts		19,965,590		20,559,398	2.16	%
Missouri		18,590,476		18,712,569	1.96	%
Iowa		13,486,486		13,486,486	1.41	%
Idaho		11,763,648		11,830,192	1.24	%
New Jersey		11,181,815		11,754,323	1.23	%
Michigan		11,389,446		11,510,608	1.21	%
Louisiana		9,216,389		9,371,830	0.98	%
Virginia		9,293,896		9,373,367	0.98	%
Washington		8,193,234		8,216,962	0.86	%
Maryland		7,529,294		7,526,300	0.79	%
Minnesota		6,448,091		6,452,144	0.68	%
South Carolina		4,836,178		4,984,667	0.52	%
Indiana		743,770		920,343	0.10	%
United Kingdom		461,899		467,733	0.05	%
Total Investments	$	961,788,706	$	953,497,688	100.00	%

The following is a summary of geographical concentration of the Company’s investment portfolio as of December 31, 2023:

					% of Total
					Investments
	Cost		Fair Value		at Fair Value
Texas	$	182,531,256	$	175,311,724	20.04	%
California		175,207,692		167,713,589	19.18	%
Florida		93,155,844		92,297,574	10.55	%
Pennsylvania		49,939,315		50,188,102	5.74	%
Illinois		58,633,617		49,834,429	5.70	%
Arizona		42,136,322		44,558,279	5.10	%
Ohio		31,805,370		34,370,277	3.93	%
Colorado		31,525,420		30,971,079	3.54	%
Wisconsin		27,452,444		26,190,771	3.00	%
Washington		24,321,085		24,540,695	2.81	%
Georgia		9,100,050		18,885,409	2.16	%
Maryland		16,676,194		16,718,728	1.91	%
New York		14,692,043		14,931,263	1.71	%
Indiana		14,235,403		14,488,700	1.66	%
North Carolina		13,891,930		14,532,532	1.66	%
District of Columbia		13,030,899		14,006,563	1.60	%
New Jersey		10,461,226		11,191,295	1.28	%
Michigan		10,664,100		10,736,783	1.23	%
Massachusetts		10,151,621		10,515,487	1.20	%
Tennessee		9,390,657		9,379,311	1.07	%
Missouri		8,862,512		8,850,162	1.01	%
Canada		8,700,383		8,813,132	1.01	%
Idaho		8,405,946		8,470,065	0.97	%
Minnesota		5,976,818		5,907,639	0.68	%
Louisiana		5,538,823		5,536,231	0.63	%
South Carolina		4,946,375		5,083,862	0.58	%
United Kingdom		20,710,205		437,002	0.05	%
Total Investments	$	902,143,550	$	874,460,683	100.00	%

The following is a summary of industry concentration of the Company’s investment portfolio as of December 31, 2024:

					% of Total
					Investments at
	Cost		Fair Value		Fair Value
Services: Business	$	219,665,133	$	234,908,112	24.64	%
High Tech Industries		91,135,577		93,468,792	9.81	%
Healthcare & Pharmaceuticals		85,300,317		85,478,418	8.97	%
Media: Advertising, Printing & Publishing		71,318,416		72,291,584	7.58	%
Beverage & Food		64,052,951		68,902,142	7.23	%
Consumer Goods: Non-Durable		67,123,135		54,473,282	5.71	%
Services: Consumer		49,388,222		46,066,301	4.83	%
Capital Equipment		41,322,214		43,647,466	4.58	%
Consumer Goods: Durable		43,393,413		42,094,390	4.41	%
Chemicals, Plastics, & Rubber		36,693,101		36,907,602	3.87	%
Construction & Building		32,374,992		32,979,859	3.46	%
Aerospace & Defense		26,014,106		21,624,091	2.27	%
Environmental Industries		18,903,681		18,282,056	1.92	%
Transportation & Logistics		17,244,131		17,532,488	1.84	%
Retail		14,799,085		14,723,620	1.54	%
Media: Broadcasting & Subscription		12,170,577		14,314,711	1.50	%
Containers, Packaging, & Glass		18,007,571		12,911,794	1.35	%
Energy: Oil & Gas		11,353,959		10,728,031	1.13	%
Hotel, Gaming, & Leisure		7,113,661		8,142,050	0.85	%
FIRE: Real Estate		17,934,808		7,652,436	0.80	%
Media: Diversified & Production		5,822,637		5,934,853	0.62	%
Education		10,537,738		5,341,151	0.56	%
Finance		119,281		5,092,459	0.53	%
Total Investments	$	961,788,706	$	953,497,688	100.00	%

The following is a summary of industry concentration of the Company’s investment portfolio as of December 31, 2023:

					% of Total
					Investments
	Cost		Fair Value		at Fair Value
Services: Business	$	198,018,290	$	207,963,749	23.78	%
Healthcare & Pharmaceuticals		100,724,952		102,915,887	11.77	%
High Tech Industries		90,795,799		91,992,012	10.52	%
Media: Advertising, Printing & Publishing		57,640,321		58,741,061	6.72	%
Consumer Goods: Non-Durable		63,145,301		52,938,611	6.05	%
Beverage, Food, & Tobacco		42,554,582		45,074,817	5.15	%
Consumer Goods: Durable		49,046,730		43,725,324	5.00	%
Capital Equipment		32,517,673		33,879,801	3.87	%
Services: Consumer		33,976,976		33,260,111	3.80	%
Construction & Building		30,319,119		30,486,411	3.49	%
Aerospace & Defense		46,745,104		24,541,921	2.81	%
Environmental Industries		24,219,811		22,997,844	2.63	%
Media: Broadcasting & Subscription		17,952,103		20,760,920	2.37	%
Transportation & Logistics		17,235,150		17,661,859	2.02	%
Chemicals, Plastics, & Rubber		18,338,366		17,569,176	2.01	%
Metals & Mining		16,580,562		16,625,000	1.90	%
Containers, Packaging, & Glass		17,432,252		15,539,555	1.78	%
Utilities: Oil & Gas		9,943,041		10,000,000	1.14	%
Education		10,251,179		8,367,469	0.96	%
FIRE: Real Estate		17,285,138		6,175,994	0.71	%
Media: Diversified & Production		5,662,174		5,763,247	0.66	%
Finance		569,039		5,736,868	0.66	%
Hotel, Gaming, & Leisure		—		890,968	0.10	%
Energy: Oil & Gas		1,189,888		852,078	0.10	%
Total Investments	$	902,143,550	$	874,460,683	100.00	%

The following provides quantitative information about Level 3 fair value measurements as of December 31, 2024:

Description:	Fair Value		Valuation Technique	Unobservable Inputs	Range (Average)(1)(3)
First lien debt	$	778,177,769	Income approach(2)	HY credit spreads	-3.39% to 8.32% (-0.54%)
				Risk free rates	-1.18% to 2.44% (0.19%)
			Market approach(2)	Market multiples	4.6x to 26.3x (13.3x)(4)
	$	77,918,486	Transaction value	Transaction price	N/A
Second lien debt	$	11,948,850	Income approach(2)	HY credit spreads	-0.72% to -0.32% (-0.46%)
				Risk free rates	-0.35% to 0.14% (-0.04%)
			Market approach(2)	Market multiples	5.3 to 11.8x (9.4x)(4)
Unsecured debt	$	6,581,668	Income approach(2)	HY credit spreads	0.18% to 0.18% (0.18%)
				Risk free rates	-0.18% to -0.18% (-0.18%)
	$	30,825	Transaction value	Transaction price	N/A
Equity investments	$	64,002,282	Market approach(5)	EBITDA multiple	3.5x to 18.3x (10.4x)
	$	14,837,808	Transaction value	Transaction price	N/A
Total Long Term Level 3 Investments	$	953,497,688

(1) Weighted average based on fair value as of December 31, 2024.

(2) Inclusive of but not limited to (a) the market approach, which is used to determine sufficient enterprise value, and (b) the income approach, which is based on discounting future cash flows using an appropriate market yield.

(3) The Company calculates the price of the loan by discounting future cash flows, which include forecasted future BSBY, SOFR, or SONIA rates based on the published forward curve at the valuation date, using an appropriate yield calculated as of the valuation date. This yield is calculated based on the loan’s yield at the original investment and is adjusted as of the valuation date based on: changes in comparable credit spreads, changes in risk free interest rates (per swap rates), and changes in credit quality (via an estimated shadow rating). Significant movements in any of these factors would result in a significantly lower or higher fair value measurement. As an example, the “Range (Average)” for a first lien debt instruments in the table above indicates that the change in the HY spreads between the date a loan closed and the valuation date ranged from (3.39)% ((339) basis points) to 8.32% (832 basis points). The weighted average of all changes was (0.54)% ( (54) basis points).

(4) Median of LTM (last twelve months) EBITDA multiples of comparable companies.

(5) The primary significant unobservable input used in the fair value measurement of the Company’s equity investments is the EBITDA multiple (the “Multiple”). Significant increases (decreases) in the Multiple in isolation would result in a significantly higher (lower) fair value measurement. To determine the Multiple for the market approach, the Company considers current market trading and/or transaction multiple, portfolio company performance (financial ratios) relative to public and private peer companies and leverage levels, among other factors. Changes in one or more of these factors can have a similar directional change on other factors in determining the appropriate Multiple to use in the market approach.

The following provides quantitative information about Level 3 fair value measurements as of December 31, 2023:

Description:	Fair Value		Valuation Technique	Unobservable Inputs	Range (Average)(1)(3)
First lien debt	$	774,789,320	Income/Market	HY credit spreads	-3.00% to 8.11% (-0.23%)
			approach(2)	Risk free rates	-1.62% to 2.03% (0.04%)
				Market multiples	5.2x to 22.5x (11.0x)(4)
Second lien debt	$	21,957,500	Income/Market	HY credit spreads	-0.97% to -0.33% (-0.63%)
			approach(2)	Risk free rates	-0.51% to 0.31% (-0.23%)
				Market multiples	6.5x to 17.5x (10.9x)(4)
Unsecured debt	$	5,956,280	Income/Market	HY credit spreads	4.98% to 4.98% (4.98%)
			approach(2)	Risk free rates	4.47% to 4.47% (4.47%)
				Market multiples	9.5x to 9.5x (9.5x)(4)
Equity investments	$	71,757,583	Market approach(5)	Underwriting multiple/
				EBITDA multiple	3.5x to 23.2x (12.1x)
Total Long Term Level 3 Investments	$	874,460,683

(1) Weighted average based on fair value as of December 31, 2023.

(2) Inclusive of but not limited to (a) the market approach, which is used to determine sufficient enterprise value, and (b) the income approach, which is based on discounting future cash flows using an appropriate market yield.

(3) The Company calculates the price of the loan by discounting future cash flows, which include forecasted future SOFR rates based on the published forward SOFR curve at the valuation date, using an appropriate yield calculated as of the valuation date. This yield is calculated based on the loan’s yield at the original investment and is adjusted as of the valuation date based on: changes in comparable credit spreads, changes in risk free interest rates (per swap rates), and changes in credit quality (via an estimated shadow rating). Significant movements in any of these factors would result in a significantly lower or higher fair value measurement. As an example, the “Range (Average)” for a first lien debt instruments in the table above indicates that the change in the HY spreads between the date a loan closed and the valuation date ranged from  (3.00)% ((300) basis points) to 8.11% (811 basis points). The average of all changes was (0.23)% ((23) basis points).

(4) Median of LTM (last twelve months) EBITDA multiples of comparable companies.

(5) The primary significant unobservable input used in the fair value measurement of the Company’s equity investments is the Multiple. Significant increases (decreases) in the Multiple in isolation would result in a significantly higher (lower) fair value measurement. To determine the Multiple for the market approach, the Company considers current market trading and/or transaction multiple, portfolio company performance (financial ratios) relative to public and private peer companies and leverage levels, among other factors. Changes in one or more of these factors can have a similar directional change on other factors in determining the appropriate Multiple to use in the market approach.