Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Investments Categorization in Fair Value Hierarchy

The Company’s investments were categorized in the fair value hierarchy described in Note 2. “Significant Accounting Policies,” as follows as of March 31, 2020 and December 31, 2019:

	As of March 31, 2020								As of December 31, 2019
Description	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Senior Debt	$	—	$	—	$	53,642,454	$	53,642,454	$	—	$	—	$	48,167,603	$	48,167,603
Equity	—		—		109,658,884		109,658,884		—		—		96,027,397		96,027,397
Total investments	$	—	$	—	$	163,301,338	$	163,301,338	$	—	$	—	$	144,195,000	$	144,195,000

Unobservable Inputs Used in Fair Value Measurement of Investments

The ranges of unobservable inputs used in the fair value measurement of the Company’s Level 3 investments as of March 31, 2020 and December 31, 2019 were as follows:

March 31, 2020
Asset Group	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Average)(1)	Impact to Valuation from an Increase in Input (2)
Senior Debt	$	51,001,610	Discounted Cash Flow Market Comparables Transaction Method	Discount Rate EBITDA Multiple EBITDA Multiple	9.0% - 14.0% (10.6%) 7.5x – 15.3x (12.2x) 7.8x – 14.5x (12.1x)	Decrease Increase Increase
	2,640,844		Transaction Precedent	Transaction Price	N/A	N/A
Equity	99,799,728		Discounted Cash Flow Market Comparables Transaction Method	Discount Rate EBITDA Multiple EBITDA Multiple	9.0% - 14.0% (10.6%) 7.5x – 15.3x (12.2x) 7.8x – 14.5x (12.1x)	Decrease Increase Increase
	9,859,156		Transaction Precedent	Transaction Price	N/A	N/A
Total	$	163,301,338

December 31, 2019
Asset Group	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Average)(1)	Impact to Valuation from an Increase in Input (2)
Senior Debt	44,814,338		Discounted Cash Flow Market Comparables Transaction Method	Discount Rate EBITDA Multiple EBITDA Multiple	9.0% - 14.0% (10.3%) 7.8x – 14.3x (12.3x) 8.0x – 14.5x (12.2x)	Decrease Increase Increase
	3,353,265		Transaction Precedent	Transaction Price	N/A	N/A
Equity	89,380,662		Discounted Cash Flow Market Comparables Transaction Method	Discount Rate EBITDA Multiple EBITDA Multiple	9.0% - 14.0% (10.3%) 7.8x – 14.3x (12.3x) 8.0x – 14.5x (12.2x)	Decrease Increase Increase
	6,646,735		Transaction Precedent	Transaction Price	N/A	N/A
Total	$	144,195,000

FOOTNOTES:

⁽¹⁾  Discount rates are relative to the enterprise value of the portfolio companies and are not the market yields on the associated debt investments. Unobservable inputs were weighted by the relative fair value of the investments.

⁽²⁾  This column represents the directional change in the fair value of the Level 3 investments that would result from an increase to the corresponding unobservable input. A decrease to the input would have the opposite effect. Significant changes in these inputs in isolation could result in significantly higher or lower fair value measurements.

Reconciliations of Investments of Level 3 Inputs

The following tables provide reconciliation of investments for which Level 3 inputs were used in determining fair value for the three months ended March 31, 2020 and 2019:

	Three Months Ended March 31, 2020
	Senior Debt		Equity			Total
Fair value balance as of January 1, 2020	$	48,167,603	$	96,027,397		$	144,195,000
Additions	5,474,851		17,025,149			22,500,000
Net change in unrealized depreciation (1)	—		(3,393,662		)	(3,393,662		)
Fair value balance as of March 31, 2020	$	53,642,454	$	109,658,884		$	163,301,338
Change in net unrealized depreciation in investments held as of March 31, 2020 (1)	$	—	$	(3,393,662	)	$	(3,393,662	)

	Three Months Ended March 31, 2019
	Senior Debt		Equity		Total
Fair value balance as of January 1, 2019	$	30,700,000	$	51,800,000	$	82,500,000
Net change in unrealized appreciation (1)	—		281,000		281,000
Fair value balance as of March 31, 2019	$	30,700,000	$	52,081,000	$	82,781,000
Change in net unrealized appreciation in investments held as of March 31, 2019 (1)	$	—	$	281,000	$	281,000

FOOTNOTE:

⁽¹⁾   Included in net change in unrealized appreciation (depreciation) on investments in the condensed consolidated statements of operations.