Quarterly report pursuant to Section 13 or 15(d)

Fair Value of Investments (Tables)

v3.24.2.u1
Fair Value of Investments (Tables)
 6 Months Ended
Jun. 30, 2024
Fair Value of Investments [Abstract]  
Schedule of Company’s Assets Measured at Fair Value The following tables present information about the Company’s assets measured at fair value as of June 30, 2024 and December 31, 2023, respectively:
    As of
June 30,
2024		  
    Level 1     Level 2     Level 3     Total  
Portfolio Investments                        
First Lien Loans   $           -     $          -     $ 10,000,325     $ 10,000,325  
Second Lien Loans    
-
      
-
       10,647,157       10,647,157  
Equity    
-
      
-
       1,461,604       1,461,604  
Unsecured Debt            
 
      
-
      
-
  
Total Portfolio Investments    
-
      
-
       22,109,086       22,109,086  
Total Investments   $
-
     $
-
     $ 22,109,086     $ 22,109,086  
    As of
December 31,
2023		  
    Level 1     Level 2     Level 3     Total  
Portfolio Investments                        
First Lien Loans   $
           -
     $
              -
     $ 12,301,440     $ 12,301,440  
Second Lien Loans    
-
      
-
       11,652,480       11,652,480  
Equity    
-
      
-
       5,781,033       5,781,033  
Total Portfolio Investments    
-
      
-
       29,734,953       29,734,953  
Total Investments   $
-
     $
-
     $ 29,734,953     $ 29,734,953  
Schedule of Changes in Level 3 Assets Measured at Fair Value Changes in Level 3 assets measured at fair value for the six months ended June 30, 2024 are as follows:
    First Lien
Loans		     Second
Lien Loans		     Unsecured
Loans		     Equity     Total  
Fair value at beginning of period   $ 12,301,440     $ 11,652,480     $
              -
     $ 5,781,033     $ 29,734,953  
Purchases of investments     15,000      
-
      
-
      
-
       15,000  
Sales or repayment of investments     (192,932 )    
-
      
-
      
-
       (192,932 )
Payment-in-kind interest    
-
       152,715      
-
      
-
       152,715  
Change in unrealized gain (loss) on investments     (799,971 )     (1,158,038 )    
-
       (92,906 )     (2,050,915 )
Realized gain (loss) on investments     (1,323,212 )    
-
      
-
       (4,226,523 )     (5,549,735 )
Fair value at end of period   $ 10,000,325     $ 10,647,157     $
-
     $ 1,461,604     $ 22,109,086  
Change in unrealized gain (loss) on Level 3 investments still held as of June 30, 2024   $ (799,971 )   $ (1,158,038 )   $
-
     $ (92,906 )   $ (2,050,915 )
Changes in Level 3 assets measured at fair value for the year ended December 31, 2023 are as follows:
    First Lien
Loans		     Second
Lien Loans		     Unsecured
Loans		     Equity     Total  
Fair value at beginning of year   $ 13,144,967     $ 10,976,647     $
              -
     $ 6,442,474     $ 30,564,088  
Sales or repayment of investments    
-
      
-
      
-
      
-
      
-
  
Payment-in-kind interest    
-
       166,339      
-
      
-
       166,339  
Realized gain (loss) on investments    
-
      
-
      
-
       (1,200 )     (1,200 )
Change in unrealized gain (loss) on investments     (843,527 )     509,494      
-
       (660,241 )     (994,274 )
Transfers in/out    
-
      
-
      
-
      
-
      
-
  
Fair value at end of year   $ 12,301,440     $ 11,652,480     $
-
     $ 5,781,033     $ 29,734,953  
Change in unrealized gain (loss) on Level 3 investments still held as of December 31, 2023   $ (843,527 )   $ 509,494     $
-
     $ (660,241 )   $ (994,274 )

 
Schedule of Quantitative Information Regarding Level 3 Fair Value Measurements The following table provides quantitative information regarding Level 3 fair value measurements as of June 30, 2024:
Description   Fair Value     Valuation Technique (1)   Unobservable Inputs   Range (Average (2))
                   
First Lien Loans   $ 9,985,325     Enterprise Value Coverage   EV / STORE LEVEL EBITDAR   5.00x-5.50x (5.25x)
                Location Value   $1,400,000-$1,600,000 ($1,500,000)
      15,000     Appraisal Value Coverage   Cost Approach   $1,332,000-$1,628,000 ($1,480,000)
                Sales Comparison Approach   $1,485,000-$1,815,000 ($1,600,000)
Total     10,000,325              
                     
Second Lien Loans     7,415,594     Enterprise Value Coverage   EV / LTM Revenue   0.36x-0.41x (0.39x)
                EV / PF EBITDA   6.25x-675x (6.50x)
      3,231,563     Net Orderly Liquidation Value   Total Asset Value Recovery Rate   84%-94% (94%)
Total     10,647,157              
                     
Unsecured Loans    
-
     Enterprise Value Coverage   EV / Run Rate Revenue   0.36x-0.41x (0.39x)
Total    
-
              
                     
Equity    
-
     Enterprise Value Coverage   EV / LTM Revenue   0.36x-0.41x (0.39x)
                EV / PF EBITDA   6.25x-6.75x (6.50x)
                EV / Store level EBITDAR   5.00x-5.50x (5.25x)
                Location Value   $1,400,000-$1,600,000 ($1,500,000)
     
-
     Net Orderly Liquidation Value   Total Asset Value Recovery Rate   84%-94% (94%)
                     
      1,461,604     Appraisal Value Coverage   Cost Approach   $1,332,000-$1,628,000 ($1,480,000)
                Sales Comparison Approach   $1,485,000-$1,815,000 ($1,650,000)
Total     1,461,604              
Total Level 3 Investments   $ 22,109,086              
(1)

The valuation technique for the Company’s investment in a Second Lien Loan and Equity changed to include a Net Orderly Liquidation Value technique. The change valued half of this investment at the new technique and half at the existing Enterprise Value Coverage technique. The reason for the change was to include an analysis of the value of the investment based on the value of the assets it owns.
(2) The average represents the arithmetic average of the unobservable inputs and is not weighted by the relative fair value.

 

Description   Fair Value     Valuation Technique (1)   Unobservable Inputs   Range (Average (2))
                     
First Lien Loans   $ 12,128,041     Enterprise Value Coverage   EV / Store level EBITDAR   5.25x-5.75x (5.50x)
                Location Value   $1,425,000-$1,625,000 (1,525,000)
Total     12,128,041              
                     
Second Lien Loans     11,652,480     Enterprise Value Coverage   EV / Run Rate Revenue   0.37x-0.42x (0.39x)
                EV / PF EBITDA   5.50x-6.50x (6.00x)
Total     11,652,480              
                     
Unsecured Loans    
-
     Enterprise Value Coverage   EV / Run Rate Revenue   0.37x-0.42x (0.39x)
Total    
-
              
                     
Equity     4,237,192     Enterprise Value Coverage   EV / Run Rate Revenue   0.37x-0.42x (0.39x)
                EV / PF EBITDA   5.50x-6.50x (6.00x)
                EV / Store level EBITDAR   5.25x-5.75x (5.50x)
                Location Value   $1,425,000-$1,625,000 ($1,525,000)
                Cost Approach   $1,413,000-$1,727,000 (1,570,000)
      1,543,841     Appraisal Value Coverage   Sales Comparison Approach   $1,440,000-$1,760,000 ($1,600,000)
Total     5,781,033              
Total Level 3 Investments   $ 29,561,554              
(1) There were no changes in the valuation technique for the Company’s investments from the prior quarter.
(2) The average represents the arithmetic average of the unobservable inputs and is not weighted by the relative fair value.