| Investments |
Note 3. Investments
The composition of our investments as of March
31, 2026 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 |
|
$ |
127,359 |
|
|
|
39.3 |
% |
|
$ |
113,491 |
|
|
|
38.4 |
% |
| Senior Secured Notes |
|
|
13,576 |
|
|
|
4.2 |
|
|
|
13,399 |
|
|
|
4.5 |
|
| Fund Investment |
|
|
2,138 |
|
|
|
0.7 |
|
|
|
2,320 |
|
|
|
0.8 |
|
| Equity/Warrants |
|
|
180,339 |
|
|
|
55.8 |
|
|
|
166,601 |
|
|
|
56.3 |
|
| Total Investments |
|
$ |
313,412 |
|
|
|
100.0 |
% |
|
$ |
295,811 |
|
|
|
100.0 |
% |
The composition of our investments as of September
30, 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 |
|
$ |
125,373 |
|
|
|
38.6 |
% |
|
$ |
116,567 |
|
|
|
38.6 |
% |
| Senior Secured Notes |
|
|
17,039 |
|
|
|
5.3 |
|
|
|
17,457 |
|
|
|
5.8 |
|
| Fund Investment |
|
|
2,194 |
|
|
|
0.7 |
|
|
|
2,227 |
|
|
|
0.7 |
|
| Equity/Warrants |
|
|
179,783 |
|
|
|
55.4 |
|
|
|
166,021 |
|
|
|
54.9 |
|
| Total Investments |
|
$ |
324,389 |
|
|
|
100.0 |
% |
|
$ |
302,272 |
|
|
|
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, 2026 and September 30, 2025, the total fair value of warrants was $896.5
thousand and $815.5
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, 2026, the Company acquired warrants in one existing portfolio company. During the three and six
months ended March 31, 2025, the Company acquired warrants in one existing portfolio company.
Total change in unrealized appreciation/(depreciation)
related to warrants for the three and six months ended March 31, 2026 was $(559.5)
thousand and $(789.1)
thousand, respectively, and was recorded on the Consolidated Statements of Operations as net change in unrealized appreciation/(depreciation)
on investments. Total change in unrealized appreciation/(depreciation) related to warrants for the three and six months ended March 31,
2025 was $(228.7)
thousand and $(493.7)
thousand, respectively, and was recorded on the Consolidated Statements of Operations as net change in 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, 2026 (dollars in thousands):
| |
|
Fair Value |
|
|
Percentage |
|
| Insurance |
|
$ |
55,356 |
|
|
|
18.7 |
% |
| Services: Business |
|
|
48,874 |
|
|
|
16.5 |
|
| Real Estate |
|
|
38,002 |
|
|
|
12.8 |
|
| Services: Consumer |
|
|
33,785 |
|
|
|
11.4 |
|
| Construction & Building |
|
|
29,832 |
|
|
|
10.1 |
|
| Aerospace & Defense |
|
|
28,398 |
|
|
|
9.6 |
|
| Hotel, Gaming & Leisure |
|
|
20,192 |
|
|
|
6.8 |
|
| High Tech Industries |
|
|
18,840 |
|
|
|
6.4 |
|
| Automotive |
|
|
8,229 |
|
|
|
2.8 |
|
| Metals & Mining |
|
|
6,763 |
|
|
|
2.3 |
|
| Consumer Discretionary |
|
|
3,235 |
|
|
|
1.1 |
|
| Banking |
|
|
2,320 |
|
|
|
0.8 |
|
| Media: Broadcasting & Subscription |
|
|
1,985 |
|
|
|
0.7 |
|
| Total |
|
$ |
295,811 |
|
|
|
100.0 |
% |
The following table shows the portfolio composition
by industry grouping at fair value at September 30, 2025 (dollars in thousands):
| |
|
Fair Value |
|
|
Percentage |
|
| |
|
|
|
|
|
|
| Services: Business |
|
$ |
56,249 |
|
|
|
18.6 |
% |
| Insurance |
|
|
48,470 |
|
|
|
16.0 |
|
| Real Estate |
|
|
47,632 |
|
|
|
15.8 |
|
| Services: Consumer |
|
|
38,418 |
|
|
|
12.7 |
|
| Aerospace & Defense |
|
|
25,881 |
|
|
|
8.6 |
|
| Hotel, Gaming & Leisure |
|
|
22,328 |
|
|
|
7.4 |
|
| Construction & Building |
|
|
18,131 |
|
|
|
6.0 |
|
| High Tech Industries |
|
|
16,961 |
|
|
|
5.6 |
|
| Metals & Mining |
|
|
8,763 |
|
|
|
2.9 |
|
| Automotive |
|
|
7,860 |
|
|
|
2.6 |
|
| Media: Broadcasting & Subscription |
|
|
4,850 |
|
|
|
1.6 |
|
| Consumer Discretionary |
|
|
4,502 |
|
|
|
1.5 |
|
| Banking |
|
|
2,227 |
|
|
|
0.7 |
|
| Total |
|
$ |
302,272 |
|
|
|
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, 2026 (dollars in thousands):
| |
|
Fair Value |
|
|
Percentage |
|
| Northeast |
|
$ |
109,560 |
|
|
|
37.0 |
% |
| Southeast |
|
|
102,843 |
|
|
|
34.8 |
|
| West |
|
|
36,535 |
|
|
|
12.4 |
|
| Midwest |
|
|
17,555 |
|
|
|
5.9 |
|
| Southwest |
|
|
17,241 |
|
|
|
5.8 |
|
| Mid-Atlantic |
|
|
314 |
|
|
|
0.1 |
|
| International |
|
|
11,763 |
|
|
|
4.0 |
|
| Total |
|
$ |
295,811 |
|
|
|
100.0 |
% |
The following table shows the portfolio composition
by geographic location at fair value at September 30, 2025 (dollars in thousands):
| |
|
Fair Value |
|
|
Percentage |
|
| Northeast |
|
$ |
114,610 |
|
|
|
37.9 |
% |
| Southeast |
|
|
106,037 |
|
|
|
35.1 |
|
| West |
|
|
31,549 |
|
|
|
10.4 |
|
| Midwest |
|
|
19,272 |
|
|
|
6.4 |
|
| Southwest |
|
|
15,645 |
|
|
|
5.2 |
|
| Mid-Atlantic |
|
|
314 |
|
|
|
0.1 |
|
| International |
|
|
14,845 |
|
|
|
4.9 |
|
| Total |
|
$ |
302,272 |
|
|
|
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 six months ended March 31, 2026 and 2025 were as follows:
| Name
of Investment(1)(2) |
|
Type of Investment |
|
Fair Value at September 30,
2025 |
|
|
Purchases/
(Sales) of or Advances/
(Distributions) |
|
|
Transfers In/(Out)
of Affiliated |
|
|
Unrealized
Gain/(Loss) |
|
|
Realized
Gain/(Loss) |
|
|
Fair Value at
March 31,
2026 |
|
|
Earned
Income |
|
|
Fee/Other
Income |
|
| Affiliated Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Advocates for Disabled
Vets, LLC (dba Reps for Vets) |
|
Senior Secured First Lien Term Loan |
|
$ |
8,798,513 |
|
|
$ |
(23,545 |
) |
|
$ |
- |
|
|
$ |
(125,526 |
) |
|
$ |
1,171 |
|
|
$ |
8,650,613 |
|
|
$ |
545,661 |
|
|
$ |
- |
|
| |
|
Equity |
|
|
3,359,511 |
|
|
|
- |
|
|
|
- |
|
|
|
(561,187 |
) |
|
|
- |
|
|
|
2,798,324 |
|
|
|
- |
|
|
|
- |
|
| FST Holdings Parent, LLC |
|
Equity |
|
|
10,960,741 |
|
|
|
- |
|
|
|
- |
|
|
|
1,224,663 |
|
|
|
- |
|
|
|
12,185,404 |
|
|
|
268,540 |
|
|
|
- |
|
| MB Precision Investment Holdings
LLC |
|
Senior Secured First Lien Term Loan |
|
|
6,398,561 |
|
|
|
(45,310 |
) |
|
|
- |
|
|
|
(231,879 |
) |
|
|
2,325 |
|
|
|
6,123,697 |
|
|
|
485,033 |
|
|
|
- |
|
| |
|
Senior Secured Delayed Draw Term Loan |
|
|
490,306 |
|
|
|
1,408,804 |
|
|
|
- |
|
|
|
(112,984 |
) |
|
|
- |
|
|
|
1,786,126 |
|
|
|
106,789 |
|
|
|
- |
|
| |
|
Senior Secured First Lien Revolver |
|
|
1,975,347 |
|
|
|
93,394 |
|
|
|
- |
|
|
|
(80,612 |
) |
|
|
- |
|
|
|
1,988,129 |
|
|
|
187,758 |
|
|
|
- |
|
| |
|
Senior Secured 6th Amendment Term Loan |
|
|
- |
|
|
|
573,803 |
|
|
|
- |
|
|
|
(22,923 |
) |
|
|
- |
|
|
|
550,880 |
|
|
|
- |
|
|
|
- |
|
| |
|
Equity |
|
|
2,725,408 |
|
|
|
427,146 |
|
|
|
- |
|
|
|
(459,723 |
) |
|
|
- |
|
|
|
2,692,831 |
|
|
|
427,146 |
|
|
|
- |
|
| |
|
Warrants |
|
|
673,018 |
|
|
|
- |
|
|
|
- |
|
|
|
(673,018 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Total
Affiliated Investments |
|
|
|
$ |
35,381,405 |
|
|
$ |
2,434,292 |
|
|
$ |
- |
|
|
$ |
(1,043,189 |
) |
|
$ |
3,496 |
|
|
$ |
36,776,004 |
|
|
$ |
2,020,927 |
|
|
$ |
- |
|
| Name
of Investment(1)(2) |
|
Type
of Investment |
|
Fair
Value at September 30,
2025 |
|
|
Purchases/
(Sales) of or Advances/
(Distributions) |
|
|
Transfers
In/(Out)
of Controlled |
|
|
Unrealized
Gain/(Loss) |
|
|
Realized
Gain/(Loss) |
|
|
Fair Value at
March 31,
2026 |
|
|
Earned
Income |
|
|
Fee/Other
Income |
|
| Controlled
Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ECC
Capital Corp. |
|
Senior
Secured First Lien Term Loan |
|
$ |
6,997,012 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
6,997,012 |
|
|
$ |
324,446 |
|
|
$ |
- |
|
| |
|
Equity |
|
|
6,636,000 |
|
|
|
- |
|
|
|
- |
|
|
|
3,024,000 |
|
|
|
- |
|
|
|
9,660,000 |
|
|
|
- |
|
|
|
79,831 |
|
| FlexFIN,
LLC |
|
Equity
Interest |
|
|
37,180,761 |
|
|
|
(384,417 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
36,796,344 |
|
|
|
1,907,359 |
|
|
|
- |
|
| NSG
Captive, Inc. |
|
Equity |
|
|
48,469,540 |
|
|
|
6,474,300 |
|
|
|
- |
|
|
|
411,853 |
|
|
|
- |
|
|
|
55,355,693 |
|
|
|
- |
|
|
|
250,000 |
|
| NVTN
LLC |
|
Senior
Secured First Lien Delayed Draw Term Loan |
|
|
8,900,000 |
|
|
|
950,000 |
|
|
|
- |
|
|
|
(49,250 |
) |
|
|
- |
|
|
|
9,800,750 |
|
|
|
518,544 |
|
|
|
- |
|
| |
|
Senior
Secured First Lien Term Loan B |
|
|
13,427,601 |
|
|
|
- |
|
|
|
- |
|
|
|
(3,686,008 |
) |
|
|
- |
|
|
|
9,741,593 |
|
|
|
315,797 |
|
|
|
- |
|
| |
|
Senior
Secured First Lien Term Loan C |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| |
|
Senior
Secured Revolving Note |
|
|
- |
|
|
|
650,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
650,000 |
|
|
|
12,376 |
|
|
|
- |
|
| Total
Controlled Investments |
|
|
|
$ |
121,610,914 |
|
|
$ |
7,689,883 |
|
|
$ |
- |
|
|
$ |
(299,405 |
) |
|
$ |
- |
|
|
$ |
129,001,392 |
|
|
$ |
3,078,522 |
|
|
$ |
329,831 |
|
| Name
of Investment(1)(2) |
|
Type
of Investment |
|
Fair
Value at
September 30,
2024 |
|
|
Purchases/
(Sales) of or Advances/
(Distributions) |
|
|
Transfers
In/(Out)
of Affiliated |
|
|
Unrealized
Gain/(Loss) |
|
|
Realized
Gain/(Loss) |
|
|
Fair
Value at
March 31,
2025 |
|
|
Earned
Income |
|
|
Fee/Other
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 |
|
|
Fee/Other
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 |
|
|
$ |
- |
|
|
(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, 2026 and
2025. Transfers in/(out) of Affiliated Investments and Controlled Investments represent the fair value for the quarter 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, 2026
and 2025.
Unconsolidated Significant Subsidiaries
We must determine which, if any, of our unconsolidated
controlled portfolio companies is a “significant subsidiary” within the meaning of Regulation S-X. We have evaluated and
determined that, as of March 31, 2026, two portfolio companies, FlexFIN LLC and NVTN LLC, triggered at least one of the significance tests,
and as of March 31, 2025, one portfolio company, FlexFIN LLC, triggered at least one of the significance tests. Below is certain selected
key financial data from FlexFIN LLC’s and NVTN LLC’s income statements for the periods in which our investment exceeded
the threshold for at least one of the tests (dollars in thousands):
| Income Statement |
|
For the
Three
Months
Ended
March 31,
2026 |
|
|
For the
Six Months
Ended
March 31,
2026 |
|
|
For the
Three
Months
Ended
March 31,
2025 |
|
|
For the
Six Months Ended
March
31,
2025 |
|
| Total Income |
|
$ |
10,285 |
|
|
$ |
19,643 |
|
|
$ |
1,997 |
|
|
$ |
3,592 |
|
| Total Expenses |
|
|
10,170 |
|
|
|
19,680 |
|
|
|
463 |
|
|
|
899 |
|
| Net Income |
|
$ |
115 |
|
|
$ |
(37 |
) |
|
$ |
1,534 |
|
|
$ |
2,693 |
|
|