v3.26.1
Investments
 9 Months Ended
Jun. 30, 2026
Investments [Abstract]  
Investments

Note 3. Investments

 

The composition of our investments as of June 30, 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   $            133,882       40.8 %   $ 119,447       39.6 %
Senior Secured Notes     15,076       4.6       15,112       5.0  
Fund Investment     2,138       0.7       2,412       0.8  
Equity/Warrants     176,318       53.9       164,666       54.6  
Total Investments   $ 327,414       100.0 %   $ 301,637       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 June 30, 2026 and September 30, 2025, the total fair value of warrants was $878.3 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 nine months ended June 30, 2026, the Company acquired warrants in zero and one existing portfolio company, respectively. During the three and nine months ended June 30, 2025, the Company acquired warrants in zero and one existing portfolio company, respectively.

 

Total change in unrealized appreciation/(depreciation) related to warrants for the three and nine months ended June 30, 2026 was $(18.2) thousand and $(807.4) 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 nine months ended June 30, 2025 was $434.7 thousand and $(59.0) 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 June 30, 2026 (dollars in thousands):

 

   Fair Value   Percentage 
Insurance  $58,515    19.4%
Services: Business   50,143    16.6 
Services: Consumer   35,805    11.9 
Real Estate   35,163    11.7 
Construction & Building   30,836    10.2 
Aerospace & Defense   27,749    9.2 
Hotel, Gaming & Leisure   20,154    6.7 
High Tech Industries   19,583    6.5 
Media: Broadcasting & Subscription   9,425    3.1 
Automotive   8,894    2.9 
Consumer Discretionary   2,958    1.0 
Banking   2,412    0.8 
Total  $301,637    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 June 30, 2026 (dollars in thousands):

 

   Fair Value   Percentage 
Southeast  $114,342    37.8%
Northeast   108,442    36.0 
West   35,609    11.8 
Southwest   18,951    6.3 
International   12,539    4.2 
Midwest   11,436    3.8 
Mid-Atlantic   318    0.1 
   $301,637    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 
International   14,845    4.9 
Mid-Atlantic   314    0.1 
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 nine months ended June 30, 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
June 30,
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   $38,896   $
        -
   $(593,472)  $1,696   $8,245,633   $857,174   $
-
 
   Equity   3,359,511    
-
    
-
    (960,622)   
-
    2,398,889    
-
    
-
 
  

Senior Secured Delayed Draw Term Loan

   
-
    225,132    
-
    (3,507)   
-
    221,625    5,437    
-
 
   Preferred Equity   
-
    99,396    
-
    
-
    
-
    99,396    
-
    
-
 
                                            
FST Holdings Parent, LLC  Equity   10,960,741    
-
    
-
    1,995,867    
-
    12,956,608    268,540    
-
 
MB Precision Investment Holdings LLC  Senior Secured First Lien Term Loan   6,398,561    (24,450)   
-
    (251,879)   1,466    6,123,698    660,589    
-
 
   Senior Secured Delayed Draw Term Loan   490,306    2,310,678    
-
    (159,866)   
-
    2,641,118    204,934    
-
 
   Senior Secured First Lien Revolver   1,975,347    102,775    
-
    (89,993)   
-
    1,988,129    264,874    
-
 
   Preferred Equity   2,725,408    656,543    
-
    (1,374,470)   
-
    2,007,481    656,543    
-
 
   Warrants   673,018    
-
    
-
    (673,018)   
-
    
-
    
-
    
-
 
Total Affiliated Investments     $35,381,405   $3,408,970   $
-
   $(2,110,960)  $3,162   $36,682,577   $2,918,091   $
-
 

 

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
June 30,
2026		     Earned Income     Fee/Other Income  
Controlled Investments                                                
ECC Capital Corp.   Senior Secured First Lien Term Loan   $ 6,997,012     $ -     $         -     $ -     $ -     $ 6,997,012     $ 480,427     $ -  
    Equity     6,636,000       -       -       924,000       -       7,560,000       -       118,787  
FlexFIN, LLC   Equity Interest     37,180,761       (2,617,801 )     -       745,800       -       35,308,760       3,298,977       -  
NSG Captive, Inc.   Equity     48,469,540       6,474,300       -       3,572,078       -       58,515,918       -       375,000  
NVTN LLC   Senior Secured First Lien Delayed Draw Term Loan     8,900,000       950,000       -       -       -       9,850,000       837,394       -  
    Senior Secured First Lien Term Loan B     13,427,601       -       -       (3,773,770 )     -       9,653,831       495,203       -  
    Senior Secured Revolving Note     -       650,000       -       -       -       650,000       30,124       -  
Total Controlled Investments       $ 121,610,914     $ 5,456,499     $ -     $ 1,468,108     $ -     $ 128,535,521     $ 5,142,125     $ 493,787  
Name of Investment(1)(2)  Type of Investment  Fair Value at September 30, 2024   Purchases/(Sales)
of or
Advances/
(Distributions)		   Transfers In/(Out)
 of Affiliates		   Unrealized Gain/(Loss)   Realized
Gain/(Loss)		   Fair Value at
June 30,
2025		   Earned
Income		   Fee/Other Income 
Affiliated Investments                                
Black Angus Steakhouses, LLC  Senior Secured First Lien Delayed Draw Term Loan  $751,207   $(243,889)  $
        -
   $124,542   $(631,860)  $
-
   $
-
   $
-
 
   Senior Secured First Lien Term Loan   
-
    
-
    
-
    7,767,533    (7,767,533)   
-
    
-
    
-
 
   Senior Secured First Lien Super Priority DDTL   1,647,776    
-
    
-
    273,184    (1,920,960)   
-
    
-
    
-
 
FST Holdings Parent, LLC  Equity   12,351,802    8,289    
-
    (767,757)   
-
    11,592,334    254,231    
-
 
Total Affiliated Investments     $14,750,785   $(235,600)  $
-
   $7,397,502   $(10,320,353)  $11,592,334   $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
June 30,
2025		   Earned Income   Fee/Other Income 
Controlled Investments                                
ECC Capital Corp.  Senior Secured First Lien Term Loan  $7,422,012   $
-
   $
        -
   $
-
   $
-
   $7,422,012   $538,943   $
-
 
   Equity   4,872,000    
-
    
-
    1,596,000    
-
    6,468,000    
-
    161,611 
FlexFIN, LLC  Equity Interest   36,683,045    (438,043)   
-
    
-
    
-
    36,245,002    3,597,022    
-
 
NSG Captive, Inc.  Equity   101,000    49,154,076    
-
    (826,575)   
-
    48,428,501    
-
    391,271 
NVTN LLC  Senior Secured First Lien Delayed Draw Term Loan   5,500,000    4,700,000    
-
    
-
    
-
    10,200,000    575,494    
-
 
   Senior Secured First Lien Term Loan B   16,353,590    
-
    
-
    (1,662,214)   
-
    14,691,376    708,477    
-
 
Total Controlled Investments     $70,931,647   $53,416,033   $
-
   $(892,789)  $
-
   $123,454,891   $5,419,936   $552,882 

 

(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 nine months ended June 30, 2026 and 2025. Transfers in/(out) of Affiliated Investments and Controlled Investments represent the fair value for the quarter in which 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 nine months ended June 30, 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 June 30, 2026, three portfolio companies, FlexFIN LLC, NVTN LLC, and NSG Captive Inc., triggered at least one of the significance tests, and as of June 30, 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, NVTN LLC’s, and NSG Captive Inc.’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
June 30,
2026		   For the
Three Months Ended
June 30,
2025		   For the
Nine Months Ended
June 30,
2026		   For the
Nine Months Ended
June 30,
2025		 
Total Income  $33,624   $1,245   $87,328   $4,837 
Total Expenses   30,223    500    81,861    1,399 
Net Income  $3,401   $745   $5,467   $3,438