| Fair Value Measurements |
Note 5. Fair Value Measurements The Company’s investments were categorized in the fair value hierarchy described in Note 2 – Significant Accounting Policies. The following tables present the fair value hierarchy of the Company’s investments as of June 30, 2026 and December 31, 2025.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2026 |
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Senior secured convertible notes |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
55,183,987 |
|
|
$ |
55,183,987 |
|
Junior secured convertible notes |
|
|
— |
|
|
|
— |
|
|
|
2,986,370 |
|
|
|
2,986,370 |
|
Unsecured convertible notes |
|
|
— |
|
|
|
— |
|
|
|
14,684,723 |
|
|
|
14,684,723 |
|
Preferred stock investments |
|
|
— |
|
|
|
— |
|
|
|
82,766,636 |
|
|
|
82,766,636 |
|
Common stock investments |
|
|
— |
|
|
|
— |
|
|
|
217,100 |
|
|
|
217,100 |
|
Warrants |
|
|
— |
|
|
|
— |
|
|
|
1,796,730 |
|
|
|
1,796,730 |
|
Total investments before cash equivalents |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
157,635,546 |
|
|
$ |
157,635,546 |
|
Money market treasury fund |
|
|
8,279,833 |
|
|
|
— |
|
|
|
— |
|
|
|
8,279,833 |
|
Total investments after cash equivalents |
|
$ |
8,279,833 |
|
|
$ |
— |
|
|
$ |
157,635,546 |
|
|
$ |
165,915,379 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2025 |
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Senior secured convertible notes |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
63,321,632 |
|
|
$ |
63,321,632 |
|
Junior secured convertible notes |
|
|
— |
|
|
|
— |
|
|
|
2,984,566 |
|
|
|
2,984,566 |
|
Unsecured convertible notes |
|
|
— |
|
|
|
— |
|
|
|
4,535,559 |
|
|
|
4,535,559 |
|
Preferred stock investments |
|
|
— |
|
|
|
— |
|
|
|
59,821,668 |
|
|
|
59,821,668 |
|
Common stock investments |
|
|
— |
|
|
|
— |
|
|
|
341,733 |
|
|
|
341,733 |
|
Warrants |
|
|
— |
|
|
|
— |
|
|
|
1,215,343 |
|
|
|
1,215,343 |
|
Total investments before cash equivalents |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
132,220,501 |
|
|
$ |
132,220,501 |
|
Money market treasury fund |
|
|
16,132,167 |
|
|
|
— |
|
|
|
— |
|
|
|
16,132,167 |
|
Total investments after cash equivalents |
|
$ |
16,132,167 |
|
|
$ |
— |
|
|
$ |
132,220,501 |
|
|
$ |
148,352,668 |
|
The following tables provide a reconciliation of the beginning and ending balances for investments for which fair value was determined using Level 3 inputs for the three and six months ended June 30, 2026 and 2025:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended June 30, 2026 |
|
|
|
Senior secured convertible notes |
|
|
Junior secured convertible notes |
|
|
Unsecured convertible notes |
|
|
Preferred stock investments |
|
|
Common stock investments |
|
|
Warrants |
|
|
Total investments |
|
Fair value, beginning of period |
|
$ |
55,319,697 |
|
|
$ |
2,985,468 |
|
|
$ |
9,680,812 |
|
|
$ |
60,389,828 |
|
|
$ |
211,086 |
|
|
$ |
1,573,308 |
|
|
$ |
130,160,199 |
|
Purchases of investments |
|
|
975,610 |
|
|
|
— |
|
|
|
4,487,714 |
|
|
|
15,024,390 |
|
|
|
— |
|
|
|
— |
|
|
|
20,487,714 |
|
Conversion of convertible notes to preferred stock |
|
|
(975,610 |
) |
|
|
— |
|
|
|
— |
|
|
|
977,214 |
|
|
|
— |
|
|
|
— |
|
|
|
1,604 |
|
Amortization of deferred loan fees |
|
|
— |
|
|
|
902 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
902 |
|
Net change in unrealized gain (loss) |
|
|
(135,710 |
) |
|
|
— |
|
|
|
516,197 |
|
|
|
6,375,204 |
|
|
|
6,014 |
|
|
|
223,422 |
|
|
|
6,985,127 |
|
Fair value, end of period |
|
$ |
55,183,987 |
|
|
$ |
2,986,370 |
|
|
$ |
14,684,723 |
|
|
$ |
82,766,636 |
|
|
$ |
217,100 |
|
|
$ |
1,796,730 |
|
|
$ |
157,635,546 |
|
Net change in unrealized gain (loss) included in earnings related to financial instruments held as of June 30, 2026 |
|
$ |
(135,710 |
) |
|
$ |
— |
|
|
$ |
516,197 |
|
|
$ |
6,375,204 |
|
|
$ |
6,014 |
|
|
$ |
223,422 |
|
|
$ |
6,985,127 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30, 2026 |
|
|
|
Senior secured convertible notes |
|
|
Junior secured convertible notes |
|
|
Unsecured convertible notes |
|
|
Preferred stock investments |
|
|
Common stock investments |
|
|
Warrants |
|
|
Total investments |
|
Fair value, beginning of period |
|
$ |
63,321,632 |
|
|
$ |
2,984,566 |
|
|
$ |
4,535,559 |
|
|
$ |
59,821,668 |
|
|
$ |
341,733 |
|
|
$ |
1,215,343 |
|
|
$ |
132,220,501 |
|
Purchases of investments |
|
|
975,610 |
|
|
|
— |
|
|
|
9,487,714 |
|
|
|
15,024,390 |
|
|
|
— |
|
|
|
— |
|
|
|
25,487,714 |
|
Conversion of convertible notes to preferred stock |
|
|
(975,610 |
) |
|
|
— |
|
|
|
— |
|
|
|
977,214 |
|
|
|
— |
|
|
|
— |
|
|
|
1,604 |
|
Amortization of deferred loan fees |
|
|
— |
|
|
|
1,804 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,804 |
|
Net change in unrealized gain (loss) |
|
|
(8,137,645 |
) |
|
|
— |
|
|
|
661,450 |
|
|
|
6,943,364 |
|
|
|
(124,633 |
) |
|
|
581,387 |
|
|
|
(76,077 |
) |
Fair value, end of period |
|
$ |
55,183,987 |
|
|
$ |
2,986,370 |
|
|
$ |
14,684,723 |
|
|
$ |
82,766,636 |
|
|
$ |
217,100 |
|
|
$ |
1,796,730 |
|
|
$ |
157,635,546 |
|
Net change in unrealized gain (loss) included in earnings related to financial instruments held as of June 30, 2026 |
|
$ |
(8,137,645 |
) |
|
$ |
— |
|
|
$ |
661,450 |
|
|
$ |
6,943,364 |
|
|
$ |
(124,633 |
) |
|
$ |
581,387 |
|
|
$ |
(76,077 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended June 30, 2025 |
|
|
|
Senior secured convertible notes |
|
|
Junior secured convertible notes |
|
|
Unsecured convertible notes |
|
|
Preferred stock investments |
|
|
Common stock investments |
|
|
Warrants |
|
|
Total investments |
|
Fair value, beginning of period |
|
$ |
59,291,281 |
|
|
$ |
— |
|
|
$ |
4,250,000 |
|
|
$ |
30,722,433 |
|
|
$ |
796,904 |
|
|
$ |
501,824 |
|
|
$ |
95,562,442 |
|
Purchases of investments |
|
|
1,000,000 |
|
|
|
3,000,000 |
|
|
|
— |
|
|
|
10,999,999 |
|
|
|
— |
|
|
|
— |
|
|
|
14,999,999 |
|
Proceeds from deferred loan fees |
|
|
— |
|
|
|
(18,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(18,000 |
) |
Amortization of deferred loan fees |
|
|
— |
|
|
|
762 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
762 |
|
Net change in unrealized gain (loss) |
|
|
2,851,295 |
|
|
|
— |
|
|
|
63,720 |
|
|
|
5,894,008 |
|
|
|
(488,819 |
) |
|
|
657,019 |
|
|
|
8,977,223 |
|
Fair value, end of period |
|
$ |
63,142,576 |
|
|
$ |
2,982,762 |
|
|
$ |
4,313,720 |
|
|
$ |
47,616,440 |
|
|
$ |
308,085 |
|
|
$ |
1,158,843 |
|
|
$ |
119,522,426 |
|
Net change in unrealized gain (loss) included in earnings related to financial instruments held as of June 30, 2025 |
|
$ |
2,851,295 |
|
|
$ |
— |
|
|
$ |
63,720 |
|
|
$ |
5,894,008 |
|
|
$ |
(488,819 |
) |
|
$ |
657,019 |
|
|
$ |
8,977,223 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30, 2025 |
|
|
|
Senior secured convertible notes |
|
|
Junior secured convertible notes |
|
|
Unsecured convertible notes |
|
|
Preferred stock investments |
|
|
Common stock investments |
|
|
Warrants |
|
|
Total investments |
|
Fair value, beginning of period |
|
$ |
54,401,998 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
30,158,406 |
|
|
$ |
796,904 |
|
|
$ |
501,824 |
|
|
$ |
85,859,132 |
|
Purchases of investments |
|
|
1,500,000 |
|
|
|
3,000,000 |
|
|
|
4,250,000 |
|
|
|
10,999,999 |
|
|
|
— |
|
|
|
— |
|
|
|
19,749,999 |
|
Proceeds from deferred loan fees |
|
|
— |
|
|
|
(18,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(18,000 |
) |
Amortization of deferred loan fees |
|
|
— |
|
|
|
762 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
762 |
|
Net change in unrealized gain (loss) |
|
|
7,240,578 |
|
|
|
— |
|
|
|
63,720 |
|
|
|
6,458,035 |
|
|
|
(488,819 |
) |
|
|
657,019 |
|
|
|
13,930,533 |
|
Fair value, end of period |
|
$ |
63,142,576 |
|
|
$ |
2,982,762 |
|
|
$ |
4,313,720 |
|
|
$ |
47,616,440 |
|
|
$ |
308,085 |
|
|
$ |
1,158,843 |
|
|
$ |
119,522,426 |
|
Net change in unrealized gain (loss) included in earnings related to financial instruments held as of June 30, 2025 |
|
$ |
7,240,578 |
|
|
$ |
— |
|
|
$ |
63,720 |
|
|
$ |
6,458,035 |
|
|
$ |
(488,819 |
) |
|
$ |
657,019 |
|
|
$ |
13,930,533 |
|
There were no transfers into or out of Level 3 of the fair value hierarchy for the three and six months ended June 30, 2026 and 2025. The following provides information on Level 3 investments held by the Company that were valued at June 30, 2026, and December 31, 2025, based on unobservable inputs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value as of
June 30, 2026 |
|
|
Valuation Technique |
|
Unobservable Input |
|
Range (Weighted Average)1 |
|
Impact to Valuation from an Increase in Input2 |
Senior secured convertible notes3 |
|
$ |
55,183,987 |
|
|
Discounted expected return |
|
Discount rate |
|
42.1% - 42.1% (42.1%) |
|
Decrease |
|
|
|
|
|
|
|
Term |
|
0.3 - 1.3 Years (0.6 Years) |
|
Decrease |
Junior secured convertible notes |
|
|
2,986,370 |
|
|
Recent transaction |
|
Transaction price |
|
N/A |
|
N/A |
Unsecured convertible notes |
|
|
14,684,723 |
|
|
Recent transaction |
|
Transaction price |
|
N/A |
|
N/A |
|
|
|
|
|
Discounted expected return |
|
Discount rate |
|
33.9% - 33.9% (33.9%) |
|
Decrease |
|
|
|
|
|
|
|
Term |
|
1.3 - 2.3 Years (1.3 Years) |
|
Decrease |
Preferred stock investments |
|
|
82,766,636 |
|
|
Recent transaction |
|
Transaction price |
|
N/A |
|
N/A |
|
|
|
|
|
Market approach |
|
Revenue Multiples |
|
2.4x - 8.4x (5.2x) |
|
Increase |
|
|
|
|
|
|
|
Volatility |
|
35.0% - 65.0% (54.2%) |
|
Increase |
|
|
|
|
|
|
|
Estimated time to exit (in years) |
|
1.0 - 5.0 Years (2.6 Years) |
|
Decrease |
Common stock investments3 |
|
|
217,100 |
|
|
Market approach |
|
Revenue Multiples |
|
1.3x - 1.3x (1.3x) |
|
Increase |
|
|
|
|
|
|
|
Volatility |
|
35.0% - 35.0% (35.0%) |
|
Increase |
|
|
|
|
|
|
|
Estimated time to exit (in years) |
|
3.0 - 3.0 Years (3.0 Years) |
|
Decrease |
Warrants3 |
|
|
1,796,730 |
|
|
Market approach |
|
Revenue Multiples |
|
2.4x - 2.4x (2.4x) |
|
Increase |
|
|
|
|
|
|
|
Volatility |
|
55.0% - 55.0% (55.0%) |
|
Increase |
|
|
|
|
|
|
|
Estimated time to exit (in years) |
|
3.0 - 3.0 Years (3.0 Years) |
|
Decrease |
Total |
|
$ |
157,635,546 |
|
|
|
|
|
|
|
|
|
1.The weighted average information is generally derived by assigning each disclosed unobservable input a proportionate weight based on the fair value of the related investment. 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. 3.The range of unobservable inputs relates to a single portfolio company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value as of
December 31, 2025 |
|
|
Valuation Technique |
|
Unobservable Input |
|
Range (Weighted Average)1 |
|
Impact to Valuation from an Increase in Input2 |
Senior secured convertible notes3 |
|
$ |
63,321,632 |
|
|
Discounted expected return |
|
Discount rate |
|
42.1% - 42.1% (42.1%) |
|
Decrease |
|
|
|
|
|
|
|
Term |
|
0.8 - 1.8 Years (1.2 Years) |
|
Decrease |
Junior secured convertible notes |
|
|
2,984,566 |
|
|
Recent transaction |
|
Transaction price |
|
N/A |
|
N/A |
Unsecured convertible notes3 |
|
|
4,535,559 |
|
|
Discounted expected return |
|
Discount rate |
|
27.7% - 27.7% (27.7%) |
|
Decrease |
|
|
|
|
|
|
|
Term |
|
0.9 - 1.8 Years (1.2 Years) |
|
Decrease |
Preferred stock investments |
|
|
59,821,668 |
|
|
Recent transaction |
|
Transaction price |
|
N/A |
|
N/A |
|
|
|
|
|
Market approach |
|
Revenue Multiples |
|
2.3x - 7.5x (5.4x) |
|
Increase |
|
|
|
|
|
|
|
Volatility |
|
40.0% - 65.0% (52.5%) |
|
Increase |
|
|
|
|
|
|
|
Estimated time to exit (in years) |
|
1.0 - 5.0 Years (3.1 Years) |
|
Decrease |
Common stock investments3 |
|
|
341,733 |
|
|
Market approach |
|
Revenue Multiples |
|
1.3x - 1.3x (1.3x) |
|
Increase |
|
|
|
|
|
|
|
Volatility |
|
35.0% - 35.0% (35.0%) |
|
Increase |
|
|
|
|
|
|
|
Estimated time to exit (in years) |
|
3.0 - 3.0 Years (3.0 Years) |
|
Decrease |
Warrants3 |
|
|
1,215,343 |
|
|
Market approach |
|
Revenue Multiples |
|
2.3x - 2.3x (2.3x) |
|
Increase |
|
|
|
|
|
|
|
Volatility |
|
55.0% - 55.0% (55.0%) |
|
Increase |
|
|
|
|
|
|
|
Estimated time to exit (in years) |
|
3.0 - 3.0 Years (3.0 Years) |
|
Decrease |
Total |
|
$ |
132,220,501 |
|
|
|
|
|
|
|
|
|
1.The weighted average information is generally derived by assigning each disclosed unobservable input a proportionate weight based on the fair value of the related investment. 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. 3.The range of unobservable inputs relates to a single portfolio company. |