v3.26.3
Fair Value of Investments
 9 Months Ended
Sep. 30, 2026
Fair Value of Investments [Abstract]  
Fair Value of Investments

6. Fair Value of Investments

 

Fair value is defined as the price that the Company would receive upon selling an investment or paying to transfer a liability in an orderly transaction to a market participant in the principal or most advantageous market for the investment. Accounting guidance emphasizes that valuation techniques maximize the use of observable market inputs and minimize the use of unobservable inputs.

 

The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the investment as of the measurement date. The three levels are defined as follows:

 

 

 

 Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities at the measurement date.
       
  Level 2 — Valuations based on inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable at the measurement date. This category includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in non-active markets including actionable bids from third parties for privately held assets or liabilities, and observable inputs other than quoted prices such as yield curves and forward currency rates that are entered directly into valuation models to determine the value of derivatives or other assets or liabilities.
       
  Level 3 — Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement date.

 

The inputs for the determination of fair value may require significant management judgment or estimation and are based upon the Adviser’s assessment of the assumptions that market participants would use in pricing the assets or liabilities. These investments include debt and equity investments in private companies or assets valued using the market or income approach, and may involve pricing models whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for identical or similar investments. The inputs in these valuations may include, but are not limited to, capitalization and discount rates and earnings before interest, taxes, depreciation, and amortization (“EBITDA”) multiples. The information may also include pricing information or broker quotes, which include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by a disclaimer would result in classification as Level 3 information, assuming no additional corroborating evidence.

 

Pricing inputs and weightings applied to determine fair value require subjective determination. Accordingly, valuations do not necessarily represent the amounts that may eventually be realized from sales or other dispositions of investments.

 

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

 

The following tables present the fair value hierarchy of the Company’s investments as of September 30, 2026 and December 31, 2025:

 

   Fair Value Hierarchy as of September 30, 2026 
Description  Level 1   Level 2   Level 3   Total 
Corporate Bond Investments  $
-
   $24,349,708   $
-
   $24,349,708 
Senior Secured Loan Debt Investments   
-
    8,688,816    57,660,872    66,349,688 
Equity Investments - Preferred Stock   
-
    
-
    4,509,301    4,509,301 
Equity Investments - Common Stock   
-
    
-
    1,547,892    1,547,892 
Short-Term Investments   5,853,734    
-
    
-
    5,853,734 
Warrants   
-
    
-
    433,063    433,063 
Total  $5,853,734   $33,038,524   $64,151,128   $103,043,386 
   Fair Value Hierarchy as of December 31, 2025 
Description  Level 1   Level 2   Level 3   Total 
Corporate Bond Investments  $
-
   $41,486,860   $
-
   $41,486,860 
Senior Secured Loan Debt Investments   
-
    12,764,068    30,580,558    43,344,626 
Equity Investments - Preferred Stock   
-
    
-
    3,197,792    3,197,792 
Short-Term Investments   6,217,008    
-
    
-
    6,217,008 
Warrants   
-
    
-
    8,102    8,102 
Total  $6,217,008   $54,250,928   $33,786,452   $94,254,388 

 

The following tables present changes in the fair value of the Company’s investments for which Level 3 inputs were used to determine the fair value of such investments as of and for the three and nine months ended September 30, 2026 and 2025:

 

   For the three months ended
September 30,		   For the nine months ended
September 30,		 
Senior Secured Loan Debt Investments  2026   2025   2026   2025 
Fair value, beginning of period  $43,350,637   $32,307,335   $30,580,558   $12,316,326 
Purchases of investments   14,360,523    2,522,512    28,226,967    18,580,712 
Proceeds from principal pre-payments and sales of investments   (198,058)   (869,393)   (2,536,077)   (1,059,135)
Net realized gain (loss)   2,326    12,657    86,510    14,852 
Net change in unrealized appreciation/(depreciation)   31,380    48,450    109,865    195,020 
Net accretion of discount (amortization of discount) on investments   32,307    29,100    (10,501)   74,812 
Restructures   
-
    
-
    
-
    
-
 
Payment-in-kind interest   81,757    68,847    226,000    161,370 
Transfers into (out of) Level 3(1)   
-
    (3,835,551)   977,550    
-
 
Fair value, end of period  $57,660,872   $30,283,957   $57,660,872   $30,283,957 

 

(1)During the nine months ended September 30, 2026, transfers into and out of Level 3 were attributable to the observability of market data and resulted from decreases in liquidity, security restructurings, reclassifications, or corporate actions.

 

   For the three months ended
September 30,		   For the nine months ended
September 30,		 
Equity Investments – Common Stock  2026   2025   2026   2025 
Fair value, beginning of period  $
-
   $
     -
   $
-
   $
     -
 
Purchases of investments   1,221,516    
-
    1,221,516    
-
 
Proceeds from sales of investments   
-
    
-
    
-
    
-
 
Net realized loss   
-
    
-
    
-
    
-
 
Net change in unrealized appreciation/(depreciation)   326,376    
-
    326,376    
-
 
Transfers into (out of) Level 3   
-
    
-
    
-
    
-
 
Fair value, end of period  $1,547,892   $
-
   $1,547,892   $
-
 

 

   For the three months ended
September 30,		   For the nine months ended
September 30,		 
Equity Investments – Preferred Stock  2026   2025   2026   2025 
Fair value, beginning of period  $3,938,257   $3,518,374   $3,197,792   $2,238,363 
Purchases of investments   
-
    
-
    648,000    984,960 
Proceeds from sales of investments   
-
    -    
-
    
-
 
Net realized loss   
-
    
-
    
-
    
-
 
Net change in unrealized appreciation/(depreciation)   571,044    (178,362)   663,509    116,689 
Net accretion of discount (amortization of premium) on investments   
-
    
-
    
-
    
-
 
Transfers into (out of) Level 3   
-
    
-
    
-
    
-
 
Fair value, end of period  $4,509,301   $3,340,012   $4,509,301   $3,340,012 
   For the three months ended September 30,   For the nine months ended September 30, 
Warrants  2026   2025   2026   2025 
Fair value, beginning of period  $256,033   $
-
   $8,102   $
-
 
Purchases of investments   
-
    
-
    
-
    
-
 
Proceeds from sales of investments   
-
    
-
    
-
    
-
 
Net realized loss   
-
    
-
    
-
    
-
 
Net change in unrealized appreciation/(depreciation)   177,011    13,903    424,961    13,903 
Transfers into (out of) Level 3   
-
    
-
    
-
    
-
 
Fair value, end of period  $433,063   $13,903   $433,063   $13,903 

 

The following table presents the net change in unrealized appreciation/(depreciation) of the Company’s investments for the respective periods relating to these Level 3 assets that were still held by the Company as of and for the three and nine months ended September 30, 2026 and 2025:

 

   For the three months ended
September 30,		   For the nine months ended
September 30,		 
Net Change in Unrealized Appreciation/(Depreciation)  2026   2025   2026   2025 
Senior Secured Loan Debt Investments  $31,380   $48,450   $109,865   $195,020 
Equity Investments - Preferred Stock   571,044    (178,362)   663,509    116,689 
Equity Investments - Common Stock   326,376    
-
    326,376    
-
 
Warrants   177,011    13,903    424,961    13,903 
Total  $1,105,810   $(116,009)  $1,524,711   $325,612 

 

The following tables present quantitative information about the significant unobservable inputs of the Company’s Level 3 investments as of September 30, 2026 and December 31, 2025. The tables are not intended to be all-inclusive, but instead capture the significant unobservable inputs relevant to the Adviser’s determination of fair value.

 

   Fair Value
as of
September 30,
2026		   Valuation
Technique		  Unobservable
Input		  Range/Input   Weighted
Average
Inputs		 
Senior Secured Loan Debt Investments (Non-Liquid)(1)  $41,359,156   Discounted cash flow  Discount rate   7.55% - 10.30%   8.52%
Senior Secured Loan Debt Investments (Non-Liquid)(1)  $14,368,325   Recent Transaction Price(2)  N/A   N/A    N/A 
Senior Secured Loan Debt Investments (Non-Liquid)(1)   1,933,391   Comparable Transaction Price(3)  N/A   N/A    N/A 
Equity Investments - Common Stock  $326,376   Market approach  EBITDA multiples   5.78x  5.78x
Equity Investments - Common Stock  $1,221,516   Recent Transaction Price(2)  N/A   N/A    N/A 
Equity Investments - Preferred Stock  $4,509,301   Market approach  EBITDA multiples   5.25x - 8.83x   6.98x
Equity Investments - Warrants  $433,063   Market approach  EBITDA multiples   8.83x -11.87x   10.38x
Total  $64,151,128                 

 

(1) Privately held assets without available third-party pricing or trading information.
   
(2) Transaction price consists of securities recently purchased. The Company determined that there was no change to the valuation based on the underlying assumptions used at the closing of such transactions.
   
(3) Based on private transaction price of comparable security.
   Fair Value
as of
December 31, 2025		   Valuation
Technique		  Unobservable
Input		  Range/Input   Weighted
Average
Inputs		 
Senior Secured Loan Debt Investments (Non-Liquid)(1)  $30,580,558   Discounted cash flow  Discount rate   7.41% – 11.10%   9.24%
Equity Investments - Preferred Stock  $3,197,792   Market approach  EBITDA multiples   5.36x – 7.85x   7.05x
Equity Investments - Warrants  $8,102   Market approach  EBITDA multiples   7.85x   7.85x
Total  $33,786,452                 

 

(1)Privately held assets without available third-party pricing or trading information.