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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Silver Spike Investment Corporation | NASDAQ:SSIC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 11.38 | 11.26 | 11.48 | 11.49 | 11.38 | 11.49 | 667 | 17:08:01 |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer Identification No.) |
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class
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Trading Symbol(s)
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Name of each exchange on which registered
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||
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The |
Large accelerated filer
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☐
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Accelerated filer
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☐
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☒
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Smaller reporting company
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Emerging growth company
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TABLE OF CONTENTS
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PAGE
NO.
|
||
PART I
|
FINANCIAL INFORMATION
|
|
Item 1
|
5 | |
5 | ||
6
|
||
7 | ||
9 | ||
10 | ||
12
|
||
Item 2
|
27 | |
Item 3
|
40 | |
Item 4
|
41 | |
PART II
|
OTHER INFORMATION
|
|
Item 1
|
41 | |
Item 1A
|
41 | |
Item 2
|
41 | |
Item 3
|
41 | |
Item 4
|
41 | |
Item 5
|
41 | |
Item 6
|
41 | |
43
|
• |
our future operating results and distribution projections;
|
• |
the ability of Silver Spike Capital, LLC (“SSC”) to attract and retain highly talented professionals;
|
• |
our business prospects and the prospects of our portfolio companies;
|
• |
the impact of interest and inflation rates on our business prospects and the prospects of our portfolio companies;
|
• |
the impact of the investments that we expect to make;
|
• |
the ability of our portfolio companies to achieve their objectives;
|
• |
our expected financings and investments and the timing of our investments in our initial portfolio;
|
• |
changes in regulation impacting the cannabis industry;
|
• |
the adequacy of our cash resources and working capital;
|
• |
the current and future effects of the COVID-19 pandemic on us and our portfolio companies;
|
• |
the timing of cash flows, if any, from the operations of our portfolio companies; and
|
• |
the Loan Portfolio Acquisition (as defined below), the likelihood the Loan Portfolio Acquisition is completed, and the anticipated timing of its
completion. See “Note 12 – Proposed Loan Portfolio Acquisition” in the notes to the financial statements included with this quarterly report on Form 10-Q for further information regarding the Loan Portfolio Acquisition Agreement and the
Loan Portfolio Acquisition.
|
• |
our limited operating history;
|
• |
changes or potential disruptions in our operations, the economy, financial markets or political environment;
|
• |
risks associated with possible disruption in our operations or the economy generally due to terrorism, natural disasters, the Russia-Ukraine war,
or the Israel-Hamas war and the potential for volatility in energy prices and other commodities and their impact on the industries in which we invest;
|
• |
the impact of information technology system failures, data security breaches, data privacy compliance, network disruptions, and cybersecurity
attacks;
|
• |
future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities) and conditions in our
operating areas, particularly with respect to business development companies (“BDCs”) or regulated investment companies (“RICs”); and
|
• |
other considerations that may be disclosed from time to time in our publicly disseminated documents and filings.
|
|
June 30, 2024 |
December 31, 2023
|
||||||
|
(unaudited)
|
|||||||
ASSETS
|
||||||||
Investments at fair value:
|
||||||||
Non-control/non-affiliate investments at fair value (amortized cost of $
|
$
|
|
$
|
|
||||
Cash and cash equivalents
|
|
|
||||||
Interest receivable
|
|
|
||||||
Deferred offering costs |
||||||||
Prepaid expenses
|
|
|
||||||
Other assets | ||||||||
Paydown receivable | ||||||||
Deferred financing costs |
||||||||
Total assets
|
|
|
||||||
|
||||||||
LIABILITIES
|
||||||||
Transaction fees payable related to the Loan Portfolio Acquisition |
||||||||
Income-based incentive fees payable
|
||||||||
Offering costs payable |
||||||||
Management fee payable
|
||||||||
Capital gains incentive fees payable | ||||||||
Audit fees payable |
||||||||
Unearned interest income |
||||||||
Legal fees payable
|
||||||||
Valuation fees payable |
||||||||
Directors fees payable |
||||||||
Administrator fees payable
|
||||||||
Other payables |
||||||||
Professional fees payable |
||||||||
Due to affiliate |
|
|||||||
Distributions payable |
||||||||
Excise tax payable |
||||||||
Total liabilities
|
|
|
||||||
|
||||||||
Commitments and contingencies (Note 6)
|
||||||||
|
||||||||
NET ASSETS
|
||||||||
Common Stock, $
|
|
|
||||||
Additional paid-in-capital
|
|
|
||||||
Distributable earnings (Accumulated losses)
|
(
|
)
|
|
|||||
Total net assets
|
$
|
|
$
|
|
||||
Total liabilities and net assets |
$ |
|
||||||
NET ASSET VALUE PER SHARE
|
$
|
|
$
|
|
|
Three Months Ended
|
Six Months Ended |
||||||||||||||
|
June 30, 2024
|
June 30, 2023
|
June 30, 2024 | June 30, 2023 | ||||||||||||
INVESTMENT INCOME
|
||||||||||||||||
Non-control/non-affiliate investment income
|
||||||||||||||||
Interest income
|
$
|
|
$
|
|
$ | $ | ||||||||||
Fee income
|
|
|
||||||||||||||
Total investment income
|
|
|
||||||||||||||
|
||||||||||||||||
EXPENSES
|
||||||||||||||||
Transaction expenses related to the Loan Portfolio Acquisition
|
|
|
||||||||||||||
Management fee
|
||||||||||||||||
Income-based incentive fees
|
||||||||||||||||
Audit expense
|
||||||||||||||||
Administrator fees
|
|
|
||||||||||||||
Legal expenses
|
|
|
||||||||||||||
Insurance expense
|
||||||||||||||||
Capital gains incentive fees
|
( |
) | ( |
) | ||||||||||||
Other expenses
|
||||||||||||||||
Director expenses
|
|
|
||||||||||||||
Valuation fees
|
||||||||||||||||
Custodian fees
|
||||||||||||||||
Professional fees
|
|
|
||||||||||||||
Total expenses
|
|
|
||||||||||||||
|
||||||||||||||||
NET INVESTMENT INCOME (LOSS)
|
|
|
||||||||||||||
|
||||||||||||||||
NET REALIZED GAIN (LOSS) FROM INVESTMENTS
|
||||||||||||||||
Non-controlled/non-affiliate investments
|
( |
) | ( |
) | ||||||||||||
Net realized gain (loss) from investments
|
|
(
|
)
|
( |
) | |||||||||||
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) FROM INVESTMENTS
|
||||||||||||||||
Non-controlled/non-affiliate investments
|
(
|
)
|
(
|
)
|
||||||||||||
Net change in unrealized appreciation (depreciation) from investments
|
(
|
)
|
(
|
)
|
||||||||||||
Net realized and unrealized gains (losses) |
( |
) | ( |
) | ||||||||||||
|
||||||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
|
$
|
|
$ | $ | ||||||||||
|
||||||||||||||||
NET INVESTMENT INCOME (LOSS) PER SHARE — BASIC AND DILUTED
|
$
|
|
$
|
|
$ | $ | ||||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS PER SHARE — BASIC AND DILUTED
|
$
|
|
$
|
|
$ | $ | ||||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING — BASIC AND DILUTED
|
|
|
|
Common Stock
|
|||||||||||||||||||
|
Shares
|
Par Value
|
Additional
paid-in-capital |
Distributable Earnings/
(Accumulated Loss)
|
Total
net assets
|
|||||||||||||||
Balance, March 31, 2024
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
Net increase (decrease) in net assets resulting from operations
|
||||||||||||||||||||
Net investment income (loss)
|
-
|
|
|
|
|
|||||||||||||||
Net realized gain (loss) from investments
|
-
|
|
|
|
|
|||||||||||||||
Net change in unrealized appreciation (depreciation) from investments
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Total net increase (decrease) in net assets resulting from operations
|
-
|
|
|
|
|
|||||||||||||||
Distributions to stockholders from:
|
||||||||||||||||||||
Investment income-net
|
- | ( |
) | ( |
) | |||||||||||||||
Capital transactions
|
||||||||||||||||||||
Reinvestment of stockholder distributions
|
||||||||||||||||||||
Total net increase (decrease) in net assets from capital transactions
|
||||||||||||||||||||
Total increase (decrease) in net assets
|
( |
) | ( |
) | ||||||||||||||||
Balance, June 30, 2024
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
Common Stock
|
||||||||||||||||||||
|
Shares
|
Par value
|
Additional
paid-in-capital |
Distributable Earnings/
(Accumulated Loss) |
Total
net assets
|
|||||||||||||||
Balance, March 31, 2023
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||
Net increase (decrease) in net assets resulting from operations
|
||||||||||||||||||||
Net investment income (loss)
|
-
|
|
|
|
|
|||||||||||||||
Net realized gain (loss) from investments
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Net change in unrealized appreciation (depreciation) from investments
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Total net increase (decrease) in net assets resulting from operations
|
-
|
|
|
|
|
|||||||||||||||
Capital transactions
|
||||||||||||||||||||
Issuance of common stock, net of offering cost
|
|
|
|
|
|
|||||||||||||||
Total increase (decrease) in net assets
|
|
|
|
|
|
|||||||||||||||
Effect of permanent adjustments
|
-
|
|
|
|
|
|
||||||||||||||
Stock issued in connection with dividend reinvestment plan
|
||||||||||||||||||||
Balance, June 30, 2023
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
Common Stock
|
|||||||||||||||||||
Shares
|
Par Value
|
Additional
paid-in-capital |
Distributable Earnings/
(Accumulated Loss)
|
Total
net assets
|
||||||||||||||||
Balance, December 31, 2023
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||
Net increase (decrease) in net assets resulting from operations
|
||||||||||||||||||||
Net investment income (loss)
|
-
|
|
|
|
|
|||||||||||||||
Net realized gain (loss) from investments
|
-
|
|
|
|
|
|||||||||||||||
Net change in unrealized appreciation (depreciation) from investments
|
-
|
|
|
|
|
|||||||||||||||
Total net increase (decrease) in net assets resulting from operations
|
-
|
|
|
|
|
|||||||||||||||
Distributions to stockholders from:
|
||||||||||||||||||||
Investment income-net
|
- | ( |
) | ( |
) | |||||||||||||||
Capital transactions
|
||||||||||||||||||||
Reinvestment of stockholder distributions
|
||||||||||||||||||||
Total net increase (decrease) in net assets from capital transactions
|
||||||||||||||||||||
Total increase (decrease) in net assets
|
( |
) | ( |
) | ||||||||||||||||
Effect of permanent adjustments |
- | ( |
) | |||||||||||||||||
Balance, June 30, 2024
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
Common Stock
|
||||||||||||||||||||
|
Shares
|
Par value
|
Additional
paid-in-capital |
Distributable Earnings/
(Accumulated Loss)
|
Total
net assets
|
|||||||||||||||
Balance, December 31, 2022
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||
Net increase (decrease) in net assets resulting from operations
|
||||||||||||||||||||
Net investment income (loss)
|
-
|
|
|
|
|
|||||||||||||||
Net realized gain (loss) from investments
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Net change in unrealized appreciation (depreciation) from investments
|
-
|
|
|
|
|
|||||||||||||||
Total net increase (decrease) in net assets resulting from operations
|
-
|
|
|
|
|
|||||||||||||||
Capital transactions
|
||||||||||||||||||||
Issuance of common stock
|
|
|
|
|
|
|||||||||||||||
Total increase (decrease) in net assets
|
|
|
|
|
|
|||||||||||||||
Effect of permanent adjustments
|
-
|
|
|
(
|
)
|
|
||||||||||||||
Balance, June 30, 2023
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
For the six months ended
|
|||||||
|
June 30, 2024
|
June 30, 2023
|
||||||
Cash flows from operating activities
|
||||||||
Net increase (decrease) in net assets resulting from operations
|
$
|
|
$
|
|
||||
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
|
||||||||
Net realized (gain) loss from investments
|
||||||||
Net change in unrealized (appreciation) depreciation from investments
|
(
|
)
|
(
|
)
|
||||
Net (accretion of discounts) and amortization of premiums
|
(
|
)
|
(
|
)
|
||||
Purchase of investments
|
(
|
)
|
(
|
)
|
||||
PIK interest capitalized
|
( |
) | ( |
) | ||||
Proceeds from sales of investments and principal repayments
|
||||||||
(Increase)/Decrease in operating assets:
|
||||||||
Interest receivable
|
|
|
||||||
Paydown receivable
|
( |
) | ||||||
Other assets
|
( |
) | ||||||
Prepaid expenses
|
(
|
)
|
(
|
)
|
||||
Increase/(Decrease) in operating liabilities:
|
||||||||
Income-based incentive fees payable
|
|
|
||||||
Management fee payable
|
( |
) | ||||||
Capital gains incentive fees payable
|
||||||||
Legal fees payable
|
( |
) | ||||||
Transaction fees payable related to the Loan Portfolio Acquisition
|
||||||||
Valuation fees payable
|
|
|
||||||
Administrator fees payable
|
(
|
)
|
|
|||||
Audit fees payable
|
|
|||||||
Directors fees payable
|
(
|
)
|
(
|
)
|
||||
Professional fees payable
|
(
|
)
|
(
|
)
|
||||
Other payables
|
|
(
|
)
|
|||||
Deferred income payable
|
||||||||
Due to affiliate
|
||||||||
Excise tax payable
|
( |
) |
(
|
)
|
||||
Net cash provided by (used in) operating activities
|
|
(
|
)
|
|||||
|
||||||||
Cash flows from financing activities
|
||||||||
Offering costs paid
|
( |
) | ||||||
Distributions paid
|
( |
) | ||||||
Net cash provided by (used in) financing activities
|
(
|
)
|
|
|||||
|
||||||||
Net increase (decrease) in cash and cash equivalents
|
|
(
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
|
|
||||||
Cash and cash equivalents, end of period
|
$
|
|
$
|
|
||||
Supplemental and non-cash financing activities |
||||||||
Reinvestment of dividend distributions
|
$ | $ |
Portfolio Company (1)(10)(13)
|
Type of Investment (2)
|
Investment
Date (3)
|
Maturity Date
|
Interest Rate (4)
|
Fair Value
Hierarchy (5)
|
Geographic
Region (6) |
Non-
Qualifying
Asset (7)
|
Principal
Amount (8)
|
Amortized
Cost
|
Fair Value (9)
|
% of Net
Assets
|
|||||||||||||||
Debt Securities - United States
|
||||||||||||||||||||||||||
Real Estate Services
|
||||||||||||||||||||||||||
|
Fixed interest rate |
No | $ | $ | $ | % |
||||||||||||||||||||
Wholesale Trade |
||||||||||||||||||||||||||
.
|
|
|
|
Fixed interest rate
|
|
|
Yes
|
|
|
|
|
|||||||||||||||
(d/b/a Jeeter)
|
|
|
|
Variable interest rate PRIME(11) + |
No |
|
||||||||||||||||||||
|
|
|
|
Fixed interest rate
|
|
|
No
|
|
|
|
|
|||||||||||||||
(f/k/a Shryne Group Inc.)
|
|
|
|
Variable interest rate PRIME(11) +
( |
|
|
No
|
|
|
|
|
|||||||||||||||
|
|
|
|
Variable interest rate PRIME(11) +
( |
|
|
Yes
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
||||||||||||||||||||||
|
||||||||||||||||||||||||||
Total: Debt Securities - United States (
|
|
|
|
|||||||||||||||||||||||
|
||||||||||||||||||||||||||
Total: Debt Securities (
|
|
|
|
|||||||||||||||||||||||
|
||||||||||||||||||||||||||
Equity Securities - United States |
Shares/
Units
|
|||||||||||||||||||||||||
Real Estate Services
|
||||||||||||||||||||||||||
|
$ | $ | % | |||||||||||||||||||||||
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||
Total: Equity Securities - United States (
|
||||||||||||||||||||||||||
Total: Equity Securities (
|
||||||||||||||||||||||||||
$
|
|
$
|
|
|
% | |||||||||||||||||||||
Cash Equivalents
|
||||||||||||||||||||||||||
State Street Institutional U.S. Government Money Market Fund (12)
|
$
|
|
$
|
|
|
%
|
||||||||||||||||||||
Cash Equivalents (
|
|
|
|
|||||||||||||||||||||||
|
||||||||||||||||||||||||||
Total Portfolio Investments and Cash Equivalents (
|
$
|
|
$
|
|
|
%
|
(1) |
|
(2) |
|
(3) |
|
(4) |
|
(5) |
|
(6) |
|
(7) |
|
(8) |
|
(9) |
|
(10) |
|
(11) |
|
(12) |
|
(13) |
(in millions)
Portfolio Company |
Total delayed
draw loan commitments
|
Less: funded commitments
|
Total unfunded
commitments
|
Less: commitments
substantially at discretion
of the Company
|
Less: unavailable
commitments due to
borrowing base or other
covenant restrictions
|
Total net delayed draw
commitments
|
||||||||||||||||||
Workbox Holdings, Inc.
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Portfolio Company (1)
|
Type of Investment (2)
|
Investment
Date (3)
|
Maturity Date
|
Interest Rate (4)
|
Fair Value
Hierarchy (5) |
Geographic
Region (6) |
Non-
Qualifying
Asset (7)
|
Principal
Amount (8)
|
Amortized
Cost
|
Fair Value (9)
|
% of
Net Assets
|
|||||||||||||||
Debt Securities - United States
|
|
|
|
|
|
|||||||||||||||||||||
Wholesale Trade (10)
|
|
|
||||||||||||||||||||||||
|
|
|
|
Fixed interest rate |
|
|
Yes
|
$ |
|
$ |
|
$ |
|
% |
||||||||||||
(d/b/a Jeeter)
|
Variable interest rate PRIME(11) + |
No | ||||||||||||||||||||||||
|
|
|
|
Fixed interest rate
|
|
|
No
|
|
|
|
|
|||||||||||||||
(f/k/a Shryne Group Inc.)
|
|
|
|
Variable interest rate PRIME(11) +
( |
|
|
No
|
|
|
|
|
|||||||||||||||
|
|
|
|
Variable interest rate PRIME(11) +
( |
|
|
Yes
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
$
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||
Total: Debt Securities - United States (
|
|
|
|
|
|
|||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||
Total: Debt Securities (
|
|
|
|
|
|
|||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||
Investment in Securities (
|
|
|
$
|
|
$
|
|
|
%
|
||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||
Cash Equivalents
|
|
|
||||||||||||||||||||||||
State Street Institutional U.S. Government Money Market Fund (12)
|
|
|
|
$
|
|
$
|
|
|
%
|
|||||||||||||||||
Cash Equivalents (
|
|
|
|
|
|
|||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||
Total Portfolio Investments and Cash Equivalents (
|
|
|
$
|
|
$
|
|
|
%
|
(1) |
All portfolio companies are located in the United States, as determined by the location of the portfolio company’s headquarters.
|
(2) |
|
(3) |
Investment date represents the date of initial investment, at which date interest began accruing.
|
(4) |
Interest rate is the fixed or variable rate of the debt investments.
|
(5) |
See Note 2 – Significant Accounting Policies and Note 4 — Fair Value of Financial Instruments in the accompanying notes to the financial statements.
|
(6) |
Geographic regions are determined by the respective portfolio company’s headquarters’ location.
|
(7) |
Under the Investment Company Act of 1940, as amended (the “1940 Act”), a business development company (“BDC”) may not acquire any “non-qualifying asset” (i.e., an asset other than assets of the type listed in Section 55(a) of the 1940
Act, which are referred to as “qualifying assets”), unless, at the time the acquisition is made, qualifying assets represent at least 70% of the BDC’s total assets. As of December 31, 2023 the aggregate fair value of non-qualifying assets
is $
|
(8) |
Principal is net of repayments, if any, as per the terms of the debt instrument’s contract.
|
(9) |
All investments were valued at fair value. See Note 4 — Fair Value of Financial Instruments in the accompanying notes to the financial statements.
|
(10) |
The Company uses the North American Industry Classification System (“NAICS”) code for classifying the industry grouping of its portfolio companies.
|
(11) |
|
(12) |
|
• |
With respect to investments for which market quotations are readily available, those investments will typically be valued at the bid price of those market quotations;
|
• |
With respect to investments for which market quotations are not readily available, the valuation process begins with the Adviser’s valuation committee establishing a preliminary valuation of each investment, which may be based on
valuations, or ranges of valuations, provided by independent valuation firm(s);
|
• |
Preliminary valuations are documented and discussed by the Adviser’s valuation committee and, where appropriate, the independent valuation firm(s); and
|
• |
The Adviser determines the fair value of each investment.
|
• |
Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date;
|
• |
Level 2 – Valuations based on quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not
active, or for which all significant inputs are observable, either directly or indirectly; and
|
• |
Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
|
June 30, 2024
|
||||||||||||||||
Amortized Cost
|
Fair Value
|
|||||||||||||||
Industry
|
Amount
|
%
|
Amount
|
%
|
||||||||||||
Wholesale Trade
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||
Real Estate Services |
||||||||||||||||
Total
|
$
|
|
|
%
|
$
|
|
|
%
|
December 31, 2023
|
||||||||||||||||
Amortized Cost
|
Fair Value
|
|||||||||||||||
Industry
|
Amount
|
%
|
Amount
|
%
|
||||||||||||
Wholesale Trade
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||
Total
|
$
|
|
|
%
|
$
|
|
|
%
|
June 30, 2024
|
||||||||||||||||
Amortized Cost
|
Fair Value
|
|||||||||||||||
Geographic Location
|
Amount
|
%
|
Amount
|
%
|
||||||||||||
West
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||
Midwest
|
|
|
|
|
||||||||||||
Northeast
|
|
|
|
|
||||||||||||
Total
|
$
|
|
|
%
|
$
|
|
|
%
|
December 31, 2023
|
||||||||||||||||
Amortized Cost
|
Fair Value
|
|||||||||||||||
Geographic Location
|
Amount
|
%
|
Amount
|
%
|
||||||||||||
West
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||
Midwest
|
|
|
|
|
||||||||||||
Northeast
|
|
|
|
|
||||||||||||
Total
|
$
|
|
|
%
|
$
|
|
|
%
|
June 30, 2024
|
||||||||||||||||
Amortized Cost
|
Fair Value
|
|||||||||||||||
Investment
|
Amount
|
%
|
Amount
|
%
|
||||||||||||
Senior Secured First Lien Term Loans
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||
Senior Secured Notes
|
|
|
|
|
||||||||||||
Equity |
||||||||||||||||
Total
|
$
|
|
|
%
|
$
|
|
|
%
|
December 31, 2023
|
||||||||||||||||
Amortized Cost
|
Fair Value
|
|||||||||||||||
Investment
|
Amount
|
%
|
Amount
|
%
|
||||||||||||
Senior Secured First Lien Term Loans
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||
Senior Secured Notes
|
|
|
|
|
||||||||||||
Total
|
$
|
|
|
%
|
$
|
|
|
%
|
Fair Value Measurements at June 30, 2024 Using
|
||||||||||||||||
Assets
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
Significant
Other
Observable
Inputs (Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
Total
|
||||||||||||
Senior Secured First Lien Term Loans
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Senior Secured Notes
|
|
|
|
|
||||||||||||
Equity |
||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
Fair Value Measurements at December 31, 2023 Using
|
||||||||||||||||
Assets
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
Significant
Other
Observable
Inputs (Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
Total
|
||||||||||||
Senior Secured First Lien Term Loans
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Senior Secured Notes
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
Investment Type
|
Fair Value as of
June 30, 2024 |
Valuation Techniques/
Methodologies
|
Unobservable
Input
|
Range
|
Weighted Average (1)
|
||||||||||
Senior Secured First Lien Term Loans
|
$
|
|
Discounted Cash Flow
|
Discount Rate
|
|
%
|
|
%
|
|||||||
Senior Secured Notes
|
|
Discounted Cash Flow
|
Discount Rate
|
|
%
|
|
%
|
||||||||
Preferred Equity Securities |
Enterprise Value Market Approach
|
Enterprise Valuation Multiple |
|||||||||||||
Warrants and Other Equity Securities |
Enterprise Value Market Approach |
Enterprise Valuation Multiple | |||||||||||||
Total
|
$
|
|
Investment Type
|
Fair Value as of
December 31, 2023
|
Valuation Techniques/ Methodologies
|
Unobservable
Input
|
Range
|
Weighted Average (1)
|
||||||||||
Senior Secured First Lien Term Loans
|
$
|
|
Discounted Cash Flow
|
Discount Rate
|
|
%
|
|
%
|
|||||||
Senior Secured Notes
|
|
Discounted Cash Flow
|
Discount Rate
|
|
%
|
|
%
|
||||||||
Total
|
$
|
|
Senior Secured
First Lien Term Loans |
Senior
Secured Notes |
Equity |
Total
Investments |
|||||||||||||
Fair Value as of December 31, 2023
|
$
|
|
$
|
|
$ |
$
|
|
|||||||||
Purchases
|
|
|
|
|||||||||||||
Accretion of discount and fees (amortization of premium), net
|
|
|
|
|||||||||||||
PIK interest |
||||||||||||||||
Proceeds from sales of investments and principal repayments
|
(
|
)
|
|
(
|
)
|
|||||||||||
Net realized gain (loss) on investments
|
|
|
|
|||||||||||||
Net change in unrealized appreciation (depreciation) from investments
|
|
|
|
|||||||||||||
Balance as of June 30, 2024
|
$
|
|
$
|
|
$ |
$
|
|
|||||||||
|
||||||||||||||||
Net change in unrealized appreciation/depreciation on Level 3 investments still held as of June 30, 2024
|
$
|
|
$
|
|
$ |
$
|
|
Senior Secured
First Lien Term Loans |
Senior Secured Notes |
Total
Investments |
||||||||||
Fair Value as of December 31, 2022
|
$
|
|
$ |
$
|
|
|||||||
Purchases
|
|
|
||||||||||
Accretion of discount and fees (amortization of premium), net
|
|
|
||||||||||
PIK interest
|
|
|
||||||||||
Proceeds from sales of investments and principal repayments
|
(
|
)
|
( |
) |
(
|
)
|
||||||
Net realized gain (loss) on investments
|
|
( |
) |
(
|
)
|
|||||||
Net change in unrealized appreciation (depreciation) on investments
|
|
|
||||||||||
Balance as of June 30, 2023
|
$
|
|
$ |
$
|
|
|||||||
Net change in unrealized appreciation/depreciation on Level 3 investments still held as of June 30, 2023
|
$
|
|
$ |
$
|
|
Declaration Date
|
Type
|
Record Date
|
Payment Date
|
Per Share
Amount |
Dividends Paid
|
|||||||||
|
|
|
|
$
|
|
$
|
|
|||||||
$ | $ |
Declaration Date |
Type |
Record Date
|
Payment Date
|
Shares
|
||||||
|
|
|
|
|||||||
Three Months Ended
|
Three Months Ended
|
Six Months Ended | Six Months Ended | |||||||||||||
June 30, 2024
|
June 30, 2023
|
June 30, 2024 | June 30, 2023 | |||||||||||||
Net increase (decrease) in net assets resulting from operations
|
$
|
|
$
|
|
$ | $ | ||||||||||
Weighted Average Shares Outstanding — basic and diluted
|
|
|
||||||||||||||
Net increase (decrease) in net assets resulting from operations per share — basic and diluted
|
$
|
|
$
|
|
$ | $ |
|
For the tax period from April 1, 2024
through June 30, 2024
|
For the tax year from April 1, 2023
through March 31, 2024
|
||||||
Ordinary Income
|
$
|
|
$
|
|
||||
Long-term Capital Gain
|
|
|
||||||
Return of Capital
|
|
|
||||||
Total Distributions
|
$
|
|
$
|
|
March 31, 2024
|
March 31, 2023 | |||||||
Undistributed ordinary income
|
$
|
|
$ |
|||||
Net unrealized appreciation (depreciation) on investments
|
|
|
||||||
Capital loss carry forwards |
|
( |
) | |||||
Other temporary differences
|
|
(
|
)
|
|
( |
) | ||
Total
|
$
|
(
|
)
|
$ |
June 30, 2024 |
March 31, 2024 |
December 31, 2023
|
||||||||||
Tax cost of investments and cash equivalents
|
$ | $ |
$
|
|
||||||||
Unrealized appreciation
|
$ | $ |
$
|
|
||||||||
Unrealized depreciation
|
$ | ( |
) | $ | ( |
) |
$
|
(
|
)
|
|||
Net unrealized appreciation (depreciation) from investments and cash equivalents
|
$ | $ |
$
|
|
For the six months ended
|
||||||||
June 30, 2024
|
June 30, 2023
|
|||||||
Per share data:
|
||||||||
Net asset value at beginning of period
|
$
|
|
$
|
|
||||
Net investment income (loss) (1)
|
|
|
||||||
Net realized and unrealized gains/(losses) on investments (1)
|
|
|
||||||
Net increase/(decrease) in net assets resulting from operations
|
|
|
||||||
Distributions from net investment income (loss)(4) |
( |
) | ||||||
Net asset value at end of period
|
$
|
|
$
|
|
||||
Net assets at end of period
|
$
|
|
$
|
|
||||
Shares outstanding at end of period
|
|
|
||||||
Weighted average net assets
|
$
|
|
$
|
|
||||
|
||||||||
Per share market value at end of period
|
$
|
|
$
|
|
||||
Total return based on market value (2)
|
|
%
|
(
|
)%
|
||||
Total return based on net asset value (2)
|
|
%
|
|
%
|
||||
|
||||||||
Ratio/Supplemental data:
|
||||||||
Ratio of expenses to average net assets (3)
|
|
%
|
|
%
|
||||
Ratio of net investment income (loss) to average net assets (3)
|
|
%
|
|
%
|
||||
Portfolio turnover (3)
|
|
%
|
|
%
|
(1) |
|
(2) |
|
(3) |
|
(4) |
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
• |
the cost of our organization and offerings;
|
• |
the cost of calculating our NAV, including the cost of any third-party valuation services;
|
• |
the cost of effecting sales and repurchases of shares of our common stock and other securities;
|
• |
fees and expenses payable under any underwriting agreements, if any;
|
• |
debt service and other costs of borrowings or other financing arrangements;
|
• |
costs of hedging;
|
• |
expenses, including travel expenses, incurred by the Adviser, or members of the investment team, or payable to third-parties, performing due diligence on prospective portfolio companies and, if necessary,
enforcing our rights;
|
• |
management and incentive fees payable pursuant to the Investment Advisory Agreement;
|
• |
fees payable to third-parties relating to, or associated with, making investments and valuing investments (including third-party valuation firms);
|
• |
costs, including legal fees, associated with compliance under cannabis laws;
|
• |
transfer agent and custodial fees;
|
• |
fees and expenses associated with marketing efforts (including attendance at industry and investor conferences and similar events);
|
• |
federal and state registration fees;
|
• |
any exchange listing fees and fees payable to rating agencies;
|
• |
federal, state and local taxes;
|
• |
independent directors’ fees and expenses, including travel expenses;
|
• |
cost of preparing financial statements and maintaining books and records and filing reports or other documents with the SEC (or other regulatory bodies) and other reporting and compliance costs, and the
compensation of professionals responsible for the preparation of the foregoing;
|
• |
the cost of any reports, proxy statements or other notices to our stockholders (including printing and mailing costs), the costs of any stockholder or director meetings and the compensation of investor relations
personnel responsible for the preparation of the foregoing and related matters;
|
• |
brokerage commissions and other compensation payable to brokers or dealers;
|
• |
research and market data;
|
• |
fidelity bond, directors’ and officers’ errors and omissions liability insurance and other insurance premiums;
|
• |
direct costs and expenses of administration, including printing, mailing and staff;
|
• |
fees and expenses associated with independent audits, and outside legal and consulting costs;
|
• |
costs of winding up;
|
• |
costs incurred in connection with the formation or maintenance of entities or vehicles to hold our assets for tax or other purposes;
|
• |
extraordinary expenses (such as litigation or indemnification); and
|
• |
costs associated with reporting and compliance obligations under the 1940 Act and applicable federal and state securities laws.
|
June 30, 2024
|
||||||||
Type
|
Amortized Cost
|
Fair Value
|
||||||
Senior Secured First Lien Term Loans
|
82.9
|
%
|
83.0
|
%
|
||||
Senior Secured Notes
|
15.7
|
15.5
|
||||||
Equity
|
1.4
|
1.5
|
||||||
Total
|
100.0
|
%
|
100.0
|
%
|
December 31, 2023
|
||||||||
Type
|
Amortized Cost
|
Fair Value
|
||||||
Senior Secured First Lien Term Loans
|
84.9
|
%
|
85.0
|
%
|
||||
Senior Secured Notes
|
15.1
|
15.0
|
||||||
Total
|
100.0
|
%
|
100.0
|
%
|
June 30, 2024
|
||||||||
Geographic Region
|
Amortized Cost
|
Fair Value
|
||||||
West
|
47.9
|
%
|
47.5
|
%
|
||||
Midwest
|
44.3
|
44.6
|
||||||
Northeast
|
7.8
|
7.9
|
||||||
Total
|
100.0
|
%
|
100.0
|
%
|
December 31, 2023
|
||||||||
Geographic Region
|
Amortized Cost
|
Fair Value
|
||||||
West
|
46.5
|
%
|
46.4
|
%
|
||||
Midwest
|
46.0
|
46.0
|
||||||
Northeast
|
7.5
|
7.6
|
||||||
Total
|
100.0
|
%
|
100.0
|
%
|
June 30, 2024
|
||||||||
Industry
|
Amortized Cost
|
Fair Value
|
||||||
Wholesale Trade
|
97.0
|
%
|
96.7
|
%
|
||||
Real Estate Services
|
3.0
|
3.3
|
||||||
Total
|
100.0
|
%
|
100.0
|
%
|
December 31, 2023
|
||||||||
Industry
|
Amortized Cost
|
Fair Value
|
||||||
Wholesale Trade
|
100.0
|
%
|
100.0
|
%
|
||||
Total
|
100.0
|
%
|
100.0
|
%
|
Six Months Ended
|
Six Months Ended
|
|||||||
June 30, 2024
|
June 30, 2023
|
|||||||
Beginning Portfolio, at fair value
|
$
|
54,120,000
|
$
|
50,254,550
|
||||
Purchases
|
1,575,000
|
8,442,000
|
||||||
Accretion of discount and fees (amortization of premium), net
|
349,179
|
301,558
|
||||||
PIK interest
|
113,137
|
62,587
|
||||||
Proceeds from sales of investments and principal repayments
|
(3,126,000
|
)
|
(1,690,000
|
)
|
||||
Net realized gain/(loss) on investments
|
-
|
(210,767
|
)
|
|||||
Net change in unrealized appreciation/(depreciation) on investments
|
366,848
|
509,116
|
||||||
Ending Portfolio, at fair value
|
$
|
53,398,164
|
$
|
57,669,044
|
Investment
Performance
Risk Rating
|
Summary Description
|
|
Grade 1
|
Investments rated 1 involve the least amount of risk to our initial cost basis. The borrower is performing above expectations, and the trends and risk factors for this investment since origination or acquisition
are generally favorable. Full return of principal, interest and dividend income is expected.
|
|
Grade 2
|
Investment is performing in-line with expectations. Investments rated 2 involve an acceptable level of risk that is similar to the risk at the time of origination or acquisition. Risk factors remain neutral or
favorable compared with initial underwriting. All investments or acquired investments in new portfolio companies are initially assessed a rating of 2.
|
|
Grade 3
|
Investments rated 3 involve a borrower performing below expectations and indicates that the loan’s risk has increased somewhat since origination or acquisition. Capital impairment or payment delinquency is not
anticipated. The investment may also be out of compliance with certain financial covenants.
|
|
Grade 4
|
Investments rated 4 involve a borrower performing materially below expectations and indicates that the loan’s risk has increased materially since origination or acquisition. In addition to the borrower being
generally out of compliance with debt covenants, loan payments may be past due (but generally not more than 120 days past due). Delinquency of interest and / or dividend payments in anticipated. No loss of principal is anticipated.
|
|
Grade 5
|
Investments rated 5 involve a borrower performing substantially below expectations and indicates that the loan’s risk has increased substantially since origination or acquisition. It is anticipated that the
Company will not recoup its initial cost and may realize a loss upon exit. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. Loans rated 5 are not anticipated to be repaid in full and we will
reduce the fair market value of the loan to the amount we anticipate will be recovered.
|
June 30, 2024
|
||||||||||
Investment Performance Risk Rating
|
Investments at Fair
Value
|
Percentage of Total
Investments
|
||||||||
1
|
$
|
-
|
-
|
%
|
||||||
2
|
53,398,164
|
100.00
|
||||||||
3
|
-
|
-
|
||||||||
4
|
-
|
-
|
||||||||
5
|
-
|
-
|
||||||||
Total
|
$
|
53,398,164
|
100.00
|
%
|
December 31, 2023
|
||||||||||
Investment Performance Risk Rating
|
Investments at Fair
Value
|
Percentage of Total
Investments
|
||||||||
1
|
$
|
-
|
-
|
%
|
||||||
2
|
54,120,000
|
100.00
|
||||||||
3
|
-
|
-
|
||||||||
4
|
-
|
-
|
||||||||
5
|
-
|
-
|
||||||||
Total
|
$
|
54,120,000
|
100.00
|
%
|
Three Months Ended
|
Three Months Ended
|
Six Months Ended
|
Six Months Ended
|
|||||||||||||
June 30, 2024
|
June 30, 2023
|
June 30, 2024
|
June 30, 2023
|
|||||||||||||
Stated interest income
|
$
|
2,522,397
|
$
|
2,550,696
|
$
|
5,054,514
|
$
|
4,856,143
|
||||||||
Accretion of discount and fees (amortization of premium), net
|
207,750
|
160,739
|
349,179
|
301,558
|
||||||||||||
Payment in-kind interest
|
60,186
|
51,014
|
113,137
|
62,587
|
||||||||||||
Total interest income
|
2,790,333
|
2,762,449
|
5,516,830
|
5,220,288
|
||||||||||||
Other fee income
|
291,000
|
131,250
|
324,750
|
131,250
|
||||||||||||
Total investment income
|
$
|
3,081,333
|
$
|
2,893,699
|
$
|
5,841,580
|
$
|
5,351,538
|
|
For the six
months ended |
For the six
months ended |
||||||||||||||
|
June 30, 2024
|
June 30, 2023
|
$ Change
|
% Change
|
||||||||||||
Transaction expenses related to the Loan Portfolio Acquisition
|
$
|
2,639,069
|
$
|
-
|
$
|
2,639,069
|
100
|
%
|
||||||||
Management fee
|
492,455
|
495,908
|
(3,453
|
)
|
-1
|
%
|
||||||||||
Income-based incentive fees
|
328,503
|
646,494
|
(317,991
|
)
|
-49
|
%
|
||||||||||
Audit expense
|
203,550
|
185,383
|
18,167
|
10
|
%
|
|||||||||||
Administrator fees
|
199,643
|
165,697
|
33,946
|
20
|
%
|
|||||||||||
Legal expenses
|
139,873
|
186,016
|
(46,143
|
)
|
-25
|
%
|
||||||||||
Insurance expense
|
132,491
|
135,475
|
(2,984
|
)
|
-2
|
%
|
||||||||||
Capital gains incentive fees
|
73,369
|
5,000
|
68,369
|
1367
|
%
|
|||||||||||
Other expenses
|
66,667
|
39,708
|
26,959
|
68
|
%
|
|||||||||||
Director expenses
|
54,319
|
67,690
|
(13,371
|
)
|
-20
|
%
|
||||||||||
Valuation fees
|
27,053
|
94,065
|
(67,012
|
)
|
-71
|
%
|
||||||||||
Custodian fees
|
23,850
|
24,000
|
(150
|
)
|
-1
|
%
|
||||||||||
Professional fees
|
14,914
|
35,967
|
(21,053
|
)
|
-59
|
%
|
||||||||||
Total expenses
|
$
|
4,395,756
|
$
|
2,081,403
|
$
|
2,314,353
|
111
|
%
|
Three Months Ended
|
Three Months Ended
|
Six Months Ended
|
Six Months Ended
|
|||||||||||||
June 30, 2024
|
June 30, 2023
|
June 30, 2024
|
June 30, 2023
|
|||||||||||||
Gross unrealized appreciation
|
$
|
190,134
|
$
|
99,357
|
$
|
389,573
|
$
|
605,659
|
||||||||
Gross unrealized depreciation
|
(422,906
|
)
|
(576,598
|
)
|
(22,725
|
)
|
(96,543
|
)
|
||||||||
Total net change in unrealized appreciation (depreciation) from investments
|
$
|
(232,772
|
)
|
$
|
(477,241
|
)
|
$
|
366,848
|
$
|
509,116
|
Three Months Ended
|
Three Months Ended
|
Six Months Ended
|
Six Months Ended
|
|||||||||||||
June 30, 2024
|
June 30, 2023
|
June 30, 2024
|
June 30, 2023
|
|||||||||||||
Verano Holdings Corp.
|
$
|
(125,424
|
)
|
$
|
(340,337
|
)
|
$
|
47,611
|
$
|
124,811
|
||||||
Workbox Holdings Inc. |
169,000 |
- |
169,000 |
- |
||||||||||||
STIIIZY, Inc. (f/k/a Shryne Group Inc.)
|
(251,788
|
)
|
68,415
|
131,680
|
341,831
|
|||||||||||
Curaleaf Holdings, Inc.
|
(36,964
|
)
|
(48,917
|
)
|
(5,519
|
)
|
108,076
|
|||||||||
MariMed Inc.
|
-
|
30,864
|
-
|
30,863
|
||||||||||||
Dreamfields Brands, Inc. (d/b/a Jeeter)
|
(8,730
|
)
|
78
|
(17,206
|
)
|
78
|
||||||||||
PharmaCann, Inc.
|
21,134
|
(180,757
|
)
|
41,282
|
(96,543
|
)
|
||||||||||
AYR Wellness, Inc.
|
-
|
(6,587
|
)
|
-
|
-
|
|||||||||||
Total net change in unrealized appreciation (depreciation) on investments
|
$
|
(232,772
|
)
|
$
|
(477,241
|
)
|
$
|
366,848
|
$
|
509,116
|
• |
With respect to investments for which market quotations are readily available, those investments will typically be valued at the bid price of those market quotations;
|
• |
With respect to investments for which market quotations are not readily available, the valuation process begins with the Adviser’s valuation committee establishing a preliminary valuation of each investment, which
may be based on valuations, or ranges of valuations, provided by independent valuation firm(s);
|
• |
Preliminary valuations are documented and discussed by the Adviser’s valuation committee and, where appropriate, the independent valuation firm(s); and
|
• |
The Adviser determines the fair value of each investment.
|
• |
Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date;
|
• |
Level 2 – Valuations based on quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or for which all
significant inputs are observable, either directly or indirectly; and
|
• |
Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
|
Price Range
|
||||||||||||||||||||||||
Class and Period
|
Net Asset
Value(1)
|
High
|
Low
|
High Sales Price
Premium
(Discount) to Net
Asset Value(2)
|
Low Sales Price
Premium
(Discount) to Net
Asset Value(2)
|
Cash
Dividend Per
Share(3)
|
||||||||||||||||||
Year Ended December 31, 2024
|
||||||||||||||||||||||||
Third Quarter (Through August 6, 2024)
|
*
|
$ |
12.00
|
$
|
11.27 |
*
|
*
|
*
|
||||||||||||||||
Second Quarter
|
$
|
13.56
|
$
|
12.38
|
$
|
9.61
|
-8.7
|
%
|
-29.1
|
%
|
$
|
0.25
|
||||||||||||
First Quarter
|
$
|
13.60
|
$
|
10.28
|
$
|
7.65
|
-24.4
|
%
|
-43.8
|
%
|
$
|
0.25
|
||||||||||||
Year Ended December 31, 2023
|
||||||||||||||||||||||||
Fourth Quarter
|
$
|
13.77
|
$
|
9.81
|
$
|
8.32
|
-28.8
|
%
|
-39.6
|
%
|
$
|
0.70
|
(6)
|
|||||||||||
Third Quarter
|
$
|
14.06
|
$
|
10.37
|
$
|
7.65
|
-26.3
|
%
|
-45.6
|
%
|
$
|
0.63
|
(6)
|
|||||||||||
Second Quarter
|
$
|
14.49
|
$
|
9.19
|
$
|
7.82
|
-36.3
|
%
|
-45.8
|
%
|
-
|
|||||||||||||
First Quarter
|
$
|
14.29
|
$
|
9.98
|
$
|
8.25
|
-30.2
|
%
|
-42.3
|
%
|
-
|
|||||||||||||
Year Ended December 31, 2022(4)
|
||||||||||||||||||||||||
Fourth Quarter
|
$
|
13.91
|
$
|
10.55
|
$
|
9.57
|
-24.2
|
%
|
-31.2
|
%
|
-
|
|||||||||||||
Third Quarter
|
$
|
13.73
|
$
|
10.74
|
$
|
9.00
|
-21.8
|
%
|
-34.5
|
%
|
-
|
|||||||||||||
Second Quarter
|
$
|
13.64
|
$
|
13.50
|
$
|
7.80
|
-1.0
|
%
|
-42.8
|
%
|
-
|
|||||||||||||
First Quarter(5)
|
$
|
13.61
|
$
|
14.41
|
$
|
12.57
|
5.9
|
%
|
-7.6
|
%
|
-
|
(1) |
Net asset value per share is determined as of the last day in the relevant quarter and therefore may not reflect the net asset value per share on the date of the high and low closing sales prices. The net asset
values shown are based on outstanding shares at the end of the relevant quarter.
|
(2) |
Calculated as the respective high or low closing sales price less net asset value, divided by net asset value (in each case, as of the end of the applicable quarter).
|
(3) |
Represents the dividend or distribution declared in the relevant quarter.
|
(4) |
On November 8, 2022, our Board of Directors approved a change to our fiscal year end from March 31 to December 31.
|
(5) |
Shares of our common stock began trading on the Nasdaq Global Market on February 4, 2022 under the trading symbol “SSIC.”
|
(6) |
Consists of a quarterly dividend and a special dividend.
|
* |
Not determined at time of filing.
|
Declaration Date
|
Type
|
Record Date
|
Payment Date
|
Per Share
Amount |
Dividends Paid
|
||||||
August 10, 2023
|
Quarterly
|
September 15, 2023
|
September 29, 2023
|
$
|
0.23
|
$
|
1,429,375
|
||||
August 10, 2023
|
Special
|
September 15, 2023
|
September 29, 2023
|
$
|
0.40
|
$
|
2,485,869
|
||||
November 9, 2023
|
Quarterly
|
December 20, 2023
|
December 29, 2023
|
$
|
0.25
|
$
|
1,553,676
|
||||
November 9, 2023
|
Special
|
December 20, 2023
|
December 29, 2023
|
$
|
0.45
|
$
|
2,796,617
|
||||
March 8, 2024
|
Quarterly
|
March 20, 2024
|
March 28, 2024
|
$
|
0.25
|
$
|
1,553,736
|
||||
May 9, 2024
|
Quarterly
|
June 20, 2024
|
June 28, 2024
|
$
|
0.25
|
$
|
1,553,738
|
Declaration Date
|
Type
|
Record Date
|
Payment Date
|
Shares
|
|||
March 8, 2024
|
Quarterly
|
March 20, 2024
|
March 28, 2024
|
8
|
|||
May 9, 2024
|
Quarterly
|
June 20, 2024
|
June 28, 2024
|
15
|
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk
|
Change in Interest Rates
|
Interest Income
|
Interest expense
|
Net Income/(Loss)
|
|||||||||
Up 300 basis points
|
$
|
1,299
|
$
|
-
|
$
|
1,299
|
||||||
Up 200 basis points
|
866 |
-
|
866
|
|||||||||
Up 100 basis points
|
433
|
-
|
433
|
|||||||||
Down 100 basis points
|
(433
|
)
|
-
|
(433
|
)
|
|||||||
Down 200 basis points
|
(823
|
)
|
-
|
(823
|
)
|
|||||||
Down 300 basis points
|
(1,079
|
)
|
-
|
(1,079
|
)
|
Change in Interest Rates
|
Interest Income
|
Interest expense
|
Net Income/(Loss)
|
|||||||||
Up 300 basis points
|
$
|
1,390
|
$
|
-
|
$
|
1,390
|
||||||
Up 200 basis points
|
926
|
-
|
926
|
|||||||||
Up 100 basis points
|
463
|
-
|
463
|
|||||||||
Down 100 basis points
|
(463
|
)
|
-
|
(463
|
)
|
|||||||
Down 200 basis points
|
(883
|
)
|
-
|
(883
|
)
|
|||||||
Down 300 basis points
|
(1,146
|
)
|
-
|
(1,146
|
)
|
Item 4. |
Controls and Procedures
|
Item 1. |
Legal Proceedings
|
Item 1A. |
Risk Factors
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3. |
Defaults Upon Senior Securities
|
Item 4. |
Mine Safety Disclosures
|
Item 5. |
Other Information
|
Item 6. |
Exhibits
|
Exhibit
Number
|
Description of Exhibit
|
|
Purchase Agreement by and between Silver Spike Investment Corp. and Chicago Atlantic Loan Portfolio, LLC dated as of February 18, 2024(1)
|
||
Articles of Amendment and Restatement of the Company(2)
|
||
Amended and Restated Bylaws of the Company(2)
|
||
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002*
|
||
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002*
|
||
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
|
||
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
|
* |
Filed herewith.
|
(1) |
Incorporated by reference to Exhibit 2.1 of the Company’s current report on Form 8-K filed on February 23, 2024.
|
(2) |
Incorporated by reference to the Company’s annual report on Form 10-K/A, filed on June 30, 2022.
|
SILVER SPIKE INVESTMENT CORP.
|
||
By:
|
/s/ Scott Gordon
|
|
Scott Gordon
|
||
Chief Executive Officer (Principal Executive Officer)
|
||
By:
|
/s/ Umesh Mahajan
|
|
Umesh Mahajan
|
||
Chief Financial Officer (Principal Financial and Accounting Officer)
|
Date: August 8, 2024
|
By:
|
/s/ Scott Gordon
|
Scott Gordon
|
||
Chief Executive Officer
(Principal Executive Officer)
|
Date: August 8, 2024
|
By:
|
/s/ Umesh Mahajan
|
Umesh Mahajan
|
||
Chief Financial Officer
(Principal Financial Officer)
|
Date: August 8, 2024
|
By:
|
/s/ Scott Gordon
|
Scott Gordon
|
||
Chief Executive Officer
(Principal Executive Officer)
|
Date: August 8, 2024
|
By:
|
/s/ Umesh Mahajan
|
Umesh Mahajan
|
||
Chief Financial Officer
(Principal Financial Officer)
|
Statements of Assets and Liabilities (Parenthetical) - USD ($) |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|
ASSETS | ||
Amortized cost | $ 52,382,633 | $ 53,471,317 |
NET ASSETS | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 6,214,964 | 6,214,941 |
Common stock, shares outstanding (in shares) | 6,214,964 | 6,214,941 |
Investment, Unaffiliated Issuer [Member] | ||
ASSETS | ||
Amortized cost | $ 52,382,633 | $ 53,471,317 |
Schedule of Investments - USD ($) |
6 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 |
Dec. 31, 2023 |
|||||||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||||||||
Amortized cost | $ 52,382,633 | $ 53,471,317 | ||||||||||||||||||||||||||||
Fair value | 53,398,164 | 54,120,000 | ||||||||||||||||||||||||||||
Investment, Identifier [Axis]: Cash Equivalents | ||||||||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||||||||
Amortized cost | 34,004,000 | 32,612,000 | ||||||||||||||||||||||||||||
Fair value | [1] | $ 34,004,000 | $ 32,612,000 | |||||||||||||||||||||||||||
Percentage of net assets | 40.36% | [2] | 38.12% | [3] | ||||||||||||||||||||||||||
Investment, Identifier [Axis]: Curaleaf Holdings, Inc. Senior Secured Notes Due 12/15/2026 Fixed Interest Rate 8% | ||||||||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||||||||
Investment, Issuer Name [Extensible Enumeration] | [4],[6] | ssic:CuraleafHoldingsIncMember | [5] | ssic:CuraleafHoldingsIncMember | ||||||||||||||||||||||||||
Investment, Type [Extensible Enumeration] | ssic:SeniorSecuredNoteMember | [7] | ssic:SeniorSecuredNoteMember | [6],[8] | ||||||||||||||||||||||||||
Investment, Significant Unobservable Input [true false] | true | true | ||||||||||||||||||||||||||||
Investment date | [9] | Oct. 11, 2022 | Oct. 11, 2022 | [6] | ||||||||||||||||||||||||||
Maturity date | Dec. 15, 2026 | Dec. 15, 2026 | [6] | |||||||||||||||||||||||||||
Debt Securities, Fair Value by Fair Value Hierarchy Level [Extensible Enumeration] | [10] | Significant Unobservable Inputs (Level 3) [Member] | Significant Unobservable Inputs (Level 3) [Member] | [6] | ||||||||||||||||||||||||||
Investment, Issuer Geographic Region [Extensible Enumeration] | [11] | Northeast [Member] | Northeast [Member] | [6] | ||||||||||||||||||||||||||
Principal amount | [12] | $ 4,500,000 | $ 4,500,000 | [6] | ||||||||||||||||||||||||||
Amortized cost | 4,063,000 | 3,989,000 | [6] | |||||||||||||||||||||||||||
Fair value | [1] | $ 4,208,000 | $ 4,140,000 | [6] | ||||||||||||||||||||||||||
Percentage of net assets | 4.99% | 4.84% | [6] | |||||||||||||||||||||||||||
Investment, Identifier [Axis]: Debt Securities | ||||||||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||||||||
Amortized cost | $ 51,640,000 | |||||||||||||||||||||||||||||
Fair value | [1] | $ 52,617,000 | ||||||||||||||||||||||||||||
Percentage of net assets | 62.45% | |||||||||||||||||||||||||||||
Investment, Identifier [Axis]: Debt and Equity Securities | ||||||||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||||||||
Amortized cost | $ 52,383,000 | |||||||||||||||||||||||||||||
Fair value | [1] | $ 53,398,000 | ||||||||||||||||||||||||||||
Percentage of net assets | 63.37% | |||||||||||||||||||||||||||||
Investment, Identifier [Axis]: Dreamfields Brands, Inc. Senior Secured First Lien Term Loan Due 5/3/2026 Variable Interest Rate Prime Spread 8.75% PRIME Floor 7.5% | ||||||||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||||||||
Investment, Issuer Name [Extensible Enumeration] | [4],[6] | ssic:DreamfieldsBrandsIncMember | [5] | ssic:DreamfieldsBrandsIncMember | ||||||||||||||||||||||||||
Investment, Type [Extensible Enumeration] | [7] | ssic:SeniorSecuredFirstLienTermLoanMember | ssic:SeniorSecuredFirstLienTermLoanMember | [6] | ||||||||||||||||||||||||||
Investment, Significant Unobservable Input [true false] | true | true | ||||||||||||||||||||||||||||
Investment date | [9] | May 03, 2023 | May 03, 2023 | [6] | ||||||||||||||||||||||||||
Maturity date | May 03, 2026 | May 03, 2026 | [6] | |||||||||||||||||||||||||||
Debt Securities, Fair Value by Fair Value Hierarchy Level [Extensible Enumeration] | [10] | Significant Unobservable Inputs (Level 3) [Member] | Significant Unobservable Inputs (Level 3) [Member] | [6] | ||||||||||||||||||||||||||
Investment, Issuer Geographic Region [Extensible Enumeration] | [11] | West [Member] | West [Member] | [6] | ||||||||||||||||||||||||||
Principal amount | [12] | $ 4,320,000 | $ 4,320,000 | [6] | ||||||||||||||||||||||||||
Amortized cost | 4,246,000 | 4,229,000 | [6] | |||||||||||||||||||||||||||
Fair value | [1] | $ 4,320,000 | $ 4,320,000 | [6] | ||||||||||||||||||||||||||
Percentage of net assets | 5.13% | 5.05% | [6] | |||||||||||||||||||||||||||
Investment, Identifier [Axis]: Equity Securities | ||||||||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||||||||
Amortized cost | $ 743,000 | |||||||||||||||||||||||||||||
Fair value | $ 781,000 | |||||||||||||||||||||||||||||
Percentage of net assets | 0.92% | |||||||||||||||||||||||||||||
Investment, Identifier [Axis]: Investments and Cash Equivalents | ||||||||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||||||||
Investment, Issuer [Extensible Enumeration] | Investment, Unaffiliated Issuer [Member] | Investment, Unaffiliated Issuer [Member] | ||||||||||||||||||||||||||||
Amortized cost | $ 86,387,000 | $ 86,083,000 | ||||||||||||||||||||||||||||
Fair value | [1] | $ 87,402,000 | $ 86,732,000 | |||||||||||||||||||||||||||
Percentage of net assets | 103.73% | 101.38% | ||||||||||||||||||||||||||||
Investment, Identifier [Axis]: Non Qualifying Assets | ||||||||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||||||||
Percentage of net assets | [13] | 24.64% | 29.30% | |||||||||||||||||||||||||||
Investment, Identifier [Axis]: PharmaCann, Inc. Senior Secured Loan Due 6/30/2025 Fixed Interest Rate 12% | ||||||||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||||||||
Investment, Issuer Name [Extensible Enumeration] | [4],[6] | ssic:PharmaCannIncMember | [5] | ssic:PharmaCannIncMember | ||||||||||||||||||||||||||
Investment, Type [Extensible Enumeration] | ssic:SeniorSecuredNoteMember | [7] | ssic:SeniorSecuredNoteMember | [6],[8] | ||||||||||||||||||||||||||
Investment, Significant Unobservable Input [true false] | true | true | ||||||||||||||||||||||||||||
Investment date | [9] | Jun. 30, 2022 | Jun. 30, 2022 | [6] | ||||||||||||||||||||||||||
Maturity date | Jun. 30, 2025 | Jun. 30, 2025 | [6] | |||||||||||||||||||||||||||
Debt Securities, Fair Value by Fair Value Hierarchy Level [Extensible Enumeration] | [10] | Significant Unobservable Inputs (Level 3) [Member] | Significant Unobservable Inputs (Level 3) [Member] | [6] | ||||||||||||||||||||||||||
Investment, Issuer Geographic Region [Extensible Enumeration] | [11] | Midwest [Member] | Midwest [Member] | [6] | ||||||||||||||||||||||||||
Principal amount | [12] | $ 4,250,000 | $ 4,250,000 | [6] | ||||||||||||||||||||||||||
Amortized cost | 4,153,000 | 4,109,000 | [6] | |||||||||||||||||||||||||||
Fair value | [1] | $ 4,059,000 | $ 3,974,000 | [6] | ||||||||||||||||||||||||||
Percentage of net assets | 4.82% | 4.65% | [6] | |||||||||||||||||||||||||||
Investment, Identifier [Axis]: Real Estate Services, Debt Securities | ||||||||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||||||||
Principal amount | [12] | $ 1,083,000 | ||||||||||||||||||||||||||||
Amortized cost | 840,000 | |||||||||||||||||||||||||||||
Fair value | [1] | $ 971,000 | ||||||||||||||||||||||||||||
Percentage of net assets | 1.15% | |||||||||||||||||||||||||||||
Investment, Identifier [Axis]: Real Estate Services, Equity Securities | ||||||||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||||||||
Amortized cost | $ 743,000 | |||||||||||||||||||||||||||||
Fair value | $ 781,000 | |||||||||||||||||||||||||||||
Percentage of net assets | 0.92% | |||||||||||||||||||||||||||||
Investment, Identifier [Axis]: STIIIZY, Inc. Senior Secured First Lien Term Loan Due 5/26/2026 Variable Interest Rate Prime Spread 8.5% Prime Floor 4.0% PIK 1.0% | ||||||||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||||||||
Investment, Issuer Name [Extensible Enumeration] | [4],[6] | ssic:ShryneGroupIncMember | [5] | ssic:ShryneGroupIncMember | ||||||||||||||||||||||||||
Investment, Type [Extensible Enumeration] | ssic:SeniorSecuredFirstLienTermLoanMember | [7] | ssic:SeniorSecuredFirstLienTermLoanMember | [6],[8] | ||||||||||||||||||||||||||
Investment, Significant Unobservable Input [true false] | true | true | ||||||||||||||||||||||||||||
Investment date | [9] | May 26, 2022 | May 26, 2022 | [6] | ||||||||||||||||||||||||||
Maturity date | May 26, 2026 | May 26, 2026 | [6] | |||||||||||||||||||||||||||
Debt Securities, Fair Value by Fair Value Hierarchy Level [Extensible Enumeration] | [10] | Significant Unobservable Inputs (Level 3) [Member] | Significant Unobservable Inputs (Level 3) [Member] | [6] | ||||||||||||||||||||||||||
Investment, Issuer Geographic Region [Extensible Enumeration] | [11] | West [Member] | West [Member] | [6] | ||||||||||||||||||||||||||
Principal amount | [12] | $ 21,170,000 | $ 21,065,000 | [6] | ||||||||||||||||||||||||||
Amortized cost | 20,872,000 | 20,682,000 | [6] | |||||||||||||||||||||||||||
Fair value | [1] | $ 21,070,000 | $ 20,749,000 | [6] | ||||||||||||||||||||||||||
Percentage of net assets | 25.01% | 24.25% | [6] | |||||||||||||||||||||||||||
Investment, Identifier [Axis]: State Street Institutional U.S. Government Money Market Fund | ||||||||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||||||||
Debt Securities, Fair Value by Fair Value Hierarchy Level [Extensible Enumeration] | [3] | Quoted Prices in Active Markets for Identical Assets (Level 1) Member | [2] | Quoted Prices in Active Markets for Identical Assets (Level 1) Member | ||||||||||||||||||||||||||
Amortized cost | $ 34,004,000 | [2] | $ 32,612,000 | |||||||||||||||||||||||||||
Fair value | [1] | $ 34,004,000 | [2] | $ 32,612,000 | ||||||||||||||||||||||||||
Percentage of net assets | 40.36% | [2] | 38.12% | [3] | ||||||||||||||||||||||||||
Investment, Identifier [Axis]: Verano Holdings Corp. Senior Secured First Lien Term Loan Due 10/30/2026 Variable Interest Rate Prime Spread 6.5% Prime Floor 6.25% | ||||||||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||||||||
Investment, Issuer Name [Extensible Enumeration] | [4],[6] | ssic:VeranoHoldingsCorpMember | [5] | ssic:VeranoHoldingsCorpMember | ||||||||||||||||||||||||||
Investment, Type [Extensible Enumeration] | ssic:SeniorSecuredFirstLienTermLoanMember | [7] | ssic:SeniorSecuredFirstLienTermLoanMember | [6],[8] | ||||||||||||||||||||||||||
Investment, Significant Unobservable Input [true false] | true | true | ||||||||||||||||||||||||||||
Investment date | [9] | Oct. 27, 2022 | Oct. 27, 2022 | [6] | ||||||||||||||||||||||||||
Maturity date | Oct. 30, 2026 | Oct. 30, 2026 | [6] | |||||||||||||||||||||||||||
Debt Securities, Fair Value by Fair Value Hierarchy Level [Extensible Enumeration] | [10] | Significant Unobservable Inputs (Level 3) [Member] | Significant Unobservable Inputs (Level 3) [Member] | [6] | ||||||||||||||||||||||||||
Investment, Issuer Geographic Region [Extensible Enumeration] | [11] | Midwest [Member] | Midwest [Member] | [6] | ||||||||||||||||||||||||||
Principal amount | [12] | $ 17,811,000 | $ 20,937,000 | [6] | ||||||||||||||||||||||||||
Amortized cost | 17,466,000 | 20,462,000 | [6] | |||||||||||||||||||||||||||
Fair value | [1] | $ 17,989,000 | $ 20,937,000 | [6] | ||||||||||||||||||||||||||
Percentage of net assets | 21.35% | 24.47% | [6] | |||||||||||||||||||||||||||
Investment, Identifier [Axis]: Wholesale Trade Debt Securities | ||||||||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||||||||
Principal amount | [12] | $ 52,051,000 | $ 55,072,000 | |||||||||||||||||||||||||||
Amortized cost | 50,800,000 | 53,471,000 | ||||||||||||||||||||||||||||
Fair value | [1] | $ 51,646,000 | $ 54,120,000 | |||||||||||||||||||||||||||
Percentage of net assets | 61.30% | 63.26% | ||||||||||||||||||||||||||||
Investment, Identifier [Axis]: Workbox Holdings, Inc. Senior Secured First Lien Term Loan Due 5/31/2029 Fixed Interest Rate 6.0% PIK 6.0% | ||||||||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||||||||
Investment, Issuer Name [Extensible Enumeration] | [4],[5],[6] | ssic:WorkboxHoldingsIncMember | ||||||||||||||||||||||||||||
Investment, Type [Extensible Enumeration] | [7] | ssic:SeniorSecuredFirstLienTermLoanMember | ||||||||||||||||||||||||||||
Investment date | [9] | May 20, 2024 | ||||||||||||||||||||||||||||
Maturity date | May 31, 2029 | |||||||||||||||||||||||||||||
Debt Securities, Fair Value by Fair Value Hierarchy Level [Extensible Enumeration] | [10] | Significant Unobservable Inputs (Level 3) [Member] | ||||||||||||||||||||||||||||
Investment, Issuer Geographic Region [Extensible Enumeration] | [11] | Midwest [Member] | ||||||||||||||||||||||||||||
Principal amount | [12] | $ 1,083,000 | ||||||||||||||||||||||||||||
Amortized cost | 840,000 | |||||||||||||||||||||||||||||
Fair value | [1] | $ 971,000 | ||||||||||||||||||||||||||||
Percentage of net assets | 1.15% | |||||||||||||||||||||||||||||
Total delayed draw loan commitments | $ 1,750,000 | |||||||||||||||||||||||||||||
Less: funded commitments | 0 | |||||||||||||||||||||||||||||
Total unfunded commitments | 1,750,000 | |||||||||||||||||||||||||||||
Less: commitments substantially at discretion of the Company | 0 | |||||||||||||||||||||||||||||
Less: unavailable commitments due to borrowing base or other covenant restrictions | 0 | |||||||||||||||||||||||||||||
Total net delayed draw commitments | $ 1,750,000 | |||||||||||||||||||||||||||||
Investment, Identifier [Axis]: Workbox Holdings, Inc. Series A-1 Preferred Shares | ||||||||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||||||||
Investment, Issuer Name [Extensible Enumeration] | [4],[5],[6] | ssic:WorkboxHoldingsIncMember | ||||||||||||||||||||||||||||
Investment, Type [Extensible Enumeration] | us-gaap:EquityMember | |||||||||||||||||||||||||||||
Investment date | May 20, 2024 | |||||||||||||||||||||||||||||
Debt Securities, Fair Value by Fair Value Hierarchy Level [Extensible Enumeration] | Significant Unobservable Inputs (Level 3) [Member] | |||||||||||||||||||||||||||||
Investment, Issuer Geographic Region [Extensible Enumeration] | Midwest [Member] | |||||||||||||||||||||||||||||
Investment owned shares (in shares) | 358,950 | |||||||||||||||||||||||||||||
Amortized cost | $ 500,000 | |||||||||||||||||||||||||||||
Fair value | $ 500,000 | |||||||||||||||||||||||||||||
Percentage of net assets | 0.59% | |||||||||||||||||||||||||||||
Investment, Identifier [Axis]: Workbox Holdings, Inc. Series A-3 Preferred Stock Warrant | ||||||||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||||||||
Investment, Issuer Name [Extensible Enumeration] | [4],[5],[6] | ssic:WorkboxHoldingsIncMember | ||||||||||||||||||||||||||||
Investment, Type [Extensible Enumeration] | ssic:WarrantsA3Member | |||||||||||||||||||||||||||||
Investment date | May 20, 2024 | |||||||||||||||||||||||||||||
Debt Securities, Fair Value by Fair Value Hierarchy Level [Extensible Enumeration] | Significant Unobservable Inputs (Level 3) [Member] | |||||||||||||||||||||||||||||
Investment, Issuer Geographic Region [Extensible Enumeration] | Midwest [Member] | |||||||||||||||||||||||||||||
Investment owned shares (in shares) | 791,258 | |||||||||||||||||||||||||||||
Amortized cost | $ 97,000 | |||||||||||||||||||||||||||||
Fair value | $ 112,000 | |||||||||||||||||||||||||||||
Percentage of net assets | 0.13% | |||||||||||||||||||||||||||||
Investment, Identifier [Axis]: Workbox Holdings, Inc. Series A-4 Preferred Stock Warrant | ||||||||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||||||||
Investment, Issuer Name [Extensible Enumeration] | [4],[5],[6] | ssic:WorkboxHoldingsIncMember | ||||||||||||||||||||||||||||
Investment, Type [Extensible Enumeration] | ssic:WarrantsA4Member | |||||||||||||||||||||||||||||
Investment date | May 20, 2024 | |||||||||||||||||||||||||||||
Debt Securities, Fair Value by Fair Value Hierarchy Level [Extensible Enumeration] | Significant Unobservable Inputs (Level 3) [Member] | |||||||||||||||||||||||||||||
Investment, Issuer Geographic Region [Extensible Enumeration] | Midwest [Member] | |||||||||||||||||||||||||||||
Investment owned shares (in shares) | 1,191,769 | |||||||||||||||||||||||||||||
Amortized cost | $ 146,000 | |||||||||||||||||||||||||||||
Fair value | $ 169,000 | |||||||||||||||||||||||||||||
Percentage of net assets | 0.20% | |||||||||||||||||||||||||||||
|
ORGANIZATION |
6 Months Ended |
---|---|
Jun. 30, 2024 | |
ORGANIZATION [Abstract] | |
ORGANIZATION |
NOTE 1 — ORGANIZATION
Silver Spike Investment Corp. (an emerging growth company) (the “Company”, “we” or “our”) was formed on January 25, 2021
as a Maryland corporation structured as an externally managed, closed-end, non-diversified management investment company. The Company has elected to be treated as a business development company (“BDC”), under the Investment Company Act of 1940,
as amended (“1940 Act”). In addition, for U.S. federal income tax purposes the Company adopted an initial tax year end of December 31, 2021, and was taxed as a corporation for the tax period ended December 31, 2021. The Company adopted the tax
year end of March 31 and elected to be treated for U.S. federal income tax purposes as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”) for the tax period January 1, 2022
through March 31, 2022, as well as maintain such election in future taxable years. However, there is no guarantee that the Company will qualify to make such an election for any taxable year.
On February 4, 2022, the Company’s common stock began trading on the Nasdaq Global Market under the ticker symbol “SSIC,” and we completed our initial public
offering of 6,214,286 shares of our common stock, par value $0.01, inclusive of an over-allotment option that was exercised on March 1, 2022 (“IPO”), for approximately $87 million.
The Company is managed by Silver Spike Capital, LLC (“SSC” or “Adviser”), a registered investment advisor under the Investment Advisers Act of 1940 with the
Securities and Exchange Commission. SSC has engaged SS&C Technologies, Inc. and ALPS Fund Services, Inc. (“SS&C”), as sub-administrator, to perform administrative services necessary for the Company to operate.
The Company’s investment objective is to maximize risk-adjusted returns on equity for its shareholders. The Company seeks to drive return on equity by generating
current income from debt investments and capital appreciation from equity and equity-related investments. The Company intends to achieve its investment objective by investing primarily in secured debt, unsecured debt, equity warrants and direct
equity investments in private leveraged middle-market cannabis companies and other companies in the health and wellness sector. The debt investments are often secured by either a first or second priority lien on the assets of the portfolio
company, can include either fixed or floating rate terms and will generally have a term of between
and six years from the original investment date.On November 8, 2022,
the Board of Directors (“Board”) of the Company approved a change in its fiscal year end from March 31 to December 31. Certain prior period information has been reclassified to conform to the current period presentation.
On February 18, 2024, the Company entered into a definitive Purchase Agreement (the “Loan Portfolio Acquisition Agreement”) with Chicago Atlantic Loan Portfolio, LLC (“CALP”), pursuant to which the
Company would purchase all or substantially all of the portfolio investments held by CALP (the “Loan Portfolio”) in exchange for newly issued shares of the Company’s common stock with a net asset value equal to the value of the Loan Portfolio,
each determined shortly before closing (the “Loan Portfolio Consideration”), subject to certain customary closing conditions (the “Loan Portfolio Acquisition”). The Board, including all the independent directors, upon the recommendation of a
special committee composed solely of the independent directors (the “Special Committee”), has approved the Loan Portfolio Acquisition Agreement and the transactions contemplated thereby. The Company’s current officers would continue to be a
part of the Company’s management team following the Loan Portfolio Acquisition. Assuming satisfaction of the conditions to the transaction, the Loan Portfolio Acquisition is expected to close in mid-2024. See “Note 12 – Proposed Loan Portfolio
Acquisition” for further information regarding the Loan Portfolio Acquisition Agreement and the Loan Portfolio Acquisition.
On February 20, 2024, SSC announced that it entered into a definitive agreement with Chicago Atlantic BDC Holdings, LLC (together with its affiliates, “Chicago Atlantic”), the investment adviser of
CALP, pursuant to which a joint venture between Chicago Atlantic and SSC would be created to combine and jointly operate SSC’s, and a portion of Chicago Atlantic’s, investment management businesses, subject to certain customary closing
conditions (the “Joint Venture”). The Joint Venture would cause the automatic termination of the Company’s existing investment advisory agreement with SSC. As a result, the Board unanimously approved, upon the recommendation of the Special
Committee, a new investment advisory agreement with SSC to take effect upon closing of the Joint Venture, subject to Company stockholder approval. The new investment advisory agreement is identical, in all material respects, to the current
investment advisory agreement. Upon the effectiveness of the new investment advisory agreement, the Company would be renamed Chicago Atlantic BDC, Inc. and SSC would be renamed Chicago Atlantic BDC Advisers, LLC.
On February 20, 2024, the Company announced that the Board unanimously approved an expansion of the Company’s investment strategy to permit investments in companies outside of the cannabis and health
and wellness sectors that otherwise meet the Company’s investment criteria. The investment strategy change became effective on April 22, 2024.
|
SIGNIFICANT ACCOUNTING POLICIES |
6 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | |||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES |
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”),
including the requirements under ASC 946, Financial Services—Investment Companies and Articles 6 and 12 of Regulation S-X. In the opinion of management, all adjustments of a normal recurring nature considered necessary for the fair presentation of the financial statements for the interim period presented have been made,
and such adjustments are normal and recurring in nature. The current period’s results of operations are not necessarily indicative of results that may be achieved for the year.
Use of Estimates
The preparation of the financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions affecting reported amounts of assets and liabilities at the date of the financial statements (i.e. fair value of investments) and the reported amounts of income, expenses, and gains and losses
during the reported period. These estimates are based on the information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could
differ materially from those estimates under different assumptions and conditions.
Investment Valuation
The Company’s investments are recorded at their estimated fair value on the Statement of Assets and Liabilities. Investments for which market
quotations are readily available will typically be valued at the bid price of those market quotations. To validate market quotations, we utilize a number of factors to determine if the quotations are representative of fair value, including the
source and number of the quotations. Debt and equity securities that are not publicly traded or whose market prices are not readily available are valued at fair value as determined in good faith by the Adviser, as the Company’s valuation designee
(the “Valuation Designee”), based on inputs that may include valuations, or ranges of valuations, provided by independent third-party valuation firm(s) engaged by the Adviser. Generally, the valuation approach used for debt investments is the
income approach. The approach derives a value based on either determining the present value of a projected level of cash flow, including a terminal value, or by the capitalization of a normalized measure of future cash flow. The discounted cash
flow (“DCF”) method, one of the methodologies under the income approach, involves estimating future cash flows under various scenarios and discounting them to the measurement date. The discount rate represents a return required by a market
participant in order to make an investment in the subject company.
Alternatively, the market approach or asset approach may be used. The market approach is a way of determining a value indication by using one or
more methods that compare the portfolio company to similar businesses. Value indicators are applied to relevant financial information of the entity being valued to estimate its fair value. There are two methodologies to consider under the market
approach: the guideline company method (“GCM”) and the controlling transaction method (“CTM”). The GCM is based on the premise that the pricing multiples of comparable publicly traded companies can be used as a tool to value privately held
companies. The publicly traded companies’ ratios and business enterprise value provide guidance in the valuation process. Considerations of factors such as size, growth, profitability and return on investment are also analyzed and compared to the
subject business. The CTM is based on the same premise as the GCM. Guideline transactions include change-of-control transactions involving public or private businesses for companies engaged in similar lines of business or with similar economic
characteristics. The valuation considers the price at which the merger or acquisition took place to other factors in order to create a pricing multiple that can be used to determine an estimate of value for the subject company.
The asset approach provides an indication of the portfolio company’s value by developing a valuation-based balance sheet. This approach requires
adjusting the historical assets and liabilities listed on the U.S. GAAP-based balance sheet to estimated fair values. The excess of assets over liabilities represents the tangible value of the business enterprise. The asset approach does not
consider the relevant earnings capacity of a going concern business.
Effective September 8, 2022, pursuant to Rule 2a-5 under the 1940 Act, the Board designated the Adviser as the Valuation Designee to perform the fair value
determinations for the Company, subject to the oversight of the Board and certain Board reporting and other requirements.
As part of the valuation process, the Adviser takes into account relevant factors in determining the fair value of our investments, including: the estimated
enterprise value of a portfolio company (i.e., the total fair value of the portfolio company’s debt and equity), the nature and realizable value of any collateral, the portfolio company’s ability to make payments based on its earnings and cash
flow, the markets in which the portfolio company does business, a comparison of the portfolio company’s securities to any similar publicly traded securities, and overall changes in the interest rate environment and the credit markets. When an
external event such as a purchase transaction, public offering or subsequent equity sale occurs, the Adviser considers whether the pricing indicated by the external event corroborates its valuation.
The Adviser undertakes a multi-step valuation process, which includes, among other procedures, the following:
We conduct this valuation process on a quarterly basis.
We apply Financial Accounting Standards Board Accounting Standards Codification 820, Fair Value Measurement (“ASC 820”),
which establishes a framework for measuring fair value in accordance with U.S. GAAP and required disclosures of fair value measurements. ASC 820 determines fair value to be the price that would be received for an investment in a current sale,
which assumes an orderly transaction between market participants on the measurement date. Market participants are defined as buyers and sellers in the principal or most advantageous market (which may be a hypothetical market) that are
independent, knowledgeable, and willing and able to transact. In accordance with ASC 820, we consider the principal market to be the market that has the greatest volume and level of activity. ASC 820 specifies a fair value hierarchy that
prioritizes and ranks the level of observability of inputs used in determination of fair value. In accordance with ASC 820, these levels are summarized below:
Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may
fluctuate from period to period. Additionally, the fair value of such investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that
may ultimately be realized. Further, such investments are generally less liquid than publicly traded securities and may be subject to contractual and other restrictions on resale. If we were required to liquidate a portfolio investment in a
forced or liquidation sale, it could realize amounts that are different from the amounts presented and such differences could be material.
In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on
these investments to be different than the unrealized gains or losses reflected previously.
Equity Securities and Warrants
The Company may be issued warrants by issuers as yield enhancements. These warrants are recorded as assets at estimated fair value on the grant date. The Company
determines the cost basis of the warrants or other equity securities received based upon their respective fair values on the date of receipt in proportion to the total fair value of the debt and warrants or other equity securities received.
Depending on the facts and circumstances, the Company generally utilizes a combination of one or several forms of the market approach and contingent claim analyses (a form of option analysis) to estimate the fair value of the securities as of the
measurement date and determines the cost basis using a relative fair value methodology. As part of its application of the market approach, the Company estimates the enterprise value of a portfolio company utilizing customary pricing multiples,
based on the development stage of the underlying issuers, or other appropriate valuation methods, such as considering recent transactions in the equity securities of the portfolio company or third-party valuations that are assessed to be
indicative of fair value of the respective portfolio company. If appropriate, based on the facts and circumstances, the Company performs an allocation of the enterprise value to the equity securities utilizing a contingent claim analysis and/or
other waterfall calculation by which it allocates the enterprise value across the portfolio company’s warrants and other equity securities in order of their preference relative to one another.
Cash and Cash Equivalents
Cash and cash equivalents consists of funds deposited with financial institutions and short-term (maturity of 90 days or less) liquid investments and money market
funds. Funds held in money market funds are considered Level 1 in the fair value hierarchy in accordance with ASC 820. Cash held in demand deposit accounts may exceed the Federal Deposit Insurance Corporation (“FDIC”) insured limit. The Company
has not incurred any losses on these accounts, and the credit risk exposure is mitigated by the financial strength of the banking institution where the accounts are held. As of June 30, 2024 and December 31, 2023, cash and cash equivalents
consisted of $34.00 million and $32.61
million, respectively, of which $34.00 million and $32.61 million, respectively, was held in the State Street Institutional U.S. Government Money Market Fund.
Earnings per share
Basic earnings per share is computed by dividing net increase (decrease) in net assets resulting from operations by the
weighted-average number of common shares outstanding for the period. Other potentially dilutive common shares, and the related impact to earnings are considered when calculating earnings per share on a diluted basis using the treasury stock
method.
Investment Transactions
Investment transactions are recorded on trade date. Realized gains or losses are recognized as the difference between the net proceeds received (excluding prepayment
fees, if any) and the amortized cost basis of the investment using the specific identification method without regard to unrealized gains or losses previously recognized, and include investments written off during the period, net of recoveries.
Current-period changes in fair value of investments are reflected as a component of the net change in unrealized appreciation (depreciation) on investments on the Statements of Operations. The net change in unrealized appreciation (depreciation)
primarily reflects the change in investment fair values as of the last business day of the reporting period, including the reversal of previously recorded unrealized gains or losses with respect to investments realized during the period.
Investments traded but not yet settled, if any, are reported in payable for investments purchased and receivable for investments sold on the Statement of Assets and
Liabilities.
Interest and Dividend Income
Interest income is recorded on the accrual basis and includes accretion and amortization of discounts or premiums, respectively. Discounts and premiums to par value
on securities purchased are accreted and amortized, respectively, into interest income over the contractual life of the respective security using the effective yield method. The amortized cost of investments includes the original cost adjusted
for the accretion and amortization of discounts and premiums, respectively. Upon prepayment of a loan or debt security, any prepayment premiums and unamortized discounts or premiums are recorded as interest income in the current period.
When a debt security becomes 90 days or more past due, or if management otherwise does not expect that principal, interest, and other obligations due will be
collected in full, the Company will generally place the debt security on non-accrual status and cease recognizing interest income on that debt security until all principal and interest due has been paid or the Company believes the borrower has
demonstrated the ability to repay its current and future contractual obligations. Any uncollected interest is reversed from income in the period that collection of the interest receivable is determined to be doubtful. However, the Company may
make exceptions to this policy if the investment has sufficient collateral value and is in the process of collection. As of June 30, 2024 and December 31, 2023, there were no loan investments in the portfolio placed on non-accrual status.
Interest income earned, excluding accretion
of discounts and amortization of premiums, was $2,582,583 and $5,167,651 for the three and six months ended June 30, 2024, respectively. Interest income earned, excluding accretion of discounts and amortization of premiums, was $2,601,710 and $4,918,730 for the
three and six months ended June 30, 2023, respectively. As of June 30, 2024 and December 31, 2023, $1,638,987 and $1,755,360, respectively, were recorded as interest receivable.
During the three and six months ended
June 30, 2024, the Company had $62,189 of unearned interest income, which represents interest received in advance but not yet
earned. This amount is recorded as a liability on the Statement of Assets and Liabilities and will be recognized as income over the remaining term of the respective loans.
Dividend income on preferred equity securities is recorded on the accrual basis to the extent that such amounts are payable by the portfolio company and are
expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies.
Certain investments may have contractual PIK interest or dividends. PIK interest or dividends represents accrued interest or dividends that is added to the
principal amount of the investment on the respective interest or dividend payment dates rather than being paid in cash and generally becomes due at maturity. If PIK interest or dividends are not expected to be realized by the Company, the
investment generating PIK interest or dividends will be placed on non-accrual status. When an investment with PIK is placed on non-accrual status, the accrued, uncapitalized interest or dividends are generally reversed through interest or
dividend income, respectively.
Fee Income
All transaction fees earned in connection with our investments are recognized as fee income and are generally non-recurring. Such fees typically include fees for
services, including administrative, structuring and advisory services, provided to portfolio companies. We recognize income from fees for providing such structuring and advisory services when the services are rendered or the transactions are
completed, and payment is received (generally immediately).
For the three and six months ended June 30, 2024, the
Company earned $291,000 and $324,750,
respectively, in fee income. For the three and six months ended June 30, 2023, the Company earned $131,250 and $131,250, respectively, in fee income.
Income Taxes
The Company adopted an initial tax year end of December 31, 2021 and was taxed as a corporation for U.S. federal income tax purposes for the tax period ended
December 31, 2021. The Company adopted the tax year end of March 31, 2022 and elected to be treated for U.S. federal income tax purposes as a RIC under Subchapter M of the Code for the tax period January 1, 2022 through March 31, 2022, and
intends to maintain such election in the current and future taxable years. To maintain its tax treatment as a RIC, the Company must meet specified source-of-income and asset diversification requirements and timely distribute to its stockholders
for each taxable year at least 90% of its investment company taxable income. In order for the Company not to be subject to U.S.
federal excise taxes, it must distribute annually an amount at least equal to the sum of (i) 98% of its net ordinary income for the
calendar year, (ii) 98.2% of its capital gains in excess of capital losses for the one-year period ending on October 31 of the
calendar year and (iii) any net ordinary income and capital gains in excess of capital losses for preceding years that were not distributed during such years. The Company, at its discretion (subject to the requirement to distribute 90% of its investment company taxable income as described above), may carry forward taxable income in excess of calendar year dividends and pay a 4% nondeductible U.S. federal excise tax on this income. If the Company chooses to do so, this generally would increase expenses and reduce the
amount available to be distributed to stockholders. For the three and six months ended June 30, 2024, the Company did not accrue
any excise tax. For the three and six months ended June 30, 2023, the Company did not accrue any excise tax. As of June 30, 2024
and December 31, 2023, $19,913 and $0,
respectively, of overpaid excise taxes are included as Other assets in the Statement of Assets and Liabilities. As of June 30, 2024 and December 31, 2023, $0 and $10,655, respectively, of accrued excise taxes remained payable.
The Company evaluates tax positions taken in the course of preparing the Company’s tax returns to determine whether the tax
positions are “more-likely-than-not” to be sustained by the applicable tax authority in accordance with ASC Topic 740, Income Taxes (“ASC 740”). Tax benefits of positions not deemed to meet the more-likely-than-not threshold, or uncertain tax positions, would be recorded as
tax expense in the current year. It is the Company’s policy to recognize accrued interest and penalties related to uncertain tax benefits in income tax expense.
Based on the analysis of the Company’s tax position, the Company has no uncertain tax positions that met the recognition or measurement criteria as of June 30, 2024 and December 31, 2023. The Company does not anticipate any significant increase or decrease in unrecognized
tax benefits for the next twelve months. All of the Company’s tax returns remain subject to examination by U.S. federal and state tax authorities.
Distributions
Distributions to common stockholders are recorded on the record date. The amount of taxable income to be paid out as a distribution is determined by our Board each quarter and is generally based upon the future taxable income estimated by management. Capital gains, if any, are distributed at least annually, although the Company may decide to retain all or some of those capital gains for investment and pay U.S. federal income tax at corporate rates on those retained amounts. If the Company chooses to do so, this generally will increase expenses and reduce the amount available to be distributed to stockholders. Our distributions may exceed our earnings, and therefore, portions of the distributions that we make may be a return of the money originally invested and represent a return of capital distribution to shareholders for tax purposes. Offering Costs
These costs consist primarily of legal fees and other costs incurred in connection with the Company’s share
offerings, the preparation of the Company’s registration statement, and registration fees.
Costs associated with the offering of common shares of the Company are capitalized as deferred offering and, if any, are included in deferred offering costs on the
Statements of Assets and Liabilities. As of June 30, 2024 and December 31, 2023, deferred offering costs were $761,867 and $0, respectively. The deferred offering costs will be charged to capital upon the issuance of shares subsequent to the completion of the Loan
Portfolio Acquisition. For the three and six months ended June 30, 2024 and 2023, no offering costs were charged to capital. As
of June 30, 2024 and December 31, 2023, there were $676,791 and $0, respectively, of offering costs payable by the Company.
Transaction expenses related to the Loan Portfolio Acquisition
Cumulative transaction expenses related to the Loan Portfolio Acquisition at June 30, 2024 and December 31, 2023 were $3,350,333 and $711,264, respectively, and consisted primarily
of legal fees incurred related to the Loan Portfolio Acquisition. See “Note 12 – Proposed Loan Portfolio Acquisition” for further information regarding the Loan Portfolio Acquisition Agreement and the Loan Portfolio Acquisition.
For the three and six months ended June 30, 2024, the Company incurred transaction expenses related to the Loan Portfolio Acquisition of $533,019 and $2,639,069, respectively.
For the three and six months ended June 30, 2023, the Company did not incur any transaction expenses related to the Loan
Portfolio Acquisition. As of June 30, 2024 and December 31, 2023, there were $2,506,784 and $711,264, respectively, of transaction expenses related to the Loan Portfolio Acquisition payable by the Company.
New Accounting Standards
In November 2023, the FASB issued Accounting Standard Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280), which improves reportable segment disclosure
requirements, primarily through enhanced disclosures about significant segment expenses. The amendment is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. We
do not believe that the Company will be materially impacted by the adoption of ASU 2023-07.
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INVESTMENTS |
NOTE 3 — INVESTMENTS
The Company’s investments in portfolio companies are primarily in the form of debt investments
(secured and unsecured), but may include equity warrants, direct equity investments and derivative investments.
Debt Investments
The Company’s
debt investments typically pay interest with some amortization of principal. As of June 30, 2024, 82.5% of the debt investments
(based on amortized cost) pay interest on a floating rate basis with a PRIME floor, and 17.5% of the debt investments (based on
amortized cost) pay fixed interest. As of December 31, 2023, 84.9% of the debt investments (based on amortized cost) pay
interest on a floating rate basis with a PRIME floor, and 15.1% of the debt investments (based on amortized cost) pay fixed
interest. We will generally seek to obtain security interests in the assets of our portfolio companies that serve as collateral in support of the repayment of these debt investments. This collateral may take the form of first or second
priority liens on the assets of a portfolio company.
We expect that our debt investments will typically have final maturities of
to six years. However, we expect that our
portfolio companies often may repay these debt investments early, generally within three years from the date of initial
investment.Warrant
Investments
In
connection with the Company’s debt investments, the Company may receive warrants in the portfolio company. Warrants received in connection with a debt investment typically include a potentially discounted contract price to exercise,
and thus, as a portfolio company appreciates in value, the Company may achieve additional investment return from this equity interest. The warrants typically contain provisions that protect the Company as a minority-interest holder,
as well as secured or unsecured put rights, or rights to sell such securities back to the portfolio company, upon the occurrence of specified events. In certain cases, the Company may also obtain follow-up rights in connection with
these equity interests, which allow the Company to participate in future financing rounds.
Equity
Investments
In
specific circumstances, the Company may seek to make direct equity investments in situations where it is appropriate to align the interests of the Company with key management and stockholders of the portfolio company, and to allow
for participation in the appreciation in the equity values of the portfolio company. These equity investments are generally made in connection with debt investments.
Derivative
Investments
A
portion of our portfolio may be comprised of derivatives, including total return swaps. No such derivative
instruments were held as of June 30, 2024 or December 31, 2023.
Portfolio Composition
The Company’s portfolio investments are primarily in companies conducting business in or supporting the cannabis industries. The following tables summarize the
composition of the Company’s portfolio investments by industry at amortized cost and fair value and as a percentage of the total portfolio as of June 30, 2024 and December 31, 2023.
The geographic composition is determined by the location of headquarters of the portfolio company. The following tables summarize the composition of the Company’s
portfolio investments by geographic region of the United States at amortized cost and fair value and as a percentage of the total portfolio as of June 30, 2024 and December 31, 2023. Geographic regions are defined as: West, for the states of WA,
OR, ID, MT, WY, CO, AK, HI, UT, NV and CA; Midwest, for the states ND, SD, NE, KS, MO, IA, MN, WI, MI, IL, IN and OH; Northeast, for the states PA, NJ, NY, CT, RI, MA, VT, NH and ME; Southeast, for the states of AR, LA, MS, TN, KY, AL, FL, GA,
SC, NC, VA, DE, WV and MD; and Southwest, for the states of AZ, NM, TX and OK.
The following tables summarize the composition of the Company’s portfolio investments by investment type at amortized cost and fair value and as a percentage of the
total portfolio as of June 30, 2024 and December 31, 2023.
Certain Risk Factors
In the ordinary course of business, the Company manages a variety of risks including market risk, credit risk, liquidity risk, interest rate risk, prepayment risk,
risks associated with financial, economic and other global market developments and disruptions, including those arising from war, terrorism, market manipulation, government interventions, defaults and shutdowns, political changes or diplomatic
developments, public health emergencies (such as the spread of infectious diseases, pandemics and epidemics) and natural/environmental disasters, which can all negatively impact the securities markets generally. These events can also impair the
technology and other operational systems upon which the Company’s service providers rely and could otherwise disrupt the Company’s service providers’ ability to fulfill their obligations to the Company. The Company identifies, measures and
monitors risk through various control mechanisms, including trading limits and diversifying exposures and activities across a variety of instruments, markets and counterparties.
Market risk is the risk of potential adverse changes to the value of financial instruments because of changes in market conditions, including as a result of changes
in the credit quality of a particular issuer, credit spreads, interest rates, and other movements and volatility in security prices or commodities. In particular, the Company may invest in issuers that are experiencing or have experienced
financial or business difficulties (including difficulties resulting from the initiation or prospect of significant litigation or bankruptcy proceedings), which involves significant risks. The Company manages its exposure to market risk through
the use of risk management strategies and various analytical monitoring techniques.
Concentration risk is the risk that the
Company’s focus on investments in cannabis companies may subject the Company to greater price volatility and risk of loss as a result of adverse economic, business or other developments affecting cannabis companies than funds investing in a
broader range of industries or sectors. At times, the performance of investments in cannabis companies will lag the performance of other industries or sectors or the broader market as a whole.
Credit risk is the risk that a decline in the credit quality of an investment could cause the Company to lose money. The Company could lose money if the issuer or
guarantor of a portfolio security fails to make timely payment or otherwise honor its obligations. Fixed income securities rated below investment grade (high-yield bonds) involve greater risks of default or downgrade and are generally more
volatile than investment grade securities. Below investment grade securities involve greater risk of price declines than investment grade securities due to actual or perceived changes in an issuer’s creditworthiness. In addition, issuers of below
investment grade securities may be more susceptible than other issuers to economic downturns. Such securities are subject to the risk that the issuer may not be able to pay interest or dividends and ultimately to repay principal upon maturity.
Discontinuation of these payments could substantially adversely affect the market value of the security.
The Company’s investments may, at any time, include securities and other financial instruments or obligations that are illiquid or thinly traded, making purchase or
sale of such securities and financial instruments at desired prices or in desired quantities difficult. Furthermore, the sale of any such investments may be possible only at substantial discounts, and it may be extremely difficult to value any
such investments accurately.
Interest rate risk refers to the change in earnings that may result from changes in the level of interest rates. To the extent that the Company borrows money to make
investments, including under any credit facility, net investment income (loss) will be affected by the difference between the rate at which the Company borrows funds and the rate at which the Company invests these funds. In periods of rising
interest rates, the Company’s cost of borrowing funds would increase, which may reduce net investment income (loss). As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect
on net investment income (loss).
Prepayment risk is the risk that a loan in the Company’s portfolio will prepay due to the existence of favorable financing market conditions that allow the portfolio
company the ability to replace existing financing with less expensive capital. As market conditions change, prepayment may be possible for each portfolio company. In some cases, the prepayment of a loan may reduce the Company’s achievable yield
if the capital returned cannot be invested in transactions with equal or greater expected yields, which could have a material adverse effect on our business, financial condition and results of operations.
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FAIR VALUE OF FINANCIAL INSTRUMENTS |
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FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS |
NOTE 4 — FAIR VALUE OF FINANCIAL INSTRUMENTS
ASC 820 defines fair value, establishes a framework for measuring fair value, and establishes a fair value hierarchy based on the quality of inputs used to measure
fair value and enhances disclosure requirements for fair value measurements. The Company accounts for its investments at fair value. As of June 30, 2024 and December 31, 2023, the Company’s portfolio investments consisted primarily of investments
in secured loans and secured notes. The fair value amounts have been measured as of the reporting date and have not been reevaluated or updated for purposes of these financial statements subsequent to that date. As such, the fair values of these
financial instruments subsequent to the reporting date may be different than amounts reported.
The fair value determination of each portfolio investment categorized as Level 3 required one or more unobservable inputs.
The use of significant unobservable inputs creates uncertainty in the measurement of fair value as of the reporting date. The significant unobservable inputs used in
the fair value measurement of the Company’s debt investments may vary and may include debt investments’ yield (i.e. discount rate) and volatility assumptions. The significant unobservable inputs used in the fair value measurement of the Company’s
equity and warrant investments may vary and may include EBITDA multiples, revenue multiples and asset multiples.
The Company’s investments measured at fair value by investment type on a recurring basis as of June 30, 2024 and December 31, 2023 were as follows:
The following tables provide a summary of the significant unobservable inputs used to fair value the Level 3 portfolio investments as of June 30, 2024 and December
31, 2023. The methodology for the determination of the fair value of the Company’s investments is discussed in “Note 2 – Significant Accounting Policies”. Discount rate ranges are shown as spread over PRIME and Treasuries, respectively, for
Senior Secured First Lien Term Loans, as of June 30, 2024 and December 31, 2023.
(1) The weighted average is calculated based on the fair
value of each investment.
Significant increases (decreases) in discount rate in isolation would result in a significantly lower (higher) fair value assessment. Significant increases
(decreases) in volatility in isolation would result in a significantly lower (higher) fair value assessment.
The following tables provide a summary of changes in the fair value of the Company’s Level 3 portfolio investments for the six months ended June 30, 2024 and 2023:
|
RELATED PARTY TRANSACTIONS |
6 Months Ended |
---|---|
Jun. 30, 2024 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS |
NOTE 5 — RELATED PARTY TRANSACTIONS
Pursuant
to the investment advisory agreement between the Company and SSC (the “Investment Advisory Agreement”), fees payable to SSC are equal to (a) a base management fee of 1.75% of the average value of the Company’s gross assets at the end of the two
most recent quarters (i.e., total assets held before deduction of any liabilities), which includes investments acquired with the use of leverage and excludes cash and cash equivalents and (b) an incentive fee based on the Company’s
performance. The incentive fee consists of two parts. The first part is calculated and payable quarterly in arrears and equals 20% of the Company’s “Pre-Incentive Fee Net Investment Income” for the quarter, subject to a preferred return, or “hurdle,” of 1.75% per quarter (7% annualized),
and a “catch-up” feature. The second part is determined and payable in arrears as of the end of each fiscal year (or upon termination of the Investment Advisory Agreement) and equals 20% of the Company’s realized capital gains on a cumulative basis from inception through the end of the fiscal year, if any, computed net of all realized capital losses
and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fee (the “Incentive Fee on Capital Gains”).
While the Investment Advisory Agreement neither includes nor contemplates the inclusion of unrealized gains in the calculation of the Incentive Fee on Capital
Gains, as required by U.S. GAAP, we accrue the Incentive Fee on Capital Gains on unrealized capital appreciation exceeding unrealized depreciation. This accrual reflects the Incentive Fee on Capital Gains that would be payable to SSC if the
Company’s entire investment portfolio was liquidated at its fair value as of the balance sheet date even though SSC is not entitled to an Incentive Fee on Capital Gains with respect to unrealized capital appreciation unless and until such gains
are actually realized.
The management fee is payable quarterly in arrears. For the three and six
months ended June 30, 2024, the Company incurred management fee expenses of $246,324 and $492,455, respectively. For the three and six months ended June 30, 2023, the Company incurred management fee expenses of $257,489 and $495,908,
respectively. As of June 30, 2024 and December 31, 2023, $246,324 and $257,121, respectively, remained payable.
For the three and six months ended June 30, 2024, the Company incurred
income-based incentive fee expenses of $328,503 and $328,503, respectively. For the three and six months ended June 30, 2023, the Company incurred income-based incentive fee expenses of $442,673 and $646,494,
respectively. As of June 30, 2024 and December 31, 2023, $1,839,756 and $1,511,253, respectively, remained payable.
For the three and six months ended June 30, 2024, the
Company incurred capital gains incentive fee expenses of $(46,555) and $73,369, respectively. For the three and six months ended June 30, 2023, the Company incurred capital gains incentive fee expenses of $(137,602) and $5,000, respectively. As of June 30, 2024 and December 31, 2023, $160,953
and $87,583, respectively, remained payable.
Pursuant
to the administration agreement between the Company and SSC (the “Administration Agreement”), the Company is to reimburse SSC for the costs and expenses incurred by SSC in performing its obligations, including but not limited to
maintaining and keeping all books and records and providing personnel and facilities. This includes costs and expenses incurred by SSC in connection with the delegation of its obligations to SS&C, the sub-administrator. The Company is
generally not responsible for the compensation of SSC’s employees or any overhead expenses. However, we may reimburse SSC for an allocable portion of the compensation paid by SSC to our CCO and CFO and their respective staffs (based on a
percentage of time such individuals devote, on an estimated basis, to our business affairs). For the three and six months ended June 30, 2024 and 2023, the Adviser has waived any expense reimbursement, other than those associated with the
delegation of its obligations to the sub-administrator and the use of temporary accounting services.
For the three and six months ended June 30, 2023, the
Company paid $984 and $1,198,
respectively, as reimbursement to SSC for expenses paid on the Company’s behalf. Due to affiliate in the accompanying Statements of Assets and Liabilities in the amount of $493 and $0 as of June 30, 2024 and December 31, 2023, respectively,
is due to SSC for expenses paid on the Company’s behalf.
SSC was the seed investor of the Company and provided initial funding to the Company by purchasing approximately $63 million of the Company’s common stock in the Company’s initial public offering. SSC provided this “seed capital” to the Company for the purpose of facilitating the launch
and initial operation of the Company, as opposed to for long term investment purposes. SSC does not expect to hold the Company’s common stock indefinitely, and may sell the Company’s common stock at a future point in time. In order for SSC’s
sales of the shares of the Company not to be deemed to have been made “on the basis of” material nonpublic information, such sales may be made pursuant to a pre-approved trading plan that complies with Rule 10b5-1 under the Exchange Act and that
may obligate SSC to make recurring sales of the Company’s common stock on a periodic basis. Sales of substantial amounts of the Company’s common stock, including by SSC or other large stockholders, or the availability of such common stock for
sale, could adversely affect the prevailing market prices for the Company’s common stock. If this occurs and continues for a sustained period of time, it could impair the Company’s ability to raise additional capital through the sale of
securities, should the Company desire to do so.
SSC holds approximately 72% of the Company’s voting
stock and has the ability to exercise substantial control over all corporate actions requiring stockholder approval, including the election and removal of directors, certain amendments of the Company’s charter, the Company’s ability to issue its
common stock at a price below NAV per share, and the approval of any merger or other extraordinary corporate action.
SSC absorbed $1.23 million, representing the cost of
the sales load (i.e., underwriting discounts and commissions) incurred by the Company in connection with the initial public offering of its common stock. The Company will not incur any additional expenses with this transaction.
During the three and six months ended June 30, 2024, SSC and certain related parties received dividend distributions from the Company relating to their shares held.
Refer to “Note 7 – Common Stock” for further details on the Company’s dividend reinvestment plan and the distributions declared. The Company did not
make any distributions during the three and six months ended June 30, 2023.
|
COMMITMENTS AND CONTINGENCIES |
6 Months Ended |
---|---|
Jun. 30, 2024 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES |
NOTE 6 — COMMITMENTS AND CONTINGENCIES
Unfunded Commitments
The Company’s commitments and contingencies include unfunded commitments to extend credit in the form of loans to the Company’s portfolio companies. A portion of
these unfunded contractual commitments are generally dependent upon the portfolio company reaching certain milestones before the debt commitment becomes available. Furthermore, the Company’s credit agreements with its portfolio companies
generally contain customary lending provisions that allow the Company relief from funding obligations for previously made commitments in instances where the underlying portfolio company experiences materially adverse events that affect the
financial condition or business outlook of the company. Since a portion of these commitments may expire without being drawn, unfunded contractual commitments do not necessarily represent future cash requirements. As such, the Company’s disclosure
of unfunded contractual commitments as of June 30, 2024 includes only those commitments that are available at the request of the portfolio company and are unencumbered by milestones or additional lending provisions. As of June 30, 2024, the
Company had outstanding commitments to fund investments totaling $1.75 million. The Company has identified no unfunded commitments as of December 31, 2023.
The Company did not have any other off-balance sheet financings or liabilities as of June 30, 2024 or December 31, 2023. The Company will fund its unfunded
commitments, if any, from the same sources it uses to fund its investment commitments that are funded at the time they are made (which are typically through existing cash and cash equivalents) and maintains adequate liquidity to fund its unfunded
commitments through these sources.
In the normal course of business, the Company enters into contracts that provide a variety of representations and warranties, and general indemnifications. Such
contracts include those with certain service providers, brokers and trading counterparties. Any exposure to the Company under these arrangements is unknown as it would involve future claims that may be made against the Company; however, based on
the Company’s experience, the risk of loss is remote and no such claims are expected to occur. As such, the Company has not accrued any liability in connection with such indemnifications.
Legal Proceedings
The Company may, from time to time, be involved in litigation arising out of its operations in the normal course of business or otherwise. Furthermore, third
parties may try to seek to impose liability on the Company in connection with the activities of its portfolio companies. As of June 30, 2024, there are no material legal matters or material litigation pending of which the Company is aware.
|
COMMON STOCK |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMON STOCK [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMON STOCK |
NOTE 7 — COMMON STOCK
As of June 30, 2024, 100,000,000 shares of $0.01 par value common stock were authorized.
Distributions
The following table summarizes distributions declared and paid by the Company
during the six months ended June 30, 2024:
During the six months ended June 30, 2023, the Company did not have any distributions.
Dividend Reinvestment Plan
The Company’s dividend reinvestment plan (“DRIP”) provides for the reinvestment of distributions in the form of common stock on behalf of its stockholders, unless a
stockholder has elected to receive distributions in cash. As a result, if the Company declares a cash distribution, its stockholders who have not “opted out” of the DRIP by the opt out date will have their cash distribution automatically
reinvested into additional shares of the Company’s common stock. The share requirements of the DRIP may be satisfied through the issuance of common shares or through open market purchases of common shares by the DRIP plan administrator.
The Company’s DRIP is administered by its transfer agent on behalf of the
Company’s record holders and participating brokerage firms. Brokerage firms and other financial intermediaries may decide not to participate in the Company’s DRIP but may provide a similar dividend reinvestment plan for their clients.
During
the six months ended June 30, 2024, the Company issued the following shares of common stock under the DRIP:
During the six months ended June 30, 2023, the Company issued no new shares of common stock under the DRIP.
|
INDEMNIFICATION |
6 Months Ended |
---|---|
Jun. 30, 2024 | |
INDEMNIFICATION [Abstract] | |
INDEMNIFICATION |
NOTE 8 — INDEMNIFICATION
Under the Company’s organizational documents, the Company’s officers and directors are indemnified against certain liabilities arising out of the performance of
their duties to the Company. In addition, in the normal course of business the Company enters into contracts that contain a variety of representations which provide general indemnifications. The Company’s maximum exposure under these agreements
cannot be known; however, the Company expects any risk of loss to be remote.
|
EARNINGS PER SHARE |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE |
NOTE 9 — EARNINGS PER SHARE
The following table sets forth the computation of the weighted average basic and diluted net increase (decrease) in net assets per share from operations for the
three and six months ended June 30, 2024 and 2023:
|
INCOME TAXES |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES |
NOTE 10 — INCOME TAXES
The Company
adopted a tax year end of March 31 and elected to be treated as a regulated investment company (“RIC”) for U.S. federal income tax purposes under Subchapter M of the Code. However, there is no guarantee that the Company will qualify to make
such an election for any taxable year. As a RIC, the Company generally will not pay corporate-level income tax if it distributes to stockholders at least 90% of its investment company taxable income (“ICTI”) (which is generally its net
ordinary taxable income and realized net short-term capital gains in excess of realized net long-term capital losses) and 90% of its tax-exempt income to maintain its RIC status. Depending on the level of ICTI earned in a tax year, the
Company may choose to carry forward ICTI in excess of the current year distribution into the next tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final
tax return related to the year which generated such ICTI. The amount to be paid out as a distribution is determined by the Board each quarter and is based upon the annual earnings estimated by the management of the Company. To the extent the
Company’s earnings fall below the amount of dividend distributions declared, however, a portion of the total amount of the Company’s distributions for the tax year may be deemed a return of capital for tax purposes to the Company’s
stockholders.
The amounts and sources of distributions reported are only estimates and are not being provided for U.S. federal income tax reporting purposes.
The timing and character of distributions for U.S. federal income tax purposes will be determined in accordance with the U.S. federal tax rules which may differ from GAAP. The final determination of the source of all distributions in 2024
will be made after the tax year-end and the amounts represented may be materially different from the amounts disclosed in the final Form 1099-DIV notice. The actual amounts and sources of the amounts for tax reporting purposes will depend
upon the Company’s investment performance and may be subject to change based on tax regulations.
Because federal income tax
regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Differences may be permanent or temporary in nature.
Permanent differences are reclassified among the capital accounts in the financial statements to reflect their appropriate tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized in
different periods for book and tax purposes.
The Company has not recorded a liability for any uncertain tax positions pursuant to the provisions of ASC 740, Income Taxes, as of June 30, 2024 and December 31, 2023. In the normal course of business, the Company is subject to examination by federal and certain state and local tax regulators. For tax purposes, net realized
capital losses may be carried over to offset future capital gains, if any. Funds are permitted to carry forward capital losses for an indefinite period, and such losses will retain their character as either short-term or long-term capital
losses. As of March 31, 2024, the Company’s most recent tax year end, the Company had $210,767 of capital loss carryforwards,
all of which is short-term.
The Company’s taxable income for each period is an estimate and will not be finally determined until the Company files its tax return for each year. Therefore, the final taxable income earned in each year and carried forward for
distribution in the following year may be different than this estimate.
For the most
recent tax year ended March 31, 2024, the Company reclassified $10,676 from distributable earnings to additional
paid-in-capital on the Statement of Assets and Liabilities arising from permanent book to tax differences primarily related to non-deductible expenses. For the tax year ended March 31, 2023, the Company reclassified $121,099 from distributable earnings to additional paid-in-capital on the Statement of Assets and Liabilities arising from permanent book to
tax differences primarily related to prior year post-financial statement updates and non-deductible excise tax.
For income tax purposes,
distributions paid to shareholders are reported as ordinary income, return of capital, long-term capital gains, or a combination thereof. The tax character of distributions paid for the three months ended June 30, 2024 and the tax year
ended March 31, 2024, were as follows:
As of March 31, 2024 and March 31, 2023, the components of distributable earnings on a tax basis detailed below
differ from the amounts reflected in the Company’s Statements of Assets and Liabilities by temporary book or tax differences primarily arising from the tax treatment of organizational costs, the tax treatment of transaction expenses related
to the Loan Portfolio Acquisition, and the tax treatment of uncrystallized capital gain incentive fees.
The following table sets forth the tax cost basis and the estimated aggregate gross unrealized appreciation and depreciation from investments
and cash equivalents for federal income tax purposes as of June 30, 2024, March 31, 2024 and December 31, 2023:
|
FINANCIAL HIGHLIGHTS |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS |
NOTE 11 — FINANCIAL HIGHLIGHTS
The following presents financial highlights for the six months ended June 30, 2024 and 2023:
|
PROPOSED LOAN PORTFOLIO ACQUISITION |
6 Months Ended |
---|---|
Jun. 30, 2024 | |
PROPOSED LOAN PORTFOLIO ACQUISITION [Abstract] | |
PROPOSED LOAN PORTFOLIO ACQUISITION |
NOTE 12 — PROPOSED LOAN PORTFOLIO ACQUISITION
Overview
On February 18, 2024, the Company entered into a Purchase Agreement (the “Loan Portfolio Acquisition Agreement”) with Chicago Atlantic Loan
Portfolio, LLC, a Delaware limited liability company (“CALP”). The Loan Portfolio Acquisition Agreement provides that, subject to the conditions set forth in the Loan Portfolio Acquisition Agreement, at the closing of the transactions
contemplated by the Loan Portfolio Acquisition Agreement (the “Closing”, and the date on which the Closing occurs, the “Closing Date”), the Company will issue to CALP shares of the Company’s common stock (the “Stock Issuance”) in consideration
for acquiring a portfolio of loans (the “Loan Portfolio” and together with the Stock Issuance, the “Loan
Portfolio Acquisition”) from CALP (the “Loan Purchase” and together with the Stock Issuance, the “Transactions”).
The Board, on the recommendation of a special committee (the “Special Committee”) comprised solely of all of the independent directors of the
Company, has approved the Loan Portfolio Acquisition Agreement and the Transactions contemplated thereby.
As of January 1, 2024, the Loan Portfolio comprised 24
loans with an aggregate value of approximately $130 million. CALP has agreed to use reasonable best efforts to add 4 loans with an aggregate value of approximately $43
million to the Loan Portfolio prior to the Closing. The Company and CALP may also agree to the addition of other loans to the Loan Portfolio prior to the Closing. The inclusion and/or addition of certain loans to the Loan Portfolio requires
third-party consents, and/or such loans may need to be acquired by CALP, and there can be no assurance that any additional loans will be added to the Loan Portfolio prior to the Closing. Certain loans may also be removed from the Loan Portfolio
upon the agreement of the Company and CALP, if required third-party consents are not obtained, or upon the repayment of the loans.
The Transactions; Valuations
At the Closing, (x) CALP shall sell and transfer to the Company, and the Company shall purchase and acquire from CALP, the Loan Portfolio,
including all of CALP’s right, title and interest in, to and under each loan in the Loan Portfolio, the loan documents, collateral and files relating to each loan in the Loan Portfolio, and all amounts received by CALP after the Closing Cut-off
Time (as defined below) arising under or in connection with each such loan (the “Contributed Investment Assets”), and (y) the Company shall issue and sell to CALP, and CALP shall purchase and acquire from the Company, such number of newly
issued shares of the Company’s common stock (the “Purchased Shares”) equal to (i) the fair value of the Contributed Investment Assets (the “Contributed Investment Assets Fair Value”) as of the Closing Cut-off Time, divided by (ii) the SSIC NAV
Per Share. The “SSIC NAV Per Share” means the SSIC NAV (as defined below) divided by the number of outstanding shares of the Company’s common stock as of the Closing Cut-off Time.
Promptly, and within twenty-four (24) hours following 5:00 p.m. Central time on the second day (excluding Sundays and holidays) immediately prior
to the Closing Date (the “Closing Cut-off Time”), the Company will deliver to CALP a calculation of the net asset value of the Company (the “SSIC NAV”) and the Contributed Investment Assets Fair Value as of the Closing Cut-off Time, in each
case using the valuation policies and procedures of the Company (the “Calculation Notice”). To the extent that CALP does not agree with the calculation of the SSIC NAV or the Contributed Investment Assets Fair Value presented by the Company and
set forth in the Calculation Notice, the parties shall negotiate in good faith to agree upon the calculation of the SSIC NAV or the Contributed Investment Assets Fair Value, as the case may be, prior to Closing.
Closing Conditions
Consummation of the Transactions is subject to certain closing conditions, including (1) requisite approvals of the Company’s stockholders, (2)
finalization of the Contributed Investment Assets Fair Value and SSIC NAV calculations, (3) the absence of certain legal impediments or challenges to the consummation of the Transactions by a governmental entity, (4) the effectiveness of a
registration statement registering the issuance of the new shares of the Company’s common stock and the listing of the new shares of the Company’s common stock on the NASDAQ Global Market, (5) the Purchased Shares, after giving effect to the
Stock Issuance, would collectively constitute at least 65%, but no more than 75%, of the total issued and outstanding shares of the Company’s common stock, (6) the absence of a “material adverse effect” on the applicable party (or the Adviser) and
(7) subject to certain exceptions, the accuracy of the representations, warranties and other factual statements and compliance with the covenants set forth in the Loan Portfolio Acquisition Agreement.
No-Solicitation
The Loan Portfolio Acquisition Agreement provides that the Company must immediately terminate any existing discussions and negotiations regarding
any competing proposals and may not solicit competing proposals, or, subject to certain exceptions, enter into discussions or negotiations or provide information in connection with any competing proposal. However, the Board may, subject to
certain conditions (including engaging in negotiations with CALP, if CALP wishes to negotiate), change its recommendation to the stockholders of the Company and, subject to payment by the Company of a termination fee in an amount of $6,046,613 (the “Termination Fee”), terminate the Loan Portfolio Acquisition Agreement to enter into a definitive agreement with respect to a
superior proposal if the Board (acting on the recommendation of the Special Committee) determines in good faith, after consultation with its outside financial advisor and outside legal counsel that the failure to take such action would be
reasonably likely to constitute a breach of the standard of conduct applicable to the directors of the Company under applicable law (taking into account, among other factors, any changes to the Loan Portfolio Acquisition Agreement proposed by
CALP).
Termination; Termination Fees
The Loan Portfolio Acquisition Agreement contains certain reciprocal termination rights for both parties, including if the Transactions are not
consummated on or before November 18, 2024 or if the requisite approvals of the Company stockholders are not obtained. In addition, the Loan Portfolio Acquisition Agreement contains certain termination rights for the Company and CALP, including
the right of the Company to terminate the Agreement in order for the Company to enter into a definitive agreement with respect to a superior proposal, subject to complying with certain requirements and the payment by the Company to CALP of the
Termination Fee. CALP also has a right to terminate the Loan Portfolio Acquisition Agreement in the event the Board changes its recommendation to the stockholders of the Company (subject to payment of the Termination Fee) or in the event the
Company or the Board materially breaches their respective nonsolicitation obligations (subject to payment of the Termination Fee in certain circumstances). The Termination Fee is also payable in the event of certain other terminations when a
competing proposal has been made public (or was otherwise known to the Board) and was not withdrawn prior to termination and a definitive agreement is entered into a competing proposal or a competing proposal is consummated within twelve months
after such termination.
Representations, Warranties and Covenants
The Loan Portfolio Acquisition Agreement contains customary representations and warranties by each of the Company and CALP and certain statements
regarding the Adviser. The Loan Portfolio Acquisition Agreement also contains customary covenants, including, among others, covenants relating to the operation of each of the Company’s and CALP’s businesses during the period prior to Closing.
The Company has agreed to convene and hold a stockholder meeting for the purpose of obtaining the approvals required of its stockholders and has agreed that the Board will, subject to certain exceptions, recommend that the Company stockholders
approve the applicable proposals in connection with the Transactions.
Indemnification
Subject to the terms of the Loan Portfolio Acquisition Agreement, CALP will indemnify the Company for damages, losses, liabilities and expenses
suffered by the Company arising out of any inaccuracy, misrepresentation or breach of certain representations of CALP with respect to the Contributed Investment Assets, subject to certain per-claim and aggregate deductibles. CALP’s maximum
liability with respect to claims of indemnification by the Company will not exceed the value of such number of Purchased Shares (the “Holdback Shares”) equal to the lesser of: (x) the quotient of (i) $10,000,000 divided by (ii) the SSIC NAV Per Share or (y) 3%
of the total issued and outstanding shares of the Company’s common stock after giving effect to the Stock Issuance. From the time of the issuance of the Holdback Shares until the six month anniversary of the Closing Date (the “Holdback Release
Date”), CALP will not be allowed to sell, transfer, distribute, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, any Holdback Shares (the “Transfer Restrictions”). Upon
the Holdback Release Date, the Holdback Shares that are not subject to pending claims will cease to be subject to the Transfer Restrictions.
Expenses
All fees and expenses incurred in connection with the Transactions will be borne by the party incurring such fees or expenses except that transfer
and similar taxes incurred in connection with the consummation of the Transactions will be borne by the Company.
Voting Agreement
On February 18, 2024, CALP, SSC, Silver Spike Holdings, LP (“Silver Spike Holdings”), the managing member of SSC, and Scott Gordon, managing member
of the general partner of Silver Spike Holdings, entered into a Voting Agreement (the “Voting Agreement”), pursuant to which, among other things, SSC has agreed (i) to vote all shares of the Company’s common stock beneficially owned by SSC in
favor of the Transactions, (ii) to vote against any competing proposal or a superior proposal and (iii) not enter into any contract, option or other arrangement or understanding with respect to the transfer of any shares of the Company’s
common stock beneficially owned by SSC, other than certain customary exceptions.
The Voting Agreement will terminate upon the earliest to occur of: (i) the mutual consent of CALP and SSC, (ii) the termination of the Loan
Portfolio Acquisition Agreement in accordance with its terms or (iii) the Closing. SSC has also the right to terminate the Voting Agreement if the Loan Portfolio Acquisition Agreement is amended in a manner materially averse to SSC without
SSC’s consent.
General
The foregoing description of the Loan Portfolio Acquisition Agreement does not purport to be complete and is qualified in its entirety by reference
to the full text of the Loan Portfolio Acquisition Agreement. The representations, warranties, covenants and agreements contained in the Loan Portfolio Acquisition Agreement were made only for purposes of the Loan Portfolio Acquisition
Agreement and as of specific dates; were solely for the benefit of the parties to the Loan Portfolio Acquisition Agreement (except as may be expressly set forth in the Loan Portfolio Acquisition Agreement); may be subject to limitations agreed
upon by the parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Loan Portfolio Acquisition Agreement instead of establishing these matters as facts; and
may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors and security holders should not rely on such representations, warranties, covenants or agreements, or any
descriptions thereof, as characterizations of the actual state of facts or condition of any of the parties to the Loan Portfolio Acquisition Agreement or any of their respective subsidiaries or affiliates. Moreover, information concerning the
subject matter of the representations, warranties, covenants and agreements may change after the date of the Loan Portfolio Acquisition Agreement, which subsequent information may or may not be fully reflected in public disclosures by the
parties to the Loan Portfolio Acquisition Agreement.
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SUBSEQUENT EVENTS |
6 Months Ended |
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Jun. 30, 2024 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS |
NOTE 13 — SUBSEQUENT EVENTS
The Company’s management evaluated subsequent events through the date on which
the financial statements were issued. Other than the item listed below, there have been no subsequent events that occurred during such period that have required adjustment or disclosure in the financial statements.
On July 16, 2024,
the Company invested $3.3 million in Ascend Wellness Holdings, Inc.’s 12.75%
.On August 7,
2024, the Board approved a cash dividend of $0.25/share. The dividend is payable on September 27, 2024 to stockholders of record
on September 19, 2024.
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Insider Trading Arrangements |
3 Months Ended |
---|---|
Jun. 30, 2024 | |
Insider Trading Arrangements [Line Items] | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SIGNIFICANT ACCOUNTING POLICIES (Policies) |
6 Months Ended | ||||||||||||||
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Jun. 30, 2024 | |||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||
Basis of Presentation |
Basis of Presentation
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”),
including the requirements under ASC 946, Financial Services—Investment Companies and Articles 6 and 12 of Regulation S-X. In the opinion of management, all adjustments of a normal recurring nature considered necessary for the fair presentation of the financial statements for the interim period presented have been made,
and such adjustments are normal and recurring in nature. The current period’s results of operations are not necessarily indicative of results that may be achieved for the year.
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Use of Estimates |
Use of Estimates
The preparation of the financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions affecting reported amounts of assets and liabilities at the date of the financial statements (i.e. fair value of investments) and the reported amounts of income, expenses, and gains and losses
during the reported period. These estimates are based on the information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could
differ materially from those estimates under different assumptions and conditions.
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Investment Valuation |
Investment Valuation
The Company’s investments are recorded at their estimated fair value on the Statement of Assets and Liabilities. Investments for which market
quotations are readily available will typically be valued at the bid price of those market quotations. To validate market quotations, we utilize a number of factors to determine if the quotations are representative of fair value, including the
source and number of the quotations. Debt and equity securities that are not publicly traded or whose market prices are not readily available are valued at fair value as determined in good faith by the Adviser, as the Company’s valuation designee
(the “Valuation Designee”), based on inputs that may include valuations, or ranges of valuations, provided by independent third-party valuation firm(s) engaged by the Adviser. Generally, the valuation approach used for debt investments is the
income approach. The approach derives a value based on either determining the present value of a projected level of cash flow, including a terminal value, or by the capitalization of a normalized measure of future cash flow. The discounted cash
flow (“DCF”) method, one of the methodologies under the income approach, involves estimating future cash flows under various scenarios and discounting them to the measurement date. The discount rate represents a return required by a market
participant in order to make an investment in the subject company.
Alternatively, the market approach or asset approach may be used. The market approach is a way of determining a value indication by using one or
more methods that compare the portfolio company to similar businesses. Value indicators are applied to relevant financial information of the entity being valued to estimate its fair value. There are two methodologies to consider under the market
approach: the guideline company method (“GCM”) and the controlling transaction method (“CTM”). The GCM is based on the premise that the pricing multiples of comparable publicly traded companies can be used as a tool to value privately held
companies. The publicly traded companies’ ratios and business enterprise value provide guidance in the valuation process. Considerations of factors such as size, growth, profitability and return on investment are also analyzed and compared to the
subject business. The CTM is based on the same premise as the GCM. Guideline transactions include change-of-control transactions involving public or private businesses for companies engaged in similar lines of business or with similar economic
characteristics. The valuation considers the price at which the merger or acquisition took place to other factors in order to create a pricing multiple that can be used to determine an estimate of value for the subject company.
The asset approach provides an indication of the portfolio company’s value by developing a valuation-based balance sheet. This approach requires
adjusting the historical assets and liabilities listed on the U.S. GAAP-based balance sheet to estimated fair values. The excess of assets over liabilities represents the tangible value of the business enterprise. The asset approach does not
consider the relevant earnings capacity of a going concern business.
Effective September 8, 2022, pursuant to Rule 2a-5 under the 1940 Act, the Board designated the Adviser as the Valuation Designee to perform the fair value
determinations for the Company, subject to the oversight of the Board and certain Board reporting and other requirements.
As part of the valuation process, the Adviser takes into account relevant factors in determining the fair value of our investments, including: the estimated
enterprise value of a portfolio company (i.e., the total fair value of the portfolio company’s debt and equity), the nature and realizable value of any collateral, the portfolio company’s ability to make payments based on its earnings and cash
flow, the markets in which the portfolio company does business, a comparison of the portfolio company’s securities to any similar publicly traded securities, and overall changes in the interest rate environment and the credit markets. When an
external event such as a purchase transaction, public offering or subsequent equity sale occurs, the Adviser considers whether the pricing indicated by the external event corroborates its valuation.
The Adviser undertakes a multi-step valuation process, which includes, among other procedures, the following:
We conduct this valuation process on a quarterly basis.
We apply Financial Accounting Standards Board Accounting Standards Codification 820, Fair Value Measurement (“ASC 820”),
which establishes a framework for measuring fair value in accordance with U.S. GAAP and required disclosures of fair value measurements. ASC 820 determines fair value to be the price that would be received for an investment in a current sale,
which assumes an orderly transaction between market participants on the measurement date. Market participants are defined as buyers and sellers in the principal or most advantageous market (which may be a hypothetical market) that are
independent, knowledgeable, and willing and able to transact. In accordance with ASC 820, we consider the principal market to be the market that has the greatest volume and level of activity. ASC 820 specifies a fair value hierarchy that
prioritizes and ranks the level of observability of inputs used in determination of fair value. In accordance with ASC 820, these levels are summarized below:
Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may
fluctuate from period to period. Additionally, the fair value of such investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that
may ultimately be realized. Further, such investments are generally less liquid than publicly traded securities and may be subject to contractual and other restrictions on resale. If we were required to liquidate a portfolio investment in a
forced or liquidation sale, it could realize amounts that are different from the amounts presented and such differences could be material.
In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on
these investments to be different than the unrealized gains or losses reflected previously.
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Equity Securities and Warrants |
Equity Securities and Warrants
The Company may be issued warrants by issuers as yield enhancements. These warrants are recorded as assets at estimated fair value on the grant date. The Company
determines the cost basis of the warrants or other equity securities received based upon their respective fair values on the date of receipt in proportion to the total fair value of the debt and warrants or other equity securities received.
Depending on the facts and circumstances, the Company generally utilizes a combination of one or several forms of the market approach and contingent claim analyses (a form of option analysis) to estimate the fair value of the securities as of the
measurement date and determines the cost basis using a relative fair value methodology. As part of its application of the market approach, the Company estimates the enterprise value of a portfolio company utilizing customary pricing multiples,
based on the development stage of the underlying issuers, or other appropriate valuation methods, such as considering recent transactions in the equity securities of the portfolio company or third-party valuations that are assessed to be
indicative of fair value of the respective portfolio company. If appropriate, based on the facts and circumstances, the Company performs an allocation of the enterprise value to the equity securities utilizing a contingent claim analysis and/or
other waterfall calculation by which it allocates the enterprise value across the portfolio company’s warrants and other equity securities in order of their preference relative to one another.
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Cash and Cash Equivalents |
Cash and Cash Equivalents
Cash and cash equivalents consists of funds deposited with financial institutions and short-term (maturity of 90 days or less) liquid investments and money market
funds. Funds held in money market funds are considered Level 1 in the fair value hierarchy in accordance with ASC 820. Cash held in demand deposit accounts may exceed the Federal Deposit Insurance Corporation (“FDIC”) insured limit. The Company
has not incurred any losses on these accounts, and the credit risk exposure is mitigated by the financial strength of the banking institution where the accounts are held. As of June 30, 2024 and December 31, 2023, cash and cash equivalents
consisted of $34.00 million and $32.61
million, respectively, of which $34.00 million and $32.61 million, respectively, was held in the State Street Institutional U.S. Government Money Market Fund.
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Earnings per share |
Earnings per share
Basic earnings per share is computed by dividing net increase (decrease) in net assets resulting from operations by the
weighted-average number of common shares outstanding for the period. Other potentially dilutive common shares, and the related impact to earnings are considered when calculating earnings per share on a diluted basis using the treasury stock
method.
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Investment Transactions |
Investment Transactions
Investment transactions are recorded on trade date. Realized gains or losses are recognized as the difference between the net proceeds received (excluding prepayment
fees, if any) and the amortized cost basis of the investment using the specific identification method without regard to unrealized gains or losses previously recognized, and include investments written off during the period, net of recoveries.
Current-period changes in fair value of investments are reflected as a component of the net change in unrealized appreciation (depreciation) on investments on the Statements of Operations. The net change in unrealized appreciation (depreciation)
primarily reflects the change in investment fair values as of the last business day of the reporting period, including the reversal of previously recorded unrealized gains or losses with respect to investments realized during the period.
Investments traded but not yet settled, if any, are reported in payable for investments purchased and receivable for investments sold on the Statement of Assets and
Liabilities.
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Interest and Dividend Income |
Interest and Dividend Income
Interest income is recorded on the accrual basis and includes accretion and amortization of discounts or premiums, respectively. Discounts and premiums to par value
on securities purchased are accreted and amortized, respectively, into interest income over the contractual life of the respective security using the effective yield method. The amortized cost of investments includes the original cost adjusted
for the accretion and amortization of discounts and premiums, respectively. Upon prepayment of a loan or debt security, any prepayment premiums and unamortized discounts or premiums are recorded as interest income in the current period.
When a debt security becomes 90 days or more past due, or if management otherwise does not expect that principal, interest, and other obligations due will be
collected in full, the Company will generally place the debt security on non-accrual status and cease recognizing interest income on that debt security until all principal and interest due has been paid or the Company believes the borrower has
demonstrated the ability to repay its current and future contractual obligations. Any uncollected interest is reversed from income in the period that collection of the interest receivable is determined to be doubtful. However, the Company may
make exceptions to this policy if the investment has sufficient collateral value and is in the process of collection. As of June 30, 2024 and December 31, 2023, there were no loan investments in the portfolio placed on non-accrual status.
Interest income earned, excluding accretion
of discounts and amortization of premiums, was $2,582,583 and $5,167,651 for the three and six months ended June 30, 2024, respectively. Interest income earned, excluding accretion of discounts and amortization of premiums, was $2,601,710 and $4,918,730 for the
three and six months ended June 30, 2023, respectively. As of June 30, 2024 and December 31, 2023, $1,638,987 and $1,755,360, respectively, were recorded as interest receivable.
During the three and six months ended
June 30, 2024, the Company had $62,189 of unearned interest income, which represents interest received in advance but not yet
earned. This amount is recorded as a liability on the Statement of Assets and Liabilities and will be recognized as income over the remaining term of the respective loans.
Dividend income on preferred equity securities is recorded on the accrual basis to the extent that such amounts are payable by the portfolio company and are
expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies.
Certain investments may have contractual PIK interest or dividends. PIK interest or dividends represents accrued interest or dividends that is added to the
principal amount of the investment on the respective interest or dividend payment dates rather than being paid in cash and generally becomes due at maturity. If PIK interest or dividends are not expected to be realized by the Company, the
investment generating PIK interest or dividends will be placed on non-accrual status. When an investment with PIK is placed on non-accrual status, the accrued, uncapitalized interest or dividends are generally reversed through interest or
dividend income, respectively.
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Fee Income |
Fee Income
All transaction fees earned in connection with our investments are recognized as fee income and are generally non-recurring. Such fees typically include fees for
services, including administrative, structuring and advisory services, provided to portfolio companies. We recognize income from fees for providing such structuring and advisory services when the services are rendered or the transactions are
completed, and payment is received (generally immediately).
For the three and six months ended June 30, 2024, the
Company earned $291,000 and $324,750,
respectively, in fee income. For the three and six months ended June 30, 2023, the Company earned $131,250 and $131,250, respectively, in fee income.
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Income Taxes |
Income Taxes
The Company adopted an initial tax year end of December 31, 2021 and was taxed as a corporation for U.S. federal income tax purposes for the tax period ended
December 31, 2021. The Company adopted the tax year end of March 31, 2022 and elected to be treated for U.S. federal income tax purposes as a RIC under Subchapter M of the Code for the tax period January 1, 2022 through March 31, 2022, and
intends to maintain such election in the current and future taxable years. To maintain its tax treatment as a RIC, the Company must meet specified source-of-income and asset diversification requirements and timely distribute to its stockholders
for each taxable year at least 90% of its investment company taxable income. In order for the Company not to be subject to U.S.
federal excise taxes, it must distribute annually an amount at least equal to the sum of (i) 98% of its net ordinary income for the
calendar year, (ii) 98.2% of its capital gains in excess of capital losses for the one-year period ending on October 31 of the
calendar year and (iii) any net ordinary income and capital gains in excess of capital losses for preceding years that were not distributed during such years. The Company, at its discretion (subject to the requirement to distribute 90% of its investment company taxable income as described above), may carry forward taxable income in excess of calendar year dividends and pay a 4% nondeductible U.S. federal excise tax on this income. If the Company chooses to do so, this generally would increase expenses and reduce the
amount available to be distributed to stockholders. For the three and six months ended June 30, 2024, the Company did not accrue
any excise tax. For the three and six months ended June 30, 2023, the Company did not accrue any excise tax. As of June 30, 2024
and December 31, 2023, $19,913 and $0,
respectively, of overpaid excise taxes are included as Other assets in the Statement of Assets and Liabilities. As of June 30, 2024 and December 31, 2023, $0 and $10,655, respectively, of accrued excise taxes remained payable.
The Company evaluates tax positions taken in the course of preparing the Company’s tax returns to determine whether the tax
positions are “more-likely-than-not” to be sustained by the applicable tax authority in accordance with ASC Topic 740, Income Taxes (“ASC 740”). Tax benefits of positions not deemed to meet the more-likely-than-not threshold, or uncertain tax positions, would be recorded as
tax expense in the current year. It is the Company’s policy to recognize accrued interest and penalties related to uncertain tax benefits in income tax expense.
Based on the analysis of the Company’s tax position, the Company has no uncertain tax positions that met the recognition or measurement criteria as of June 30, 2024 and December 31, 2023. The Company does not anticipate any significant increase or decrease in unrecognized
tax benefits for the next twelve months. All of the Company’s tax returns remain subject to examination by U.S. federal and state tax authorities.
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Distributions |
Distributions
Distributions to common stockholders are recorded on the record date. The amount of taxable income to be paid out as a distribution is determined by our Board each quarter and is generally based upon the future taxable income estimated by management. Capital gains, if any, are distributed at least annually, although the Company may decide to retain all or some of those capital gains for investment and pay U.S. federal income tax at corporate rates on those retained amounts. If the Company chooses to do so, this generally will increase expenses and reduce the amount available to be distributed to stockholders. Our distributions may exceed our earnings, and therefore, portions of the distributions that we make may be a return of the money originally invested and represent a return of capital distribution to shareholders for tax purposes. |
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Offering Costs |
Offering Costs
These costs consist primarily of legal fees and other costs incurred in connection with the Company’s share
offerings, the preparation of the Company’s registration statement, and registration fees.
Costs associated with the offering of common shares of the Company are capitalized as deferred offering and, if any, are included in deferred offering costs on the
Statements of Assets and Liabilities. As of June 30, 2024 and December 31, 2023, deferred offering costs were $761,867 and $0, respectively. The deferred offering costs will be charged to capital upon the issuance of shares subsequent to the completion of the Loan
Portfolio Acquisition. For the three and six months ended June 30, 2024 and 2023, no offering costs were charged to capital. As
of June 30, 2024 and December 31, 2023, there were $676,791 and $0, respectively, of offering costs payable by the Company.
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Transaction Expenses Related to the Loan Portfolio Acquisition |
Transaction expenses related to the Loan Portfolio Acquisition
Cumulative transaction expenses related to the Loan Portfolio Acquisition at June 30, 2024 and December 31, 2023 were $3,350,333 and $711,264, respectively, and consisted primarily
of legal fees incurred related to the Loan Portfolio Acquisition. See “Note 12 – Proposed Loan Portfolio Acquisition” for further information regarding the Loan Portfolio Acquisition Agreement and the Loan Portfolio Acquisition.
For the three and six months ended June 30, 2024, the Company incurred transaction expenses related to the Loan Portfolio Acquisition of $533,019 and $2,639,069, respectively.
For the three and six months ended June 30, 2023, the Company did not incur any transaction expenses related to the Loan
Portfolio Acquisition. As of June 30, 2024 and December 31, 2023, there were $2,506,784 and $711,264, respectively, of transaction expenses related to the Loan Portfolio Acquisition payable by the Company.
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New Accounting Standards |
New Accounting Standards
In November 2023, the FASB issued Accounting Standard Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280), which improves reportable segment disclosure
requirements, primarily through enhanced disclosures about significant segment expenses. The amendment is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. We
do not believe that the Company will be materially impacted by the adoption of ASU 2023-07.
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INVESTMENTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio Investments |
The Company’s portfolio investments are primarily in companies conducting business in or supporting the cannabis industries. The following tables summarize the
composition of the Company’s portfolio investments by industry at amortized cost and fair value and as a percentage of the total portfolio as of June 30, 2024 and December 31, 2023.
The geographic composition is determined by the location of headquarters of the portfolio company. The following tables summarize the composition of the Company’s
portfolio investments by geographic region of the United States at amortized cost and fair value and as a percentage of the total portfolio as of June 30, 2024 and December 31, 2023. Geographic regions are defined as: West, for the states of WA,
OR, ID, MT, WY, CO, AK, HI, UT, NV and CA; Midwest, for the states ND, SD, NE, KS, MO, IA, MN, WI, MI, IL, IN and OH; Northeast, for the states PA, NJ, NY, CT, RI, MA, VT, NH and ME; Southeast, for the states of AR, LA, MS, TN, KY, AL, FL, GA,
SC, NC, VA, DE, WV and MD; and Southwest, for the states of AZ, NM, TX and OK.
The following tables summarize the composition of the Company’s portfolio investments by investment type at amortized cost and fair value and as a percentage of the
total portfolio as of June 30, 2024 and December 31, 2023.
|
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments Measured at Fair Value by Investment Type on Recurring Basis |
The Company’s investments measured at fair value by investment type on a recurring basis as of June 30, 2024 and December 31, 2023 were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Unobservable Inputs used in Fair Value Measurement Level 3 Portfolio Investments |
The following tables provide a summary of the significant unobservable inputs used to fair value the Level 3 portfolio investments as of June 30, 2024 and December
31, 2023. The methodology for the determination of the fair value of the Company’s investments is discussed in “Note 2 – Significant Accounting Policies”. Discount rate ranges are shown as spread over PRIME and Treasuries, respectively, for
Senior Secured First Lien Term Loans, as of June 30, 2024 and December 31, 2023.
(1) The weighted average is calculated based on the fair
value of each investment.
|
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Changes in Fair Value of Level 3 Portfolio Investments |
The following tables provide a summary of changes in the fair value of the Company’s Level 3 portfolio investments for the six months ended June 30, 2024 and 2023:
|
COMMON STOCK (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
COMMON STOCK [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Summary of Distributions Declared and Paid |
The following table summarizes distributions declared and paid by the Company
during the six months ended June 30, 2024:
|
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Schedule of Distribution Reinvestment Plan | During
the six months ended June 30, 2024, the Company issued the following shares of common stock under the DRIP:
|
EARNINGS PER SHARE (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Weighted Average Basic and Diluted Net Increase (Decrease) in Net Assets Per Share from Operations |
The following table sets forth the computation of the weighted average basic and diluted net increase (decrease) in net assets per share from operations for the
three and six months ended June 30, 2024 and 2023:
|
INCOME TAXES (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Distributable Earning |
For income tax purposes,
distributions paid to shareholders are reported as ordinary income, return of capital, long-term capital gains, or a combination thereof. The tax character of distributions paid for the three months ended June 30, 2024 and the tax year
ended March 31, 2024, were as follows:
As of March 31, 2024 and March 31, 2023, the components of distributable earnings on a tax basis detailed below
differ from the amounts reflected in the Company’s Statements of Assets and Liabilities by temporary book or tax differences primarily arising from the tax treatment of organizational costs, the tax treatment of transaction expenses related
to the Loan Portfolio Acquisition, and the tax treatment of uncrystallized capital gain incentive fees.
|
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Investments and Cash Equivalents for Federal Income tax |
The following table sets forth the tax cost basis and the estimated aggregate gross unrealized appreciation and depreciation from investments
and cash equivalents for federal income tax purposes as of June 30, 2024, March 31, 2024 and December 31, 2023:
|
FINANCIAL HIGHLIGHTS (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Highlights |
The following presents financial highlights for the six months ended June 30, 2024 and 2023:
|
ORGANIZATION (Details) - USD ($) $ / shares in Units, $ in Millions |
Feb. 04, 2022 |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|---|
Debt Instruments [Abstract] | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
IPO [Member] | |||
Debt Instruments [Abstract] | |||
Number of shares issued (in shares) | 6,214,286 | ||
Common stock, par value (in dollars per share) | $ 0.01 | ||
Shares issued | $ 87 | ||
Minimum [Member] | |||
Debt Instruments [Abstract] | |||
Debt investments term period | 2 years | ||
Maximum [Member] | |||
Debt Instruments [Abstract] | |||
Debt investments term period | 6 years |
SIGNIFICANT ACCOUNTING POLICIES, Cash and Cash Equivalents (Details) - USD ($) |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|
Cash and Cash Equivalents [Abstract] | ||
Cash and cash equivalents | $ 34,003,851 | $ 32,611,635 |
State Street Institutional U.S. Government Money Market Fund [Member] | ||
Cash and Cash Equivalents [Abstract] | ||
Cash and cash equivalents | $ 34,000,000 | $ 32,610,000 |
SIGNIFICANT ACCOUNTING POLICIES, Interest and Dividend Income (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
Dec. 31, 2023 |
|
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||
Loan investments in portfolio placed on non-accrual status | $ 0 | $ 0 | $ 0 | ||
Interest income earned, excluding accretion of discounts | 2,582,583 | $ 2,601,710 | 5,167,651 | $ 4,918,730 | |
Interest receivable | 1,638,987 | 1,638,987 | 1,755,360 | ||
Unearned interest income | $ 62,189 | $ 62,189 | $ 0 |
SIGNIFICANT ACCOUNTING POLICIES, Fee Income (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Fee Income [Abstract] | ||||
Fee income | $ 291,000 | $ 131,250 | $ 324,750 | $ 131,250 |
SIGNIFICANT ACCOUNTING POLICIES, Income Taxes (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
Dec. 31, 2023 |
|
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||||
Percentage of taxable income and gain planned to be distributed by company | 90.00% | ||||
Minimum percentage of ordinary income | 98.00% | ||||
Minimum percentage of capital gains | 98.20% | ||||
Federal excise tax rate based on distribution requirements | 4.00% | ||||
Excise tax expense | $ 0 | $ 0 | $ 0 | $ 0 | |
Overpaid excise taxes | 19,913 | 19,913 | $ 0 | ||
Accrued exercise taxes payable | 0 | 0 | 10,655 | ||
Uncertain tax positions | $ 0 | $ 0 | $ 0 | ||
Minimum [Member] | |||||
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||||
Percentage of taxable income and gain planned to be distributed by company | 90.00% |
SIGNIFICANT ACCOUNTING POLICIES, Offering Costs (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
Dec. 31, 2023 |
|
Offering Costs [Abstract] | |||||
Deferred offering costs | $ 761,867 | $ 761,867 | $ 0 | ||
Offering costs charged to capital | 0 | $ 0 | 0 | $ 0 | |
Offering costs unpaid | $ 676,791 | $ 676,791 | $ 0 |
SIGNIFICANT ACCOUNTING POLICIES, Transaction Expenses Related to Loan Portfolio Acquisition (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
Dec. 31, 2023 |
|
Transaction Expenses [Abstract] | |||||
Transaction expenses | $ 533,019 | $ 0 | $ 2,639,069 | $ 0 | |
Transaction fees payable | 2,506,784 | 2,506,784 | $ 711,264 | ||
Loan Portfolio Acquisition [Member] | |||||
Transaction Expenses [Abstract] | |||||
Transaction expenses related to legal costs | 3,350,333 | 3,350,333 | 711,264 | ||
Transaction expenses | 533,019 | $ 0 | 2,639,069 | $ 0 | |
Transaction fees payable | $ 2,506,784 | $ 2,506,784 | $ 711,264 |
INVESTMENTS (Details) |
6 Months Ended | |
---|---|---|
Jun. 30, 2024
USD ($)
Derivative
|
Dec. 31, 2023
USD ($)
Derivative
|
|
Investments, Loans [Abstract] | ||
Percentage of debt investments with variable interest rate | 82.50% | 84.90% |
Percentage of debt investments with fixed interest rate | 17.50% | 15.10% |
Loan repayment period | 3 years | |
Number of derivative instruments held | Derivative | 0 | 0 |
Amortized Cost [Abstract] | ||
Amount | $ 52,382,633 | $ 53,471,317 |
Percentage | 100.00% | 100.00% |
Fair Value [Abstract] | ||
Amount | $ 53,398,164 | $ 54,120,000 |
Percentage | 100.00% | 100.00% |
Minimum [Member] | ||
Investments, Loans [Abstract] | ||
Loans maturity period | 3 years | |
Maximum [Member] | ||
Investments, Loans [Abstract] | ||
Loans maturity period | 6 years | |
Senior Secured First Lien Term Loans [Member] | ||
Amortized Cost [Abstract] | ||
Amount | $ 43,423,880 | $ 45,372,626 |
Percentage | 82.90% | 84.90% |
Fair Value [Abstract] | ||
Amount | $ 44,350,164 | $ 46,006,000 |
Percentage | 83.00% | 85.00% |
Senior Secured Notes [Member] | ||
Amortized Cost [Abstract] | ||
Amount | $ 8,215,927 | $ 8,098,691 |
Percentage | 1570.00% | 15.10% |
Fair Value [Abstract] | ||
Amount | $ 8,267,000 | $ 8,114,000 |
Percentage | 1550.00% | 15.00% |
Equity [Member] | ||
Amortized Cost [Abstract] | ||
Amount | $ 742,826 | |
Percentage | 140.00% | |
Fair Value [Abstract] | ||
Amount | $ 781,000 | |
Percentage | 150.00% | |
West [Member] | ||
Amortized Cost [Abstract] | ||
Amount | $ 25,117,324 | $ 24,910,798 |
Percentage | 47.90% | 46.50% |
Fair Value [Abstract] | ||
Amount | $ 25,390,000 | $ 25,069,000 |
Percentage | 47.50% | 46.40% |
Midwest [Member] | ||
Amortized Cost [Abstract] | ||
Amount | $ 23,202,468 | $ 24,571,197 |
Percentage | 4430.00% | 46.00% |
Fair Value [Abstract] | ||
Amount | $ 23,800,164 | $ 24,911,000 |
Percentage | 4460.00% | 46.00% |
Northeast [Member] | ||
Amortized Cost [Abstract] | ||
Amount | $ 4,062,841 | $ 3,989,322 |
Percentage | 780.00% | 7.50% |
Fair Value [Abstract] | ||
Amount | $ 4,208,000 | $ 4,140,000 |
Percentage | 790.00% | 7.60% |
Wholesale Trade [Member] | ||
Amortized Cost [Abstract] | ||
Amount | $ 50,799,469 | $ 53,471,317 |
Percentage | 97.00% | 100.00% |
Fair Value [Abstract] | ||
Amount | $ 51,646,000 | $ 54,120,000 |
Percentage | 96.70% | 100.00% |
Real Estate Services [Member] | ||
Amortized Cost [Abstract] | ||
Amount | $ 1,583,164 | |
Percentage | 300.00% | |
Fair Value [Abstract] | ||
Amount | $ 1,752,164 | |
Percentage | 330.00% |
FAIR VALUE OF FINANCIAL INSTRUMENTS, Investments Measured at Fair Value (Details) - USD ($) |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|
Assets [Abstract] | ||
Fair value | $ 53,398,164 | $ 54,120,000 |
Senior Secured First Lien Term Loans [Member] | ||
Assets [Abstract] | ||
Fair value | 44,350,164 | 46,006,000 |
Senior Secured Notes [Member] | ||
Assets [Abstract] | ||
Fair value | 8,267,000 | 8,114,000 |
Equity Securities [Member] | ||
Assets [Abstract] | ||
Fair value | 781,000 | |
Recurring [Member] | ||
Assets [Abstract] | ||
Fair value | 53,398,164 | 54,120,000 |
Recurring [Member] | Senior Secured First Lien Term Loans [Member] | ||
Assets [Abstract] | ||
Fair value | 44,350,164 | 46,006,000 |
Recurring [Member] | Senior Secured Notes [Member] | ||
Assets [Abstract] | ||
Fair value | 8,267,000 | 8,114,000 |
Recurring [Member] | Equity Securities [Member] | ||
Assets [Abstract] | ||
Fair value | 781,000 | |
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) Member | ||
Assets [Abstract] | ||
Fair value | 0 | 0 |
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) Member | Senior Secured First Lien Term Loans [Member] | ||
Assets [Abstract] | ||
Fair value | 0 | 0 |
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) Member | Senior Secured Notes [Member] | ||
Assets [Abstract] | ||
Fair value | 0 | 0 |
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) Member | Equity Securities [Member] | ||
Assets [Abstract] | ||
Fair value | 0 | |
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Assets [Abstract] | ||
Fair value | 0 | 0 |
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Senior Secured First Lien Term Loans [Member] | ||
Assets [Abstract] | ||
Fair value | 0 | 0 |
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Senior Secured Notes [Member] | ||
Assets [Abstract] | ||
Fair value | 0 | 0 |
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Equity Securities [Member] | ||
Assets [Abstract] | ||
Fair value | 0 | |
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Assets [Abstract] | ||
Fair value | 53,398,164 | 54,120,000 |
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Senior Secured First Lien Term Loans [Member] | ||
Assets [Abstract] | ||
Fair value | 44,350,164 | 46,006,000 |
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Senior Secured Notes [Member] | ||
Assets [Abstract] | ||
Fair value | 8,267,000 | $ 8,114,000 |
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Equity Securities [Member] | ||
Assets [Abstract] | ||
Fair value | $ 781,000 |
FAIR VALUE OF FINANCIAL INSTRUMENTS, Significant Unobservable Inputs used in Fair Value Measurement Level 3 Portfolio Investments (Details) |
Jun. 30, 2024
USD ($)
|
Dec. 31, 2023
USD ($)
|
||
---|---|---|---|---|
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||||
Fair value | $ 53,398,164 | $ 54,120,000 | ||
Senior Secured First Lien Term Loans [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||||
Fair value | $ 44,350,164 | $ 46,006,000 | ||
Senior Secured First Lien Term Loans [Member] | Discounted Cash Flow [Member] | Discount Rate [Member] | Minimum [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||||
Measurement Input | 0.101 | 0.101 | ||
Senior Secured First Lien Term Loans [Member] | Discounted Cash Flow [Member] | Discount Rate [Member] | Maximum [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||||
Measurement Input | 0.135 | 0.135 | ||
Senior Secured First Lien Term Loans [Member] | Discounted Cash Flow [Member] | Discount Rate [Member] | Weighted Average [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||||
Measurement Input | [1] | 0.12 | 0.122 | |
Senior Secured Notes [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||||
Fair value | $ 8,267,000 | $ 8,114,000 | ||
Senior Secured Notes [Member] | Discounted Cash Flow [Member] | Discount Rate [Member] | Minimum [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||||
Measurement Input | 0.069 | 0.074 | ||
Senior Secured Notes [Member] | Discounted Cash Flow [Member] | Discount Rate [Member] | Maximum [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||||
Measurement Input | 0.129 | 0.137 | ||
Senior Secured Notes [Member] | Discounted Cash Flow [Member] | Discount Rate [Member] | Weighted Average [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||||
Measurement Input | [1] | 0.098 | 0.105 | |
Preferred Equity Securities [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||||
Fair value | $ 500,000 | |||
Preferred Equity Securities [Member] | Liquidation Preference [Member] | Liquidation Preference [Member] | Minimum [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||||
Measurement Input | 0.02 | |||
Preferred Equity Securities [Member] | Liquidation Preference [Member] | Liquidation Preference [Member] | Maximum [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||||
Measurement Input | 0.02 | |||
Preferred Equity Securities [Member] | Liquidation Preference [Member] | Liquidation Preference [Member] | Weighted Average [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||||
Measurement Input | [1] | 0.02 | ||
Warrants and Other Equity Securities [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||||
Fair value | $ 281,000 | |||
Warrants and Other Equity Securities [Member] | Enterprise Value Market Approach [Member] | Enterprise Valuation Multiple [Member] | Minimum [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||||
Measurement Input | 0.02 | |||
Warrants and Other Equity Securities [Member] | Enterprise Value Market Approach [Member] | Enterprise Valuation Multiple [Member] | Maximum [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||||
Measurement Input | 0.02 | |||
Warrants and Other Equity Securities [Member] | Enterprise Value Market Approach [Member] | Enterprise Valuation Multiple [Member] | Weighted Average [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||||
Measurement Input | [1] | 0.02 | ||
|
FAIR VALUE OF FINANCIAL INSTRUMENTS, Summary of Changes in Fair Value of Level 3 Portfolio Investments (Details) - USD ($) |
6 Months Ended | |
---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Changes in Fair Value of Level 3 Portfolio Investments [Abstract] | ||
Fair value, beginning of period | $ 54,120,000 | $ 50,254,550 |
Purchases | 1,575,000 | 8,442,000 |
Accretion of discount and fees (amortization of premium), net | 349,179 | 301,558 |
PIK interest | 113,137 | 62,587 |
Proceeds from sales of investments and principal repayments | (3,126,000) | (1,690,000) |
Net realized gain (loss) on investments | 0 | (210,767) |
Net change in unrealized appreciation (depreciation) from investments | 366,848 | 509,116 |
Fair value, end of period | 53,398,164 | 57,669,044 |
Net change in unrealized appreciation/depreciation on Level 3 investments still held as of September 30 | 366,848 | 509,116 |
Senior Secured First Lien Term Loans [Member] | ||
Changes in Fair Value of Level 3 Portfolio Investments [Abstract] | ||
Fair value, beginning of period | 46,006,000 | 40,660,633 |
Purchases | 832,175 | 8,442,000 |
Accretion of discount and fees (amortization of premium), net | 231,942 | 158,740 |
PIK interest | 113,137 | 62,587 |
Proceeds from sales of investments and principal repayments | (3,126,000) | (90,000) |
Net realized gain (loss) on investments | 0 | 0 |
Net change in unrealized appreciation (depreciation) from investments | 292,910 | 497,584 |
Fair value, end of period | 44,350,164 | 49,731,544 |
Net change in unrealized appreciation/depreciation on Level 3 investments still held as of September 30 | 292,910 | 497,584 |
Senior Secured Notes [Member] | ||
Changes in Fair Value of Level 3 Portfolio Investments [Abstract] | ||
Fair value, beginning of period | 8,114,000 | 9,593,917 |
Purchases | 0 | 0 |
Accretion of discount and fees (amortization of premium), net | 117,237 | 142,818 |
PIK interest | 0 | 0 |
Proceeds from sales of investments and principal repayments | 0 | (1,600,000) |
Net realized gain (loss) on investments | 0 | (210,767) |
Net change in unrealized appreciation (depreciation) from investments | 35,763 | 11,532 |
Fair value, end of period | 8,267,000 | 7,937,500 |
Net change in unrealized appreciation/depreciation on Level 3 investments still held as of September 30 | 35,763 | $ 11,532 |
Equity [Member] | ||
Changes in Fair Value of Level 3 Portfolio Investments [Abstract] | ||
Fair value, beginning of period | 0 | |
Purchases | 742,825 | |
Accretion of discount and fees (amortization of premium), net | 0 | |
PIK interest | 0 | |
Proceeds from sales of investments and principal repayments | 0 | |
Net realized gain (loss) on investments | 0 | |
Net change in unrealized appreciation (depreciation) from investments | 38,175 | |
Fair value, end of period | 781,000 | |
Net change in unrealized appreciation/depreciation on Level 3 investments still held as of September 30 | $ 38,175 |
RELATED PARTY TRANSACTIONS (Details) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2024
USD ($)
qtr
|
Jun. 30, 2023
USD ($)
|
Jun. 30, 2024
USD ($)
qtr
|
Jun. 30, 2023
USD ($)
|
Dec. 31, 2023
USD ($)
|
|
Investment Advisory Agreement [Abstract] | |||||
Management fee expenses incurred | $ 246,324 | $ 257,489 | $ 492,455 | $ 495,908 | |
Management fee payable | 246,324 | 246,324 | $ 257,121 | ||
Income-based incentive fee expenses | 328,503 | 442,673 | 328,503 | 646,494 | |
Income-based incentive fee payable | 1,839,756 | 1,839,756 | 1,511,253 | ||
Capital gains incentive fee expenses | (46,555) | (137,602) | 73,369 | 5,000 | |
Capital gains incentive fee payable | $ 160,953 | 160,953 | 87,583 | ||
Common stock purchased | 0 | 0 | |||
Distributions declared | 0 | 0 | |||
Silver Spike Capital, LLC [Member] | IPO [Member] | |||||
Investment Advisory Agreement [Abstract] | |||||
Common stock purchased | $ 63,000,000 | ||||
Percentage of voting stock held | 72.00% | 72.00% | |||
Cost of sales incurred | $ 1,230,000 | ||||
Related Party [Member] | |||||
Investment Advisory Agreement [Abstract] | |||||
Due to affiliate | $ 493 | $ 493 | 0 | ||
Investment Advisory Agreement [Member] | |||||
Investment Advisory Agreement [Abstract] | |||||
Percentage of management fee payable | 1.75% | ||||
Number of recent quarters | qtr | 2 | 2 | |||
Duration of incentive fee payable | quarterly | ||||
Percentage payable of Pre-Incentive Fee Net Investment Income | 20.00% | 20.00% | |||
Percentage payable of Pre-Incentive Fee Net Investment Income subject to a preferred return, or "hurdle" per quarter | 1.75% | 1.75% | |||
Percentage of Pre-Incentive Fee Net Investment Income subject to a preferred return, or "hurdle" per annum | 7.00% | 7.00% | |||
Percentage payable of realized capital gains on a cumulative basis | 20.00% | 20.00% | |||
Investment Advisory Agreement [Member] | Silver Spike Capital, LLC [Member] | |||||
Investment Advisory Agreement [Abstract] | |||||
Payment of related party expenses | $ 984 | $ 1,198 | |||
Investment Advisory Agreement [Member] | Related Party [Member] | |||||
Investment Advisory Agreement [Abstract] | |||||
Due to affiliate | $ 493 | $ 493 | $ 0 |
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|
COMMITMENTS AND CONTINGENCIES [Abstract] | ||
Outstanding commitments to fund Investments | $ 1,750,000 | |
Unfunded commitments | $ 0 |
COMMON STOCK, Distributions (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2024 |
Jun. 30, 2023 |
Dec. 31, 2023 |
|
COMMON STOCK [Abstract] | ||||
Common stock shares authorized (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | |
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |
Distributions [Abstract] | ||||
Cash dividends paid | $ 3,107,219 | $ 0 | ||
Q1 Dividend [Member] | ||||
Distributions [Abstract] | ||||
Declaration date | Mar. 08, 2024 | |||
Type | Quarterly | |||
Record date | Mar. 20, 2024 | |||
Payment date | Mar. 28, 2024 | |||
Per share amount (in dollars per share) | $ 0.25 | |||
Cash dividends paid | $ 1,553,736 | |||
Q2 Dividends [Member] | ||||
Distributions [Abstract] | ||||
Declaration date | May 09, 2024 | |||
Type | Quarterly | |||
Record date | Jun. 20, 2024 | |||
Payment date | Jun. 28, 2024 | |||
Per share amount (in dollars per share) | $ 0.25 | |||
Cash dividends paid | $ 1,553,738 |
COMMON STOCK, Distribution Reinvestment Plan (Details) - shares |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Distribution Reinvestment Plan [Abstract] | |||
Shares (in shares) | 0 | ||
Q1 Dividend [Member] | |||
Distribution Reinvestment Plan [Abstract] | |||
Shares (in shares) | 8 | ||
Declaration date | Mar. 08, 2024 | ||
Type | Quarterly | ||
Record date | Mar. 20, 2024 | ||
Payment date | Mar. 28, 2024 | ||
Q2 Dividends [Member] | |||
Distribution Reinvestment Plan [Abstract] | |||
Shares (in shares) | 15 | ||
Declaration date | May 09, 2024 | ||
Type | Quarterly | ||
Record date | Jun. 20, 2024 | ||
Payment date | Jun. 28, 2024 |
EARNINGS PER SHARE (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Net Increase (Decrease) in Net Assets Per Share [Abstract] | ||||
Net increase (decrease) in net assets resulting from operations | $ 1,292,861 | $ 1,211,404 | $ 1,812,672 | $ 3,568,484 |
Weighted Average Shares Outstanding - basic (in shares) | 6,214,949 | 6,214,672 | 6,214,945 | 6,214,672 |
Weighted Average Shares Outstanding - diluted (in shares) | 6,214,949 | 6,214,672 | 6,214,945 | 6,214,672 |
Net increase (decrease) in net assets resulting from operations per share - basic (in dollars per share) | $ 0.21 | $ 0.19 | $ 0.29 | $ 0.57 |
Net increase (decrease) in net assets resulting from operations per share - diluted (in dollars per share) | $ 0.21 | $ 0.19 | $ 0.29 | $ 0.57 |
INCOME TAXES (Details) - USD ($) |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Income Taxes Summary [Abstract] | |||||||
Effect of permanent adjustments | $ 0 | $ 0 | $ 0 | ||||
Tax Character of Distributions Paid [Abstract] | |||||||
Ordinary Income | $ 1,553,738 | $ 9,819,273 | |||||
Long-term Capital Gain | 0 | 0 | |||||
Return of Capital | 0 | 0 | |||||
Total Distributions | 1,553,738 | 9,819,273 | |||||
Components of Distributable Earnings [Abstract] | |||||||
Undistributed ordinary income | 1,782,017 | $ 3,418,714 | |||||
Net unrealized appreciation (depreciation) from investments | 1,015,531 | 1,015,531 | 1,248,303 | 713,009 | $ 648,683 | ||
Capital loss carry forwards | (210,767) | 0 | |||||
Other temporary differences | (3,393,536) | ||||||
Other temporary differences | (399,948) | ||||||
Deferred tax liabilities | (573,983) | ||||||
Deferred tax assets | 3,731,775 | ||||||
Aggregate Gross Unrealized Appreciation and Depreciation from Investments and Cash Equivalents for Federal Income Tax Purposes [Abstract] | |||||||
Tax cost of investments and cash equivalents | 86,386,485 | 86,386,485 | 86,762,991 | 86,082,952 | |||
Unrealized appreciation | 1,109,618 | 1,109,618 | 1,363,524 | 784,052 | |||
Unrealized depreciation | (94,087) | (94,087) | (115,221) | (135,369) | |||
Net unrealized appreciation (depreciation) from investments and cash equivalents | $ 1,015,531 | 1,015,531 | 1,248,303 | 713,009 | $ 648,683 | ||
Additional Paid-in Capital [Member] | |||||||
Income Taxes Summary [Abstract] | |||||||
Effect of permanent adjustments | $ 0 | $ (10,676) | $ 121,099 | $ 10,676 | $ 121,099 |
FINANCIAL HIGHLIGHTS (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
Dec. 31, 2023 |
|||||||||
Per share data [Roll Forward] | ||||||||||||
Net asset value at beginning of period (in dollars per share) | $ 13.77 | $ 13.91 | ||||||||||
Net investment income (loss) (in dollars per share) | [1] | 0.23 | 0.53 | |||||||||
Net realized and unrealized gains/(losses) on investments (in dollars per share) | [1] | 0.06 | 0.05 | |||||||||
Net increase/(decrease) in net assets resulting from operations (in dollars per share) | 0.29 | 0.58 | ||||||||||
Distributions from net investment income (loss) (in dollars per share) | [2] | (0.5) | 0 | |||||||||
Net asset value at end of period (in dollars per share) | $ 14.49 | $ 13.56 | $ 14.49 | |||||||||
Net assets at end of period | $ 90,044,213 | $ 84,258,073 | $ 90,044,213 | |||||||||
Shares outstanding at end of period (in shares) | 6,214,672 | 6,214,964 | 6,214,672 | 6,214,941 | ||||||||
Weighted average net assets | $ 85,034,260 | $ 87,669,473 | ||||||||||
Per share market value at end of period (in dollars per share) | $ 11.82 | $ 8.18 | ||||||||||
Total return based on market value | [3] | 46.73% | (16.53%) | |||||||||
Total return based on net asset value | [3] | 3.17% | 4.17% | |||||||||
Ratio/Supplemental data [Abstract] | ||||||||||||
Ratio of expenses to average net assets | [4] | 2.37% | 5.17% | |||||||||
Ratio of net investment income (loss) to average net assets | [4] | 3.73% | 1.70% | |||||||||
Portfolio turnover | [4] | 3.12% | 3.10% | |||||||||
|
PROPOSED LOAN PORTFOLIO ACQUISITION (Details) |
Feb. 18, 2024
USD ($)
|
Dec. 31, 2023
USD ($)
Loan
|
---|---|---|
Loan Portfolio Acquisition [Abstract] | ||
Number of loans in portfolio | Loan | 24 | |
Loans in portfolio, principal outstanding | $ 130,000,000 | |
Number of loans to be acquired | Loan | 4 | |
Principal amount of loans to be acquired | $ 43,000,000 | |
Termination fee | $ 6,046,613 | |
Indemnification quotient | $ 10,000,000 | |
Percent of outstanding shares after giving effect to the stock issuance | 3.00% | |
Minimum [Member] | ||
Loan Portfolio Acquisition [Abstract] | ||
Percent of outstanding common stock sold | 65.00% | |
Maximum [Member] | ||
Loan Portfolio Acquisition [Abstract] | ||
Percent of outstanding common stock sold | 75.00% |
SUBSEQUENT EVENTS (Details) - Subsequent Event [Member] - USD ($) $ / shares in Units, $ in Millions |
Aug. 07, 2024 |
Jul. 16, 2024 |
---|---|---|
Subsequent Event [Abstract] | ||
Investment | $ 3.3 | |
Interest rate | 12.75% | |
Investment, Type [Extensible Enumeration] | ssic:SeniorSecuredNotesDue2029Member | |
Dividend payable (in dollars per share) | $ 0.25 |
1 Year Silver Spike Investment Chart |
1 Month Silver Spike Investment Chart |
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