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Fair Value of Other Securities (Tables)
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9 Months Ended |
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Sep. 30, 2013
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| Fair Value Disclosures [Abstract] |
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| Assets and liabilities measured on a recurring basis |
The following tables provide the fair value measurements of applicable Company assets and liabilities by level within the fair value hierarchy as of September 30, 2013, and November 30, 2012. These assets and liabilities are measured on a recurring basis.
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September 30, 2013 |
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September 30, 2013 |
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Fair Value |
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Level 1 |
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Level 2 |
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Level 3 |
Assets: |
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Trading securities |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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Other equity securities |
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22,168,268 |
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— |
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— |
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22,168,268 |
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Total Assets |
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$ |
22,168,268 |
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$ |
— |
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$ |
— |
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$ |
22,168,268 |
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November 30, 2012 |
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November 30, 2012 |
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Fair Value |
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Level 1 |
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Level 2 |
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Level 3 |
Assets: |
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Trading securities |
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$ |
55,219,411 |
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$ |
27,480,191 |
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$ |
27,739,220 |
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$ |
— |
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Other equity securities |
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19,866,621 |
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— |
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— |
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19,866,621 |
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Total Assets |
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$ |
75,086,032 |
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$ |
27,480,191 |
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$ |
27,739,220 |
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$ |
19,866,621 |
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| The changes for all Level 3 assets measured at fair value on a recurring basis using significant unobservable inputs |
The changes for all Level 3 securities measured at fair value on a recurring basis using significant unobservable inputs for the nine months ended September 30, 2013 are as follows:
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For the Nine Months Ended |
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September 30, 2013 |
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August 31, 2012 |
Fair value beginning balance |
$ |
19,707,126 |
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$ |
41,856,730 |
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Total realized and unrealized gains included in net income |
3,509,432 |
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15,467,845 |
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Sales |
— |
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(35,919,672 |
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Return of capital adjustments impacting cost basis of securities |
(1,048,290 |
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(1,875,120 |
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Fair value ending balance |
$ |
22,168,268 |
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$ |
19,529,783 |
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Changes in unrealized gains, included in net income, relating to securities still held (1) |
$ |
3,509,432 |
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$ |
(355,223 |
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| Quantitative table for Valuation Techniques |
The following table summarizes the significant unobservable inputs that the Company uses to value its portfolio investments categorized as Level 3 as of September 30, 2013.
Quantitative Table for Valuation Techniques
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Significant Unobservable Inputs Used To Value Portfolio Investments |
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Unobservable Inputs |
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Range |
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Weighted Average |
Assets at Fair Value |
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Fair Value |
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Valuation Technique |
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Low |
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High |
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Other equity securities, at fair value |
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$ |
22,168,268 |
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Public company historical EBITDA analysis |
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Historical EBITDA Valuation Multiples |
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10.0x |
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13.3x |
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11.7x |
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Public company projected EBITDA analysis |
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Projected EBITDA Valuation Multiples |
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9.3x |
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11.1x |
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10.2x |
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M&A company analysis |
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EV/LTM 2012 EBITDA |
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8.3x |
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10.7x |
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9.5x |
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Discounted cash flow |
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Weighted Average Cost of Capital |
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9.5% |
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13.9% |
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11.7% |
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| Carrying and Fair Value Amounts |
The carrying value of the line of credit approximates the fair value due to its short term nature.
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Carrying and Fair Value Amounts |
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Level within fair value hierarchy |
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September 30, 2013 |
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November 30, 2012 |
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Carrying
Amount
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Fair Value |
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Carrying
Amount
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Fair Value |
Financial Assets: |
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Cash and cash equivalents |
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Level 1 |
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$ |
18,918,718 |
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$ |
18,918,718 |
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$ |
14,333,456 |
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$ |
14,333,456 |
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Escrow receivable |
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Level 2 |
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$ |
— |
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$ |
— |
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$ |
698,729 |
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$ |
698,729 |
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Financial Liabilities: |
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Long-term debt |
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Level 2 |
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$ |
70,000,000 |
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$ |
70,000,000 |
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$ |
— |
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$ |
— |
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Line of credit |
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Level 1 |
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$ |
— |
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$ |
— |
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$ |
120,000 |
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$ |
120,000 |
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