CAPITAL SOUTHWEST CORP

Previous wording

Because we are internally managed, we do not pay any external investment advisory fees, but instead directly incur the operating costs associated with employing investment and portfolio management professionals. We believe that our internally managed structure provides us with a beneficial operating expense structure when compared to other publicly traded and privately held investment firms that are externally managed, and our internally managed structure allows us the opportunity to leverage our non-interest operating expenses as we grow our investment portfolio. As of September 30, 2025 and 2024, the ratio of our last twelve months ("LTM") operating expenses, excluding interest expense, as a percentage of our LTM average total assets was 1.64% and 1.74%, respectively.

Current wording

Because we are internally managed, we do not pay any external investment advisory fees, but instead directly incur the operating costs associated with employing investment and portfolio management professionals. We believe that our internally managed structure provides us with a beneficial operating expense structure when compared to other publicly traded and privately held investment firms that are externally managed, and our internally managed structure allows us the opportunity to leverage our non-interest operating expenses as we grow our investment portfolio. As of December 31, 2025 and 2024, the ratio of our last twelve months ("LTM") operating expenses, excluding interest expense, as a percentage of our LTM average total assets was 1.67% and 1.61%, respectively.

Previous wording

The most significant determination inherent in the preparation of our consolidated financial statements is the valuation of our investment portfolio and the related amounts of unrealized appreciation and depreciation. As of September 30, 2025 and March 31, 2025, our investment portfolio at fair value represented approximately 92.9% and 94.8% of our total assets, respectively. We are required to report our investments at fair value. We follow the provisions of ASC 820. ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and enhances disclosure requirements for fair value measurements. ASC 820 requires us to assume that the portfolio investment is to be sold in the principal market to independent market participants, which may be a hypothetical market. See Note 4 - Fair Value Measurements in the Notes to the Consolidated Financial Statements for a detailed discussion of our investment portfolio valuation process and procedures.

Current wording

The most significant determination inherent in the preparation of our consolidated financial statements is the valuation of our investment portfolio and the related amounts of unrealized appreciation and depreciation. As of December 31, 2025 and March 31, 2025, our investment portfolio at fair value represented approximately 95.1% and 94.8% of our total assets, respectively. We are required to report our investments at fair value. We follow the provisions of ASC 820. ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and enhances disclosure requirements for fair value measurements. ASC 820 requires us to assume that the portfolio investment is to be sold in the principal market to independent market participants, which may be a hypothetical market. See Note 4 - Fair Value Measurements in the Notes to the Consolidated Financial Statements for a detailed discussion of our investment portfolio valuation process and procedures.

Previous wording

Interest and dividend income is recorded on an accrual basis to the extent amounts are expected to be collected. Dividend income is recognized on the date dividends are declared by the portfolio company or at the point an obligation exists for the portfolio company to make a distribution. Discounts/premiums received to par on loans purchased are capitalized and accreted or amortized into income over the life of the loan using the effective interest method. Upon the prepayment of a loan, any unamortized discount or premium is accelerated into interest income. In accordance with our valuation policy, accrued interest and dividend income is evaluated quarterly for collectability. When we do not expect the debtor to be able to service all of its debt or other obligations, we will generally establish a reserve against interest income receivable, thereby placing the loan or debt security on non-accrual status, and cease to recognize interest income on that loan or debt security until the borrower has demonstrated the ability and intent to pay contractual amounts due. If a loan or debt security’s status significantly improves regarding the portfolio company's ability to service debt or other obligations, it will be restored to accrual basis. As of September 30, 2025, investments on non-accrual status represented approximately 1.0% of our total investment portfolio's fair value and approximately 2.6% of its cost. As of March 31, 2025, investments on non-accrual status represented approximately 1.7% of our total investment portfolio's fair value and approximately 3.5% of its cost.

Current wording

Interest and dividend income is recorded on an accrual basis to the extent amounts are expected to be collected. Dividend income is recognized on the date dividends are declared by the portfolio company or at the point an obligation exists for the portfolio company to make a distribution. Discounts/premiums received to par on loans purchased are capitalized and accreted or amortized into income over the life of the loan using the effective interest method. Upon the prepayment of a loan, any unamortized discount or premium is accelerated into interest income. In accordance with our valuation policy, accrued interest and dividend income is evaluated quarterly for collectability. When we do not expect the debtor to be able to service all of its debt or other obligations, we will generally establish a reserve against interest income receivable, thereby placing the loan or debt security on non-accrual status, and cease to recognize interest income on that loan or debt security until the borrower has demonstrated the ability and intent to pay contractual amounts due. If a loan or debt security’s status significantly improves regarding the portfolio company's ability to service debt or other obligations, it will be restored to accrual basis. As of December 31, 2025, investments on non-accrual status represented approximately 1.5% of our total investment portfolio's fair value and approximately 3.2% of its cost. As of March 31, 2025, investments on non-accrual status represented approximately 1.7% of our total investment portfolio's fair value and approximately 3.5% of its cost.

Previous wording

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures," which was issued to enhance the transparency and decision usefulness of income tax disclosures, including an annual requirement to (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. The new guidance is effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of the new standard on the Company's consolidated financial statements and related disclosures and does not believe it will have a material impact on its consolidated financial statements or its disclosure.

Current wording

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures," which was issued to enhance the transparency and decision usefulness of income tax disclosures, including an annual requirement to (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. The new guidance is effective for annual periods beginning after December 15, 2024. The Company has evaluated the impact of the new standard on the Company's consolidated financial statements and related disclosures and does not believe it will have a material impact on its consolidated financial statements or its disclosure.

Previous wording

The total fair value of our investment portfolio was $1,877.9 million as of September 30, 2025, as compared to $1,785.3 million as of March 31, 2025. As of September 30, 2025, we had investments in 126 portfolio companies with an aggregate cost of $1,896.5 million. As of March 31, 2025, we had investments in 121 portfolio companies with an aggregate cost of $1,779.4 million. The following table presents certain additional selected information regarding our debt investments as of September 30, 2025 and March 31, 2025 (dollars in millions):

Current wording

The total fair value of our investment portfolio was $2,013.2 million as of December 31, 2025, as compared to $1,785.3 million as of March 31, 2025. As of December 31, 2025, we had investments in 132 portfolio companies with an aggregate cost of $2,031.2 million. As of March 31, 2025, we had investments in 121 portfolio companies with an aggregate cost of $1,779.4 million. The following table presents certain additional selected information regarding our debt investments as of December 31, 2025 and March 31, 2025 (dollars in millions):

Previous wording

The weighted average annual effective yields were computed using the effective interest rates during the quarter for all debt investments at cost as of September 30, 2025 and March 31, 2025, respectively, including accretion of original issue discount but excluding fees payable upon repayment of the debt instruments. As of September 30, 2025, investments on non-accrual status represented approximately 1.0% of our total investment portfolio's fair value and approximately 2.6% of its cost. As of March 31, 2025, investments on non-accrual status represented approximately 1.7% of our total investment portfolio's fair value and approximately 3.5% of its cost. Weighted average annual effective yield is not a return to shareholders and is higher than what an investor in shares in our common stock will realize on its investment because it does not reflect our expenses or any sales load paid by an investor.

Current wording

(b)The weighted average annual effective yield of debt investments is not the same as a return on investment for CSWC's shareholders, but rather relates to CSWC's investment portfolio and is calculated before the payment of all of CSWC's and subsidiaries' fees and expenses. The weighted average annual effective yields were computed using the effective interest rates during the quarter for all debt investments at cost as of December 31, 2025 and March 31, 2025, respectively, including accretion of original issue discount but excluding fees payable upon repayment of the debt instruments. As of December 31, 2025, investments on non-accrual status represented approximately 1.5% of our total investment portfolio's fair value and approximately 3.2% of its cost. As of March 31, 2025, investments on non-accrual status represented approximately 1.7% of our total investment portfolio's fair value and approximately 3.5% of its cost. Weighted average annual effective yield is not a return to shareholders and is higher than what an investor in shares in our common stock will realize on its investment because it does not reflect our expenses or any sales load paid by an investor.

Previous wording

Wecontinue to observe commodity inflation, elements of financial market instability (including elevated interest rates), supply chain disruptions, changes to U.S. tariff and import/export regulations, and elements of geopolitical instability (including the ongoing war in Ukraine, conflict in the Middle East, and U.S. and China relations). Changes to trade policies, including the imposition of new tariffs, could disrupt supply chains and may negatively impact the financial condition of certain of our portfolio companies as well as the macro-economic environment. In the event that the U.S. economy enters into a protracted recession, it is possible that the results of certain U.S. middle market companies could experience deterioration. We are closely monitoring the effect of such market volatility may have on our portfolio companies and our investment activities, and we have also increased oversight of credits in vulnerable industries to mitigate any decline in loan performance and reduce credit risk.

Current wording

Wecontinue to observe certain macro-economic risks and uncertainties, including those relating to commodity inflation and elements of geopolitical instability (including the conflicts in Europe and the Middle East and U.S. and China relations). Changes to trade policies, including the imposition of new tariffs, could disrupt supply chains and may negatively impact the financial condition of certain of our portfolio companies as well as the macro-economic environment. In the event that the U.S. economy enters into a protracted recession, it is possible that the results of certain U.S. middle market companies could experience deterioration. We are closely monitoring the effect of such market volatility may have on our portfolio companies and our investment activities, and we have also increased oversight of credits in vulnerable industries to mitigate any decline in loan performance and reduce credit risk.

Previous wording

During the six months ended September 30, 2025, we made debt investments totaling $201.6 million and equity investments totaling $6.0 million. We also received, in connection with the sale of a preferred equity investment, an earnout with a cost basis of $3.5 million, which is included in financial instruments. We received contractual principal repayments totaling approximately $17.5 million and full prepayments of approximately $78.0 million. We funded $30.1 million on revolving loans and received $21.0 million in repayments on revolving loans. In addition, we received proceeds from sales of debt and equity investments totaling $36.3 million.

Current wording

During the nine months ended December 31, 2025, we made debt investments totaling $461.5 million and equity investments totaling $8.5 million. We also received, in connection with the sale of a preferred equity investment, an earnout with a cost basis of $3.5 million, which is included in financial instruments. We received contractual principal repayments totaling approximately $30.9 million and full prepayments of approximately $170.8 million. We funded $54.6 million on revolving loans and received $44.2 million in repayments on revolving loans. In addition, we received proceeds from sales of debt and equity investments totaling $65.5 million.

Previous wording

During the six months ended September 30, 2024, we made debt investments totaling $165.5 million and equity investments totaling $4.9 million. We received contractual principal repayments totaling approximately $16.2 million and full prepayments of approximately $103.0 million. We funded $23.6 million on revolving loans and received $13.0 million in repayments on revolving loans. In addition, we received proceeds from sales of debt investments totaling $22.6 million.

Current wording

During the nine months ended December 31, 2024, we made debt investments totaling $420.3 million and equity investments totaling $9.1 million. We received contractual principal repayments totaling approximately $40.8 million and full prepayments of approximately $131.1 million. We funded $37.5 million on revolving loans and received $29.6 million in repayments on revolving loans. In addition, we received proceeds from sales of debt investments totaling $27.3 million.

Previous wording

Total portfolio investment activity for the six months ended September 30, 2025 and 2024 was as follows (dollars in thousands):

Current wording

Total portfolio investment activity for the nine months ended December 31, 2025 and 2024 was as follows (dollars in thousands):

Previous wording

The composite measure of our financial performance in the Consolidated Statements of Operations is captioned “Net increase in net assets from operations” and consists of three elements. The first is “Net investment income,” which is the difference between income from interest, dividends and fees and our combined operating and interest expenses, net of applicable income taxes. The second element is “Net realized (loss) gain on investments, net of tax,” which is the difference between the proceeds received from the disposition of portfolio securities and their stated cost. The third element is the “Net unrealized (depreciation) appreciation on investments, net of tax,” which is the net change in the market or fair value of our investment portfolio, compared with the stated cost. The “Net realized (loss) gain on investments before income tax” and “Net unrealized (depreciation) appreciation on investments, net of tax” are directly related in that when an appreciated portfolio security is sold to realize a gain, a corresponding decrease in net unrealized appreciation occurs by transferring the gain associated with the transaction from being “unrealized” to being “realized.” Conversely, when a loss is realized on a depreciated portfolio security, an increase in net unrealized appreciation occurs.

Current wording

The composite measure of our financial performance in the Consolidated Statements of Operations is captioned “Net increase in net assets from operations” and consists of four elements. The first is “Net investment income,” which is the difference between income from interest, dividends and fees and our combined operating and interest expenses, net of applicable income taxes. The second element is “Net realized (loss) gain on investments, net of tax,” which is the difference between the proceeds received from the disposition of portfolio securities and their stated cost. The third element is the “Net unrealized (depreciation) appreciation on investments, net of tax,” which is the net change in the market or fair value of our investment portfolio, compared with the stated cost. The “Net realized (loss) gain on investments before income tax” and “Net unrealized (depreciation) appreciation on investments, net of tax” are directly related in that when an appreciated portfolio security is sold to realize a gain, a corresponding decrease in net unrealized appreciation occurs by transferring the gain associated with the transaction from being “unrealized” to being “realized.” Conversely, when a loss is realized on a depreciated portfolio security, an increase in net unrealized appreciation occurs. The fourth element is the “Realized loss on extinguishment of debt”, which, with respect to the full redemption of the January 2026 Notes, the October 2026 Notes and the August 2028 Notes, is the difference between the principal amount due at maturity adjusted for any unamortized debt issuance costs.

Previous wording

Total investment income for the three months ended September 30, 2025 was approximately $56.9 million, a $8.2 million, or 16.9%, increase as compared to the three months ended September 30, 2024. Investment income primarily consists of interest income, dividend income, fee income and other income for each applicable period.

Current wording

Total investment income for the three months ended December 31, 2025 was approximately $61.4 million, a $9.5 million, or 18.2%, increase as compared to the three months ended December 31, 2024. Investment income primarily consists of interest income, dividend income, fee income and other income for each applicable period.

Previous wording

The following table summarizes the components of investment income for the three months ended September 30, 2025 and 2024:

Current wording

The following table summarizes the components of investment income for the three months ended December 31, 2025 and 2024 (amounts in thousands):

Previous wording

Interest income (including PIK interest income and amortization of purchase discounts and fees) for the three months ended September 30, 2025 totaled $51.1 million as compared to $46.1 million for the three months ended September 30, 2024. The increase was primarily due to a 22.2% increase in the average monthly cost basis of debt investments held by us from $1,405.4 million to $1,717.2 million year-over-year, partially offset by a decrease in the weighted average yield on debt investments from 12.9% to 11.5% year-over-year. Dividend income for the three months ended September 30, 2025 increased

Current wording

Interest income (including PIK interest income and amortization of purchase discounts and fees) for the three months ended December 31, 2025 totaled $53.4 million as compared to $46.1 million for the three months ended December 31, 2024. The increase was primarily due to a 22.5% increase in the average monthly cost basis of debt investments held by us from $1,508.0 million to $1,848.0 million year-over-year, partially offset by a decrease in the weighted average yield on debt investments from 12.1% to 11.3% year-over-year. Dividend income for the three months ended December 31, 2025 increased $3.2 million as compared to the three months ended December 31, 2024 due to an increase in distributions received from portfolio companies. Fee income for the three months ended December 31, 2025 decreased $0.6 million as compared to the three months ended December 31, 2024 primarily due to a decrease in arranger fees and prepayment fees received in the current period. Other income for the three months ended December 31, 2025 decreased $0.3 million as compared to the three months ended December 31, 2024 primarily due to a decrease in interest income on cash balances held.

Previous wording

For the three months ended September 30, 2025, our total interest expense was $16.0 million, an increase of $3.4 million, as compared to the total interest expense of $12.6 million for the three months ended September 30, 2024. The increase was primarily attributable to an increase of $239.3 million in average borrowings outstanding, partially offset by a decrease in the weighted average interest rate on our total debt outstanding from 5.61% to 5.49% for the three months ended September 30, 2024 and September 30, 2025, respectively. This decrease in the weighted average interest rate on our total debt was primarily due to a decrease in the weighted average interest rate on our Credit Facilities, partially offset by the issuance of the 2029 Convertible Notes.

Current wording

For the three months ended December 31, 2025, our total interest expense was $18.0 million, an increase of $3.3 million, as compared to the total interest expense of $14.7 million for the three months ended December 31, 2024. The increase was primarily attributable to an increase of $196.2 million in average borrowings outstanding and an increase in the weighted average interest rate on our total debt outstanding from 5.49% to 5.65% for the three months ended December 31, 2024 and December 31, 2025, respectively. This increase in the weighted average interest rate on our total debt was primarily due to the issuance of the September 2030 Notes, partially offset by the decrease in the weighted average interest rate on our Credit Facilities and the redemption of the October 2026 Notes.

Previous wording

For the three months ended September 30, 2025, our total employee compensation expense (including both cash and share-based compensation) increased by $0.4 million, or 10.6%, as compared to the total employee compensation expense for the three months ended September 30, 2024. The increase was primarily due to an increase in accrued bonus compensation based on the Company's projected performance compared to its plan, partially offset by a decrease in share-based compensation due to a lower fair value on current year restricted stock award grants. For the three months ended September 30, 2025, our total general and administrative expense increase by $0.4 million, or 16.7%, as compared to the total general and administrative expense for the three months ended September 30, 2024. The increase was primarily due to an increase in legal fees, as well as individually immaterial increases across several general operating expenses.

Current wording

For the three months ended December 31, 2025, our total employee compensation expense (including both cash and share-based compensation) increased by $1.9 million, or 49.1%, as compared to the total employee compensation expense for the three months ended December 31, 2024. The increase was primarily due to an increase in accrued bonus compensation based on the Company's projected performance compared to its plan, partially offset by a decrease in share-based compensation due to a lower fair value on current year restricted stock award grants. For the three months ended December 31, 2025, our total general and administrative expense increased by $0.3 million, or 9.9%, as compared to the total general and administrative expense for the three months ended December 31, 2024. The increase was primarily due to an increase in legal fees, as well as individually immaterial increases across several general operating expenses.

Previous wording

For the three months ended September 30, 2025, income before taxes increased by $4.0 million, or 13.3%. Net investment income increased from the prior year period by $0.8 million, or 2.6%, to $32.0 million as a result of a $8.2 million increase in total investment income, partially offset by a $3.4 million increase in interest expense and a $3.2 million increase in income tax provision.

Current wording

For the three months ended December 31, 2025, income before taxes increased by $3.9 million, or 12.9%. Net investment income increased from the prior year period by $6.7 million, or 22.0%, to $37.0 million as a result of a $9.5 million increase in total investment income and a $2.7 million decrease in income tax provision, partially offset by a $3.3 million increase in interest expense.

Previous wording

The following table provides a summary of the primary components of the total net realized gain on investments of $10.8 million for the six months ended September 30, 2025:

Current wording

The following table provides a summary of the primary components of the total net realized gain on investments of $0.2 million for the three months ended December 31, 2025 (amounts in thousands):

Previous wording

(1)Included in "Other" is a $7.0 million income tax provision related to realized gains on equity investments, as well as realized gains and losses from transactions, which are not considered to be significant individually or in the aggregate.

Current wording

(1)Included in "Other" is a $0.4 million income tax benefit related to realized gains on equity investments, as well as realized gains and losses from transactions, which are not considered to be significant individually or in the aggregate.

Previous wording

Total investment income for the six months ended September 30, 2025 was approximately $112.9 million, a $12.8 million, or 12.8%, increase as compared to the six months ended September 30, 2024. Investment income primarily consists of interest income, dividend income, fee income and other income for each applicable period.

Current wording

Total investment income for the nine months ended December 31, 2025 was approximately $174.3 million, a $22.3 million, or 14.7%, increase as compared to the nine months ended December 31, 2024. Investment income primarily consists of interest income, dividend income, fee income and other income for each applicable period.

Previous wording

The following table summarizes the components of investment income for the six months ended September 30, 2025 and 2024:

Current wording

The following table summarizes the components of investment income for the nine months ended December 31, 2025 and 2024 (amounts in thousands):

Previous wording

Interest income, PIK interest income, and amortization of purchase discounts and fees on an aggregate basis for the six months ended September 30, 2025 totaled $101.4 million as compared to $92.1 million for the six months ended September 30, 2024. The increase was primarily due to a 22.2% increase in the average monthly cost basis of debt investments held by us from $1,391.3 million to $1,699.8 million year-over-year, partially offset by a decrease in weighted average yield on debt investments from 12.9% to 11.5% year-over-year. Dividend income for the six months ended September 30, 2025 increased $3.4 million as compared to the six months ended September 30, 2024 due to an increase in distributions received from portfolio companies. Fee income for the six months ended September 30, 2025 increased $0.2 million as compared to the six months ended September 30, 2024 primarily due to an increase in arranger fees and administrative fees, partially offset by a decrease in amendment fees.

Current wording

Interest income, PIK interest income, and amortization of purchase discounts and fees on an aggregate basis for the nine months ended December 31, 2025 totaled $154.8 million as compared to $138.3 million for the nine months ended December 31, 2024. The increase was primarily due to a 22.2% increase in the average monthly cost basis of debt investments held by us from $1,435.1 million to $1,753.0 million year-over-year, partially offset by a decrease in weighted average yield on debt investments from 12.1% to 11.3% year-over-year. Dividend income for the nine months ended December 31, 2025 increased $6.6 million as compared to the nine months ended December 31, 2024 due to an increase in distributions received from portfolio companies. Fee income for the nine months ended December 31, 2025 decreased $0.4 million as compared to the nine months ended December 31, 2024 primarily due to a decrease in prepayment fees and arranger fees, partially offset by an increase in administrative fees. Other income for the nine months ended December 31, 2025 decreased $0.5 million as compared to the three months ended December 31, 2024 primarily due to a decrease in interest income on cash balances held.

Previous wording

For the six months ended September 30, 2025, our total interest expense was $31.3 million, an increase of $6.3 million, as compared to the total interest expense of $25.0 million for the six months ended September 30, 2024. The increase was primarily attributable to an increase of $217.2 million in average borrowings outstanding, partially offset by a decrease in the weighted average interest rate on our total debt from 5.60% to 5.47% for the six months ended September 30, 2024 and September 30, 2025, respectively. The decrease in the weighted average interest rate was primarily due to a decrease in the weighted average interest rate on our Credit Facilities.

Current wording

For the nine months ended December 31, 2025, our total interest expense was $49.3 million, an increase of $9.6 million, as compared to the total interest expense of $39.7 million for the nine months ended December 31, 2024. The increase was primarily attributable to an increase of $210.2 million in average borrowings outstanding, partially offset by a decrease in the weighted average interest rate on our total debt from 5.54% to 5.51% for the nine months ended December 31, 2024 and December 31, 2025, respectively. The decrease in the weighted average interest rate was primarily due to a decrease in the weighted average interest rate on our Credit Facilities.

Previous wording

For the six months ended September 30, 2025, our total employee compensation expense (including both cash and share-based compensation) increased by $0.8 million as compared to the total employee compensation expense for the six months ended September 30, 2024. The increase was primarily due to an increase in accrued bonus compensation based on the Company's projected performance compared to its plan, partially offset by a decrease in share-based compensation due to a lower fair value on current year restricted stock award grants. For the six months ended September 30, 2025, our total general and administrative expense, including professional fees, was $5.9 million, an increase of $0.4 million, or 6.6%, as compared to $5.5 million for the six months ended September 30, 2024. The increase was primarily attributable to a variety of factors including an increase in legal fees, as well as an increase in rent expense and depreciation expense due to additional office space, in addition to individually immaterial increases across several general operating expenses.

Current wording

For the nine months ended December 31, 2025, our total employee compensation expense (including both cash and share-based compensation) increased by $2.7 million as compared to the total employee compensation expense for the nine months ended December 31, 2024. The increase was primarily due to an increase in accrued bonus compensation based on the Company's projected performance compared to its plan, partially offset by a decrease in share-based compensation due to a lower fair value on current year restricted stock award grants. For the nine months ended December 31, 2025, our total general and administrative expense, including professional fees, was $8.8 million, an increase of $0.7 million, or 7.7%, as compared to $8.1 million for the nine months ended December 31, 2024. The increase was primarily attributable to a variety of factors including an increase in legal fees, as well as an increase in building expenses associated with our additional office space, in addition to individually immaterial increases across several general operating expenses.

Previous wording

For the six months ended September 30, 2025, income before taxes increased by $5.4 million, or 8.9%. Net investment income increased from the prior year period by $3.8 million, or 6.4%, to $63.9 million as a result of a $12.8 million increase in total investment income, partially offset by a $6.3 million increase in interest expense and a $1.6 million increase in income tax provision.

Current wording

For the nine months ended December 31, 2025, income before taxes increased by $9.4 million, or 10.2%. Net investment income increased from the prior year period by $10.5 million, or 11.6%, to $100.9 million as a result of a $22.3 million increase in total investment income and a $1.1 million decrease in income tax provision, partially offset by a $9.6 million increase in interest expense.

Previous wording

(1)Included in "Other" is a $0.8 million income tax provision related to realized gains on equity investments, as well as realized gains and losses from transactions, which are not considered to be significant individually or in the aggregate.

Current wording

(1)Included in "Other" is a $6.6 million income tax provision related to realized gains on equity investments, as well as realized gains and losses from transactions, which are not considered to be significant individually or in the aggregate.

Previous wording

In accordance with the 1940 Act, effective April 25, 2019, the Company is only allowed to borrow amounts such that its asset coverage (i.e., the ratio of assets less liabilities not represented by senior securities to senior securities such as borrowings), calculated pursuant to the 1940 Act, is at least 150% after such borrowing. The Board of Directors also approved a resolution that limits the Company’s issuance of senior securities such that the asset coverage ratio, taking into account any such issuance, would not be less than 166%, which became effective April 25, 2019. On August 11, 2021, we received an exemptive order from SEC to permit us to exclude the senior securities issued by the SBIC Subsidiaries from the definition of senior securities in the asset coverage requirement applicable to the Company under the 1940 Act. As of September 30, 2025, the Company’s asset coverage was 208%.

Current wording

In accordance with the 1940 Act, effective April 25, 2019, the Company is only allowed to borrow amounts such that its asset coverage (i.e., the ratio of assets less liabilities not represented by senior securities to senior securities such as borrowings), calculated pursuant to the 1940 Act, is at least 150% after such borrowing. The Board of Directors also approved a resolution that limits the Company’s issuance of senior securities such that the asset coverage ratio, taking into account any such issuance, would not be less than 166%, which became effective April 25, 2019. On August 11, 2021, we received an exemptive order from SEC to permit us to exclude the senior securities issued by the SBIC Subsidiaries from the definition of senior securities in the asset coverage requirement applicable to the Company under the 1940 Act. As of December 31, 2025, the Company’s asset coverage was 211%.

Previous wording

For the six months ended September 30, 2025, we experienced a net increase in cash and cash equivalents in the amount of $44.2 million. During the foregoing period, our operating activities used $40.7 million in cash, consisting primarily of new portfolio investments made by the Company of $237.7 million, partially offset by $114.7 million from sales and repayments received from debt investments in portfolio companies and $30.9 million from sales of equity investments in portfolio companies. In addition, our financing activities provided cash of $85.2 million, consisting primarily of net proceeds from the issuance of the September 2030 Notes of $344.2 million and net proceeds from the Equity ATM Program of $80.9 million partially offset by net repayments on our Credit Facilities of $266.0 million and cash dividends paid in the amount of $71.4 million. At September 30, 2025, the Company had cash and cash equivalents of approximately $87.4 million and restricted cash of approximately $1.7 million.

Current wording

For the nine months ended December 31, 2025, we experienced a net decrease in cash and cash equivalents in the amount of $0.7 million. During the foregoing period, our operating activities used $134.4 million in cash, consisting primarily of new portfolio investments made by the Company of $524.7 million, partially offset by $273.6 million from sales and repayments received from debt investments in portfolio companies and $31.5 million from sales of equity investments in portfolio companies. In addition, our financing activities provided cash of $133.9 million, consisting primarily of net proceeds from the issuance of the September 2030 Notes of $344.2 million, net proceeds from the Equity ATM Program of $132.7 million and net proceeds from the issuance of SBA Debentures of $19.5 million, partially offset by the full redemption of $150.0 million in aggregate principal amount of the October 2026 Notes, cash dividends paid in the amount of $108.7 million, the full redemption of $71.9 million in aggregate principal amount of the August 2028 Notes, and net repayments on our Credit Facilities of $29.0 million. At December 31, 2025, the Company had cash and cash equivalents of approximately $42.6 million and restricted cash of approximately $1.7 million.

Previous wording

For the six months ended September 30, 2024, we experienced a net increase in cash and cash equivalents in the amount of $15.0 million. During that period, our operating activities provided $7.3 million in cash, consisting primarily of $153.1 million from sales and repayments received from debt investments in portfolio companies, partially offset by new portfolio investments made by the Company of $194.0 million. In addition, our financing activities used cash of $8.2 million, consisting primarily of cash dividends paid in the amount of $60.0 million, partially offset by net proceeds from the Equity ATM Program of $58.0 million and net borrowings on our Credit Facilities of $13.0 million. At September 30, 2024, the Company had cash and cash equivalents of approximately $47.2 million.

Current wording

For the nine months ended December 31, 2024, we experienced a net increase in cash and cash equivalents in the amount of $3.7 million. During that period, our operating activities used $158.5 million in cash, consisting primarily of new portfolio investments made by the Company of $466.9 million, partially offset by $226.9 million from sales and repayments received from debt investments in portfolio companies. In addition, our financing activities provided cash of $163.5 million, consisting primarily of net proceeds from the issuance of the 2029 Convertible Notes of $223.1 million, net proceeds from the Equity ATM Program of $111.0 million, net borrowings on our Credit Facilities of $43.0 million and net proceeds from the issuance of SBA Debentures of $21.5 million, partially offset by the full redemption of $140.0 million in aggregate principal amount of the January 2026 Notes and cash dividends paid in the amount of $91.6 million. At December 31, 2024, the Company had cash and cash equivalents of approximately $36.0 million.

Previous wording

As of September 30, 2025, we had $87.4 million in unrestricted cash and cash equivalents and $632.2 million of unused capacity under the Credit Facilities that we maintain to support our investment and operating activities.

Current wording

As of December 31, 2025, we had $42.6 million in unrestricted cash and cash equivalents and $395.2 million of unused capacity under the Credit Facilities that we maintain to support our investment and operating activities.

Previous wording

As of September 30, 2025, we had no borrowings outstanding and $509.2 million of undrawn commitments under the Corporate Credit Facility, and $77.0 million outstanding and $123.0 million of undrawn commitments under the SPV Credit Facility. Availability under the Credit Facilities is subject to certain leverage and borrowing base limitations, various covenants, reporting requirements and other customary requirements for similar credit facilities. For more information on our Credit Facilities, including material terms and financial covenants, refer to Note 5 - Borrowings in the Notes to the Consolidated Financial Statements.

Current wording

As of December 31, 2025, we had $210.0 million borrowings outstanding and $299.2 million of undrawn commitments under the Corporate Credit Facility, and $104.0 million outstanding and $96.0 million of undrawn commitments under the SPV Credit Facility. Availability under the Credit Facilities is subject to certain leverage and borrowing base limitations, various covenants, reporting requirements and other customary requirements for similar credit facilities. For more information on our Credit Facilities, including material terms and financial covenants, refer to Note 5 - Borrowings in the Notes to the Consolidated Financial Statements.

Previous wording

In August 2021, the Company issued $100.0 million in aggregate principal amount of 3.375% notes due 2026 (the "October 2026 Notes"). In November 2021, the Company issued an additional $50.0 million in aggregate principal amount of the October 2026 Notes. The outstanding aggregate principal amount of the October 2026 Notes was $150.0 million as of both September 30, 2025 and March 31, 2025. Subsequent to the fiscal quarter ended September 30, 2025, we redeemed, in full, the October 2026 Notes. See "Recent Developments" for more information.

Current wording

In August 2021, the Company issued $100.0 million in aggregate principal amount of 3.375% notes due 2026 (the "October 2026 Notes"). In November 2021, the Company issued an additional $50.0 million in aggregate principal amount of the October 2026 Notes. On October 13, 2025, the Company redeemed $150.0 million in aggregate principal amount of the issued and outstanding October 2026 Notes in full. The October 2026 Notes were redeemed at 100% of their principal amount, plus the accrued and unpaid interest thereon, through, but excluding the redemption date. Accordingly, the Company recognized a realized loss on extinguishment of debt, equal to the write-off of the related unamortized debt issuance costs, of $0.8 million during the quarter ended December 31, 2025.

Previous wording

In June 2023, the Company issued approximately $71.9 million in aggregate principal amount, including the underwriters' full exercise of their option to purchase an additional $9.4 million in aggregate principal amount to cover over-allotments, of 7.75% notes due 2028 (the "August 2028 Notes"). The outstanding aggregate principal amount of the August 2028 Notes was $71.9 million as of both September 30, 2025 and March 31, 2025. Subsequent to the fiscal quarter ended September 30, 2025, we redeemed, in full, the August 2028 Notes. See "Recent Developments" for more information.

Current wording

In June 2023, the Company issued approximately $71.9 million in aggregate principal amount, including the underwriters' full exercise of their option to purchase an additional $9.4 million in aggregate principal amount to cover over-allotments, of 7.75% notes due 2028 (the "August 2028 Notes"). On October 13, 2025, the Company redeemed $71.9 million in aggregate principal amount of the issued and outstanding August 2028 Notes in full. The August 2028 Notes were redeemed at 100% of their principal amount, plus the accrued and unpaid interest thereon, through, but excluding the redemption date. Accordingly, the Company recognized a realized loss on extinguishment of debt, equal to the write-off of the related unamortized debt issuance costs, of $1.4 million during the quarter ended December 31, 2025.

Previous wording

On April 20, 2021 and April 17, 2025, SBIC I and SBIC II, respectively, received a license from the SBA to operate as an SBIC under Section 301(c) of the Small Business Investment Act of 1958, as amended. The licenses allow each of SBIC I and SBIC II to obtain leverage by issuing SBA Debentures, subject to the issuance of a leverage commitment by the SBA. Current SBA regulations permit SBIC I and SBIC II to each borrow up to $175 million in SBA Debentures with at least $87.5 million in regulatory capital (as defined in the SBA regulations). As of September 30, 2025, SBIC I had a total leverage commitment from the SBA in the amount of $175.0 million, all of which was drawn. As of September 30, 2025, SBIC II had a total leverage commitment from the SBA in the amount of $40.0 million, none of which was drawn. SBA Debentures have interest payable semi-annually and a ten-year maturity. The interest rate is fixed shortly after issuance at a market-driven spread over U.S. Treasury Notes with ten-year maturities. Interest on SBA Debentures is payable semi-annually on March 1 and September 1. The first maturity date related to the SBA Debentures occurs in September 2031.

Current wording

On April 20, 2021 and April 17, 2025, SBIC I and SBIC II, respectively, received a license from the SBA to operate as an SBIC under Section 301(c) of the Small Business Investment Act of 1958, as amended. The licenses allow each of SBIC I and SBIC II to obtain leverage by issuing SBA Debentures, subject to the issuance of a leverage commitment by the SBA. Current SBA regulations permit SBIC I and SBIC II to each borrow up to $175 million in SBA Debentures with at least $87.5 million in regulatory capital (as defined in the SBA regulations). As of December 31, 2025, SBIC I had a total leverage commitment from the SBA in the amount of $175.0 million, all of which was drawn. As of December 31, 2025, SBIC II had a total leverage commitment from the SBA in the amount of $40.0 million, of which $20.0 million was drawn. SBA Debentures have interest payable semi-annually and a ten-year maturity. The interest rate is fixed shortly after issuance at a market-driven spread over U.S. Treasury Notes with ten-year maturities. Interest on SBA Debentures is payable semi-annually on March 1 and September 1. The first maturity date related to the SBA Debentures occurs in September 2031.

Previous wording

The following table summarizes certain information relating to shares sold under the Equity ATM Program:

Current wording

The following table summarizes certain information relating to shares sold under the Equity ATM Program (dollars in thousands):

Previous wording

Cumulative to date, the Company has sold 36,843,069 shares of its common stock under the Equity ATM Program at a weighted-average price of $21.50, raising $792.0 million of gross proceeds. Net proceeds were $779.9 million after commissions to the sales agents on shares sold. As of September 30, 2025, the Company had $208.0 million available under the Equity ATM Program.

Current wording

Cumulative to December 31, 2025, the Company has sold 39,333,069 shares of its common stock under the Equity ATM Program at a weighted-average price of $21.47, raising $844.6 million of gross proceeds. Net proceeds were $831.7 million after commissions to the sales agents on shares sold. As of December 31, 2025, the Company had $155.4 million available under the Equity ATM Program.

Previous wording

On July 28, 2021, the Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $20 million of its outstanding shares of common stock in the open market at certain thresholds below its NAV per share, in accordance with guidelines specified in Rules 10b5-1(c)(1)(i)(B) and 10b-18 under the Exchange Act. On August 31, 2021, the Company entered into a share repurchase agreement, which became effective immediately, and the Company will cease purchasing its common stock under the share repurchase program upon the earlier of, among other things: (1) the date on which the aggregate price for all shares purchased under the share repurchase program equals $20 million including, without limitation, all applicable fees, costs and expenses; or (2) upon written notice by the Company to the broker that the share repurchase agreement is terminated. During the three and six months ended September 30, 2025 and 2024, the Company did not repurchase any shares under the share repurchase program.

Current wording

On July 28, 2021, the Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $20 million of its outstanding shares of common stock in the open market at certain thresholds below its NAV per share, in accordance with guidelines specified in Rules 10b5-1(c)(1)(i)(B) and 10b-18 under the Exchange Act. On August 31, 2021, the Company entered into a share repurchase agreement, which became effective immediately, and the Company will cease purchasing its common stock under the share repurchase program upon the earlier of, among other things: (1) the date on which the aggregate price for all shares purchased under the share repurchase program equals $20 million including, without limitation, all applicable fees, costs and expenses; or (2) upon written notice by the Company to the broker that the share repurchase agreement is terminated. During the three and nine months ended December 31, 2025 and 2024, the Company did not repurchase any shares under the share repurchase program.

Previous wording

At September 30, 2025 and March 31, 2025, we had a total of approximately $334.1 million and $197.4 million, respectively, in currently unfunded commitments (as discussed in Note 11 - Commitments and Contingencies to the Consolidated Financial Statements). As of September 30, 2025, the total unfunded commitments included commitments to issue letters of credit through a financial intermediary on behalf of certain portfolio companies. As of September 30, 2025, we had $0.9 million in letters of credit issued and outstanding under these commitments on behalf of the portfolio companies. For the letters of credit issued and outstanding, we would be required to make payments to third parties if the portfolio companies were to default on their related payment obligations. Of these letters of credit, $0.4 million expire in February 2026, $0.3 million expire in March 2026, and $0.2 million expire in April 2026. As of September 30, 2025, none of the letters of credit were drawn and as such, were not recorded as a liability on the Company's balance sheet.

Current wording

At December 31, 2025 and March 31, 2025, we had a total of approximately $284.6 million and $197.4 million, respectively, in currently unfunded commitments (as discussed in Note 11 -Commitments and Contingencies to the Consolidated Financial Statements). As of December 31, 2025, the total unfunded commitments included commitments to issue letters of credit through a financial intermediary on behalf of certain portfolio companies. As of December 31, 2025, we had $0.9 million in letters of credit issued and outstanding under these commitments on behalf of the portfolio companies. For the letters of credit issued and outstanding, we would be required to make payments to third parties if the portfolio companies were to default on their related payment obligations. Of these letters of credit, $0.4 million expire in February 2026, $0.3 million expire in March 2026, and $0.2 million expire in April 2026. As of December 31, 2025, none of the letters of credit were drawn and as such, were not recorded as a liability on the Company's balance sheet.

Previous wording

(1)Amounts include interest payments calculated at an average rate of 6.92% of outstanding borrowings under the SPV Credit Facility, which were $77.0 million as of September 30, 2025.

Current wording

(1)Amounts include interest payments calculated at an average rate of 6.39% of outstanding borrowings under the Corporate Credit Facility, which were $210.0 million as of December 31, 2025.