BlackRock TCP Capital Corp

Previous wording

our ability to maintain our qualification as a regulated investment company and as a business development company; and

Current wording

our ability to maintain our qualification as a RIC and as a BDC; and

Previous wording

The Company is a Delaware corporation formed on April 2, 2012 and is an externally managed, closed-end, non-diversified management investment company. The Company was formed through the conversion of a pre-existing closed-end investment company. The Company elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). Our investment objective is to seek to achieve high total returns through current income and capital appreciation, with an emphasis on principal protection. We invest primarily in the debt of middle-market companies as well as small businesses, including senior secured loans, junior loans, mezzanine debt and bonds. Such investments may include an equity component, and, to a lesser extent, we may make equity investments directly. Certain investment operations are conducted through the Company’s wholly-owned subsidiaries, Special Value Continuation Partners LLC, a Delaware limited liability company (“SVCP”), TCPC Funding I, LLC (“TCPC Funding”), TCPC Funding II, LLC ("TCPC Funding II") and TCPC SBIC, LP (the “SBIC”). SVCP was organized as a limited partnership and had elected to be regulated as a BDC under the 1940 Act through July 31, 2018. On August 1, 2018, SVCP withdrew its election to be regulated as a BDC under the 1940 Act and withdrew the registration of its common limited partner interests under Section 12(g) of the 1934 Act and, on August 2, 2018, terminated its general partner, Series H of SVOF/MM, LLC, and converted to a Delaware limited liability company. Series H of SVOF/MM, LLC (“SVOF/MM”) serves as the administrator (the “Administrator”) of the Company. The managing member of SVOF/MM is Tennenbaum Capital Partners, LLC (the “Advisor”), which serves as the investment manager to the Company, TCPC Funding, TCPC Funding II and the SBIC. On August 1, 2018, the Advisor merged with and into a wholly owned subsidiary of BlackRock Capital Investment Advisors, LLC, an indirect wholly owned subsidiary of BlackRock, Inc. with the Advisor as the surviving entity. The SBIC was organized as a Delaware limited partnership in June 2013. On April 22, 2014, the SBIC received a license from the United States Small Business Administration (the “SBA”) to operate as a small business investment company under the provisions of Section 301(c) of the Small Business Investment Act of 1958.

Current wording

The Company is a Delaware corporation formed on April 2, 2012 and is an externally managed, closed-end, non-diversified management investment company. The Company was formed through the conversion of a pre-existing closed-end investment company. The Company elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). Our investment objective is to seek to achieve high total returns through current income and capital appreciation, with an emphasis on principal protection. We invest primarily in the debt of middle-market companies as well as small businesses, including senior secured loans, junior loans, mezzanine debt and bonds. Such investments may include an equity component, and, to a lesser extent, we may make equity investments directly. Certain investment operations are conducted through the Company’s wholly-owned subsidiaries, Special Value Continuation Partners LLC, a Delaware limited liability company (“SVCP”), TCPC Funding I, LLC (“TCPC Funding”), TCPC Funding II, LLC ("TCPC Funding II") TCPC SBIC, LP, a Delaware limited partnership (the “SBIC”) and BCIC Merger Sub, LLC, a Delaware limited liability company and a wholly-owned subsidiary of SVCP (“Merger Sub”). SVCP was organized as a limited partnership and had elected to be regulated as a BDC under the 1940 Act through July 31, 2018. On August 1, 2018, SVCP withdrew its election to be regulated as a BDC under the 1940 Act and withdrew the registration of its common limited partner interests under Section 12(g) of the 1934 Act and, on August 2, 2018, terminated its general partner, Series H of SVOF/MM, LLC, and converted to a Delaware limited liability company. Series H of SVOF/MM, LLC (“SVOF/MM”) serves as the administrator (the “Administrator”) of the Company. The managing member of SVOF/MM is Tennenbaum Capital Partners, LLC (the “Advisor”), which serves as the investment manager to the Company, TCPC Funding, TCPC Funding II and the SBIC. On August 1, 2018, the Advisor merged with and into a wholly owned subsidiary of BlackRock Capital Investment Advisors, LLC ("BCIA"), an indirect wholly owned subsidiary of BlackRock, Inc. with the Advisor as the surviving entity. The SBIC was organized as a Delaware limited partnership in June 2013. On April 22, 2014, the SBIC received a license from the United States Small Business Administration (the “SBA”) to operate as a small business investment company under the provisions of Section 301(c) of the Small Business Investment Act of 1958.

Previous wording

The Company has elected to be treated as a regulated investment company (“RIC”) for U.S. federal income tax purposes. As a RIC, the Company will not be taxed on its income to the extent that it distributes such income each year and satisfies other applicable income tax requirements. TCPC Funding, TCPC Funding II and the SBIC have elected to be treated as partnerships for U.S. federal income tax purposes. SVCP was treated as a partnership for U.S. federal income tax purposes through August 1, 2018 and upon its conversion to a limited liability company on August 2, 2018, and thereafter is and will be treated as a disregarded entity.

Current wording

The Company has elected to be treated as a RIC for U.S. federal income tax purposes. As a RIC, the Company will not be taxed on its income to the extent that it distributes such income each year and satisfies other applicable income tax requirements. All of the subsidiaries of the Company are treated as disregarded entities.

Previous wording

Our leverage program is comprised of $300.0 million in available debt under a revolving, multi-currency credit facility issued by SVCP (the “Operating Facility”), $200.0 million in available debt under a senior secured revolving credit facility issued by TCPC Funding II (“Funding Facility II”), $250.0 million in senior unsecured notes issued by the Company maturing in 2024 (the “2024 Notes”), $325.0 million in senior unsecured notes issued by the Company maturing in 2026 (the “2026 Notes”) and $160.0 million in committed leverage from the SBA (the “SBA Program” and, together with the Operating Facility, Funding Facility II, the 2024 Notes and the 2026 Notes, the “Leverage Program”). Prior to being repaid on March 1, 2022, debt included $140.0 million in Convertible unsecured notes due March 2022 issued by the Company (the "2022 Convertible Notes"). Prior to being repaid on September 17, 2021, debt included $175.0 million in unsecured notes due August 2022 issued by the Company (the "2022 Notes").

Current wording

Our leverage program is comprised of $300.0 million in available debt under a revolving, multi-currency credit facility issued by SVCP (the “Operating Facility”), $200.0 million in available debt under a senior secured revolving credit facility issued by TCPC Funding II (“Funding Facility II”), amounts outstanding under a senior secured revolving credit facility originally issued by BlackRock Capital Investment Corporation, a Delaware corporation ("BCIC"), and assumed by Merger Sub ("Merger Sub Facility"), unsecured notes due December 2025 originally issued by BCIC and assumed by Merger Sub (the "2025 Notes"), $325.0 million in senior unsecured notes issued by the Company maturing in 2026 (the “2026 Notes”), $325.0 million in senior unsecured notes issued by the Company maturing in 2029 (the “2029 Notes”) and $141.5 million in committed leverage from the SBA (the “SBA Program” and, together with the Operating Facility, Funding Facility II, Merger Sub Facility, the 2025 Notes, the 2026 Notes and the 2029 Notes, the “Leverage Program”). Prior to being repaid on March 1, 2022, debt included $140.0 million in Convertible unsecured notes due March 2022 issued by the Company (the "2022 Convertible Notes"). Prior to being repaid on August 23, 2024, debt included $250.0 million in unsecured notes due August 2024 issued by the Company (the "2024 Notes").

Previous wording

To qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements and timely distribute to our stockholders generally at least 90% of our investment company taxable income, as defined by the Internal Revenue Code of 1986, as amended, for each year. Pursuant to this election, we generally will not have to pay corporate level taxes on any income that we distribute to our stockholders provided that we satisfy those requirements.

Current wording

To qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements and timely distribute to our shareholders generally at least 90% of our investment company taxable income, as defined by the Internal Revenue Code of 1986, as amended, for each year. Pursuant to this election, we generally will not have to pay corporate level taxes on any income that we distribute to our shareholders provided that we satisfy those requirements.

Previous wording

On September 6, 2023, the Company entered into the Merger Agreement with BCIC, Merger Sub, and, solely for the limited purposes set forth therein, BCIA and the Advisor. On January 10, 2024, the Merger Agreement was amended and restarted. See “Note 12 – Proposed Merger with BlackRock Capital Investment Corporation” for further information regarding the Merger Agreement and the Merger.

Current wording

On September 6, 2023, the Company entered into an agreement and plan of merger with BCIC, Merger Sub, and, solely for the limited purposes set forth therein, BCIA and the Advisor (such agreement, as amended, the "Merger Agreement"). On March 18, 2024, BCIC merged with and into Merger Sub, with Merger Sub continuing as the surviving company and as a subsidiary of SVCP and an indirect wholly-owned subsidiary of the Company (the "Merger"). As a result of the Merger, BCIC’s separate existence ceased.

Previous wording

the Merger, the likelihood the Merger is completed, the anticipated timing of its completion and the outcome and impact of any litigation relating to the Merger. See “Note 12 – Proposed Merger with BlackRock Capital Investment Corporation” for further information regarding the Merger Agreement and the Merger.

Current wording

See “Note 12 – Merger with BlackRock Capital Investment Corporation” for further information regarding the Merger Agreement and the Merger.

Previous wording

As a BDC, we are required to comply with certain regulatory requirements. For instance, we generally have to invest at least 70% of our total assets in “qualifying assets,” including securities and indebtedness of private U.S. companies, public U.S. operating companies whose securities are not listed on a national securities exchange or registered under the Securities Exchange Act of 1934, as amended, public domestic operating companies having a market capitalization of less than $250.0 million, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. We are also permitted to make certain follow-on investments in companies that were eligible portfolio companies at the time of initial investment but that no longer meet the definition. As of December 31, 2023, 81.7% of our total assets were invested in qualifying assets.

Current wording

As a BDC, we are required to comply with certain regulatory requirements. For instance, we generally have to invest at least 70% of our total assets in “qualifying assets,” including securities and indebtedness of private U.S. companies, public U.S. operating companies whose securities are not listed on a national securities exchange or registered under the Securities Exchange Act of 1934, as amended, public domestic operating companies having a market capitalization of less than $250.0 million, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. We are also permitted to make certain follow-on investments in companies that were eligible portfolio companies at the time of initial investment but that no longer meet the definition. As of December 31, 2024, 83.1% of our total assets were invested in qualifying assets.

Previous wording

Our primary operating expenses include the payment of a base management fee and, depending on our operating results, incentive compensation, expenses reimbursable under the management agreement, administration fees and the allocable portion of overhead under the administration agreement. The base management fee and incentive compensation remunerates the Advisor for work in identifying, evaluating, negotiating, closing and monitoring our investments. Our administration agreement with the Administrator provides that the Administrator may be reimbursed for costs and expenses incurred by the Administrator for office space rental, office equipment and utilities allocable to us under the administration agreement, as well as any costs and expenses incurred by the Administrator or its affiliates relating to any non-investment advisory, administrative or operating services provided by the Administrator or its affiliates to us. We also bear all other costs and expenses of our operations and transactions (and the Company’s common stockholders indirectly bear all of the costs and expenses of the Company, SVCP, TCPC Funding II and the SBIC), which may include those relating to:

Current wording

Our primary operating expenses include the payment of a base management fee and, depending on our operating results, incentive compensation, expenses reimbursable under the management agreement, administration fees and the allocable portion of overhead under the administration agreement. The base management fee and incentive compensation remunerates the Advisor for work in identifying, evaluating, negotiating, closing and monitoring our investments. Our administration agreement with the Administrator provides that the Administrator may be reimbursed for costs and expenses incurred by the Administrator for office space rental, office equipment and utilities allocable to us under the administration agreement, as well as any costs and expenses incurred by the Administrator or its affiliates relating to any non-investment advisory, administrative or operating services provided by the Administrator or its affiliates to us. We also bear all other costs and expenses of our operations and transactions (and the Company’s common shareholders indirectly bear all of the costs and expenses of the Company, SVCP, TCPC Funding II, the SBIC and Merger Sub), which may include those relating to:

Previous wording

costs of any reports, proxy statements or other notices to our stockholders, including printing costs;

Current wording

costs of any reports, proxy statements or other notices to our shareholders, including printing costs;

Previous wording

The investment management agreement provides that the base management fee be calculated at an annual rate of 1.5% of our total assets (excluding cash and cash equivalents) payable quarterly in arrears; provided, however, that, effective as of February 9, 2019, the base management fee is calculated at an annual rate of 1.0% of our total assets (excluding cash and cash equivalents) that exceed an amount equal to 200% of the net asset value of the Company. For purposes of calculating the base management fee, “total assets” is determined without deduction for any borrowings or other liabilities. The base management fee is calculated based on the value of our total assets and net asset value (excluding cash and cash equivalents) at the end of the most recently completed calendar quarter.

Current wording

Prior to the Closing, the investment management agreement provided that the base management fee be calculated at an annual rate of 1.5% of our total assets (excluding cash and cash equivalents) payable quarterly in arrears; provided, however, that, effective as of February 9, 2019, the base management fee was calculated at an annual rate of 1.0% of our total assets (excluding cash and cash equivalents) that exceed an amount equal to 200% of the net asset value of the Company. For purposes of calculating the base management fee, “total assets” is determined without deduction for any borrowings or other liabilities. The base management fee is calculated based on the value of our total assets and net asset value (excluding cash and cash equivalents) at the end of the most recently completed calendar quarter.

Previous wording

Additionally, the investment management agreement provides that the Advisor or its affiliates may be entitled to incentive compensation under certain circumstances. According to the terms of such agreement, no incentive compensation was incurred prior to January 1, 2013. Under the current investment management agreement, dated February 9, 2019, the incentive compensation equals the sum of (1) 20% of all ordinary income since January 1, 2013 through February 8, 2019 and 17.5% thereafter and (2) 20% of all net realized capital gains (net of any net unrealized capital depreciation) since January 1, 2013 through February 8, 2019 and 17.5% thereafter, less ordinary income incentive compensation and capital gains incentive compensation previously paid. However, incentive compensation will only be paid to the extent the cumulative total return of the Company after incentive compensation and including such payment would equal or exceed a 7% annual return on daily weighted-average contributed common equity. The determination of incentive compensation is subject to limitations under the 1940 Act and the Investment Advisers Act of 1940.

Current wording

Additionally, the previous investment management agreement dated February 9, 2019 and the Amended and Restated Investment Advisory Agreement each provide that the Advisor or its affiliates may be entitled to incentive compensation under certain circumstances. According to the terms of such agreements, no incentive compensation was incurred prior to January 1, 2013. Under the previous investment management agreement, dated February 9, 2019, and as continued under the Amended and Restated Investment Advisory Agreement, the incentive compensation equals the sum of (1) 20% of all ordinary income since January 1, 2013 through February 8, 2019 and 17.5% thereafter and (2) 20% of all net realized capital gains (net of any net unrealized capital depreciation) since January 1, 2013 through February 8, 2019 and 17.5% thereafter, less ordinary income incentive compensation and capital gains incentive compensation previously paid. However, incentive compensation will only be paid to the extent the cumulative total return of the Company after incentive compensation and including such payment would equal or exceed a 7% annual return on daily weighted-average contributed common equity. The determination of incentive compensation is subject to limitations under the 1940 Act and the Investment Advisers Act of 1940.

Previous wording

As of December 31, 2022, 0.1% of our investments were categorized as Level 1, 5.7% were categorized as Level 2, 94.0% were Level 3 investments valued based on valuations by independent third-party sources, and 0.2% were Level 3 investments valued based on valuations by the Valuation Designee.

Current wording

As of December 31, 2024, 0.0% of our investments were categorized as Level 1, 1.6% were categorized as Level 2, 98.3% were categorized as Level 3 investments valued based on valuations by independent third-party sources, and 0.1% were categorized as Level 3 investments valued based on valuations by the Valuation Designee.

Previous wording

As of December 31, 2023, 0.0% of our investments were categorized as Level 1, 3.0% were categorized as Level 2, 96.9% were Level 3 investments valued based on valuations by independent third-party sources, and 0.1% were Level 3 investments valued based on valuations by the Valuation Designee.

Current wording

As of December 31, 2023, 0.0% of our investments were categorized as Level 1, 3.0% were categorized as Level 2, 96.9% were categorized as Level 3 investments valued based on valuations by independent third-party sources, and 0.1% were categorized as Level 3 investments valued based on valuations by the Valuation Designee.

Previous wording

During the year ended December 31, 2022, we invested approximately $338.3 million, comprised of new investments in 35 new and 15 existing portfolio companies, as well as draws made on existing commitments and PIK received on prior investments. Of these investments, $323.0 million, or 95.5% of total acquisitions, were in senior secured loans, $8.8 million, or 2.6% of total acquisitions, were in senior secured notes, and $0.7 million, or 0.2% of total acquisitions, were in unsecured debt securities. The remaining $5.8 million (1.7% of total acquisitions) was comprised of equity investments, including $1.8 million in equity interest in a portfolio of lease assets. Additionally, we received approximately $481.5 million in proceeds from sales or repayments of investments during the year ended December 31, 2022.

Current wording

During the year ended December 31, 2024, we invested approximately $930.2 million, of which $587.0 million of investments were acquired as a result of the Merger which were comprised of 95.8% in senior secured loans, 3.1% in unsecured or subordinated debt securities and 1.1% in equity investments. The remaining $343.2 million of investments made by the Company during the year ended December 31, 2024, included new investments in 24 new and 20 existing portfolio companies, as well as draws made on existing commitments and PIK received on prior investments. Of these investments, $324.5 million, or 94.5% of total acquisitions, were in senior secured loans and $7.6 million, or 2.3% of total acquisitions, were in senior secured notes. The remaining $11.1 million, or 3.2% of total acquisitions, was comprised of equity investments. Additionally, we received approximately $517.1 million in proceeds from sales or repayments of investments during the year ended December 31, 2024.

Previous wording

During the year ended December 31, 2023, we invested approximately $226.1 million, comprised of new investments in 19 new and 9 existing portfolio companies, as well as draws made on existing commitments and PIK received on prior investments. Of these investments, $219.6 million, or 97.1% of total acquisitions, were in senior secured loans, and $2.2 million, or 1.0% of total acquisitions, were in senior secured notes, The remaining $4.3 million (1.9% of total acquisitions) was comprised of equity investments. Additionally, we received approximately $218.7 million in proceeds from sales or repayments of investments during the year ended December 31, 2023.

Current wording

During the year ended December 31, 2023, we invested approximately $226.1 million, comprised of new investments in 19 new and 9 existing portfolio companies, as well as draws made on existing commitments and PIK received on prior investments. Of these investments, $219.6 million, or 97.1% of total acquisitions, were in senior secured loans, $2.2 million, or 1.0% of total acquisitions, were in senior secured notes. The remaining $4.3 million, or 1.9% of total acquisitions, was comprised of equity investments. Additionally, we received approximately $218.7 million in proceeds from sales or repayments of investments during the year ended December 31, 2023.

Previous wording

At December 31, 2022, our investment portfolio of $1,609.6 million (at fair value) consisted of 136 portfolio companies and was invested 88.2% in debt investments, primarily in senior secured debt. In aggregate, our investment portfolio was invested 83.9% in senior secured loans, 4.3% in senior secured notes and 11.8% in equity investments. Our average portfolio company investment at fair value was approximately $11.8 million. Our largest portfolio company investment by value was approximately 6.6% of our portfolio and our five largest portfolio company investments by value comprised approximately 20.1% of our portfolio at December 31, 2022.

Current wording

At December 31, 2024, our consolidated investment portfolio of $1,794.8 million (at fair value) consisted of 154 portfolio companies and was invested 91.5% in debt investments, primarily in senior secured debt. In aggregate, our investment portfolio was invested 87.9% in senior secured loans, 3.3% in senior secured notes, 0.3% in unsecured debt and 8.5% in equity investments. Our average portfolio company investment at fair value was approximately $11.7 million. Our largest portfolio company investment based on fair value was approximately 6.2% of our portfolio and our five largest portfolio company investments by value comprised approximately 18.3% of our portfolio at December 31, 2024.

Previous wording

At December 31, 2023, our investment portfolio of $1,554.9 million (at fair value) consisted of 142 portfolio companies and was invested 89.3% in debt investments, primarily in senior secured debt. In aggregate, our investment portfolio was invested 86.0% in senior secured loans, 3.3% in senior secured notes and 10.7% in equity investments. Our average portfolio company investment at fair value was approximately $11.0 million. Our largest portfolio company investment by value was approximately 6.6% of our portfolio and our five largest portfolio company investments by value comprised approximately 19.8% of our portfolio at December 31, 2023.

Current wording

At December 31, 2023, our investment portfolio of $1,554.9 million (at fair value) consisted of 142 portfolio companies and was invested 89.3% in debt investments, primarily in senior secured debt. In aggregate, our investment portfolio was invested 86.0% in senior secured loans, 3.3% in senior secured notes and 10.7% in equity investments. Our average portfolio company investment at fair value was approximately $11.0 million. Our largest portfolio company investment based on fair value was approximately 6.6% of our portfolio and our five largest portfolio company investments by value comprised approximately 19.8% of our portfolio at December 31, 2023.

Previous wording

The weighted average effective yield of our debt portfolio was 14.1% at December 31, 2023 and 12.7% at December 31, 2022. The weighted average effective yield of our total portfolio was 13.3% at December 31, 2023 and 11.9% at December 31, 2022. At December 31, 2023, 95.6% of debt investments in our portfolio bore interest based on floating rates, such as LIBOR, EURIBOR, SOFR, the Federal Funds Rate or the Prime Rate, and 4.4% bore interest at fixed rates. The percentage of floating rate debt investments in our portfolio that were subject to an interest rate floor was 94.0% at December 31, 2023. Debt investments in four portfolio companies were on non-accrual status as of December 31, 2023, representing 2.0% of the portfolio at fair value and 3.7% at cost. At December 31, 2022, 93.6% of debt investments in our portfolio bore interest based on floating rates, such as LIBOR, EURIBOR, SOFR, the Federal Funds Rate or the Prime Rate, and 6.4% bore interest at fixed rates. The percentage of floating rate debt investments in our portfolio that were subject to an interest rate floor was 94.9% at December 31, 2022. Debt investments in three portfolio companies were on non-accrual status as of December 31, 2022, representing 2.0% of the portfolio at fair value and 4.2% at cost.

Current wording

The weighted average effective yield of our debt portfolio based on fair value was 12.4% at December 31, 2024 and 14.1% at December 31, 2023, excluding non-accrual and non-income producing loans. The weighted average effective yield of our total portfolio based on fair value was 11.1% at December 31, 2024 and 13.3% at December 31, 2023. At December 31, 2024, 94.5% of debt investments in our portfolio bore interest based on floating rates, such as SOFR, EURIBOR, the Federal Funds Rate or the Prime Rate, and 5.5% bore interest at fixed rates. The percentage of floating rate debt investments in our portfolio that were subject to an interest rate floor was 97.5% at December 31, 2024. Debt and preferred equity investments in twelve portfolio companies were on non-accrual status as of December 31, 2024, representing 5.6% of the portfolio at fair value and 14.4% at cost. At December 31, 2023, 95.6% of debt investments in our portfolio bore interest based on floating rates, such as SOFR, EURIBOR, the Federal Funds Rate or the Prime Rate, and 4.4% bore interest at fixed rates. The percentage of floating rate debt investments in our portfolio that were subject to an interest rate floor was 94.0% at December 31, 2023. Debt and preferred equity investments in four portfolio companies were on non-accrual status as of December 31, 2023, representing 2.0% of the portfolio at fair value and 3.7% at cost.

Previous wording

Investment income totaled $209.3 million, $181.0 million and $165.1 million, respectively, for the years ended December 31, 2023, 2022 and 2021, of which $205.1 million, $172.8 million and $155.7 million were attributable to interest and fees on our debt investments, $3.8 million, $7.2 million and $7.8 million to dividend income and $0.4 million, $1.0 million and $1.6 million to other income, respectively. Included in interest and fees on our debt investments were $1.8 million, $8.3 million and $7.0 million of non-recurring income related to prepayments and $0.9 million, $0.5 million and $0.0 million in amendment fees for the years ended December 31, 2023, 2022 and 2021, respectively. The increase in investment income for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily reflects an increase in interest income due to the rise in LIBOR/SOFR rates, partially offset by the lower dividend income and other income received during the year ended December 31, 2023. The increase in investment income for the year ended December 31, 2022 compared to the year ended December 31, 2021 primarily reflects an increase in interest income due to the rise in LIBOR/SOFR rates, partially offset by the lower other income received during the year ended December 31, 2022.

Current wording

Investment income totaled $259.4 million, $209.3 million and $181.0 million, respectively, for the years ended December 31, 2024, 2023 and 2022, of which $251.4 million, $205.1 million and $172.8 million were attributable to interest and fees on our debt investments, $7.9 million, $3.8 million and $7.2 million to dividend income and $0.1 million, $0.4 million and $1.0 million to other income, respectively. Included in interest and fees on our debt investments were $16.5 million, $1.8 million and $8.3 million of non-recurring income related to prepayments and $1.1 million, $0.9 million and $0.5 million in amendment fees for the years ended December 31, 2024, 2023 and 2022, respectively. The increase in investment income for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily reflects an increase in interest income due to additional investment income earned on investments acquired as a result of the Merger and higher SOFR rates during the year ended December 31, 2024. The increase in investment income for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily reflects an increase in interest income due to the rise in LIBOR/SOFR rates, partially offset by the lower dividend income and other income received during the year ended December 31, 2023.

Previous wording

Total operating expenses for the years ended December 31, 2023, 2022 and 2021 were $102.5 million, $92.6 million and $92.6 million, respectively, comprised of $47.8 million, $39.4 million and $41.0 million in interest expense and related fees, $24.0 million, $26.2 million and $25.7 million in base management fees, $22.6 million, $18.8 million and $17.7 million in incentive fee expense, $2.2 million, $1.8 million and $1.7 million in professional fees, $1.5 million, $1.8 million and $1.9 million in administrative expenses and $4.4 million, $4.6 million and $4.6 million in other expenses, respectively. The increase in operating expenses for the year ended December 31, 2023 compared to the year ended December 31, 2022 reflects an increase in interest expense due to the rise in LIBOR/SOFR rates and an increase in incentive fee expense, partially offset by the lower management fees during the year ended December 31, 2023. The expenses in the year ended December 31, 2022 were in line with the year ended December 31, 2021.

Current wording

Total operating expenses for the years ended December 31, 2024, 2023 and 2022 were $127.2 million, $102.5 million and $92.6 million, respectively, comprised of $72.2 million, $47.8 million and $39.4 million in interest expense and related fees, $24.5 million, $24.0 million and $26.3 million in base management fees, $19.2 million, $22.6 million and $18.8 million in incentive fee expense, $3.2 million, $2.2 million and $1.8 million in professional fees, $2.4 million, $1.5 million and $1.8 million in administrative expenses and $5.7 million, $4.4 million and $4.5 million in other expenses, respectively. The increase in operating expenses for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily reflects an increase in interest expense as a result of the higher debt outstanding assumed as a result of the Merger and the issuance of the 2029 Notes during the year ended December 31, 2024. The increase in operating expenses for the year ended December 31, 2023 compared to the year ended December 31, 2022 reflects an increase in interest expense due to the rise in LIBOR/SOFR rates and an increase in incentive fee expense, partially offset by the lower management fees during the year ended December 31, 2023.

Previous wording

Net investment income was $106.6 million, $88.4 million and $72.5 million, respectively, for the years ended December 31, 2023, 2022 and 2021. The increase in net investment income for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily reflects the increase in total investment income, partially offset by the increase in expenses during the year ended December 31, 2023. The increase in net investment income for the year ended December 31, 2022 compared to the year ended December 31, 2021 primarily reflects the increase in total investment income in the year ended December 31, 2022.

Current wording

Net investment income was $131.8 million, $106.6 million and $88.4 million, respectively, for the years ended December 31, 2024, 2023 and 2022. The increase in net investment income for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily reflects the increase in total investment income, partially offset by the increase in expenses during the year ended December 31, 2024. The increase in net investment income for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily reflects the increase in total investment income, partially offset by the increase in expenses during the year ended December 31, 2023.

Previous wording

Net realized gain (loss) for the years ended December 31, 2023, 2022 and 2021 was $(31.6) million, $(18.2) million and $4.3 million, respectively. Net realized losses for the year ended December 31, 2023 was comprised primarily of a $30.7 million loss from reorganization of our investment in Autoalert. Net realized losses for the year ended December 31, 2022 was comprised primarily of a $13.8 million loss from reorganization of our investment in Fishbowl, a $13.3 million loss from the restructuring of our investment in Avanti, partially offset by a $11.2 million gain from the exit of our debt investment in CORE Entertainment. Net realized gains for the year ended December 31, 2021 reflect a $8.8 million gain from the dispositon of our One Sky equity position and a $6.5 million gain on the partial sale of our equity investment in Edmentum, partially offset by a $7.1 million loss from the disposition of our debt investment in GlassPoint and a $5.5 million loss from the sale of a portion of our investment in Credit Suisse AG.

Current wording

Net realized gain (loss) for the years ended December 31, 2024, 2023 and 2022 was $(67.1) million, $(31.6) million and $(18.2) million, respectively. Net realized losses for the year ended December 31, 2024 were comprised primarily of $24.1 million, $22.8 million, $12.6 million and $7.4 million in losses from the restructuring of our investments in Pluralsight, Thras.io, Hylan and McAfee, respectively. Net realized losses for the year ended December 31, 2023 were comprised primarily of a $30.7 million loss from reorganization of our investment in Autoalert. Net realized losses for the year ended December 31, 2022 were comprised primarily of a $13.8 million loss from reorganization of our investment in Fishbowl, a $13.3 million loss from the restructuring of our investment in Avanti, partially offset by a $11.2 million gain from the exit of our debt investment in CORE Entertainment.

Previous wording

For the years ended December 31, 2023, 2022 and 2021, the change in net unrealized appreciation (depreciation) was $(36.4) million, $(79.4) million and $63.2 million, respectively. The change in net unrealized depreciation for the year ended December 31, 2023 primarily reflects a $18.2 million unrealized loss on our investment in Edmentum, a $12.3 million unrealized loss on our investment in Thras.io, a $9.3 million unrealized loss on our investment in Hylan, a $8.6 million unrealized loss on our investment in Magenta Buyer, a $6.3 million unrealized loss on our investment in Astra, a $6.0 million unrealized loss on our investment in 36th Street Capital, a $5.5 million unrealized loss on our investment in Khoros, a $4.8 million unrealized loss on our investment in Perch, offset by a $36.2 million reversal of previously recognized unrealized losses from the reorganization of our investment in Autoalert. The change in net unrealized appreciation (depreciation) for the year ended December 31, 2022 primarily reflects $34.3 million in unrealized losses from Autoalert, $14.9 million reversal of previously recognized unrealized gains from the disposition of our investment in CORE Entertainment, $11.1 million of unrealized losses on Edmentum, as well as unrealized losses across the portfolio from widening market spreads, offset by $20.9 million in unrealized gains on our investment in 36th Street Capital, $13.9 million reversal of previously recognized unrealized losses from the restructuring of our investment in Fishbowl and $12.3 million reversal of previously recognized unrealized losses from the restructuring of our investment in Avanti. The change in net unrealized appreciation (depreciation) for the year ended December 31, 2021 was primarily driven by $45.0 million in unrealized gains on our investment in Edmentum, $9.8 million in unrealized gains on CORE Entertainment, $6.8 million in unrealized gains on our investment in Razor and a $7.0 million reversal of previously recognized unrealized losses from the sale of Credit Suisse AG, partially offset by a $11.1 million reversal of previously recognized unrealized gains on One Sky and $9.1 million in reversal of previously recognized unrealized gains on Amteck.

Current wording

For the years ended December 31, 2024, 2023 and 2022, the change in net unrealized appreciation (depreciation) was $(127.8) million, $(36.4) million and $(79.4) million, respectively. The change in unrealized depreciation of $(127.8) million is net of $21.3 million in unrealized appreciation resulting from a reduction of the cost basis of investments acquired as a result of the Merger from allocation of the purchase discount paid by the Company. The change in net unrealized depreciation for the year ended December 31, 2024 primarily reflects a $63.7 million unrealized loss on our investment in Razor, a $21.9 million unrealized loss on our investment in Edmentum, an $20.6 million unrealized loss on our investment in Seller-X, a $16.0 million unrealized loss on our investment in Lithium, a $12.0 million unrealized loss on our investment in Astra, and a $11.4 million unrealized loss on our investment in Securus, partially offset by $17.1 million, $10.2 million, $6.3 million, and $5.5 million reversals of previous unrealized losses from the restructuring of our investments in Thras.io, Hylan, Perch and McAfee, respectively. The change in net unrealized appreciation (depreciation) for the year ended December 31, 2023 primarily reflects an $18.2 million unrealized loss on our investment in Edmentum, a $12.3 million unrealized loss on our investment in Thras.io, a $9.3 million unrealized loss on our investment in Hylan, an $8.6 million unrealized loss on our investment in Magenta Buyer, a $6.3 million unrealized loss on our investment in Astra, a $6.0 million unrealized loss on our investment in 36th Street Capital, a $5.5 million unrealized loss on our investment in Khoros, a $4.8 million unrealized loss on our investment in Perch, offset by a $36.2 million reversal of previously recognized unrealized losses from the reorganization of our investment in Autoalert. The change in net unrealized appreciation (depreciation) for the year ended December 31, 2022 primarily reflects $34.3 million in unrealized losses from Autoalert, $14.9 million reversal of previously recognized unrealized gains from the disposition of our investment in CORE Entertainment, $11.1 million of unrealized losses on Edmentum, as well as unrealized losses across the portfolio from widening market spreads, offset by $20.9 million in unrealized gains on our investment in 36th Street Capital, $13.9 million reversal of previously recognized unrealized losses from the restructuring of our investment in Fishbowl and $12.3 million reversal of previously recognized unrealized losses from the restructuring of our investment in Avanti.

Previous wording

The Company has elected to be treated as a RIC under Subchapter M of the Internal Revenue Code (the "Code”) and operates in a manner so as to qualify for the tax treatment applicable to RICs. To qualify as a RIC, the Company must, among other things, timely distribute to its stockholders generally at least 90% of its investment company taxable income, as defined by the Code, for each year. The Company has made and intends to continue to make the requisite distributions to its stockholders which will generally relieve the Company from U.S. federal income taxes.

Current wording

The Company has elected to be treated as a RIC under Subchapter M of the Code and operates in a manner so as to qualify for the tax treatment applicable to RICs. To qualify as a RIC, the Company must, among other things, timely distribute to its shareholders generally at least 90% of its investment company taxable income, as defined by the Code, for each year. The Company has made and intends to continue to make the requisite distributions to its shareholders which will generally relieve the Company from U.S. federal income taxes.

Previous wording

Depending on the level of taxable income earned in a tax year, we may choose to carry forward taxable income in excess of current year dividend distributions from such current year taxable income into the next tax year and pay a 4% excise tax on such income. Any excise tax expense is recorded at year end as such amounts are known. For the year ended December 31, 2023, an excise tax expense of $0.2 million was recorded, based on the amount of tax-basis ordinary income for the years ended December 31, 2023 and 2022. No excise tax was incurred for the years ended December 31, 2022 and 2021.

Current wording

Depending on the level of taxable income earned in a tax year, we may choose to carry forward taxable income in excess of current year dividend distributions from such current year taxable income into the next tax year and pay a 4% excise tax on such income. Any excise tax expense is recorded at year end as such amounts are known. For the year ended December 31, 2024, an excise tax expense of $0.5 million was recorded, based on the amount of tax-basis ordinary income for the years ended December 31, 2024 and 2023. For the year ended December 31, 2023, an excise tax expense of $0.2 million was recorded, based on the amount of tax-basis ordinary income for the years ended December 31, 2023 and 2022. No excise tax was incurred for the year ended December 31, 2022.

Previous wording

The net increase (decrease) in net assets applicable to common shareholders resulting from operations was $38.5 million, $(9.2) million and $133.8 million for the years ended December 31, 2023, 2022 and 2021, respectively. The higher net increase in net assets resulting from operations during the year ended December 31, 2023 was primarily due to the higher net investment income and the lower realized and unrealized losses compared to the year ended December 31, 2022. The lower net increase in net assets resulting from operations during the year ended December 31, 2022 was primarily due to the higher realized and unrealized losses compared to the net realized and unrealized gains, partially offset by higher net investment income compared to the year ended December 31, 2021.

Current wording

The net increase (decrease) in net assets applicable to common shareholders resulting from operations was $(63.1) million, $38.5 million and $(9.2) million for the years ended December 31, 2024, 2023 and 2022, respectively. The net decrease in net assets resulting from operations during the year ended December 31, 2024 was primarily due to the higher net realized and unrealized losses, partially offset by higher net investment income compared to the year ended December 31, 2023. The higher net increase in net assets resulting from operations during the year ended December 31, 2023 was primarily due to the higher net investment income and the lower realized and unrealized losses compared to the year ended December 31, 2022.

Previous wording

On February 24, 2015, the Company’s Board of Directors approved a stock repurchase plan (the “Company Repurchase Plan”) to acquire up to $50.0 million in the aggregate of the Company’s common stock at prices at certain thresholds below the Company’s net asset value per share, in accordance with the guidelines specified in Rule 10b-18 and Rule 10b5-1 of the 1934 Act. The Company Repurchase Plan is designed to allow the Company to repurchase its common stock at times when it otherwise might be prevented from doing so under insider trading laws. The Company Repurchase Plan requires an agent selected by the Company to repurchase shares of common stock on the Company’s behalf if and when the market price per share is at certain thresholds below the most recently reported net asset value per share. Under the plan, the agent will increase the volume of purchases made if the price of the Company’s common stock declines, subject to volume restrictions. The timing and amount of any stock repurchased depends on the terms and conditions of the Company Repurchase Plan, the market price of the common stock and trading volumes, and no assurance can be given that any particular amount of common stock will be repurchased. The Company Repurchase Plan was re-approved on October 26, 2023, to be in effect through the earlier of two trading days after our fourth quarter 2023 earnings release, unless further extended or terminated by our Board of Directors, or such time as the approved $50.0 million repurchase amount has been fully utilized, subject to certain conditions. No shares were repurchased by the Company under the Company Repurchase plan for the years ended December 31, 2023 and 2022.

Current wording

On February 24, 2015, the Company’s Board of Directors approved a stock repurchase plan (the “Company Repurchase Plan”) to acquire up to $50.0 million in the aggregate of the Company’s common stock at prices at certain thresholds below the Company’s net asset value per share, in accordance with the guidelines specified in Rule 10b-18 and Rule 10b5-1 of the 1934 Act. The Company Repurchase Plan is designed to allow the Company to repurchase its common stock at times when it otherwise might be prevented from doing so under insider trading laws. The Company Repurchase Plan requires an agent selected by the Company to repurchase shares of common stock on the Company’s behalf if and when the market price per share is at certain thresholds below the most recently reported net asset value per share. Under the plan, the agent will increase the volume of purchases made if the price of the Company’s common stock declines, subject to volume restrictions. The timing and amount of any stock repurchased depends on the terms and conditions of the Company Repurchase Plan, the market price of the common stock and trading volumes, and no assurance can be given that any particular amount of common stock will be repurchased. The Company Repurchase Plan was re-approved on April 24, 2024, to be in effect through the earlier of April 30, 2025, unless further extended or terminated by the Company’s Board of Directors, or such time as the approved $50.0 million repurchase amount has been fully utilized, subject to certain conditions.

Previous wording

As of December 31, 2023, $155.0 million of the outstanding amount was subject to a SOFR credit adjustment of 0.11%. $8.2 million of the outstanding amount bore interest at a rate of EURIBOR + 2.00%.

Current wording

As of December 31, 2024, $113.0 million of the outstanding amount was subject to a SOFR credit adjustment of 0.10%. $7.7 million of the outstanding amount bore interest at a rate of EURIBOR + 2.00%.

Previous wording

Effective November 7, 2018, the Company’s Board of Directors, including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) of our Board of Directors, approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act, as amended by the SBCAA (the “Asset Coverage Ratio Election”), which would have resulted (had the Company not received earlier stockholder approval) in our asset coverage requirement applicable to senior securities being reduced from 200% to 150%, effective on November 7, 2019. On February 8, 2019, the stockholders of the Company approved the Asset Coverage Ratio Election, and, as a result, effective on February 9, 2019, our asset coverage requirement applicable to senior securities was reduced from 200% to 150%. As of December 31, 2023, the Company’s asset coverage ratio was 164%.

Current wording

Effective November 7, 2018, the Company’s Board of Directors, including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) of our Board of Directors, approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act, as amended by the SBCAA (the “Asset Coverage Ratio Election”), which would have resulted (had the Company not received earlier shareholder approval) in our asset coverage requirement applicable to senior securities being reduced from 200% to 150%, effective on November 7, 2019. On February 8, 2019, the shareholders of the Company approved the Asset Coverage Ratio Election, and, as a result, effective on February 9, 2019, our asset coverage requirement applicable to senior securities was reduced from 200% to 150%. As of December 31, 2024, the Company’s asset coverage ratio was 178.9%.

Previous wording

On July 13, 2015, we obtained exemptive relief from the SEC to permit us to exclude debt outstanding under the SBA Debentures from our asset coverage test under the 1940 Act. The exemptive relief provides us with increased flexibility under the 150% asset coverage test by permitting the SBIC to borrow up to $160.0 million more than it would otherwise be able to absent the receipt of this exemptive relief.

Current wording

On July 13, 2015, we obtained exemptive relief from the SEC to permit us to exclude debt outstanding under the SBA Debentures from our asset coverage test under the 1940 Act. The exemptive relief provides us with increased flexibility under the 150% asset coverage test by permitting the SBIC to borrow up to $141.5 million more than it would otherwise be able to absent the receipt of this exemptive relief.

Previous wording

Net cash provided by operating activities during the year ended December 31, 2023 was $92.5 million, consisting primarily of $90.5 million in net investment income (net of non-cash income and expenses) and the settlement of dispositions of investments (net of acquisitions) of $2.0 million.

Current wording

Net cash provided by operating activities during the year ended December 31, 2024 was $293.1 million, consisting primarily of $107.1 million in net investment income (net of non-cash income and expenses) and the settlement of dispositions of investments (net of acquisitions) of $186.0 million.

Previous wording

At December 31, 2023, we had $112.2 million in cash and cash equivalents.

Current wording

At December 31, 2024, we had $91.6 million in cash and cash equivalents.

Previous wording

The Operating Facility and Funding Facility II are secured by substantially all of the assets in our portfolio, including cash and cash equivalents, and are subject to compliance with customary affirmative and negative covenants, including the maintenance of a minimum shareholders’ equity, the maintenance of a ratio of not less than 150% of total assets (less total liabilities other than indebtedness) to total indebtedness, and restrictions on certain payments and issuance of debt. Unfavorable economic conditions may result in a decrease in the value of our investments, which would affect both the asset coverage ratios and the value of the collateral securing the Operating Facility and Funding Facility II, and may therefore impact our ability to borrow under the Operating Facility and Funding Facility II. In addition to regulatory restrictions that restrict our ability to raise capital, the Leverage Program contains various covenants which, if not complied with, could accelerate repayment of debt, thereby materially and adversely affecting our liquidity, financial condition and results of operations. At December 31, 2023, we were in compliance with all financial and operational covenants required by the Leverage Program.

Current wording

The Operating Facility, Funding Facility II and Merger Sub Facility (in the aggregate) are secured by substantially all of the assets in our portfolio, including cash and cash equivalents, and are subject to compliance with customary affirmative and negative covenants, including the maintenance of a minimum stockholders’ equity, the maintenance of a ratio of not less than 150% of total assets (less total liabilities other than indebtedness) to total indebtedness, and restrictions on certain payments and issuance of debt. Unfavorable economic conditions may result in a decrease in the value of our investments, which would affect both the asset coverage ratios and the value of the collateral securing the Operating Facility, Funding Facility II and Merger Sub Facility, and may therefore impact our ability to borrow under the Operating Facility, Funding Facility II and Merger Sub Facility. In addition to regulatory restrictions that restrict our ability to raise capital, the Leverage Program contains various covenants which, if not complied with, could accelerate repayment of debt, thereby materially and adversely affecting our liquidity, financial condition and results of operations. At December 31, 2024, we were in compliance with all financial and operational covenants required by the Leverage Program.

Previous wording

Unfavorable economic conditions, such as those caused by COVID-19, while potentially creating attractive opportunities for us, may decrease liquidity and raise the cost of capital generally, which could limit our ability to renew, extend or replace the Leverage Program on terms as favorable as are currently included therein. If we are unable to renew, extend or replace the Leverage Program upon the various dates of maturity, we expect to have sufficient funds to repay the outstanding balances in full from our net investment income and sales of, and repayments of principal from, our portfolio company investments, as well as from anticipated debt and equity capital raises, among other sources. Unfavorable economic conditions may limit our ability to raise capital or the ability of the companies in which we invest to repay our loans or engage in a liquidity event, such as a sale, recapitalization or initial public offering. The Operating Facility, Funding Facility II, the 2024 Notes and the 2026 Notes, mature in May 2026, August 2027, August 2024 and February 2026, respectively. Any inability to renew, extend or replace the Leverage Program could adversely impact our liquidity and ability to find new investments or maintain distributions to our stockholders.

Current wording

Unfavorable economic conditions, while potentially creating attractive opportunities for us, may decrease liquidity and raise the cost of capital generally, which could limit our ability to renew, extend or replace the Leverage Program on terms as favorable as are currently included therein. If we are unable to renew, extend or replace the Leverage Program upon the various dates of maturity, we expect to have sufficient funds to repay the outstanding balances in full from our net investment income and sales of, and repayments of principal from, our portfolio company investments, as well as from anticipated debt and equity capital raises, among other sources. Unfavorable economic conditions may limit our ability to raise capital or the ability of the companies in which we invest to repay our loans or engage in a liquidity event, such as a sale, recapitalization or initial public offering. The Operating Facility, Funding Facility II, Merger Sub Facility, the 2025 Notes, the 2026 Notes and the 2029 Notes, mature in August 2029, August 2027, September 2028, December 2025, February 2026 and May 2029, respectively. Any inability to renew, extend or replace the Leverage Program could adversely impact our liquidity and ability to find new investments or maintain distributions to our shareholders.

Previous wording

Challenges in the market are intensified for us by certain regulatory limitations under the Code and the 1940 Act. To maintain our qualification as a RIC, we must satisfy, among other requirements, an annual distribution requirement to pay out at least 90% of our ordinary income and short-term capital gains to our stockholders. Because we are required to distribute our income in this manner, and because the illiquidity of many of our investments may make it difficult for us to finance new investments through the sale of current investments, our ability to make new investments is highly dependent upon external financing. While we anticipate being able to continue to satisfy all covenants and repay the outstanding balances under the Leverage Program when due, there can be no assurance that we will be able to do so, which could lead to an event of default.

Current wording

Challenges in the market are intensified for us by certain regulatory limitations under the Code and the 1940 Act. To maintain our qualification as a RIC, we must satisfy, among other requirements, an annual distribution requirement to pay out at least 90% of our ordinary income and short-term capital gains to our shareholders. Because we are required to distribute our income in this manner, and because the illiquidity of many of our investments may make it difficult for us to finance new investments through the sale of current investments, our ability to make new investments is highly dependent upon external financing. While we anticipate being able to continue to satisfy all covenants and repay the outstanding balances under the Leverage Program when due, there can be no assurance that we will be able to do so, which could lead to an event of default.

Previous wording

Our quarterly dividends and distributions to common stockholders are recorded on the ex-dividend date. Distributions are declared considering our estimate of annual taxable income available for distribution to stockholders and the amount of taxable income carried over from the prior year for distribution in the current year. We do not have a policy to pay distributions at a specific level and expect to continue to distribute substantially all of our taxable income. We cannot assure stockholders that they will receive any distributions or distributions at a particular level.

Current wording

Our quarterly dividends and distributions to common shareholders are recorded on the ex-dividend date. Distributions are declared considering our estimate of annual taxable income available for distribution to shareholders and the amount of taxable income carried over from the prior year for distribution in the current year. We do not have a policy to pay distributions at a specific level and expect to continue to distribute substantially all of our taxable income. We cannot assure shareholders that they will receive any distributions or distributions at a particular level.

Previous wording

The following tables summarize dividends declared for the years ended December 31, 2023 and 2022:

Current wording

The following tables summarize dividends declared for the year ended December 31, 2024 and 2023:

Previous wording

We have elected to be taxed as a RIC under Subchapter M of the Code. In order to maintain favorable RIC tax treatment, we must distribute annually to our stockholders at least 90% of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, out of the assets legally available for distribution. In order to avoid certain excise taxes imposed on RICs, we must distribute during each calendar year an amount at least equal to the sum of:

Current wording

We have elected to be taxed as a RIC under Subchapter M of the Code. In order to maintain favorable RIC tax treatment, we must distribute annually to our shareholders at least 90% of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, out of the assets legally available for distribution. In order to avoid certain excise taxes imposed on RICs, we must distribute during each calendar year an amount at least equal to the sum of:

Previous wording

We may, at our discretion, carry forward taxable income in excess of calendar year distributions and pay a 4% excise tax on this income. If we choose to do so, all other things being equal, this would increase expenses and reduce the amounts available to be distributed to our stockholders. We will accrue excise tax on estimated taxable income as required. In addition, although we currently intend to distribute realized net capital gains (i.e., net long-term capital gains in excess of short-term capital losses), if any, at least annually, out of the assets legally available for such distributions, we may in the future decide to retain such capital gains for investment.

Current wording

We may, at our discretion, carry forward taxable income in excess of calendar year distributions and pay a 4% excise tax on this income. If we choose to do so, all other things being equal, this would increase expenses and reduce the amounts available to be distributed to our shareholders. We will accrue excise tax on estimated taxable income as required. In addition, although we currently intend to distribute realized net capital gains (i.e., net long-term capital gains in excess of short-term capital losses), if any, at least annually, out of the assets legally available for such distributions, we may in the future decide to retain such capital gains for investment.