FIDUS INVESTMENT Corp

Previous wording

an economic downturn and significant disruptions to our portfolio companies, including supply chain disruptions and labor shortages, could impair our portfolio companies’ ability to continue to operate, which could lead to the loss of some or all of our investments in such portfolio companies;

Current wording

an economic downturn and significant disruptions to our portfolio companies, including supply chain disruptions, labor shortages, and uncertainty associated with the imposition of tariffs, could impair our portfolio companies’ ability to continue to operate, which could lead to the loss of some or all of our investments in such portfolio companies;

Previous wording

During the three months ended March 31, 2025 and 2024, we invested $115.6 million and $145.9 million, respectively, in debt and equity investments including seven and seven new portfolio companies, respectively. During the three months ended March 31, 2025 and 2024, we received proceeds from sales or repayments, including principal, return of capital dividends and net realized gains (losses), of $57.3 million and $60.2 million, respectively, including an exit of two portfolio companies and one portfolio company, respectively. The following table summarizes purchases of investments and sales and repayments of investments by type for the three months ended March 31, 2025 and 2024 (dollars in millions).

Current wording

During the six months ended June 30, 2025 and 2024, we invested $210.0 million and $208.3 million, respectively, in debt and equity investments including eleven and eight new portfolio companies, respectively. During the six months ended June 30, 2025 and 2024, we received proceeds from sales or repayments, including principal, return of capital dividends and net realized gains (losses), of $166.6 million and $103.3 million, respectively, including an exit of five portfolio companies and two portfolio companies, respectively. The following table summarizes purchases of investments and sales and repayments of investments by type for the six months ended June 30, 2025 and 2024 (dollars in millions).

Previous wording

(1) For the three months ended March 31, 2025 and 2024, first lien debt includes unitranche securities, which account for 51.5% and 36.5% of purchases, respectively. For the three months ended March 31, 2025 and 2024, first lien debt includes unitranche securities, which account for 1.0% and 3.0% of repayments, respectively.

Current wording

(1) For the six months ended June 30, 2025 and 2024, first lien debt includes unitranche securities, which account for 58.4% and 29.9% of purchases, respectively. For the six months ended June 30, 2025 and 2024, first lien debt includes unitranche securities, which account for 22.6% and 5.0% of repayments, respectively.

Previous wording

As of March 31, 2025, the fair value of our investment portfolio totaled $1.2 billion and consisted of 92 active portfolio companies and four portfolio companies that have sold their underlying operations. As of March 31, 2025, 52 portfolio companies’ debt investments bore interest at a variable rate, which represented $740.3 million, or 72.8%, of our debt investment portfolio on a fair value basis, and the remainder of our debt investment portfolio was comprised of fixed-rate investments. Overall, the portfolio had net unrealized appreciation of $5.6 million as of March 31, 2025. As of March 31, 2025, our average active portfolio company investment at amortized cost was $12.5 million, which excludes investments in four portfolio companies that have sold their underlying operations.

Current wording

As of June 30, 2025, the fair value of our investment portfolio totaled $1.1 billion and consisted of 92 active portfolio companies and five portfolio companies that have sold their underlying operations. As of June 30, 2025, 50 portfolio companies’ debt investments bore interest at a variable rate, which represented $718.6 million, or 71.1%, of our debt investment portfolio on a fair value basis, and the remainder of our debt investment portfolio was comprised of fixed-rate investments. Overall, the portfolio had net unrealized appreciation of $19.9 million as of June 30, 2025. As of June 30, 2025, our average active portfolio company investment at amortized cost was $12.3 million, which excludes investments in five portfolio companies that have sold their underlying operations.

Previous wording

The weighted average yield on debt investments as of March 31, 2025 and December 31, 2024 was 13.2% and 13.3%, respectively. The weighted average yield of our debt investments is not the same as a return on investment for our stockholders but, rather, relates to a portion of our investment portfolio and is calculated before the payment of all of our and our subsidiaries’ fees and expenses. The weighted average yields were computed using the effective interest rates for debt investments at cost including the accretion of OID and debt investment origination fees, but excluding investments on non-accrual status.

Current wording

The weighted average yield on debt investments as of June 30, 2025 and December 31, 2024 was 13.1% and 13.3%, respectively. The weighted average yield of our debt investments is not the same as a return on investment for our stockholders but, rather, relates to a portion of our investment portfolio and is calculated before the payment of all of our and our subsidiaries’ fees and expenses. The weighted average yields were computed using the effective interest rates for debt investments at cost including the accretion of OID and debt investment origination fees, but excluding investments on non-accrual status.

Previous wording

(1) Includes unitranche investments, which account for 44.6% and 44.7% of our portfolio on a fair value and cost basis as of March 31, 2025, respectively. Includes unitranche investments, which account for 39.9% and 40.4% of our portfolio on a fair value and cost basis as of December 31, 2024, respectively.

Current wording

(1) Includes unitranche investments, which account for 46.9% and 47.9% of our portfolio on a fair value and cost basis as of June 30, 2025, respectively. Includes unitranche investments, which account for 39.9% and 40.4% of our portfolio on a fair value and cost basis as of December 31, 2024, respectively.

Previous wording

We also have observed, and continue to observe, commodity inflation, elements of financial market instability (including elevated interest rates), supply chain disruptions, changes to U.S. tariff and trade policies, labor and resource shortages, an uncertain economic outlook for the United States (which may include a recession), and elements of geopolitical instability (including the ongoing war in Ukraine and U.S. and China relations and ongoing conflict in the Middle East). 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. We also are maintaining close communications with our portfolio companies and have also increased oversight of credits in vulnerable industries to mitigate any decline in loan performance and reduce credit risk.

Current wording

We also have observed, and continue to observe, commodity inflation, elements of financial market instability (including elevated interest rates), supply chain disruptions, changes to U.S. tariff and trade policies and uncertainty relating to such changes, labor and resource shortages, an uncertain economic outlook for the United States (which may include a recession), and elements of geopolitical instability (including the ongoing war in Ukraine and U.S. and China relations and ongoing conflicts in the Middle East). 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. We also are maintaining close communications with our portfolio companies and have also increased oversight of credits in vulnerable industries to mitigate any decline in loan performance and reduce credit risk.

Previous wording

Based on our investment rating system, the weighted average rating of our portfolio as of March 31, 2025 and December 31, 2024 was 2.0 and 2.0, respectively, on a fair value basis and 2.2 and 2.2, respectively, on a cost basis.

Current wording

Based on our investment rating system, the weighted average rating of our portfolio as of June 30, 2025 and December 31, 2024 was 2.0 and 2.0, respectively, on a fair value basis and 2.1 and 2.2, respectively, on a cost basis.

Previous wording

As of March 31, 2025 and December 31, 2024, we had debt investments in four portfolio companies on non-accrual status (dollars in millions), respectively.

Current wording

As of June 30, 2025 and December 31, 2024, we had debt investments in three and four portfolio companies on non-accrual status (dollars in millions), respectively.

Previous wording

Comparison of three months ended March 31, 2025 and 2024

Current wording

Comparison of three and six months ended June 30, 2025 and 2024

Previous wording

For the three months ended March 31, 2025, total investment income was $36.5 million, an increase of $1.8 million or 5.3%, from $34.7 million of total investment income for the three months ended March 31, 2024. As reflected in the table above, the increase is primarily attributable to the following:

Current wording

For the three months ended June 30, 2025, total investment income was $40.0 million, an increase of $4.3 million or 12.1%, from $35.7 million of total investment income for the three months ended June 30, 2024. As reflected in the table above, the increase is primarily attributable to the following:

Previous wording

$2.5 million increase in total interest income (which includes payment-in-kind ("PIK") interest income) resulting from an increase in average debt investment balances, partially offset by a decrease in weighted average yield on debt investment balances outstanding during 2025 as compared to the same period in 2024.

Current wording

$1.4 million increase in total interest income (which includes payment-in-kind ("PIK") interest income) resulting from an increase in average debt investment balances, partially offset by a decrease in weighted average yield on debt investment balances outstanding during 2025 as compared to the same period in 2024.

Previous wording

$0.8 million increase in dividend income due to an increase in distributions received from equity investments, during 2025 as compared to the same period in 2024.

Current wording

$0.2 million increase in dividend income due to an increase in distributions received from equity investments, during 2025 as compared to the same period in 2024.

Previous wording

$0.3 million decrease in fee income resulting from a decrease in amendment and management services fees during 2025 as compared to the same period in 2024.

Current wording

$2.4 million increase in fee income resulting from an increase in prepayment and origination fees during 2025 as compared to the same period in 2024.

Previous wording

$1.2 million decrease in interest on idle funds and other income resulting from a decrease in average cash balances outstanding during 2025 as compared to the same period in 2024.

Current wording

$0.7 million decrease in interest on idle funds and other income due to a decrease in average cash balances outstanding during 2025 as compared to the same period in 2024.

Previous wording

For the three months ended March 31, 2025, total expenses, including income tax provision, were $18.3 million, an increase of $1.3 million or 7.3%, from the $17.0 million of total expenses, including income tax provision, for the three months ended March 31, 2024. As reflected in the table above, changes across the periods were primarily attributable to the following:

Current wording

For the three months ended June 30, 2025, total expenses, including the base management fee waiver and income tax provision, were $21.3 million, an increase of $2.6 million or 14.0%, from the $18.7 million of total expenses, including income tax provision, for the three months ended June 30, 2024. As reflected in the table above, changes across the periods were primarily attributable to the following:

Previous wording

$0.8 million increase in interest and financing expenses due to an increase the weighted average interest rate of our debt outstanding and an increase in average borrowings outstanding during 2025 as compared to the same period in 2024.

Current wording

$1.7 million increase in interest and financing expenses due to an increase in the weighted average interest rate of our debt outstanding and an increase in weighted average borrowings outstanding during 2025 as compared to the same period in 2024.

Previous wording

$0.6 million net increase in base management fee, including the base management fee waiver, due to higher average total assets during 2025 as compared to the same period in 2024.

Current wording

$0.4 million net increase in the base management fee, including the base management fee waiver, due to higher average total assets during 2025 as compared to the same period in 2024.

Previous wording

$0.1 million increase in the income incentive fee due to an increase in pre-incentive fee net investment income during 2025 as compared to the same period in 2024.

Current wording

$0.3 million increase in the income incentive fee due to an increase in pre-incentive fee net investment income during 2025 as compared to the same period in 2024.

Previous wording

$0.2 million decrease in the accrued capital gains incentive fee due to a net $1.0 million decrease in net gain on investments and realized losses on extinguishment of debt during 2025 as compared to the same period in 2024.

Current wording

$0.1 million decrease in the accrued capital gains incentive fee due to a net $0.5 million decrease in net gain on investments and realized losses on extinguishment of debt during 2025 as compared to the same period in 2024.

Previous wording

Net investment income increased by $0.6 million, or 3.4%, to $18.2 million during the three months ended March 31, 2025 as compared to the same period in 2024, as a result of the $1.8 million increase in total investment income and the $1.3 million increase in total expenses, including income tax provision.

Current wording

Net investment income increased by $1.7 million, or 9.9%, to $18.7 million during the three months ended June 30, 2025 as compared to the same period in 2024, as a result of the $4.3 million increase in total investment income, partially offset by the $2.6 million increase in total expenses, including base management fee waiver and income tax provision.

Previous wording

For the three months ended March 31, 2024, the total net realized gain/(loss) on investments, before income tax (provision)/benefit, was $1.7 million. Income tax (provision) benefit from realized gains on investments was $0.1 million for the three months ended March 31, 2024. We realize a gain/(loss) on our equity investments primarily when we either sell our equity investment or the underlying portfolio company is sold. Realized gains (losses) for the three months ended March 31, 2024 are summarized below (dollars in millions):

Current wording

For the three and six months ended June 30, 2025, the total net realized gain/(loss) on investments, before income tax (provision)/benefit, was $(7.6) million and $5.7 million, respectively. Income tax (provision) benefit from realized gains on investments was zero and $(1.9) million for the three and six months ended June 30, 2025. We realize a gain/(loss) on our equity investments primarily when we either sell our equity investment or the underlying portfolio company is sold. Realized gains (losses) for the three and six months ended June 30, 2025 are summarized below (dollars in millions):

Previous wording

For the three months ended March 31, 2025, the total net realized gain/(loss) on investments, before income tax (provision)/benefit, was $13.3 million. Income tax (provision) benefit from realized gains on investments was $(1.8) million for the three months ended March 31, 2025. We realize a gain/(loss) on our equity investments primarily when we either sell our equity investment or the underlying portfolio company is sold. Realized gains (losses) for the three months ended March 31, 2025 are summarized below (dollars in millions):

Current wording

For the three and six months ended June 30, 2024, the total net realized gain/(loss) on investments, before income tax (provision)/benefit, was $10.8 and $12.5 million. Income tax (provision) benefit from realized gains on investments was (1.6) and $(1.5) million for the three and six months ended June 30, 2024. We realize a gain/(loss) on our equity investments primarily when we either sell our equity investment or the underlying portfolio company is sold. Realized gains (losses) for the three and six months ended June 30, 2024 are summarized below (dollars in millions):

Previous wording

During the three months ended March 31, 2025 and 2024, we recorded a net change in unrealized appreciation (depreciation) on investments attributable to the following (dollars in millions):

Current wording

During the three and six months ended June 30, 2025 and 2024, we recorded a net change in unrealized appreciation (depreciation) on investments attributable to the following (dollars in millions):

Previous wording

Net increase (decrease) in net assets resulting from operations during the three months ended March 31, 2025 and 2024 was $19.7 million and $20.1 million, respectively, as a result of the events described above.

Current wording

Net increase (decrease) in net assets resulting from operations during the three months ended June 30, 2025 and 2024 was $25.3 million and $24.1 million, respectively, as a result of the events described above.

Previous wording

As of March 31, 2025, we had $67.5 million in cash and cash equivalents and our net assets totaled $677.9 million. We believe that our current cash and cash equivalents on hand, our Credit Facility, our continued access to SBA-guaranteed debentures, and our anticipated cash flows from investments will provide adequate capital resources with which to operate and finance our investment business and make distributions to our stockholders for at least the next 12 months. We intend to generate additional cash primarily from the future offerings of debt and equity securities (including the ATM Program) and future borrowings, as well as cash flows from operations, including income earned from investments in our portfolio companies. On both a short-term and long-term basis, our primary use of funds will be investments in portfolio companies and cash distributions to our stockholders. During the three months ended March 31, 2025, we repaid $12.5 million of SBA debentures relating to Fund III that would have matured during the period March 1, 2032 through September 1, 2033. Our remaining outstanding SBA debentures begin to mature in 2029 and subsequent years through 2035, which will require repayment on or before the respective maturity dates. In light of current market conditions, we will continually evaluate our overall liquidity position and take proactive steps to maintain that position based on the current circumstances. This “Financial Liquidity and Capital Resources” section should be read in conjunction with the notes of our consolidated financial statements.

Current wording

As of June 30, 2025, we had $91.2 million in cash and cash equivalents and our net assets totaled $692.3 million. We believe that our current cash and cash equivalents on hand, our Credit Facility, our continued access to SBA-guaranteed debentures, and our anticipated cash flows from investments will provide adequate capital resources with which to operate and finance our investment business and make distributions to our stockholders for at least the next 12 months. We intend to generate additional cash primarily from the future offerings of debt and equity securities (including the ATM Program) and future borrowings, as well as cash flows from operations, including income earned from investments in our portfolio companies. On both a short-term and long-term basis, our primary use of funds will be investments in portfolio companies and cash distributions to our stockholders. During the six months ended June 30, 2025, we repaid $12.5 million of SBA debentures relating to Fund III that would have matured during the period March 1, 2032 through September 1, 2033. Our remaining outstanding SBA debentures begin to mature in 2029 and subsequent years through 2035, which will require repayment on or before the respective maturity dates. In light of current market conditions, we will continually evaluate our overall liquidity position and take proactive steps to maintain that position based on the current circumstances. This “Financial Liquidity and Capital Resources” section should be read in conjunction with the notes of our consolidated financial statements.

Previous wording

For the three months ended March 31, 2025, we experienced a net increase in cash and cash equivalents in the amount of $10.3 million. During that period, we made payments of $50.2 million of cash for operating activities, which included the funding of $115.6 million of investments that was partially offset by proceeds received from sales and repayments of investments of $57.3 million. During the same period, we received net proceeds from the issuance of the March 2030 Notes of $96.9 million, we received proceeds from the issuances of SBA debentures of $19.5 million, we repaid SBA debentures of $12.5 million relating to Fund III, repaid $45.0 million of our Credit Facility, received net proceeds from the ATM Program of approximately $20.7 million, received repayments of $0.1 million on our secured borrowings, paid cash dividends to stockholders of $18.8 million, and made payment of deferred financing costs related to our debt financings of $3.3 million.

Current wording

For the six months ended June 30, 2025, we experienced a net increase in cash and cash equivalents in the amount of $34.0 million. During that period, we made payments of $10.3 million of cash for operating activities, which included the funding of $210.0 million of investments that was partially offset by proceeds received from sales and repayments of investments of $166.6 million. During the same period, we received gross proceeds from the issuance of the March 2030 Notes of $100.0 million, received proceeds from the issuances of SBA debentures of $39.5 million, redeemed $25.0 million of the aggregate principal amount on our January 2026 Notes, repaid SBA debentures of $12.5 million relating to Fund III, repaid $45.0 million of our Credit Facility, received net proceeds from the ATM Program of approximately $28.2 million, received repayments of $0.4 million on our secured borrowings, paid cash dividends to stockholders of $36.5 million, and made payment of deferred financing costs related to our debt financings of $4.0 million.

Previous wording

Each of Fund III and Fund IV is licensed to operate as an SBIC, and has the ability to issue debentures guaranteed by the SBA at favorable interest rates. Under the SBA regulations, an SBIC can have outstanding at any time debentures guaranteed by the SBA in an amount up to twice its regulatory capital. The SBA regulations currently limit the amount that is available to be borrowed by any SBIC and guaranteed by the SBA to 300.0% of an SBIC’s regulatory capital or $175.0 million, whichever is less. For two or more SBICs under common control, the maximum amount of outstanding SBA debentures cannot exceed $350.0 million. The SBA may limit the amount that may be drawn each year under the SBA debenture commitments, and each issuance of leverage is conditioned on such SBIC Fund's full compliance, as determined by the SBA, with the terms and conditions under SBA regulations. SBA debentures have fixed interest rates that approximate prevailing 10-year Treasury Note rates plus a spread and have a maturity of ten years with interest payable semi-annually. The principal amount of the SBA debentures is not required to be paid before maturity but may be pre-paid at any time. On September 30, 2024, Fund IV received a license to operate as a SBIC. As of March 31, 2025, Fund III and Fund IV had $162.5 million and $19.5 million outstanding SBA debentures, respectively. Subject to SBA regulatory requirements and approval of SBA debenture commitments, we may access up to $155.5 million of additional SBA debentures under the SBIC debenture program. For more information on the SBA debentures, please refer to Note 6 to our consolidated financial statements.

Current wording

Each of Fund III and Fund IV is licensed to operate as an SBIC, and has the ability to issue debentures guaranteed by the SBA at favorable interest rates. Under the SBA regulations, an SBIC can have outstanding at any time debentures guaranteed by the SBA in an amount up to twice its regulatory capital. The SBA regulations currently limit the amount that is available to be borrowed by any SBIC and guaranteed by the SBA to 300.0% of an SBIC’s regulatory capital or $175.0 million, whichever is less. For two or more SBICs under common control, the maximum amount of outstanding SBA debentures cannot exceed $350.0 million. The SBA may limit the amount that may be drawn each year under the SBA debenture commitments, and each issuance of leverage is conditioned on such SBIC Fund's full compliance, as determined by the SBA, with the terms and conditions under SBA regulations. SBA debentures have fixed interest rates that approximate prevailing 10-year Treasury Note rates plus a spread and have a maturity of ten years with interest payable semi-annually. The principal amount of the SBA debentures is not required to be paid before maturity but may be pre-paid at any time. On September 30, 2024, Fund IV received a license to operate as a SBIC. As of June 30, 2025, Fund III and Fund IV had $162.5 million and $39.5 million outstanding SBA debentures, respectively. Subject to SBA regulatory requirements and approval of SBA debenture commitments, we may access up to $135.5 million of additional SBA debentures under the SBIC debenture program. For more information on the SBA debentures, please refer to Note 6 to our consolidated financial statements.

Previous wording

On December 23, 2020, we closed the offering of $125.0 million in aggregate principal amount of our 4.75% notes due 2026 (the “January 2026 Notes”). The total net proceeds to us from the January 2026 Notes, based on a public offering price of 100.00% of par, after deducting underwriting discounts of $2.5 million and offering expenses of $0.4 million, were $122.1 million. The January 2026 Notes will mature on January 31, 2026 and bear interest at a rate of 4.75%. The January 2026 Notes may be redeemed in whole or in part at any time or from time to time at our option subject to a make whole provision if redeemed before October 31, 2025 (the date falling three months prior to maturity) and at par thereafter. Interest on the January 2026 Notes is payable on January 31 and July 31 of each year. We do not intend to list the January 2026 Notes on any securities exchange or automated dealer quotation system. As of March 31, 2025, the outstanding principal balance of the January 2026 Notes was $125.0 million.

Current wording

On December 23, 2020, we closed the offering of $125.0 million in aggregate principal amount of our 4.75% notes due 2026 (the “January 2026 Notes”). The total net proceeds to us from the January 2026 Notes, based on a public offering price of 100.00% of par, after deducting underwriting discounts of $2.5 million and offering expenses of $0.4 million, were $122.1 million. The January 2026 Notes will mature on January 31, 2026 and bear interest at a rate of 4.75%. The January 2026 Notes may be redeemed in whole or in part at any time or from time to time at our option subject to a make whole provision if redeemed before October 31, 2025 (the date falling three months prior to maturity) and at par thereafter. Interest on the January 2026 Notes is payable on January 31 and July 31 of each year. We do not intend to list the January 2026 Notes on any securities exchange or automated dealer quotation system. On May 21, 2025, we redeemed $25.0 million of the $125.0 million aggregate principal amount on the January 2026 Notes, resulting in a realized loss on extinguishment of debt of approximately $0.1 million. As of June 30, 2025, the outstanding principal balance of the January 2026 Notes was $100.0 million.

Previous wording

On March 19, 2025, the Company closed the offering of $100.0 million in aggregate principal amount of its 6.75% notes due 2030 (the “March 2030 Notes” and together with the January 2026 Notes and the November 2026 Notes, the “Notes”). The total net proceeds to the Company from the March 2030 Notes, based on a public offering price of 99.29954% of par, after deducting underwriting discounts of $2.0 million and estimated offering expenses of $0.4 million, were approximately $96.9 million. The March 2030 Notes will mature on March 19, 2030 and bear interest at a rate of 6.75%. The March 2030 Notes may be redeemed in whole or in part at any time or from time to time at our option subject to a make whole provision if redeemed before September 19, 2029 (the date falling six months prior to maturity) and at par thereafter. Interest on the March 2030 Notes is payable on March 19 and September 19 of each year, beginning September 19, 2025. The Company does not intend to list the March 2030 Notes on any securities exchange or automated dealer quotation system.

Current wording

On March 19, 2025, we closed the offering of $100.0 million in aggregate principal amount of our 6.75% notes due 2030 (the “March 2030 Notes” and together with the January 2026 Notes and the November 2026 Notes, the “Notes”). The total net proceeds to us from the March 2030 Notes, based on a public offering price of 99.29954% of par, after deducting underwriting discounts of $2.0 million and offering expenses of $0.4 million, were approximately $96.9 million. The March 2030 Notes will mature on March 19, 2030 and bear interest at a rate of 6.75%. The March 2030 Notes may be redeemed in whole or in part at any time or from time to time at our option subject to a make whole provision if redeemed before September 19, 2029 (the date falling six months prior to maturity) and at par thereafter. Interest on the March 2030 Notes is payable on March 19 and September 19 of each year, beginning September 19, 2025. We do not intend to list the March 2030 Notes on any securities exchange or automated dealer quotation system. As of June 30, 2025, the outstanding principal balance of the March 2030 Notes was $100.0 million.

Previous wording

As of March 31, 2025, the carrying value of secured borrowings totaled $13.6 million and the fair value of the associated loans included in investments was $13.6 million. As of December 31, 2024, the carrying value of secured borrowings totaled $13.7 million and the fair value of the associated loans included in investments was $13.5 million. These secured borrowings were created as a result of our completion of partial loan sales of certain unitranche loan assets that did not meet the definition of a “participating interest” as defined in ASC 860 (see Note 2. Significant Accounting Policies - Partial loan and equity sales” for more information). As a result, sale treatment was not permitted and these partial loan sales were treated as secured borrowings. The weighted average interest rate on our secured borrowings was approximately 8.498% and 8.568% as of March 31, 2025 and December 31, 2024, respectively.

Current wording

As of June 30, 2025, the carrying value of secured borrowings totaled $13.3 million and the fair value of the associated loans included in investments was $13.2 million. As of December 31, 2024, the carrying value of secured borrowings totaled $13.7 million and the fair value of the associated loans included in investments was $13.5 million. These secured borrowings were created as a result of our completion of partial loan sales of certain unitranche loan assets that did not meet the definition of a “participating interest” as defined in ASC 860 (see Note 2. Significant Accounting Policies - Partial loan and equity sales” for more information). As a result, sale treatment was not permitted and these partial loan sales were treated as secured borrowings. The weighted average interest rate on our secured borrowings was approximately 8.491% and 8.568% as of June 30, 2025 and December 31, 2024, respectively.

Previous wording

As of March 31, 2025, the weighted average stated interest rates for our SBA debentures and the Notes were 4.323% and 4.875%, respectively. As of March 31, 2025, we had $140.0 million of unutilized commitment under our Credit Facility, and we were subject to a 1.261% fee on such amount. As of March 31, 2025, the weighted average stated interest rate on total debt outstanding was 4.781%.

Current wording

As of June 30, 2025, the weighted average stated interest rates for our SBA debentures and the Notes were 4.408% and 4.885%, respectively. As of June 30, 2025, we had $140.0 million of unutilized commitment under our Credit Facility, and we were subject to a 1.261% fee on such amount. As of June 30, 2025, the weighted average stated interest rate on total debt outstanding was 4.795%.

Previous wording

As a BDC, we are generally required to meet an asset coverage ratio of at least 150% (defined as the ratio which the value of our consolidated total assets, less all consolidated liabilities and indebtedness not represented by senior securities, bears to the aggregate amount of senior securities representing indebtedness), which includes borrowings and any preferred stock we may issue in the future. This requirement limits the amount that we may borrow. On April 29, 2019, our Board, including a majority of the non-interested directors, approved a minimum asset coverage ratio of 150% under Sections 18(a)(1) and 18(a)(2) of the 1940 Act, effective as of April 29, 2020. We also have received exemptive relief from the U.S. Securities and Exchange Commission (“SEC”) to allow us to exclude the senior securities issued by the SBIC Funds and any future SBIC subsidiary from the definition of senior securities in the 150% asset coverage requirement applicable to the Company under the 1940 Act, which, in turn, will enable us to fund more investments with debt capital.

Current wording

As a BDC, we are generally required to meet an asset coverage ratio of at least 150.0% (defined as the ratio which the value of our consolidated total assets, less all consolidated liabilities and indebtedness not represented by senior securities, bears to the aggregate amount of senior securities representing indebtedness), which includes borrowings and any preferred stock we may issue in the future. This requirement limits the amount that we may borrow. On April 29, 2019, our Board, including a majority of the non-interested directors, approved a minimum asset coverage ratio of 150% under Sections 18(a)(1) and 18(a)(2) of the 1940 Act, effective as of April 29, 2020. We also have received exemptive relief from the U.S. Securities and Exchange Commission (“SEC”) to allow us to exclude the senior securities issued by the SBIC Funds and any future SBIC subsidiary from the definition of senior securities in the 150% asset coverage requirement applicable to the Company under the 1940 Act, which, in turn, will enable us to fund more investments with debt capital.

Previous wording

On November 10, 2022, the Company established the at-the-market program (the “ATM Program”), pursuant to which the Company may offer and sell, from time to time through Raymond James & Associates, Inc. and B. Riley Securities, Inc., each as sales agents, shares of the Company's common stock having an aggregate offering price of up to $50.0 million. On August 11, 2023, the Company increased the maximum amount of shares to be sold through the ATM Program to $150.0 million from $50.0 million. On February 29, 2024, the Company increased the maximum amount of shares to be sold through the ATM Program to $300.0 million from $150.0 million. Cumulative to date, the Company has sold 10,384,056 shares of common stock under the ATM Program at a weighted-average price of $19.83, raising $206.0 million of gross proceeds. Net proceeds were $203.2 million after commissions to the sales agents on sales sold. As of March 31, 2025, the Company has $94.0 million available under the ATM Program.

Current wording

On November 10, 2022, the Company established the at-the-market program (the “ATM Program”), pursuant to which the Company may offer and sell, from time to time through Raymond James & Associates, Inc. and B. Riley Securities, Inc., each as sales agents, shares of the Company's common stock having an aggregate offering price of up to $50.0 million. On August 11, 2023, the Company increased the maximum amount of shares to be sold through the ATM Program to $150.0 million from $50.0 million. On February 29, 2024, the Company increased the maximum amount of shares to be sold through the ATM Program to $300.0 million from $150.0 million. Through June 30, 2025, the Company has sold 10,760,681 shares of common stock under the ATM Program at a weighted-average price of $19.85, raising $213.6 million of gross proceeds. Net proceeds were $210.7 million after commissions to the sales agents on sales sold. As of June 30, 2025, the Company has $86.4 million available under the ATM Program.

Previous wording

We have an open market stock repurchase program (the “Stock Repurchase Program”) under which we may acquire up to $5.0 million of our outstanding common stock. Under the Stock Repurchase Program, we may, but are not obligated to, repurchase outstanding common stock in the open market from time to time provided that we comply with the prohibitions under our insider trading policies and the requirements of Rule 10b-18 of the Securities Exchange Act of 1934, as amended, including certain price, market value and timing constraints. The timing, manner, price and amount of any share repurchases will be determined by our management, in its discretion, based upon the evaluation of economic and market conditions, stock price, capital availability, applicable legal and regulatory requirements and other corporate considerations. On October 28, 2024, the Board extended the Stock Repurchase Program through December 31, 2025, or until the approved dollar amount has been used to repurchase shares. The Stock Repurchase Program does not require us to repurchase any specific number of shares and we cannot assure that any shares will be repurchased under the Stock Repurchase Program. The Stock Repurchase Program may be suspended, extended, modified or discontinued at any time. We did not make any repurchases of common stock during the three months ended March 31, 2025 and 2024. Refer to Note 8 to our consolidated financial statements for additional information concerning stock repurchases.

Current wording

We have an open market stock repurchase program (the “Stock Repurchase Program”) under which we may acquire up to $5.0 million of our outstanding common stock. Under the Stock Repurchase Program, we may, but are not obligated to, repurchase outstanding common stock in the open market from time to time provided that we comply with the prohibitions under our insider trading policies and the requirements of Rule 10b-18 of the Securities Exchange Act of 1934, as amended, including certain price, market value and timing constraints. The timing, manner, price and amount of any share repurchases will be determined by our management, in its discretion, based upon the evaluation of economic and market conditions, stock price, capital availability, applicable legal and regulatory requirements and other corporate considerations. On October 28, 2024, the Board extended the Stock Repurchase Program through December 31, 2025, or until the approved dollar amount has been used to repurchase shares. The Stock Repurchase Program does not require us to repurchase any specific number of shares and we cannot assure that any shares will be repurchased under the Stock Repurchase Program. The Stock Repurchase Program may be suspended, extended, modified or discontinued at any time. We did not make any repurchases of common stock during the three and six months ended June 30, 2025 and 2024. Refer to Note 8 to our consolidated financial statements for additional information concerning stock repurchases.

Previous wording

Our Board consulted with the independent third-party valuation firm(s) in arriving at our determination of fair value for 18 and 21 of our portfolio company investments representing 28.3% and 27.5% of the total portfolio investments at fair value (exclusive of new portfolio company investments made during the three months ended March 31, 2025 and December 31, 2024, respectively) as of March 31, 2025 and December 31, 2024, respectively.

Current wording

Our Board consulted with the independent third-party valuation firm(s) in arriving at our determination of fair value for 16 and 21 of our portfolio company investments representing 23.3% and 27.5% of the total portfolio investments at fair value (exclusive of new portfolio company investments made during the three months ended June 30, 2025 and December 31, 2024, respectively) as of June 30, 2025 and December 31, 2024, respectively.

Previous wording

— a base management fee and an incentive fee. See Note 5 to our consolidated financial statements. The Investment Advisor, in consultation with the Board, agreed to voluntarily waive $0.1 million and $0.1 million of the base management fees on any assets accounted for as secured borrowings as defined under GAAP for the three months ended March 31, 2025 and 2024, respectively.

Current wording

We have entered into the Investment Advisory Agreement with Fidus Investment Advisors as our investment advisor. Pursuant to the agreement, the Investment Advisor manages our day-to-day operating and investing activities. We pay the Investment Advisor a fee for its services under the Investment Advisory Agreement consisting of two components — a base management fee and an incentive fee. See Note 5 to our consolidated financial statements. The Investment Advisor, in consultation with the Board, agreed to voluntarily waive $0.1 million and $0.1 million of the base management fees on any assets accounted for as secured borrowings as defined under GAAP for the three and six months ended June 30, 2025, respectively, and $0.1 million and $0.1 million for the three and six months ended June 30, 2024, respectively.

Previous wording

While we may co-invest with investment entities managed by the Investment Advisor or its affiliates, to the extent permitted by the 1940 Act and the rules and regulations thereunder, the 1940 Act imposes significant limits on co-investment. Our Investment Advisor and its affiliates has received an exemptive order that expands our ability to co-invest in portfolio companies with other funds managed by the Investment Advisor or its affiliates (“Affiliated Funds”) in a manner consistent with our investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with certain conditions (the “Order”). Pursuant to the Order, we are permitted to co-invest with our affiliates if a “required majority” (as defined in Section 57(o) of the 1940 Act) of the Independent Directors make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transactions, including the consideration to be paid, are reasonable and fair to us and our stockholders and do not involve overreaching by us or our stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of our stockholders and is consistent with our investment objective and strategies. However, neither we nor our affiliates are obligated to invest or co-invest when investment opportunities are referred to us or them.

Current wording

Advisor and its affiliates has received an exemptive order that expands our ability to co-invest in portfolio companies with other funds managed by the Investment Advisor or its affiliates (“Affiliated Funds”) in a manner consistent with our investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with certain conditions (the “Order”). Pursuant to the Order, we are permitted to co-invest with our affiliates if a “required majority” (as defined in Section 57(o) of the 1940 Act) of the Independent Directors make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transactions, including the consideration to be paid, are reasonable and fair to us and our stockholders and do not involve overreaching by us or our stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of our stockholders and is consistent with our investment objective and strategies. However, neither we nor our affiliates are obligated to invest or co-invest when investment opportunities are referred to us or them.

Previous wording

On April 23, 2025, we exited our debt investments in Elements Brands, LLC. We received payment in full of $3.7 million on our first lien debt, which includes fees.

Current wording

On July 30, 2025, we exited our first lien debt investment in Choice Technology Solutions, LLC (dba Choice Merchant Solutions, LLC). We received payment in full of $10.6 million on our first lien debt, which includes a prepayment fee. We also received a distribution on our preferred equity investment and recognized a loss of $0.5 million.

Previous wording

On May 5, 2025, our Board declared a regular quarterly dividend of $0.43 per share and a supplemental dividend of $0.11 per share payable on June 25, 2025, to stockholders of record as of June 13, 2025.

Current wording

On August 4, 2025, our Board declared a regular quarterly dividend of $0.43 per share and a supplemental dividend of $0.14 per share payable on September 25, 2025, to stockholders of record as of September 18, 2025.