Investcorp Credit Management BDC, Inc.

Previous wording

Some of the statements in this quarterly report on Form 10-Q constitute forward-looking statements, which relate to future events or our future performance or financial condition. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation the risks, uncertainties and other factors we identify in “Risk Factors” in this Quarterly Report on Form 10-Q, in our most recent Transition Report on Form 10-KT under Part I, Item 1A, and in our other filings with the SEC that we make from time to time. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties, and include statements regarding the following, without limitation:

Current wording

Some of the statements in this quarterly report on Form 10-Q constitute forward-looking statements, which relate to future events or our future performance or financial condition. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation the risks, uncertainties and other factors we identify in “Risk Factors” in this Quarterly Report on Form 10-Q, in our most recent Annual Report on Form 10-K under Part I, Item 1A, and in our other filings with the SEC that we make from time to time. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties, and include statements regarding the following, without limitation:

Previous wording

Investcorp Credit Management BDC, Inc. (“ICMB,” the “Company”, “us”, “we” or “our”), a Maryland corporation formed in May 2013, is a closed-end, externally managed, non-diversified management investment company that has elected to be regulated as a BDC under the 1940 Act. In addition, for U.S. federal income tax purposes, we have elected to be treated and intend to continue to qualify as a RIC under Subchapter M of the Code. On August 30, 2019, we changed our name from CM Finance Inc. to Investcorp Credit Management BDC, Inc. On September 18, 2024, the Company changed its fiscal year end from June 30 to December 31.

Current wording

Investcorp Credit Management BDC, Inc. (“ICMB,” the “Company”, “us”, “we” or “our”), a Maryland corporation formed in May 2013, is a closed-end, externally managed, non-diversified management investment company that has elected to be regulated as a BDC under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for U.S. federal income tax purposes, we have elected to be treated and intend to continue to qualify as a RIC under Subchapter M of the Code. On August 30, 2019, we changed our name from CM Finance Inc. to Investcorp Credit Management BDC, Inc. On September 18, 2024, the Company changed its fiscal year end from June 30 to December 31.

Previous wording

CM Investment Partners LLC (the “Adviser”) serves as our investment adviser. On August 30, 2019, Investcorp Credit Management US LLC (“Investcorp”) acquired an approximate 76% ownership interest in the Adviser through the acquisition of the interests held by Stifel Venture Corp. (“Stifel”) and certain funds managed by Cyrus Capital and through a direct purchase of equity from the Adviser. On August 31, 2023, Investcorp acquired approximately an additional 7% ownership interest in the Adviser. On December 12, 2024, Investcorp assigned its ownership of the Adviser to IVC Credit Management Financing, LLC its parent entity and the entity that manages Investcorp’s US credit management regulated entities. Investcorp and its credit advisory affiliates are a leading global credit investment platform with assets under management of $21.2 billion as of September 30, 2025. Investcorp and its credit advisory affiliates manage funds which invest primarily in senior secured corporate debt issued by mid and large-cap corporations in Western Europe and the United States. The business has a strong track record of consistent performance and growth, employing approximately 50 investment professionals in London and New York. Investcorp is a subsidiary of Investcorp Holdings B.S.C. (“Investcorp Holdings”). Investcorp Holdings and its consolidated subsidiaries, including Investcorp, are referred to as “Investcorp Group”. Investcorp Group is a global provider and manager of alternative investments, offering such investments to its high-net-worth private and institutional clients on a global basis.

Current wording

CM Investment Partners LLC (the “Adviser”) serves as our investment adviser. On August 30, 2019, Investcorp Credit Management US LLC (“Investcorp”) acquired an approximate 76% ownership interest in the Adviser through the acquisition of the interests held by Stifel Venture Corp. (“Stifel”) and certain funds managed by Cyrus Capital and through a direct purchase of equity from the Adviser (the “Investcorp Transaction”). On August 31, 2023, Investcorp acquired approximately an additional 7% ownership interest in the Adviser. On December 12, 2024, Investcorp assigned its ownership of the Adviser to IVC Credit Management Financing, LLC its parent entity and the entity that manages Investcorp’s US credit management regulated entities. Investcorp and its credit advisory affiliates are a leading global credit investment platform with assets under management of $21.5 billion as of March 31, 2026. Investcorp and its credit advisory affiliates manage funds which invest primarily in senior secured corporate debt issued by mid and large-cap corporations in Western Europe and the United States. The business has a strong track record of consistent performance and growth, employing approximately 50 investment professionals in London and New York. Investcorp is a subsidiary of Investcorp Holdings B.S.C. (“Investcorp Holdings”). Investcorp Holdings and its consolidated subsidiaries, including Investcorp, are referred to as “Investcorp Group.” Investcorp Group is a global provider and manager of alternative investments, offering such investments to its high-net-worth private and institutional clients on a global basis.

Previous wording

In connection with the Investcorp Transaction, on June 26, 2019, our board of directors, including all of the directors who are not “interested persons” of the Company, as defined in Section 2(a)(19) of the 1940 Act (each, an “Independent Director”), unanimously approved the Advisory Agreement and recommended that the Advisory Agreement be submitted to our stockholders for approval, which our stockholders approved at the Special Meeting of Stockholders held on August 28, 2019.

Current wording

In connection with the Investcorp Transaction, on June 26, 2019, our board of directors, including all of the directors who are not “interested persons” of the Company, as defined in Section 2(a)(19) of the 1940 Act (each, an “Independent Director”), unanimously approved a new investment advisory agreement (the “Advisory Agreement”) and recommended that the Advisory Agreement be submitted to our stockholders for approval, which our stockholders approved at the Special Meeting of Stockholders held on August 28, 2019.

Previous wording

At the Closing, we entered into the Advisory Agreement with the Adviser, pursuant to which we have agreed to pay the Adviser a fee for investment advisory and management services consisting of two components — the Base Management Fee and the Incentive Fee. The Base Management Fee is equal to 1.75% of our gross assets, payable in arrears on a quarterly basis. The Incentive Fee, which provides the Adviser with a share of the income that it generates for the Company, has two components: the Income-Based Fee and the Capital Gains Fee. The Income-Based Fee is equal to 20.0% of pre-incentive fee net investment income, subject to an annualized hurdle rate of 8.0% with a “catch up” fee for returns between the 8.0% hurdle and 10.0%. The Capital Gains Fee is determined and payable in arrears as of the end of each fiscal year (or upon termination of the Advisory Agreement, as of the termination date), commencing with the fiscal year ended June 30, 2021, and is equal to 20.0% of the Company’s cumulative aggregate realized capital gains from the Commencement Date through the end of each fiscal year, computed net of the Company’s aggregate cumulative realized capital losses and the Company’s aggregate cumulative unrealized capital depreciation through the end of such year, less the aggregate amount of any previously paid Capital Gains Fees.

Current wording

At the Closing, we entered into the Advisory Agreement with the Adviser, pursuant to which we have agreed to pay the Adviser a fee for investment advisory and management services consisting of two components — a base management fee (the “Base Management Fee”) and an incentive fee (the “Incentive Fee”). The Base Management Fee is equal to 1.75% of our gross assets, payable in arrears on a quarterly basis. The Incentive Fee, which provides the Adviser with a share of the income that it generates for the Company, has two components: an income-based fee (the “Income-Based Fee”) and a capital gains fee (the “Capital Gains Fee”). The Income-Based Fee is equal to 20.0% of pre-incentive fee net investment income, subject to an annualized hurdle rate of 8.0% with a “catch-up” fee for returns between the 8.0% hurdle and 10.0%. The Capital Gains Fee is determined and payable in arrears as of the end of each fiscal year (or upon termination of the Advisory Agreement, as of the termination date), commencing with the fiscal year ended June 30, 2021, and is equal to 20.0% of the Company’s cumulative aggregate realized capital gains from the Commencement Date through the end of each fiscal year, computed net of the Company’s aggregate cumulative realized capital losses and the Company’s aggregate cumulative unrealized capital depreciation through the end of such year, less the aggregate amount of any previously paid Capital Gains Fees.

Previous wording

We have entered into the Advisory Agreement and the Administration Agreement with the Adviser, pursuant to which the Adviser provides us with investment advisory and the administrative services necessary for our operations. See “Note 7. Agreements and Related Party Transactions” in the notes to our consolidated financial statements in this Quarterly Report on Form 10-Q for more information regarding the Advisory Agreement and Administration Agreement and the fees and expenses paid or reimbursed by us thereunder.

Current wording

We have entered into the Advisory Agreement and an administration agreement with the Adviser (the “Administration Agreement”), pursuant to which the Adviser provides us with investment advisory and the administrative services necessary for our operations. See “Note 7. Agreements and Related Party Transactions” in the notes to our consolidated financial statements in this Quarterly Report on Form 10-Q for more information regarding the Advisory Agreement and Administration Agreement and the fees and expenses paid or reimbursed by us thereunder.

Previous wording

From time to time, we may form Taxable Subsidiaries to allow the Company to hold equity securities of portfolio companies organized as pass-through entities while continuing to satisfy the requirements applicable to a RIC under the Code. As of each of September 30, 2025 and December 31, 2024, we had no Taxable Subsidiaries.

Current wording

From time to time, we may form taxable subsidiaries that are taxed as corporations for U.S. federal income tax purposes (the “Taxable Subsidiaries”) to allow the Company to hold equity securities of portfolio companies organized as pass-through entities while continuing to satisfy the requirements applicable to a RIC under the Code. As of March 31, 2026 and December 31, 2025, we had no Taxable Subsidiaries.

Previous wording

The current inflationary environment and uncertainty as to the probability of, and length and depth of a global recession could affect our portfolio companies. Government spending, government policies and the potential for disruptions in the availability of credit in the United States and elsewhere, in conjunction with other factors, including those described elsewhere in this Quarterly Report and in other filings we have made with the SEC, could affect our portfolio companies, our financial condition and our results of operations. We will continue to monitor the evolving market environment. In these circumstances, developments outside our control could require us to adjust our plan of operations and could impact our financial condition, results of operations or cash flows in the future. Despite these factors, we believe we and our portfolio are well positioned to manage the current environment. For additional information, see Part I, Item 1A. Risk Factors in our most recently filed Transition Report on Form 10-KT, as well as the risk factors listed in our subsequently filed Quarterly Reports on Form 10-Q.

Current wording

The current inflationary environment and uncertainty as to the probability of, and length and depth of a global recession could affect our portfolio companies. Government spending, government policies and the potential for disruptions in the availability of credit in the United States and elsewhere, in conjunction with other factors, including those described elsewhere in this Quarterly Report and in other filings we have made with the SEC, could affect our portfolio companies, our financial condition and our results of operations. We will continue to monitor the evolving market environment. In these circumstances, developments outside our control could require us to adjust our plan of operations and could impact our financial condition, results of operations or cash flows in the future. Despite these factors, we believe we and our portfolio are well positioned to manage the current environment. For additional information, see Part I, Item 1A. Risk Factors in our most recent Annual Report on Form 10-K, as well as the risk factors listed in our subsequently filed Quarterly Reports on Form 10-Q.

Previous wording

Understanding our accounting policies and the extent to which we use management’s judgment and estimates in applying these policies is integral to understanding our financial statements. We describe our most significant accounting policies in “Note 2. Significant Accounting Policies” in our consolidated financial statements included in our Transition Report on Form 10-KT for the fiscal period ended December 31, 2024 and in this Quarterly Report on Form 10-Q. Critical accounting policies are those that require the application of management’s most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that may change in subsequent periods. Management has utilized available information, including our past history, industry standards and the current economic environment, among other factors, in forming the estimates and judgments, giving due consideration to materiality. We have identified the valuation of our portfolio investments, including our investment valuation policy (which has been approved by our board of directors), as our critical accounting policy and estimates. The critical accounting policies should be read in conjunction with our risk factors in our Transition Report on Form 10-KT for the fiscal period ended December 31, 2024 and our subsequently filed Quarterly Reports on Form 10-Q. In addition to the discussion below, our critical accounting policies are further described in the notes to our consolidated financial statements.

Current wording

Understanding our accounting policies and the extent to which we use management’s judgment and estimates in applying these policies is integral to understanding our financial statements. We describe our most significant accounting policies in “Note 2. Significant Accounting Policies” in our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal period ended December 31, 2025 and in this Quarterly Report on Form 10-Q. Critical accounting policies are those that require the application of management’s most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that may change in subsequent periods. Management has utilized available information, including our past history, industry standards and the current economic environment, among other factors, in forming the estimates and judgments, giving due consideration to materiality. We have identified the valuation of our portfolio investments, including our investment valuation policy (which has been approved by our board of directors), as our critical accounting policy and estimates. The critical accounting policies should be read in conjunction with our risk factors in our Annual Report on Form 10-K for the fiscal period ended December 31, 2025 and our subsequently filed Quarterly Reports on Form 10-Q. In addition to the discussion below, our critical accounting policies are further described in the notes to our consolidated financial statements.

Previous wording

As of September 30, 2025, our investment portfolio, valued at fair value in accordance with our board of directors-approved valuation policy, represented 93.1% of our total assets, as compared to 92.6% of our total assets as of December 31, 2024.

Current wording

As of March 31, 2026, our investment portfolio, valued at fair value in accordance with our board of directors-approved valuation policy, represented 92.0% of our total assets, as compared to 91.4% of our total assets as of December 31, 2025.

Previous wording

See Note 2.j “Significant Accounting Policies – Investment Valuation” and Note 4. “Investments” in the notes to the consolidated financial statements included in our most recent Transition Report on Form 10-KT and in this Quarterly Report on Form 10-Q for more information on our valuation process.

Current wording

See Note 2.j “Significant Accounting Policies – Investment Valuation” and Note 4. “Investments” in the notes to the consolidated financial statements included in our most recent Annual Report on Form 10-K and in this Quarterly Report on Form 10-Q for more information on our valuation process.

Previous wording

Effective January 17, 2024, borrowings under the Capital One Revolving Financing generally bear interest at a rate per annum equal to SOFR plus 3.10%. The default interest rate will be equal to the interest rate then in effect plus 2.00%. The Capital One Revolving Financing required the payment of an upfront fee of 1.125% ($1.3 million) of the available borrowings under the Capital One Revolving Financing at the closing, and requires the payment of an unused fee of (i) 0.75% annually for any undrawn amounts below 50% of the Capital One Revolving Financing, (ii) 0.50% annually for any undrawn amounts between 50% and 75% of the Capital One Revolving Financing, and (iii) 0.25% annually for any undrawn amounts above 75% of the Capital One Revolving Financing. Borrowings under the Capital One Revolving Financing are based on a borrowing base. The Capital One Revolving Financing generally requires payment of interest and fees on a quarterly basis. All outstanding principal is due on the Maturity Date. The Capital One Revolving Financing also requires mandatory prepayment of interest and principal upon certain events.

Current wording

Effective January 17, 2024, borrowings under the Capital One Revolving Financing generally bear interest at a rate per annum equal to Secured Overnight Financing Rate (“SOFR”) plus 3.10%. The default interest rate will be equal to the interest rate then in effect plus 2.00%. The Capital One Revolving Financing required the payment of an upfront fee of 1.125% ($1.3 million) of the available borrowings under the Capital One Revolving Financing at the closing, and requires the payment of an unused fee of (i) 0.75% annually for any undrawn amounts below 50% of the Capital One Revolving Financing, (ii) 0.50% annually for any undrawn amounts between 50% and 75% of the Capital One Revolving Financing, and (iii) 0.25% annually for any undrawn amounts above 75% of the Capital One Revolving Financing. Borrowings under the Capital One Revolving Financing are based on a borrowing base. The Capital One Revolving Financing generally requires payment of interest and fees on a quarterly basis. All outstanding principal is due on the Maturity Date. The Capital One Revolving Financing also requires mandatory prepayment of interest and principal upon certain events.

Previous wording

As of September 30, 2025 and December 31, 2024, there were $63.5 million and $58.5 million in borrowings outstanding under the Capital One Revolving Financing, respectively.

Current wording

As of March 31, 2026 and December 31, 2025, there were $44,900,000 and $58,900,000 in borrowings outstanding under the Capital One Revolving Financing, respectively.

Previous wording

On March 31, 2021, we closed the public offering of $65.0 million in aggregate principal amount of 4.875% notes due 2026 (the “2026 Notes”). The total net proceeds to us from the 2026 Notes after deducting underwriting discounts and commissions of approximately $1.3 million and offering expenses of approximately $215,000, were approximately $63.1 million.

Current wording

On March 31, 2021, the Company closed the public offering of $65.0 million in aggregate principal amount of 4.875% notes due 2026 (the “2026 Notes”). The total net proceeds to the Company from the sale of the 2026 Notes, after deducting the underwriting discounts and commissions of approximately $1.3 million and estimated offering expenses of approximately $215,000, were approximately $63.1 million.

Previous wording

The 2026 Notes will mature on April 1, 2026, unless previously redeemed or repurchased in accordance with their terms, and bear interest at a rate of 4.875%. The 2026 Notes are our direct unsecured obligations and rank pari passu, which means equal in right of payment, with all of our outstanding and future unsecured, unsubordinated indebtedness. Because the 2026 Notes are not secured by any of our assets, they are effectively subordinated to all of our existing and future secured indebtedness (including indebtedness that is initially unsecured as to which we subsequently grant a security interest), to the extent of the value of the assets securing such indebtedness. The 2026 Notes are structurally subordinated to all existing and future indebtedness and other obligations of any of our existing or future subsidiaries and financing vehicles, including, without limitation, borrowings under the Capital One Revolving

Current wording

The 2026 Notes were due to mature on April 1, 2026 and bore interest at a rate of 4.875%. The 2026 Notes were the Company’s direct unsecured obligations and ranked pari passu, which means equal in right of payment, with all outstanding and future unsecured, unsubordinated indebtedness issued by the Company. Because the 2026 Notes were not secured by any of the Company’s assets, they were effectively subordinated to all of the Company’s existing and future secured unsubordinated indebtedness (or any indebtedness that is initially unsecured as to which the Company subsequently grants a security interest), to the extent of the value of the assets securing such indebtedness. The 2026 Notes were structurally subordinated to all existing and future indebtedness and other obligations of any of the Company’s subsidiaries and financing vehicles, including, without limitation, borrowings under the Capital One Revolving Financing. The 2026 Notes were obligations exclusively of the Company and not of any of the Company’s subsidiaries. Interest on the 2026 Notes was payable semi-annually on April 1 and October 1 of each year, commencing October 1, 2021.

Previous wording

On November 10, 2025, the Company entered into a letter of commitment with Investcorp Capital plc (“ICAP”), an Affiliate of the Adviser, to provide, or cause to be provided, capital to the Company in the event the Company is unable to repay any portion of the principal balance of the Company’s 4.875% Notes due 2026. Under the letter of commitment, ICAP is required to provide, or cause to be provided a loan (“ICAP Loan”) to the Company in an amount up to the lesser of (i) the remaining, unredeemed, principal amount of the Notes outstanding on April 1, 2026 and (ii) $65,000,000. In exchange, the Company will pay ICAP a fee in an amount equal to the sum of (i) the upfront fee of 0.50% and (ii) an ongoing fee of 1.00% per annum during the period from November 10, 2025 until April 1, 2026, pro rated for any period of less than one year. The ICAP Loan would bear interest at the rate of SOFR plus 5.50% per year, payable quarterly in arrears. The ICAP Loan would mature on July 1, 2029. The foregoing description of the letter of commitment does not purport to be complete and is qualified in its entirety by reference to the full text of the letter of commitment, filed as an exhibit hereto and incorporated by reference herein.

Current wording

On November 10, 2025, the Company entered into a letter of commitment with Investcorp Capital plc (“ICAP”), an Affiliate of the Adviser, to provide, or cause to be provided, capital to the Company in the event the Company was unable to repay any portion of the principal balance of the Company’s 4.875% Notes due 2026. Under the letter of commitment, ICAP was required to provide, or cause to be provided, a loan (“ICAP Loan”) to the Company in an amount up to the lesser of (i) the remaining, unredeemed, principal amount of the Notes outstanding on April 1, 2026 and (ii) $65,000,000. In exchange, the Company paid ICAP a fee in an amount equal to the sum of (i) the upfront fee of 0.50% of principal amount and (ii) an ongoing fee of 1.00% of principal amount per annum during the period from November 10, 2025 until April 1, 2026, pro-rated for any period of less than one year. On March 30, 2026, the Company issued $65.0 million in aggregate principal amount of Floating Rate Senior Unsecured Notes due 2029. The Company used the proceeds from that issuance to fully repay the 2026 Notes on March 30, 2026.

Previous wording

The indenture under which the 2026 Notes are issued (the “2026 Notes Indenture”) contains certain covenants, including covenants requiring us to comply with Section 18(a)(1)(A) as modified by Section 61(a)(2) of 1940 Act, or any successor provisions, to comply with Section 18(a)(1)(B) as modified by Section 61(a)(2) of the 1940 Act, or any successor provisions but giving effect to any no-action relief granted by the SEC to another BDC and upon which we may reasonably rely (or to us if we determine to seek such similar no-action or other relief), and to provide financial information to the holders of the 2026 Notes and the trustee if we should no longer be subject to the reporting requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These covenants are subject to important limitations and exceptions that are set forth in the 2026 Notes Indenture.

Current wording

The 2029 Notes Indenture contains certain covenants, including covenants requiring the Company to comply with Section 18(a)(1)(A) as modified by Section 61(a)(2) of the 1940 Act, or any successor provisions, whether or not the Company continues to be subject to such provisions of the 1940 Act, but giving effect, in either case, to any exemptive relief granted to the Company by the SEC and Section 18(a)(1)(B) as modified by Section 61(a)(2) of the 1940 Act, or any successor provisions but giving effect to any no-action relief granted by the SEC to another business development company and upon which the Company may reasonably rely (or to the Company if the Company determines to seek such similar no-action or other relief). The 2029 Notes Indenture also contains covenants (i) restricting consolidations, mergers, asset transfer, equity and debt transactions, dispositions of portfolio investments having an aggregate fair value of 10% or more of the aggregate fair value of all portfolio investments (“Disposal Transactions”), change of control transactions, and the use of the Company’s and its subsidiaries’ unrestricted cash and cash equivalents to the redemption of the Notes if the Board determines that some or all of such unrestricted cash should be applied in repaying an amount of the Company’s or any of its subsidiaries’ indebtedness, in each case without the prior written consent of holders of greater than 50% in principal amount of the 2029 Notes (the “Required Holders”), and (ii) requiring the Company to consult with the Required Holders prior to commencing discussions or negotiations for any debt or equity transaction, Disposal Transaction, change of control transaction, or declaration or payment of dividends or other distributions. The 2029 Notes Indenture also contains a covenant that prohibits the Company and its subsidiaries from entering into any transaction or arrangement with any affiliate unless such transaction or arrangement is on arm’s length terms, is no less favorable to the Company than those that would be available from a non-affiliate in comparable circumstances and is approved by the Board (or any committee thereof) acting reasonably and in good faith.

Previous wording

We generate revenues primarily in the form of interest on the debt we hold. We also generate revenue from royalty income, dividends on our equity interests and capital gains on the sale of warrants and other debt or equity interests that we acquire. Our investments in fixed income instruments generally have an expected maturity of three to five years, although we have no lower or upper constraint on maturity. Interest on our debt investments is generally payable quarterly or semi-annually. Payments of principal of our debt investments may be amortized over the stated term of the investment, deferred for several years or due entirely at maturity. In some cases, our debt investments and preferred stock investments may defer payments of cash interest or dividends or PIK interest. Any outstanding principal amount of our debt investments and any accrued but unpaid interest will generally become due at the maturity date. In addition, we may generate revenue in the form of prepayment fees, commitment, origination, structuring or due diligence fees, fees for providing significant managerial assistance, consulting fees and other investment related income.

Current wording

We generate revenues primarily in the form of interest on the debt we hold. We also generate revenue from royalty income, dividends on our equity interests and capital gains on the sale of warrants and other debt or equity interests that we acquire. Our investments in fixed income instruments generally have an expected maturity of three to five years, although we have no lower or upper constraint on maturity. Interest on our debt investments is generally payable quarterly or semi-annually. Payments of principal of our debt investments may be amortized over the stated term of the investment, deferred for several years or due entirely at maturity. In some cases, our debt investments and preferred stock investments may defer payments of cash interest or dividends or payment-in-kind (“PIK”) interest. Any outstanding principal amount of our debt investments and any accrued but unpaid interest will generally become due at the maturity date. In addition, we may generate revenue in the form of prepayment fees, commitment, origination, structuring or due diligence fees, fees for providing significant managerial assistance, consulting fees and other investment related income.

Previous wording

As of December 31, 2024, our investment portfolio of $191.6 million (at fair value) consisted of debt and equity investments in 43 portfolio companies, of which 81.17% were first lien investments and 18.83% were in equities, warrants and other positions. At December 31, 2024, our average and largest portfolio company investment at fair value was $4.5 million and $15.4 million, respectively.

Current wording

As of March 31, 2026, our investment portfolio of $151.4 million (at fair value) consisted of debt and equity investments in 34 portfolio companies, of which 82.54% were first lien investments and 17.46% were equities, warrants and other positions. At March 31, 2026, our average and largest portfolio company investment at fair value was $4.5 million and $11.6 million, respectively.

Previous wording

As of September 30, 2025, our investment portfolio of $196.1 million (at fair value) consisted of debt and equity investments in 41 portfolio companies, of which 78.32% were first lien investments and 21.68% were equities, warrants and other positions. At September 30, 2025, our average and largest portfolio company investment at fair value was $4.8 million and $13.4 million, respectively.

Current wording

As of December 31, 2025, our investment portfolio of $172.7 million (at fair value) consisted of debt and equity investments in 37 portfolio companies, of which 80.76% were first lien investments and 19.24% were in equities, warrants and other positions. At December 31, 2025, our average and largest portfolio company investment at fair value was $4.7 million and $11.4 million, respectively.

Previous wording

As of September 30, 2025 and December 31, 2024, our average total yield of debt and income producing securities weighted by amortized cost (which includes interest income and amortization of fees and discounts) was 9.97% and 10.60% respectively. As of September 30, 2025 and December 31, 2024, our average total yield on the total portfolio weighted by amortized cost (which includes interest income and amortization of fees and discounts) was 8.01% and 8.72%, respectively. The weighted average total yield was computed using an internal rate of return calculation of our debt investments based on contractual cash flows, including interest and amortization payments, and, for floating rate investments, the spot SOFR, as applicable, as of September 30, 2025, of all of our debt investments. The weighted average total 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 payment of all of our fees and expenses, including any sales load paid in connection with an offering of our securities. There can be no assurance that the weighted average total yield will remain at its current level.

Current wording

As of March 31, 2026 and December 31, 2025, our average total yield of debt and income producing securities weighted by amortized cost (which includes interest income and amortization of fees and discounts) was 11.85% and 10.34%, respectively. As of March 31, 2026 and December 31, 2025, our average total yield on the total portfolio weighted by amortized cost (which includes interest income and amortization of fees and discounts) was 8.63% and 7.71%, respectively. The weighted average total yield was computed using an internal rate of return calculation of our debt investments based on contractual cash flows, including interest and amortization payments, and, for floating rate investments, the spot SOFR, as applicable, as of March 31, 2026, of all of our debt investments. The weighted average total 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 payment of all of our fees and expenses, including any sales load paid in connection with an offering of our securities. There can be no assurance that the weighted average total yield will remain at its current level.

Previous wording

We use GICS codes to identify the industry groupings of our portfolio companies. At September 30, 2025 and December 31, 2024, respectively, the industry composition of our portfolio in accordance with the GICS codes at fair value, as a percentage of our total portfolio, was as follows:

Current wording

We use Global Industry Classification Standard (“GICS”) codes to identify the industry groupings of our portfolio companies. At March 31, 2026 and December 31, 2025, respectively, the industry composition of our portfolio in accordance with the GICS codes at fair value, as a percentage of our total portfolio, was as follows:

Previous wording

During the six months ended December 31, 2024, we made investments in five new portfolio companies and five existing portfolio companies. Investments in new and existing portfolio companies, to which we were not previously contractually committed to provide financial support, totaled approximately $23.0 million. Of these investments, 99.80% consisted of first lien investments and 0.20% were in equity, warrants, and other investments.

Current wording

During the three months ended March 31, 2026, we made investments in one existing portfolio company, which totaled approximately $0.1 million. We made investments in one existing portfolio company, to which we were previously contractually committed to provide financial support through the terms of the revolvers and delayed draw term loans, which totaled approximately $0.7 million. Of these investments, 100.00% consisted of first lien investments.

Previous wording

During the nine months ended September 30, 2025, we made investments in two new portfolio companies and seven existing portfolio companies. Investments in new and existing portfolio companies, to which we were not previously contractually committed to provide financial support, totaled approximately $24.1 million. Of these investments, 97.10% consisted of first lien investments and 2.90% were in equity, warrants, and other investments.

Current wording

During the three months ended March 31, 2025, we made investments in one new portfolio company and two existing portfolio companies. These investments totaled approximately $5.1 million. Of these investments, 86.71% consisted of first lien investments and 13.29% were in equity, warrants, and other investments.

Previous wording

At September 30, 2025, 98.5% of our debt investments bore interest based on floating rates based on indices such as SOFR, the Euro Interbank Offered Rate, the Federal Funds Rate of the Prime Rate (in certain cases, subject to interest rate floors), and 1.5% bore interest at fixed rates. At December 31, 2024, 96.4% of our debt investments bore interest based on floating rates based on indices such as SOFR, the Euro Interbank Offered Rate, the Federal Funds Rate or the Prime Rate (in certain cases, subject to interest rate floors), and 3.6% bore interest at fixed rates.

Current wording

At March 31, 2026, 97.8% of our debt investments bore interest based on floating rates based on indices such as SOFR, the Euro Interbank Offered Rate, the Federal Funds Rate or the Prime Rate (in certain cases, subject to interest rate floors), and 2.2% bore interest at fixed rates. At December 31, 2025, 98.0% of our debt investments bore interest based on floating rates based on indices such as SOFR, the Euro Interbank Offered Rate, the Federal Funds Rate or the Prime Rate (in certain cases, subject to interest rate floors), and 2.0% bore interest at fixed rates.

Previous wording

Our investment portfolio may contain loans that are in the form of lines of credit or revolving credit facilities, which require us to provide funding when requested by portfolio companies in accordance with the terms of the underlying loan agreements. As of September 30, 2025, we had ten investments with aggregate unfunded commitments of $5.6 million, and as of December 31, 2024, we had eight investments with aggregate unfunded commitments of $4.6 million. As of September 30, 2025, we had sufficient liquidity (through cash on hand and available borrowings under our Capital One Revolving Financing) to fund such unfunded loan commitments should the need arise.

Current wording

Our investment portfolio may contain loans that are in the form of lines of credit or revolving credit facilities, which require us to provide funding when requested by portfolio companies in accordance with the terms of the underlying loan agreements. As of March 31, 2026, we had nine investments with aggregate unfunded commitments of $3.6 million, and as of December 31, 2025, we had nine investments with aggregate unfunded commitments of $3.7 million. As of March 31, 2026, we had sufficient liquidity (through cash on hand and available borrowings under our Capital One Revolving Financing) to fund such unfunded loan commitments should the need arise.

Previous wording

Investment income, attributable primarily to interest and fees on our debt investments, for the three months ended September 30, 2025 decreased to $4.4 million from $6.8 million for the three months ended September 30, 2024 primarily due to a decrease in interest income due to lower index and interest rates in 2025 compared to 2024, a decrease in PIK interest income primarily related to the recognition of PIK interest income for the period January 2024 to July 2024 for the Klein Hersh, LLC Term Loan - Last Out during the three months ended September 30, 2024 after it was removed from non-accrual status and lower PIK rates, and a decrease in PIK dividend income related to Fusion Connect, Inc. - Series A Preferred.

Current wording

Investment income, attributable primarily to interest and fees on our debt investments, for the three months ended March 31, 2026 decreased to $3.6 million from $4.4 million for the three months ended March 31, 2025 primarily due to a decrease in interest income due to lower average assets and lower index and interest rates in 2026 compared to 2025, and a decrease in PIK dividend income related to Fusion Connect, Inc. - Series A Preferred, which is on non-accrual status in 2026 compared to 2025.

Previous wording

Net investment income before taxes decreased to $0.6 million for the three months ended September 30, 2025 from $2.5 million for the three months ended September 30, 2024 primarily due to a decrease in interest income due to lower index and interest rates in 2025 compared to 2024, a decrease in PIK interest income primarily related to the recognition of PIK interest income for the period January 2024 to July 2024 for the Klein Hersh, LLC Term Loan - Last Out during the three months ended September 30, 2024 after it was removed from non-accrual status and lower PIK rates, and a decrease in PIK dividend income related to Fusion Connect, Inc. - Series A Preferred, partially offset by a decrease in interest expense due to lower index rates in 2025 compared to 2024, a decrease in income-based incentive fees due to write offs of deferred incentive fees in 2025 as a result of restructurings related to our investments in Crafty Apes, American Nuts, and Procera Networks/Sandvine, and a decrease in professional fees due to lower accrued audit and legal fees.

Current wording

Net investment income before taxes decreased to $0.3 million for the three months ended March 31, 2026 from $0.7 million for the three months ended March 31, 2025 primarily due to a decrease in interest income due to lower average assets and lower index and interest rates in 2026 compared to 2025, and the loss of PIK dividend income related to Fusion Connect, Inc. - Series A Preferred, which is on non-accrual status in 2026 compared to 2025, partially offset by a decrease in interest expense resulting from reduced index rates and lower borrowings under the Revolving Credit Facility in 2026 compared to 2025, and an increase in the waiver of base management fees.

Previous wording

There was a net realized gain on investments of $0.6 million for the nine months ended September 30, 2025 primarily due to the realization of a gain associated with the sale of our investment in Investcorp Transformer Aggregator LP - Equity Interest, partially offset by the realization of losses associated with the restructuring of our investments in American Nuts Holdings, LLC and a write off of our investment in American Teleconferencing Services, Ltd.

Current wording

There was a net realized loss on investments of $1.6 million for the three months ended March 31, 2025 primarily due to the realization of losses associated with the restructuring of our investments in American Nuts Holdings, LLC and a write off of our investment in American Teleconferencing Services, Ltd., partially offset by a realization of gains associated with the restructuring of our investments in Sandvine Corporation.

Previous wording

We recorded a net change in unrealized depreciation of $1.8 million for the nine months ended September 30, 2025 primarily due to changes in marks for Advanced Solutions International - Preferred Stock, American Nuts Holdings, LLC Class A Units, ArborWorks, LLC A-1 - Preferred Units, Bioplan USA, Inc. - Common Stock, CareerBuilder, LLC Term Loan B3, Crafty Apes LLC - Common Stock, Fusion Connect, Inc. - Series A Preferred, Klein Hersh, LLC Term Loan - Last Out, LABL, Inc. Term Loan B, and investments in Techniplas Foreign Holdco LP, the realization of previously unrealized gains resulting from the sale of our investment in Investcorp Transformer Aggregator LP - Equity Interest, the realization of previously unrealized losses resulting from the restructuring of our investments in American Nuts Holdings, LLC, and a write off of our investment in American Teleconferencing Services, Ltd.

Current wording

We recorded a net change in unrealized appreciation of $3.2 million for the three months ended March 31, 2025, primarily due to changes in marks for ArborWorks, LLC A-1 - Preferred Units, Crafty Apes LLC - Common Stock, Klein Hersh, LLC Term Loan - Last Out, Bioplan USA, Inc. - Common Stock and LABL, Inc. Term Loan B and due to the realization of previously unrealized losses resulting from the restructuring of our investments in American Nuts Holdings, LLC and a write off of our investment in American Teleconferencing Services, Ltd.

Previous wording

Our primary liquidity needs include interest and principal repayments under the Capital One Revolving Financing, interest payments on the 2026 Notes, our unfunded loan commitments (if any), investments in portfolio companies, dividend distributions to our stockholders and operating expenses. We believe that our current cash on hand and our anticipated cash flows from operations, including from contractual monthly portfolio company payments and prepayments, will be adequate to meet our cash needs for our daily operations.

Current wording

Our primary liquidity needs include interest and principal repayments under the Capital One Revolving Financing, interest payments on the 2029 Notes, our unfunded loan commitments (if any), investments in portfolio companies, dividend distributions to our stockholders and operating expenses. We believe that our current cash on hand and our anticipated cash flows from operations, including from contractual monthly portfolio company payments and prepayments, will be adequate to meet our cash needs for our daily operations. This “Liquidity and Capital Resources” section should be read in conjunction with “Market Developments” above and the risk factors referenced in our most recent Annual Report on Form 10-K.

Previous wording

For the nine months ended September 30, 2025, our cash balance decreased by $0.5 million. During that period, $0.4 million in net cash was used in operating activities, primarily for investments of $28.4 million in portfolio companies, offset by proceeds from repayments and sales of investments in portfolio companies of $25.1 million. During that same period, $0.1 million in net cash was used in financing activities, primarily from borrowings of $18.5 million under the Capital One Revolving Financing, repayments of $13.5 million under the Capital One Revolving Financing, and distributions of $5.1 million to our stockholders.

Current wording

For the three months ended March 31, 2026, our cash and cash equivalents and restricted cash and cash equivalents balance decreased by $3.4 million. During that period, $10.8 million in net cash was provided by operating activities, primarily from proceeds from sales and repayments of investments in portfolio companies of $14.0 million, offset by investments of $0.8 million in portfolio companies. During that same period, $14.2 million in net cash was used in financing activities, primarily for the repayment of $14.0 million under the Capital One Revolving Financing and a full repayment of $65.0 million for the 2026 Notes using the proceeds of $65.0 million from the issuance of the 2029 Notes.

Previous wording

As of September 30, 2025, we had $3.9 million of cash as well as $7.8 million in restricted cash and $36.5 million of capacity under the Capital One Revolving Financing. As of September 30, 2025, we had $128.5 million of senior securities outstanding at par value and our asset coverage ratio based on par value was 156.6%. We intend to generate additional cash primarily from future offerings of equity and/or debt securities, future borrowings or debt issuances, as well as cash flows from operations, including income earned from investments in our portfolio companies and, to a lesser extent, from the temporary investment of cash in U.S. government securities and other high-quality debt investments that mature in one year or less.

Current wording

As of March 31, 2026, we had $2.7 million of cash and cash equivalents as well as $8.8 million in restricted cash and cash equivalents and $55.1 million of capacity under the Capital One Revolving Financing. As of March 31, 2026, we had $109.9 million of senior securities outstanding at par value and our asset coverage ratio based on par value was 148.0%. We intend to generate additional cash primarily from future offerings of equity and/or debt securities, future borrowings or debt issuances, as well as cash flows from operations, including income earned from investments in our portfolio companies and, to a lesser extent, from the temporary investment of cash in U.S. government securities and other high-quality debt investments that mature in one year or less.

Previous wording

On May 2, 2018, our board of directors, including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) of the board of directors, approved the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act. As a result, effective May 2, 2019, our applicable minimum asset coverage ratio under the 1940 Act was decreased to 150% from 200%. Thus, we are permitted under the 1940 Act, under specified conditions, to issue multiple classes of debt and one class of stock senior to our common stock if our asset coverage, as defined in the 1940 Act, is at least equal to 150% immediately after each such issuance. As of September 30, 2025, our asset coverage for borrowed amounts was 156.6%.

Current wording

On May 2, 2018, our board of directors, including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) of the board of directors, approved the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act. As a result, effective May 2, 2019, our applicable minimum asset coverage ratio under the 1940 Act was decreased to 150% from 200%. Thus, we are permitted under the 1940 Act, under specified conditions, to issue multiple classes of debt and one class of stock senior to our common stock if our asset coverage, as defined in the 1940 Act, is at least equal to 150% immediately after each such issuance. As of March 31, 2026, our asset coverage for borrowed amounts was 148.0%.

Previous wording

We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. As of September 30, 2025, our off-balance sheet arrangements consisted of $5.6 million in unfunded commitments to six of our portfolio companies. As of December 31, 2024, our off-balance arrangements consisted of $4.6 million in unfunded commitments to six of our portfolio companies. We maintain sufficient liquidity (through cash on hand and available borrowings under our Capital One Revolving Financing) to fund such unfunded loan commitments should the need arise.

Current wording

We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. As of March 31, 2026, our off-balance sheet arrangements consisted of $3.6 million in unfunded commitments to six of our portfolio companies. As of December 31, 2025, our off-balance sheet arrangements consisted of $3.7 million in unfunded commitments to six of our portfolio companies. We maintain sufficient liquidity (through cash on hand and available borrowings under our Capital One Revolving Financing) to fund such unfunded loan commitments should the need arise.

Previous wording

Subsequent to September 30, 2025 and through November 12, 2025, the Company invested a total of $2.5 million, at cost, which included investments in three existing portfolio companies, and received approximately $11.1 million from the repayment of three positions, the sale of one position, and the cancellation of warrants in one position. As of November 12, 2025, the Company had investments in 37 portfolio companies.

Current wording

Subsequent to March 31, 2026, and through May 12, 2026, the Company invested a total of $2.0 million, at cost, which included investments in one existing portfolio company. As of May 12, 2026, the Company had investments in 34 portfolio companies.