Hercules Capital, Inc.

Previous wording

Since inception through March 31, 2025, we have originated more than $22.0 billion in commitments in over 680 companies. We, through the Adviser Subsidiary, may also agree to manage certain other funds that invest in debt, equity or provide other financing or services to companies in a variety of industries for which we, through the Adviser Subsidiary may earn management or other fees for our services. As of March 31, 2025, we, including through our Adviser Subsidiary, actively manage approximately $5.0 billion of assets.

Current wording

Since inception through June 30, 2025, we have originated more than $23.0 billion in commitments in over 690 companies. We, through the Adviser Subsidiary, may also agree to manage certain other funds that invest in debt, equity or provide other financing or services to companies in a variety of industries for which we, through the Adviser Subsidiary may earn management or other fees for our services. As of June 30, 2025, we, including through our Adviser Subsidiary, actively manage more than $5.3 billion of assets.

Previous wording

Our portfolio activity for the three months ended March 31, 2025 and 2024 was comprised of the following:

Current wording

Our portfolio activity for the six months ended June 30, 2025 and 2024 was comprised of the following:

Previous wording

(3)Amount represents unfunded commitments, including undrawn revolving facilities, which are available at the request of the portfolio company. Amount excludes unfunded commitments which are unavailable due to the borrower having not met certain milestones. This excludes $136.0 million and $156.0 million of unfunded commitments as of March 31, 2025 and March 31, 2024, respectively, to portfolio companies related to loans assigned to or directly committed by the Adviser Funds.

Current wording

(3)Amount represents unfunded commitments, including undrawn revolving facilities, which are available at the request of the portfolio company. Amount excludes unfunded commitments which are unavailable due to the borrower having not met certain milestones. This excludes $129.7 million and $125.6 million of unfunded commitments as of June 30, 2025 and June 30, 2024, respectively, to portfolio companies related to loans assigned to or directly committed by the Adviser Funds.

Previous wording

We receive principal payments on our debt investment portfolio based on scheduled amortization of the outstanding balances. In addition, we receive principal repayments for some of our loans prior to their scheduled maturity date. The frequency or volume of these early principal repayments may fluctuate significantly from period to period. During the three months ended March 31, 2025, we received approximately $144.5 million in aggregate principal repayments. Approximately $12.7 million of the aggregate principal repayments related to scheduled principal payments and approximately $131.8 million were early principal repayments related to 17 portfolio companies.

Current wording

We receive principal payments on our debt investment portfolio based on scheduled amortization of the outstanding balances. In addition, we receive principal repayments for some of our loans prior to their scheduled maturity date. The frequency or volume of these early principal repayments may fluctuate significantly from period to period. During the six months ended June 30, 2025, we received approximately $414.4 million in aggregate principal repayments. Approximately $15.2 million of the aggregate principal repayments related to scheduled principal payments and approximately $399.2 million were early principal repayments related to 28 portfolio companies. Additionally, during the six months ended June 30, 2025, we received $47.5 million from the partial sale of two debt investments to external parties.

Previous wording

Total portfolio investment activity (inclusive of unearned income and excluding activity related to taxes payable and escrow receivables) as of and for the three months ended March 31, 2025 and 2024 was as follows:

Current wording

Total portfolio investment activity (inclusive of unearned income and excluding activity related to taxes payable and escrow receivables) as of and for the six months ended June 30, 2025 and 2024 was as follows:

Previous wording

The following table presents certain additional selected information regarding our debt investment portfolio as of March 31, 2025 and March 31, 2024. This includes information on index rate floors which we have in place on all of our floating rate debt investments.

Current wording

The following table presents certain additional selected information regarding our debt investment portfolio as of June 30, 2025 and June 30, 2024. This includes information on benchmark index rate floors which we have in place on all of our floating rate debt investments.

Previous wording

Our investment portfolio continues to be focused on industries and sectors that are generally expected to be more resilient to U.S. and global economic cycles. This includes being partially insulated from declining interest rates as all of our floating rate debt investments, which represent 98.0% and 97.4% of our debt portfolio as of March 31, 2025 and December 31, 2024, respectively, are subject to interest rate floors. While our portfolio is not immune to the impact of macroeconomic events, we believe we and our portfolio are well positioned to manage the current environment. Given the unpredictability and fluidity of the macroeconomic market, neither our management nor our Board is able to predict the full impact of the macroeconomic events on our business, future results of operations, financial position, or cash flows. For additional information, see“Part I - Item 1A. Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 13, 2025.

Current wording

December 31, 2024, respectively, are subject to interest rate floors. While our portfolio is not immune to the impact of macroeconomic events, we believe we and our portfolio are well positioned to manage the current environment. Given the unpredictability and fluidity of the macroeconomic market, neither our management nor our Board is able to predict the full impact of the macroeconomic events on our business, future results of operations, financial position, or cash flows. For additional information, see“Part I - Item 1A. Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 13, 2025.

Previous wording

Additionally, we have debt investments in our portfolio that earn PIK interest. The PIK interest, computed at the contractual rate specified in each loan agreement, is recorded as interest income and added to the principal balance of the loan on specified capitalization dates. To maintain our status as a RIC, the non-cash PIK income must be distributed to stockholders with other sources of income in the form of dividend distributions even though we have not yet collected any cash from the borrower. Amounts necessary to pay these distributions may come from available cash or the liquidation of certain investments. During the three months ended March 31, 2025 and 2024, we recorded approximately $13.5 million and $9.9 million of PIK income, respectively.

Current wording

Additionally, we have debt investments in our portfolio that earn PIK interest. The PIK interest, computed at the contractual rate specified in each loan agreement, is recorded as interest income and added to the principal balance of the loan on specified capitalization dates. To maintain our status as a RIC, the non-cash PIK income must be distributed to stockholders with other sources of income in the form of dividend distributions even though we have not yet collected any cash from the borrower. Amounts necessary to pay these distributions may come from available cash or the liquidation of certain investments. During the three months ended June 30, 2025 and 2024, we recorded approximately $13.6 million and $15.3 million of PIK income, respectively. During the six months ended June 30, 2025 and 2024, we recorded approximately $27.1 million and $25.2 million of PIK income, respectively.

Previous wording

Another financial measure that we monitor is the total return for our investors, which was approximately (2.0)% and 13.6% during the three months ended March 31, 2025 and 2024, respectively. The total return equals the change in the ending market value over the beginning of the period price per share plus distributions paid per share during the period, divided by the beginning price assuming the distribution is reinvested on the date of the distribution. The total return does not reflect any sales load that may be paid by investors. See “Note 10 – Financial Highlights” included in the notes to our consolidated financial statements appearing elsewhere in this report.

Current wording

Another financial measure that we monitor is the total return for our investors, which was approximately (4.4)% and 28.8% during the six months ended June 30, 2025 and 2024, respectively. The total return equals the change in the ending market value over the beginning of the period price per share plus distributions paid per share during the period, divided by the beginning price assuming the distribution is reinvested on the date of the distribution. The total return does not reflect any sales load that may be paid by investors. See “Note 10 – Financial Highlights” included in the notes to our consolidated financial statements appearing elsewhere in this report.

Previous wording

For the three months ended March 31, 2025 and the year ended December 31, 2024, our ten largest portfolio companies represented approximately 30.4% and 31.6%, respectively, of the total fair value of our investments in portfolio companies, respectively. As of March 31, 2025 and December 31, 2024, we had six and six investments, respectively, that represented 5% or more of our net assets, respectively. As of March 31, 2025 and December 31, 2024, we had four and three equity investments, respectively, that represented 5% or more of the total fair value of our equity investments. These equity investments represented approximately 61.3% and 49.7% of the total fair value of our equity investments as of March 31, 2025 and December 31, 2024, respectively.

Current wording

For the six months ended June 30, 2025 and the year ended December 31, 2024, our ten largest portfolio companies represented approximately 28.6% and 31.6%, respectively, of the total fair value of our investments in portfolio companies, respectively. As of June 30, 2025 and December 31, 2024, we had six and six investments, respectively, that represented 5% or more of our net assets, respectively. As of June 30, 2025 and December 31, 2024, we had four and three equity investments, respectively, that represented 5% or more of the total fair value of our equity investments. These equity investments represented approximately 58.1% and 49.7% of the total fair value of our equity investments as of June 30, 2025 and December 31, 2024, respectively.

Previous wording

As of March 31, 2025 and December 31, 2024, approximately 98.0% and 97.4%, respectively, of the debt investment portfolio was priced at floating interest rates or floating interest rates with a Prime, SOFR, or SONIA-based interest rate floor, respectively. Changes in interest rates, including Prime, SOFR, or SONIA rates, may affect the interest income and the value of our investment portfolio for portfolio investments with floating rates.

Current wording

As of June 30, 2025 and December 31, 2024, approximately 97.8% and 97.4%, respectively, of the debt investment portfolio was priced at floating interest rates with a floor. Our interest rates use Prime, SOFR, or SONIA as benchmark index rates. Changes in these benchmark index rates may affect the interest income and the value of our investment portfolio for portfolio investments with floating rates.

Previous wording

Our investments in Structured Debt generally have detachable equity enhancement features in the form of warrants or other equity securities designed to provide us with an opportunity for capital appreciation. These features are treated as OID and are accreted into interest income over the term of the loan as a yield enhancement. Our warrant coverage generally ranges from 3% to 20% of the principal amount invested in a portfolio company, with a strike price generally equal to the most recent equity financing round. As of March 31, 2025, we held warrants in 98 portfolio companies, with a fair value of approximately $31.5 million. The fair value of our warrant portfolio increased by approximately $1.0 million, as compared to a fair value of $30.5 million as of December 31, 2024, primarily related to the increase in fair value of the portfolio companies.

Current wording

Our investments in Structured Debt generally have detachable equity enhancement features in the form of warrants or other equity securities designed to provide us with an opportunity for capital appreciation. These features are treated as OID and are accreted into interest income over the term of the loan as a yield enhancement. Our warrant coverage generally ranges from 3% to 20% of the principal amount invested in a portfolio company, with a strike price generally equal to the most recent equity financing round. As of June 30, 2025, we held warrants in 100 portfolio companies, with a fair value of approximately $35.5 million. The fair value of our warrant portfolio increased by approximately $5.0 million, as compared to a fair value of $30.5 million as of December 31, 2024, primarily related to the increase in fair value of the portfolio companies.

Previous wording

Our existing warrant holdings would require us to invest approximately $59.9 million to exercise such warrants as of March 31, 2025. Warrants may appreciate or depreciate in value depending largely upon the underlying portfolio company’s performance and overall market conditions. As attractive investment opportunities arise, we may exercise certain of our warrants to purchase stock, and could ultimately monetize our investments. Of the warrants that we have monetized since inception, we have realized multiples in the range of approximately 1.02x to 42.71x based on the historical rate of return on our investments. We may also experience losses from our warrant portfolio in the event that warrants are terminated or expire unexercised.

Current wording

Our existing warrant holdings would require us to invest approximately $62.1 million to exercise such warrants as of June 30, 2025. Warrants may appreciate or depreciate in value depending largely upon the underlying portfolio company’s performance and overall market conditions. As attractive investment opportunities arise, we may exercise certain of our warrants to purchase stock, and could ultimately monetize our investments. Of the warrants that we have monetized since inception, we have realized multiples in the range of approximately 1.02x to 42.71x based on the historical rate of return on our investments. We may also experience losses from our warrant portfolio in the event that warrants are terminated or expire unexercised.

Previous wording

As of March 31, 2025 and December 31, 2024, our debt investments had a weighted average investment grading of 2.31 and 2.26 on a cost basis, respectively. Changes in a portfolio company's investment grading may be a result of changes in portfolio company's performance and/or timing of expected liquidity events. For instance, we may downgrade a portfolio company if it is not meeting our financing criteria or is underperforming relative to its respective business plan. We may also downgrade a portfolio company as it approaches a point in time when it will require additional equity capital to continue operations. Conversely, we may upgrade a portfolio company's investment grading when it is exceeding our financial performance expectations and/or is expected to mature/repay in full due to a liquidity event. The overall downgrade of the portfolio's weighted average investment grading is reflective of the impact of the current macroeconomic environment.

Current wording

As of June 30, 2025 and December 31, 2024, our debt investments had a weighted average investment grading of 2.26 and 2.26 on a cost basis, respectively. Changes in a portfolio company's investment grading may be a result of changes in portfolio company's performance and/or timing of expected liquidity events. For instance, we may downgrade a portfolio company if it is not meeting our financing criteria or is underperforming relative to its respective business plan. We may also downgrade a portfolio company as it approaches a point in time when it will require additional equity capital to continue operations. Conversely, we may upgrade a portfolio company's investment grading when it is exceeding our financial performance expectations and/or is expected to mature/repay in full due to a liquidity event. The overall downgrade of the portfolio's weighted average investment grading is reflective of the impact of the current macroeconomic environment.

Previous wording

Our condensed consolidated operating results for the three months ended March 31, 2025 and 2024, were as follows:

Current wording

Our condensed consolidated operating results for the three and six months ended June 30, 2025 and 2024, were as follows:

Previous wording

Total investment income for the three months ended March 31, 2025 was approximately $119.5 million as compared to approximately $121.6 million for the three months ended March 31, 2024. Investment income is primarily composed of interest income earned on our debt investments, fee income from commitments, facilities, and other loan related fees and dividend income.

Current wording

Total investment income for the three and six months ended June 30, 2025 was approximately $137.5 million and $257.0 million, respectively as compared to approximately $125.0 million and $246.6 million, respectively for the three and six months ended June 30, 2024. Investment income is primarily composed of interest income earned on our debt investments, fee income from commitments, facilities, and other loan related fees and dividend income.

Previous wording

The following table summarizes the components of interest and dividend income for the three months ended March 31, 2025 and 2024:

Current wording

The following table summarizes the components of interest and dividend income for the three and six months ended June 30, 2025 and 2024:

Previous wording

Interest and dividend income for the three months ended March 31, 2025 totaled approximately $115.6 million as compared to approximately $115.8 million for the three months ended March 31, 2024. The decrease in interest and dividend income for the three months ended March 31, 2025 as compared to the period ended March 31, 2024 is primarily attributable to a decrease in Core Yield due to declining benchmark rates in 2024. This was partially offset by an increase in the weighted average principal outstanding and dividend income distributions primarily from the Adviser Subsidiary.

Current wording

Interest and dividend income for the three and six months ended June 30, 2025 totaled approximately $129.6 million and $245.2 million, respectively as compared to approximately $117.5 million and $233.3 million, respectively for the three and six months ended June 30, 2024. The increase in interest income for the three and six months ended June 30, 2025 as compared to the period ended June 30, 2024 is primarily attributable to an increase in the weighted average principal outstanding, partially offset by lower core yield. The increase in dividend income for the six months ended June 30, 2025 as compared to the period ended June 30, 2024 is primarily attributable to an increase in dividend income distributions from the Adviser Subsidiary.

Previous wording

The following table summarizes recurring and non-recurring interest income and dividend income for the three months ended March 31, 2025 and 2024:

Current wording

The following table summarizes recurring and non-recurring interest income and dividend income for the three and six months ended June 30, 2025 and 2024:

Previous wording

A portion of interest income is earned in the form of PIK interest. The following table shows the PIK-related activity for the three months ended March 31, 2025 and 2024, at cost:

Current wording

A portion of interest income is earned in the form of PIK interest. The following table shows the PIK-related activity for the six months ended June 30, 2025 and 2024, at cost:

Previous wording

The increase in PIK interest income during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 is due to an increase in the weighted average principal outstanding for debt investments which earn PIK interest. Payments on PIK loans are normally received only in the event of payoffs. The PIK receivable for March 31, 2025 and March 31, 2024 was approximately 2% and 1% of total debt investments, respectively.

Current wording

The increase in PIK interest income during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 is due to an increase in the weighted average principal outstanding for debt investments which earn PIK interest. Payments on PIK loans are normally received only in the event of payoffs. The PIK receivable for June 30, 2025 and June 30, 2024 was approximately 2% and 2% of total debt investments, respectively.

Previous wording

Fee income is comprised of recurring fee income from commitment, facility, and loan related fees, fee income due to expired commitments, and acceleration of fee income due to early loan repayments during the period. The following table summarizes the components of fee income for the three months ended March 31, 2025 and 2024:

Current wording

Fee income is comprised of recurring fee income from commitment, facility, and loan related fees, fee income due to expired commitments, and acceleration of fee income due to early loan repayments during the period. The following table summarizes the components of fee income for the three and six months ended June 30, 2025 and 2024:

Previous wording

The fee income for the three months ended March 31, 2025 totaled approximately $3.9 million as compared to approximately $5.8 million for the three months ended March 31, 2024. The decrease in fee income for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 is primarily due to lower acceleration of fee income from early repayments and lower fee income from expired commitments. This is partially offset by higher weighted average principal outstanding.

Current wording

The fee income for the three and six months ended June 30, 2025 totaled approximately $7.9 million and $11.8 million, respectively as compared to approximately $7.5 million and $13.3 million, respectively for the three and six months ended June 30, 2024. The increase in fee income for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 is primarily due to higher weighted average principal outstanding. The decrease in fee income for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 is primarily due to lower acceleration of fee income from early repayments and lower fee income from expired commitments. This is partially offset by higher weighted average principal outstanding.

Previous wording

Our operating expenses are comprised of interest and fees on our debt borrowings, general and administrative expenses, taxes, and employee compensation and benefits. During the three months ended March 31, 2025 and 2024, our net operating expenses totaled approximately $42.1 million and $42.4 million, respectively.

Current wording

Our operating expenses are comprised of interest and fees on our debt borrowings, general and administrative expenses, taxes, and employee compensation and benefits. During the three and six months ended June 30, 2025 and 2024, our net operating expenses totaled approximately $48.7 million and $42.6 million, respectively, for the three-month periods, and approximately $90.8 million and $85.0 million, respectively, for the six-month periods.

Previous wording

Interest and fees on our debt totaled approximately $22.1 million and $20.0 million for the three months ended March 31, 2025 and 2024, respectively. Interest and fee expense during the three months period ended March 31, 2025 as compared to the three months ended March 31, 2024, increased due to higher weighted average debt outstanding.

Current wording

2025 and 2024, respectively. Interest and fee expense during the three and six months period ended June 30, 2025 as compared to the three and six months ended June 30, 2024, increased due to higher weighted average debt outstanding.

Previous wording

Our weighted average cost of debt was approximately 4.9% and 4.9% for the three months ended March 31, 2025 and 2024, respectively. The weighted average cost of debt includes interest and fees on our debt, but excludes the impact of fee accelerations due to the extinguishment of debt, as applicable.

Current wording

Our weighted average cost of debt was approximately 5.0% and 5.0% for the three months ended June 30, 2025 and 2024, respectively and 4.9% and 5.0%, for the six months ended June 30, 2025 and 2024, respectively. The weighted average cost of debt includes interest and fees on our debt, but excludes the impact of fee accelerations due to the extinguishment of debt, as applicable.

Previous wording

General and administrative expenses include legal fees, consulting fees, accounting fees, printer fees, insurance premiums, rent, expenses associated with the workout of underperforming investments, and various other expenses. Our general and administrative expenses decreased to $4.8 million from $5.1 million for the three months ended March 31, 2025 and 2024, respectively. The decrease in general and administrative expenses for the three months ended March 31, 2025 is primarily attributable to a decrease in costs of office and professional fees and expenses. Tax expenses were $0.9 million and $0.7 million during the three months ended March 31, 2025 and 2024, respectively. Our tax expenses primarily relate to excise tax accruals.

Current wording

General and administrative expenses include legal fees, consulting fees, accounting fees, printer fees, insurance premiums, rent, expenses associated with the workout of underperforming investments, and various other expenses. Our general and administrative expenses increased to $5.1 million from $4.4 million for the three months ended June 30, 2025 and 2024, respectively, and increased to $9.9 million from $9.5 million for the six months ended June 30, 2025 and 2024, respectively. The increase in general and administrative expenses for the three and six months ended June 30, 2025 is primarily attributableto an increase in costs of legal fees, recruiting, and other business expenses. Tax expenses were $1.1 million and $1.8 million during the three months ended June 30, 2025 and 2024, respectively, and $2.0 million and $2.5 million for the six months ended June 30, 2025 and 2024, respectively. Our tax expenses primarily relate to excise tax accruals.

Previous wording

Employee compensation and benefits totaled approximately $13.9 million and $16.3 million, for the three months ended March 31, 2025 and 2024, respectively. The movement between the three months ended March 31, 2025 and 2024 wasprimarily due to fluctuations in variable compensation.

Current wording

Employee compensation and benefits totaled approximately $16.7 million and $30.6 million, for the three and six months ended June 30, 2025, respectively, as compared to approximately $14.4 million and $30.8 million, respectively, for the three and six months ended June 30, 2024. The movement between the three and six months ended June 30, 2025 and 2024 wasprimarily due to fluctuations in variable compensation.

Previous wording

Employee stock-based compensation totaled approximately $3.6 million and $3.1 million, for the three months ended March 31, 2025 and 2024, respectively. The movement between the three months ended March 31, 2025 and 2024 was primarily attributable to an increase in the grant date fair value of the Service-Vesting Awards.

Current wording

Employee stock-based compensation totaled approximately $3.7 million and $7.3 million, for the three and six months ended June 30, 2025 as compared to approximately $3.3 million and $6.5 million, respectively, for the three and six months ended June 30, 2024. The increase between the three and six months ended June 30, 2025 and 2024 was primarily attributable to an increase in the grant date fair value of the Service Vesting Awards.

Previous wording

The Sharing Agreement provides the Adviser Subsidiary access to our human capital resources, including deal professionals, finance, and administrative functions, as well as other resources including infrastructure assets such as office space and technology. Under the terms of the Sharing Agreement, we allocate the related expenses of shared services to the Adviser Subsidiary. Our total net operating expenses for the three months ended March 31, 2025 and 2024, are net of expenses allocated to the Adviser Subsidiary of $3.3 million and $2.9 million, respectively. The increase in expenses allocated to the Adviser Subsidiary for the three months ended March 31, 2025 compared to 2024 is due to an increase in time spent on the Adviser Funds by senior management. As of March 31, 2025 and December 31, 2024, there was approximately $0.6 million and less than $0.1 million due from the Adviser Subsidiary, respectively.

Current wording

The Sharing Agreement provides the Adviser Subsidiary access to our human capital resources, including deal professionals, finance, and administrative functions, as well as other resources including infrastructure assets such as office space and technology. Under the terms of the Sharing Agreement, we allocate the related expenses of shared services to the Adviser Subsidiary. Our total net operating expenses for the three months ended June 30, 2025 and 2024, are net of expenses allocated to the Adviser Subsidiary of $3.4 million and $2.8 million, respectively, and $6.7 million and $5.7 million for the six months ended June 30, 2025 and 2024, respectively. The increase in expenses allocated to the Adviser Subsidiary for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 is due to an increase in time spent on the Adviser Funds by senior management and higher allocation to the Adviser Funds. As of June 30, 2025 and December 31, 2024, there was approximately $1.2 million and less than $0.1 million due from the Adviser Subsidiary, respectively.

Previous wording

A summary of net realized gains and losses for the three months ended March 31, 2025 and 2024 is as follows:

Current wording

A summary of net realized gains and losses for the three and six months ended June 30, 2025 and 2024 is as follows:

Previous wording

During the three months ended March 31, 2025, we recognized a net realized loss of $1.6 million. The net realized losses were generated from gross realized losses of $0.9 million from the write-off of equity and warrant investments in 3GTMS, LLC, Fresh Tracks Therapeutics, Inc. and others. Additionally, we realized $0.7 million of foreign exchange losses primarily from our investments in foreign denominated debt investments.

Current wording

During the three and six months ended June 30, 2025, we recognized a net realized loss of $57.6 million and $59.2 million, respectively. The net realized gains (losses) were generated from gross realized gains of $0.4 million and $0.5 million, respectively, for the three and six month periods, primarily from collections from Codiak Biosciences, Inc. that was fully written off previously. Our gains were offset by gross realized losses of $56.5 million and $57.5 million, respectively, for the three and six month periods, from the write-off of our debt investments due to the restructure of Khoros, LLC and Annex Cloud, sale of AmplifyBio, LLC, and the write-off of our warrant investments in bluebird bio, Inc., AmplifyBio, LLC, and others. Additionally, we realized $1.5 million and $2.2 million, respectively, for the three and six month periods, from foreign exchange losses primarily from our investments in foreign denominated debt investments and forward contract.

Previous wording

During the three months ended March 31, 2024, we recognized a net realized gain of $8.2 million. The net realized gains (losses) were generated from gross realized gains of $9.2 million primarily from the sale of our equity and warrant positions in Palantir Technologies and DoorDash, Inc., and sale proceeds from the completed acquisition of Delphix Corp. Our gains were offset by gross realized losses of $0.9 million from the write-off of equity and warrant investments in Proterra, Inc., The Faction Group LLC, and ADMA Biologics, Inc., which had no value after the respective portfolio companies were acquired.

Current wording

During the three and six months ended June 30, 2024, we recognized a net realized loss of $5.8 million and a net realized gain of $2.4 million, respectively. The net realized gains (losses) were generated from gross realized gains of $5.8 million and $15.0 million respectively, for the three and six month periods, primarily from the sale of our equity and warrant positions in Palantir Technologies, TransMedics Group, Inc., Tarsus Pharmaceuticals, Inc., DoorDash, Inc., and sale proceeds from the completed acquisition of Delphix Corp. Our gains were offset by gross realized losses of $10.7 million and $11.7 million, respectively, for the three and six month periods, from the write-off of equity and warrant investments in Proterra, Inc., The Faction Group LLC, Udacity, Inc., Humanigen, Inc., Eigen Technologies Ltd., and ADMA Biologics, Inc. which had no value after the respective portfolio companies were acquired. Additionally, we realized a loss of $9.1 million from write-off of our debt investments relating to Better Therapeutics, Inc. and Eigen Technologies Ltd., net of recovered collections of $6.0 million.

Previous wording

The net change in unrealized appreciation and depreciation of our investments is derived from the changes in fair value of each investment determined in good faith by our Valuation Committee and approved by the Board. The following table summarizes the change in net unrealized appreciation or depreciation of investments for the three months ended March 31, 2025 and 2024:

Current wording

The net change in unrealized appreciation and depreciation of our investments is derived from the changes in fair value of each investment determined in good faith by our Valuation Committee (as defined in “Note 2 - Summary of Significant Accounting Policies - Valuation of Investments”) and approved by the Board. The following table summarizes the change in net unrealized appreciation or depreciation of investments for the three and six months ended June 30, 2025 and 2024:

Previous wording

(1)Includes the net change in unrealized appreciation (depreciation) related to derivative instruments and other assets and liabilities.

Current wording

(1)Includes the net change in unrealized appreciation (depreciation) related to foreign exchange movements, derivative instruments and other assets and liabilities.

Previous wording

During the three months ended March 31, 2025 and 2024, we recorded approximately $25.6 million of net unrealized depreciation and $3.6 million of net unrealized appreciation, respectively, on our investments. The movement in unrealized appreciation to depreciation was primarily related to depreciation of our debt investments during the three months ended March 31, 2025 due to an increase in impairments and discount rates.

Current wording

During the three months ended June 30, 2025 and 2024, we recorded approximately $47.8 million of net unrealized appreciation and $34.7 million of net unrealized depreciation, respectively, on our investments. During the six months ended June 30, 2025 and 2024, we recorded approximately $22.2 million of net unrealized appreciation and $31.1 million of net unrealized depreciation, respectively, on our investments. The movement in unrealized depreciation to appreciation during the three and six months ended June 30, 2025 was primarily related to the reversal of previously recorded net unrealized depreciation of our debt investments as realization events occurred.

Previous wording

The following table summarizes the key drivers of change in net unrealized appreciation (depreciation) of investments for the three months ended March 31, 2025 and 2024:

Current wording

The following table summarizes the key drivers of change in net unrealized appreciation (depreciation) of investments for the three and six months ended June 30, 2025 and 2024:

Previous wording

(1)Includes the net change in unrealized appreciation (depreciation) related to derivative instruments and other assets and liabilities.

Current wording

(1)Includes the net change in unrealized appreciation (depreciation) related to foreign exchange movements, derivative instruments and other assets and liabilities.

Previous wording

The Adviser Subsidiary’s contribution to our net investment income is primarily derived from dividend income declared by the Adviser Subsidiary and interest income earned on loans to the Adviser Subsidiary. For the three months ended March 31, 2025 and 2024, $1.9 millionand$1.6 million, respectively, of dividends were declared by the Adviser Subsidiary.

Current wording

The Adviser Subsidiary’s contribution to our net investment income is primarily derived from dividend income declared by the Adviser Subsidiary and interest income earned on loans to the Adviser Subsidiary. For the three months ended June 30, 2025 and 2024, $2.1 million and $1.6 million, respectively, of dividends were declared by the Adviser Subsidiary. For the six months ended June 30, 2025 and 2024, $4.0 million and $3.2 million dividends, respectively, were declared by the Adviser Subsidiary.

Previous wording

During the three months ended March 31, 2025, we principally funded our operations from (i) cash receipts from interest, dividend, and fee income from our investment portfolio, (ii) cash proceeds from the realization of portfolio investments through the repayments of debt investments and the sale of debt and equity investments, (iii) debt borrowings on our Credit Facilities and 2028 Convertible Notes, and (iv) equity offerings.

Current wording

During the six months ended June 30, 2025, we principally funded our operations from (i) cash receipts from interest, dividend, and fee income from our investment portfolio, (ii) cash proceeds from the realization of portfolio investments through the repayments of debt investments and the sale of debt and equity investments, (iii) debt borrowings on our Credit Facilities, 2028 Convertible Notes and June 2030 Notes, and (iv) equity offerings.