Hercules Capital, Inc.

Previous wording

•the occurrence and impact of macro-economic developments (for example, global pandemics, natural disasters, terrorism, international conflicts and war) on us and our portfolio companies;

Current wording

•the occurrence and impact of macro-economic developments (for example, tariffs and other trade or sanction issues, government shutdown, global pandemics, natural disasters, terrorism, international conflicts and war) on us and our portfolio companies;

Previous wording

Since inception through December 31, 2024, we have originated more than $21.0 billion in commitments in over 600 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 December 31, 2024, we, including through our Adviser Subsidiary, actively manage approximately$4.8 billion of assets.

Current wording

Since inception through December 31, 2025, we have originated more than $25.0 billion in commitments in over 700 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 December 31, 2025, we, including through our Adviser Subsidiary, actively manage more than $5.7 billion of assets.

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 $139.7 million and $127.7 million of unfunded commitments as of December 31, 2024 and December 31, 2023, 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 $96.2 million and $139.7 million of unfunded commitments as of December 31, 2025 and December 31, 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 year ended December 31, 2024, we received approximately $953.6 million in aggregate principal repayments. Approximately $31.6 million of the aggregate principal repayments related to scheduled principal payments and approximately $922.0 million were early principal repayments related to 56 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 year ended December 31, 2025, we received approximately $848.3 million in aggregate principal repayments. Approximately $37.1 million of the aggregate principal repayments related to scheduled principal payments and approximately $811.2 million were early principal repayments related to 48 portfolio companies. Additionally, during the year ended December 31, 2025, we received $54.5 million from the partial sale of three debt investments to external parties and sold four debt investments for $20.0 million to the Adviser Funds.

Previous wording

Additionally, we may hold investments in debt, warrant, or equity positions of portfolio companies that have filed a registration statement with the SEC in contemplation of a potential IPO. There can be no assurance that companies that have yet to complete their IPO will do so in a timely manner or at all.

Current wording

Additionally, we may hold investments in debt, warrant, or equity positions of portfolio companies that have filed a registration statement with the SEC in contemplation of a potential IPO. There can be no assurance that companies that have yet to complete their IPOs will do so in a timely manner or at all.

Previous wording

The following table presents certain additional selected information regarding our debt investment portfolio as of December 31, 2024 and December 31, 2023. 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 December 31, 2025 and December 31, 2024. This includes information on benchmark index rate floors which we have in place on all of our floating rate debt investments.

Previous wording

The capital markets are subject to fluctuations caused by various external factors such as changes in the inflationary environment, interest rate movements, concerns over slowing economic growth and possible global recession, changes to U.S. tariff and import/export regulations, uncertainty and disruption caused by geopolitical events, including the conflicts in Ukraine, Russia, and the Middle East, among other factors. These macroeconomic developments are outside our control and could require us to adjust our plan of operations, and impact our financial position, results of operations or cash flows in the future. We monitor macroeconomic market developments and their related impact to our business, including impacts to our portfolio companies, employees, due diligence and underwriting processes, and the broader financial markets.

Current wording

The capital markets are subject to fluctuations caused by various external factors such as changes in the inflationary environment, interest rate movements, concerns over slowing economic growth and possible global recession, changes to U.S. tariff and import/export regulations, uncertainty and disruption caused by geopolitical tensions and disruptions caused by government shutdowns, among other factors. These macroeconomic developments are outside our control and could require us to adjust our plan of operations, and impact our financial position, results of operations or cash flows in the future. We monitor macroeconomic market developments and their related impact to our business, including impacts to our portfolio companies, employees, due diligence and underwriting processes, and the broader financial markets.

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 97.4% and 95.9% of our debt portfolio as of December 31, 2024 and December 31, 2023, 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" in this Annual Report.

Current 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 97.9% and 97.4% of our debt portfolio as of December 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” in this Annual Report.

Previous wording

As of December 31, 2024, our debt investments generally have a term of between two and five years and typically bear interest at a rate ranging from approximately 7.5% to approximately 14.9%. In addition to the cash yields received on our debt investments, in some instances, our debt investments may also include any of the following: exit fees, balloon payment fees, commitment fees, success fees, PIK provisions or prepayment fees which may be required to be included in income prior to receipt.

Current wording

As of December 31, 2025, our debt investments generally have a term of between two and five years and typically bear interest at a rate ranging from approximately 7% to approximately 14%. In addition to the cash yields received on our debt investments, in some instances, our debt investments may also include any of the following: exit fees, balloon payment fees, commitment fees, success fees, PIK provisions or prepayment fees which may be required to be included in income prior to receipt.

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 years ended December 31, 2024 and December 31, 2023, we recorded approximately $51.3 million and $24.7 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 years ended December 31, 2025 and December 31, 2024, we recorded approximately $55.9 million and $51.3 million of PIK income, respectively.

Previous wording

We believe that these measures are useful for our stockholders as it provides further insight into the yield of our portfolio to allow a more meaningful comparison with our competitors. As noted above, Core Yield, a Non-GAAP financial measure, is derived by dividing Core investment income, as defined above, by the weighted average GAAP basis value of debt investment portfolio assets at amortized cost outstanding. The reconciliation to calculate “Core investment income” from GAAP basis “Total investment income” are as follows:

Current wording

We believe that these measures are useful for our stockholders as it provides further insight into the yield of our portfolio to allow a more meaningful comparison with our competitors. The reconciliation to calculate “Core investment income” from GAAP basis “Total investment income” are as follows:

Previous wording

Another financial measure that we monitor is the total return for our investors, which was approximately 32.8% and 42.0% during the years ended December 31, 2024 and 2023, 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 3.2% and 32.8% during the years ended December 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.

Previous wording

The following table presents the fair value of the Company’s portfolio by industry sector as of December 31, 2024 and December 31, 2023:

Current wording

The following table presents the fair value of our portfolio by industry sector as of December 31, 2025 and December 31, 2024:

Previous wording

(1)See “Note 4 – Investments” for complete list of industry sectors and corresponding amounts of investments at fair value as a percentage of the total portfolio. As of December 31, 2024, the fair value as a percentage of total portfolio does not exceed 5.0% for any individual industry sector other than “Software”, “Drug Discovery & Development”, “Healthcare Services, Other”, and “Consumer & Business Services.”

Current wording

(2)See “Note 4 – Investments” for complete list of industry sectors and corresponding amounts of investments at fair value as a percentage of the total portfolio. As of December 31, 2025, the fair value as a percentage of total portfolio does not exceed 5.0% for any individual industry sector other than “Application Software”, “Drug Discovery & Development”, “Healthcare Services, Other”, “System Software”, and “Consumer & Business Services”.

Previous wording

For the years ended December 31, 2024 and 2023, our ten largest portfolio companies represented approximately 31.6% and 29.7% of the total fair value of our investments in portfolio companies, respectively. As of December 31, 2024 and December 31, 2023, we had six and five investments that represented 5% or more of our net assets, respectively. As of December 31, 2024 and December 31, 2023, we had three and five equity investments, respectively, that represented 5% or more of the total fair value of our equity investments. These equity investments represented approximately 49.7% and 56.5% of the total fair value of our equity investments as of December 31, 2024 and December 31, 2023, respectively.

Current wording

For the years ended December 31, 2025 and 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. As of December 31, 2025 and December 31, 2024, we had seven and six investments, respectively, that represented 5% or more of our net assets. As of December 31, 2025 and December 31, 2024, we had two and three equity investments, respectively, that represented 5% or more of the total fair value of our equity investments. These equity investments represented approximately 48.4% and 49.7% of the total fair value of our equity investments as of December 31, 2025 and December 31, 2024, respectively.

Previous wording

As of December 31, 2024 and 2023, approximately 97.4% and 95.9% of the debt investment portfolio was priced at floating interest rates or floating interest rates with a Prime, SOFR, SONIA, or BSBY-based interest rate floor, respectively. Changes in interest rates, including Prime, SOFR, SONIA, or BSBY rates, may affect the interest income and the value of our investment portfolio for portfolio investments with floating rates.

Current wording

As of December 31, 2025 and 2024, approximately 97.9% 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 December 31, 2024, we held warrants in 98 portfolio companies, with a fair value of approximately $30.5 million. The fair value of our warrant portfolio decreased by approximately $3.4 million, as compared to a fair value of $33.9 million as of December 31, 2023, primarily related to the decrease 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 December 31, 2025, we held warrants in 108 portfolio companies, with a fair value of approximately $41.1 million. The fair value of our warrant portfolio increased by approximately $10.6 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 $60.5 million to exercise such warrants as of December 31, 2024. 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 $63.7 million to exercise such warrants as of December 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.

Previous wording

As of December 31, 2024 and December 31, 2023, our debt investments had a weighted average investment grading of 2.26 and 2.24 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 are 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 December 31, 2025 and December 31, 2024, our debt investments had a weighted average investment grading of 2.20 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.

Previous wording

Total investment income for the year ended December 31, 2024 was approximately $493.6 million as compared to approximately $460.7 million for the year ended December 31, 2023. 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 year ended December 31, 2025 was approximately $532.5 million as compared to approximately $493.6 million for the year ended December 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.

Previous wording

Interest and dividend income for the year ended December 31, 2024 totaled appro ximately $467.2 million as compared to approximately $434.4 million for the year ended December 31, 2023. The increase in interest and dividend income for the year ended December 31, 2024 as compared to the year ended December 31, 2023 isprimarily attributable to an increase in the weighted average principal outstanding and dividend income distributions primarily from the Adviser Subsidiary. Partially offsetting income growth was the impact of declining Core Yield due to declining benchmark rates in 2024.

Current wording

Interest and dividend income for the year ended December 31, 2025 totaled appro ximately $507.9 million as compared to approximately $467.2 million for the year ended December 31, 2024. The increase in interest and dividend income for the year ended December 31, 2025 as compared to the year ended December 31, 2024, isprimarily attributable to an increase in the weighted average principal outstanding and dividend income distributions primarily from the Adviser Subsidiary. Partially offsetting income growth was the impact of declining core yield due to declining benchmark rates in 2025.

Previous wording

The increase in PIK interest income during the year ended December 31, 2024, as compared to the year ended December 31, 2023 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 December 31, 2024 and December 31, 2023 was approximately 2% and 1% of total debt investments, respectively.

Current wording

The increase in PIK interest income during the year ended December 31, 2025, as compared to the year ended December 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 December 31, 2025 and December 31, 2024 was approximately 3% and 2% of total debt investments, respectively.

Previous wording

The fee income for the year ended December 31, 2024 was similar to the year ended December 31, 2023. This is primarily due to higher weighted average principal outstanding and fee income from expired commitments, partially offset by lower acceleration of fee income from early repayments.

Current wording

The decrease in fee income for the year ended December 31, 2025, as compared to the year ended December 31, 2024, is primarily due to lower prepayment penalty from early repayments and lower fees recognized on expired commitments, partially offset by higher recurring fee income from an increase in the 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 years ended December 31, 2024 and 2023, our net operating expenses totaled approximately $167.8 million and $156.6 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 years ended December 31, 2025 and 2024, our net operating expenses totaled approximately $190.8 million and $167.8 million, respectively.

Previous wording

Interest and fees on our debt totaled approx imately $86.0 million and $77.5 million for the years ended December 31, 2024 and 2023, respectively. Interest and fee expense during the year ended December 31, 2024, as compared to the year ended December 31, 2023, increased due to higher weighted average borrowing costs and debt outstanding.

Current wording

Interest and fees on our debt totaled approx imately $103.2 million and $86.0 million for the years ended December 31, 2025 and 2024, respectively. Interest and fee expense during the year ended December 31, 2025, as compared to the year ended December 31, 2024, increased due to higher weighted average debt outstanding.

Previous wording

Our weighted average cost of debt was approximately 5.0% and 4.8%for the years ended December 31, 2024 and 2023, 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. The increase in the weighted average cost of debt during

Current wording

Our weighted average cost of debt was approximately 5.0%for each of the years ended December 31, 2025 and 2024. 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 theworkout of underperforming investments and various other expenses. Our general and administrative expenses increased to $19.7 million from $18.7 million for the years ended December 31, 2024 and 2023, respectively. Theincrease in general and administrative expenses for the year ended December 31, 2024 is primarily attributable to anincrease in costs of office and professional fees and expenses. Tax expenses were $5.8 million and $6.1 million for the years ended December 31, 2024 and December 31, 2023, 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 theworkout of underperforming investments and various other expenses. Our general and administrative expenses decreased to $19.0 million from $19.7 million for the years ended December 31, 2025 and 2024, respectively. Thedecrease in general and administrative expenses for the year ended December 31, 2025 is primarily attributable to adecrease in costs of office and professional fees and expenses. Tax expenses were $5.8 million for each of the years ended December 31, 2025 and 2024. Our tax expenses primarily relate to excise tax accruals.

Previous wording

Employee compensation and benefits totaled approximately $54.2 million for the year ended December 31, 2024, as compared to approximately $50.2 million for the year ended December 31, 2023. The increase for the year ended December 31, 2024 was primarily due to fluctuations in variable compensation and increase in headcount.

Current wording

Employee compensation and benefits totaled approximately $63.3 million for the year ended December 31, 2025, as compared to approximately $54.2 million for the year ended December 31, 2024. The increase for the year ended December 31, 2025 was primarily due to fluctuations in variable compensation and increase in headcount.

Previous wording

Employee stock-based compensation totaled approximately $12.8 million for the year ended December 31, 2024, as compared to approximately $13.2 million for the year ended December 31, 2023. The decrease for the year ended December 31, 2024 was primarily attributable to a decrease in compensation expense related to Performance Awards (as defined below) which vested in 2023.

Current wording

Employee stock-based compensation totaled approximately $14.6 million for the year ended December 31, 2025, as compared to approximately $12.8 million for the year ended December 31, 2024. The increase for the year ended December 31, 2025 was primarily attributable to an increase in the grant date fair value of the Service Vesting Awards (as defined in “Note 8 —Equity Incentive Plans— Service Vesting Awards” to our consolidated financial statements).

Previous wording

The shared services agreement with the Adviser Subsidiary (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 years ended December 31, 2024 and 2023, are net of expenses alloc ated to the Adviser Subsidiary of $10.8 million and $9.1 million, respectively. The increase in expenses allocated to the Adviser Subsidiary for the year ended December 31, 2024 compared to 2023 is due to higher average assets under management and higher allocations to the Adviser Funds. As of December 31, 2024 and 2023, less than $0.1 million and $0.1 million, respectively, was due from the Adviser Subsidiary.

Current wording

The shared services agreement with the Adviser Subsidiary (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 years ended December 31, 2025 and 2024, are net of expenses alloc ated to the Adviser Subsidiary of $15.2 million and $10.8 million, respectively. The increase in expenses allocated to the Adviser Subsidiary for the year ended December 31, 2025 compared to 2024 is due to an increase in time spent on the Adviser Funds and an increase in investments allocated to the Adviser Funds. As of December 31, 2025 and 2024, there was $1.7 million and less than $0.1 million due from the Adviser Subsidiary, respectively.

Previous wording

During the year ended December 31, 2023, we recognized a net realized gain of $8.4 million. The net realized gains were generated from gross realized gains of approximately $29.9 million primarily from the sale of our equity and warrant positions in Palantir Technologies, Provention Bio, Inc., TransMedics Group, Inc., Sprinklr, Inc., DoorDash, Inc., and Zeta Global Corp. Our gross realized gains were offset by gross realized losses of $21.5 million from the write-off of equity and warrant investments in Concert Pharmaceuticals, Inc. and Fungible, Inc., which had no value after the respective portfolio companies were acquired, as well as the write-off of our equity investments in Gynesonics, Inc. Paratek Pharmaceuticals, Inc., Tricida, Inc., Gelesis, Inc. and Flowonix Medical Inc. as a result of capital market transactions or events. Additionally, we realized a net $6.3 million loss from the write-off of our debt investments relating to Codiak Biosciences, Inc. and Esme Learning Solutions, Inc., which are net of recovered collections of $17.5 million.

Current wording

During the year ended December 31, 2025, we recognized a net realized loss of $40.8 million. The net realized gains (losses) were generated from gross realized gains of $32.1 million primarily from sale of our equity positions in Axsome Therapeutics, Inc., BridgeBio Pharma, Inc and Madrigal Pharmaceuticals, Inc. and collections from our equity and warrants related to Akero Therapeutics, Inc., Couchbase, Inc. and Next Insurance, Inc. following capital market transactions or events. Our gains were offset by gross realized losses of $70.6 million from the write-off of our debt investments relating to restructure of Khoros, LLC and Annex Cloud and sale of AmplifyBio, LLC and Carbon Health Technologies, Inc., and the write-off of our equity and warrant investments in HilleVax, Inc., Chrome Holding Co. (p.k.a 23andMe, Inc.), bluebird bio, Inc., and others. Additionally, we recognized a foreign exchange loss of $2.1 million related to investments in foreign denominated debt investments and a forward contract.

Previous wording

During the year ended December 31, 2024, we recognized a net realized loss of $31.7 million. The net realized losses were generated from a realized loss of $63.1 million from the write-off of our debt investments relating to Convoy, Inc., Gritstone Bio, Inc., Better Therapeutics, Inc., and Eigen Technologies Ltd., which are net of recovered collections of $55.5 million. $44.6 million of the write-off of our debt investments resulted in a reversal of unrealized depreciation previously reported as of December 31, 2023. We also realized a loss of $7.1 million primarily from the write-off of equity and warrant investments in Sio Gene Therapies, Inc., Eigen Technologies Ltd., Humanigen, Inc., Proterra, Inc., and Fulcrum Bioenergy, Inc. The net realized losses were partially offset by gross realized gains of $39.7 million primarily from the sale of our equity and warrant positions in Palantir Technologies, TransMedics Group, Inc., Tarsus Pharmaceuticals, Inc., DoorDash, Inc., and TG Therapeutics, Inc.

Current wording

Gritstone Bio, Inc., Better Therapeutics, Inc., and Eigen Technologies Ltd., which are net of recovered collections of $55.5 million. $44.6 million of the write-off of our debt investments resulted in a reversal of unrealized depreciation previously reported as of December 31, 2023. We also realized a loss of $7.1 million primarily from the write-off of equity and warrant investments in Sio Gene Therapies, Inc., Eigen Technologies Ltd., Humanigen, Inc., Proterra, Inc., and Fulcrum Bioenergy, Inc. The net realized losses were partially offset by gross realized gains of $39.7 million primarily from the sale of our equity and warrant positions in Palantir Technologies, TransMedics Group, Inc., Tarsus Pharmaceuticals, Inc., DoorDash, Inc., and TG Therapeutics, Inc.

Previous wording

(2)Included in reversals of prior period net changes in unrealized appreciation (depreciation) are $44.6 million of reversed unrealized depreciation, related to the $63.1 million of realized debt loss from the write-off of certain debt investments noted above.

Current wording

(1)For the years ended December 31, 2025 and 2024, reversals of prior period net changes in unrealized appreciation (depreciation) include $45.2 million and $44.6 million, respectively, of reversed unrealized depreciation, related to the $57.7 million and $63.1 million, respectively, of realized debt losses from the write-off of certain debt investments noted above.

Previous wording

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

Current wording

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

Previous wording

During the years ended December 31, 2024 and 2023, we recorded approximately $31.2 million of net unrealized depreciation and $25.0 million of net unrealized appreciation on our investments. The decrease in unrealized depreciation was primarily related to depreciation of our equity, warrants, and debt investments during the year ended December 31, 2024.

Current wording

During the years ended December 31, 2025 and 2024, we recorded approximately $38.8 million of net unrealized appreciation and $31.2 million of net unrealized depreciation on our investments, respectively. The increase in unrealized appreciation was primarily related to appreciation on debt and warrant investments which was partially offset by depreciation of our equity investments during the year ended December 31, 2025.

Previous wording

(2)Included in reversals of prior period net changes in unrealized appreciation (depreciation) are $44.6 million of reversed unrealized depreciation, related to the $63.1 million of realized debt loss from the write-off of certain debt investments noted above.

Current wording

(1)For the years ended December 31, 2025 and 2024, reversals of prior period net changes in unrealized appreciation (depreciation) include $45.2 million and $44.6 million, respectively, of reversed unrealized depreciation, related to the $57.7 million and $63.1 million, respectively, of realized debt losses from the write-off of certain debt investments noted above.

Previous wording

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

Current wording

(2)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 years ended December 31, 2024 and 2023, $6.8 million and $1.4 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, expenses allocated to the Adviser Subsidiary, and interest income earned on loans to the Adviser Subsidiary. A summary of the Adviser Subsidiary’s contribution to our net investment income for the years ended December 31, 2025 and 2024 is as follows:

Previous wording

During the year ended December 31, 2024, 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 (iv) equity offerings.

Current wording

During the year ended December 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, 2028 Convertible Notes and June 2030 Notes, and (iv) equity offerings.

Previous wording

During the year ended December 31, 2024, our operating activities used $118.1 million of cash and cash equivalents, compared to $68.3 million provided by operating activities during the year ended December 31, 2023. The $186.4 million increase in cash used in operating activities was primarily due to a $176.2 million increase in net purchases of investments.

Current wording

During the year ended December 31, 2025, our operating activities used $425.8 million of cash and cash equivalents, compared to $118.1 million used during the year ended December 31, 2024. The $307.7 million increase in cash used in operating activities was primarily due to a $271.9 million increase in net purchases of investments.