PROSPECT CAPITAL CORP

Previous wording

Prospect is a financial services company that primarily lends to and invests in middle market privately-held companies. We are a closed-end investment company incorporated in Maryland. We have elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”). As a BDC, we have elected to be treated as a regulated investment company (“RIC”), under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). We were organized on April 13, 2004, and were funded in an initial public offering completed on July 27, 2004.

Current wording

Prospect is a financial services company that primarily lends to and invests in middle market privately-held companies. We are a closed-end investment company incorporated in Maryland. We have elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). As a BDC, we have elected to be treated as a regulated investment company (“RIC”), under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). We were organized on April 13, 2004, and were funded in an initial public offering completed on July 27, 2004.

Previous wording

We consolidate certain of our wholly owned and substantially wholly owned holding companies formed by us in order to facilitate our investment strategy. The following companies are included in our consolidated financial statements and are collectively referred to as the “Consolidated Holding Companies”: Belnick Holdings of Delaware, LLC (“Belnick Delaware”); CP Holdings of Delaware LLC (“CP Holdings”); Credit Central Holdings of Delaware, LLC (“Credit Central Delaware”); Energy Solutions Holdings Inc.; First Tower Holdings of Delaware LLC (“First Tower Delaware”); MITY Holdings of Delaware Inc. (“MITY Delaware”); Nationwide Acceptance Holdings LLC; NMMB Holdings, Inc. (“NMMB Holdings”); NPH Property Holdings, LLC (“NPH”); Prospect Opportunity Holdings I, Inc. (“POHI”); SB Forging Company, Inc. (“SB Forging”); STI Holding, Inc.; UTP Holdings Group Inc. (“UTP Holdings”); Valley Electric Holdings I, Inc. (“Valley Holdings I”); and Valley Electric Holdings II, Inc. (“Valley Holdings II”).

Current wording

We consolidate certain of our wholly owned and substantially wholly owned holding companies formed by us in order to facilitate our investment strategy. The following companies are included in our consolidated financial statements and are collectively referred to as the “Consolidated Holding Companies”: Belnick Holdings of Delaware, LLC (“Belnick Delaware”); CP Holdings of Delaware LLC (“CP Holdings”); Credit Central Holdings of Delaware, LLC (“Credit Central Delaware”); Energy Solutions Holdings Inc.; First Tower Holdings of Delaware LLC (“First Tower Delaware”); MITY Holdings of Delaware Inc. (“MITY Delaware”); Nationwide Acceptance Holdings LLC; NMMB Holdings, Inc. (“NMMB Holdings”); NPH Property Holdings, LLC (“NPH”); NPH Holdco LLC (“NPH Holdco”); Prospect Opportunity Holdings I, Inc. (“POHI”); R-V Holdings of Delaware, LLC (“R-V Holdings”); SB Forging Company, Inc. (“SB Forging”); STI Holding, Inc.; UTP Holdings Group Inc. (“UTP Holdings”); Valley Electric Holdings I, Inc. (“Valley Holdings I”); Valley Electric Holdings II, Inc. (“Valley Holdings II”); and Victor Holdings of Delaware, LLC (“Victor Holdings”).

Previous wording

We hold many of our control investments in a two-tier structure consisting of a holding company and one or more related operating companies for tax purposes. These holding companies serve various business purposes including concentration of management teams, optimization of third-party borrowing costs, improvement of supplier, customer, and insurance terms, and enhancement of co-investments by the management teams. In these cases, our investment, which is generally equity in the holding company, the holding company’s equity investment in the operating company and any debt from us directly to the operating company structure represents our total exposure for the investment. As of June 30, 2025, as shown in our Consolidated Schedule of Investments, the cost basis and fair value of our investments in controlled companies was $3,416,244 and $3,696,367, respectively. This structure gives rise to several of the risks described in our public documents and highlighted elsewhere in this Annual Report. We consolidate all wholly owned and substantially wholly owned holding companies formed by us for the purpose of holding our controlled investments in operating companies. There is no significant effect of consolidating these holding companies as they hold minimal assets other than their investments in the controlled operating companies. Investment company accounting prohibits the consolidation of any operating companies.

Current wording

We hold many of our control investments in a two-tier structure consisting of a holding company and one or more related operating companies for tax purposes. These holding companies serve various business purposes including concentration of management teams, optimization of third-party borrowing costs, improvement of supplier, customer, and insurance terms, and enhancement of co-investments by the management teams. In these cases, our investment, which is generally equity in the holding company, the holding company’s equity investment in the operating company and any debt from us directly to the operating company structure represents our total exposure for the investment. As of June 30, 2026, as shown in our Consolidated Schedule of Investments, the cost basis and fair value of our investments in controlled companies was $3,367,618 and $3,644,274, respectively. This structure gives rise to several of the risks described in our public documents and highlighted elsewhere in this Annual Report. We consolidate all wholly owned and substantially wholly owned holding companies formed by us for the purpose of holding our controlled investments in operating companies. There is no significant effect of consolidating these holding companies as they hold minimal assets other than their investments in the controlled operating companies. Investment company accounting prohibits the consolidation of any operating companies.

Previous wording

Our previously outstanding 6.375% convertible notes due 2025, which matured during the fiscal year ended June 30, 2025, are referred to as the “2025 Notes” or the “Convertible Notes”. Our previously outstanding 3.706% unsecured notes due 2026, which redeemed during the fiscal year ended June 30, 2025, are referred to as the “2026 Notes”. Our $300.0 million of 3.364% unsecured notes due 2026 are referred to as the “3.364% 2026 Notes”. Our $300.0 million of 3.437% unsecured notes due 2028 are referred to as the “3.437% 2028 Notes”, and collectively with the 2026 Notes, and the 3.364% 2026 Notes are the “Public Notes”. Any corporate notes issued pursuant to our medium term notes program with InspereX LLC are referred to as “Prospect Capital InterNotes®”. The Convertible Notes, Public Notes, and Prospect Capital InterNotes® are collectively referred to as the “Unsecured Notes”.

Current wording

Our previously outstanding 6.375% convertible notes due 2025, which matured during the fiscal year ended June 30, 2025, are referred to as the “2025 Notes” or the “Convertible Notes”. Our previously outstanding 3.706% unsecured notes due 2026, which were redeemed during the fiscal year ended June 30, 2025, are referred to as the “2026 Notes”. Our $264.5 million of 3.364% unsecured notes due 2026 are referred to as the “3.364% 2026 Notes”. Our $254.7 million of 3.437% unsecured notes due 2028 are referred to as the “3.437% 2028 Notes”. Our $182.2 million of 5.50% unsecured notes due 2030 are referred to as the “5.50% 2030 Notes”, and collectively with the 2026 Notes, the 3.364% 2026 Notes, and the 3.437% 2028 Notes, as the “Public Notes”. Any corporate notes issued pursuant to our medium term notes program with InspereX LLC are referred to as “Prospect Capital InterNotes®”. The Public Notes and Prospect Capital InterNotes® are collectively referred to as the “Unsecured Notes”.

Previous wording

We seek to be a long-term investor with our portfolio companies. During thethree months ended June 30, 2025 we acquired $181,383 of new investments, completed follow-on investments in existing portfolio companies totaling approximately $59,644, funded $12,500 of revolver advances, and recorded PIK interest of $17,332, resulting in gross investment originations of$270,859. During the three months ended June 30, 2025 we received full repayments totaling $53,000, received $315,601 in sales, received $4,563 of revolver paydowns, and received$72,162 in partial prepayments, scheduled principal amortization payments, and return of capital distributions, resulting in repayments of approximately $445,326.

Current wording

We seek to be a long-term investor with our portfolio companies. During the three months ended June 30, 2026 we acquired $97,170 of new investments, completed follow-on investments in existing portfolio companies totaling approximately $27,644, funded $20,800 of revolver advances, and recorded PIK interest of $20,707, resulting in gross investment originations of

Previous wording

During the three months ended June 30, 2025 we repaid$1,399 aggregate principal amount of Prospect Capital InterNotes® at par in accordance with the Survivor’s Option, as defined in the InterNotes® Offering prospectus. As a result of these transactions, we recorded aloss in the amount of the unamortized debt issuance costs. The netloss on the extinguishment of Prospect Capital InterNotes® in the three months ended June 30, 2025 was $32.

Current wording

During the three months ended June 30, 2026 we repaid $1,854 aggregate principal amount of Prospect Capital InterNotes® at par in accordance with the Survivor’s Option, as defined inthe InterNotes® Offering prospectus. As a result of these transactions, we recorded a loss in the amount of the unamortized debt issuance costs. The net loss on the extinguishment of Prospect Capital InterNotes® in the three months ended June 30, 2026 was $37.

Previous wording

During the three months ended June 30, 2025 we issued$5,733 aggregate principal amount of Prospect Capital InterNotes® with a weighted average stated interest rate of 7.53%, to extend our borrowing base. The newly issued notes mature between April 15, 2028 and July 15, 2032 and generated net proceeds of$5,652.

Current wording

During the three months ended June 30, 2026 we issued $6,917 aggregate principal amount of Prospect Capital InterNotes® with a weighted average stated interest rate of 7.01%, to extend our borrowing base. The newly issued notes mature between April 15, 2029 and June 15, 2033 and generated net proceeds of $6,832.

Previous wording

On April 17, 2025, May 20, 2025 and June 18, 2025 we issued 704,660, 672,278, and 733,322 shares of our common stock in connection with the dividend reinvestment plan, respectively.

Current wording

On April 21, 2026, May 19, 2026 and June 18, 2026 we issued 998,885, 1,275,870, and 985,754 shares of our common stock in connection with the dividend reinvestment plan, respectively.

Previous wording

During the three months ended June 30, 2025, 675,943 shares of our Series A1 Preferred Stock, 220,408 shares of our Series A3 Preferred Stock, 61,732 shares of our Series M1 Preferred Stock, and 24,062 shares of our Series M3 Preferred Stock were converted to 6,448,188 shares of our common stock, in connection with Holder Optional Conversions and Optional Redemptions Following Death of a Holder, resulting in a loss from redemption of preferred stock of $1,762.

Current wording

During the three months ended June 30, 2026, 1,597,774 shares of our Series A1 Preferred Stock, 568,950 shares of our Series A3 Preferred Stock, 19,289 shares of our Series M1 Preferred Stock, and 106,743 shares of our Series M3 Preferred Stock were converted to 21,457,011 shares of our common stock, in connection with Holder Optional Conversions and Optional Redemptions Following Death of a Holder, resu lting in aloss from redemption of preferred stockof $5,335.

Previous wording

During the three months ended June 30, 2025 we issued 616,374 shares of Series A5 Preferred Stock for net proceeds of$13,868, and 164,218 sharesof Series M5 Preferred Stock for net proceeds of$3,992, each excluding offering costs and preferred stock dividend reinvestment.

Current wording

During the three months ended June 30, 2026 we issued 626,888 shares of Series A5 Preferred Stock for net proceeds of $14,103, 88,489 shares of Series M5 Preferred Stock for net proceeds of $2,146, and 65,692 shares of Series A Preferred Stock for net proceeds of $1,098 each excluding offering costs and preferred stock dividend reinvestment.

Previous wording

In connection with our Preferred Stock Dividend Reinvestment Plan, we issued additional Series A1 Preferred Stock, Series A3 Preferred Stock, Series A4 Preferred Stock, Series A5 Preferred Stock, Series M1 Preferred Stock, Series M3 Preferred Stock, Series M4 Preferred Stock, and Series M5 Preferred Stock of 13,720, 14,101, and 13,429 throughout April, May, and June, respectively.

Current wording

In connection with our Preferred Stock Dividend Reinvestment Plan, we issued additional Series A1 Preferred Stock, Series A3 Preferred Stock, Series A4 Preferred Stock, Series A5 Preferred Stock, Series M1 Preferred Stock, Series M3 Preferred Stock, Series M4 Preferred Stock, and Series M5 Preferred Stock of 13,149, 12,988, and 12,797 throughout April, May, and June, respectively.

Previous wording

At June 30, 2025, we have $6,673,516, or 223.3%, of our net assets applicable to common shares invested in 97 portfolio investments and CLOs.

Current wording

As of June 30, 2026, we have $6,342,558, or 216.5%, of our net assets applicable to common shares, invested in 91 portfolio companies and other portfolio investments.

Previous wording

Our annualized current yield was 12.2% and 12.1% as of June 30, 2025 and June 30, 2024, respectively, across all performing interest bearing investments, excluding equity investments and non-accrual loans. Our annualized current yield was 9.6% and 9.8%as of June 30, 2025 and June 30, 2024, respectively, across all investments. In many of our portfolio companies we hold equity positions, ranging from minority interests to majority stakes, which we expect over time to contribute to our investment returns. Some of these equity positions include features such as contractual minimum internal rates of returns, preferred distributions, flip structures and other features expected to generate additional investment returns, as well as contractual protections and preferences over junior equity, in addition to the yield and security offered by our cash flow and collateral debt protections.

Current wording

9.6% as of June 30, 2026 and June 30, 2025, respectively, across all investments. In many of our portfolio companies we hold equity positions, ranging from minority interests to majority stakes, which we expect over time to contribute to our investment returns. Some of these equity positions include features such as contractual minimum internal rates of returns, preferred distributions, flip structures and other features expected to generate additional investment returns, as well as contractual protections and preferences over junior equity, in addition to the yield and security offered by our cash flow and collateral debt protections.

Previous wording

As of June 30, 2025, we own controlling interests in the following portfolio companies: Belnick, LLC (Belnick); CP Energy Services Inc. (“CP Energy”); Credit Central Loan Company, LLC (“Credit Central”); Echelon Transportation, LLC (“Echelon”); First Tower Finance Company LLC (“First Tower Finance”); Freedom Marine Solutions, LLC (“Freedom Marine”); InterDent, Inc. (“InterDent”); Kickapoo Ranch Pet Resort (“Kickapoo”); MITY, Inc. (“MITY”); NPRC; Nationwide Loan Company LLC (“Nationwide”); NMMB, Inc. (“NMMB”); Pacific World Corporation (“Pacific World”); R-V Industries, Inc. (“R-V”); Universal Turbine Parts, LLC (“UTP”); USES Corp. (“United States Environmental Services” or “USES”); and Valley Electric Company, Inc. (“Valley Electric”). In June 2019, CP Energy purchased a controlling interest of the common equity of Spartan Energy Holdings, Inc. (“Spartan Holdings”), which owns 100% of Spartan Energy Services, LLC (“Spartan”), a portfolio company of Prospect with $51,477 and$41,177 in first lien term loans (the “Spartan Term Loan A”) due to us as of June 30, 2025 and June 30, 2024, respectively. As a result of CP Energy’s purchase, and given Prospect’s controlling interest in CP Energy, we report our investments in Spartan as control investment. Spartan remains the direct borrower and guarantor to Prospect for the Spartan Term Loan A.

Current wording

As of June 30, 2026, we own controlling interests in the following portfolio companies: Belnick, LLC (“Belnick”); CP Energy Services Inc. (“CP Energy”); Credit Central Loan Company, LLC (“Credit Central”); Echelon Transportation, LLC (“Echelon”); First Tower Finance Company LLC (“First Tower Finance”); Freedom Marine Solutions, LLC (“Freedom Marine”); InterDent, Inc. (“InterDent”); Kickapoo Ranch Pet Resort (“Kickapoo”); MITY, Inc. (“MITY”); NPRC; Nationwide Loan Company LLC (“Nationwide”); NMMB, Inc. (“NMMB”); Pacific World Corporation (“Pacific World”); QC Holdings TopCo, LLC (“QC Holdings”); R-V Industries, Inc. (“R-V”); Universal Turbine Parts, LLC (“UTP”); Strategic Chemical Solutions Corp. (f/k/a USES Corp.); Valley Electric Company, Inc. (“Valley Electric”); and Victor Technology, LLC (“Victor”). In June 2019, CP Energy purchased a controlling interest of the common equity of Spartan Energy Holdings, Inc. (“Spartan Holdings”), which owns 100% of Spartan Energy Services, LLC (“Spartan”), a portfolio company of Prospect with $61,429 and $51,477 in first lien term loans (the “Spartan Term Loan A”) due to us as of June 30, 2026 and June 30, 2025, respectively. As a result of CP Energy’s purchase, and given Prospect’s controlling interest in CP Energy, we report our investments in Spartan as a control investment. Spartan remains the direct borrower and guarantor to Prospect for the Spartan Term Loan A.

Previous wording

(1) Our SSN investments do not have industry concentrations and as such have been separated in the tables above. As of June 30, 2025 and June 30, 2024, Structured Finance includes $0 and $190,500, respectively, of senior secured term loan investments held through our investment in NPRC and its wholly-owned subsidiary related to its rated secured structured notes.

Current wording

(1) Our SSN investments do not have industry concentrations and as such have been separated in the tables above.

Previous wording

Our origination efforts are focused primarily on secured lending to non-control investments to reduce the risk in the portfolio by investing primarily in first lien loans and second lien loans, though we also continue to invest in select equity investments. For information regarding investment activity for the year ended June 30, 2023, see the Company’s Form 10-K for the fiscal year ended June 30, 2024.

Current wording

Our current origination efforts are focused primarily on secured lending to middle market investments to mitigate downside risk in the portfolio by investing primarily in first lien loans and second lien loans, though we also continue to invest in select equity investments. For information regarding investment activity for the year ended June 30, 2024, see the Company’s Form 10-K for the fiscal year ended June 30, 2025.

Previous wording

Our gross investment activity for the year ended June 30, 2025 and June 30, 2024 are presented below:

Current wording

Our gross investment activity for the years ended June 30, 2026 and June 30, 2025 are presented below:

Previous wording

The Board of Directors looked at several factors in determining where within the range to value the asset including: recent operating and financial trends for the asset, independent ratings obtained from third parties, comparable multiples for recent sales of companies within the industry and discounted cash flow models for our investments in CLOs. The composite of all these various valuation techniques, applied to each investment, was a total valuation of$6,673,516.

Current wording

The Board of Directors looked at several factors in determining where within the range to value the asset including: recent operating and financial trends for the asset, independent ratings obtained from third parties, comparable multiples for recent sales of companies within the industry and discounted cash flow models for our investments in CLOs. The composite of all these various valuation techniques, applied to each investment, was a total valuation of $6,342,558.

Previous wording

On March 31, 2025, Prospect exercised certain rights and remedies under its loan documents to exercise voting rights in respect of the equity of Belnick, LLC and certain of its subsidiaries (“Belnick”) to, among other things, appoint new officers, all of whom are our Investment Adviser’s professionals. As a result, Prospect’s investment in Belnick is classified as a control investment. Belnick is a provider of high-volume, value-oriented furniture and furnishings to a broad range of residential and commercial end markets.

Current wording

On March 31, 2025, Prospect exercised certain rights and remedies under its loan documents to exercise voting rights in respect of the equity of Belnick and certain of its subsidiaries to, among other things, appoint new officers, all of whom are our Investment Adviser’s professionals. As a result, Prospect’s investment in Belnick is classified as a control investment.

Previous wording

The fair value of our investment in Belnick was $51,166 as of June 30, 2025, a discount of $37,086 to its amortized cost basis compared to a fair value of $84,250 as of June 30, 2024, a discount of $302 to its amortized cost. The increase in discount to amortized cost resulted from a decline in financial performance.

Current wording

The fair value of our investment in Belnick was $108,565 as of June 30, 2026, a premium of $8,808 to its amortized cost basis, compared to a fair value of $51,166 as of June 30, 2025, a discount of $37,086 to its amortized cost. The premium to amortized cost resulted from an improvement in financial performance and resolution of tariff refund receivables.

Previous wording

Prospect owns 100% of the equity of First Tower Delaware, a consolidated holding company. First Tower Delaware owns 78.06% of First Tower Finance. First Tower Finance owns 100% of First Tower, LLC (“First Tower”), a multiline specialty finance company.

Current wording

Prospect owns 100% of the equity of First Tower Delaware, a Consolidated Holding Company. First Tower Delaware owns 80.10% of the voting interest of First Tower Finance, resulting in 78.06% ownership. First Tower Finance owns 100% of First Tower, LLC, a multiline specialty finance company.

Previous wording

The fair value of our investment in First Tower was $760,518 as of June 30, 2025, a premium of $277,200 to its amortized cost basis compared to a fair value of $605,928 as of June 30, 2024, a premium of $149,790 to its amortized cost. The increase in premium to amortized cost resulted from an improvement in financial performance and an expansion of comparable company trading multiples.

Current wording

The fair value of our investment in First Tower was $960,778 as of June 30, 2026, a premiumof $469,368 to its amortized cost basis, compared to a fair value of $760,518 as of June 30, 2025, a premium of $277,200 to its amortized cost basis. The increase in premium to amortized cost resulted from an improvement in financial performance, higher projected performance, and an expansion of comparable company trading multiples.

Previous wording

Prospect owns 100% of the equity of InterDent, Inc. InterDent is a dental support organization (“DSO”). InterDent provides business and administrative support services to a regionally-diversified set of dental practices so that dentists can focus on delivering high-quality clinical care and patient satisfaction.

Current wording

Prospect owns 100% of the equity of InterDent. InterDent is a dental support organization (“DSO”). InterDent provides business and administrative support services to a regionally-diversified set of dental practices so that dentists can focus on delivering high-quality clinical care and patient satisfaction.

Previous wording

The fair value of our investment in InterDent was $338,781 as of June 30, 2025, a discount of $55,244 to its amortized cost basis compared to a fair value of $463,883 as of June 30, 2024, a premium of $102,337 to its amortized cost. The discount to amortized cost resulted from a decline in financial performance and increased debt in the capital structure.

Current wording

The fair value of our investment in InterDent was $340,451 as of June 30, 2026, a discount of $89,490 to its amortized cost basis, compared to a fair value of $338,781 as of June 30, 2025, a discount of $55,244 to its amortized cost basis. The increase in discount to amortized cost resulted from increased debt in the capital structure.

Previous wording

NPRC is a Maryland corporation and a qualified REIT for federal income tax purposes. NPRC is held for purposes of investing, operating, financing, leasing, managing and selling a portfolio of real estate assets and engages in any and all other activities that may be necessary, incidental, or convenient to perform the foregoing. NPRC acquires real estate assets, including, but not limited to, industrial, commercial, and multi-family properties, self-storage, and student housing properties. NPRC may acquire real estate assets directly or through joint ventures by making a majority equity investment in a property-owning entity. Additionally, through its wholly owned subsidiaries, NPRC invests in online consumer loans and RSSNs. As of June 30, 2025 and June 30, 2024, we own 100% of the fully-diluted common equity of NPRC.

Current wording

NPRC is a Maryland corporation and a qualified REIT for federal income tax purposes. NPRC was formed to hold for investment, operate, finance, lease, manage, and sell a portfolio of real estate assets and engage in any and all other activities as may be necessary, incidental or convenient to carry out the foregoing. NPRC acquires real estate assets, including, but not limited to, industrial, commercial, multi-family, self-storage, and student housing properties. NPRC may acquire real estate assets directly or through joint ventures by making a majority equity investment in a property-owning entity. Additionally, through its wholly owned subsidiaries, NPRC invests in online consumer loans and RSSNs. As of June 30, 2026 and June 30, 2025, we own 100% of the fully-diluted common equity of NPRC.

Previous wording

During theyear ended June 30, 2024, we provided$248,344 of debt financing and$4,600 of equity financing to NPRC to fund real estate capital expenditures, provide working capital, and to fund purchases of rated secured structured notes.

Current wording

During theyear ended June 30, 2025, we provided$96,995 of debt financing to NPRC to fund real estate capital expenditures and provide working capital.

Previous wording

During theyear ended June 30, 2024, we received partial repayments of$108,950 of our loans previously outstanding with NPRC and its wholly owned subsidiary.

Current wording

During theyear ended June 30, 2025, we received partial repayments of$285,386 of our loans previously outstanding with NPRC and its wholly owned subsidiary.

Previous wording

As of June 30, 2024, our investment in NPRC and its wholly owned subsidiaries had an amortized cost of $1,108,311 and a fair value of$1,696,462. The fair value of $1,431,472 related to NPRC’s real estate portfolio was comprised offorty-nine multi-family properties, six student housing properties, four senior living properties, and two commercial properties. The following table shows the location, acquisition date, purchase price, and mortgage outstanding due to other parties for each of the properties held by NPRC as of June 30, 2024:

Current wording

As of June 30, 2026, our investment in NPRC and its wholly owned subsidiaries had an amortized cost of $896,889 and a fair value of $1,081,596, primarily related to NPRC’s real estate portfolio. The real estate portfolio was comprised of forty-four multi-family properties, two student housing properties, four senior living properties, and two commercial properties. The following table shows the location, acquisition date, purchase price, and mortgage outstanding due to other parties for each of the properties held by NPRC as of June 30, 2026:

Previous wording

The fair value of our investment in NPRC was $1,300,972 as of June 30, 2025, a premium of $378,325 from its amortized cost basis, compared to a fair value of $1,696,462 as of June 30, 2024, representing a premium of $588,151. The decrease in premium to amortized cost was primarily driven by a decline in market interest rates, an increase in discount and terminal capitalization rates, and higher leverage within the capital structure. These effects were partially offset by growth in net operating income across our real estate portfolio. Additionally, the unwinding of the National General Lending Limited (“NGL”) and NMF portfolios resulted in debt repayments of $211,130 and a change in unrealized losses of $36,980.

Current wording

The fair value of our investment in NPRC was $1,081,596 as of June 30, 2026, a premium of $184,707 from its amortized cost basis, compared to a fair value of $1,300,972 as of June 30, 2025, a premium of $378,325 to its amortized cost. The decrease in premium to amortized cost was primarily driven by a softening in cash flow projections across NPRC’s real estate portfolio, an increase in discount and terminal capitalization rates, and higher leverage within the capital structure.

Previous wording

On May 29, 2018, Prospect exercised its rights and remedies under its loan documents to exercise the shareholder voting rights in respect of the stock of Pacific World Corporation (“Pacific World”) and to appoint a new Board of Directors of Pacific World. As a result, as of June 30, 2018, Prospect’s investment in Pacific World is classified as a control investment. Pacific World supplies nail and beauty care products to food, drug, mass, and value retail channels worldwide.

Current wording

Prospect owns 100% of the preferred equity of Pacific World Corporation, which represents a 99.99% fully-diluted ownership interest of Pacific World as of June 30, 2026. Pacific World supplies nail and beauty care products to food, drug, mass, and value retail channels worldwide.

Previous wording

The fair value of our investment in Pacific World was $107,970 as of June 30, 2025, a discount of $228,143 to its amortized cost compared to a fair value of $104,663 as of June 30, 2024, a discount of $215,733 to its amortized cost. The increase in discount to amortized cost resulted from increased debt in the capital structure.

Current wording

The fair value of our investment in Pacific World was $112,412 as of June 30, 2026, a discount of $248,527 to its amortized cost compared to a fair value of $107,970 as of June 30, 2025, a discount of $228,143 to its amortized cost. The increase in discount to amortized cost resulted from increased debt in the capital structure and additional preferred equity funding provided by Prospect.

Previous wording

On December 10, 2018, UTP Holdings Group, Inc. (“UTP Holdings”) purchased all of the voting stock of Universal Turbine Parts, LLC (“UTP”) and appointed a new board of directors to UTP Holdings, consisting of three employees of the Investment Adviser. At the time UTP Holdings acquired UTP, UTP Holdings (f/k/a Harbortouch Holdings of Delaware) was a wholly-owned holding company controlled by Prospect and therefore Prospect’s investment in UTP is classified as a control investment as of June 30, 2019.

Current wording

On December 10, 2018, UTP Holdings purchased all of the voting stock of Universal Turbine Parts, LLC (“UTP”) and appointed a new board of directors to UTP Holdings, consisting of three employees of the Investment Adviser. At the time UTP Holdings acquired UTP, UTP Holdings (f/k/a Harbortouch Holdings of Delaware) was a wholly-owned holding company controlled by Prospect and therefore Prospect’s investment in UTP is classified as a control investment.

Previous wording

The fair value of our investment in UTP was $102,728 as of June 30, 2025, a premium of $15,200 to its amortized cost compared to a fair value of $68,067 as of June 30, 2024, a premium of $432 to its amortized cost. The increase in premium to amortized cost was driven primarily by an improvement in financial outlook, due to the positive impact of a strategic acquisition that closed in the last year, and due to an expansion of comparable company trading multiples.

Current wording

The fair value of our investment in UTP was $124,259 as of June 30, 2026, a premium of $30,800 to its amortized cost basis, compared to a fair value of $102,728 as of June 30, 2025, a premium of $15,200 to its amortized cost basis. The increase in premium to amortized cost resulted from increased profitability.

Previous wording

Prospect owns 100% of the common stock of Valley Holdings I, a Consolidated Holding Company. Valley Holdings I owns 100% of Valley Holdings II, a Consolidated Holding Company. Valley Holdings II owns 94.99% of Valley Electric Company, Inc. (“Valley Electric”), with Valley Electric management owning the remaining 5.01% of the equity. Valley Electric owns 100% of the equity of VE Company, Inc., which owns 100% of the equity of Valley Electric Co. of Mt. Vernon, Inc. (“Valley”) and Comet Electric, Inc (“Comet”), leading providers of specialty electrical services in the states of Washington and California. Valley and Comet are amongst the top electrical contractors in the United States.

Current wording

Prospect owns 100% of the common stock of Valley Holdings I, a Consolidated Holding Company. Valley Holdings I owns 100% of Valley Holdings II, a Consolidated Holding Company. Valley Holdings II owns 94.99% of Valley Electric Company, Inc., with Valley Electric management owning the remaining 5.01% of the equity. Valley Electric owns 100% of the equity of VE Company, Inc., which owns 100% of the equity of Valley Electric Co. of Mt. Vernon, Inc. (“Valley”) and Comet Electric, Inc (“Comet”), leading providers of specialty electrical services in the states of Washington and California. Valley and Comet are amongst the top 50 electrical contractors in the United States.

Previous wording

The fair value of our investment in Valley Electric was $351,291 as of June 30, 2025, a premium of $255,379 to its amortized cost compared to a fair value of $316,419 as of June 30, 2024, a premium of $220,508 to its amortized cost. The increase in premium to amortized cost primarily resulted from an increase in financial performance and an expansion of comparable company trading multiples.

Current wording

The fair value of our investment in Valley Electric was $293,854 as of June 30, 2026, a premium of $197,942 to its amortized cost basis, compared to a fair value of $351,291 as of June 30, 2025, a premium of $255,379 to its amortized cost basis. The decrease in premium to amortized cost reflects a reduction in comparable company multiples and the results of the sale transaction, which closed on July 1, 2026. See Recent Developments for additional details.

Previous wording

Our controlled investments, including those discussed above, are valued at $280,123 above their amortized cost as of June 30, 2025.

Current wording

Our controlled investments, including those discussed above, are valued at $276,656 above their amortized cost as of June 30, 2026.

Previous wording

We hold two affiliate investments at June 30, 2025 (Nixon, Inc. and RGIS Services, LLC, (“RGIS”)) with a total fair value of $27,057, a premium of $15,322 from their combined amortized cost, compared to a fair value of $18,069 as of June 30, 2024, representing a $6,475 premium to its amortized cost. The increase in premium to amortized cost was driven by an improvement in RGIS’s financial performance.

Current wording

We hold two affiliate investm ents as of June 30, 2026 (Nixon, Inc. and RGIS Services, LLC, (“RGIS”)) with a total fair value of $30,447, a premium of $17,612 from their combined amortized cost, compared to a fair value of $27,057 as of June 30, 2025, representing a $15,322 premium to its amortized cost. The increase in premium to amortized cost was driven by an improvement in RGIS’ financial performance.

Previous wording

With the non-control/non-affiliate investments, generally, there is less volatility related to our total investments because our equity positions tend to be smaller than with our control/affiliate investments, and debt investments are generally not as susceptible to large swings in value as equity investments. For debt investments, the fair value is generally limited on the high side to each loan’s par value, plus any prepayment premium that could be imposed. Note that seven of our non-control/non-affiliate investments, Credit.com Holdings, LLC, Discovery Point Retreat, Druid City Infusion, LLC, Taos Footwear, Town & Country Holdings, Inc. (“Town & Country”), Verify Diagnostics LLC, and our CLO investment portfolio, have larger equity or convertible debt option positions and are therefore more susceptible to changes in value than the rest of our non-control/non-affiliate investments. As of June 30, 2025, our non-control/non-affiliate portfolio is valued at a discount to amortized cost primarily due to nine of our non-control/ non-affiliate investments, United Sporting Companies, Inc. (“USC”), Credit.com Holdings, LLC (“Credit.com”), Aventiv Technologies, LLC (f/k/a Securus Technologies Holdings, Inc.) (“Aventiv”), Town & Country Holdings, Inc., Rising Tide Holdings, Inc. (“West Marine”), Medical Solutions Holdings Inc., K&N HoldCo, LLC (“K&N”), Redstone Holdco 2 LP (“RSA”), and STG Distribution, LLC (f/k/a Reception Purchaser, LLC) are valued at discounts to amortized cost of $73,412, $60,926, $58,603, $53,557, $26,162, $25,825, $25,190, $24,012, and $20,397, respectively.

Current wording

With the non-control/non-affiliate investments, generally, there is less volatility related to our total investments because our equity positions tend to be smaller than with our control/affiliate investments, and debt investments are generally not as susceptible to large swings in value as equity investments. For debt investments, the fair value is generally limited on the high side to each loan’s par value, plus any prepayment premium that could be imposed. Note that some of our non-control/non-affiliate investments have larger equity or convertible debt option positions and are therefore more susceptible to changes in value than the rest of our non-control/non-affiliate investments. As of June 30, 2026, our non-control/non-affiliate portfolio is valued at a discount to amortized cost primarily due to nine of our non-control/ non-affiliate investments, Credit.com Holdings, LLC (“Credit.com”), First Brands Group, Aventiv Technologies, LLC, STG Distribution, LLC (f/k/a Reception Purchaser, LLC), Medical Solutions Holdings, Inc., Town & Country Holdings, Inc., Rising Tide Holdings, Inc. (“West Marine”), Precisely Software Incorporated (“Precisely”), and K&N HoldCo, LLC (“K&N”), which are valued at discounts to amortized cost of $93,603, $69,279, $58,108, $48,895, $33,042, $30,098, $26,860, $25,733, and $25,363, respectively.

Previous wording

Excluding those non-control/non-affiliate investments discussed above, our remaining non-control/non-affiliate portfolio is valued at a premium of $55,492 to amortized cost as of June 30, 2025.

Current wording

Excluding those non-control/non-affiliate investments discussed above, our remaining non-control/non-affiliate portfolio is valued at a premium of $143,902 to amortized cost as of June 30, 2026.

Previous wording

Each of our Convertible Notes, Public Notes and Prospect Capital InterNotes® (collectively, our “Unsecured Notes”) are our general, unsecured obligations and rank equal in right of payment with all of our existing and future unsecured indebtedness and will be senior in right of payment to any of our subordinated indebtedness that may be issued in the future. The Unsecured Notes are effectively subordinated to our existing secured indebtedness, such as our credit facility, and future secured indebtedness to the extent of the value of the assets securing such indebtedness and structurally subordinated to any existing and future liabilities and other indebtedness of any of our subsidiaries.

Current wording

Each of our Public Notes and Prospect Capital InterNotes® (collectively, our “Unsecured Notes”) are our general, unsecured obligations and rank equal in right of payment with all of our existing and future unsecured indebtedness and will be senior in right of payment to any of our subordinated indebtedness that may be issued in the future. The Unsecured Notes are effectively subordinated to our existing secured indebtedness, such as our credit facility, and future secured indebtedness to the extent of the value of the assets securing such indebtedness and structurally subordinated to any existing and future liabilities and other indebtedness of any of our subsidiaries.