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”); Valley Electric Holdings II, Inc. (“Valley Holdings II”); and Victor Holdings of Delaware, LLC (“Victor Holdings”).

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 March 31, 2026, as shown in our Consolidated Schedule of Investments, the cost basis and fair value of our investments in controlled companies was $3,310,666 and $3,679,145, respectively. This structure gives rise to several of the risks described in our public documents and highlighted elsewhere in this Quarterly 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 September 30, 2026, as shown in our Consolidated Schedule of Investments, the cost basis and fair value of our investments in controlled companies was $3,323,679 and $3,360,718, respectively. This structure gives rise to several of the risks described in our public documents and highlighted elsewhere in this Quarterly 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 were redeemed during the fiscal year ended June 30, 2025, are referred to as the “2026 Notes”. Our $265.2 million of 3.364% unsecured notes due 2026 are referred to as the “3.364% 2026 Notes”. Our $279.8 million of 3.437% unsecured notes due 2028 are referred to as the “3.437% 2028 Notes”. Our $172.5 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 Convertible Notes, Public Notes, and Prospect Capital InterNotes® are collectively referred to as the “Unsecured Notes”.

Current wording

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 $263,220 of 3.364% unsecured notes due November 15, 2026 are referred to as the “3.364% 2026 Notes”. Our $220,803 of 3.437% unsecured notes due October 15, 2028 are referred to as the “3.437% 2028 Notes”. Our $167,755 of 5.50% unsecured notes due December 31, 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 the three months ended March 31, 2026 we acquired $8,300 of new investments, completed follow-on investments in existing portfolio companies totaling approximately $80,637, funded $6,869 of revolver advances, and recorded PIK interest of $19,470, resulting in gross investment originations of $115,276. During the three months ended March 31, 2026 we received full repayments totaling $146,250, received $8,568 of revolver paydowns, received $14,563 in sales, and received $52,861 in partial prepayments, scheduled principal amortization payments, and return of capital distributions, resulting in repayments of approximately $222,242.

Current wording

We seek to be a long-term investor with our portfolio companies. During the three months ended September 30, 2026 we acquired $11,990 of new investments, completed follow-on investments in existing portfolio companies totaling approximately $39,033, funded $20,422 of revolver advances, and recorded PIK interest of $19,032, resulting in gross investment originations of $90,477. During the three months ended September 30, 2026 we received full repayments totaling $214,999, received $29 of revolver paydowns, received $12,053 in sales, and received $30,291 in partial prepayments, scheduled principal amortization payments, and return of capital distributions, resulting in repayments of approximately $257,372.

Previous wording

During the three months ended March 31, 2026 we repaid $3,521 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 March 31, 2026 was $86.

Current wording

During thethree months ended September 30, 2026 we repaid $2,174 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 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 September 30, 2026 was $50.

Previous wording

During the three months ended March 31, 2026 we issued $5,523 aggregate principal amount of Prospect Capital InterNotes® with a weighted average stated interest rate of 6.76%, to extend our borrowing base. The newly issued notes mature between January 15, 2029 and April 15, 2033 and generated net proceedsof $5,436.

Current wording

During the three months ended September 30, 2026 we issued $805 aggregate principal amount of Prospect Capital InterNotes® with a weighted average stated interest rate of 6.30%, to extend our borrowing base. The newly issued notes mature between July 15, 2029 and August 15, 2033 and generated net proceeds of $793.

Previous wording

During the three months ended March 31, 2026, we did not have repurchase activity on the 3.364% 2026 Notes. During the nine months ended March 31, 2026, we repurchased $34,837 aggregate principal amount of the 3.364% 2026 Notes at a weighted average price of 96.87%, including commissions, plus accrued and unpaid interest. As a result, we recognized a net realized gain of $1,006 from the extinguishment of debt in the amount of the difference between the reacquisition price and the net carrying amount of the repurchased 3.364% 2026 Notes.

Current wording

During the three months ended September 30, 2026 we repurchased $1,266 aggregate principal amount of the 3.364% 2026 Notes at a weighted average price of 99.24%, including commissions, plus accrued and unpaid interest. As a result, we recognized a net realized loss of $73 from the extinguishment of debt in the amount of the difference between the reacquisition price and the net carrying amount of the repurchased 3.364% 2026 Notes

Previous wording

On January 22, 2026, February 19, 2026 and March 20, 2026 we issued 840,928, 804,914, and 928,532 shares of our common stock in connection with the dividend reinvestment plan, respectively.

Current wording

On July 22, 2026, August 20, 2026 and September 17, 2026 we issued 1,049,699, 1,005,099, and 1,028,431 shares of our common stock in connection with the dividend reinvestment plan, respectively.

Previous wording

During the three months ended March 31, 2026, 454,925 shares of our Series A1 Preferred Stock, 283,920 shares of our Series A3 Preferred Stock, 85,820 shares of our Series M1 Preferred Stock, and 186,105 shares of our Series M3 Preferred Stock were converted to 8,992,783 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 $1,678.

Current wording

During the three months ended September 30, 2026, 1,145,143 shares of our Series A1 Preferred Stock, 415,054 shares of our Series A3 Preferred Stock, 61,680 shares of our Series M1 Preferred Stock, and 42,207 shares of our Series M3 Preferred Stock were converted to 20,466,000 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 $4,047.

Previous wording

During the three months ended March 31, 2026 we issued 556,736 shares of Series A5 Preferred Stock for net proceeds of $12,527, and 178,248 shares of Series M5 Preferred Stock for net proceeds of $4,323, each excluding offering costs and preferred stock dividend reinvestment.

Current wording

During the three months ended September 30, 2026 we issued 644,465 shares of Series A5 Preferred Stock for net proceeds of $13,915, 172,786 shares of Series M5 Preferred Stock for net proceeds of $4,776, and 42,438 shares of Series A Preferred Stock for net proceeds of $700,992 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 13,306, 13,247, and 13,391 throughout January, February, and March, 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 13,809, 13,774, and 14,073 throughout July, August, and September, respectively.

Previous wording

On March 11, 2026, we filed a notice of meeting and definitive proxy statement in connection with a special meeting of our stockholders that is scheduled to be held on June 9, 2026 for the purpose of asking our stockholders to vote on a proposal to authorize us, with approval of our Board of Directors, to sell shares of our common stock (during the next 12 months) at a price or prices below our then current net asset value per share in one or more offerings subject to certain conditions as set forth in the proxy statement relating to the special meeting (including that the number of shares sold on any given date does not exceed 25% of our outstanding common stock immediately prior to such sale).

Current wording

On July 7, 2026, at a special meeting of our stockholders, our stockholders authorized us sell shares of our common stock (during the next 12 months) at a price or prices below our then current net asset value per share in one or more offerings subject to certain conditions as set forth in the proxy statement relating to the special meeting (including that the number of shares sold on any given date does not exceed 25% of our outstanding common stock immediately prior to such sale).

Previous wording

As of March 31, 2026, we have $6,302,465, or 213.4%, of our net assets applicable to common shares invested in 89 portfolio investments and CLOs.

Current wording

As of September 30, 2026, we have $5,944,478, or 206.8%, of our net assets applicable to common shares, invested in 85 portfolio companies and other portfolio investments.

Previous wording

Our annualized current yield was 10.5% and 12.2% as of March 31, 2026 and June 30, 2025, respectively, across all performing interest bearing investments, excluding equity investments and non-accrual loans. Our annualized current yield was 7.9% and 9.6% as of March 31, 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.

Current wording

Our annualized current yield was 11.3% and 11.8% as of September 30, 2026 and June 30, 2026, respectively, across all performing interest bearing investments, excluding equity investments and non-accrual loans. Our annualized current yield was 8.8% and 9.0% as of September 30, 2026 and June 30, 2026, 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

We are a non-diversified company within the meaning of the 1940 Act. As required by the 1940 Act, we classify our investments by level of control. As defined in the 1940 Act, “Control Investments” are those where there is the ability or power to exercise a controlling influence over the management or policies of a company. Control is generally deemed to exist when a company or individual possesses a beneficial ownership of 25% or more of the voting securities of an investee company. Under the 1940 Act, “Affiliate Investments” are defined by a lesser degree of influence and are deemed to exist through owning, controlling, or holding with power to vote, 5% or more of the outstanding voting securities of another person. “Non-Control/Non-Affiliate Investments” are those that are neither Control Investments nor Affiliate Investments.

Current wording

We are a non-diversified company within the meaning of the 1940 Act. As required by the 1940 Act, we classify our investments by level of control. As defined in the 1940 Act, “Control Investments” are those where there is the ability or power to exercise a controlling influence over the management or policies of a company. Control is generally deemed to exist when a company or individual possesses a beneficial ownership of more than 25% of the voting securities of an investee company. Under the 1940 Act, “Affiliate Investments” are defined by a lesser degree of influence and are deemed to exist through owning, controlling, or holding with power to vote, 5% or more of the outstanding voting securities of another person. “Non-Control/Non-Affiliate Investments” are those that are neither Control Investments nor Affiliate Investments.

Previous wording

As of March 31, 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”); R-V Industries, Inc. (“R-V”); Universal Turbine Parts, LLC (“UTP”); Strategic Chemical Solutions Corp. (f/k/a USES Corp.); 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 $60,529 and $51,477 in first lien term loans (the “Spartan Term Loan A”) due to us as of March 31, 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 control investment. Spartan remains the direct borrower and guarantor to Prospect for the Spartan Term Loan A.

Current wording

As of September 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.); 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 $61,912 and $61,429 in first lien term loans (the “Spartan Term Loan A”) due to us as of September 30, 2026 and June 30, 2026, 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

Our current origination efforts are focused primarily on secured lending to middle market 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.

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.

Previous wording

Our gross investment activity for the nine months ended March 31, 2026 and March 31, 2025 are presented below:

Current wording

Our gross investment activity for the three months ended September 30, 2026 and September 30, 2025 are presented below:

Previous wording

Key developments in the Company’s portfolio during the nine months ended March 31, 2026 are as follows:

Current wording

Key developments in the Company’s portfolio during the three months ended September 30, 2026 are as follows:

Previous wording

On July 11, 2025, the National Property REIT Corp. loan agreement was amended, extending the maturity date of the First Lien Term Loan facilities (A, D and E) to March 31, 2027.

Current wording

On June 29, 2026, the National Property REIT Corp. loan agreement was amended, extending the maturity date of the First Lien Term Loan facility to March 31, 2030. The amendment was made effective as of July 1, 2026.

Previous wording

Certain derivative instruments are valued as Level 2 assets or liabilities using pricing information obtained from third-party pricing services, including HIS Markit. These valuations are based on prevailing market data as of the measurement date and are derived using models that apply well-recognized financial principles. Significant inputs to the valuation models include observable market data such as interest rate curves, forward curves, credit spreads, foreign exchange rates, volatilities, and other market-corroborated inputs. Management and the independent valuation firm evaluate the methodologies and inputs to assess whether the resulting values are representative of fair value.

Current wording

Certain derivative instruments are valued as Level 2 assets or liabilities using pricing information obtained from third-party pricing services, including IHS Markit. These valuations are based on prevailing market data as of the measurement date and are derived using models that apply well-recognized financial principles. Significant inputs to the valuation models include observable market data such as interest rate curves, forward curves, credit spreads, foreign exchange rates, volatilities, and other market-corroborated inputs. Management and the independent valuation firm evaluate the methodologies and inputs to assess whether the resulting values are representative of fair value.

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 $6,302,465.

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 $5,944,478.

Previous wording

Control investments offer increased risk and reward over straight debt investments. Operating results and changes in market multiples can result in dramatic changes in values from quarter to quarter. Significant downturns in operations can further result in our looking to recoveries on sales of assets rather than the enterprise value of the investment. Equity positions in our portfolio are susceptible to potentially significant changes in value, both increases as well as decreases, due to changes in operating results and market multiples. Our controlled companies discussed below experienced such changes and we recorded corresponding fluctuations in valuations during the nine months ended March 31, 2026.

Current wording

Control investments offer increased risk and reward over straight debt investments. Operating results and changes in market multiples can result in dramatic changes in values from quarter to quarter. Significant downturns in operations can further result in our looking to recoveries on sales of assets rather than the enterprise value of the investment. Equity positions in our portfolio are susceptible to potentially significant changes in value, both increases as well as decreases, due to changes in operating results and market multiples. Our controlled companies discussed below experienced such changes and we recorded corresponding fluctuations in valuations during the three months ended September 30, 2026.

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 $952,349 as of March 31, 2026, a premium of $471,867 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. 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.

Current wording

The fair value of our investment in First Tower was $983,900 as of September 30, 2026, a premiumof $483,124 to its amortized cost basis, compared to a fair value of $960,778 as of June 30, 2026, a premium of $469,368 to its amortized cost basis. The increase in premium to amortized cost resulted from an improvement in financial performance.

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 $339,156 as of March 31, 2026, a discount of $82,568 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. The increase in 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 $331,762 as of September 30, 2026, a discount of $106,593 to its amortized cost basis, compared to a fair value of$340,451 as of June 30, 2026, a discount of $89,490 to its amortized cost basis. The increase in discount to amortized cost resulted from increased debt in the capital structure and a decline in financial performance.

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 March 31, 2026 and June 30, 2025, 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 September 30, 2026 and June 30, 2026, we own 100% of the fully-diluted common equity of NPRC.

Previous wording

During thenine months ended March 31, 2025, we provided$71,427 of debt financing to NPRC to fund real estate capital expenditures and provide working capital.

Current wording

During thethree months ended September 30, 2025, we provided$25,568 of debt financing to NPRC to fund real estate capital expenditures and provide working capital.

Previous wording

During thenine months ended March 31, 2025, we received partial repayments of$213,386 of our loans previously outstanding with NPRC and its wholly owned subsidiary.

Current wording

During thethree months ended September 30, 2025, we received partial repayments of$22,604 of our loans previously outstanding with NPRC and its wholly owned subsidiary.

Previous wording

As of March 31, 2026, our investment in NPRC and its wholly owned subsidiaries had an amortized cost of $883,242 and a fair value of $1,112,198, primarily related to NPRC’s real estate portfolio. The real estate portfolio was comprised of forty-four multi-family properties, three 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 March 31, 2026:

Current wording

As of September 30, 2026, our investment in NPRC and its wholly owned subsidiaries had an amortized cost of $911,906 and a fair value of $1,071,107, primarily related to NPRC’s real estate portfolio. The real estate portfolio was comprised of forty-four multi-family 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 September 30, 2026:

Previous wording

As of June 30, 2025, our investment in NPRC and its wholly owned subsidiaries had an amortized cost of $922,647 and a fair value of $1,300,972. The fair value of $1,289,092 related to NPRC’s real estate portfolio was comprised of forty-seven multi-family properties, five 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, 2025:

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, 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 $1,112,198 as of March 31, 2026, a premium of $228,956 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.

Current wording

The fair value of our investment in NPRC was $1,071,107 as of September 30, 2026, a premium of $159,201 from its amortized cost basis, compared to a fair value of $1,081,596 as of June 30, 2026, a premium of$184,707 to its amortized cost basis. 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

Our controlled investments, including those discussed above, are valued at $368,479 above their amortized cost as of March 31, 2026.

Current wording

Our controlled investments, including those discussed above, are valued at $37,039 above their amortized cost as of September 30, 2026.

Previous wording

We hold two affiliate investments as of March 31, 2026 (Nixon, Inc. and RGIS Services, LLC, (“RGIS”)) with a total fair value of $36,438, a premium of $23,603 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.

Current wording

We hold two affiliate invest ments as of September 30, 2026 (Nixon, Inc. and RGIS Services, LLC, (“RGIS”)) with a total fair value of $22,028, a premium of $9,193 from their combined amortized cost, compared to a fair value of $30,447 as of June 30, 2026, representing a $17,612 premium to its amortized cost. The decrease in premium to amortized cost was driven by a decline 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 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 March 31, 2026, our non-control/non-affiliate portfolio is valued at a discount to amortized cost primarily due to eight of our non-control/ non-affiliate investments, Credit.com Holdings, LLC (“Credit.com”), First Brands Group, Aventiv Technologies, LLC (“Securus”), STG Distribution, LLC (f/k/a Reception Purchaser, LLC), Medical Solutions Holdings, Inc., Rising Tide Holdings, Inc. (“West Marine”), Town & Country Holdings, Inc., and K&N HoldCo, LLC (“K&N”), which are valued at discounts to amortized cost of $91,301, $68,972, $57,037, $45,502, $39,176, $27,200, $26,095, and $25,428, 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 six of our non-control/non-affiliate investments, Credit.com Holdings, LLC, Discovery Point Retreat, LLC, Druid City Infusion, LLC, Shoes West, LLC (d/b/a Taos Footwear), Town & Country Holdings, Inc., and Verify Diagnostics LLC, 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 September 30, 2026, our non-control/non-affi liate portfolio is valued at a discount to amortized cost primarily due to two of our non-control/non-affiliate investments, Credit.com Holdings, LLC (“Credit.com”) and Town & Country Holdings, Inc., which are valued at discounts to amortized cost of $94,456 and $69,745, 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 $98,193 to amortized cost as of March 31, 2026.

Current wording

Excluding those non-control/non-affiliate inve stments discussed above, our remaining non-control/non-affiliate portfolio is valued at a premium of $118,128 to amortized cost as of September 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.

Previous wording

On May 15, 2007, we formed our wholly owned subsidiary, PCF, a Delaware limited liability company and a bankruptcy remote special purpose entity, which holds certain of our portfolio loan investments that are used as collateral for the revolving credit facility at PCF. Since origination of the revolving credit facility, we have renegotiated the terms and extended the commitments of the revolving credit facility several times. Most recently, effective June 28, 2024, we completed an extension and upsizing of the revolving credit facility (the “Revolving Credit Facility”). The lenders have extended commitments of $2,121,500 as of March 31, 2026. The Revolving Credit Facility includes an accordion feature which allows commitments to be increased up to $2,250,000 in the aggregate. The extension and upsizing of the Revolving Credit Facility extended the maturity date to June 28, 2029 andthe revolving period through June 28, 2028, foll owed by an additional one-year amortization period, with distributions allowed to Prospect after the completion of the revolving period. During such one-year amortization period, all principal payments on the pledged assets will be applied to reduce the balance. At the end of the one-year amortization period, the remaining balance will become due.

Current wording

On May 15, 2007, we formed our wholly owned subsidiary, PCF, a Delaware limited liability company and a bankruptcy remote special purpose entity, which holds certain of our portfolio loan investments that are used as collateral for the revolving credit facility at PCF. Since origination of the revolving credit facility, we have renegotiated the terms and extended the commitments of the revolving credit facility several times. Most recently, effective June 28, 2024, we completed an extension and upsizing of the revolving credit facility (the “Revolving Credit Facility”). The lenders have extended commitments of $2,121,500 as of September 30, 2026. The Revolving Credit Facility includes an accordion feature which allows commitments to be increased up to $2,250,000 in the aggregate. The extension and upsizing of the Revolving Credit Facility extended the maturity date to June 28, 2029 and the revolving period through June 28, 2028, followed by an additional one-year amortization period, with distributions allowed to Prospect after the completion of the revolving period. During such one-year amortization period, all principal payments on the pledged assets will be applied to reduce the balance. At the end of the one-year amortization period, the remaining balance will become due.