GLADSTONE INVESTMENT CORPORATION\DE

Previous wording

We were established for the purpose of investing in debt and equity securities of established private businesses operating in the U.S. Our investment objectives are to: (i) achieve and grow current income by investing in debt securities of established businesses that we believe will provide stable earnings and cash flow to pay expenses, make principal and interest payments on our outstanding indebtedness, and make distributions to our stockholders that grow over time; and (ii) provide our stockholders with long-term capital appreciation in the value of our assets by investing in equity securities of established businesses, generally, in combination with the aforementioned debt securities, that we believe can grow over time to permit us to sell our equity investments for capital gains. To achieve our objectives, our investment strategy is to invest in several categories of debt and equity securities, with individual investments generally totaling up to $75 million, although investment size may vary, depending upon our total assets or available capital at the time of investment. We expect that our investment portfolio over time will consist of approximately 75% in debt investments and 25% in equity investments, at cost. As of March 31, 2024, our investment portfolio was comprised of 77.0% in debt investments and 23.0% in equity investments, at cost.

Current wording

We were established for the purpose of investing in debt and equity securities of established private businesses operating in the U.S. Our investment objectives are to: (i) achieve and grow current income by investing in debt securities of established businesses that we believe will provide stable earnings and cash flow to pay expenses, make principal and interest payments on our outstanding indebtedness, and make distributions to our stockholders that grow over time; and (ii) provide our stockholders with long-term capital appreciation in the value of our assets by investing in equity securities of established businesses, generally, in combination with the aforementioned debt securities, that we believe can grow over time to permit us to sell our equity investments for capital gains. To achieve our objectives, our investment strategy is to invest in several categories of debt and equity securities, with individual investments generally totaling up to $75 million, although investment size may vary, depending upon our total assets or available capital at the time of investment. We expect that our investment portfolio over time will consist of approximately 75% in debt investments and 25% in equity investments, at cost. As of March 31, 2025, our investment portfolio was comprised of 73.3% in debt investments and 26.7% in equity investments, at cost.

Previous wording

We invest by ourselves or jointly with other funds and/or management of the portfolio company, depending on the opportunity, and have opportunistically made several co-investments with Gladstone Capital pursuant to the Co-Investment Order. We believe the Co-Investment Order has enhanced and will continue to enhance our ability to further our investment objectives and strategies. If we are participating in an investment with one or more co-investors, whether or not an affiliate of ours, our investment is likely to be smaller than if we were investing alone.

Current wording

We invest by ourselves or jointly with other funds and/or management of the portfolio company, depending on the opportunity, and have opportunistically made several co-investments with Gladstone Capital and Gladstone Alternative pursuant to the Co-Investment Order. We believe the Co-Investment Order has enhanced and will continue to enhance our ability to further our investment objectives and strategies. If we are participating in an investment with one or more co-investors, whether or not an affiliate of ours, our investment is likely to be smaller than if we were investing alone.

Previous wording

While the business environment remains competitive, we continue to see new investment opportunities consistent with our investment strategy of providing a combination of debt and equity in support of management and independent sponsor-led buyouts of Lower Middle Market companies in the U.S. During the year ended March 31, 2024, we invested in two new portfolio companies and exited three portfolio companies. From our initial public offering in June 2005 through March 31, 2024, we have invested in 58 companies, excluding investments in syndicated loans, for a total of approximately $1.7 billion, before giving effect to principal repayments and divestitures.

Current wording

While the business environment remains competitive, we continue to see new investment opportunities consistent with our investment strategy of providing a combination of debt and equity in support of management and independent sponsor-led buyouts of Lower Middle Market companies in the U.S. During the year ended March 31, 2025, we invested in four new portfolio companies and exited two portfolio companies. From our initial public offering in June 2005 through March 31, 2025, we have invested in 62 companies, excluding investments in syndicated loans, for a total of approximately $2.0 billion, before giving effect to principal repayments and divestitures.

Previous wording

The majority of the debt securities in our portfolio have a success fee component, which enhances the yield on our debt investments. Unlike PIK income, we generally do not recognize success fees as income until payment has been received. Due to the contingent nature of success fees, there are no guarantees that we will be able to collect any or all of these success fees or know the timing of any such collections. As a result, as of March 31, 2024, we had unrecognized, contractual success fees of $44.9 million, or $1.23 per common share. Consistent with GAAP, we generally have not recognized success fee receivables and related income in our accompanying Consolidated Financial Statements until earned.

Current wording

The majority of the debt securities in our portfolio have a success fee component, which enhances the yield on our debt investments. Unlike PIK income, we generally do not recognize success fees as income until payment has been received. Due to the contingent nature of success fees, there are no guarantees that we will be able to collect any or all of these success fees or know the timing of any such collections. As a result, as of March 31, 2025, we had unrecognized, contractual success fees of $52.5 million, or $1.43 per common share. Consistent with GAAP, we generally have not recognized success fee receivables and related income in our accompanying Consolidated Financial Statements until earned.

Previous wording

From inception through March 31, 2024, we exited our investments in 31 portfolio companies that we acquired under our buyout strategy (which excludes investments in syndicated loans). In the aggregate, these sales have generated $290.2 million in net realized gains and $41.8 million in other income upon exit, for a total increase to our net assets of $332.0 million. We believe, in aggregate, these transactions were equity-oriented investment successes and exemplify our investment strategy of striving to achieve returns through current income on the debt portion of our investments and capital gains from the equity portion. The 31 liquidity events have offset any realized losses since inception, which were primarily incurred during the 2008-2009 recession in connection with the sale of performing syndicated loans at a realized loss to pay off a former lender. The successful exits, in part, enabled us to increase the monthly distribution by 100.0% from March 2011 through March 31, 2024 and allowed us to declare and pay 22 supplemental distributions to common stockholders through March 31, 2024.

Current wording

From inception through March 31, 2025, we exited our investments in 33 portfolio companies that we acquired under our buyout strategy. In the aggregate, these sales have generated $353.4 million in net realized gains and $45.4 million in other income upon exit, for a total increase to our net assets of $398.8 million. We believe, in aggregate, these transactions were equity-oriented investment successes and exemplify our investment strategy of striving to achieve returns through current income on the debt portion of our investments and capital gains from the equity portion. The 33 liquidity events have offset any realized losses since inception, which were primarily incurred during the 2008-2009 recession in connection with the sale of performing syndicated loans at a realized loss to pay off a former lender. The successful exits, in part, enabled us to increase the monthly distribution by 100.0% from March 2011 through March 31, 2025 and allowed us to declare and pay 23 supplemental distributions to common stockholders through March 31, 2025.

Previous wording

We have been able to meet our capital needs through extensions of and increases to the Credit Facility and by accessing the capital markets in the form of public offerings of unsecured notes, as well as common and preferred stock. We have successfully extended the Credit Facility’s revolving period multiple times, most recently to October 2026, and currently have a total commitment amount of $200.0 million (with a potential total commitment of $300.0 million through additional commitments from new or existing lenders). During the year ended March 31, 2024, we issued the 8.00% 2028 Notes for gross proceeds of $74.8 million and sold 3,097,162 shares of our common stock under our "at-the-market" program (the "Common Stock ATM Program") for gross proceeds of approximately $44.5 million. During the year ended March 31, 2023, we sold 386,482 shares of our common stock under our Common Stock ATM Program for gross proceeds of approximately $5.5 million. Refer to “Liquidity and Capital Resources.”

Current wording

We have been able to meet our capital needs through extensions of and increases to the Credit Facility and by accessing the capital markets in the form of public offerings of unsecured notes, as well as common and preferred stock. We have successfully extended the Credit Facility’s revolving period multiple times, most recently to October 2026, and currently have a total commitment amount of $270.0 million (with a potential total commitment of $300.0 million through additional commitments from new or existing lenders). During the year ended March 31, 2025, we issued the 7.875% 2030 Notes for gross proceeds of$126.5 million and sold 148,714 shares of our common stock under our "at-the-market" program (the "2024 Common Stock ATM Program") for gross proceeds of approximately $2.0 million. During the year ended March 31, 2024, we issued the 8.00% 2028 Notes for gross proceeds of $74.8 million and sold 3,097,162 shares of our common stock under our previous "at-the-market" program (the "2022 Common Stock ATM Program") for gross proceeds of approximately $44.5 million. Refer to “Liquidity and Capital Resources.”

Previous wording

Although we have been able to access the capital markets historically, market conditions may continue to affect the trading price of our common stock and thus our ability to finance new investments through the issuance of common equity. On March 31, 2024, the closing market price of our common stock was $14.23 per share, representing a 6.0% premium to our NAV of $13.43 per share as of March 31, 2024. When our common stock trades below NAV, our ability to issue additional equity is constrained by provisions of the 1940 Act, which generally prohibits the issuance and sale of our common stock at an issuance price below the then current NAV per share without stockholder approval, other than through sales to our then existing stockholders pursuant to a rights offering.

Current wording

Although we have been able to access the capital markets historically, market conditions may continue to affect the trading price of our common stock and thus our ability to finance new investments through the issuance of common equity. On March 31, 2025, the closing market price of our common stock was $13.36 per share, representing a 1.4% discount to our NAV of $13.55 per share as of March 31, 2025. When our common stock trades below NAV, our ability to issue additional equity is constrained by provisions of the 1940 Act, which generally prohibits the issuance and sale of our common stock at an issuance price below the then current NAV per share without stockholder approval, other than through sales to our then existing stockholders pursuant to a rights offering.

Previous wording

As of March 31, 2024, our asset coverage ratio on our senior securities representing indebtedness was 219.0%.

Current wording

As of March 31, 2025, our asset coverage ratio on our senior securities representing indebtedness was 204.4%.

Previous wording

•In August 2023, we invested an additional $18.7 million in the form of secured first lien debt in Nocturne to fund an add-on acquisition.

Current wording

•In July 2024, we invested an additional $18.5 million through secured first lien debt in Nocturne Luxury Villas, Inc. ("Nocturne") to fund an add-on acquisition.

Previous wording

•In June 2023, we recapitalized our existing investment in Old World and invested an additional $2.5 million in the form of secured first lien debt. In connection with this investment, we received proceeds of $2.2 million, of which $1.9 million was recognized as dividend income and $0.3 million was recognized as a realized gain.

Current wording

•In February 2025, we recapitalized our existing investment in Educators Resource, Inc. and invested an additional $10.0 million in the form of secured first lien debt. In connection with this recapitalization, we received dividend income of $1.8 million.

Previous wording

•In October 2023, we exited our investment in Counsel Press, Inc. ("Counsel Press"), which resulted in success fee income of $1.4 million, a realized gain of $43.5 million and the repayment of our debt investment of $27.5 million at par.

Current wording

•In March 2025, we exited our investment in Nocturne, which resulted in success fee income of $3.5 million, a realized gain on our preferred equity of $19.8 million and the repayment of our debt investment of $85.6 million at par.

Previous wording

Total investment income increased $5.8 million, or 7.1%, for the year ended March 31, 2024, as compared to the prior year. This increase was primarily due to an increase in interest income, partially offset by a decrease in dividend and success fee income.

Current wording

Total investment income increased $6.4 million, or 7.3%, for the year ended March 31, 2025, as compared to the prior year. This increase was primarily due to an increase in dividend and success fee income and an increase in interest income.

Previous wording

Interest income from our investments in debt securities increased $21.5 million, or 35.7%, for the year ended March 31, 2024, as compared to the prior year. Generally, the level of interest income from investments is directly related to the weighted-average principal balance of our interest-bearing investment portfolio outstanding during the period, multiplied by the weighted-average yield.

Current wording

Interest income from our investments in debt securities increased $1.8 million, or 2.2%, for the year ended March 31, 2025, as compared to the prior year. Generally, the level of interest income from investments is directly related to the weighted-average principal balance of our interest-bearing investment portfolio outstanding during the period, multiplied by the weighted-average yield.

Previous wording

The weighted-average principal balance of our interest-bearing investment portfolio during the year ended March 31, 2024 was $560.8 million, compared to $464.4 million during the prior year. This increase was primarily due to $158.8 million of follow-on debt investments to existing portfolio companies, the origination of $85.8 million of new debt investments, and $14.9 million of loans placed back on accrual status, partially offset by the pay-off, restructuring, or write-off of $37.4 million of debt investments and $9.2 million of existing loans placed on non-accrual status after March 31, 2022, and their respective impact on the weighted-average principal balance when considering the timing of new investments, pay-offs, restructurings, write-offs, and accrual status changes, as applicable.

Current wording

The weighted-average principal balance of our interest-bearing investment portfolio during the year ended March 31, 2025 was $601.5 million, compared to $560.8 million during the prior year. This increase was primarily due to the origination of $177.7 million of new debt investments and $102.5 million of follow-on debt investments in existing portfolio companies, partially offset by the pay-off, restructuring, or write-off of $151.6 million of debt investments and $31.0 million of existing loans placed on non-accrual status after March 31, 2023, and their respective impact on the weighted-average principal balance when considering the timing of new investments, pay-offs, restructurings, write-offs, and accrual status changes, as applicable.

Previous wording

The weighted-average yield on our interest-bearing investments, excluding cash and cash equivalents and receipts recorded as other income, was 14.4% and 13.0% for the years ended March 31, 2024 and 2023, respectively. The weighted-average yield may vary from period to period, based on the current stated interest rate on interest-bearing investments, coupled with any collection of past due interest during the period. During the years ended March 31, 2024 and 2023, we had no collections of past due interest.

Current wording

The weighted-average yield on our interest-bearing investments, excluding cash and cash equivalents and receipts recorded as dividend and success fee income, was 13.9% and 14.4% for the years ended March 31, 2025 and 2024, respectively. The weighted-average yield may vary from period to period, based on the current stated interest rate on interest-bearing investments, coupled with any collection of past due interest during the period. During the years ended March 31, 2025 and 2024, we had no collections of past due interest.

Previous wording

As of March 31, 2024, our loans to Edge Adhesives Holdings, Inc. ("Edge") and J.R. Hobbs Co. - Atlanta, LLC ("J.R. Hobbs") were on non-accrual status, with an aggregate debt cost basis of $59.1 million. As of March 31, 2023, our loans to Edge, J.R. Hobbs, and The Mountain were on non-accrual status, with an aggregate debt cost basis of $66.9 million.

Current wording

As of March 31, 2025, our loans to B+T Group Acquisition, Inc. ("B+T"), Diligent Delivery Systems ("Diligent"), Edge Adhesives Holdings, Inc. ("Edge"), and J.R. Hobbs Co. – Atlanta, LLC ("J.R. Hobbs") were on non-accrual status, with an aggregate debt cost basis of $90.2 million. As of March 31, 2024, our loans to Edge and J.R. Hobbs were on non-accrual status, with an aggregate debt cost basis of $59.1 million.

Previous wording

Dividend and success fee income for the year ended March 31, 2024 decreased $15.8 million, or 74.1%, as compared to the prior year. During the year ended March 31, 2024, dividend and success fee income consisted of $3.6 million of success fee income and $1.9 million of dividend income. During the year ended March 31, 2023, dividend and success fee income consisted of $10.9 million of dividend income and $10.4 million of success fee income.

Current wording

Dividend and success fee income for the year ended March 31, 2025 increased $4.5 million, or 82.3%, as compared to the prior year. During the year ended March 31, 2025, dividend and success fee income consisted of $6.8 million of success fee income and $3.3 million of dividend income. During the year ended March 31, 2024, dividend and success fee income consisted of $3.6 million of success fee income and $1.9 million of dividend income.

Previous wording

As of March 31, 2024, SFEG represented 10.1% of the total investment portfolio at fair value. As of March 31, 2023, no single investment represented greater than 10% of our total investment portfolio at fair value.

Current wording

As of March 31, 2025 and 2024, SFEG Holdings, Inc. represented 10.8% and 10.1% of the total investment portfolio at fair value, respectively.

Previous wording

Total expenses, net of any non-contractual, unconditional, and irrevocable credits from the Adviser, increased $21.0 million, or 47.1%, for the year ended March 31, 2024, as compared to the prior year, primarily due to increases in the capital gains-based incentive fee, interest expense and base management fee, partially offset by an increase in credits to fees from Adviser, and a decrease in income-based incentive fee.

Current wording

Total expenses, net of any non-contractual, unconditional, and irrevocable credits from the Adviser, increased $38.0 thousand, or 0.1%, for the year ended March 31, 2025, as compared to the prior year, primarily due to increases in interest expense, other expenses and base management fee, partially offset by a decrease in incentive fees.

Previous wording

In accordance with GAAP, we recorded a capital gains-based incentive fee of $12.7 million during the year ended March 31, 2024, compared to reversal of capital gains-based incentive fee of $0.3 million during the year ended March 31, 2023. The capital gains-based incentive fee is a result of the net impact of net realized gains (losses) and net unrealized appreciation (depreciation) on investments during the respective periods. The income-based incentive fee for the year ended March 31, 2024 decreased $0.8 million, or 9.2%, as compared to the prior year, due to the increase in net assets, which increases the pre-incentive fee net investment income required to meet the hurdle rate, and the decrease in pre-incentive fee net investment income.

Current wording

In accordance with GAAP, we recorded a capital gains-based incentive fee of $7.4 million during the year ended March 31, 2025, compared to a capital gains-based incentive fee of $12.7 million during the year ended March 31, 2024. The capital gains-based incentive fee is a result of the net impact of net realized gains (losses) and net unrealized appreciation (depreciation) on investments during the respective periods. The income-based incentive fee for the year ended March 31, 2025 decreased $3.5 million, or 42.2%, as compared to the prior year, due to the increase in net assets, which increases the pre-incentive fee net investment income required to meet the hurdle rate, and the decrease in pre-incentive fee net investment income.

Previous wording

Base management fee for the year ended March 31, 2024 increased $2.7 million, or 18.3%, as compared to the prior year, primarily due to the increase in the average total assets subject to the base management fee as a result of a net increase in additional investments at cost and an increase in the fair value of investments.

Current wording

Base management fee for the year ended March 31, 2025 increased $1.6 million, or 9.2%, as compared to the prior year, primarily due to the increase in the average total assets subject to the base management fee as a result of a net increase in additional investments at cost and an increase in the fair value of investments.

Previous wording

(B)Reflected as a line item on our accompanying Consolidated Statement of Operations.

Current wording

(C)Reflected as a line item on our accompanying Consolidated Statement of Operations.

Previous wording

(C)The capital gains-based incentive fees are recorded in accordance with GAAP and do not necessarily reflect amounts contractually due under the terms of the Advisory Agreement.

Current wording

(D)The capital gains-based incentive fees are recorded in accordance with GAAP and do not necessarily reflect amounts contractually due under the terms of the Advisory Agreement.

Previous wording

Interest expense increased $8.2 million, or 51.9%, during the year ended March 31, 2024, as compared to the prior year, primarily due to the issuance of the 8.00% 2028 Notes in May 2023 and increased borrowings on the Credit Facility, partially offset by a decrease in the effective interest rate. The weighted-average balance outstanding on the Credit Facility during the year ended March 31, 2024 was $61.0 million, as compared to $16.2 million in the prior year. The effective interest rate on the Credit Facility, excluding the impact of deferred financing costs, during the year ended March 31, 2024 was 10.1%, as compared to 17.3% in the prior year. This decrease in the effective interest rate on the Credit Facility was primarily a result of a decrease in unused commitment fees, partially offset by an increase in interest rates on the drawn portion of the Credit Facility.

Current wording

Interest expense increased $4.1 million, or 17.1%, during the year ended March 31, 2025, as compared to the prior year, primarily due to the issuance of the 7.785% 2030 Notes in December 2024 and the 8.00% 2028 Notes in May 2023 and the increase in the effective interest rate of the Credit Facility. The weighted-average balance outstanding on our Credit Facility during the year ended March 31, 2025 was $60.3 million, as compared to $61.0 million in the prior year. The effective interest rate on our Credit Facility, excluding the impact of deferred financing costs, during the year ended March 31, 2025 was 10.6%, as compared to 10.1% in the prior year. This increase in the effective interest rate on our Credit Facility was primarily a result of an increase in unused commitment fees, partially offset by a decrease in interest rates on the drawn portion of our Credit Facility.

Previous wording

During the year ended March 31, 2024, we recorded net realized gains on investments of $30.3 million, primarily due to a $43.5 million realized gain from the exit of Counsel Press, $1.2 million of realized gains related to certain prior period exits and $0.3 million of realized gain from the recapitalization of Old World. These amounts were partially offset by the $14.7 million realized loss recognized from the dissolution and liquidation of The Mountain.

Current wording

During the year ended March 31, 2024, we recorded net realized gains on investments of $30.3 million, primarily due to a $43.5 million realized gain from the exit of Counsel Press, Inc. ("Counsel Press"), $1.2 million of realized gains related to certain prior period exits and $0.3 million of realized gain from the recapitalization of Old World Christmas. Inc. These amounts were partially offset by the $14.7 million realized loss recognized from the dissolution and liquidation of The Mountain Corporation ("The Mountain").

Previous wording

Net unrealized appreciation of investments of $12.2 million for the year ended March 31, 2023 was primarily due to the net unrealized depreciation across our portfolio, as well as the reversal of unrealized appreciation of our investment in Bassett Creek upon its exit, partially offset by the reversal of unrealized depreciation of our investment in The Mountain upon the replacement of our existing investment. The net depreciation was driven primarily by decreased performance of certain of our other portfolio companies and decreased comparable transaction multiples used to estimate the fair value of certain of our portfolio companies. These decreases were partially offset by increased performance of certain of our portfolio companies, driven partially by the reversal of the impact of COVID-19 on certain of our portfolio companies and the markets in which they operate.

Current wording

Net unrealized depreciation of investments of $26.0 million for the year ended March 31, 2025 was primarily due to the reversal of net unrealized appreciation of Nth Degree and Nocturne upon exit and decreased performance of certain of our portfolio companies. These decreases were partially offset by an increase in transaction multiples used to estimate the fair value of certain of our portfolio companies and increased performance of certain of our portfolio companies.

Previous wording

Net unrealized appreciation of investments of $33.3 million for the year ended March 31, 2024 was primarily due to the net unrealized appreciation across our portfolio, as well as the reversal of unrealized depreciation of our investment in The Mountain upon its exit. These amounts were partially offset by the reversal of unrealized appreciation of our investment in Counsel Press upon its exit. The net appreciation was driven primarily by increased performance of certain of our portfolio companies, partially offset by decreased comparable transaction multiples used to estimate the fair value of certain of our portfolio companies.

Current wording

Net unrealized appreciation of investments of $33.3 million for the year ended March 31, 2024 was primarily due to the net unrealized appreciation across our portfolio, as well as the reversal of unrealized depreciation of our investment in The Mountain upon its liquidation and dissolution. These amounts were partially offset by the reversal of unrealized appreciation of our investment in Counsel Press upon exit. The net appreciation was driven primarily by increased performance of certain of our portfolio companies, partially offset by decreased comparable transaction multiples used to estimate the fair value of certain of our portfolio companies.

Previous wording

Across our entire investment portfolio, we recorded $35.8 million of net unrealized appreciation on our equity investments and $2.5 million of net unrealized depreciation on our debt investments for the year ended March 31, 2024. As of March 31, 2024, the fair value of our investment portfolio was more than our cost basis by $66.2 million, compared to March 31, 2023, when the fair value of our investment portfolio was more than our cost basis by $32.9 million. This resulted in net unrealized appreciation of $33.3 million for the year ended March 31, 2024. Our entire portfolio was fair valued at 107.8% of cost as of March 31, 2024.

Current wording

Across our entire investment portfolio, we recorded $25.2 million of net unrealized depreciation on our debt investments and $0.7 million of net unrealized depreciation on our equity investments for the year ended March 31, 2025. As of March 31, 2025, the fair value of our investment portfolio was more than our cost basis by $40.3 million, compared to March 31, 2024, when the fair value of our investment portfolio was more than our cost basis by $66.2 million. This resulted in net unrealized depreciation of $25.9 million for the year ended March 31, 2025. Our entire portfolio was fair valued at 104.3% of cost as of March 31, 2025.

Previous wording

Cash inflows from operating activities are primarily generated from cash collections of interest and other income from our portfolio companies, as well as from cash proceeds received from repayments of debt investments and from sales of equity investments. These cash collections are principally used to fund new investments, pay distributions to our common stockholders, make interest payments on our Credit Facility, 5.00% 2026 Notes, 4.875% 2028 Notes and 8.00% 2028 Notes, pay management and incentive fees to the Adviser and other operating expenses. We may also use cash inflows from operating activities to repay outstanding borrowings under the Credit Facility.

Current wording

Cash inflows from operating activities are primarily generated from cash collections of interest and other income from our portfolio companies, as well as from cash proceeds received from repayments of debt investments and from sales of equity investments. These cash collections are principally used to fund new investments, pay distributions to our common stockholders, make interest payments on our Credit Facility and the Notes, pay management and incentive fees to the Adviser and other operating expenses. We may also use cash inflows from operating activities to repay outstanding borrowings under our Credit Facility.

Previous wording

Net cash used in operating activities for the year ended March 31, 2023 was$4.5 million, as compared to net cash provided by operating activities of $36.6 million for the year ended March 31, 2022. This change was primarily due to an increase in purchases of investments, partially offset by a decrease in the aggregate net proceeds from the sale and recapitalization of investments and principal repayments of investments.

Current wording

Net cash provided by operating activities for the year ended March 31, 2025 was $16.3 million, as compared to net cash used in operating activities of $69.9 million for the year ended March 31, 2024. This change was primarily due to increases in principal repayments of investments and the aggregate net proceeds from the sale and recapitalization of investments, partially offset by an increase in purchases of investments.

Previous wording

Purchases of investments totaled $183.9 million during the year ended March 31, 2024, compared to $133.8 million during the year ended March 31, 2023. Net proceeds from the sale and recapitalization of investments and principal repayments of investments totaled $80.2 million during the year ended March 31, 2024, compared to $87.8 million during the year ended March 31, 2023.

Current wording

Purchases of investments totaled $221.2 million during the year ended March 31, 2025, compared to $183.9 million during the year ended March 31, 2024. Net proceeds from the sale and recapitalization of investments and principal repayments of investments totaled $199.6 million during the year ended March 31, 2025, compared to $80.2 million during the year ended March 31, 2024.

Previous wording

Net cash used in operating activities for the year ended March 31, 2024 was $69.9 million, as compared to net cash used in operating activities of $4.5 million for the year ended March 31, 2023. This change was primarily due to an increase in purchases of investments, partially offset by a decrease in the aggregate net proceeds from the sale and recapitalization of investments and principal repayments of investments.

Current wording

Net cash used in operating activities for the year ended March 31, 2024 was$69.9 million, as compared to net cash used in operating activities of $4.5 million for the year ended March 31, 2023. This change was primarily due to an increase in purchases of investments, partially offset by a decrease in the aggregate net proceeds from the sale and recapitalization of investments and principal repayments of investments.

Previous wording

Purchases of investments totaled$133.8 million during the year ended March 31, 2023, compared to $92.7 million during the year ended March 31, 2022. Net proceeds from the sale and recapitalization of investments and principal repayments totaled$87.8 million during the year ended March 31, 2023, compared to $101.4 million during the year ended March 31, 2022.

Current wording

Purchases of investments totaled$183.9 million during the year ended March 31, 2024, compared to $133.8 million during the year ended March 31, 2023. Net proceeds from the sale and recapitalization of investments and principal repayments totaled$80.2 million during the year ended March 31, 2024, compared to $87.8 million during the year ended March 31, 2023.

Previous wording

As of March 31, 2024, we had equity investments in and/or loans to 24 companies with an aggregate cost basis of $854.3 million. As of March 31, 2023, we had equity investments in and/or loans to 25 companies with an aggregate cost basis of $720.6 million. The following table summarizes our total portfolio investment activity for the years ended March 31, 2024 and 2023:

Current wording

As of March 31, 2025, we had equity investments in and/or loans to 25 companies with an aggregate cost basis of $939.1 million. As of March 31, 2024, we had equity investments in and/or loans to 24 companies with an aggregate cost basis of $854.3 million. The following table summarizes our total portfolio investment activity for the years ended March 31, 2025 and 2024:

Previous wording

Net cash used in financing activities for the year ended March 31, 2023 was $6.7 million, which consisted primarily of $47.1 million in distributions to common stockholders and $0.3 million of deferred financing and offering costs, partially offset by $35.2 million of net borrowings on our Credit Facility and $5.4 million of proceeds from the issuance of common stock under the Common Stock ATM Program, net expenses and shelf registration offering costs.

Current wording

Net cash used in financing activities for the year ended March 31, 2025 was $4.4 million, which consisted primarily of $67.0 million of net repayments on our Credit Facility, $61.0 million in distributions to common stockholders, $4.9 million of deferred financing and offering costs, partially offset by $126.5 million of gross proceeds from the issuance of the 7.875% 2030 Notes and $2.0 million of proceeds from the issuance of common stock under the 2024 Common Stock ATM Program, net of expenses and shelf offering registration costs.

Previous wording

Net cash provided by financing activities for the year ended March 31, 2024 was $69.9 million, which consisted primarily of $74.8 million of gross proceeds from the issuance of the 8.00% 2028 Notes, $43.9 million of proceeds from the issuance of common stock under the Common Stock ATM Program, net of expenses and shelf offering registration costs, and $31.8 million of net borrowings on our Credit Facility, partially offset by $76.1 million in distributions to common stockholders and $4.5 million of deferred financing and offering costs.

Current wording

Net cash provided by financing activities for the year ended March 31, 2024 was $69.9 million, which consisted primarily of $74.8 million of gross proceeds from the issuance of the 8.00% 2028 Notes, $43.9 million of proceeds from the issuance of common stock under the 2022 Common Stock ATM Program, net of expenses and shelf offering registration costs, and $31.8 million of net borrowings on our Credit Facility, partially offset by $76.1 million in distributions to common stockholders and $4.5 million of deferred financing and offering costs.

Previous wording

To qualify to be taxed as a RIC and thus avoid corporate level federal income tax on the income we distribute to our stockholders, we are required, among other requirements, to distribute to our stockholders on an annual basis at least 90% of our Investment Company Taxable Income, determined without regard to the dividends paid deduction. Additionally, the Credit Facility generally restricts the amount of distributions to stockholders that we can pay out to be no greater than the sum of certain amounts, including our net investment income, plus net capital gains, plus amounts elected by the Company to be considered as having been paid during the prior fiscal year in accordance with Section 855(a) of the Code. In accordance with these requirements, our Board of Directors declared, and we paid, monthly cash distributions of $0.08 per common share for each of the twelve months from April 2023 through March 2024, and supplemental distributions of $0.12 per common share in June, September, and November 2023 and $0.88 per common share in December 2023. See also “Recent Developments - Distributions and Dividends” for a discussion of cash distributions to common stockholders declared by our Board of Directors in April 2024.

Current wording

To qualify to be taxed as a RIC and thus avoid corporate level federal income tax on the income we distribute to our stockholders, we are required, among other requirements, to distribute to our stockholders on an annual basis at least 90% of our Investment Company Taxable Income, determined without regard to the dividends paid deduction. Additionally, our Credit Facility generally restricts the amount of distributions to stockholders that we can pay out to be no greater than the sum of certain amounts, including our net investment income, plus net capital gains, plus amounts elected by the Company to be considered as having been paid during the prior fiscal year in accordance with Section 855(a) of the Code. In accordance with these requirements, our Board of Directors declared, and we paid, monthly cash distributions of $0.08 per common share for each of the twelve months from April 2024 through March 2025, and a supplemental distribution of $0.70 per common share in October 2024. See also “Recent Developments - Distributions and Dividends” for a discussion of cash distributions to common stockholders declared by our Board of Directors in April 2025.

Previous wording

For each of the fiscal years ended March 31, 2024 and 2023, Investment Company Taxable Income exceeded distributions declared and paid, and, in accordance with Section 855(a) of the Code, we elected to treat $18.7 million and $21.4 million, respectively, of the first distributions paid subsequent to fiscal year-end as having been paid in the prior year. In addition, for each of the fiscal years ended March 31, 2024 and 2023, net capital gains exceeded distributions declared and paid, and, in accordance with Section 855(a) of the Code, we elected to treat $1.4 million and $10.6 million, respectively, of the first distributions paid subsequent to fiscal year-end as having been paid in the prior year. For the year ended March 31, 2024, we recorded $0.8 million of net adjustments for estimated permanent book-tax differences to reflect tax character, which increased Overdistributed net investment income and decreased Accumulated net realized gain in excess of distributions and Capital in excess of par value. For the year ended March 31, 2023, we recorded $1.6 million of net adjustments for estimated permanent book-tax differences to reflect tax character, which decreased Capital in excess of par value and increased Overdistributed net investment income and Accumulated net realized gain in excess of distributions.

Current wording

For each of the fiscal years ended March 31, 2025 and 2024, Investment Company Taxable Income exceeded distributions declared and paid, and, in accordance with Section 855(a) of the Code, we elected to treat $36.7 million and $18.7 million, respectively, of the first distributions paid subsequent to fiscal year-end as having been paid in the prior year. In addition, for each of the fiscal years ended March 31, 2025 and 2024, net capital gains exceeded distributions declared and paid, and, in accordance with Section 855(a) of the Code, we elected to treat $18.7 million and $1.4 million, respectively, of the first distributions paid subsequent to fiscal year-end as having been paid in the prior year. For the year ended March 31, 2025, we recorded $1.2 million of net adjustments for estimated permanent book-tax differences to reflect tax character, which decreased Capital in excess of par value and increased Overdistributed net investment income. For the year ended March 31, 2024, we recorded $0.8 million of net adjustments for estimated permanent book-tax differences to reflect tax character, which increased Overdistributed net investment income and decreased Accumulated net realized gain in excess of distributions and Capital in excess of par value.

Previous wording

On February 28, 2024, we filed a registration statement on Form N-2 (File No. 333-277452), which the SEC declared effective on April 18, 2024. The registration statement permits us to issue, through one or more transactions, up to an aggregate of $450.0 million in securities, consisting of common stock, preferred stock, subscription rights, debt securities, and warrants to purchase common stock, preferred stock, or debt securities, including through concurrent, separate offerings of such securities. As of the date of this report, we have the ability to issue up to $450.0 million of securities under the registration statement.

Current wording

On February 28, 2024, we filed a registration statement on Form N-2 (File No. 333-277452), which the SEC declared effective on April 18, 2024. The registration statement permits us to issue, through one or more transactions, up to an aggregate of $450.0 million in securities, consisting of common stock, preferred stock, subscription rights, debt securities, and warrants to purchase common stock, preferred stock, or debt securities, including through concurrent, separate offerings of such securities. As of the date of this report, we have the ability to issue up to an additional $321.5 million of the securities registered under the registration statement.

Previous wording

On September 3, 2021, we filed a registration statement on Form N-2 (File No. 333-259302), which the SEC declared effective on October 15, 2021. The registration statement permited us to issue, through one or more transactions, up to an aggregate of $300.0 million in securities, consisting of common stock, preferred stock, subscription rights, debt securities, and warrants to purchase common stock, preferred stock, or debt securities, including through concurrent, separate offerings of such securities. As of March 31, 2024, we had the ability to issue up to $175.3 million of the securities registered under the registration statement. This registration statement was terminated on April 18, 2024.

Current wording

On September 3, 2021, we filed a registration statement on Form N-2 (File No. 333-259302), which the SEC declared effective on October 15, 2021. The registration statement permitted us to issue, through one or more transactions, up to an aggregate of $300.0 million in securities, consisting of common stock, preferred stock, subscription rights, debt securities, and warrants to purchase common stock, preferred stock, or debt securities, including through concurrent, separate offerings of such securities. This registration statement was terminated on April 18, 2024.