GLADSTONE INVESTMENT CORPORATION\DE

Previous wording

The following analysis of our financial condition and results of operations should be read in conjunction with our accompanying Consolidated Financial Statements and the notes thereto contained elsewhere in this Annual Report. Historical financial condition and results of operations and percentage relationships among any amounts in the financial statements are not necessarily indicative of financial condition, results of operations or percentage relationships for any future periods. Except per share amounts, dollar amounts included herein are in thousands unless otherwise indicated.

Current wording

The following analysis of our financial condition and results of operations should be read in conjunction with our accompanying Consolidated Financial Statements and the notes thereto contained elsewhere in this Annual Report. Historical financial condition and results of operations and percentage relationships among any amounts in the financial statements are not necessarily indicative of financial condition, results of operations or percentage relationships for any future periods. Except per share amounts, dollar amounts in tables included herein are in thousands unless otherwise indicated.

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, 2025, our investment portfolio was comprised of 73.3% in debt investments and 26.7% 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 70% in debt investments and 30% in equity investments, at cost. As of March 31, 2026, our investment portfolio was comprised of 70.8% in debt investments and 29.2% in equity investments, at cost.

Previous wording

We focus on investing in Lower Middle Market businesses in the U.S. that meet certain criteria, including: the sustainability of the business’ free cash flow and its ability to grow it over time, adequate assets for loan collateral, experienced management teams with a significant ownership interest in the portfolio company, reasonable capitalization of the portfolio company, including an ample equity contribution or cushion based on prevailing enterprise valuation multiples, and the potential to realize appreciation and gain liquidity in our equity position, if any. We anticipate that liquidity in our equity position will be achieved through a merger or acquisition of the portfolio company, a public offering of the portfolio company’s stock or, to a lesser extent, by exercising our right to require the portfolio company to repurchase our warrants, though there can be no assurance that we will always have these rights. We invest in portfolio companies that seek funds for management buyouts and/or growth capital to finance acquisitions, recapitalize or, to a lesser extent, refinance their existing debt facilities. We seek to avoid investing in high-risk, early-stage enterprises. Our targeted portfolio companies are generally considered too small for the larger capital marketplace.

Current wording

We focus on investing in Lower Middle Market businesses in the U.S. that meet certain criteria, including: the sustainability of the business’ free cash flow and its ability to grow it over time, adequate assets for loan collateral, experienced management teams with a significant ownership interest in the portfolio company, reasonable capitalization of the portfolio company, including an ample equity contribution or cushion based on prevailing enterprise valuation multiples, and the potential to realize appreciation and gain liquidity in our equity position, if any. We anticipate that liquidity in our equity position will be achieved through a merger, acquisition or recapitalization of the portfolio company, a public offering of the portfolio company’s stock, or, to a lesser extent, by exercising our right to require the portfolio company to repurchase our warrants, though there can be no assurance that we will always have these rights. We invest in portfolio companies that seek funds for management buyouts and/or growth capital to finance acquisitions, recapitalize or, to a lesser extent, refinance their existing debt facilities. We seek to avoid investing in high-risk, early-stage enterprises. Our targeted portfolio companies are generally considered too small for the larger capital marketplace.

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, 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.

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, 2026, we invested in four new portfolio companies. From our initial public offering in June 2005 through March 31, 2026, we have invested in 66 companies, excluding investments in syndicated loans, for a total of approximately $2.2 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, 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.

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, 2026, we had unrecognized, contractual success fees of $65.4 million, or $1.64 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, 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.

Current wording

From inception through March 31, 2026, we exited our investments in 33 portfolio companies that we acquired under our buyout strategy. In the aggregate, these sales have generated $353.6 million in net realized gains and $45.4 million in other income upon exit, for a total increase to our net assets of $399.0 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 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 per common share by 100.0% from March 2011 through March 31, 2026 and allowed us to declare and pay 24 supplemental distributions to common stockholders through March 31, 2026.

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 $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.”

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 $300.0 million. During the year ended March 31, 2026, we issued the 6.875% 2028 Notes for gross proceeds of$60.0 million, issued the 7.125% 2031 Notes for gross proceeds of $100.0 millionand sold 2,984,586 shares of our common stock under our "at-the-market" program (the "2024 Common Stock ATM Program") for gross proceeds of approximately $42.1 million. 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 2024 Common Stock ATM Program for gross proceeds of approximately$2.0 million.

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, 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.

Current wording

Although we have been able to access the capital markets historically, market conditions 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, 2026, the closing market price of our common stock was $14.20 per share, representing a 15.4% discount to our NAV of $16.78 per share as of March 31, 2026. 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, 2025, our asset coverage ratio on our senior securities representing indebtedness was 204.4%.

Current wording

As of March 31, 2026, our asset coverage ratio on our senior securities representing indebtedness was 213.8%.

Previous wording

•In January 2025, we restructured our investment in PSI Molded Plastics, Inc ("PSI Molded"). As a result of the restructuring, we converted debt with a cost basis of $16.4 million into preferred equity.

Current wording

•In June 2025, we restructured our investment in PSI Molded Plastics, Inc. ("PSI Molded"). As a result of the restructuring, we converted debt with a cost basis of $10.6 million into preferred equity.

Previous 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.

Current wording

Total investment income increased $5.4 million, or 5.8%, for the year ended March 31, 2026, 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.

Previous 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.

Current wording

Interest income from our investments in debt securities increased $6.1 million, or 7.3%, for the year ended March 31, 2026, 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, 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.

Current wording

The weighted-average principal balance of our interest-bearing investment portfolio during the year ended March 31, 2026 was $671.6 million, compared to $601.5 million during the prior year. This increase was primarily due to the origination of $250.5 million of new debt investments, $47.0 million of follow-on debt investments in existing portfolio companies and $20.0 million of loans returned to accrual status, partially offset by the pay-off, restructuring, or write-off of $153.5 million of debt investments and $30.8 million of existing loans placed on non-accrual status after March 31, 2024, 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. During the year ended March 31, 2026, we collected $1.8 million in past due interest from portfolio companies that were previously on non-accrual status, including $1.5 million from SFEG Holdings, Inc. ("SFEG") and $0.3 million from J.R. Hobbs. We had no collections of past due interest during the year ended March 31, 2025.

Previous 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.

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 13.3% and 13.9% for the years ended March 31, 2026 and 2025, 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.

Previous 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.

Current wording

As of March 31, 2026, our loans to B+T Group Acquisition, Inc. ("B+T"), Diligent Delivery Systems ("Diligent") and Edge Adhesives Holdings, Inc. ("Edge") were on non-accrual status, with an aggregate debt cost basis of $40.3 million. As of March 31, 2025, our loans to B+T, Diligent, Edge and J.R. Hobbs were on non-accrual status, with an aggregate debt cost basis of $90.2 million.

Previous 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.

Current wording

Dividend and success fee income for the year ended March 31, 2026 decreased $0.7 million, or 7.1%, as compared to the prior year. During the year ended March 31, 2026, dividend and success fee income consisted of $6.1 million of dividend income and $3.2 million of success fee income. 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.

Previous 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.

Current wording

As of March 31, 2026 and 2025, SFEG represented 19.8% and 10.8% 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 $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.

Current wording

Total expenses, net of any non-contractual, unconditional, and irrevocable credits from the Adviser, increased $37.3 million, or 56.8%, for the year ended March 31, 2026, as compared to the prior year, primarily due to increases in incentive fees, interest expense and base management fee, partially offset by a decrease in other expenses.

Previous 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.

Current wording

In accordance with GAAP, we recorded a capital gains-based incentive fee of $38.0 million during the year ended March 31, 2026, compared to a capital gains-based incentive fee of $7.4 million during the year ended March 31, 2025. 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, 2026 decreased $4.5 million, or 93.6%, as compared to the prior year, due to the increase in net assets, which drives the hurdle rate, and a decrease in pre-incentive fee net investment income.

Previous 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.

Current wording

Base management fee for the year ended March 31, 2026 increased $3.7 million, or 19.5%, 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 the fair value of investments and an increase in additional investments at cost.

Previous wording

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

Current wording

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

Previous 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.

Current wording

Interest expense on borrowings increased $8.9 million, or 31.5%, during the year ended March 31, 2026, as compared to the prior year, primarily due to interest expense related to the issuance of the 7.875% 2030 Notes in December 2024, the 6.875% 2028 Notes in November 2025 and the 7.125% 2031 Notes in February 2026 and increased borrowings on the Credit Facility, partially offset by a decrease in the effective interest rate and the redemption of the 8.00% 2028 Notes in December 2025. The weighted-average balance outstanding on our Credit Facility during the year ended March 31, 2026 was $76.2 million, as compared to $60.3 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, 2026 was 9.9%, as compared to 10.6% in the prior year. This decrease in the effective interest rate on our Credit Facility was primarily a result of a decrease in interest rates on the drawn portion of our Credit Facility, partially offset by an increase in unused commitment fees due to the increased facility size during the year.

Previous wording

Other expenses increased $1.9 million, or 44.3%, during the year ended March 31, 2025, as compared to the prior year, primarily due to an increase in bad debt expense.

Current wording

Other expenses decreased $2.1 million, or 33.6%, during the year ended March 31, 2026, as compared to the prior year, primarily due to a decrease in bad debt expense and tax expense, partially offset by an increase in professional fees.

Previous wording

During the year ended March 31, 2025, we recorded net realized gains on investments of$63.2 million, primarily due to a$43.4 million realized gain from the exit of Nth Degree and a$19.8 million realized gain from the exit of Nocturne.

Current wording

During the year ended March 31, 2025, we recorded net realized gains on investments of $63.2 million, primarily due to a$43.4 million realized gain from the exit of Nth Degree Investment Group, LLC ("Nth Degree") and a $19.8 million realized gain from the exit of Nocturne Luxury Villas, Inc. ("Nocturne").

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 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.

Current wording

Net unrealized appreciation on investments of $216.1 million for the year ended March 31, 2026 was primarily due to the increased performance of certain of our portfolio companies, an increase in transaction multiples used to estimate the fair value of certain of our portfolio companies and the reversal of previously recorded unrealized depreciation related to our investment in J.R. Hobbs upon its restructure. These increases were partially offset by decreased performance of certain of our portfolio companies.

Previous 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.

Current wording

Net unrealized depreciation on 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

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.

Current wording

Across our entire investment portfolio, we recorded $222.1 million of net unrealized appreciation on our equity investments and $6.0 million of net unrealized depreciation on our debt investments for the year ended March 31, 2026. As of March 31, 2026, the fair value of our investment portfolio exceeded the cost basis by $256.4 million, compared to March 31, 2025, when the fair value of our investment portfolio exceeded the cost basis by $40.3 million. This resulted in net unrealized appreciation of $216.1 million for the year ended March 31, 2026. Our entire portfolio had a fair value of 124.4% of cost as of March 31, 2026.

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, 2026 was $101.6 million, as compared to net cash provided by operating activities of $16.3 million for the year ended March 31, 2025. This change was primarily due to a decrease in net proceeds from the sale and recapitalization of investments and principal repayments of investments, partially offset by a decrease in purchases of investments.

Previous 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.

Current wording

Purchases of investments totaled $173.6 million during the year ended March 31, 2026, compared to $221.2 million during the year ended March 31, 2025. Aggregate net proceeds from the sale and recapitalization of investments and principal repayments of investments totaled $33.5 million during the year ended March 31, 2026, compared to $199.6 million during the year ended March 31, 2025.

Previous 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.

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 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 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

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:

Current wording

As of March 31, 2026, we had equity investments in and/or loans to 29 companies with an aggregate cost basis of $1.1 billion. 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. The following table summarizes our total portfolio investment activity for the years ended March 31, 2026 and 2025:

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 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.

Current wording

Net cash provided by financing activities for the year ended March 31, 2026 was $88.8 million, which consisted primarily of$96.9 million of proceeds from the issuance of our 7.125% 2031 Notes, net of deferred offering costs,$58.8 million of proceeds from the issuance of our 6.875% 2028 Notes, net of deferred offering costs, $41.6 million of proceeds from issuance of common stock, net of expenses and shelf offering registration costs, and $23.9 million of net borrowings on our Credit Facility, partially offset by the$74.8 million redemption of our 8.00% 2028 Notes, $57.2 million in distributions to common stockholders, and $0.3 million of deferred financing costs.

Previous 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.

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, $0.8 million of deferred financing costs, partially offset by$122.4 million of proceeds from the issuance of the 7.875% 2030 Notes, net of deferred offering costs, and $2.0 million of proceeds from the issuance of common stock, net of expenses and shelf offering registration 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, 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.

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 2025 through March 2026, and a supplemental distribution of $0.54 per common share paid in June 2025. See also “Recent Developments - Distributions and Dividends” for a discussion of cash distributions to common stockholders declared by our Board of Directors in April 2026.

Previous 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.

Current wording

For each of the fiscal years ended March 31, 2026 and 2025, Investment Company Taxable Income exceeded distributions declared and paid, and, in accordance with Section 855(a) of the Code, we elected to treat $21.3 million and $36.7 million, respectively, of the first distributions paid subsequent to fiscal year-end as having been paid in the prior year. In addition, for the fiscal year ended March 31, 2026, our capital loss carryforward balance was$17.3 million and no distributions paid subsequent to fiscal year-end will be treated as having been paid in the prior year. For the fiscal year ended March 31, 2025, 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 of the first distributions paid subsequent to fiscal year-end as having been paid in the prior year. For the year ended March 31, 2026, we recorded $0.3 million of net adjustments for estimated permanent book-tax differences to reflect tax character, which increased Total distributable earnings and decreased Capital in excess of par value. 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 Total distributable earnings.

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 an additional $321.5 million of the securities registered 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 $119.3 million of the securities registered under the registration statement.

Previous wording

In May 2024, we entered into equity distribution agreements with Oppenheimer & Co., B. Riley Securities, Inc. and Virtu Americas LLC (collectively, the "Sales Agents"), under which we have the ability to issue and sell shares of our common stock, from time to time, through the Sales Agents, having an aggregate offering price of up to $75.0 million in our 2024 Common Stock ATM Program. As of March 31, 2025, we had remaining capacity to sell up to an additional $73.0 million of common stock under the 2024 Common Stock ATM Program.

Current wording

In May 2024, we entered into equity distribution agreements with Oppenheimer & Co., B. Riley Securities, Inc. and Virtu Americas LLC (collectively, the "Sales Agents"), under which we have the ability to issue and sell shares of our common stock, from time to time, through the Sales Agents, having an aggregate offering price of up to $75.0 million in the 2024 Common Stock ATM Program. In June 2025, we entered into an equity distribution agreement with M&T Securities, Inc. and entered into amendments to the agreements with Oppenheimer & Co. Inc., B. Riley Securities, Inc. and Virtu Americas LLC to add M&T Securities, Inc. as a Sales Agent for the 2024 Common Stock ATM Program. As of March 31, 2026, we had remaining capacity to sell up to an additional $30.8 million of common stock under the 2024 Common Stock ATM Program.

Previous wording

In August 2022, we entered into equity distribution agreements with Oppenheimer & Co. and Virtu Americas LLC (each a “2022 Sales Agent”), under which we had the ability to issue and sell shares of our common stock, from time to time, through the 2022 Sales Agents, up to an aggregate offering price of $50.0 million in our 2022 Common Stock ATM Program. In August 2023, we entered into an equity distribution agreement with B. Riley Securities, Inc. and entered into amendments to the agreements with Oppenheimer & Co. Inc. and Virtu Americas LLC to add B. Riley Securities, Inc. as a 2022 Sales Agent for the 2022 Common Stock ATM Program. We did not sell any shares under the 2022 Common Stock ATM Program, which terminated in connection with our entry into the 2024 Common Stock ATM Program on May 14, 2024, during the year ended March 31, 2025.

Current wording

In August 2022, we entered into equity distribution agreements with Oppenheimer & Co. and Virtu Americas LLC (each a “2022 Sales Agent”), under which we had the ability to issue and sell shares of our common stock, from time to time, through the 2022 Sales Agents, up to an aggregate offering price of $50.0 million in the 2022 Common Stock ATM Program. In August 2023, we entered into an equity distribution agreement with B. Riley Securities, Inc. and entered into amendments to the agreements with Oppenheimer & Co. Inc. and Virtu Americas LLC to add B. Riley Securities, Inc. as a 2022 Sales Agent for the 2022 Common Stock ATM Program. We did not sell any shares under the 2022 Common Stock ATM Program, which terminated in connection with our entry into the 2024 Common Stock ATM Program on May 14, 2024, during the year ended March 31, 2025.

Previous wording

During the year ended March 31, 2024, we sold 3,097,162 shares of our common stock under the 2022 Common Stock ATM Program at a weighted-average gross price of $14.37 per share and raised approximately $44.5 million of gross proceeds. The weighted-average net price per share, after deducting commissions and offering costs borne by us, was $14.12 and resulted in total net proceeds of approximately $43.7 million. These sales were above our then current NAV per share.

Current wording

During the year ended March 31, 2026, we sold 2,984,586 shares of our common stock under the 2024 Common Stock ATM Program, with a weighted-average gross price of $14.12 per share and a weighted-average net price of $13.92 per share after deducting commissions and offering costs borne by us, raising approximately $42.1 million and $41.5 million of gross and net proceeds, respectively. These sales were above our then current NAV per share.