Horizon Technology Finance Corp
For the period ended Jun 30, 2026. Filed Aug 4, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 4, 2026
HRZN$3.960.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-05.
0001437749-26-014916
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-04.
0001437749-26-025689
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 145 previous paragraphs and 194 current paragraphs.
98 unchanged; 40 reworded; 41 added; 7 removed; 0 previous and 15 current paragraphs rearranged.
Tables are not compared: 41 previous and 47 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (41)
Current report
We use an internal credit rating system to assess the credit risk of each debt investment in our portfolio. Our internal credit rating system is not a national credit rating system and is not intended to be comparable to ratings issued by any nationally recognized statistical rating organization. See “Item 1 — Business” in our Annual Report on Form 10-K for the year ended December 31, 2025, as updated below under “Update to Internal Credit Rating Methodology,” for a more detailed description of the internal credit rating system.
Current report
Effective June 30, 2026, we changed our internal credit rating scale to adopt the scale used by our affiliate Monroe Capital LLC, and its affiliates. We made this change in order to improve consistency and efficiency in portfolio risk assessment by the affiliated entities, with whom we have made, and we anticipate we will continue to make, co-investments. Accordingly, our internal credit rating methodology was changed from a 4-to-1 scale (on which a 4 represented the highest credit quality) to a 1-to-5 scale (on which a 1 represents the highest credit quality). For comparability, credit rating disclosures for prior periods presented herein have been recast to conform to the updated 1-to-5 scale. The recast was performed by our investment adviser by applying the revised rating definitions and criteria to the facts and circumstances of each portfolio company as they existed at each prior reporting date, using information available to the adviser at that time. The recast is a reclassification for presentation and comparability purposes only. It does not reflect any change in the underlying credit quality, fair value, cost basis, non-accrual status, income recognition, or financial condition of any portfolio company as of any prior reporting date, and it did not affect our previously reported net assets, net increase (decrease) in net assets resulting from operations, or fair value measurements.
Current report
Credit rating information for periods prior to June 30, 2026, as originally reported on the prior 4-to-1 scale can be found in our Annual Report on Form 10-K for the year ended December 31, 2025 and in our Quarterly Reports on Form 10-Q for periods ending prior to June 30, 2026.
Current report
Update to internal credit rating methodology
Current report
The updated methodology is administered by our investment adviser using the same portfolio management and reporting process described in "Item 1 — Business — Portfolio Management and Reporting" of our Annual Report on Form 10-K for the year ended December 31, 2025. That process is substantively unchanged, including without limitation; (i) at least quarterly, our Advisor contacts each portfolio company, no less than once a quarter, for operational and financial updates and performs reviews with portfolio companies that we deem to have greater credit risk on a monthly or more frequent basis; and (ii) our Advisor requires all private portfolio companies to provide financial statements, typically monthly, and relies on publicly reported quarterly financials for public portfolio companies.
Current report
Under the updated credit scale system, each debt investment is rated on a 1 through 5 scale, with 2 representing the rating for an acceptable level of risk. A rating of 1 represents a portfolio company that is exhibiting the lowest level of risk and is exceeding expectations. Newly funded investments are typically assigned a rating of 2. A rating of 3 represents investments performing below expectations and indicates that the risk has increased somewhat since origination. A rating of 4 or 5 represents a deteriorating credit quality and an increased risk of loss of principal. Investment ratings are generated internally by our Advisor, and we cannot guarantee that others would assign the same ratings to our portfolio investments or similar portfolio investments. Our Advisor closely monitors portfolio companies rated a 4 or 5 for adverse developments. In addition, our Advisor maintains regular contact with the management, board of directors and major equity holders of these portfolio companies in order to discuss strategic initiatives to correct the deterioration of the portfolio company.
Current report
The ratings under our updated internal credit rating system are defined as follows:
Current report
Rating upon adoption
Current report
In the second quarter of 2026, in connection with the adoption of the new 1-5 credit rating scale, our Advisor (i) rated all debt investments as of June 30, 2026 under the new 1-to-5 scale and (ii) recast the credit ratings of the debt investments for all of the prior periods presented in this Quarterly Report to the new 1-to-5 scale. The ratings and recast ratings in this Quarterly Report are made based on the same proprietary credit assessment process our Advisor regularly utilizes on a quarterly basis, as applied to the facts and circumstances existing at the applicable reporting date.
Current report
Under the updated 1-to-5 scale, our debt investments had a weighted average credit rating of 2.3 as of June 30, 2026. On a recast basis, our debt investments had a weighted average credit rating of 2.4 as of December 31, 2025. Weighted average credit ratings previously reported on the 4-to-1 scale (2.9 as of December 31, 2025) are not directly comparable to ratings under the updated scale due to the change in credit rating methodology.
Current report
The following table shows the classification of our debt investment portfolio by internal credit rating, in each case presented under the updated 1-to-5 scale, as of June 30, 2026 and December 31, 2025 (recast):
Current report
RoHo Capital Opportunity LLC
Current report
On March 18, 2026, we and CRFH entered into an LLC Agreement to form the RoHo Joint Venture. The RoHo Joint Venture is intended to enhance our investment strategy by providing growth capital financing solutions to small and micro-cap public companies.
Current report
We have committed to invest up to $87.5 million in the RoHo Joint Venture and CRFH has committed to invest up to $12.5 million in the RoHo Joint Venture. Investments by each of us and CRFH in the RoHo Joint Venture will be made in the form of membership interests. All investments by the RoHo Joint Venture must be approved by the unanimous vote of the RoHo Joint Venture’s investment committee, which is comprised of an equal number of representatives designated by each of us and CRFH. Further, all other decisions regarding the management of the RoHo Joint Venture require the approval of the majority of the RoHo Joint Venture’s board of directors, which is comprised of an equal number of representatives from each us and CRFH.
Current report
As of June 30, 2026, no investments were made by the RoHo Joint Venture. The following tables show certain summarized financial information for the RoHo Joint Venture as of June 30, 2026 and for the three months ended June 30, 2026 and for the period March 18, 2026 through June 30, 2026:
Current report
Expenses related to the Merger were $4.4 million for the three months ended June 30, 2026.
Current report
During the three months ended June 30, 2026, net unrealized depreciation on investments totaled $38.5 million which was primarily due to the unrealized depreciation on one of our equity investments and two of our debt investments partially offset by the reversal of previously recorded unrealized depreciation from the settlement of one of our other investments. During the three months ended June 30, 2025, net unrealized depreciation on investments totaled $22.2 million which was primarily due to (1) the unrealized depreciation on seven of our debt investments and (2) the unrealized depreciation on two of our other investments partially offset by (1) the reversal of previously recorded unrealized depreciation from the settlement of two of our debt investments and (2) the unrealized appreciation of two of our warrant investments.
Current report
Comparison of the six months ended June 30, 2026 and 2025
Current report
Investment income
Current report
Fee income, which includes success fee, other fee and prepayment fee income on debt investments, decreased by $0.8 million, or 28.1%, to $2.1 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to a lower aggregate amount of principal prepayments for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
Current report
Expenses
Current report
Total expenses increased by $6.1 million, or 23.4%, to $32.2 million for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. Total expenses for each period consisted of interest expense, base management fee, incentive and administrative fees, professional fees and general and administrative expenses. For the six months ended June 30, 2026, transaction costs directly attributable to the Merger were included in total expenses.
Current report
Base management fee expense increased by $0.1 million, or 2.1%, to $6.3 million for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. Base management fee increased primarily due to an increase of $16.0 million, or 2.3%, in average gross assets less cash for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025.
Current report
Expenses related to the Merger were $4.4 million for the six months ended June 30, 2026.
Current report
Administrative fee expense, professional fees and general and administrative expenses were $3.8 million and $3.1 million for the six months ended June 30, 2026 and 2025, respectively.
Current report
On May 20, 2026, we amended the Nuveen Facility to extend the date through which we may request advances under the Nuveen Facility to July 22, 2026.
Current report
On April 14, 2026, we completed our previously announced merger with MRCC, the Merger Sub, Monroe Capital BDC Advisors, LLC, and our Advisor, pursuant to the Merger Agreement. In connection with the Merger, our Advisor has agreed to waive $4.0 million of base management fees and/or incentive fees due and payable to our Advisor pursuant to the terms of the Investment Management Agreement at the rate of $1.0 million per quarter commencing with our third fiscal quarter of 2026. The Fee Waiver will be in effect until the end of our second fiscal quarter of 2027 and, for each applicable fiscal quarter, will not exceed the total amount of base management fees and incentive fees earned by our Advisor during such fiscal quarter. See “Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview” for additional information about the Mergers.
Current report
Distributions from the RoHo Joint Venture are evaluated at the time of distribution to determine if the distribution should be recorded as dividend income or a return of capital. Generally, we will not record distributions from the RoHo Joint Venture as dividend income unless there are sufficient accumulated tax-basis earnings and profit in the RoHo Joint Venture prior to distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment. For the three months ended June 30, 2026 and the period March 18, 2026 (the commencement of the RoHo Joint Venture’s operations) through June 30, 2026, the RoHo Joint Venture did not distribute dividend income to us.
Current report
Recently issued accounting pronouncements
Current report
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies interim reporting disclosure requirements and enhances the organization of interim reporting guidance. ASU 2025-11 is effective for interim reporting periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact ASU No. 2025-11.
Current report
On July 1, 2026, we funded a $0.6 million debt investment to an existing portfolio company, Glass Routes LLC.
Current report
On July 8, 2026, we funded a $5.0 million debt investment to an existing portfolio company, Onkos Surgical, Inc.
Current report
On July 15, 2026, we funded a $2.5 million debt investment to an existing portfolio company, Ossio, Inc.
Current report
On July 15, 2026, we funded a $23.3 million debt investment to a new portfolio company, StarCompliance Midco, LLC.
Current report
On July 17, 2026, we amended the Nuveen Facility to extend the date through which we may request advances under the Nuveen Facility to August 21, 2026 and to decrease the commitment by $50.0 million in connection with secured notes previously issued by our wholly-owned subsidiary.
Current report
On July 24, 2026, we funded a $6.8 million debt investment to an existing portfolio company, Avive Solutions, Inc.
Current report
On July 29, 2026, we amended the NYL Facility to, among other things, to (i) add a second class of notes and (ii) extend the legal final maturity date to June 2034. The total commitment amount of $250.0 million for the secured notes remains the same under the NYL Facility.
Current report
On August 3, 2026, Mirantis, Inc. prepaid its outstanding principal balance of $15.0 million on its venture loan, plus interest, end-of-term payment and prepayment penalty.
Current report
On August 3, 2026, we sold our debt investment in Havenly, Inc. (“Havenly”) and received proceeds in an amount equal to the outstanding principal balance of $11.8 million of the debt investment, plus accrued interest and $1.2 million of the end-of-term payment. We continue to hold warrants in Havenly.
Current report
On August 3, 2026, our Board approved an increase in the amount of common stock that may be repurchased under the stock repurchase program to allow us to repurchase up to a total of $20.0 million of common stock.
Showing the first 40 of 41 passages. Open the source sections for the rest.
Removed paragraphs (7)
Previous report
On April 14, 2026, the Company completed its previously announced merger with Monroe Capital Corporation (“MRCC”), HMMS, Inc. (“Merger Sub”), Monroe Capital BDC Advisors, LLC, and the Advisor, pursuant to the Agreement and Plan of Merger, dated as of August 7, 2025 (the “Merger Agreement”). Pursuant to the Merger Agreement, immediately following the Asset Sale (as defined below) and at the effective time of the Merger (the “Effective Time”), Merger Sub merged with and into MRCC, with MRCC continuing as the surviving company and as a wholly owned subsidiary of the Company, and, immediately thereafter, MRCC merged into the Company, with the Company continuing as the surviving company (collectively, the “Mergers”). MRCC also entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Monroe Capital Income Plus Corporation (“MCIP”), and MC Advisors, pursuant to which, MCIP acquired all of MRCC’s investment assets and liabilities at fair value, for cash (the “Asset Sale” and together with the Merger, the “Transactions”).
Previous report
We use an internal credit rating system which rates each debt investment on a scale of 4 to 1, with 4 being the highest credit quality rating and 3 being the rating for a standard level of risk. A rating of 2 represents an increased level of risk and, while no loss is currently anticipated for a 2‑rated debt investment, there is potential for future loss of principal. A rating of 1 represents a deteriorating credit quality and a high degree of risk of loss of principal. Our internal credit rating system is not a national credit rating system. As of March 31, 2026 and December 31, 2025, our debt investments had a weighted average credit rating of 3.0 and 2.9, respectively. The following table shows the classification of our debt investment portfolio by credit rating as of March 31, 2026 and December 31, 2025:
Previous report
Recently issued accounting pronouncement
Previous report
On April 1, 2026, we funded a $15.0 million debt investment to a new portfolio company, Stellar Cyber, Inc.
Previous report
On April 14, 2026, we closed the Merger with MRCC. In connection with the closing of the Merger, we received approximately $141.1 million in cash and issued 20,370,645 shares of our common stock in the aggregate, or 0.9402 shares of our common stock for each share of MRCC common stock, to MRCC stockholders (and payment of cash in lieu of fractional shares). Former MRCC stockholders and our legacy stockholders own 29.86% and 70.14% of the combined company, respectively, immediately following the closing of the Merger.
Previous report
On April 14, 2026, we repaid the outstanding balance of $45.0 million on our Key Facility from the proceeds of our merger with MRCC.
Previous report
On April 30, 2026, we funded a $3.0 million debt investment to a new portfolio company, Bastille Buyer, Inc.
Reworded paragraphs (40)
Previous wording
We are a specialty finance company that lends to and invests in development-stage companies in the technology, life science, healthcare information and services and sustainability industries, which we refer to as our “Target Industries.” Our investment objective is to maximize our investment portfolio’s total return by generating current income from the debt investments we make and capital appreciation from the warrants we receive when making such debt investments. We are focused on making secured debt investments, which we refer to collectively as “Venture Loans,” to venture capital and private equity backed companies and publicly traded companies in our Target Industries, which we refer to as “Venture Lending.” Our debt investments are typically secured by first liens or first liens behind a secured revolving line of credit, or collectively “Senior Term Loans.” Some of our debt investments may also be subordinated to term debt provided by third parties. As of March 31, 2026, 97.5%, or $629.3 million, of our debt investment portfolio at fair value consisted of Senior Term Loans. Venture Lending is typically characterized by (1) the making of a secured debt investment after a venture capital or equity investment in the portfolio company has been made, which investment provides a source of cash to fund the portfolio company’s debt service obligations under the Venture Loan, (2) the senior priority of the Venture Loan which requires repayment of the Venture Loan prior to the equity investors realizing a return on their capital, (3) the amortization of the Venture Loan and (4) the lender’s receipt of warrants or other success fees with the making of the Venture Loan.
Current wording
We are a specialty finance company that lends to and invests in development-stage companies in the technology, life science, healthcare information and services and sustainability industries, which we refer to as our “Target Industries.” Our investment objective is to maximize our investment portfolio’s total return by generating current income from the debt investments we make and capital appreciation from the warrants we receive when making such debt investments. We are focused on making secured debt investments, which we refer to collectively as “Venture Loans,” to venture capital and private equity backed companies and publicly traded companies in our Target Industries, which we refer to as “Venture Lending.” Our debt investments are typically secured by first liens or first liens behind a secured revolving line of credit, or collectively “Senior Term Loans.” Some of our debt investments may also be subordinated to term debt provided by third parties. As of June 30, 2026, 97.7%, or $633.3 million, of our debt investment portfolio at fair value consisted of Senior Term Loans. Venture Lending is typically characterized by (1) the making of a secured debt investment after a venture capital or equity investment in the portfolio company has been made, which investment provides a source of cash to fund the portfolio company’s debt service obligations under the Venture Loan, (2) the senior priority of the Venture Loan which requires repayment of the Venture Loan prior to the equity investors realizing a return on their capital, (3) the amortization of the Venture Loan and (4) the lender’s receipt of warrants or other success fees with the making of the Venture Loan.
Previous wording
We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a BDC under the Investment Company Act of 1940, as amended, or the 1940 Act. In addition, for U.S. federal income tax purposes, we have elected to be treated as a RIC under Subchapter M of the Code. As a BDC, we are required to comply with regulatory requirements, including limitations on our use of debt. We are permitted to, and expect to, finance our investments through borrowings subject to a 150% asset coverage test. As defined in the 1940 Act, asset coverage of 150% means that for every $100 of net assets a BDC holds, it may raise up to $200 from borrowing and issuing senior securities. The amount of leverage that we may employ will depend on our assessment of market conditions and other factors at the time of any proposed borrowing. As a RIC, we generally are not subject to corporate-level income taxes on our investment company taxable income, determined without regard to any deductions for dividends paid, and our net capital gain that we distribute as dividends for U.S. federal income tax purposes to our stockholders as long as we meet certain source-of-income, distribution, asset diversification and other requirements.
Current wording
We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a BDC under the Investment Company Act of 1940, as amended, or the 1940 Act. In addition, for U.S. federal income tax purposes, we have elected to be treated as a RIC under Subchapter M of the Code. As a BDC, we are required to comply with regulatory requirements, including limitations on our use of debt. We are permitted to, and expect to, finance our investments through borrowings subject to a 150% asset coverage test. In accordance with GAAP, any borrowings of the RoHo Joint Venture are not included in the asset coverage test. As defined in the 1940 Act, asset coverage of 150% means that for every $100 of net assets a BDC holds, it may raise up to $200 from borrowing and issuing senior securities. The amount of leverage that we may employ will depend on our assessment of market conditions and other factors at the time of any proposed borrowing. As a RIC, we generally are not subject to corporate-level income taxes on our investment company taxable income, determined without regard to any deductions for dividends paid, and our net capital gain that we distribute as dividends for U.S. federal income tax purposes to our stockholders as long as we meet certain source-of-income, distribution, asset diversification and other requirements.
Previous wording
On April 14, 2026, we completed our previously announced merger with MRCC, the Merger Sub, Monroe Capital BDC Advisors, LLC, and the Advisor, pursuant to the Agreement and Plan of Merger, dated as of August 7, 2025 (the “Merger Agreement”). See “Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview” for additional information about the Mergers.
Current wording
On April 14, 2026, the Company completed its previously announced merger with Monroe Capital Corporation (“MRCC”), HMMS, Inc. (“Merger Sub”), Monroe Capital BDC Advisors, LLC, and the Advisor, pursuant to the Agreement and Plan of Merger, dated as of August 7, 2025 (the “Merger Agreement”) (the “Merger”). Former MRCC stockholders and legacy stockholders own 29.86% and 70.14% of the combined company, respectively, immediately following the closing of the Merger.
Previous wording
The following table shows total portfolio investment activity as of and for the three months ended March 31, 2026 and 2025:
Current wording
The following table shows total portfolio investment activity as of and for the three and six months ended June 30, 2026 and 2025:
Previous wording
The largest debt investments in our portfolio may vary from period to period as new debt investments are originated and existing debt investments are repaid. Our five largest debt investments at cost represented 24% and 26% of total debt investments outstanding as of March 31, 2026 and December 31, 2025, respectively. Our five largest debt investments at fair value represented 24% and 26% of total debt investments outstanding as of March 31, 2026 and December 31, 2025, respectively. No single debt investment at cost or fair value represented more than 10% of our total debt investments as of March 31, 2026 and December 31, 2025.
Current wording
The largest debt investments in our portfolio may vary from period to period as new debt investments are originated and existing debt investments are repaid. Our five largest debt investments at cost represented 24% and 26% of total debt investments outstanding as of June 30, 2026 and December 31, 2025, respectively. Our five largest debt investments at fair value represented 25% and 26% of total debt investments outstanding as of June 30, 2026 and December 31, 2025, respectively. No single debt investment at cost or fair value represented more than 10% of our total debt investments as of June 30, 2026 and December 31, 2025.
Previous wording
As of March 31, 2026, there were four debt investments with an internal credit rating of 1, with an aggregate cost of $33.1 million and an aggregate fair value of $24.3 million and there were four debt investments with an internal credit rating of 2, with an aggregate cost of $56.9 million and an aggregate fair value of $50.2 million. As of December 31, 2025, there were four debt investments with an internal credit rating of 1, with an aggregate cost of $33.8 million and an aggregate fair value of $24.5 million and there were four debt investments with an internal credit rating of 2, with an aggregate cost of $56.8 million and an aggregate fair value of $53.5 million.
Current wording
As of June 30, 2026, there were five debt investments with an internal credit rating of 5, with an aggregate cost of $58.0 million and an aggregate fair value of $31.3 million and there were four debt investments with an internal credit rating of 4, with an aggregate cost of $57.1 million and an aggregate fair value of $48.0 million. On a recast basis as of December 31, 2025, there were four debt investments with an internal credit rating of 5 (previously reported as rating 1 on the prior 4-to-1 scale), with an aggregate cost of $33.8 million and an aggregate fair value of $24.5 million and there were four debt investments with an internal credit rating of 4 (previously reported as rating 2 on the prior 4-to-1 scale), with an aggregate cost of $56.8 million and an aggregate fair value of $53.5 million. The period-over-period change in investments with internal credit ratings of 4 or 5 was primarily a result of the increase in the risk of loss of principal caused by certain portfolio companies' low cash positions, the difficult equity fundraising market, and/or the underperformance of such portfolio companies. This period-over-period change reflects underlying credit developments and is not attributable to the methodology change described above.
Previous wording
Net increase (decrease) in net assets resulting from operations can vary substantially from period to period for various reasons, including, without limitation, the recognition of realized gains and losses and unrealized appreciation and depreciation on investments. As a result, quarterly comparisons of net increase in net assets resulting from operations may not be meaningful.
Current wording
Net decrease in net assets resulting from operations can vary substantially from period to period for various reasons, including, without limitation, the recognition of realized gains and losses and unrealized appreciation and depreciation on investments. As a result, quarterly comparisons of net decrease in net assets resulting from operations may not be meaningful.
Previous wording
Total investment income decreased by $0.4 million, or 1.8%, to $24.1 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. For the three months ended March 31, 2026, total investment income consisted primarily of (1) $23.1 million in interest income from investments, which included $5.0 million in income from the accretion of origination fees and end of term payments and $1.3 million in PIK interest income and (2) $1.0 million in fee income.
Current wording
Total investment income increased by $0.5 million, or 2.1%, to $25.0 million for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. For the three months ended June 30, 2026, total investment income consisted primarily of (1) $23.9 million in interest income from investments, which included $5.5 million in income from the accretion of origination fees and end of term payments and $1.6 million in PIK interest income and (2) $1.1 million in fee income.
Previous wording
Interest income on debt investments decreased by $0.4 million, or 1.6%, to $23.1 million, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Interest income on debt investments for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 decreased primarily due to a decrease in the Prime Rate which is the base rate for most of our variable rate debt investments and a decrease of $19.5 million, or 3.0%, in our average earning debt investments partially offset by an increase in accelerated income from prepayments. The proportion of total investment income that resulted from the portion of ETPs not received in cash for the three months ended March 31, 2026 and 2025 was 6.0% and 4.6%, respectively. The increase in the proportion of total investment income that resulted from the portion of ETPs not received in cash was a result of an increase in accretion of final payments for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
Current wording
Interest income on debt investments increased by $1.3 million, or 5.7%, to $23.9 million, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Interest income on debt investments for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 increased primarily due to an increase of $41.2 million, or 6.7%, in our average earning debt investments. The proportion of total investment income that resulted from the portion of ETPs not received in cash for the three months ended June 30, 2026 and 2025 was 4.4% and 2.8%, respectively. The increase in the proportion of total investment income that resulted from the portion of ETPs not received in cash was a result of an increase in accretion of final payments for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.
Previous wording
PIK interest income increased by $1.0 million, or 348.4%, to $1.3 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. For the three months ended March 31, 2026 and 2025, 5.3% and 1.2%, respectively, of total investment income was attributable to non-cash PIK interest income. The increase in PIK interest income as a percentage of total investment income was primarily due to an increase in earning assets that contain a PIK feature for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
Current wording
PIK interest income increased by $1.3 million, or 544.4%, to $1.6 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. For the three months ended June 30, 2026 and 2025, 6.3% and 1.0%, respectively, of total investment income was attributable to non-cash PIK interest income. The increase in PIK interest income as a percentage of total investment income was primarily due to an increase in earning assets that contain a PIK feature for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.
Previous wording
Fee income, which includes success fee, other fee and prepayment fee income on debt investments, decreased by $0.1 million, or 6.1%, to $1.0 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to a lower success fee and other fee income for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
Current wording
Fee income, which includes success fee, other fee and prepayment fee income on debt investments, decreased by $0.8 million, or 40.3%, to $1.1 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 primarily due to a lower aggregate amount of principal prepayments for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.
Previous wording
Investment income, consisting of interest income and fees on debt investments, can fluctuate significantly upon repayment of large debt investments. Interest income from the five largest debt investments at cost in the aggregate accounted for 23% and 24% of investment income for the three months ended March 31, 2026 and 2025, respectively. Interest income from the five largest debt investments at fair value in the aggregate accounted for 23% and 24% of investment income for the three months ended March 31, 2026 and 2025, respectively.
Current wording
Investment income, consisting of interest income and fees on debt investments, can fluctuate significantly upon repayment of large debt investments. Interest income from the five largest debt investments at cost in the aggregate accounted for 23% and 18% of investment income for the three months ended June 30, 2026 and 2025, respectively. Interest income from the five largest debt investments at fair value in the aggregate accounted for 23% and 22% of investment income for the three months ended June 30, 2026 and 2025, respectively.
Previous wording
Total expenses increased by $1.4 million, or 10.6%, to $14.8 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. Total expenses for each period consisted of interest expense, base management fee, incentive and administrative fees, professional fees and general and administrative expenses.
Current wording
Total expenses increased by $4.7 million, or 36.9%, to $17.4 million for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. Total expenses for each period consisted of interest expense, base management fee, incentive and administrative fees, professional fees and general and administrative expenses. For the three months ended June 30, 2026, transaction costs directly attributable to the Merger were included in total expenses.
Previous wording
Interest expense decreased by $0.5 million, or 5.8%, to $8.2 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. Interest expense, which includes the amortization of debt issuance costs, decreased primarily due to a decrease in average borrowings for the three months ended March 31, 2026 of $25.3 million, or 5.4%, as compared to the three months ended March 31, 2025 and a decrease in our effective cost of debt for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025.
Current wording
Interest expense decreased by $0.4 million, or 4.9%, to $7.8 million for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. Interest expense, which includes the amortization of debt issuance costs, decreased primarily due to a decrease in average borrowings for the three months ended June 30, 2026 of $26.5 million, or 6.0%, as compared to the three months ended June 30, 2025.
Previous wording
Base management fee expense decreased by $0.1 million, or 1.9%, to $3.1 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. Base management fee decreased primarily due to a decrease of $15.0 million, or 2.1%, in average gross assets less cash for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025.
Current wording
Base management fee expense increased by $0.2 million, or 6.4%, to $3.1 million for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. Base management fee increased primarily due to an increase of $47.0 million, or 6.9%, in average gross assets less cash for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025.
Previous wording
Administrative fee expense, professional fees and general and administrative expenses were $1.8 million and $1.6 million for the three months ended March 31, 2026 and 2025, respectively.
Current wording
Administrative fee expense, professional fees and general and administrative expenses were $2.0 million and $1.5 million for the three months ended June 30, 2026 and 2025, respectively.
Previous wording
During the three months ended March 31, 2026 and March 31, 2025, we realized netlosses on investments totaling$0.2 million and$0.001 million, respectively. During the three months ended March 31, 2026, we converted$15.1 million in outstanding principal of the 2030 Convertible Notes (as defined below) which resulted in a realized loss on extinguishment of debt of $1.3 million. During the same period, we redeemed all of the outstanding principal balance of the 2026 Notes (as defined below) which resulted in a realized loss onextinguishment of debt of $0.1 million.
Current wording
During the three months ended June 30, 2026, we realized netlosses on investments totaling$6.1 million primarily due to the settlement of one of our other investments. During the three months ended June 30, 2025, we realized net losses on investments totaling$9.3 million primarily due to the settlement of two of our debt investments. During the same period, we converted $12.5 million in outstanding principal of the 2031 Convertible Notes which resulted in a realized loss on extinguishment of debt of $0.8 million.
Previous wording
Performance based incentive fee expense increased by $1.8 million to $1.8 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. There was no performance based incentive fee expense for three months ended March 31, 2025. This increase was due to an Incentive Fee Cap calculated based on the Incentive Fee Cap and Deferral Mechanism in our Investment Management Agreement of $0.4 million for the three months ended March 31, 2026 compared to an Incentive Fee Cap of $2.1 million for the three months ended March 31, 2025. The Incentive Fee Cap and Deferral Mechanism resulted in $0.4 million and $2.1 million of reduced incentive fee expense and increased net investment income for the three months ended March 31, 2026 and 2025, respectively. The incentive fee on pre-incentive fee net investment income was subject to the Incentive Fee Cap for the three months ended March 31, 2026 due to the cumulative incentive fees paid exceeding 20% of cumulative pre-incentive fee net return during the applicable quarter and the 11 preceding full calendar quarters.
Current wording
Performance based incentive fee expense increased by $1.8 million to $1.8 million for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. There was no performance based incentive fee expense for six months ended June 30, 2025. This increase was due to an Incentive Fee Cap calculated based on the Incentive Fee Cap and Deferral Mechanism in our Investment Management Agreement of $0.8 million for the six months ended June 30, 2026 compared to an Incentive Fee Cap of $4.4 million for the six months ended June 30, 2025. The Incentive Fee Cap and Deferral Mechanism resulted in $0.8 million and $4.4 million of reduced incentive fee expense and increased net investment income for the six months ended June 30, 2026 and 2025, respectively. The incentive fee on pre-incentive fee net investment income was subject to the Incentive Fee Cap for the six months ended June 30, 2026 due to the cumulative incentive fees paid exceeding 20% of cumulative pre-incentive fee net return during the applicable quarter and the 11 preceding full calendar quarters.
Previous wording
During the three months ended March 31, 2026, net unrealized depreciation on investments totaled $4.6 million which was primarily due to the unrealized depreciation on two of our debt investments and one of our equity investments and the unrealized depreciation on our warrant investments. During the three months ended March 31, 2025, net unrealized depreciation on investments totaled $32.2 million which was primarily due to the unrealized depreciation on three of our debt investments and two of our equity investments. The difficult equity fundraising market and under performance of certain portfolio companies, among other factors, resulted in our reduction of the fair market value of the debt investments in such portfolio companies, thus increasing the unrealized depreciation on such debt investments.
Current wording
During the six months ended June 30, 2026, net unrealized appreciation on investments totaled $43.1 million which was primarily due to the unrealized depreciation on one of our equity investments and three of our debt investments partially offset by the reversal of previously recorded unrealized depreciation from the settlement of one of our other investments. During the six months ended June 30, 2025, net unrealized depreciation on investments totaled $54.3 million which was primarily due to (1) the unrealized depreciation on seven of our debt investments, (2) the unrealized depreciation on four of our other investments and (3) the unrealized depreciation on two of our equity investments partially offset by (1) the reversal of previously recorded unrealized depreciation from the settlement of one of our debt investments and (2) the unrealized appreciation of two of our warrant investments. The difficult equity fundraising market and under performance of certain portfolio companies, among other factors, resulted in our reduction of the fair market value of the debt investments in such portfolio companies, thus resulting in the unrealized depreciation on such debt investments.
Previous wording
As of March 31, 2026 and December 31, 2025, we had cash and investments in money market funds of $70.6 million and $140.2 million, respectively. Cash and investments in money market funds are available to fund new investments, reduce borrowings, pay expenses, repurchase common stock and pay distributions. In addition, as of March 31, 2026 and December 31, 2025, we had $2.6 million and $2.5 million, respectively, of restricted investments in money market funds. Restricted investments in money market funds may be used to make monthly interest and principal payments on our NYL Facility or our Nuveen Facility. Our primary sources of capital have been from our public equity offerings, use of our revolving credit facility (the “Key Facility”) with KeyBank National Association (“Key”), the Note Funding Agreement (the “NYL Facility”), with several entities owned or affiliated with New York Life Insurance Company and the Nuveen Note Funding Agreement (the “Nuveen Facility”, together with the Key Facility and the NYL Facility, the “Credit Facilities”) with several entities owned or affiliated with Nuveen Alternative Advisors LLC, and issuance of our public and private debt securities.
Current wording
As of June 30, 2026 and December 31, 2025, we had cash and investments in money market funds of $132.3 million and $140.2 million, respectively. Cash and investments in money market funds are available to fund new investments, reduce borrowings, pay expenses, repurchase common stock and pay distributions. In addition, as of June 30, 2026 and December 31, 2025, we had $2.7 million and $2.5 million, respectively, of restricted investments in money market funds. Restricted investments in money market funds may be used to make monthly interest and principal payments on our NYL Facility or our Nuveen Facility. Our primary sources of capital have been from our public equity offerings, use of our revolving credit facility (the “Key Facility”) with KeyBank National Association (“Key”), the Note Funding Agreement (the “NYL Facility”), with several entities owned or affiliated with New York Life Insurance Company and the Nuveen Note Funding Agreement (the “Nuveen Facility”, together with the Key Facility and the NYL Facility, the “Credit Facilities”) with several entities owned or affiliated with Nuveen Alternative Advisors LLC, and issuance of our public and private debt securities.
Previous wording
During the three months ended March 31, 2025, we sold 404,305 shares of common stock under the 2023 Equity Distribution Agreement. For the same period, we received total accumulated net proceeds of approximately $3.6 million, including $0.1 million of offering expenses, from these sales.
Current wording
During the six months ended June 30, 2025, we sold 404,305 shares of common stock under the 2023 Equity Distribution Agreement. For the same period, we received total accumulated net proceeds of approximately $3.6 million, including $0.2 million of offering expenses, from these sales.
Previous wording
On May 1, 2026, our Board extended a previously authorized stock repurchase program which allows us to repurchase up to $10.0 million of our common stock at prices below our net asset value (“NAV”) per share as reported in our most recent consolidated financial statements, provided such purchases, in the aggregate, do not exceed two percent (2%) of the shares outstanding at the time of purchase and such shares are purchased only when the such shares are trading below 90% of our most recently disclosed NAV per share. Under the repurchase program, we may, but are not obligated to, repurchase shares of our outstanding common stock in the open market or in privately negotiated transactions from time to time. Any repurchases by us will comply with the requirements of Rule 10b‑18 under the Exchange Act and any applicable requirements of the 1940 Act. Unless extended by our Board, the repurchase program will terminate on the earlier of June 30, 2027 or the repurchase of $10.0 million of our common stock. During the three months ended March 31, 2026 and 2025, we did not make any repurchases of our common stock under our stock repurchase program. From the date of the inception of our stock repurchase program through March 31, 2026, we repurchased 167,465 shares of our common stock at an average price of $11.22 on the open market at a total cost of $1.9 million. From time to time, our Board assesses the size and effectiveness of the stock repurchase program and could elect to increase or decrease the size of the program in the future.
Current wording
On May 1, 2026, our Board extended a previously authorized stock repurchase program which allows us to repurchase up to $10.0 million of our common stock at prices below our net asset value (“NAV”) per share as reported in our most recent consolidated financial statements, provided such purchases, in the aggregate, do not exceed two percent (2%) of the shares outstanding at the time of purchase and such shares are purchased only when the such shares are trading below 90% of our most recently disclosed NAV per share. Under the repurchase program, we may, but are not obligated to, repurchase shares of our outstanding common stock in the open market or in privately negotiated transactions from time to time. Any repurchases by us will comply with the requirements of Rule 10b‑18 under the Exchange Act and any applicable requirements of the 1940 Act. Unless extended by our Board, the repurchase program will terminate on the earlier of June 30, 2027 or the repurchase of $10.0 million of our common stock. During the three and six months ended June 30, 2026, we repurchased 1,365,222 shares of our common stock at an average price of $4.54 on the open market at a total cost of $6.2 million. During the three and six months ended June 30, 2025, we did not make any repurchases of our common stock under our stock repurchase program. From the date of the inception of our stock repurchase program through June 30, 2026, we repurchased 1,532,687 shares of our common stock at an average price of $5.27 on the open market at a total cost of $8.1 million. From time to time, our Board assesses the size and effectiveness of the stock repurchase program and could elect to increase or decrease the size of the program in the future.
Previous wording
At March 31, 2026, the outstanding principal balance under the Key Facility was $45.0 million. At December 31, 2025, there was no outstanding principal balance under the Key Facility. As of March 31, 2026 and December 31, 2025, we had borrowing capacity under the Key Facility of $105.0 million and $150.0, respectively. At March 31, 2026 and December 31, 2025, $23.3 million and $49.6 million, respectively, was available for borrowing under the Key Facility, subject to existing terms and advance rates.
Current wording
At June 30, 2026 and December 31, 2025, there was no outstanding principal balance under the Key Facility. As of June 30, 2026 and December 31, 2025, we had borrowing capacity under the Key Facility of $150.0 million. At June 30, 2026 and December 31, 2025, $82.7 million and $49.6 million, respectively, was available for borrowing under the Key Facility, subject to existing terms and advance rates.
Previous wording
At March 31, 2026 and December 31, 2025, the outstanding principal balance under the NYL Facility was $181.0 million. As of March 31, 2026 and December 31, 2025, we had borrowing capacity under the NYL Facility of $69.0 million. At March 31, 2026 and December 31, 2025, $2.6 million and $1.9 million, respectively, was available for borrowing under the NYL Facility, subject to existing terms and advance rates.
Current wording
At June 30, 2026 and December 31, 2025, the outstanding principal balance under the NYL Facility was $181.0 million. As of June 30, 2026 and December 31, 2025, we had borrowing capacity under the NYL Facility of $69.0 million. At June 30, 2026 and December 31, 2025, $7.9 million and $1.9 million, respectively, was available for borrowing under the NYL Facility, subject to existing terms and advance rates.
Previous wording
At March 31, 2026 and December 31, 2025, the outstanding principal balance under the Nuveen Facility was $90.0 million. As of March 31, 2026 and December 31, 2025, we had borrowing capacity under the Nuveen Facility of $110.0 million. At March 31, 2026 and December 31, 2025, $22.3 million and $12.1 million, respectively, was available for borrowing under the Nuveen Facility, subject to existing terms and advance rates.
Current wording
At June 30, 2026 and December 31, 2025, the outstanding principal balance under the Nuveen Facility was $90.0 million. As of June 30, 2026 and December 31, 2025, we had borrowing capacity under the Nuveen Facility of $110.0 million. At June 30, 2026 and December 31, 2025, $26.7 million and $12.1 million, respectively, was available for borrowing under the Nuveen Facility, subject to existing terms and advance rates.
Previous wording
Our operating activities used cash of $42.1 million for the three months ended March 31, 2026, and our financing activities used cash of $27.3 million for the same period. Our operating activities used cash primarily to purchase investments in portfolio companies offset by cash provided by principal payments received on our debt investments. Our financing activities used cash primarily to repay our 2026 Notes and to pay distributions to our stockholders partially offset by advances on our Key Facility.
Current wording
Our operating activities provided cash of $81.4 million for the six months ended June 30, 2026, and our financing activities used cash of $89.1 million for the same period. Our operating activities provided cash primarily from cash received from principal payments received on our debt investments partially offset by cash used to purchase investments in portfolio companies. Our financing activities used cash primarily to repay our 2026 Notes and our Key Facility and to pay distributions to our stockholders partially offset by advances on our Key Facility.
Previous wording
Our operating activities used cash of $13.2 million for the three months ended March 31, 2025, and our financing activities used cash of $10.2 million for the same period. Our operating activities used cash primarily to purchase investments in portfolio companies partially offset by cash provided by principal payments received on our debt investments. Our financing activities used cash primarily to repay our 2022 Asset-Backed Notes and to pay distributions to our stockholders partially offset by an advance on our Nuveen Facility and the sale of shares through our ATM for net proceeds of $3.6 million.
Current wording
Our operating activities provided cash of $36.4 million for the six months ended June 30, 2025, and our financing activities used cash of $56.1 million for the same period. Our operating activities provided cash primarily from principal payments received on our debt investments partially offset by cash used to purchase investments in portfolio companies. Our financing activities used cash primarily to repay our 2022 Asset-Backed Notes and to pay distributions to our stockholders partially offset by an advance on our Nuveen Facility and the sale of shares through our ATM for net proceeds of $3.6 million.
Previous wording
There were $181.0 million in notes issued to the NYL Noteholders as of March 31, 2026 and December 31, 2025 at an interest rate of 6.57%. As of March 31, 2026 and December 31, 2025, we had borrowing capacity under the NYL Facility of $69.0 million. At March 31, 2026 and December 31, 2025, $2.6 million and $1.9 million, respectively, was available for borrowing, subject to existing terms and advance rates.
Current wording
There were $181.0 million in notes issued to the NYL Noteholders as of June 30, 2026 and December 31, 2025 at an interest rate of 6.61% and 6.57%, respectively. As of June 30, 2026 and December 31, 2025, we had borrowing capacity under the NYL Facility of $69.0 million. At June 30, 2026 and December 31, 2025, $7.9 million and $1.9 million, respectively, was available for borrowing, subject to existing terms and advance rates.
Previous wording
There were $90.0 million in notes issued to the Nuveen Noteholders as of March 31, 2026 and December 31, 2025 at an interest rate of 7.21%. As of March 31, 2026 and December 31, 2025, we had borrowing capacity under the Nuveen Facility of $110.0 million. At March 31, 2026 and December 31, 2025, $22.3 million and $12.1 million, respectively, was available for borrowing, subject to existing terms and advance rates.
Current wording
There were $90.0 million in notes issued to the Nuveen Noteholders as of June 30, 2026 and December 31, 2025 at an interest rate of 7.21%. As of June 30, 2026 and December 31, 2025, we had borrowing capacity under the Nuveen Facility of $110.0 million. At June 30, 2026 and December 31, 2025, $26.7 million and $12.1 million, respectively, was available for borrowing, subject to existing terms and advance rates.
Previous wording
During the three months ended March 31, 2026, the holders of a portion of the 2030 Convertible Notes converted $15.1 million in outstanding principal of the 2030 Convertible Notes plus accrued but unpaid interest on such outstanding principal as of the conversion date into 2,118,250 shares of common stock at a weighted average conversion price of $7.12 together with cash in lieu of fractional shares, in accordance with noteholder conversion notice.
Current wording
During the six months ended June 30, 2026, the holders of a portion of the 2030 Convertible Notes converted $15.1 million in outstanding principal of the 2030 Convertible Notes plus accrued but unpaid interest on such outstanding principal as of the conversion date into 2,118,250 shares of common stock at a weighted average conversion price of $7.12 together with cash in lieu of fractional shares, in accordance with noteholder conversion notice.
Previous wording
During the three months ended March 31, 2026 and 2025, the holders of the 2031 Convertible Notes did not convert any of the 2031 Convertible Notes.
Current wording
During the three and six months ended June 30, 2026, the holders of the 2031 Convertible Notes did not convert any of the 2031 Convertible Notes.
Previous wording
As of March 31, 2026 and December 31, 2025, other assets were $9.9 million and $9.1 million, respectively, which were primarily comprised of debt issuance costs and prepaid expenses.
Current wording
As of June 30, 2026 and December 31, 2025, other assets were $7.8 million and $9.1 million, respectively, which were primarily comprised of debt issuance costs and prepaid expenses.
Previous wording
In the normal course of business, we are party to financial instruments with off-balance sheet risk. These consist primarily of unfunded commitments to extend credit, in the form of loans, to our portfolio companies. Unfunded commitments to provide funds to portfolio companies are not reflected on our balance sheet. Our unfunded commitments may be significant from time to time. As of March 31, 2026, we had unfunded commitments of $155.0 million. This includes $15.0 million of undrawn revolver commitments. These commitments are subject to the same underwriting and ongoing portfolio maintenance requirements as are the financial instruments that we hold on our balance sheet. In addition, these commitments are often subject to financial or non-financial milestones and other conditions to borrowing that must be achieved before the commitment can be drawn. Since these commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. We regularly monitor our unfunded commitments and anticipated refinancings, maturities and capital raising, to ensure that we have sufficient liquidity to fund unfunded commitments. As of March 31, 2026, we reasonably believed that our assets would provide adequate financial resources to satisfy all of our unfunded commitments.
Current wording
In the normal course of business, we are party to financial instruments with off-balance sheet risk. These consist primarily of unfunded commitments to extend credit, in the form of loans, to our portfolio companies. Unfunded commitments to provide funds to portfolio companies are not reflected on our balance sheet. Our unfunded commitments may be significant from time to time. As of June 30, 2026, we had unfunded commitments of $153.5 million. This includes $16.6 million of undrawn revolver commitments. These commitments are subject to the same underwriting and ongoing portfolio maintenance requirements as are the financial instruments that we hold on our balance sheet. In addition, these commitments are often subject to financial or non-financial milestones and other conditions to borrowing that must be achieved before the commitment can be drawn. Since these commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. We regularly monitor our unfunded commitments and anticipated refinancings, maturities and capital raising, to ensure that we have sufficient liquidity to fund unfunded commitments. As of June 30, 2026, we reasonably believed that our assets would provide adequate financial resources to satisfy all of our unfunded commitments.
Previous wording
The incentive fee on Pre-Incentive Fee Net Investment Income is subject to a fee cap and deferral mechanism which is determined based upon a look-back period of up to three years and is expensed when incurred. For this purpose, the Incentive Fee Look-back Period includes the relevant calendar quarter and the 11 preceding full calendar quarters. Each quarterly incentive fee payable on Pre-Incentive Fee Net Investment Income is subject to the Incentive Fee Cap and Deferral Mechanism. The Incentive Fee Cap is equal to (a) 20.00% of Cumulative Pre-Incentive Fee Net Return during the Incentive Fee Look-back Period less (b) cumulative incentive fees of any kind paid to our Advisor during the Incentive Fee Look-back Period. To the extent the Incentive Fee Cap is zero or a negative value in any calendar quarter, we will not pay an incentive fee on Pre-Incentive Fee Net Investment Income to our Advisor in that quarter. To the extent that the payment of incentive fees on Pre-Incentive Fee Net Investment Income is limited by the Incentive Fee Cap, the payment of such fees will be deferred and paid in subsequent calendar quarters up to three years after their date of deferment, subject to certain limitations, which are set forth in the Investment Management Agreement. During the three months ended March 31, 2026 and 2025, the Incentive Fee Cap and Deferral Mechanism resulted in deferral of $0.4 million and $2.1 million, respectively, of incentive fee which may become subject to payment up to three years after the date of deferment. As of March 31, 2026 and December 31, 2025, the total amount subject to recoupment was $28.2 million and $28.0 million, respectively. Commencing with the quarter ending March 31, 2025 and terminated with the quarter ending December 31, 2025, our Advisor agreed to waive the portion of its quarterly income incentive fee, if any, if and to the extent that, after payment of such portion, our net investment income per share for such quarter would be less than the quarterly distribution per share declared in such quarter. During the three months ended March 31, 2025, our Advisor did not earn an income incentive fee.
Current wording
The incentive fee on Pre-Incentive Fee Net Investment Income is subject to a fee cap and deferral mechanism which is determined based upon a look-back period of up to three years and is expensed when incurred. For this purpose, the Incentive Fee Look-back Period includes the relevant calendar quarter and the 11 preceding full calendar quarters. Each quarterly incentive fee payable on Pre-Incentive Fee Net Investment Income is subject to the Incentive Fee Cap and Deferral Mechanism. The Incentive Fee Cap is equal to (a) 20.00% of Cumulative Pre-Incentive Fee Net Return during the Incentive Fee Look-back Period less (b) cumulative incentive fees of any kind paid to our Advisor during the Incentive Fee Look-back Period. To the extent the Incentive Fee Cap is zero or a negative value in any calendar quarter, we will not pay an incentive fee on Pre-Incentive Fee Net Investment Income to our Advisor in that quarter. To the extent that the payment of incentive fees on Pre-Incentive Fee Net Investment Income is limited by the Incentive Fee Cap, the payment of such fees will be deferred and paid in subsequent calendar quarters up to three years after their date of deferment, subject to certain limitations, which are set forth in the Investment Management Agreement. During the three months ended June 30, 2026 and 2025, the Incentive Fee Cap and Deferral Mechanism resulted in deferral of $0.4 million and $2.3 million, respectively, of incentive fee which may become subject to payment up to three years after the date of deferment. During six months ended June 30, 2026 and 2025, the Incentive Fee Cap and Deferral Mechanism resulted in deferral of $0.8 million and $4.4 million, respectively, of incentive fee which may become subject to payment up to three years after the date of deferment. As of June 30, 2026 and December 31, 2025, the total amount subject to recoupment was $25.4 million and $28.0 million, respectively. Commencing with the quarter ending March 31, 2025 and terminated with the quarter ending December 31, 2025, our Advisor agreed to waive the portion of its quarterly income incentive fee, if any, if and to the extent that, after payment of such portion, our net investment income per share for such quarter would be less than the quarterly distribution per share declared in such quarter. During the six months ended June 30, 2025, our Advisor did not earn an income incentive fee.
Previous wording
We have entered into the Investment Management Agreement with our Advisor. Our Advisor is registered as an investment adviser under the Investment Advisers Act of 1940, as amended. Our investment activities are managed by our Advisor and supervised by our Board, the majority of whom are independent directors. Under the Investment Management Agreement, we have agreed to pay our Advisor a base management fee as well as an incentive fee. During the three months ended March 31, 2026 and 2025, our Advisor earned $4.9 million and $3.2 million pursuant to the Investment Management Agreement.
Current wording
We have entered into the Investment Management Agreement with our Advisor. Our Advisor is registered as an investment adviser under the Investment Advisers Act of 1940, as amended. Our investment activities are managed by our Advisor and supervised by our Board, the majority of whom are independent directors. Under the Investment Management Agreement, we have agreed to pay our Advisor a base management fee as well as an incentive fee. During the three months ended June 30, 2026 and 2025, our Advisor earned $3.1 million and $3.0 million pursuant to the Investment Management Agreement. During the six months ended June 30, 2026 and 2025, our Advisor earned $8.0 million and $6.1 million pursuant to the Investment Management Agreement.
Previous wording
We have also entered into the Administration Agreement with our Advisor. Under the Administration Agreement, we have agreed to reimburse our Advisor for our allocable portion of overhead and other expenses incurred by our Advisor in performing its obligations under the Administration Agreement, including rent and our allocable portion of the costs of compensation and related expenses of our Chief Financial Officer and Chief Compliance Officer and their respective staffs. In addition, pursuant to the terms of the Administration Agreement our Advisor provides us with the office facilities and administrative services necessary to conduct our day-to-day operations. During the three months ended March 31, 2026 and 2025, our Advisor earned $0.6 million and $0.4 million, respectively, pursuant to the Administration Agreement.
Current wording
We have also entered into the Administration Agreement with our Advisor. Under the Administration Agreement, we have agreed to reimburse our Advisor for our allocable portion of overhead and other expenses incurred by our Advisor in performing its obligations under the Administration Agreement, including rent and our allocable portion of the costs of compensation and related expenses of our Chief Financial Officer and Chief Compliance Officer and their respective staffs. In addition, pursuant to the terms of the Administration Agreement our Advisor provides us with the office facilities and administrative services necessary to conduct our day-to-day operations. During the three months ended June 30, 2026 and 2025, our Advisor earned $0.4 million, pursuant to the Administration Agreement. During the six months ended June 30, 2026 and 2025, our Advisor earned $1.1 million and $0.8 million, respectively, pursuant to the Administration Agreement.
Previous wording
We believe that we derive substantial benefits from our relationship with our Advisor. Our Advisor and its affiliates may manage other investment vehicles with similar or overlapping investment strategies as us. Our Advisor may provide us with an opportunity to co-invest with other investment vehicles managed by our Advisor, Monroe and/or their affiliates. Under the 1940 Act, absent receipt of exemptive relief from the SEC, we and our affiliates are precluded from co-investing in negotiated investments with other funds and accounts sponsored or managed by our Advisor, Monroe and their affiliates. Since June 30, 2023, we and our Advisor have relied on exemptive relief from the SEC granted to certain affiliates of Monroe on October 15, 2014, as amended on January 10, 2023. Monroe, et al. filed an application on May 14, 2025, and amendments to the application on August 6, 2025 and October 3, 2025, for a new exemptive relief order for co-investments for the Company, the Advisor, Monroe and its affiliates. On November 21, 2025, a notice of the filing of the application was issued (Investment Company Act Release No. 35799). On December 17, 2025, the SEC granted an order for such exemptive relief (File No. 812-15798). The exemptive relief affords our Advisor greater flexibility to negotiate the terms of co-investments if our Board determines that it would be advantageous for us to co-invest with other accounts sponsored or managed by our Advisor, Monroe or their affiliates in a manner consistent with our investment objectives, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors.
Current wording
We believe that we derive substantial benefits from our relationship with our Advisor. Our Advisor and its affiliates may manage other investment vehicles with similar or overlapping investment strategies as us. Our Advisor may provide us with an opportunity to co-invest with other investment vehicles managed by our Advisor, Monroe and/or their affiliates. Under the 1940 Act, absent receipt of exemptive relief from the SEC, we and our affiliates are precluded from co-investing in negotiated investments with other funds and accounts sponsored or managed by our Advisor, Monroe and their affiliates. On December 17, 2025, the SEC granted Monroe and its affiliates, our Advisor, and us exemptive relief for co-investments for us, our Advisor, Monroe and its affiliates. We are required to comply with all terms and conditions required therein. The exemptive relief affords our Advisor greater flexibility to negotiate the terms of co-investments if our Board determines that it would be advantageous for us to co-invest with other accounts sponsored or managed by our Advisor, Monroe or their affiliates in a manner consistent with our investment objectives, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors.
Previous wording
Interest on debt investments is accrued and included in income based on contractual rates applied to principal amounts outstanding. Interest income is determined using a method that results in a level rate of return on principal amounts outstanding. Generally, when a debt investment becomes 90 days or more past due, or if we otherwise do not expect to receive interest and principal repayments, the debt investment is placed on non-accrual status and the recognition of interest income may be discontinued. Interest payments received on non-accrual debt investments may be recognized as income, on a cash basis, or applied to principal depending upon management’s judgment at the time the debt investment is placed on non-accrual status. For the three months ended March 31, 2026, we recognized in interest income $0.1 million from debt investments while on non-accrual status. For the three months ended March 31, 2025, we did not recognize any interest income from debt investments on non-accrual status.
Current wording
Interest on debt investments is accrued and included in income based on contractual rates applied to principal amounts outstanding. Interest income is determined using a method that results in a level rate of return on principal amounts outstanding. Generally, when a debt investment becomes 90 days or more past due, or if we otherwise do not expect to receive interest and principal repayments, the debt investment is placed on non-accrual status and the recognition of interest income may be discontinued. Interest payments received on non-accrual debt investments may be recognized as income, on a cash basis, or applied to principal depending upon management’s judgment at the time the debt investment is placed on non-accrual status. For the three months ended June 30, 2026 and 2025, we recognized in interest income $0.03 million and $0.2 million, respectively, from debt investments while on non-accrual status. For the six months ended June 30, 2026 and 2025, we recognized in interest income $0.1 million and $0.2 million, respectively, from debt investments while on non-accrual status.
Previous wording
In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update, or ASU, No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). ASU No. 2024-03 requires disaggregated disclosure of certain costs and expenses, including purchase of inventory, employee compensation, depreciation, amortization and depletion, within relevant income statement captions. ASU 2024-03 is effective for years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption and retrospective application are permitted. We are currently evaluating the impact ASU No. 2024-03.
Current wording
In November 2024, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). ASU No. 2024-03 requires disaggregated disclosure of certain costs and expenses, including purchase of inventory, employee compensation, depreciation, amortization and depletion, within relevant income statement captions. ASU 2024-03 is effective for years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption and retrospective application are permitted. We are currently evaluating the impact ASU No. 2024-03.
Previous wording
On April 30, 2026, we funded a $4.0 million debt investment to a new portfolio company, Volt Bidco, Inc.
Current wording
On July 31, 2026, we funded a $0.1 million debt investment to an existing portfolio company Volt Bidco, Inc.
Rearranged current paragraphs (15)
Current report — wording carried from elsewhere
There was no performance based incentive fee expense for three months ended June 30, 2026 and 2025. The incentive fee on pre-incentive fee net investment income was subject to an Incentive Fee Cap and Deferral Mechanism in our Investment Management Agreement of $0.4 million for the three months ended June 30, 2026 compared to an Incentive Fee Cap of $2.3 million for the three months ended June 30, 2025. The Incentive Fee Cap and Deferral Mechanism resulted in $0.4 million and $2.3 million of reduced incentive fee expense and increased net investment income for the three months ended June 30, 2026 and 2025, respectively. The incentive fee on pre-incentive fee net investment income was subject to the Incentive Fee Cap for the three months ended June 30, 2026 due to the cumulative incentive fees paid exceeding 20% of cumulative pre-incentive fee net return during the applicable quarter and the 11 preceding full calendar quarters.
Current report — wording carried from elsewhere
The following table shows consolidated results of operations for the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
Net decrease in net assets resulting from operations can vary substantially from period to period for various reasons, including, without limitation, the recognition of realized gains and losses and unrealized appreciation and depreciation on investments. As a result, quarterly comparisons of net decrease in net assets resulting from operations may not be meaningful.
Current report — wording carried from elsewhere
Total investment income increased by $0.1 million, or 0.2%, to $49.1 million for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. For the six months ended June 30, 2026, total investment income consisted primarily of (1) $47.0 million in interest income from investments, which included $10.5 million in income from the accretion of origination fees and end of term payments and $2.8 million in PIK interest income and (2) $2.1 million in fee income.
Current report — wording carried from elsewhere
Interest income on debt investments increased by $0.9 million, or 2.0%, to $47.0 million, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Interest income on debt investments for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 increased primarily due to an increase of $11.8 million, or 1.9%, in our average earning debt investments. The proportion of total investment income that resulted from the portion of ETPs not received in cash for the six months ended June 30, 2026 and 2025 was 5.2% and 3.7%, respectively. The increase in the proportion of total investment income that resulted from the portion of ETPs not received in cash was a result of an increase in accretion of final payments for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
Current report — wording carried from elsewhere
PIK interest income increased by $2.3 million, or 439.7%, to $2.8 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. For the six months ended June 30, 2026 and 2025, 5.8% and 1.1%, respectively, of total investment income was attributable to non-cash PIK interest income. The increase in PIK interest income as a percentage of total investment income was primarily due to an increase in earning assets that contain a PIK feature for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
Current report — wording carried from elsewhere
The following table shows our dollar-weighted annualized yield for the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
Investment income, consisting of interest income and fees on debt investments, can fluctuate significantly upon repayment of large debt investments. Interest income from the five largest debt investments at cost in the aggregate accounted for 22% and 17% of investment income for the six months ended June 30, 2026 and 2025, respectively. Interest income from the five largest debt investments at fair value in the aggregate accounted for 22% and 20% of investment income for the six months ended June 30, 2026 and 2025, respectively.
Current report — wording carried from elsewhere
Interest expense decreased by $0.9 million, or 5.4%, to $16.0 million for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. Interest expense, which includes the amortization of debt issuance costs, decreased primarily due to a decrease in average borrowings for the six months ended June 30, 2026 of $25.9 million, or 5.7%, as compared to the six months ended June 30, 2025.
Current report — wording carried from elsewhere
Net realized gains and losses and net unrealized appreciation and depreciation
Current report — wording carried from elsewhere
Realized gains or losses on investments are measured by the difference between the net proceeds from the repayment or sale and the cost basis of our investments without regard to unrealized appreciation or depreciation previously recognized. Realized gains or losses on investments include investments charged off during the period, net of recoveries. The net unrealized appreciation or depreciation on investments primarily reflects the change in portfolio investment fair values during the reporting period, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.
Current report — wording carried from elsewhere
During thesix months ended June 30, 2026, we realized net losses on investments totaling $6.3 million primarily due to the settlement of one of our other investments. During the six months ended June 30, 2026, we converted $15.1 million in outstanding principal of the 2030 Convertible Notes (as defined below) which resulted in a realized loss on extinguishment of debt of $1.3 million. During the same period, we redeemed all of the outstanding principal balance of the 2026 Notes (as defined below) which resulted in a realized loss on extinguishment of debt of $0.1 million. During thesix months ended June 30, 2025, we realized net losses on investments totaling$9.3 million primarily due to the settlement of two of our debt investments. During the same period, we converted $12.5 million in outstanding principal of the 2031 Convertible Notes which resulted in a realized loss on extinguishment of debt of $0.8 million.
Current report — wording carried from elsewhere
During the three and six months ended June 30, 2026, we did not sell any shares of common stock under the 2023 Equity Distribution Agreement.
Current report — wording carried from elsewhere
During the three months ended June 30, 2026, the holders of the 2030 Convertible Notes did not convert any of the 2030 Convertible Notes.
Current report — wording carried from elsewhere
During the three and six months ended June 30, 2025, the holders of a portion of the 2031 Convertible Notes converted $12.5 million in outstanding principal of the 2031 Convertible Notes plus accrued but unpaid interest on such outstanding principal as of the conversion date into 1,621,503 shares of common stock at a weighted average conversion price of $7.79, together with cash in lieu of fractional shares, in accordance with noteholder conversion notice.