What changed in this filing

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Item 1. Business

2025-05-13 compared with 2024-05-08 · 62 added, 68 removed, 508 unchanged (20% of the section changed)

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federal income tax purposes and obtain favorable RIC tax treatment, we must meet certain requirements, including certain minimum distribution requirements.

As of March 31, 2024, shares of our common stock, our 5.00% Notes due 2026 (“5.00% 2026 Notes”), our 4.875% Notes due 2028 (“4.875% 2028 Notes”) and our 8.00% Notes due 2028 ("8.00% 2028 Notes") are traded on the Nasdaq Global Select Market (“Nasdaq”) under the trading symbols “GAIN,” “GAINN,” “GAINZ,” and "GAINL," respectively.

As of March 31, 2025, shares of our common stock, our 5.00% Notes due 2026 (“5.00% 2026 Notes”), our 4.875% Notes due 2028 (“4.875% 2028 Notes”), our 8.00% Notes due 2028 ("8.00% 2028 Notes") and our 7.875% Notes due 2030 ("7.875% 2030 Notes") are traded on the Nasdaq Global Select Market (“Nasdaq”) under the trading symbols “GAIN,” “GAINN,” “GAINZ,” "GAINL," and "GAINI" respectively.

Investment Adviser and Administrator

We are externally managed by the Adviser, an affiliate of ours and an SEC-registered investment adviser, pursuant to an investment advisory and management agreement, as amended from time to time, (the “Advisory Agreement”).

We have also entered into an administration agreement (the “Administration Agreement”) with Gladstone Administration, LLC (the “Administrator”), an affiliate of ours and the Adviser.

Each of the Adviser and the Administrator are privately-held companies that are indirectly owned and controlled by David Gladstone, our chairman and chief executive officer.

Each of the Adviser and the Administrator are privately-held companies that are indirectly owned by David Gladstone, our chairman and chief executive officer.

David Dullum, our president, also serves as the executive vice president of private equity (buyouts) of the Adviser.

Michael LiCalsi, our general counsel and secretary, also serves as the Administrator’s president, general counsel, and secretary, as well as the executive vice president of administration of the Adviser.

Gladstone and Terry Lee Brubaker, our chief operating officer, also serve on the board of directors of the Adviser, the board of managers of the Administrator, and as executive officers of the Adviser and the Administrator.

Gladstone also serves on the board of directors of the Adviser, the board of managers of the Administrator, and as an executive officer of the Adviser and the Administrator.

The Administrator employs, among others, our chief financial officer and treasurer, chief valuation officer, chief compliance officer, general counsel and secretary (who also serves as the president of the Administrator) and their respective staffs.

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Gladstone Capital Corporation (“Gladstone Capital”), a publicly-traded BDC and RIC;

and Gladstone Land Corporation, a publicly-traded real estate investment trust (“Gladstone Land”) (together with “Gladstone Commercial” and “Gladstone Capital,” collectively the “Affiliated Public Funds”).

Gladstone Land Corporation (“Gladstone Land”), a publicly-traded real estate investment trust;

and Gladstone Alternative Income Fund ("Gladstone Alternative"), a registered, non-diversified, closed-end management investment company that operates as an interval fund (together with “Gladstone Commercial,” “Gladstone Capital,” and "Gladstone Land," collectively the “Affiliated Public Funds”).

In the future, the Adviser and Administrator may provide investment advisory and administrative services, respectively, to other funds and companies, both public and private.

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Investment Objectives and Strategy

We were established for the purpose of investing in debt and equity securities of established private businesses operating in the U.S.

We were established for the purpose of investing in debt and equity securities of established private businesses operating in the United States ("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 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 investment objectives, our investment strategy is to invest

in several categories of debt and equity securities, with individual investments in a particular portfolio company 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 securities and 25% in equity securities, at cost.

As of March 31, 2024, our investment portfolio was comprised of 77.0% in debt securities and 23.0% in equity securities, at cost.

To achieve our investment objectives, our investment strategy is to invest in several categories of debt and equity securities, with individual investments in a particular portfolio company 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.

We focus on investing in lower middle market private businesses (which we generally define as private companies with annual earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $4 million to $15 million) (“Lower Middle Market”) in the U.S.

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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.

We invest by ourselves or jointly with other funds and/or management of the portfolio company, depending on the opportunity.

In July 2012, the SEC granted us an exemptive order (the “Co-Investment Order”) that expanded our ability to co-invest, under certain circumstances, with certain of our affiliates, including Gladstone Capital and any future BDC or registered closed-end management investment company that is advised (or sub-advised if it controls the fund) by the Adviser, or any combination of the foregoing, subject to the conditions in the Co-Investment Order.

In July 2012, the SEC granted us an exemptive order (the “Co-Investment Order”) that expanded our ability to co-invest, under certain circumstances, with certain of our affiliates, including Gladstone Capital and Gladstone Alternative and any future BDC or registered closed-end management investment company that is advised (or sub-advised if it controls the fund) by the Adviser, or any combination of the foregoing, subject to the conditions in the Co-Investment Order.

We believe the Co-Investment Order has enhanced and will continue to enhance our ability to further our investment objectives and strategies.

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Investment Concentrations

As of March 31, 2024, our investment portfolio consisted of investments in 24 portfolio companies located in 18 states across 16 different industries with an aggregate fair value of $920.5 million.

As of March 31, 2025, our investment portfolio consisted of investments in 25 portfolio companies located in 19 states or countries across 16 different industries with an aggregate fair value of $979.3 million.

Our investments in SFEG Holdings, Inc.

("SFEG"), Nocturne Luxury Villas, Inc.

("Nocturne"), Nth Degree Investment Group, LLC ("Nth Degree"), Old World Christmas, Inc.

(“Old World”), and Brunswick Bowling Products, Inc.

("Brunswick") represented our five largest portfolio investments at fair value and collectively comprised $ 393.5 million, or 42.7 %, of our total investment portfolio at fair value as of March 31, 2024.

("SFEG"), Ricardo Defense, Inc.

("Ricardo"), Brunswick Bowling Products, Inc.

("Brunswick"), Nielsen-Kellerman Acquisition Corp.

("Nielsen-Kellerman") and The E3 Company, LLC ("E3") represented our five largest portfolio investments at fair value and collectively comprised $401.7 million, or 41.0%, of our total investment portfolio at fair value as of March 31, 2025.

The following table summarizes our investments by security type as of March 31, 2025 and 2024:

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Home and Office Furnishings, Housewares, and Durable Consumer Products 159,236 16.3 % 160,038 17.3 %

Aerospace and Defense 107,869 10.9 % 29,064 3.2 %

Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) 105,432 10.8 % 92,781 10.1 %

Hotels, Motels, Inns, and Gaming 77,366 8.4 % 58,713 7.8 %

Buildings and Real Estate 60,431 6.6 % 60,571 8.0 %

Leisure, Amusement, Motion Pictures, and Entertainment 78,460 8.0 % 39,350 4.3 %

Electronics 71,573 7.2 % — — %

Oil and Gas 69,589 7.1 % 51,171 5.6 %

Buildings and Real Estate 69,320 7.1 % 60,431 6.6 %

Healthcare, Education, and Childcare 51,501 5.3 % 49,638 5.4 %

Leisure, Amusement, Motion Pictures, and Entertainment 39,350 4.3 % 47,616 6.3 %

Mining, Steel, Iron and Non-Precious Metals 41,010 4.2 % 30,537 3.3 %

Aerospace and Defense 29,064 3.2 % 22,215 2.8 %

Chemicals, Plastics, and Rubber 20,363 2.2 % 24,891 3.3 %

Printing and Publishing 14,238 1.5 % — — %

Cargo Transport 12,624 1.3 % 13,500 1.5 %

Telecommunications 9,002 1.0 % 18,987 2.5 %

Printing and Publishing 11,681 1.2 % 14,238 1.5 %

Chemicals, Plastics, and Rubber 11,612 1.2 % 20,363 2.2 %

Hotels, Motels, Inns, and Gaming — — % 77,366 8.4 %

Other < 2.0% 19,053 2.0 % 17,492 1.9 %

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$ 979,320 100.0 % $ 920,504 100.0 %

Our investments at fair value were included in the following U.S.

geographic regions as of March 31, 2024 and 2023:

Our investments at fair value were included in the following geographic regions of the U.S and Canada as of March 31, 2025 and 2024:

March 31, 2025 March 31, 2024

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Total Investments

United States

South $ 317,294 32.4 % $ 346,838 37.7 %

Midwest 227,415 23.2 % 141,925 15.4 %

West 222,062 22.7 % 223,871 24.3 %

Northeast 182,669 18.7 % 207,870 22.6 %

Midwest 141,925 15.4 % 117,886 15.6 %

Canada 29,880 3.0 % — — %

Total investments

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If the prospective portfolio company passes this initial screening and the IOI is accepted by the prospective company, the investment professionals will seek approval to issue a letter of intent (“LOI”) from the Adviser’s investment committee, which currently is composed of Messrs.

Gladstone, Brubaker, and Dullum, as well as Jonathan Sateri and Laura Gladstone.

Gladstone and Dullum, as well as John Sateri and Laura Gladstone.

If this LOI is issued, then the Adviser and Gladstone Securities, LLC (“Gladstone Securities”) (collectively, the “Due Diligence Team”) will conduct a due diligence investigation and create a detailed profile summarizing the prospective portfolio company’s historical financial statements, industry, competitive position and management team and analyzing its conformity to our general investment criteria.

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In seeking income, we typically invest in companies that generate relatively stable to growing sales, cash flows, and EBITDA to fixed charges coverage, which provides some assurance that the companies will be able to service their debt.

We do not expect to invest in start-up companies or companies with what we believe to be speculative business plans.

We do not expect to invest in high-risk early stage companies or companies with what we believe to be speculative business plans.

• Strong Competitive Position in an Industry:

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A large number of entities compete with us and make the types of investments that we seek to make in Lower Middle Market companies.

Such competitors include private equity funds, leveraged buyout funds, other BDCs, investment banks and other equity and non-equity based investment funds, and other financing sources, including traditional financial services companies such as commercial banks.

Such competitors include private equity funds, leveraged buyout funds, other BDCs, other equity and non-equity based investment funds, and other financing sources, including commercial banks.

Many of our competitors are substantially larger than we are and have considerably greater funding sources or are able to access capital more cost effectively.

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The Adviser's investment committee for the Company is comprised of Messrs.

Gladstone, Brubaker, Dullum and Sateri and Ms.

Gladstone, Dullum and Sateri and Ms.

Gladstone, each of whom have a wealth of experience in our area of operation.

Gladstone and Messrs.

Gladstone, Brubaker, and Sateri also serve on the Adviser’s investment committee for the other Affiliated Public Funds.

Gladstone and Sateri also serve on the Adviser’s investment committee for the other Affiliated Public Funds.

Gladstone has over 20 years of experience in investing in middle market companies and is a managing director of the Adviser.

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Gladstone, Dullum and Sateri (also a managing director of the Adviser) have over 30 years of experience in investing in middle market companies and with operating in the BDC marketplace in general.

Gladstone and Brubaker also have principal management responsibility for the Adviser as its executive officers, and have worked together at the Gladstone Companies for more than 20 years.

Brubaker has over 30 years of experience in acquisitions and operations of companies.

These five individuals dedicate a significant portion of their time to managing our investment portfolio.

Gladstone also has principal management responsibility for the Adviser as an executive officer, and has worked at the Gladstone companies for more than 20 years.

These four individuals dedicate a significant portion of their time to managing our investment portfolio.

Our senior management has extensive experience providing capital to Lower Middle Market companies.

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Valuation Process

Our Board of Directors has approved investment valuation policies and procedures pursuant to Rule 2a-5 (the “Policy”) and, in July 2022, designated the Adviser to serve as the Board of Directors’ valuation designee (“Valuation Designee”) under the 1940 Act.

Our Board of Directors has approved investment valuation policies and procedures pursuant to Rule 2a-5 (the “Policy”) and designated the Adviser to serve as the Board of Directors’ valuation designee (“Valuation Designee”) under the 1940 Act.

The following is a general description of the Policy that the professionals of the Adviser and Administrator, with oversight and direction from our chief valuation officer, an employee of the Administrator that reports directly to our Board of Directors (collectively, the “Valuation Team”), use each quarter to determine the fair value of our investment portfolio.

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Fair value determinations and supporting material are sent to the Board of Directors in advance of its quarterly meetings.

• The Valuation Committee of the Board of Directors (comprised entirely of independent directors) meets to review the valuation determinations and supporting materials, discusses the information provided by the Valuation Team, determines whether the Valuation Team has followed the Policy and reviews other facts and circumstances, including current valuation risks, conflicts of interest, material valuation matters, appropriateness of valuation methodologies, back-testing results, price challenges/overides, and ongoing monitoring and oversight of pricing services.

After the Valuation Committee concludes its meeting, it and the chief valuation officer, representing the Valuation Designee, present the Valuation Committee’s findings on the Valuations Designee's determinations to the entire Board of Directors so that the full Board of Directors may review the Valuation Designee's determined fair values of such investments in accordance with the Policy.

Fair value measurements of our investments may involve subjective judgment and estimates.

Due to the uncertainty inherent in valuing these securities, the determinations of fair value may fluctuate from period to period and may differ materially from the values that could be obtained if a ready market for these securities existed.

• The Valuation Committee of the Board of Directors (comprised entirely of independent directors) meets to review the valuation determinations and supporting materials, discusses the information provided by the Valuation Team, determines whether the Valuation Team has followed the Policy and reviews other facts and circumstances, including current valuation risks, conflicts of interest, material valuation matters, appropriateness of valuation methodologies, back-testing results, price challenges/overrides, and ongoing monitoring and oversight of pricing services.

After the Valuation Committee concludes its meeting, it and the chief valuation officer, representing the Valuation Designee, present the Valuation Committee’s findings on the Valuation Designee's determinations to the entire Board of Directors so that the full Board of Directors may review the Valuation Designee's determined fair values of such investments in accordance with the Policy.

Fair value measurements of our investments may involve subjective judgments and estimates and, due to the uncertainty inherent in valuing these securities, the determinations of fair value may fluctuate from period to period and may differ materially from the values that could be obtained if a ready market for these securities existed.

Our net asset value (“NAV”) could be materially affected if the determinations regarding the fair value of our investments are materially different from the values that we ultimately realize upon our disposal of such securities.

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Pursuant to our Advisory Agreement, we pay the Adviser certain fees as compensation for its services, consisting of a base management fee and an incentive fee, each as described below.

On July 11, 2023, our Board of Directors, including a majority of the directors who are not parties to the Advisory Agreement or interested persons of either party, unanimously approved the renewal of the Advisory Agreement through August 31, 2024.

Our Board of Directors considered the following factors as the basis for its decision to renew the Advisory Agreement:

Our Board of Directors, including a majority of the directors who are not parties to the Advisory Agreement or interested persons of either party, unanimously approved the Advisory Agreement.

Our Board of Directors considered the following factors as the basis for its decision to approve the Advisory Agreement:

(1) the nature, extent and quality of services provided by the Adviser to our stockholders, (2) the investment performance of the Company and the Adviser, (3) the costs of the services to be provided and profits to be realized by the Adviser and its affiliates from the relationship with the Company, (4) the extent to which economies of scale will be realized as the Company and the Affiliated Public Funds grow and whether the fee level under the Advisory Agreement reflects the economies of scale for the Company’s investors, (5) the fee structure of the advisory and administrative agreements of comparable funds, (6) indirect profits to the Adviser created through the Company and (7) in light of the foregoing considerations, the overall fairness of the advisory fees paid under the Advisory Agreement.

On January 4, 2024, we approved a new investment advisory agreement between us and the Adviser (the "New Advisory Agreement").

The New Advisory Agreement is the result of an anticipated change in control of the Adviser.

From inception, the Adviser has been 100% indirectly owned and controlled by David Gladstone.

David Gladstone owns 100% of the voting and economic interests of The Gladstone Companies, Ltd., which in turn owns 100% of the voting and economic interests of The Gladstone Companies, Inc., which in turn owned 100% of the voting and economic interests of the Adviser.

Immediately after approval by the stockholders of Gladstone Capital Corporation of a similar advisory agreement, which occurred on January 24, 2024, the Adviser entered into a voting trust agreement (the “Voting Trust Agreement”), among David Gladstone, Lorna Gladstone, Laura Gladstone, Kent Gladstone and Jessica Martin, each as a trustee and collectively, as the board of trustees of the voting trust (the “Voting Trust Board”), the Adviser and certain stockholders of the Adviser, pursuant to which David Gladstone deposited all of his indirect interests in the Adviser, which represented 100% of the voting and economic interests thereof, with the voting trust.

Pursuant to the Voting Trust Agreement, prior to its Effective Date (as defined below) David Gladstone has, in his sole discretion, the full, exclusive and unqualified right and power to vote in person or by proxy all of the shares of common stock of the Adviser deposited with the voting trust at all meetings of the stockholders of the Adviser in respect of any and all matters on which the stockholders of the Adviser are entitled to vote under the Adviser’s certificate of incorporation or applicable law, to give consents in lieu of voting such shares of common stock of the Adviser at a meeting of the stockholders of the Adviser in respect of any and all matters on which stockholders of the Adviser are entitled to vote under its certificate of incorporation or applicable law, to enter into voting agreements, waive notice of any meeting of

stockholders of the Adviser in respect of such shares of common stock of the Adviser and to grant proxies with respect to all such shares of common stock of the Adviser with respect to any lawful corporate action (collectively, the “Voting Powers”).

Commencing on the Effective Date, the Voting Trust Board shall have the full, exclusive and unqualified right and power to exercise the Voting Powers.

Each member of the Voting Trust Board shall hold 20% of the voting power of the Voting Trust Board as of the Effective Date.

The “Effective Date” shall occur on the earliest of (i) the death of David Gladstone, (ii) David Gladstone’s election (in his sole discretion) and (iii) one year from the date the Voting Trust Agreement is entered into.

Following entry into the Voting Trust Agreement, the current members of senior management of the Adviser will continue to manage the day-to-day aspects of the Adviser.

There are no changes to the terms of the Advisory Agreement currently in effect (the "Original Advisory Agreement") in the New Advisory Agreement, including the fee structure and services to be provided, other than the date and term of the New Advisory Agreement as compared to the Original Advisory Agreement.

In addition to there being no changes to the fee structure, no other fees or expenses currently paid by us will change as a result of entry into the New Advisory Agreement.

There will be no changes to our principal investment objective, investment strategies, fundamental investment restrictions or principal risks as a result of entry into the Voting Trust Agreement or New Advisory Agreement.

On January 24, 2025, the Company entered into the Advisory Agreement, which was approved by the Company's stockholders at a stockholders' meeting on January 4, 2024, as a result of a change of control of the Adviser pursuant to a previously disclosed voting trust agreement.

There are no changes to the terms, including the fee structure and services to be provided, of the prior Advisory Agreement other than the date and term of the Advisory Agreement.

Base Management Fee

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(iii) consulting services regarding restructuring of the portfolio company and financial modeling as it relates to raising additional debt and equity capital from unaffiliated third parties;

and (iv) a primary role in interviewing, vetting and negotiating employment contracts with candidates in connection with adding and retaining key portfolio company management team members.

and (iv) a primary role in interviewing, vetting and negotiating employment contracts with candidates in

connection with adding and retaining key portfolio company management team members.

The Adviser non-contractually, unconditionally, and irrevocably credits 100% of any fees received for such services against the base management fee that we would otherwise be required to pay to the Adviser;

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• 20.0% of the amount of our pre-incentive fee net investment income, if any, that exceeds 2.1875% of our net assets, adjusted appropriately for any share issuances or repurchases during the period, in any calendar quarter.

For this purpose, pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence, consulting fees that we receive from portfolio companies, but excluding fees for providing managerial assistance) accrued by us during the calendar quarter, minus our operating expenses for the quarter.

Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with payment-in-kind interest and zero coupon securities), accrued income that we not yet received in cash.

Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

Quarterly Incentive Fee Based on Net Investment Income

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If this number is positive at the applicable calculation date, then the capital gains-based incentive fee for such year equals 20.0% of such amount, less the aggregate amount of any capital gains-based incentive fees paid in respect of our portfolio in all prior years.

For calculation purposes, cumulative aggregate realized capital gains, if any, equals the sum of the excess between the net sales price of each investment, when sold, and the original cost of such investment since our inception.

For calculation purposes, cumulative aggregate realized capital gains, if any, equals the sum of the excess

between the net sales price of each investment, when sold, and the original cost of such investment since our inception.

Cumulative aggregate realized capital losses equals the sum of the deficit between the net sales price of each investment, when sold, and the original cost of such investment since our inception.

The entire portfolio’s aggregate unrealized capital depreciation, if any, equals the sum of the deficit between the fair value of each investment security as of the applicable calculation date and the original cost of such investment security.

As of and for the years ended March 31, 2024 and 2022, capital gains-based incentive fees of $ 1.1 million and $ 5.3 million, respectively, were contractually due and paid to the Adviser.

For the years ended March 31, 2025 and 2024, capital gains-based incentive fees of $4.9 million and $1.1 million, respectively, were contractually due and paid to the Adviser.

For the year ended March 31, 2023, no capital gains-based incentive fees were contractually due and paid to the Adviser.

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If such amount is negative, then there is no accrual for such period and prior period accruals are reversed, as appropriate.

For the three years ended March 31, 2024, 2023 and 2022, we recorded/(reversed) capital gains-based incentive fees of $12.7 million, $(0.3) million and $18.3 million, respectively.

For the years ended March 31, 2025, 2024 and 2023, we recorded/(reversed) capital gains-based incentive fees of $7.4 million, $12.7 million and $(0.3) million, respectively.

Loan Servicing Fee Pursuant to Credit Facility

The Adviser also services the loans held by our wholly-owned subsidiary, Gladstone Business Investment, LLC (“Business Investment”) (the borrower under the Credit Facility), in return for which the Adviser receives a 2.0 % annual fee based on the monthly aggregate outstanding balance of loans pledged under the Credit Facility.

borrowings) during any given calendar year, we treat the payment of the loan servicing fee pursuant to the Credit Facility as a pre-payment of the base management fee under the Advisory Agreement.

The Adviser also services the loans held by our wholly-owned subsidiary, Gladstone Business Investment, LLC (“Business Investment”) (the borrower under our Credit Facility), in return for which the Adviser receives a 2.0% annual fee based on the monthly aggregate outstanding balance of loans pledged under our Credit Facility.

Since Business Investment is a consolidated subsidiary of ours, coupled with the fact that the total base management fee paid to the Adviser pursuant to the Advisory Agreement cannot exceed 2.0% of total assets (less any uninvested cash or cash equivalents resulting from borrowings) during any given calendar year, we treat the payment of the loan servicing fee pursuant to our Credit Facility as a pre-payment of the base management fee under the Advisory Agreement.

Accordingly, these loan servicing fees are 100% non-contractually, unconditionally, and irrevocably credited back to us by the Adviser.

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On July 9, 2024, our Board of Directors, including a majority of the directors who are not parties to the Administration Agreement or interested persons of either party, approved the annual renewal of the Administration Agreement through August 31, 2025.

For the years ended March 31, 2025, 2024 and 2023, administration fees were $1.9 million, $1.8 million and $1.8 million, respectively.

Other Transactions

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government securities, the securities of other regulated investment companies and other securities to the extent that (a) we do not hold more than 10% of the outstanding voting securities of an issuer of such other securities and (b) such other securities of any one issuer do not represent more than 5% of our total assets (the “50% threshold”), and (2) no more than 25% of the value of our total assets may be invested in the securities (other than U.S.

government securities or the securities of other regulated investment companies) of (i) one issuer, (ii) two or more issuers that are controlled by us and are engaged in the same or similar or related trades or businesses, and (iii) one or more qualified publicly-traded partnerships.

government securities or the securities of other

regulated investment companies) of (i) one issuer, (ii) two or more issuers that are controlled by us and are engaged in the same or similar or related trades or businesses, and (iii) one or more qualified publicly-traded partnerships.

Our qualification and taxation as a RIC depends upon our ability to satisfy on a continuing basis, through actual, annual operating results, distribution, income and asset, and other requirements imposed under the Code.

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If you are not a U.S.

sotckholder this section does not apply to you.

stockholder this section does not apply to you.

Whether an investment is appropriate for a U.S.

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Qualifying Assets

Under the 1940 Act, a BDC may not acquire any asset other than assets of the type listed in Section 55(a) of the 1940 Act, which are referred to as qualifying assets, unless, at the time the acquisition is made, qualifying assets, other than certain interests in furniture, equipment, real estate, or leasehold improvements (“Operating Assets”), represent at least 70% of total assets, exclusive of Operating Assets.

total assets, exclusive of Operating Assets.

The types of qualifying assets in which we may invest under the 1940 Act include the following:

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Below is a summary of the principal risk factors associated with an investment in our securities.

In addition to the below, you should carefully consider the information included in “ Risk Factors ”, beginning on page 20 of this Annual Report, together with all of the other information included in this Annual Report and the other reports and documents filed or furnishe d by us with the SEC for a more detailed discussion of the principal risks, as well as certain other risks that you should carefully consider before deciding to invest in our securities.

In addition to the below, you should carefully consider the information included in Item 1A.

“ Risk Factors ” of this Annual Report, together with all of the other information included in this Annual Report and the other reports and documents filed or furnishe d by us with the SEC for a more detailed discussion of the principal risks, as well as certain other risks that you should carefully consider before deciding to invest in our securities.

• Market conditions could negatively impact our business, results of operations, cash flows and financial condition.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business