What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-02-03 compared with 2025-11-04 · 223 added, 197 removed, 442 unchanged (49% of the section changed)

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Such factors include:

(1) changes in the economy and the capital markets, including stock price volatility, inflation, elevated interest rates, tariffs and trade wars and risks of recession;

(1) changes in the economy and the capital markets, including stock price volatility, inflation, elevated interest rates, geopolitical conflicts, tariffs and trade wars and risks of recession;

(2) risks associated with negotiation and consummation of pending and future transactions;

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We expect that our investment portfolio over time will consist of approximately 75.0 % in debt investments and 25.0 % in equity investments, at cost.

As of September 30, 2025, our investment portfolio was comprised of 71.1% in debt investments and 28.9% in equity investments, at cost.

As of December 31, 2025, our investment portfolio was comprised of 71.0% in debt investments and 29.0% in equity investments, at cost.

We focus on investing in lower middle market private businesses (which we generally define as 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 have also entered into an administration agreement with Gladstone Administration, LLC, an affiliate of ours and the Adviser, whereby we pay separately for administrative services.

Our shares of 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.

Our shares of common stock, our 5.00% Notes due 2026 (“5.00% 2026 Notes”), our 4.875% Notes due 2028 ("4.875% 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,” and “GAINI,” respectively.

Our 6.875% Notes due 2028 ("6.875% 2028 Notes") are not listed.

Portfolio and Investment Activity

While the business environment remains competitive, we continue to see new investment opportunities consistent with our investment strategy of providing a combination of debt and equity in support of management and independent sponsor-led buyouts of Lower Middle Market companies in the U.S.

During the six months ended September 30, 2025, we invested in three new portfolio companies.

From our initial public offering in June 2005 through September 30, 2025, we have invested in 65 companies, excluding investments in syndicated loans, for a total of approximately $2.2 billion, before giving effect to principal repayments and divestitures.

During the nine months ended December 31, 2025, we invested in four new portfolio companies.

From our initial public offering in June 2005 through December 31, 2025, we have invested in 66 companies, excluding investments in syndicated loans, for a total of approximately $2.2 billion, before giving effect to principal repayments and divestitures.

The majority of the debt securities in our portfolio have a success fee component, which enhances the yield on our debt investments.

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Due to the contingent nature of success fees, there are no guarantees that we will be able to collect any or all of these success fees or know the timing of any such collections.

As a result, as of September 30, 2025, we had unrecognized, contractual success fees of $59.3 million, or $1.50 per common share.

As a result, as of December 31, 2025, we had unrecognized, contractual success fees of $62.7 million, or $1.57 per common share.

Consistent with accounting principles generally accepted in the U.S.

(“GAAP”), we have not recognized success fee receivables and related income in our accompanying Consolidated Financial Statements until earned.

From inception through September 30, 2025, we exited our investments in 33 portfolio companies that we acquired under our buyout strategy.

From inception through December 31, 2025, we exited our investments in 33 portfolio companies that we acquired under our buyout strategy.

In the aggregate, these sales have generated $353.4 million in net realized gains and $45.4 million in other income upon exit, for a total increase to our net assets of $398.8 million.

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The 33 liquidity events have offset any realized losses since inception, which were primarily incurred during the 2008-2009 recession in connection with the sale of performing syndicated loans at a realized loss to pay off a former lender.

The successful exits, in part, enabled us to increase the monthly distribution by 100.0% from March 2011 through September 30, 2025, and allowed us to declare and pay 24 supplemental distributions to common stockholders through September 30, 2025.

The successful exits, in part, enabled us to increase the monthly distribution by 100.0% from March 2011 through December 31, 2025, and allowed us to declare and pay 24 supplemental distributions to common stockholders through December 31, 2025.

Capital Raising

We have been able to meet our capital needs through extensions of and increases to the Fifth Amended and Restated Credit Agreement dated April 30, 2013, as amended from time to time (the “Credit Facility”), and by accessing the capital markets in the form of public offerings of unsecured notes, as well as common and preferred stock.

We have successfully extended the Credit Facility’s revolving period multiple times, most recently to October 2026, and currently have a total commitment amount of $270.0 million (with a potential total commitment of $300.0 million through additional commitments from new or existing lenders).

During the six months ended September 30, 2025, we sold 2,753,656 shares of our common stock under our "at-the-market" program (the "2024 Common Stock ATM Program") for gross proceeds of approximately $38.9 million.

We have successfully extended the Credit Facility’s revolving period multiple times, most recently to October 2026, and currently have a total commitment amount of $300.0 million.

During the nine months ended December 31, 2025, we issued the 6.875% 2028 Notes for gross proceeds of $60.0 million and sold 2,984,586 shares of our common stock under our "at-the-market" program (the "2024 Common Stock ATM Program") for gross proceeds of approximately $42.1 million.

During the year ended March 31, 2025, we issued the 7.875% 2030 Notes for gross proceeds of $126.5 million and sold 148,714 shares of our common stock under our 2024 Common Stock ATM Program for gross proceeds of approximately $2.0 million.

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Although we have been able to access the capital markets historically, market conditions may continue to affect the trading price of our common stock and thus our ability to finance new investments through the issuance of common equity.

On September 30, 2025, the closing market price of our common stock was $ 13.82 per share, representing a 2.1 % premium to our net asset value (“NAV”) of $ 13.53 per share as of September 30, 2025.

On December 31, 2025, the closing market price of our common stock was $ 13.97 per share, representing a 6.6 % discount to our net asset value (“NAV”) of $ 14.95 per share as of December 31, 2025.

When our common stock trades below NAV, our ability to issue additional equity is constrained by provisions of the 1940 Act, which generally prohibits the issuance and sale of our common stock at an issuance price below the then-current NAV per share without stockholder approval, other than through sales to our then-existing stockholders pursuant to a rights offering.

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As a result, our asset coverage requirements for senior securities changed from 200% to 150%, effective as of April 10, 2019, one year after the date of the Board of Directors’ approval.

As of September 30, 2025, our asset coverage ratio on our senior securities representing indebtedness was 193.2%.

As of December 31, 2025, our asset coverage ratio on our senior securities representing indebtedness was 201.1%.

Investment Highlights

Investment Activity

During the six months ended September 30, 2025, the following significant transactions occurred:

During the nine months ended December 31, 2025, the following significant transactions occurred:

• In May 2025, we invested $49.5 million in a new portfolio company, Smart Chemical Solutions, LLC, ("Smart Chemical"), in the form of $35.7 million of secured first lien debt and $13.8 million of preferred equity.

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Hobbs"), restructuring our previously outstanding first lien term loans and line of credit with an aggregate total cost basis of $49.9 million, which resulted in a realized loss of $29.9 million.

• In December 2025, we invested $33.1 million in a new portfolio company, Rowan Energy Inc.

(“Rowan”), in the form of $25.8 million of secured first lien debt and $7.3 million of preferred equity.

Rowan, headquartered in Oklahoma, specializes in advanced frac sand filtration, completion-equipment deployment and field-operations support.

Distributions and Dividends

• In October 2025, our Board of Directors declared the following monthly cash distributions to common stockholders:

• In January 2026, our Board of Directors declared the following monthly cash distributions to common stockholders:

Payment Date Distribution per Common Share

October 24, 2025 October 31, 2025 $ 0.08

November 17, 2025 November 26, 2025 0.08

December 22, 2025 December 31, 2025 0.08

January 23, 2026 January 30, 2026 $ 0.08

February 18, 2026 February 27, 2026 0.08

March 23, 2026 March 31, 2026 0.08

Total for the Quarter:

RESULTS OF OPERATIONS

Comparison of the Three Months Ended September 30, 2025 to the Three Months Ended September 30, 2024

For the Three Months Ended September 30,

Comparison of the Three Months Ended December 31, 2025 to the Three Months Ended December 31, 2024

For the Three Months Ended December 31,

2025 2024 Change % Change

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Total expenses, net of credits to fees 31,571 20,210 11,361 56.2 %

NET INVESTMENT INCOME 4,279 7,291 (3,012) (41.3) %

NET INVESTMENT (LOSS) INCOME (6,509) 1,161 (7,670) NM

REALIZED AND UNREALIZED GAIN (LOSS)

Net realized (loss) gain on investments (29,938) 42,303 (72,241) NM

Net unrealized appreciation (depreciation) 54,368 (34,112) 88,480 NM

Net realized and unrealized gain 24,430 8,191 16,239 NM

Net realized gain on investments 3,481 — 3,481 NM

Net realized loss on other (1,301) — (1,301) NM

Net unrealized appreciation 70,227 37,329 32,898 88.1 %

Net realized and unrealized gain 72,407 37,329 35,078 94.0 %

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 65,898 $ 38,490 $ 27,408 71.2 %

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BASIC AND DILUTED PER COMMON SHARE:

Net investment income $ 0.11 $ 0.20 $ (0.09) (45.0) %

Net investment (loss) income $ (0.16) $ 0.03 $ (0.19) NM

Net increase in net assets resulting from operations $ 1.66 $ 1.05 $ 0.61 58.1 %

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Investment Income

Total investment income increased $2.7 million, or 12.0%, for the three months ended September 30, 2025, as compared to the prior year period, primarily due to an increase in interest income and dividend and success fee income.

Interest income from our investments in debt securities increased $1.7 million, or 8.0%, for the three months ended September 30, 2025, as compared to the prior year period.

Total investment income increased $3.7 million, or 17.3%, for the three months ended December 31, 2025, as compared to the prior year period, primarily due to an increase in interest income and dividend and success fee income.

Interest income from our investments in debt securities increased $2.3 million, or 11.2%, for the three months ended December 31, 2025, as compared to the prior year period.

Generally, the level of interest income from investments is directly related to the weighted-average principal balance of our interest-bearing investment portfolio outstanding during the period, multiplied by the weighted-average yield.

The weighted-average principal balance of our interest-bearing investment portfolio during the three months ended September 30, 2025 was $668.9 million, compared to $572.8 million for the prior year period.

This increase was primarily due to the origination of $222.9 million of new debt investments and $41.7 million of follow-on debt investments in existing portfolio companies, partially offset by $126.4 million of pay-offs, restructurings, or write-offs of debt investments and $3.8 million of existing loans placed on non-accrual status after June 30, 2024, and their respective impact on the weighted-average principal balance when considering the timing of new investments, pay-offs, restructurings, write-offs, and accrual status changes, as applicable.

During the three months ended September 30, 2025, we collected $0.3 million in past due interest from J.R.

Hobbs that was previously on non-accrual status.

We had no collections of past due interest during the three months ended September 30, 2024.

The weighted-average yield on our interest-bearing investments, excluding cash and cash equivalents and receipts recorded as dividend and success fee income, was 13.4% for the three months ended September 30, 2025, compared to 14.5% for the prior year period.

The weighted-average principal balance of our interest-bearing investment portfolio during the three months ended December 31, 2025 was $698.9 million, compared to $579.7 million for the prior year period.

This increase was primarily due to the origination of $222.9 million of new debt investments and $26.5 million of follow-on debt investments in existing portfolio companies after September 30, 2024, partially offset by $117.1 million of pay-offs, restructurings, or write-offs of debt investments after September 30, 2024 and their respective impact on the weighted-average principal balance when considering the timing of new investments, pay-offs, restructurings, write-offs, and accrual status changes, as applicable.

We had no collections of past due interest during the three months ended December 31, 2025 and 2024.

The weighted-average yield on our interest-bearing investments, excluding cash and cash equivalents and receipts recorded as dividend and success fee income, was 12.9% for the three months ended December 31, 2025, compared to 14.0% for the prior year period.

The weighted-average yield may vary from period to period, based on the current stated interest rate on interest-bearing investments, coupled with any collection of past due interest during the period.

As of September 30, 2025, our loans to B+T Group Acquisition, Inc.

As of December 31, 2025, our loans to B+T Group Acquisition, Inc.

("B+T"), Diligent Delivery Systems ("Diligent") and Edge Adhesives Holdings, Inc.

("Edge") were on non-accrual status, with an aggregate debt cost basis of $40.3 million.

As of September 30, 2024, certain of our loans to B+T, Diligent, Edge and J.R.

As of December 31, 2024, certain of our loans to B+T, Diligent, Edge and J.R.

Hobbs were on non-accrual status, with an aggregate debt cost basis of $90.0 million.

As of September 30, 2025 and March 31, 2025, SFEG Holdings, Inc.

As of December 31, 2025 and March 31, 2025, SFEG Holdings, Inc.

("SFEG") represented 11.8% and 10.8% of the total investment portfolio at fair value, respectively.

Dividend and success fee income for the three months ended September 30, 2025 increased $1.0 million, or 66.3%, from the prior year period.

During the three months ended September 30, 2025, dividend and success fee income consisted of $2.6 million of dividend income.

During the three months ended September 30, 2024, dividend and success fee income consisted of $1.4 million of dividend income and $0.2 million of success fee income.

Total expenses, net of any non-contractual, unconditional, and irrevocable credits from the Adviser, increased $5.7 million, or 37.5%, during the three months ended September 30, 2025, as compared to the prior year period, primarily due to an increase in incentive fees, interest expense and base management fees, partially offset by an increase in fee credits from the Adviser.

In accordance with GAAP, during the three months ended September 30, 2025, we recorded a $4.9 million capital gains-based incentive fee compared to a $1.6 million capital gains-based incentive fee during the three months ended September 30, 2024.

Dividend and success fee income for the three months ended December 31, 2025 increased $1.4 million, or 164.2%, from the prior year period.

During the three months ended December 31, 2025, dividend and success fee income consisted of $1.2 million of success fee income and $1.0 million of dividend income.

During the three months ended December 31, 2024, dividend and success fee income consisted of $0.8 million of success fee income.

Total expenses, net of any non-contractual, unconditional, and irrevocable credits from the Adviser, increased $11.4 million, or 56.2%, during the three months ended December 31, 2025, as compared to the prior year period, primarily due to an increase in incentive fees, interest expense and base management fees, and a decrease in fee credits from the Adviser.

In accordance with GAAP, during the three months ended December 31, 2025, we recorded a $14.7 million capital gains-based incentive fee compared to a $7.5 million capital gains-based incentive fee during the three months ended December 31, 2024.

The capital gains-based incentive fee is a result of the net impact of net realized gains and net unrealized appreciation (depreciation) on investments during the respective periods.

The income-based incentive fee decreased by $1.9 million, for the three months ended December 31, 2025, as compared to the prior year period, primarily due to an increase in net assets, which drives the hurdle rate, and a decrease in pre-incentive fee net investment income.

The base management fee, loan servicing fee, incentive fee, and their related non-contractual, unconditional, and irrevocable credits are computed quarterly, as described under “Transactions with the Adviser” in Note 4 — Related Party Transactions in the accompanying Notes to Consolidated Financial Statements and are summarized in the following table:

Three Months Ended September 30,

Three Months Ended December 31,

Average total assets subject to base management fee (A)(B)

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

Interest expense increased $3.2 million, or 50.5%, during the three months ended September 30, 2025, as compared to the prior year period, primarily due to the issuance of the 7.785% 2030 Notes in December 2024 and increased borrowings on our Credit Facility, partially offset by a decrease in the effective interest rate.

The weighted-average balance outstanding under our Credit Facility during the three months ended September 30, 2025 was $107.6 million, compared to $60.8 million in the prior year period.

The effective interest rate on our Credit Facility, excluding the impact of deferred financing costs, during the three months ended September 30, 2025 was 8.9%, as compared to 11.0% in the prior year period.

The decrease in the effective interest rate on the Credit Facility was primarily a result of lower interest rates on the drawn portion of our Credit Facility, partially offset by an increase in unused commitment fees on the undrawn portion of the Credit Facility during the three months ended September 30, 2025.

Other expenses decreased $0.8 million, or 45.3%, during the three months ended September 30, 2025, as compared to the prior year period, due to a decrease in tax expense and bad debt expense.

Interest expense increased $3.1 million, or 48.7%, during the three months ended December 31, 2025, as compared to the prior year period, primarily due to the issuance of the 6.875% 2028 Notes in November 2025 and the 7.785% 2030 Notes in December 2024 and increased borrowings on our Credit Facility, partially offset by the redemption of the 8.00% 2028 Notes in December 2025 and a decrease in the effective interest rate.

The weighted-average balance outstanding under our Credit Facility during the three months ended December 31, 2025 was $80.2 million, compared to $41.9 million in the prior year period.

The effective interest rate on our Credit Facility, excluding the impact of deferred financing costs, during the three months ended December 31, 2025 was 9.7%, as compared to 11.8% in the prior year period.

The decrease in the effective interest rate on the Credit Facility was primarily a result of lower interest rates on the drawn portion of our Credit Facility, partially offset by an increase in the drawn portion of the Credit Facility during the three months ended December 31, 2025.

Other expenses decreased $0.2 million, or 11.2%, during the three months ended December 31, 2025, as compared to the prior year period, due to a decrease in tax expense, partially offset by an increase in professional fees.

Realized and Unrealized Gain (Loss)

The realized gains (losses) and unrealized appreciation (depreciation) across our investments for the three months ended September 30, 2025 and 2024 were as follows:

Three Months Ended September 30, 2025

The realized gains (losses) and unrealized appreciation (depreciation) across our investments for the three months ended December 31, 2025 and 2024 were as follows:

Three Months Ended December 31, 2025

Portfolio Company Realized Gain (Loss) on Investments Unrealized Appreciation (Depreciation) Reversal of Unrealized (Appreciation) Depreciation Net Gain (Loss)

Schylling, Inc.

$ — $ 27,680 $ — $ 27,680

Old World Christmas, Inc.

3,481 11,255 — 14,736

SFEG Holdings, Inc.

— 14,174 — 14,174

ImageWorks Display and Marketing Group, Inc.

— 9,969 — 9,969

The E3 Company, LLC — 8,660 — 8,660

Schylling, Inc.

Global GRAB Technologies, Inc.

— 4,239 — 4,239

Dema/Mai Holding, Inc.

Mason West, LLC — 3,949 — 3,949

Galaxy Technologies Holdings, Inc.

— 3,158 — 3,158

Brunswick Bowling Products, Inc.

UPB Acquisition, Inc.

— 2,578 — 2,578

- Atlanta, LLC (29,938) 12,362 19,104 1,528

Phoenix Door Systems, Inc.

— 2,416 — 2,416

Ginsey Home Solutions, Inc.

— 2,306 — 2,306

Horizon Facilities Services, Inc.

Phoenix Door Systems, Inc.

PSI Molded Plastics, Inc.

— 1,796 — 1,796

Pyrotek Special Effects, Inc.

Educators Resource, Inc.

— (847) — (847)

Smart Chemical Solutions, LLC — (1,314) — (1,314)

Home Concepts Acquisition, Inc.

— (1,451) — (1,451)

The Maids International, LLC — (1,288) — (1,288)

Smart Chemical Solutions, LLC — (1,694) — (1,694)

PSI Molded Plastics, Inc.

Pyrotek Special Effects, Inc.

— (1,678) — (1,678)

Educators Resource, Inc.

Sun State Nursery and Landscaping, LLC — (1,742) — (1,742)

Dema/Mai Holding, Inc.

— (2,041) — (2,041)

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— (3,020) — (3,020)

Old World Christmas, Inc.

Nielsen-Kellerman Acquisition Corp.

— (4,288) — (4,288)

Diligent Delivery Systems — (2,707) — (2,707)

UPB Acquisition, Inc.

Horizon Facilities Services, Inc.

— (5,321) — (5,321)

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Total $ 3,481 $ 70,235 $ — $ 73,716

Three Months Ended September 30, 2024

Three Months Ended December 31, 2024

Portfolio Company Realized Gain (Loss) on Investments Unrealized Appreciation (Depreciation) Reversal of Unrealized (Appreciation) Depreciation Net Gain (Loss)

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$ — $ 13,680 $ — $ 13,680

Nth Degree Investment Group, LLC 42,284 — (38,028) 4,256

ImageWorks Display and Marketing Group, Inc.

The E3 Company, LLC — 11,895 — 11,895

SFEG Holdings, Inc.

— 8,445 — 8,445

Old World Christmas, Inc.

Schylling, Inc.

— 4,773 — 4,773

Galaxy Technologies Holding, Inc.

ImageWorks Display and Marketing Group, Inc.

— 3,269 — 3,269

Schylling, Inc.

UPB Acquisition, Inc.

— 2,063 — 2,063

The E3 Company, LLC — 2,561 — 2,561

The Maids International, LLC — 1,434 — 1,434

- Atlanta, LLC — 1,635 — 1,635

Phoenix Doors Systems, Inc.

— 1,095 — 1,095

Edge Adhesives Holdings, Inc.

Brunswick Bowling Products, Inc.

— 1,488 — 1,488

UPB Acquisition, Inc.

Old World Christmas, Inc.

— 1,350 — 1,350

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— 1,189 — 1,189

Brunswick Bowling Products, Inc.

The Maids International, LLC — 1,101 — 1,101

Mason West, LLC — (1,671) — (1,671)

Horizon Facilities Services, Inc.

— (1,725) — (1,725)

B+T Group Acquisition, Inc — (2,839) — (2,839)

Horizon Facilities Service, Inc.

Galaxy Technologies Holdings, Inc.

— (2,051) — (2,051)

PSI Molded Plastics, Inc.

— (2,707) — (2,707)

Educators Resource, Inc.

— (6,008) — (6,008)

Other, net (<$1.0 million, net) — 603 — 603

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Net Realized Gain (Loss) on Investments

During the three months ended September 30, 2025, we recorded net realized losses on investments of $29.9 million, due to the realized loss from the restructuring of J.R.

During the three months ended September 30, 2024, we recorded net realized gains on investments of $42.3 million, due to the realized gain from the exit of Nth Degree Investment Group, LLC ("Nth Degree").

During the three months ended December 31, 2025, we recorded net realized gains on investments of $3.5 million, due to the equity distribution recognized as realized gain from Old World Christmas, Inc.

("Old World").

During the three months ended December 31, 2024, we did not record any net realized gains or losses on investments.

Net Realized Gain (Loss) on Other

During the three months ended December 31, 2025, we recorded net realized losses on other of $1.3 million, due to the unamortized deferred offering costs written off upon the redemption of our 8.00% 2028 Notes .

During the three months ended December 31, 2024, we did not record any net realized gains or losses on other.

Net Unrealized Appreciation (Depreciation) of Investments

Net unrealized appreciation of investments of $54.5 million for the three months ended September 30, 2025 was primarily due to increased performance of certain of our portfolio companies and the reversal of previously recorded unrealized depreciation related to our investment in J.R.

Hobbs upon its restructure.

These increases were partially offset by decreased performance of certain of our portfolio companies and a decrease in transaction multiples used to estimate the fair value of certain of our portfolio companies.

Net unrealized depreciation of investments of $34.1 million for the three months ended September 30, 2024 was primarily due to the reversal of unrealized appreciation of Nth Degree upon our exit, and a decrease in the performance of certain of our portfolio companies.

These decreases were partially offset by an increase in transaction multiples used to estimate the fair value of certain of our portfolio companies and increased performance of certain of our other portfolio companies.

Across our entire investment portfolio, we recorded net unrealized appreciation of $38.8 million on our equity positions and net unrealized appreciation of $15.7 million on our debt investments for the three months ended September 30, 2025 .

As of September 30, 2025 , the fair value of our investment portfolio was more than our cost basis by $93.7 million, compared to June 30, 2025, when the fair value of our investment portfolio was more than our cost basis by $39.2 million.

This resulted in net unrealized appreciation of $54.5 million for the three months ended September 30, 2025 .

Our entire portfolio was fair valued at 109.0% of cost as of September 30, 2025 .

Comparison of the Six Months Ended September 30, 2025 to the Six Months Ended September 30, 2024

For the Six Months Ended September 30,

Net unrealized appreciation of investments of $70.2 million for the three months ended December 31, 2025 was primarily due to increased performance of certain of our portfolio companies and an increase in transaction multiples used to estimate the fair value of certain of our portfolio companies.

These increases were partially offset by decreased performance of certain of our portfolio companies.

Net unrealized appreciation of investments of $37.3 million for the three months ended December 31, 2024 was primarily due to an increase in the performance of certain of our portfolio companies and an increase in transaction multiples used to estimate the fair value of certain of our portfolio companies.

These increases were partially offset by decreased performance of certain of our other portfolio companies.

Across our entire investment portfolio, we recorded net unrealized appreciation of $74.5 million on our equity positions and net unrealized depreciation of $4.2 million on our debt investments for the three months ended December 31, 2025 .

As of December 31, 2025 , the fair value of our investment portfolio exceeded our cost basis by $163.9 million, compared to September 30, 2025, when the fair value of our investment portfolio exceeded our cost basis by $93.7 million.

This resulted in net unrealized appreciation of $70.2 million for the three months ended December 31, 2025 .

Our entire portfolio was fair valued at 115.5% of cost as of December 31, 2025 .

Comparison of the Nine Months Ended December 31, 2025 to the Nine Months Ended December 31, 2024

For the Nine Months Ended December 31,

2025 2024 Change % Change

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Loan servicing fee 8,706 6,821 1,885 27.6 %

Incentive fee 4,998 (1,556) 6,554 NM

Incentive fee 19,747 7,797 11,950 153.3 %

Administration fee 1,450 1,478 (28) (1.9) %

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REALIZED AND UNREALIZED GAIN (LOSS)

Net realized (loss) gain on investments (29,938) 42,305 (72,243) NM

Net unrealized appreciation (depreciation) of investments 53,052 (53,054) 106,106 NM

Net realized and unrealized gain (loss) 23,114 (10,749) 33,863 NM

Net realized gain on investments (26,457) 42,305 (68,762) NM

Net realized loss on other (1,301) — (1,301) NM

Net unrealized appreciation (depreciation) 123,279 (15,725) 139,004 NM

Net realized and unrealized gain (loss) 95,521 26,580 68,941 259.4 %

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 102,379 $ 47,446 $ 54,933 115.8 %

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Investment Income

Total investment income increased $4.1 million, or 9.1%, for the six months ended September 30, 2025, as compared to the prior year period, primarily due to an increase in interest income and dividend and success fee income.

Interest income from our investments in debt securities increased $2.7 million, or 6.5%, for the six months ended September 30, 2025, as compared to the prior year period.

Total investment income increased $7.8 million, or 11.8%, for the nine months ended December 31, 2025, as compared to the prior year period, primarily due to an increase in interest income and dividend and success fee income.

Interest income from our investments in debt securities increased $5.0 million, or 8.1%, for the nine months ended December 31, 2025, as compared to the prior year period.

The weighted-average principal balance of our interest-bearing investment portfolio during the six months ended September 30, 2025 was $639.6 million, compared to $578.1 million for the prior year period.

This increase was primarily due to the origination of $222.9 million of new debt investments and $42.2 million of follow-on debt investments in existing portfolio companies, partially offset by $129.4 million of pay-offs, restructurings, or write-offs of debt investments and $30.8 million of existing loans placed on non-accrual status after March 31, 2024, and their respective impact on the weighted-average principal balance when considering the timing of new investments, pay-offs, restructurings, write-offs, and accrual status changes, as applicable.

During the six months ended September 30, 2025, we collected $1.8 million in past due interest from portfolio companies that were previously on non-accrual status, including $1.5 million from SFEG and $0.3 million from J.R.

We had no collections of past due interest during the six months ended September 30, 2024.

The weighted-average yield on our interest-bearing investments, excluding cash and cash equivalents and receipts recorded as dividend and success fee income, was 13.7% for the six months ended September 30, 2025, compared to 14.4% for the prior year period.

The weighted-average principal balance of our interest-bearing investment portfolio during the nine months ended December 31, 2025 was $670.0 million, compared to $576.1 million for the prior year period.

This increase was primarily due to the origination of $222.9 million of new debt investments, $46.5 million of follow-on debt investments in existing portfolio companies and $20.0 million of loans returned to accrual status, partially offset by $145.1 million of pay-offs, restructurings, or write-offs of debt investments and $30.8 million of existing loans placed on non-accrual status after March 31, 2024, and their respective impact on the weighted-average principal balance when considering the timing of new investments, pay-offs, restructurings, write-offs, and accrual status changes, as applicable.

During the nine months ended December 31, 2025, we collected $1.8 million in past due interest from portfolio companies that were previously on non-accrual status, including $1.5 million from SFEG and $0.3 million from J.R.

We had no collections of past due interest during the nine months ended December 31, 2024.

The weighted-average yield on our interest-bearing investments, excluding cash and cash equivalents and receipts recorded as dividend and success fee income, was 13.2% for the nine months ended December 31, 2025, compared to 14.3% for the prior year period.

As of September 30, 2025, our loans to B+T, Diligent and Edge were on non-accrual status, with an aggregate debt cost basis of $40.3 million.

As of September 30, 2024, our loans to B+T, Diligent, Edge, and J.R.

As of December 31, 2025, our loans to B+T, Diligent and Edge were on non-accrual status, with an aggregate debt cost basis of $40.3 million.

As of December 31, 2024, our loans to B+T, Diligent, Edge, and J.R.

Hobbs were also on non-accrual status, with an aggregate debt cost basis of $90.0 million.

As of September 30, 2025 and March 31, 2025, SFEG represented 11.5% and 10.8% of the total investment portfolio at fair value, respectively.

Dividend and success fee income for the six months ended September 30, 2025 increased $1.4 million, or 44.3% from the prior year period.

During the six months ended September 30, 2025, dividend and success fee income consisted of $3.7 million of dividend income and $0.8 million of success fee income.

During the six months ended September 30, 2024, dividend and success fee income consisted of $1.7 million of success fee income and $1.4 million of dividend income.

Total expenses, net of any non-contractual, unconditional, and irrevocable credits from the Adviser, increased $10.4 million, or 41.6%, during the six months ended September 30, 2025, as compared to the prior year period, primarily due to an increase in incentive fees, interest expense and base management fee, partially offset by a decrease in other expense and an increase in fee credits from the Adviser.

In accordance with GAAP, we recorded a $4.7 million capital gains-based incentive fee during the six months ended September 30, 2025, compared to a $2.2 million reversal of previously accrued capital gains-based incentive fee recorded during the six months ended September 30, 2024.

As of December 31, 2025 and March 31, 2025, SFEG represented 11.8% and 10.8% of the total investment portfolio at fair value, respectively.

Dividend and success fee income for the nine months ended December 31, 2025 increased $2.8 million, or 69.8% from the prior year period.

During the nine months ended December 31, 2025, dividend and success fee income consisted of $4.7 million of dividend income and $2.0 million of success fee income.

During the nine months ended December 31, 2024, dividend and success fee income consisted of $2.5 million of success fee income and $1.4 million of dividend income.

Total expenses, net of any non-contractual, unconditional, and irrevocable credits from the Adviser, increased $21.8 million, or 48.1%, during the nine months ended December 31, 2025, as compared to the prior year period, primarily due to an increase in incentive fees, interest expense and base management fee, partially offset by a decrease in other expense and an increase in fee credits from the Adviser.

In accordance with GAAP, we recorded a $19.4 million capital gains-based incentive fee during the nine months ended December 31, 2025, compared to a $5.3 million capital gains-based incentive fee recorded during the nine months ended December 31, 2024.

The capital gains-based incentive fee was a result of the net impact of net realized gains and net unrealized appreciation (depreciation) on investments during the respective periods.

The income-based incentive fee decreased by $0.3 million for the six months ended September 30, 2025, as compared to the prior year period, primarily due to an increase in net assets, which drives the hurdle rate.

The income-based incentive fee decreased by $2.2 million for the nine months ended December 31, 2025, as compared to the prior year period, primarily due to an increase in net assets, which drives the hurdle rate, partially offset by a decrease in pre-incentive fee net investment income.

Six Months Ended September 30,

Nine Months Ended December 31,

Average total assets subject to base management fee (A)

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Incentive fee – capital gains-based (C)

4,688 (2,150)

Total incentive fee (B)

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

Interest expense increased $5.3 million, or 40.8%, during the six months ended September 30, 2025, as compared to the prior year period, primarily due to interest expense related to the issuance of the 7.785% 2030 Notes in December 2024 and increased borrowings on the Credit Facility, partially offset by a decrease in the effective interest rate.

The weighted-average balance outstanding on the Credit Facility during the six months ended September 30, 2025 was $72.2 million as compared to $62.8 million in the prior year period.

The effective interest rate on the Credit Facility, excluding the impact of deferred financing costs, during the six months ended September 30, 2025 was 10.2%, as compared to 10.9% in the prior year period.

Other expenses decreased $1.6 million, or 43.1%, during the six months ended September 30, 2025, as compared to the prior year period, due to an decrease in bad debt expense and tax expense, partially offset by an increase in professional fees.

Interest expense increased $8.4 million, or 43.4%, during the nine months ended December 31, 2025, as compared to the prior year period, primarily due to interest expense related to the issuance of the 6.875% 2028 Notes in November 2025 and the 7.785% 2030 Notes in December 2024 and increased borrowings on the Credit Facility, partially offset by a decrease in the effective interest rate and the redemption of the 8.00% 2028 Notes in December 2025.

The weighted-average balance outstanding on the Credit Facility during the nine months ended December 31, 2025 was $74.8 million as compared to $55.8 million in the prior year period.

The effective interest rate on the Credit Facility, excluding the impact of deferred financing costs, during the nine months ended December 31, 2025 was 10.0%, as compared to 11.1% in the prior year period.

The decrease in the effective interest rate on the Credit Facility was primarily a result of lower interest rates on the drawn portion of our Credit Facility, partially offset by an increase in the drawn portion of the Credit Facility during the nine months ended December 31, 2025.

Other expenses decreased $1.7 million, or 34.4%, during the nine months ended December 31, 2025, as compared to the prior year period, due to an decrease in bad debt expense and tax expense, partially offset by an increase in professional fees.

Realized and Unrealized Gain (Loss)

The realized gains (losses) and unrealized appreciation (depreciation) across our investments for the six months ended September 30, 2025 and 2024 were as follows:

Six Months Ended September 30, 2025

The realized gains (losses) and unrealized appreciation (depreciation) across our investments for the nine months ended December 31, 2025 and 2024 were as follows:

Nine Months Ended December 31, 2025

Portfolio Company Realized Gain (Loss) on Investments Unrealized Appreciation (Depreciation) Reversal of Unrealized (Appreciation) Depreciation Net Gain (Loss)

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$ — $ 39,280 $ — $ 39,280

The E3 Company, LLC — 13,465 — 13,465

- Atlanta, LLC (29,938) 12,873 19,104 2,039

Schylling, Inc.

— 36,345 — 36,345

The E3 Company, LLC — 22,126 — 22,126

ImageWorks Display and Marketing Group, Inc.

— 14,873 — 14,873

Dema/Mai Holding, Inc.

— 4,172 — 4,172

Horizon Facilities Services, Inc.

Old World Christmas, Inc.

3,481 9,959 — 13,440

Mason West, LLC — 5,783 — 5,783

Nielsen-Kellerman Acquisition Corp.

Global GRAB Technologies, Inc.

— 4,239 — 4,239

Old World Christmas, Inc.

Dema/Mai Holding, Inc.

— 2,131 — 2,131

Smart Chemical Solutions, LLC — (1,694) — (1,694)

Detroit Defense, Inc.

- Atlanta, LLC (29,938) 12,337 19,104 1,503

Home Concepts Acquisition, Inc.

— (1,408) — (1,408)

Ginsey Home Solutions, Inc.

Sun State Nursery and Landscaping, LLC — (1,742) — (1,742)

Pyrotek Special Effects, Inc.

— (2,200) — (2,200)

Diligent Delivery Systems — (2,691) — (2,691)

Phoenix Door Systems, Inc.

Brunswick Bowling Products, Inc.

— (2,742) — (2,742)

UPB Acquisition, Inc.

Nielsen-Kellerman Acquisition Corp.

— (2,917) — (2,917)

Brunswick Bowling Products, Inc.

Smart Chemical Solutions, LLC — (3,009) — (3,009)

Horizon Facilities Services, Inc.

— (3,243) — (3,243)

Galaxy Technologies Holdings, Inc.

Detroit Defense, Inc.

— (4,817) — (4,817)

The Maids International, LLC — (5,129) — (5,129)

Educators Resource, Inc.

— (5,734) — (5,734)

PSI Molded Plastics, Inc.

— (6,441) — (6,441)

Educators Resource, Inc.

— (6,581) — (6,581)

Other, net (<$1.0 million, net) — 383 — 383

Total $ (26,457) $ 104,536 $ 19,104 $ 97,183

Six Months Ended September 30, 2024

Nine Months Ended December 31, 2024

Portfolio Company Realized Gain (Loss) Unrealized Appreciation (Depreciation) Reversal of Unrealized (Appreciation) Depreciation Net Gain (Loss)

The E3 Company, LLC $ — $ 5,208 $ — $ 5,208

Nocturne Luxury Villas, Inc.

$ — $ 18,668 $ — $ 18,668

Old World Christmas, Inc.

The E3 Company, LLC — 17,103 — 17,103

SFEG Holdings, Inc.

— 8,139 — 8,139

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— 7,804 — 7,804

Old World Christmas, Inc.

— 6,084 — 6,084

UPB Acquisition, Inc.

Galaxy Technologies Holdings, Inc.

— 5,049 — 5,049

ImageWorks Display and Marketing Group, Inc.

— 3,932 — 3,932

Ginsey Home Solutions, Inc.

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- Atlanta, LLC — 2,984 — 2,984

The Maids International, LLC — 2,352 — 2,352

Dema/Mai Holdings, Inc.

— 1,272 — 1,272

The Maids International, LLC — 1,251 — 1,251

Diligent Delivery Systems — (986) — (986)

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— (1,238) — (1,238)

PSI Molded Plastics, Inc.

— (1,767) — (1,767)

Brunswick Bowling Products, Inc.

B+T Group Acquisition, Inc.

— (2,303) — (2,303)

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— (2,402) — (2,402)

B+T Group Acquisition, Inc.

— (2,742) — (2,742)

Nth Degree Investment Group, LLC 42,284 (7,195) (38,028) (2,939)

Horizon Facilities Services, Inc.

PSI Molded Plastics, Inc.

— (4,474) — (4,474)

Phoenix Door Systems, Inc.

Educators Resource, Inc.

— (5,507) — (5,507)

Mason West, LLC — (10,285) — (10,285)

Horizon Facilities Services, Inc.

— (19,888) — (19,888)

Other, net (<$1.0 million, net) 21 (384) 4 (359)

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Net Realized Gain (Loss)

During the six months ended September 30, 2025, we recorded net realized losses on investments of $29.9 million, due to the realized loss from the restructuring of J.R.

During the six months ended September 30, 2024, we recorded net realized gains on investments of $42.3 million, due to the realized gain from the exit of Nth Degree.

During the nine months ended December 31, 2025, we recorded net realized losses on investments of $26.5 million, due to the realized loss from the restructuring of J.R.

Hobbs, partially offset by the equity distribution recognized as realized gain from Old World.

During the nine months ended December 31, 2024, we recorded net realized gains on investments of $42.3 million, due to the realized gain from the exit of Nth Degree Investment Group, LLC ("Nth Degree").

Net Realized Gain (Loss) on Other

During the nine months ended December 31, 2025, we recorded net realized losses on other of $ 1.3 million, due to the unamortized deferred offering costs written off upon the redemption of our 8.00% 2028 Notes .

During the nine months ended December 31, 2024, we did not record any net realized gains or losses on other.

Net Unrealized Appreciation (Depreciation) on Investments

Net unrealized appreciation of investments of $53.4 million for the six months ended September 30, 2025 was primarily due to the increased performance of certain of our portfolio companies and the reversal of previously recorded unrealized depreciation related to our investment in J.R.

Net unrealized appreciation of investments of $123.6 million for the nine months ended December 31, 2025 was primarily due to the increased performance of certain of our portfolio companies, an increase in transaction multiples used to estimate the fair value of certain of our portfolio companies and the reversal of previously recorded unrealized depreciation related to our investment in J.R.

Hobbs upon its restructure.

Net unrealized depreciation of investments of $53.1 million for the six months ended September 30, 2024 was primarily due to the reversal of unrealized appreciation of Nth Degree upon our exit and decreased performance of certain of our portfolio companies.

These increases were partially offset by decreased performance of certain of our portfolio companies.

Net unrealized depreciation of investments of $15.7 million for the nine months ended December 31, 2024 was primarily due to the reversal of unrealized appreciation of Nth Degree upon exit and decreased performance of certain of our portfolio companies.

Across our entire investment portfolio, we recorded net unrealized appreciation of $36.2 million on our equity positions and appreciation of $17.2 million on our debt positions , for the six months ended September 30, 2025 .

As of September 30, 2025 , the fair value of our investment portfolio was more than the cost basis by $93.7 million , as compared to March 31, 2025, when the fair value of our investment portfolio was more than the cost basis by $40.3 million , representing net unrealized appreciation of $53.4 million for the six months ended September 30, 2025 .

Our entire portfolio had a fair value of 109.0% of cost as of September 30, 2025 .

Across our entire investment portfolio, we recorded net unrealized appreciation of $110.7 million on our equity positions and appreciation of $13.0 million on our debt positions , for the nine months ended December 31, 2025 .

As of December 31, 2025 , the fair value of our investment portfolio exceeded the cost basis by $163.9 million , as compared to March 31, 2025, when the fair value of our investment portfolio exceeded the cost basis by $40.3 million , representing net unrealized appreciation of $123.6 million for the nine months ended December 31, 2025 .

Our entire portfolio had a fair value of 115.5% of cost as of December 31, 2025 .

LIQUIDITY AND CAPITAL RESOURCES

Operating Activities

Net cash used in operating activities for the six months ended September 30, 2025 was $110.8 million compared to net cash provided by operating activities of $75.5 million for the six months ended September 30, 2024.

This change was primarily due to an increase in purchases of investments and decrease in net proceeds from the sale and recapitalization of investments and principal repayments of investments.

Purchases of investments totaled $133.9 million during the six months ended September 30, 2025, compared to $20.1 million during the six months ended September 30, 2024.

Aggregate net proceeds from the sale and recapitalization of investments and principal repayments of investments totaled $5.8 million during the six months ended September 30, 2025, compared to $76.5 million during the six months ended September 30, 2024.

As of September 30, 2025, we had equity investments in and/or loans to 28 portfolio companies with an aggregate cost basis of $1.0 billion.

As of September 30, 2024, we had equity investments in and/or loans to 22 portfolio companies with an aggregate cost basis of $840.1 million.

The following table summarizes our total portfolio investment activity during the six months ended September 30, 2025 and 2024:

Six Months Ended September 30,

Net cash used in operating activities for the nine months ended December 31, 2025 was $118.4 million compared to net cash used in operating activities of $96.4 million for the nine months ended December 31, 2024.

This change was primarily due to a decrease in net proceeds from the sale and recapitalization of investments and principal repayments of investments, partially offset by a decrease in purchases of investments.

Purchases of investments totaled $171.3 million during the nine months ended December 31, 2025, compared to $207.2 million during the nine months ended December 31, 2024.

Aggregate net proceeds from the sale and recapitalization of investments and principal repayments of investments totaled $25.0 million during the nine months ended December 31, 2025, compared to $82.0 million during the nine months ended December 31, 2024.

As of December 31, 2025, we had equity investments in and/or loans to 29 portfolio companies with an aggregate cost basis of $1.1 billion.

As of December 31, 2024, we had equity investments in and/or loans to 26 portfolio companies with an aggregate cost basis of $1.0 billion.

The following table summarizes our total portfolio investment activity during the nine months ended December 31, 2025 and 2024:

Nine Months Ended December 31,

Beginning investment portfolio, at fair value $ 979,320 $ 920,504

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Ending investment portfolio, at fair value $ 1,222,792 $ 1,072,230

The following table summarizes the contractual principal repayment and maturity of our investment portfolio by fiscal year, assuming no voluntary prepayments, as of September 30, 2025:

For the remaining six months ending March 31, 2026

The following table summarizes the contractual principal repayment and maturity of our investment portfolio by fiscal year, assuming no voluntary prepayments, as of December 31, 2025:

For the remaining three months ending March 31, 2026

For the fiscal years ending March 31:

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Investments in equity securities 307,000

Total cost basis of investments held as of September 30, 2025:

Total cost basis of investments held as of December 31, 2025:

Financing Activities

Net cash provided by financing activities for the six months ended September 30, 2025 was $97.9 million, which consisted primarily of $97.7 million of net borrowings under our Credit Facility and $38.4 million of proceeds from issuance of common stock, net of expenses and shelf offering registration costs, partially offset by $38.1 million in distributions to common stockholders and $0.1 million of deferred financing and offering costs.

Net cash used in financing activities for the six months ended September 30, 2024 was $76.0 million, which consisted primarily of $58.1 million of net repayments under our Credit Facility, $17.6 million in distributions to common stockholders and $0.3 million of deferred financing and offering costs.

Net cash provided by financing activities for the nine months ended December 31, 2025 was $106.2 million, which consisted primarily of $128.6 million of net borrowings under our Credit Facility, $60.0 million of gross proceeds from the issuance of our 6.875% 2028 Notes and $41.6 million of proceeds from issuance of common stock, net of expenses and shelf offering registration costs, partially offset by $74.8 million redemption of our 8.00% 2028 Notes, $47.6 million in distributions to common stockholders and $1.7 million of deferred financing and offering costs.

Net cash provided by financing activities for the nine months ended December 31, 2024 was $96.3 million, which consisted primarily of $126.5 million of gross proceeds from the issuance of our 7.875% 2030 Notes, $24.5 million of net borrowings under the Credit Facility and $2.0 million of proceeds from issuance of common stock, net of expenses and shelf offering registration costs, partially offset by $52.1 million in distributions to common stockholders and $4.6 million of deferred financing and offering costs.

Distributions and Dividends to Stockholders

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Additionally, our Credit Facility generally restricts the amount of distributions to stockholders that we can pay out to be no greater than the sum of certain amounts, including our net investment income, plus net capital gains, plus amounts elected by the Company to be considered as having been paid during the prior fiscal year in accordance with Section 855(a) of the Code.

In accordance with these requirements, our Board of Directors declared, and we paid, monthly cash distributions of $0.08 per common share for each of the six months from April through September 2025, and a supplemental distribution of $0.54 per common share paid in June 2025.

See also “ Recent Developments - Distributions and Dividends ” for a discussion of cash distributions to common stockholders declared our Board of Directors in October 2025.

In accordance with these requirements, our Board of Directors declared, and we paid, monthly cash distributions of $0.08 per common share for each of the nine months from April through December 2025, and a supplemental distribution of $0.54 per common share paid in June 2025.

See also “ Recent Developments - Distributions and Dividends ” for a discussion of cash distributions to common stockholders declared our Board of Directors in January 2026.

For the fiscal year ended March 31, 2025, Investment Company Taxable Income exceeded distributions declared and paid, and, in accordance with Section 855(a) of the Code, we elected to treat $36.7 million of the first distributions paid subsequent to fiscal year-end as having been paid in the prior year.

In addition, for the fiscal year ended March 31, 2025, net capital gains exceeded distributions declared and paid, and, in accordance with Section 855(a) of the Code, we elected to treat $18.7 million of the first distributions paid subsequent to fiscal year-end as having been paid in the prior year.

For the year ended March 31, 2025, we recorded $1.2 million of net adjustments for estimated permanent book-tax differences to reflect tax character, which decreased Capital in excess of par value and Overdistributed net investment income.

For the six months ended September 30, 2025, we recorded $2.2 thousand of net adjustments for estimated permanent book-tax differences to reflect tax character, which increased Accumulated net realized (loss) gain in excess of distributions and increased Overdistributed net investment income and Capital in excess of par value.

For the nine months ended December 31, 2025, we recorded $0.4 million of net adjustments for estimated permanent book-tax differences to reflect tax character, which increased Total distributable earnings and decreased Capital in excess of par value.

Dividend Reinvestment Plan

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as a Sales Agent for the 2024 Common Stock ATM Program.

As of September 30, 2025, we had remaining capacity to sell up to an additional $34.1 million of common stock under the 2024 Common Stock ATM Program.

As of December 31, 2025, we had remaining capacity to sell up to an additional $30.8 million of common stock under the 2024 Common Stock ATM Program.

In August 2022, we entered into equity distribution agreements with Oppenheimer & Co.

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as a 2022 Sales Agent for the 2022 Common Stock ATM Program.

We did not sell any shares under the 2022 Common Stock ATM Program, which terminated in connection with our entry into the 2024 Common Stock ATM Program on May 14, 2024, during the six months ended September 30, 2024.

During the three months ended September 30, 2025, we sold 2,238,361 shares of our common stock under the 2024 Common Stock ATM Program, with a weighted-average gross price of $14.10 per share and a weighted-average net price of $13.90 per share after deducting commissions and offering costs borne by us, raising approximately $31.6 million and $31.1 million of gross and net proceeds, respectively.

We did not sell any shares under the 2022 Common Stock ATM Program, which terminated in connection with our entry into the 2024 Common Stock ATM Program on May 14, 2024, during the nine months ended December 31, 2024.

During the three months ended December 31, 2025, we sold 230,930 shares of our common stock under the 2024 Common Stock ATM Program, with a weighted-average gross price of $14.03 per share and a weighted-average net price of $13.83 per share after deducting commissions and offering costs borne by us, raising approximately $3.2 million and $3.2 million of gross and net proceeds, respectively.

These sales were above our then current NAV per share.

During the six months ended September 30, 2025, we sold 2,753,656 shares of our common stock under the 2024 Common Stock ATM Program, with a weighted-average gross price of $14.12 per share and a weighted-average net price of $13.93 per share after deducting commissions and offering costs borne by us, raising approximately $38.9 million and $38.4 million of gross and net proceeds, respectively.

During the nine months ended December 31, 2025, we sold 2,984,586 shares of our common stock under the 2024 Common Stock ATM Program, with a weighted-average gross price of $14.12 per share and a weighted-average net price of $13.92 per share after deducting commissions and offering costs borne by us, raising approximately $42.1 million and $41.5 million of gross and net proceeds, respectively.

These sales were above our then current NAV per share.

During the three and six months ended September 30, 2024, we did not sell any shares under the 2024 Common Stock ATM Program.

During the three and nine months ended December 31, 2024, we sold 148,714 shares of our common stock under the 2024 Common Stock ATM Program, with a weighted-average gross price of $13.64 per share and a weighted-average net price of $13.48 per share after deducting commissions and offering costs borne by us, raising approximately $2.0 million and $2.0 million of gross and net proceeds, respectively.

All of these sales were above our then current NAV per share.

We anticipate issuing equity securities to obtain additional capital in the future.

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Generally, the 1940 Act provides that we may not issue and sell our common stock at a price below our NAV per common share, other than to our then-existing common stockholders pursuant to a rights offering, without first obtaining approval from our stockholders and our independent directors and meeting other stated requirements.

As of September 30, 2025, the closing market price of our common stock was $ 13.82 per share, representing a 2.1 % premium to our NAV per share of $ 13.53 as of September 30, 2025.

As of December 31, 2025, the closing market price of our common stock was $ 13.97 per share, representing a 6.6 % discount to our NAV per share of $ 14.95 as of December 31, 2025.

Revolving Line of Credit

As of September 30, 2025, our Credit Facility had a total commitment amount of $ 270.0 million with an "accordion" feature that permits us to increase the size of the facility to $ 300.0 million.

We, through our wholly-owned subsidiary, Business Investment, have entered into the Credit Facility with KeyBank, as administrative agent, joint lead arranger and lender, Fifth Third Bank as managing agent, joint lead arranger and lender, City National Bank, as lender, the Adviser, as servicer, and certain other lenders party thereto.

As of December 31, 2025, the maximum size of the facility was $ 300.0 million.

The Credit Facility includes customary terms, covenants, events of default and constraints on borrowing availability based on collateral tests for a credit facility of its size and nature.

The Credit Facility has a revolving period end date of October 30, 2026 and a final maturity date of October 30, 2028 (at which time all principal and interest will be due and payable if the Credit Facility is not extended by the revolving period end date).

See " Overview - Revolving Line of Credit ".

As of September 30, 2025, advances under the Credit Facility generally bore interest at 30-day Term SOFR, subject to a floor of 0.35 %, with a SOFR credit spread adjustment of 10 basis points, plus a margin of 3.15 % per annum until October 30, 2026, with the margin then increasing to 3.40 % for the period from October 30, 2026 to October 30, 2027, and increasing further to 3.65 % thereafter.

As of December 31, 2025, advances under the Credit Facility generally bore interest at 30-day Term SOFR, subject to a floor of 0.35 %, with a SOFR credit spread adjustment of 10 basis points, plus a margin of 3.15 % per annum until October 30, 2026, with the margin then increasing to 3.40 % for the period from October 30, 2026 to October 30, 2027, and increasing further to 3.65 % thereafter.

The Credit Facility has an unused commitment fee on the daily unused commitment amount of 0.50 % per annum if the daily unused commitment amount is less than or equal to 50% of the total commitment amount, 0.75 % per annum if the daily unused commitment amount is greater than 50% but less than or equal to 65% of the total commitment amount, and 1.00 % per annum if the daily unused commitment amount is greater than 65% of the total commitment amount.

At September 30, 2025, we had $ 97.7 million of borrowings outstanding on the Credit Facility and as of the date of this report, we had $95.9 million outstanding under our Credit Facility.

At December 31, 2025, we had $ 128.6 million of borrowings outstanding on the Credit Facility and as of the date of this report, we had $129.4 million outstanding under our Credit Facility.

Interest is payable monthly during the term of our Credit Facility.

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Our Credit Facility also requires Business Investment to comply with other financial and operational covenants, which obligate Business Investment to, among other things, maintain certain financial ratios, including asset and interest coverage and a minimum number of obligors required in the borrowing base.

Additionally, our Credit Facility contains a performance guaranty that requires the Company to maintain (i) a minimum net worth of the greater of $ 210.0 million or $ 210.0 million plus 50 % of all equity and subordinated debt raised, minus 50 % of any equity or subordinated debt redeemed or retired after November 16, 2016, which equated to $ 432.4 million as of September 30, 2025, (ii) asset coverage with respect to senior securities representing indebtedness of at least 150 % (or such percentage as may be set forth in Section 18 of the 1940 Act, as modified by Section 61 of the 1940 Act), and (iii) our status as a BDC under the 1940 Act and as a RIC under the Code.

As of September 30, 2025, and as defined in the performance guaranty of our Credit Facility, we had a net worth of $ 991.8 million, asset coverage on our senior securities representing indebtedness of 193.2 %, calculated in compliance with the requirements of Sections 18 and 61 of the 1940 Act, and an active status as a BDC and RIC.

As of September 30, 2025, we had availability, after adjustments for various constraints based on collateral quality, of $ 172.3 million under our Credit Facility and were in compliance with all covenants under our Credit Facility.

Additionally, our Credit Facility contains a performance guaranty that requires the Company to maintain (i) a minimum net worth of the greater of $ 210.0 million or $ 210.0 million plus 50 % of all equity and subordinated debt raised, minus 50 % of any equity or subordinated debt redeemed or retired after November 16, 2016, which equated to $ 426.6 million as of December 31, 2025, (ii) asset coverage with respect to senior securities representing indebtedness of at least 150 % (or such percentage as may be set forth in Section 18 of the 1940 Act, as modified by Section 61 of the 1940 Act), and (iii) our status as a BDC under the 1940 Act and as a RIC under the Code.

As of December 31, 2025, and as defined in the performance guaranty of our Credit Facility, we had a net worth of $ 1.0 billion, asset coverage on our senior securities representing indebtedness of 201.1 %, calculated in compliance with the requirements of Sections 18 and 61 of the 1940 Act, and an active status as a BDC and RIC.

As of December 31, 2025, we had availability, after adjustments for various constraints based on collateral quality, of $ 171.4 million under our Credit Facility and were in compliance with all covenants under our Credit Facility.

Notes Payable

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In May 2023, we completed a public offering of the 8.00% 2028 Notes with an aggregate principal amount of $74.8 million, which resulted in net proceeds of approximately $72.3 million after deducting underwriting discounts, commissions and offering costs borne by us.

The 8.00% 2028 Notes are traded under the ticker symbol “GAINL” on Nasdaq.

The 8.00% 2028 Notes will mature on August 1, 2028 and may be redeemed in whole or in part at any time or from time to time at the Company’s option.

The 8.00% 2028 Notes bear interest at a rate of 8.00% per year (which equates to $6.0 million per year), payable quarterly in arrears.

The indenture relating to the 8.00% 2028 Notes contains certain covenants, including (i) an inability to incur additional debt or issue additional debt or preferred securities unless the Company’s asset coverage meets the threshold specified in the 1940 Act after such borrowing, (ii) an inability to declare any dividend or distribution (except a dividend payable in our stock) on a class of our capital stock or to purchase shares of our capital stock unless the Company’s asset coverage meets the threshold specified in the 1940 Act at the time of (and giving effect to) such declaration or purchase, and (iii) if, at any time, we are not subject to the reporting requirements of the Exchange Act, we will provide the holders of the 8.00% 2028 Notes and the trustee with audited annual consolidated financial statements and unaudited interim consolidated financial statements.

The 8.00% 2028 Notes are recorded at the aggregate principal amount, less underwriting discounts, commissions, and offering costs, on our accompanying Consolidated Statements of Assets and Liabilities .

Total underwriting discounts, commissions, and offering costs related to this offering were $ 2.5 million, which have been recorded as discounts to the aggregate principal amount on our accompanying Consolidated Statements of Assets and Liabilities and are being amortized over the period ending August 1, 2028, the maturity date.

On December 16, 2025, we voluntarily redeemed 100 % of the issued and outstanding 8.00 % 2028 Notes.

The 8.00 % 2028 Notes would have otherwise matured on August 1, 2028.

We incurred a loss on extinguishment of debt of $ 1.3 million, which was recorded in Realized loss on other in our accompanying Consolidated Statements of Operations and which was primarily comprised of unamortized deferred offering costs at the time of redemption.

7.875 % Notes due 2030

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Total underwriting discounts, commissions, and offering costs related to this offering were $ 4.1 million, which have been recorded as discounts to the aggregate principal amount on our accompanying Consolidated Statements of Assets and Liabilities and are being amortized over the period ending February 1, 2030, the maturity date.

6.875 % Notes due 2028

In November 2025 , we completed an offering of the 6.875 % 2028 Notes with an aggregate principal amount of $ 60.0 million, which resulted in net proceeds of approximately $ 58.8 million after deducting underwriting discounts, commissions and offering costs borne by us.

The 6.875 % 2028 Notes will mature on November 1, 2028 and may be redeemed in whole or in part at any time prior to August 1, 2028 at par plus a "make-whole" premium and thereafter at par plus accrued and unpaid interest thereon to the redemption date.

The 6.875 % 2028 Notes bear interest at a rate of 6.875 % per year (which equates to $4.1 milli on per year), payable semi-annually in arrears.

The indenture relating to the 6.875 % 2028 Notes contains certain covenants, including (i) an inability to incur additional debt or issue additional debt or preferred securities unless the Company’s asset coverage meets the threshold specified in the 1940 Act after such borrowing, (ii) an inability to declare any dividend or distribution (except a dividend payable in our stock) on a class of our capital stock or to purchase shares of our capital stock unless the Company’s asset coverage meets the threshold specified in the 1940 Act at the time of (and giving effect to) such declaration or purchase, and (iii) if, at any time, we are not subject to the reporting requirements of the Exchange Act, we will provide the holders of the 6.875 % 2028 Notes and the trustee with audited annual consolidated financial statements and unaudited interim consolidated financial statements.

The 6.875 % 2028 Notes are recorded at the aggregate principal amount, less underwriting discounts, commissions, and offering costs, on our accompanying Consolidated Statements of Assets and Liabilities .

Total underwriting discounts, commissions, and offering costs related to this offering were $ 1.2 million, which have been recorded as discounts to the aggregate principal amount on our accompanying Consolidated Statements of Assets and Liabilities and are being amortized over the period ending November 1, 2028, the maturity date.

OFF-BALANCE SHEET ARRANGEMENTS

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Due to the contingent nature of success fees, there are no guarantees that we will be able to collect any or all of these success fees or know the timing of any such collections.

As a result, as of September 30, 2025 and March 31, 2025, we had unrecognized, contractual off-balance sheet success fee receivables of $59.3 million and $52.5 million (or approximately $1.50 and $1.43 per common share), respectively, on our debt investments.

As a result, as of December 31, 2025 and March 31, 2025, we had unrecognized, contractual off-balance sheet success fee receivables of $62.7 million and $52.5 million (or approximately $1.57 and $1.43 per common share), respectively, on our debt investments.

Consistent with GAAP, we have not recognized success fee receivables and related income in our accompanying Consolidated Financial Statements until earned.

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Since these line of credit commitments have expiration dates and we expect many will never be fully drawn, the total line of credit commitment amounts do not necessarily represent future cash requirements.

We estimate the fair value of the combined unused line of credit commitments as of September 30, 2025 to be insignificant.

The following table shows our contractual obligations as of September 30, 2025, at cost:

We estimate the fair value of the combined unused line of credit commitments as of December 31, 2025 to be insignificant.

The following table shows our contractual obligations as of December 31, 2025, at cost:

Payments Due by Period

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The amount of interest payments calculated for purposes of this table was based upon rates and outstanding balances as of September 30, 2025.

The amount of interest payments calculated for purposes of this table was based upon rates and outstanding balances as of December 31, 2025.

Critical Accounting Estimates

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The Adviser’s risk rating system covers both qualitative and quantitative aspects of the business and the securities we hold.

The following table reflects risk ratings for all loans in our portfolio as of September 30, 2025 and March 31, 2025:

Rating September 30, 2025 March 31, 2025

The following table reflects risk ratings for all loans in our portfolio as of December 31, 2025 and March 31, 2025:

Rating December 31, 2025 March 31, 2025

Weighted-average

14 unchanged sentences

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-Q

Item 2. Management’s Discussion and Analysis