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Item 7. Management’s Discussion and Analysis

2026-05-12 compared with 2025-05-13 · 162 added, 155 removed, 344 unchanged (48% of the section changed)

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Historical financial condition and results of operations and percentage relationships among any amounts in the financial statements are not necessarily indicative of financial condition, results of operations or percentage relationships for any future periods.

Except per share amounts, dollar amounts included herein are in thousands unless otherwise indicated.

Except per share amounts, dollar amounts in tables included herein are in thousands unless otherwise indicated.

We were incorporated under the General Corporation Law of the State of Delaware on February 18, 2005.

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the sustainability of the business’ free cash flow and its ability to grow it over time, adequate assets for loan collateral, experienced management teams with a significant ownership interest in the portfolio company, reasonable capitalization of the portfolio company, including an ample equity contribution or cushion based on prevailing enterprise valuation multiples, and the potential to realize appreciation and gain liquidity in our equity position, if any.

We anticipate that liquidity in our equity position will be achieved through a merger or acquisition of the portfolio company, a public offering of the portfolio company’s stock or, to a lesser extent, by exercising our right to require the portfolio company to repurchase our warrants, though there can be no assurance that we will always have these rights.

We anticipate that liquidity in our equity position will be achieved through a merger, acquisition or recapitalization of the portfolio company, a public offering of the portfolio company’s stock, or, to a lesser extent, by exercising our right to require the portfolio company to repurchase our warrants, though there can be no assurance that we will always have these rights.

We invest in portfolio companies that seek funds for management buyouts and/or growth capital to finance acquisitions, recapitalize or, to a lesser extent, refinance their existing debt facilities.

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

During the year ended March 31, 2025, we invested in four new portfolio companies and exited two portfolio companies.

During the year ended March 31, 2026, we invested in four new portfolio companies.

From our initial public offering in June 2005 through March 31, 2026, we have invested in 66 companies, excluding investments in syndicated loans, for a total of approximately $2.2 billion, before giving effect to principal repayments and divestitures.

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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 March 31, 2025 and allowed us to declare and pay 23 supplemental distributions to common stockholders through March 31, 2025 .

The successful exits, in part, enabled us to increase the monthly distribution per common share by 100.0% from March 2011 through March 31, 2026 and allowed us to declare and pay 24 supplemental distributions to common stockholders through March 31, 2026 .

Capital Raising

We have been able to meet our capital needs through extensions of and increases to the Credit Facility and by accessing the capital markets in the form of public offerings of unsecured notes, as well as common and preferred stock.

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

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

During the year ended March 31, 2024, we issued the 8.00% 2028 Notes for gross proceeds of $74.8 million and sold 3,097,162 shares of our common stock under our previous "at-the-market" program (the "2022 Common Stock ATM Program") for gross proceeds of approximately $44.5 million.

Refer to “ Liquidity and Capital Resources.”

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.

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

During the year ended March 31, 2026, we issued the 6.875% 2028 Notes for gross proceeds of $60.0 million, issued the 7.125% 2031 Notes for gross proceeds of $100.0 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 .

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

On March 31, 2026, the closing market price of our common stock was $ 14.20 per share, representing a 15.4 % discount to our NAV of $ 16.78 per share as of March 31, 2026.

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During the fiscal year ended March 31, 2026, the following significant transactions occurred:

• In May 2024, our remaining shares in Funko Acquisition Holdings, LLC (“Funko”) were sold representing an exit of our investment in Funko, and resulting in a return of our equity cost basis of $ 21 thousand and a realized gain of $ 2 thousand.

• In July 2024, we invested an additional $ 18.5 million through secured first lien debt in Nocturne Luxury Villas, Inc.

("Nocturne") to fund an add-on acquisition.

• In September 2024, we exited our investment in Nth Degree Investment Group, LLC ("Nth Degree"), which resulted in success fee income of $ 0.1 million, a realized gain on our preferred equity of $ 42.3 million and the repayment of our debt investment of $ 25.0 million at par.

• In November 2024, we invested $ 27.2 million in a new portfolio company, Pyrotek Special Effects, Inc.

("Pyrotek"), in the form of $ 20.1 million of secured first lien debt and $ 7.1 million of preferred equity.

Pyrotek, headquartered in Ontario, Canada, is a leading provider of special effects services and solutions for the live entertainment industry.

• In December 2024, we invested $ 5.0 million in Gladstone Alternative, one of our affiliated funds, through common equity.

Gladstone Alternative is a registered, non-diversified, closed-end management investment company that operates as an interval fund.

• In December 2024, we invested $ 71.3 million in a new portfolio company, Nielsen-Kellerman Acquisition Corp.

("Nielsen-Kellerman"), in the form of $ 49.1 million of secured first lien debt and $ 22.2 million of preferred equity.

Nielsen-Kellerman, headquartered in Boothwyn, Pennsylvania, designs, manufactures, and distributes a wide range of rugged, waterproof environmental measurement and sports performance instruments.

• In December 2024, we invested $ 78.7 million in a new portfolio company, Ricardo Defense, Inc.

("Ricardo"), in the form of $ 61.3 million of secured first lien debt and $ 17.4 million of preferred equity.

Ricardo, headquartered in Troy, Michigan, with operations in California, Texas and Alabama and overseas, develops engineering and product solutions for U.S.

Army vehicle and logistics programs.

• In January 2025, we restructured our investment in PSI Molded Plastics, Inc ("PSI Molded").

• 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.

Smart Chemical, headquartered in Midland, Texas, is a provider of production chemicals for onshore oil and gas operators throughout the United States.

• In May 2025, we invested $12.8 million in a new portfolio company, Sun State Nursery and Landscaping, LLC ("Sun State"), in the form of $9.8 million of secured first lien debt and $3.1 million of preferred equity.

Sun State, headquartered in Jacksonville, Florida, is a commercial landscaping installation and maintenance provider in the Jacksonville area.

• In June 2025, we restructured our investment in PSI Molded Plastics, Inc.

("PSI Molded").

As a result of the restructuring, we converted debt with a cost basis of $10.6 million into preferred equity.

• In February 2025, we invested an additional $ 3.0 million through secured first lien debt in Pyrotek to fund an add-on acquisition.

• In February 2025, we recapitalized our existing investment in Educators Resource, Inc.

and invested an additional $ 10.0 million in the form of secured first lien debt.

In connection with this recapitalization, we received dividend income of $ 1.8 million.

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

• In July 2025, we invested $67.6 million in a new portfolio company, Global GRAB Technologies, Inc.

("Global GRAB"), in the form of $46.5 million of secured first lien debt and $21.1 million of preferred equity.

Global GRAB, headquartered in Franklin, Tennessee, is a provider of turnkey perimeter security and hostile vehicle mitigation systems, serving various government and commercial organizations.

• In September 2025, we entered into a new $20.0 million secured first lien term loan with J.R.

- Atlanta, LLC ("J.R.

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

Recent Developments

Appointment of Officer

On March 20, 2026, the Board of Directors appointed David Dullum as the Company’s chief executive officer, effective immediately.

On that same date, Erika Highland, who was promoted to executive vice president, was appointed as the Company's president effective October 1, 2026.

Additionally, John Sateri was appointed as the Company's chief investment officer effective immediately.

Distributions and Dividends

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May 20, 2026 May 29, 2026 0.08

June 4, 2025 June 13, 2025 0.54 (A)

June 23, 2026 June 30, 2026 0.08

Total for the Quarter:

(A) Represents a supplemental distribution to common stockholders.

Notes Payable

On May 1, 2026, we repaid the 5.00% 2026 Notes with an aggregate principal amount outstanding of $127.9 million .

RESULTS OF OPERATIONS

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Administration fee 1,959 1,914 45 2.4 %

Interest expense 28,246 24,121 4,125 17.1 %

Interest expense on borrowings 37,140 28,246 8,894 31.5 %

Amortization of deferred financing costs and discounts 3,881 2,852 1,029 36.1 %

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Total expenses, net of credits to fees 102,829 65,567 37,262 56.8 %

NET INVESTMENT INCOME 28,095 21,777 6,318 29.0 %

NET INVESTMENT (LOSS) INCOME (3,752) 28,095 (31,847) NM

REALIZED AND UNREALIZED GAIN (LOSS), NET OF TAXES

Net realized gain on investments 63,184 30,256 32,928 108.8 %

Net unrealized (depreciation) appreciation of investments (25,960) 33,301 (59,261) NM

Net unrealized appreciation of other — (29) 29 (100.0) %

Net realized and unrealized gain, net of taxes on deemed distribution of long-term capital gains 37,224 63,528 (26,304) (41.4) %

Net realized (loss) gain on investments (26,294) 63,184 (89,478) NM

Net realized loss on other

(1,301) — (1,301) NM

Net unrealized appreciation (depreciation) of investments 216,146 (25,960) 242,106 NM

Net unrealized appreciation of other (46) — (46) NM

Net realized and unrealized gain 188,505 37,224 151,281 406.4 %

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 184,753 $ 65,319 $ 119,434 182.8 %

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BASIC AND DILUTED PER COMMON SHARE:

Net investment income $ 0.76 $ 0.63 $ 0.13 20.6 %

Net investment (loss) income $ (0.10) $ 0.76 $ (0.86) NM

Net increase in net assets resulting from operations $ 4.77 $ 1.78 $ 2.99 168.0 %

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

This increase was primarily due to an increase in dividend and success fee income and an increase in interest income.

This increase was primarily due to an increase in interest income, partially offset by a decrease in dividend and success fee income.

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

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The weighted-average principal balance of our interest-bearing investment portfolio during the year ended March 31, 2026 was $671.6 million, compared to $601.5 million during the prior year.

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

This increase was primarily due to the origination of $250.5 million of new debt investments, $47.0 million of follow-on debt investments in existing portfolio companies and $20.0 million of loans returned to accrual status, partially offset by the pay-off, restructuring, or write-off of $153.5 million of debt investments and $30.8 million of existing loans placed on non-accrual status after March 31, 2024, and their respective impact on the weighted-average principal balance when considering the timing of new investments, pay-offs, restructurings, write-offs, and accrual status changes, as applicable.

During the year ended March 31, 2026, we collected $1.8 million in past due interest from portfolio companies that were previously on non-accrual status, including $1.5 million from SFEG Holdings, Inc.

("SFEG") and $0.3 million from J.R.

We had no collections of past due interest during the year ended March 31, 2025.

The weighted-average yield on our interest-bearing investments, excluding cash and cash equivalents and receipts recorded as dividend and success fee income, was 13.3% and 13.9% for the years ended March 31, 2026 and 2025, respectively.

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

During the years ended March 31, 2025 and 2024, we had no collections of past due interest.

As of March 31, 2026, our loans to B+T Group Acquisition, Inc.

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

("Edge"), and J.R.

– Atlanta, LLC ("J.R.

Hobbs") were on non-accrual status, with an aggregate debt cost basis of $90.2 million.

As of March 31, 2024, our loans to Edge and J.R.

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

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

As of March 31, 2025, our loans to B+T, Diligent, Edge and J.R.

Hobbs were on non-accrual status, with an aggregate debt cost basis of $90.2 million.

Dividend and success fee income for the year ended March 31, 2025 increased $4.5 million, or 82.3%, as compared to the prior year.

During the year ended March 31, 2025, dividend and success fee income consisted of $6.8 million of success fee income and $3.3 million of dividend income.

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

During the year ended March 31, 2026, dividend and success fee income consisted of $6.1 million of dividend income and $3.2 million of success fee income.

During the year ended March 31, 2025, dividend and success fee income consisted of $6.8 million of success fee income and $3.3 million of dividend income.

As of March 31, 2025 and 2024, SFEG Holdings, Inc.

represented 10.8% and 10.1% of the total investment portfolio at fair value, respectively.

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

As of March 31, 2026 and 2025, SFEG represented 19.8% and 10.8% of the total investment portfolio at fair value, respectively.

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

In accordance with GAAP, we recorded a capital gains-based incentive fee of $38.0 million during the year ended March 31, 2026, compared to a capital gains-based incentive fee of $7.4 million during the year ended March 31, 2025.

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

The income-based incentive fee for the year ended March 31, 2025 decreased $3.5 million, or 42.2%, as compared to the prior year, due to the increase in net assets, which increases the pre-incentive fee net investment income required to meet the hurdle rate, and the decrease in pre-incentive fee net investment income.

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

The income-based incentive fee for the year ended March 31, 2026 decreased $4.5 million, or 93.6%, as compared to the prior year, due to the increase in net assets, which drives the hurdle rate, and a decrease in pre-incentive fee net investment income.

Base management fee for the year ended March 31, 2026 increased $3.7 million, or 19.5%, as compared to the prior year, primarily due to the increase in the average total assets subject to the base management fee as a result of a net increase in the fair value of investments and an increase in additional investments at cost.

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:

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(B) Excludes our investment in Gladstone Alternative valued at the end of the applicable quarters within the respective periods.

(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 $4.1 million, or 17.1%, during the year ended March 31, 2025, as compared to the prior year, primarily due to the issuance of the 7.785% 2030 Notes in December 2024 and the 8.00% 2028 Notes in May 2023 and the increase in the effective interest rate of the Credit Facility.

Interest expense on borrowings increased $8.9 million, or 31.5%, during the year ended March 31, 2026, as compared to the prior year, primarily due to interest expense related to the issuance of the 7.875% 2030 Notes in December 2024, the 6.875% 2028 Notes in November 2025 and the 7.125% 2031 Notes in February 2026 and increased borrowings on the Credit Facility, partially offset by a decrease in the effective interest rate and the redemption of the 8.00% 2028 Notes in December 2025.

The weighted-average balance outstanding on our Credit Facility during the year ended March 31, 2026 was $76.2 million, as compared to $60.3 million in the prior year.

The effective interest rate on our Credit Facility, excluding the impact of deferred financing costs, during the year ended March 31, 2026 was 9.9%, as compared to 10.6% in the prior year.

This increase in the effective interest rate on our Credit Facility was primarily a result of an increase in unused commitment fees, partially offset by a decrease in interest rates on the drawn portion of our Credit Facility.

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

This decrease in the effective interest rate on our Credit Facility was primarily a result of a decrease in interest rates on the drawn portion of our Credit Facility, partially offset by an increase in unused commitment fees due to the increased facility size during the year.

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

Realized and Unrealized Gain (Loss)

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Depreciation Net Gain

The E3 Company, LLC $ — $ 19,418 $ — $ 19,418

Nocturne Luxury Villas, Inc.

19,790 18,668 (24,334) 14,124

UPB Acquisition, Inc.

— 13,723 — 13,723

SFEG Holdings, Inc.

$ — $ 153,260 $ — $ 153,260

Schylling, Inc.

— 45,804 — 45,804

The E3 Company, LLC — 22,731 — 22,731

ImageWorks Display and Marketing Group, Inc.

— 17,532 — 17,532

Schylling, Inc.

Old World Christmas, Inc.

3,481 6,191 — 9,672

Dema/Mai Holdings, Inc.

Mason West, LLC — 5,973 — 5,973

Global GRAB Technologies, Inc.

— 3,922 — 3,922

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The Maids International, LLC — (3,779) — (3,779)

B+T Group Acquisition, Inc.

Detroit Defense, Inc.

— (4,817) — (4,817)

Nth Degree Investment Group, LLC 43,373 (7,195) (38,028) (1,850)

Edge Adhesives Holdings, Inc.

Pyrotek Special Effects, Inc.

— (5,425) — (5,425)

Home Concepts Acquisition, Inc.

Smart Chemical Solutions, LLC — (6,516) — (6,516)

PSI Molded Plastics, Inc.

— (6,684) — (6,684)

Mason West, LLC — (6,497) — (6,497)

Old World Christmas, Inc.

Nielsen-Kellerman Acquisition Corp.

— (7,780) — (7,780)

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— (9,871) — (9,871)

PSI Molded Plastics, Inc.

— (9,151) — (9,151)

Diligent Delivery Systems — (12,112) — (12,112)

Horizon Facilities Services, Inc.

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Depreciation Net Gain

Nth Degree Investment Group, LLC $ — $ 31,199 $ — $ 31,199

Counsel Press, Inc.

43,459 22,676 (43,566) 22,569

Brunswick Bowling Products, Inc.

The E3 Company, LLC $ — $ 19,418 $ — $ 19,418

Nocturne Luxury Villas, Inc.

19,790 18,668 (24,334) 14,124

Educators Resource, Inc.

UPB Acquisition, Inc.

— 13,723 — 13,723

Mason West, LLC — 8,819 — 8,819

SFEG Holdings, Inc.

— 12,652 — 12,652

Galaxy Technologies Holdings, Inc.

ImageWorks Display and Marketing Group, Inc.

— 10,314 — 10,314

The E3 Company, LLC — 5,189 — 5,189

Utah Pacific Bridge & Steel, Ltd.

Schylling, Inc.

— 9,230 — 9,230

Dema/Mai Holdings, Inc.

— 8,889 — 8,889

Ginsey Home Solutions, Inc.

— 8,178 — 8,178

- Atlanta, LLC — 3,532 — 3,532

Brunswick Bowling Products, Inc.

— 3,118 — 3,118

The Maids International, LLC — 2,984 — 2,984

Gladstone SOG Investments, Inc.

B+T Group Acquisition, Inc.

— (1,691) — (1,691)

The Mountain Corporation (14,650) — 14,650 —

Diligent Delivery Systems — (1,207) — (1,207)

Nth Degree Investment Group, LLC 43,373 (7,195) (38,028) (1,850)

Edge Adhesives Holdings, Inc.

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— (3,957) — (3,957)

Mason West, LLC — (6,497) — (6,497)

Old World Christmas, Inc.

— (7,099) — (7,099)

Nocturne Luxury Villas, Inc.

Educators Resource, Inc.

— (8,137) — (8,137)

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— (9,151) — (9,151)

Schylling, Inc.

— (7,553) — (7,553)

ImageWorks Display and Marketing Group, Inc.

— (8,319) — (8,319)

B+T Group Acquisition, Inc.

— (10,921) — (10,921)

Horizon Facilities Services, Inc.

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Net Realized Gain (Loss) on Investments

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

During the year ended March 31, 2024, we recorded net realized gains on investments of $30.3 million, primarily due to a $43.5 million realized gain from the exit of Counsel Press, Inc.

("Counsel Press"), $1.2 million of realized gains related to certain prior period exits and $0.3 million of realized gain from the recapitalization of Old World Christmas.

These amounts were partially offset by the $14.7 million realized loss recognized from the dissolution and liquidation of The Mountain Corporation ("The Mountain").

Net Unrealized Appreciation (Depreciation) of Investments

Net unrealized depreciation of investments of $26.0 million for the year ended March 31, 2025 was primarily due to the reversal of net unrealized appreciation of Nth Degree and Nocturne upon exit and decreased performance of certain of our portfolio companies.

During the year ended March 31, 2026, we recorded net realized losses on investments of $26.3 million , primarily 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 Christmas, Inc.

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

("Nocturne").

Net Realized Gain (Loss) on Other

During the year ended March 31, 2026, 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 year ended March 31, 2025, we did not record any net realized gains or losses on other.

Net Unrealized Appreciation (Depreciation) on Investments

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

Hobbs upon its restructure.

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

Net unrealized depreciation on investments of $26.0 million for the year ended March 31, 2025 was primarily due to the reversal of net unrealized appreciation of Nth Degree and Nocturne upon exit and decreased performance of certain of our portfolio companies.

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

Net unrealized appreciation of investments of $33.3 million for the year ended March 31, 2024 was primarily due to the net unrealized appreciation across our portfolio, as well as the reversal of unrealized depreciation of our investment in The Mountain upon its liquidation and dissolution.

These amounts were partially offset by the reversal of unrealized appreciation of our investment in Counsel Press upon exit.

The net appreciation was driven primarily by increased performance of certain of our portfolio companies, partially offset by decreased comparable transaction multiples used to estimate the fair value of certain of our portfolio companies.

Across our entire investment portfolio, we recorded $25.2 million of net unrealized depreciation on our debt investments and $0.7 million of net unrealized depreciation on our equity investments for the year ended March 31, 2025.

As of March 31, 2025, the fair value of our investment portfolio was more than our cost basis by $40.3 million, compared to March 31, 2024, when the fair value of our investment portfolio was more than our cost basis by $66.2 million.

This resulted in net unrealized depreciation of $25.9 million for the year ended March 31, 2025.

Our entire portfolio was fair valued at 104.3% of cost as of March 31, 2025.

Across our entire investment portfolio, we recorded $222.1 million of net unrealized appreciation on our equity investments and $6.0 million of net unrealized depreciation on our debt investments for the year ended March 31, 2026.

As of March 31, 2026, the fair value of our investment portfolio exceeded the cost basis by $256.4 million, compared to March 31, 2025, when the fair value of our investment portfolio exceeded the cost basis by $40.3 million.

This resulted in net unrealized appreciation of $216.1 million for the year ended March 31, 2026.

Our entire portfolio had a fair value of 124.4% of cost as of March 31, 2026.

The comparison of the fiscal year ended March 31, 2025 to the fiscal year ended March 31, 2024 can be found in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025 located within Item 7.

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We may also use cash inflows from operating activities to repay outstanding borrowings under our Credit Facility.

Net cash used in operating activities for the year ended March 31, 2026 was $101.6 million, as compared to net cash provided by operating activities of $16.3 million for the year ended March 31, 2025.

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

Purchases of investments totaled $173.6 million during the year ended March 31, 2026, compared to $221.2 million during the year ended March 31, 2025.

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

Net cash provided by operating activities for the year ended March 31, 2025 was $16.3 million , as compared to net cash used in operating activities of $69.9 million for the year ended March 31, 2024.

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Purchases of investments totaled $221.2 million during the year ended March 31, 2025 , compared to $183.9 million during the year ended March 31, 2024.

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

Net cash used in operating activities for the year ended March 31, 2024 was $69.9 million , as compared to net cash used in operating activities of $4.5 million for the year ended March 31, 2023.

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

Purchases of investments totaled $183.9 million during the year ended March 31, 2024 , compared to $133.8 million during the year ended March 31, 2023.

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

As of March 31, 2025, we had equity investments in and/or loans to 25 companies with an aggregate cost basis of $939.1 million.

As of March 31, 2026, we had equity investments in and/or loans to 29 companies with an aggregate cost basis of $1.1 billion.

As of March 31, 2025, we had equity investments in and/or loans to 25 companies with an aggregate cost basis of $939.1 million.

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Unscheduled principal repayments (29,896) (123,600)

Net proceeds from sales of investments (76,025) (52,228)

Net realized gain on investments 63,184 29,964

Net proceeds from sale and recapitalization of investments (3,524) (76,025)

Net realized (loss) gain on investments (26,414) 63,184

Net unrealized appreciation of investments 197,042 36,398

Reversal of net unrealized appreciation of investments (62,358) (29,009)

Reversal of net unrealized depreciation (appreciation) of investments 19,104 (62,358)

Ending investment portfolio, at fair value $ 1,309,248 $ 979,320

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Financing Activities

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

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

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

Net cash used in financing activities for the year ended March 31, 2025 was $4.4 million, which consisted primarily of $67.0 million of net repayments on our Credit Facility, $61.0 million in distributions to common stockholders, $0.8 million of deferred financing costs, partially offset by $122.4 million of proceeds from the issuance of the 7.875% 2030 Notes, net of deferred offering costs, and $2.0 million of proceeds from the issuance of common stock, net of expenses and shelf offering registration costs.

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 twelve months from April 2024 through March 2025, and a supplemental distribution of $0.70 per common share in October 2024.

In accordance with these requirements, our Board of Directors declared, and we paid, monthly cash distributions of $0.08 per common share for each of the twelve months from April 2025 through March 2026, and a supplemental distribution of $0.54 per common share paid in June 2025.

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

For each of the fiscal years ended March 31, 2026 and 2025, Investment Company Taxable Income exceeded distributions declared and paid, and, in accordance with Section 855(a) of the Code, we elected to treat $21.3 million and $36.7 million, respectively, of the first distributions paid subsequent to fiscal year-end as having been paid in the prior year.

In addition, for each of the fiscal years ended March 31, 2025 and 2024, net capital gains exceeded distributions declared and paid, and, in accordance with Section 855(a) of the Code, we elected to treat $18.7 million and $1.4 million, respectively, of the first distributions paid subsequent to fiscal year-end as having been paid in the prior year.

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

For the year ended March 31, 2024 , we recorded $0.8 million of net adjustments for estimated permanent book-tax differences to reflect tax character, which increased Overdistributed net investment income and decreased Accumulated net realized gain in excess of distributions and Capital in excess of par value.

In addition, for the fiscal year ended March 31, 2026, o ur capital loss carryforward balance was $17.3 million and no distributions paid subsequent to fiscal year-end will be treated as having been paid in the prior year.

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

For the year ended March 31, 2026, we recorded $0.3 million of net adjustments for estimated permanent book-tax differences to reflect tax character, which increased Total distributable earnings and decreased Capital in excess of par value.

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

Dividend Reinvestment Plan

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Riley Securities, Inc.

and Virtu Americas LLC (collectively, the "Sales Agents"), under which we have the ability to issue and sell shares of our common stock, from time to time, through the Sales Agents, having an aggregate offering price of up to $ 75.0 million in our 2024 Common Stock ATM Program.

In June 2025, we entered into an equity distribution agreement with M&T Securities, Inc.

and entered into amendments to the agreements with Oppenheimer & Co.

Riley Securities, Inc.

and Virtu Americas LLC to add M&T Securities, Inc.

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

As of March 31, 2026, we had remaining capacity to sell up to an additional $30.8 million of common stock under the 2024 Common Stock ATM Program.

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

and Virtu Americas LLC (each a “2022 Sales Agent”), under which we had the ability to issue and sell shares of our common stock, from time to time, through the 2022 Sales Agents, up to an aggregate offering price of $ 50.0 million in our 2022 Common Stock ATM Program.

In August 2023, we entered into an equity distribution agreement with B.

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We did not sell any shares under the 2022 Common Stock ATM Program, which terminated in connection with our entry into the 2024 Common Stock ATM Program on May 14, 2024, during the year ended March 31, 2025.

During the year ended March 31, 2025, we sold 148,714 shares of our common stock under the 2024 Common Stock ATM Program at a weighted-average gross price of $ 13.64 per share and raised approximately $ 2.0 million of gross proceeds.

The weighted-average net price per share, after deducting commissions and offering costs borne by us, was $ 13.48 and resulted in total net proceeds of approximately $ 2.0 million.

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

These sales were above our then current NAV per share.

During the year ended March 31, 2024, we sold 3,097,162 shares of our common stock under the 2022 Common Stock ATM Program at a weighted-average gross price of $ 14.37 per share and raised approximately $ 44.5 million of gross proceeds.

The weighted-average net price per share, after deducting commissions and offering costs borne by us, was $ 14.12 and resulted in total net proceeds of approximately $ 43.7 million.

During the year ended March 31, 2025, 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.

These sales were above our then current NAV per share.

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Revolving Line of Credit

As of March 31, 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.

As of March 31, 2026 , our Credit Facility had a total commitment amount of $ 300.0 million .

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).

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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 March 31, 2025, we had no borrowings outstanding on our Credit Facility and as of the date of this report, we had $56.0 million outstanding under our Credit Facility.

At March 31, 2026, we had $23.9 million of borrowings outstanding on our Credit Facility and as of the date of this report, we had $157.6 million outstanding under our Credit Facility.

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

Available borrowings are subject to various constraints and applicable advance rates, which are generally based on the size, characteristics, and quality of the collateral pledged by Business Investment.

Our Credit Facility also requires that any interest and principal payments on pledged loans be

remitted directly by the borrower into a lockbox account with KeyBank.

Available borrowings are subject to various constraints and applicable advance rates, which are generally based on the size, characteristics, and quality of the collateral pledged by

Business Investment.

Our Credit Facility also requires that any interest and principal payments on pledged loans be remitted directly by the borrower into a lockbox account with KeyBank.

KeyBank is also the trustee of the account and generally remits the collected funds to us once a month.

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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 (defined in our Credit Facility to include any outstanding mandatorily redeemable preferred stock) 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 $ 412.9 million as of March 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);

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 $ 476.6 million as of March 31, 2026, (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 March 31, 2025, and as defined in the performance guaranty of our Credit Facility, we had a net worth of $ 953.3 million, asset coverage on our senior securities representing indebtedness of 204.4 %, 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 March 31, 2026, and as defined in the performance guaranty of our Credit Facility, we had a net worth of $ 1.2 billion, asset coverage on our senior securities representing indebtedness of 213.8 %, 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 March 31, 2026, we had availability, after adjustments for various constraints based on collateral quality, of $ 276.1 million under our Credit Facility and were in compliance with all covenants under our Credit Facility.

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In March 2021, we completed a public offering of the 5.00 % 2026 Notes with an aggregate principal amount of $ 127.9 million, which resulted in net proceeds of approximately $ 123.8 million after deducting underwriting discounts, commissions and offering costs borne by us.

The 5.00% 2026 Notes are traded under the ticker symbol “GAINN” on Nasdaq.

The 5.00% 2026 Notes will mature on May 1, 2026 and may be redeemed in whole or in part at any time or from time to time at the Company’s option.

The 5.00% 2026 Notes bear interest at a rate of 5.00% per year (which equates to $6.4 million per year), payable quarterly in arrears.

The indenture relating to the 5.00% 2026 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 5.00% 2026 Notes and the trustee with audited annual consolidated financial statements and unaudited interim consolidated financial statements.

The 5.00% 2026 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 $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 May 1, 2026, the maturity date.

The 5.00 % 2026 Notes were traded under the ticker symbol “GAINN” on Nasdaq.

On May 1, 2026, we repaid the 5.00 % 2026 Notes with an aggregate principal amount outstanding of $ 127.9 million at maturity.

The 5.00 % 2026 Notes were 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 $ 4.1 million, which were recorded as discounts to the aggregate principal amount on our accompanying Consolidated Statements of Assets and Liabilities and were being amortized over the period ended May 1, 2026, the maturity date.

4.875 % Notes due 2028

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The 4.875 % 2028 Notes are traded under the ticker symbol “GAINZ” on Nasdaq.

The 4.875% 2028 Notes will mature on November 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 4.875 % 2028 Notes will mature on November 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 4.875 % 2028 Notes bear interest at a rate of 4.875 % per year (which equates to $6.6 million per year), payable quarterly in arrears.

The indenture relating to the 4.875% 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 4.875% 2028 Notes and the trustee with audited annual consolidated financial statements and unaudited interim consolidated financial statements.

The indenture relating to the 4.875 % 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 4.875 % 2028

Notes and the trustee with audited annual consolidated financial statements and unaudited interim consolidated financial statements.

The 4.875 % 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 .

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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 on or after August 1, 2025.

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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The 7.875% 2030 Notes bear interest at a rate of 7.875 % per year (which equates to $10.0 milli on per year), payable quarterly in arrears.

The indenture relating to the 7.875% 2030 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 7.875% 2030

Notes and the trustee with audited annual consolidated financial statements and unaudited interim consolidated financial statements.

The indenture relating to the 7.875 % 2030 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 7.875 % 2030 Notes and the trustee with audited annual consolidated financial statements and unaudited interim consolidated financial statements.

The 7.875 % 2030 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 $ 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.

7.125 % Notes due 2031

In February 2026 , we completed a public offering of the 7.125 % 2031 Notes with an aggregate principal amount of $ 100.0 million, which resulted in net proceeds of approximately $ 96.9 million after deducting underwriting discounts, commissions and offering costs borne by us.

The 7.125 % 2031 Notes are traded under the ticker symbol “GAING” on Nasdaq.

The 7.125 % 2031 Notes will mature on May 1, 2031 and may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after May 1, 2028.

The 7.125 % 2031 Notes bear interest at a rate of 7.125 % per year (which equates to $7.1 milli on per year), payable quarterly in arrears.

The indenture relating to the 7.125 % 2031 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 7.125 % 2031 Notes and the trustee with audited annual consolidated financial statements and unaudited interim consolidated financial statements.

The 7.125 % 2031 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 $ 3.1 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 May 1, 2031, the maturity date.

OFF-BALANCE SHEET ARRANGEMENTS

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The amount of interest payments calculated for purposes of this table was based upon rates and outstanding balances as of March 31, 2026.

Critical Accounting Policies

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported consolidated amounts of assets and liabilities, including disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the period reported.

Actual results could differ materially from those estimates under different assumptions or conditions.

We have identified our investment valuation policy (which has been approved by our Board of Directors) as our most critical accounting policy, which is described in Note 2— Summary of Significant Accounting Policies in the accompanying Notes to Consolidated Financial Statements included elsewhere in this Annual Report.

Additionally, refer to Note 3 — Investments in the accompanying Notes to Consolidated Financial Statements included elsewhere in this Annual Report for additional information regarding fair value measurements and our application of Financial Accounting Standards Board Accounting Standards Codification Topic 820, “ Fair Value Measurements and Disclosures.” We have also identified our revenue recognition policy as a critical accounting policy, which is described in Note 2— Summary of Significant Accounting Policies in the accompanying Notes to Consolidated Financial Statements included elsewhere in this Annual Report.

We have identified our investment valuation policy (which has been approved by our Board of Directors) as our critical accounting estimates, which is described in Note 2— Summary of Significant Accounting Policies in the accompanying Notes to Consolidated Financial Statements included elsewhere in this Annual Report.

Additionally, refer to Note 3 — Investments in the accompanying Notes to Consolidated Financial Statements included elsewhere in this Annual Report for additional information regarding fair value measurements and our application of Financial Accounting Standards Board Accounting Standards Codification Topic 820, “ Fair Value Measurement.” Our accounting estimate on the fair value of our investments is critical because the determination of fair value involves subjective judgments and estimates.

Accordingly, the notes to our consolidated financial statements express the uncertainty with respect to the possible effect of these valuations, and any change in these valuations, on the consolidated financial statements.

Investment Valuation

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The Adviser’s risk rating system uses a scale of 0 to >10, with >10 being the lowest probability of default.

It is the Adviser’s understanding that most debt securities of Lower Middle Market companies do not exceed the grade of BBB on an NRSRO scale, so there would be no debt securities in the Lower Middle Market that would meet the definition of AAA, AA or A.

It is the Adviser’s understanding that most debt securities of Lower Middle Market companies do not exceed the grade of BBB

on an NRSRO scale, so there would be no debt securities in the Lower Middle Market that would meet the definition of AAA, AA or A.

Therefore, the Adviser’s scale begins with the designation >10 as the best risk rating which may be equivalent to a BBB from an NRSRO;

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Under the RIC Modernization Act, we are permitted to carryforward any capital losses that we may incur for an unlimited period, and such capital loss carryforwards will retain their character as either short-term or long-term capital losses.

Our capital loss carryforward balance was $ 0 as of March 31, 2025 and 2024 .

Our capital loss carryforward balance was $17.3 million and $0 as of March 31, 2026 and 2025, respectively .

Recent Accounting Pronouncements

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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 7. Management’s Discussion and Analysis