What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-02-03 · 158 added, 369 removed, 296 unchanged (64% of the section changed)

4 unchanged sentences

Such factors include:

(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;

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

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

(3) the loss of one or more of our executive officers, in particular David Gladstone or David D ullum;

(3) the loss of one or more of our executive officers, in particular David D ullum, Erika Highland and Christopher Lee;

( 4) changes in our investment objectives and strategy;

4 unchanged sentences

(9) changes in governmental regulation, tax rates and similar matters;

(10) our ability to exit investments in a timely manner;

(10) our ability to exit investments in a timely manner and/or at fair value;

(11) our ability to maintain our qualification as a regulated investment company (“RIC”) and as a business development company (“BDC”);

9 unchanged sentences

In this Quarterly Report, the terms the “Company,” “we,” “us,” and “our” refer to Gladstone Investment Corporation and its wholly-owned subsidiaries unless the context otherwise indicates.

Dollar amounts, except per share amounts, are in thousands, unless otherwise indicated.

Dollar amounts in tables, except per share amounts, are in thousands, unless otherwise indicated.

The following analysis of our financial condition and results of operations should be read in conjunction with our accompanying Consolidated Financial Statements and the notes thereto contained elsewhere in this Quarterly Report and in our Annual Report.

11 unchanged sentences

We expect that our investment portfolio over time will consist of approximately 70 % in debt investments and 30 % in equity investments, at cost.

As of 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.

As of June 30, 2026, our investment portfolio was comprised of 70.6% in debt investments and 29.4% in equity investments, at cost.

We focus on investing in lower middle market private businesses (which we generally define as private companies with annual earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $5 million to $25 million) (“Lower Middle Market”) in the U.S.

that meet certain criteria, including:

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

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

We 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, as applicable, 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.

2 unchanged sentences

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

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

In September 2025, the SEC granted us a new Co-Investment Order that contains a more flexible requirement that allocations be “fair and equitable” to us and that the Adviser consider the interests of us in allocations and which minimizes certain board approval requirements from the prior Co-Investment Order.

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

In September 2025, the SEC granted us our current Co-Investment Order that contains a more flexible requirement that allocations be “fair and equitable” to us and that the Adviser consider the interests of us in allocations and which minimizes certain board approval requirements from the prior Co-Investment Order.

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

3 unchanged sentences

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") 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 shares of common stock, our 4.875% Notes due 2028 ("4.875% 2028 Notes"), our 7.875% Notes due 2030 (“7.875% 2030 Notes”) and our 7.125% Notes due 2031 ("7.125% 2031 Notes") are traded on the Nasdaq Global Select Market

(“Nasdaq”) under the trading symbols “GAIN,” “GAINZ,” “GAINI,” and "GAING," respectively.

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

1 unchanged sentence

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 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.

From our initial public offering in June 2005 through June 30, 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.

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

1 unchanged sentence

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

As a result, as of June 30, 2026, we had unrecognized, contractual success fees of $63.8 million, or $1.60 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 December 31, 2025, we exited our investments in 33 portfolio companies that we acquired under our buyout strategy.

From inception through June 30, 2026, we exited our investments in 33 portfolio companies that we acquired under our buyout strategy.

In the aggregate, these sales have generated $353.6 million in net realized gains and $45.4 million in other income upon exit, for a total increase to our net assets of $399.0 million.

1 unchanged sentence

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 December 31, 2025, and allowed us to declare and pay 24 supplemental distributions to common stockholders through December 31, 2025.

The successful exits, in part, enabled us to increase the monthly distribution per common share by 100.0% from March 2011 through June 30, 2026, and allowed us to declare and pay 24 supplemental distributions to common stockholders through June 30, 2026.

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 $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.

Refer to “ Liquidity and Capital Resources — Revolving Line of Credit ” for further discussion of the Credit Facility and to “ Liquidity and Capital Resources — Equity — Common Stock ” further discussion of our common stock.

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 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.

We have successfully extended the Credit Facility’s revolving period multiple times, most recently to June 2029, and currently have a total commitment amount of $405.0 million (with a potential total commitment of $500.0 million through additional commitments from new or existing lenders).

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 "Common Stock ATM Program") for gross proceeds of approximately $42.1 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 June 30, 2026, the closing market price of our common stock was $15.46 per share, representing a 4.8% discount to our net asset value (“NAV”) of $16.24 per share as of June 30, 2026.

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

3 unchanged sentences

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

As of June 30, 2026, our asset coverage ratio on our senior securities representing indebtedness was 208.8%.

Investment Highlights

Investment Activity

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.

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.

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

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

During the three months ended June 30, 2026, the following significant transactions occurred:

• In June 2026, we entered into a new $3.0 million secured first lien term loan with Home Concepts Acquisition, Inc., restructuring our previously outstanding secured first lien term loan with a cost basis of $12.0 million, which resulted in a realized loss of $9.0 million.

• In June 2026, we entered into a definitive agreement to acquire Extrude Hone LLC, a provider of precision surface-finishing solutions used in mission-critical applications, which is expected to close in the second fiscal quarter.

Distributions and Dividends

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

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

Payment Date Distribution per Common Share

January 23, 2026 January 30, 2026 $ 0.08

February 18, 2026 February 27, 2026 0.08

March 23, 2026 March 31, 2026 0.08

July 24, 2026 July 31, 2026 $ 0.08

August 18, 2026 August 31, 2026 0.08

September 21, 2026 September 30, 2026 0.08

Total for the Quarter:

RESULTS OF OPERATIONS

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

For the Three Months Ended December 31,

Comparison of the Three Months Ended June 30, 2026 to the Three Months Ended June 30, 2025

For the Three Months Ended June 30,

2026 2025 Change % Change

5 unchanged sentences

Loan servicing fee 2,962 2,672 290 10.9 %

Incentive fee 14,749 9,353 5,396 57.7 %

Incentive fee (5,566) (209) (5,357) NM

Administration fee 492 433 59 13.6 %

Interest expense 9,495 6,385 3,110 48.7 %

Interest expense on borrowings 9,856 8,499 1,357 16.0 %

Amortization of deferred financing costs and discounts 980 910 70 7.7 %

3 unchanged sentences

Total expenses, net of credits to fees 12,428 14,456 (2,028) (14.0) %

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

NET INVESTMENT INCOME 15,927 9,088 6,839 75.3 %

REALIZED AND UNREALIZED GAIN (LOSS)

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 %

Net realized loss on investments (9,000) — (9,000) NM

Net unrealized depreciation (18,782) (1,316) (17,466) NM

Net realized and unrealized loss (27,782) (1,316) (26,466) NM

NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (11,855) $ 7,772 $ (19,627) NM

WEIGHTED-AVERAGE SHARES OF COMMON STOCK OUTSTANDING

1 unchanged sentence

BASIC AND DILUTED PER COMMON SHARE:

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 %

Net investment income $ 0.40 $ 0.25 $ 0.15 60.0 %

Net (decrease) increase in net assets resulting from operations $ (0.30) $ 0.21 $ (0.51) NM

NM - Not meaningful

Investment Income

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.

Total investment income increased $4.8 million, or 20.4%, for the three months ended June 30, 2026, as compared to the prior year period, primarily due to an increase in dividend and success fee income and interest income.

Interest income from our investments in debt securities increased $1.0 million, or 4.7%, for the three months ended June 30, 2026, 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 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 principal balance of our interest-bearing investment portfolio during the three months ended June 30, 2026 was $705.5 million, compared to $610.0 million for the prior year period.

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 June 30, 2026, compared to 14.1% 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 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 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 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 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.

We had no collections of past due interest during the three months ended June 30, 2026.

During the three months ended June 30, 2025, we collected $1.5 million in past due interest from SFEG Holdings, Inc.

("SFEG") that was previously on non-accrual status.

As of June 30, 2026, our loans on non-accrual status were $40.3 million at cost and $12.2 million at fair value, which represent 5.5% and 1.8% of all debt investments in our portfolio at cost and fair value, respectively.

As of June 30, 2025, our loans on non-accrual status were $90.3 million at cost and $51.7 million at fair value, which represent 12.6% and 7.9% of all debt investments in our portfolio at cost and fair value, respectively.

As of June 30, 2026 and March 31, 2026, SFEG represented 17.3% and 19.8% of the total investment portfolio at fair value, respectively.

Dividend and success fee income for the three months ended June 30, 2026 increased $3.8 million, or 199.6%, from the prior year period.

During the three months ended June 30, 2026, dividend and success fee income consisted of $5.6 million of success fee income and $0.1 million of dividend income.

During the three months ended June 30, 2025, dividend and success fee income consisted of $1.1 million of dividend income and $0.8 million of success fee income.

Total expenses, net of any non-contractual, unconditional, and irrevocable credits from the Adviser, decreased $2.0 million, or 14.0%, during the three months ended June 30, 2026, as compared to the prior year period, primarily due to a decrease in incentive fees, partially offset by an increase in base management fees and interest expense.

In accordance with GAAP, during the three months ended June 30, 2026, we recorded a $5.6 million reversal of previously accrued capital gains-based incentive fee compared to a $0.2 million reversal during the three months ended June 30, 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 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 December 31,

Three Months Ended June 30,

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

13 unchanged sentences

Incentive fee – capital gains-based (D)

(5,566) (209)

Total incentive fee (C)

4 unchanged sentences

(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 $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.

Interest expense on borrowings increased $1.4 million, or 16.0%, during the three months ended June 30, 2026, as compared to the prior year period, primarily due to increased borrowings on our Credit Facility and the issuance of the 6.875% 2028 Notes in November 2025 and the 7.125% 2031 Notes in February 2026, partially offset by the redemption of the 8.00% 2028 Notes in December 2025, redemption of the 5.00% 2026 Notes in May 2026 and a decrease in the effective interest rate on the Credit Facility.

The weighted-average balance outstanding on our Credit Facility during the three months ended June 30, 2026 was $116.7 million, compared to $36.3 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 June 30, 2026 was 8.2%, as compared to 14.0% 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 and a decrease in unused commitment fees on the undrawn portion of the Credit Facility during the three months ended June 30, 2026.

Realized and Unrealized Gain (Loss)

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

The realized gains (losses) and unrealized appreciation (depreciation) across our investments for the three months ended June 30, 2026 and 2025 were as follows:

Three Months Ended June 30, 2026

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.

Galaxy Technologies Holdings, Inc.

$ — $ 9,201 $ — $ 9,201

SFEG Holdings, Inc.

Diligent Delivery Systems — 3,767 — 3,767

Schylling, Inc.

— 3,426 — 3,426

1 unchanged sentence

— 3,084 — 3,084

The E3 Company, LLC — 8,660 — 8,660

Global GRAB Technologies, Inc.

— 4,239 — 4,239

Mason West, LLC — 3,949 — 3,949

Galaxy Technologies Holdings, Inc.

— 3,158 — 3,158

UPB Acquisition, Inc.

— 2,861 — 2,861

Phoenix Door Systems, Inc.

— 2,416 — 2,416

Ginsey Home Solutions, Inc.

— 2,306 — 2,306

PSI Molded Plastics, Inc.

— 1,796 — 1,796

Educators Resource, Inc.

Old World Christmas, Inc.

— 2,847 — 2,847

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

Home Concepts Acquisition, Inc.

Brunswick Bowling Products, Inc.

— 2,558 — 2,558

1 unchanged sentence

— 1,785 — 1,785

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

Dema/Mai Holding, Inc.

— (2,041) — (2,041)

Detroit Defense, Inc.

— (3,020) — (3,020)

Nielsen-Kellerman Acquisition Corp.

— (4,288) — (4,288)

Horizon Facilities Services, Inc.

— (5,321) — (5,321)

Other, net (<$1.0 million, net) — (243) — (243)

Total $ 3,481 $ 70,235 $ — $ 73,716

Three Months Ended December 31, 2024

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

Nocturne Luxury Villas, Inc.

Smart Chemical Solutions, LLC — 1,603 — 1,603

Ginsey Home Solutions, Inc.

— 1,387 — 1,387

The E3 Company, LLC — 1,376 — 1,376

SFEG Holdings, Inc.

— 8,445 — 8,445

Schylling, Inc.

— 4,773 — 4,773

ImageWorks Display and Marketing Group, Inc.

— 3,269 — 3,269

UPB Acquisition, Inc.

— 2,063 — 2,063

– Atlanta, LLC — 947 — 947

Brunswick Bowling Products, Inc.

— 1,488 — 1,488

Old World Christmas, Inc.

Mason West, LLC — 812 — 812

Rowan Energy Inc.

— (3,431) — (3,431)

Ginsey Home Solutions, Inc.

Global GRAB Technologies, Inc.

— (3,887) — (3,887)

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

Mason West, LLC — (1,671) — (1,671)

Horizon Facilities Services, Inc.

Dema/Mai Holdings, Inc.

— (4,156) — (4,156)

Galaxy Technologies Holdings, Inc.

Home Concepts Acquisition, Inc.

(9,000) 311 3,621 (5,068)

PSI Molded Plastics, Inc.

Detroit Defense, Inc.

— (10,801) — (10,801)

Educators Resource, Inc.

SFEG Holdings, Inc.

— (36,687) — (36,687)

1 unchanged sentence

Total $ (9,000) $ (22,449) $ 3,621 $ (27,828)

Net Realized Gain (Loss) on Investments

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 $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

INVESTMENT INCOME

Interest income $ 67,152 $ 62,149 $ 5,003 8.1 %

Dividend and success fee income 6,733 3,965 2,768 69.8 %

Total investment income 73,885 66,114 7,771 11.8 %

Base management fee 16,457 13,937 2,520 18.1 %

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

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

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

Interest expense 27,625 19,264 8,361 43.4 %

Amortization of deferred financing costs and discounts 2,792 1,951 841 43.1 %

Other 3,258 4,968 (1,710) (34.4) %

Expenses before credits from Adviser 80,035 56,216 23,819 42.4 %

Credits to fees from Adviser (13,008) (10,968) (2,040) 18.6 %

Total expenses, net of credits to fees 67,027 45,248 21,779 48.1 %

NET INVESTMENT INCOME 6,858 20,866 (14,008) (67.1) %

REALIZED AND UNREALIZED GAIN (LOSS)

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 %

WEIGHTED-AVERAGE SHARES OF COMMON STOCK OUTSTANDING

Basic and diluted 38,349,549 36,701,783 1,647,766 4.5 %

BASIC AND DILUTED PER COMMON SHARE:

Net investment income $ 0.18 $ 0.57 $ (0.39) (68.4) %

Net increase in net assets resulting from operations $ 2.67 $ 1.29 $ 1.38 107.0 %

NM = Not Meaningful

Investment Income

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 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 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 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 $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.

Nine Months Ended December 31,

Average total assets subject to base management fee (A)

$ 1,097,133 $ 929,133

Multiplied by prorated annual base management fee of 2.0% 1.5 % 1.5 %

Base management fee (B)

$ 16,457 $ 13,937

Credits to fees from Adviser - other (B)

(4,302) (4,147)

Net base management fee $ 12,155 $ 9,790

Loan servicing fee (B)

$ 8,706 $ 6,821

Credits to base management fee - loan servicing fee (B)

(8,706) (6,821)

Net loan servicing fee $ — $ —

Incentive fee – income-based $ 310 $ 2,481

Incentive fee – capital gains-based (C)

Total incentive fee (B)

$ 19,747 $ 7,797

Credits to fees from Adviser - other (B)

Net total incentive fee $ 19,747 $ 7,797

(A) Average total assets subject to the base management fee is defined in the Advisory Agreement as total assets, including investments made with proceeds of borrowings, less any uninvested cash or cash equivalents resulting from borrowings, valued at the end of the applicable quarters within the respective periods and adjusted appropriately for any share issuances or repurchases during the periods.

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

(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 $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.

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 nine months ended December 31, 2025 and 2024 were as follows:

Nine Months Ended December 31, 2025

Three Months Ended June 30, 2025

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

ImageWorks Display and Marketing Group, Inc.

$ — $ 5,266 $ — $ 5,266

SFEG Holdings, Inc.

3 unchanged sentences

The E3 Company, LLC — 2,696 — 2,696

ImageWorks Display and Marketing Group, Inc.

— 14,873 — 14,873

Old World Christmas, Inc.

3,481 9,959 — 13,440

Mason West, LLC — 2,517 — 2,517

Global GRAB Technologies, Inc.

UPB Acquisition, Inc.

— 2,495 — 2,495

Dema/Mai Holding, Inc.

Old World Christmas, Inc.

— 1,373 — 1,373

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

Home Concepts Acquisition, Inc.

— 1,330 — 1,330

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)

Brunswick Bowling Products, Inc.

— (2,742) — (2,742)

Nielsen-Kellerman Acquisition Corp.

— (2,917) — (2,917)

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

Horizon Facilities Services, Inc.

— 1,100 — 1,100

Nielsen-Kellerman Acquisition Corp.

Detroit Defense, Inc.

— (4,817) — (4,817)

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

PSI Molded Plastics, Inc.

Pyrotek Special Effects, Inc.

Phoenix Door Systems, Inc.

— (1,600) — (1,600)

1 unchanged sentence

— (3,304) — (3,304)

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

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

Nine Months Ended December 31, 2024

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

Nocturne Luxury Villas, Inc.

$ — $ 18,668 $ — $ 18,668

The E3 Company, LLC — 17,103 — 17,103

SFEG Holdings, Inc.

— 8,139 — 8,139

Schylling, Inc.

— 7,804 — 7,804

Old World Christmas, Inc.

— 6,084 — 6,084

UPB Acquisition, Inc.

— 5,049 — 5,049

ImageWorks Display and Marketing Group, Inc.

— 3,932 — 3,932

Ginsey Home Solutions, Inc.

— (3,468) — (3,468)

- Atlanta, LLC — 2,984 — 2,984

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

Dema/Mai Holdings, Inc.

— 1,272 — 1,272

Diligent Delivery Systems — (986) — (986)

Home Concepts Acquisition, Inc.

— (1,238) — (1,238)

B+T Group Acquisition, Inc.

— (2,303) — (2,303)

Edge Adhesives Holdings, Inc.

Galaxy Technologies Holdings, Inc.

— (3,480) — (3,480)

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

The Maids International, LLC — (3,728) — (3,728)

PSI Molded Plastics, Inc.

— (6,134) — (6,134)

Educators Resource, Inc.

— (5,507) — (5,507)

Mason West, LLC — (10,285) — (10,285)

Horizon Facilities Services, Inc.

Brunswick Bowling Products, Inc.

— (6,392) — (6,392)

1 unchanged sentence

Total $ — $ (1,047) $ — $ (1,047)

Net Realized Gain (Loss)

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 Realized Gain (Loss) on Investments

During the three months ended June 30, 2026, we recorded net realized losses on investments of $9.0 million, due to the realized loss from the restructuring of Home Concepts Acquisition, Inc.

During the three months ended June 30, 2025, we did not record any net realized gains or losses on investments.

Net Unrealized Appreciation (Depreciation) on Investments

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.

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.

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.

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 .

Net unrealized depreciation on investments of $18.8 million for the three months ended June 30, 2026 was primarily due to the decreased performance of certain of our portfolio companies.

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

Net unrealized depreciation on investments of $1.0 million for the three months ended June 30, 2025 was primarily due to a decrease in the performance of certain of our portfolio companies.

These decreases were partially offset by increased performance of certain of our other portfolio companies and changes in economic conditions that led to an increase in transaction multiples used to estimate the fair

value of certain of our portfolio companies.

Across our entire investment portfolio, we recorded net unrealized depreciation of $24.8 million on our equity investments and net unrealized appreciation of $6.0 million on our debt investments for the three months ended June 30, 2026 .

As of June 30, 2026 , the fair value of our investment portfolio exceeded the cost basis by $237.6 million, compared to March 31, 2026, when the fair value of our investment portfolio exceeded the cost basis by $256.4 million.

This resulted in net unrealized depreciation of $18.8 million for the three months ended June 30, 2026 .

Our entire portfolio had a fair value of 122.7% of cost as of June 30, 2026 .

LIQUIDITY AND CAPITAL RESOURCES

Operating Activities

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,

Net cash provided by operating activities for the three months ended June 30, 2026 was $8.1 million compared to net cash used in operating activities of $50.2 million for the three months ended June 30, 2025.

This change was primarily due to a decrease in purchases of investments.

Purchases of investments totaled $0.6 million during the three months ended June 30, 2026, compared to $62.8 million during the three months ended June 30, 2025.

There were no aggregate net proceeds from the sale and recapitalization of investments and principal repayments of investments during the three months ended June 30, 2026, compared to $4.4 million during the three months ended June 30, 2025.

As of June 30, 2026, we had equity investments in and/or loans to 29 portfolio companies with an aggregate cost basis of $1.0 billion.

As of June 30, 2025, we had equity investments in and/or loans to 27 portfolio companies with an aggregate cost basis of $1.0 billion.

The following table summarizes our total portfolio investment activity during the three months ended June 30, 2026 and 2025:

Three Months Ended June 30,

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

3 unchanged sentences

Net proceeds from sale and recapitalization of investments — —

Net realized (loss) gain on investments (26,457) 42,305

Net unrealized appreciation (depreciation) of investments 104,536 22,299

Reversal of net unrealized depreciation (appreciation) of investments 19,104 (38,024)

Net realized loss on investments (9,000) —

Net unrealized depreciation of investments (22,449) (1,047)

Reversal of net unrealized depreciation of investments 3,621 —

Ending investment portfolio, at fair value $ 1,282,020 $ 1,036,745

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

The following table summarizes the contractual principal repayment and maturity of our investment portfolio by fiscal year, assuming no voluntary prepayments, as of June 30, 2026:

For the remaining nine months ending March 31, 2027

For the fiscal years ending March 31:

Thereafter 137,470

Total contractual repayments $ 737,448

Investments in equity securities 307,000

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

Total cost basis of investments held as of June 30, 2026:

Financing Activities

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.

Net cash used in financing activities for the three months ended June 30, 2026 was $6.9 million, which consisted primarily of the $127.9 million redemption of our 5.00% 2026 Notes, $9.6 million in distributions to common stockholders and $3.1 million of deferred financing costs, partially offset by $133.7 million of net borrowings under our Credit Facility.

Net cash provided by financing activities for the three months ended June 30, 2025 was $40.4 million, which consisted primarily of $62.0 million of net borrowings under our Credit Facility and $7.3 million of proceeds from issuance of common stock, net of expenses and shelf offering registration costs, partially offset by $28.8 million in distributions to common stockholders and $0.1 million of deferred financing costs.

Distributions and Dividends to Stockholders

2 unchanged sentences

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 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.

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 three months from April through June 2026.

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

For the fiscal year ended March 31, 2026, 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 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 Total distributable earnings.

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.

In addition, for the fiscal year ending March 31, 2027, the net capital loss carryforward balance was $17.3 million and no distributions paid will be treated as having been paid in the fiscal year ended March 31, 2026.

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 three months ended June 30, 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.

Dividend Reinvestment Plan

12 unchanged sentences

The registration statement permits us to issue, through one or more transactions, up to an aggregate of $450.0 million in securities, consisting of common stock, preferred stock, subscription rights, debt securities, and warrants to purchase common stock, preferred stock, or debt securities, including through concurrent, separate offerings of such securities.

As of the date of this report, we have the ability to issue up to an additional $219.3 million of the securities registered under the registration statement.

As of June 30, 2026, we have the ability to issue up to an additional $119.3 million of the securities registered under the registration statement.

In May 2024, we entered into equity distribution agreements with Oppenheimer & Co., B.

4 unchanged sentences

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 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.

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

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

Riley Securities, Inc.

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

and Virtu Americas LLC to add B.

Riley Securities, Inc.

and Virtu Americas

LLC to add M&T Securities, Inc.

as a Sales Agent for the 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 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 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.

As of June 30, 2026, we had remaining capacity to sell up to an additional $30.8 million of common stock under the Common Stock ATM Program.

During the three months ended June 30, 2026, we did not sell any shares under the Common Stock ATM Program.

During the three months ended June 30, 2025, we sold 515,295 shares of our common stock under the Common Stock ATM Program, with a weighted-average gross price of $14.23 per share and a weighted-average net price of $14.04 per share after deducting commissions and offering costs borne by us, raising approximately $7.3 million and $7.2 million of gross and net proceeds, respectively.

These sales were above our then current NAV per share.

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.

2 unchanged sentences

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 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.

As of June 30, 2026, the closing market price of our common stock was $15.46 per share, representing a 4.8% discount to our NAV per share of $16.24 as of June 30, 2026.

Revolving Line of Credit

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.

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 joint lead arranger and lender, the Adviser, as servicer, and certain other lenders party thereto.

As of June 30, 2026, the Credit Facility had a total commitment amount of $405.0 million with an "accordion" feature that permits us to increase the size of the facility to $500.0 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).

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 a revolving period end date of June 8, 2029 and a final maturity date of June 8, 2031 (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).

As of June 30, 2026, advances under the Credit Facility generally bore interest at 30-day Term SOFR, subject to a floor of 0.35%, plus a margin of 2.85% per annum until June 8, 2029, with the margin then increasing to 3.10% for the period from June 8, 2029 to June 8, 2030, and increasing further to 3.35% 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 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.

At June 30, 2026, we had $157.6 million of borrowings outstanding on the Credit Facility and as of the date of this report, we had $223.8 million outstanding under our Credit Facility.

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

5 unchanged sentences

Loans eligible to be pledged as collateral are subject to certain limitations, including, among other things, restrictions on geographic concentrations, industry concentrations, loan size, payment frequency and status, average life, portfolio company leverage, and lien property.

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 $ 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.

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 $500.0 million or $500.0 million plus 50% of all equity and subordinated debt raised, minus 50% of any equity or subordinated debt redeemed or retired after June 10, 2026, which equated to $0 as of June 30, 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 June 30, 2026, and as defined in the performance guaranty of our Credit Facility, we had a net worth of $1.1 billion, asset coverage on our senior securities representing indebtedness of 208.8%, 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 June 30, 2026, we had availability, after adjustments for various constraints based on collateral quality, of $163.2 million under our Credit Facility and were in compliance with all covenants under our Credit Facility.

Notes Payable

1 unchanged sentence

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 Securities Exchange Act of 1934, as amended (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.

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

4.875% Notes due 2028

7 unchanged sentences

7.875% Notes due 2030

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.

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

In December 2024 , we completed a public offering of the 7.875% 2030 Notes with an aggregate principal amount of $126.5 million, which resulted in net proceeds of approximately $122.4 million after deducting underwriting discounts, commissions and offering costs borne by us.

12 unchanged sentences

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

1 unchanged sentence

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 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.

As a result, as of June 30, 2026 and March 31, 2026, we had unrecognized, contractual off-balance sheet success fee receivables of $63.8 million and $65.4 million (or approximately $1.60 and $1.64 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.

2 unchanged sentences

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 December 31, 2025 to be insignificant.

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

We estimate the fair value of the combined unused line of credit commitments as of June 30, 2026 to be insignificant.

The following table shows our contractual obligations as of June 30, 2026, at cost:

Payments Due by Period

8 unchanged sentences

Total $ 735,561 $ 40,042 $ 425,169 $ 270,350 $ —

(A) Excludes unused line of credit commitments to our portfolio companies in the aggregate principal amount of $4.2 million.

(A) Excludes unused line of credit commitments to our portfolio companies, of which there are no unused line of credit commitments.

(B) Principal balance of borrowings outstanding under our Credit Facility, based on the maturity date following the current contractual revolving period end date.

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

The amount of interest payments calculated for purposes of this table was based upon rates and outstanding balances as of June 30, 2026.

Critical Accounting Estimates

1 unchanged sentence

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 Quarterly Report.

Additionally, refer to Note 3 — Investments in the accompanying Notes to Consolidated Financial Statements included elsewhere in this Quarterly 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 Quarterly Report.

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

Additionally, refer to Note 3 — Investments in the accompanying Notes to Consolidated Financial Statements included elsewhere in this Quarterly 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

14 unchanged sentences

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 December 31, 2025 and March 31, 2025:

Rating December 31, 2025 March 31, 2025

The following table reflects risk ratings for all loans in our portfolio as of June 30, 2026 and March 31, 2026:

Rating June 30, 2026 March 31, 2026

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