FRBP 10-K & 10-Q changes, risk factors and insider trading

In the event we concentrate our investments in companies in a particular industry or industries, any adverse conditions that disproportionately impact that industry or industries may have a magnified adverse effect on our operating results. We are meaningfully concentrated in the following four industries: professional services (11.8% of our total portfolio), health care providers & services (10.6% of our total portfolio), asset based financing (10.4% of our total portfolio) and software (9.9% of our total portfolio). Further, any industry in which we are meaningfully concentrated may be subject to significant risks that could adversely impact our operating results. For example:

The following table illustrates the effects of leverage on returns from an investment in shares of Common Stock, assuming various hypothetical annual returns, net of expenses. The calculations are hypothetical and actual returns may be higher or lower than those appearing below. The calculation assumes (i) $4.3$5.1 billion in total assets, (ii) a weighted average cost of funds of 6.72%,6.17%, (iii) $2.3$3.1 billion of debt outstanding (i.e. assumes that the $700.0$1.0 millionbillion principal amount of our unsecured notes sold and the full $1.6$2.1 billion available to us under our revolving credit facilities are outstanding at December 31, 20242025) and (iv) $1.9$1.8 billion in stockholders’ equity. In order to compute the “Corresponding return to stockholders,” the “Assumed Return on Our Portfolio (net of expenses)” is multiplied by the assumed total assets to obtain an assumed return to us. From this amount, the interest expense is calculated by multiplying the assumed weighted average cost of funds by the assumed debt outstanding, and the product is subtracted from the assumed return to us in order to determine the return available to stockholders. The return available to stockholders is then divided by our stockholders’ equity to determine the “Corresponding return to stockholders.” Actual interest payments may be different. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Related Party Transactions and Agreements—Borrowings” for further information regarding our Borrowings.

(1) In order for us to cover our hypothetical annual interest payments on indebtedness, we would need to achieve annual returns on our December 31, 20242025 total assets of at least 3.57%.3.82%, including the impact of the application of hedge accounting.

We intend to achieve an investment grade rating for our Series A Preferred Stock from a nationally recognized statistical ratings organization (“NRSRO”) and to seek a second rating from another NRSRO within two years of the initial closing of the private placement of our Series A Preferred Stock.. However, there is no assurance that we will receive a rating, or the desired rating, from a NRSRO and may remain unrated.

A “publicly offered regulated investment company” is a regulated investment company whose shares are either (i) continuously offered pursuant to a public offering, (ii) regularly traded on an established securities market or (iii) held by at least 500 persons at all times during the taxable year. If we are not a publicly offered regulated investment company for any period, a non-corporate stockholder’s pro rata portion of our affected expenses, including our management fees, will be treated as an additional distribution to the stockholder and will be deductible by such stockholder only to the extent permitted under the limitations described below. For non-corporate stockholders, including individuals, trusts, and estates, significant limitations generally apply to the deductibility of certain expenses of a non-publicly offered regulated investment company, including advisory fees. In particular, these expenses, referred to as miscellaneous itemized deductions, are generally not deductible for taxable years beginning before 2026. For taxable years beginning in 2026 and later, such expenses may be deductible only to the extent they exceed 2% of such a stockholder’s adjusted gross income. Such expenses are not deductible by an individual for alternative minimum tax purposes.deductible. While we anticipate that we will constitute a publicly offered regulated investment company for our current tax year, there can be no assurance that we will in fact so qualify for any of our taxable years.

Terrorist attacks, acts of war, global or regional conflicts (such as those in the Middle EastEast, Central and South America and Eastern Europe), natural disasters, disease outbreaks or pandemics may impact our portfolio companies and harm our business, operating results and financial condition.

Terrorist attacks, acts of war, global or regional conflicts (such as those in the Middle EastEast, Central and South America and Eastern Europe), natural disasters, disease outbreaks, pandemics, or other similar events may disrupt our operations, as well as the operations of our portfolio companies. Such acts have created, and continue to create, economic and political uncertainties and have contributed to recent global economic instability. Future terrorist activities, military or security operations, natural disasters, disease outbreaks, pandemics, or other similar events could further weaken the domestic/global economies and create additional uncertainties, which may impact our portfolio companies and, in turn, could have a material adverse impact on our business, operating results, and financial condition. Losses from terrorist attacks and natural disasters are generally uninsurable.

The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements of Franklin BSP Capital Corporation (including, for periods prior to the Conversion, Franklin BSP Capital L.L.C., a Delaware limited liability company, the "Company," "FBCC," "we," “us,” or "our") and the notes thereto and other financial information included elsewhere in this Annual Report on Form 10-K. We are externally managed by our adviser, Franklin BSP Capital Adviser L.L.C. (the “Adviser”). In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Our actual results may differ materially from those in this discussion as a result of various factors, including but not limited to those discussed in Item 1A — “Risk Factors” in this Annual Report on Form 10-K.

During the year ended December 31, 2024,2025, we made $1.1 billion of investments in new portfolio companies and had $651.2$965.8 million in aggregate amount of sales and repayments, resulting in net investments of $450.9$128.7 million for the period, excluding any impact from the Mergers.period. The total portfolio of debt investments at fair value consisted of 94.9%94.0% bearing variable interest rates and 5.1%6.0% bearing fixed interest rates.

The weighted average risk rating of our investments based on fair value was 2.22.1 and 2.32.2 as of December 31, 20242025 and December 31, 2023,2024, respectively. As of December 31, 2025, we had eight portfolio companies on non-accrual status with a total amortized cost of $100.3 million and fair value of $46.5 million, which represented 2.4% and 1.1% of the investment portfolio's total amortized cost and fair value, respectively. As of December 31, 2024, we had eight portfolio companies on non-accrual status with a total amortized cost of $105.1 million and fair value of $65.5 million, which represented 2.6% and 1.7% of the investment portfolio's total amortized cost and fair value, respectively. As of December 31, 2023, we had no portfolio companies on non-accrual status. The increase of portfolio companies on non-accrual status was partially a result of the Mergers whereby we acquired FBLC’s assets, including its non-accrual assets. Refer to Note 2 - Summary of Significant Accounting Policies for additional details regarding our non-accrual policy.

On January 24, 2024, as a result of the consummation of the Mergers, we became party to the joint venture formed on January 20, 2021, between FBLC and Cliffwater Corporate Lending Fund (“CCLF”), FBLC Senior Loan Fund, LLC (“SLF”). SLF invests primarily in senior secured loans and, to a lesser extent, may invest in mezzanine loans, unsecured loans and equity of predominantly private U.S. middle market companies. SLF was formed as a Delaware limited liability company and is not consolidated by us for financial reporting purposes. We provide capital to SLF in the form of LLC equity interests. At formation, FBLC and CCLF owned 87.5% and 12.5%, respectively, of the LLC equity interests of SLF. On July 2, 2024, the Company contributed $100.0 million of additional capital into SLF. On February 28, 2025, SLF distributed $100.0 million to the Company as a return of capital. On October 15, 2025, SLF distributed $80.0 million to the Company as a return of capital. As of December 31, 2024,2025, we and CCLF owned 84.0%80.0% and 16.0%,20.0%, respectively, of the LLC equity interests of SLF. Profit and loss are allocated based on each members' ownership percentage of the joint venture's net asset value. SLF has an Administrative and Loan Services Agreement with BSP, our affiliate, pursuant to which BSP provides certain operational and valuation services for SLF's investments; as well as certain agreements with third-party service providers. We and CCLF each appoint two members to SLF's four-person board of members. All material decisions with respect to SLF, including those involving its investment portfolio, require unanimous approval of a quorum of the board of members. Quorum is defined as (i) the presence of two members of the board of members; provided that at least one individual is present that was elected, designated or appointed by each member; (ii) the presence of three members of the board of members; provided that the individual that was elected, designated or appointed by the member with only one individual present shall be entitled to cast two votes on each matter; and (iii) the presence of four members of the board of members; provided that two individuals are present that were elected, designated or appointed by each member.

Our operating results for the yearsyear ended December 31, 2023 and 2022 were prior to the Mergers.

Our operating expenses for the yearsyear ended December 31, 2023 and 2022 were prior to the Mergers.

Interest and Debt Fees increased from $17.5$117.4 million for the year ended December 31, 20222024 to $31.1$140.7 million for the year ended December 31, 2023.2025. The increase isfrom December 31, 2024 to December 31, 2025 was primarily driven by the increase in debt borrowing and rising base interest rates of our variable rate debt. The average daily debt outstanding for facility borrowings forand theunsecured yearnotes. endedThe Decemberaverage 31,daily 2022debt was $324.3 million compared to $346.1 millionoutstanding for the year ended December 31, 2023.2024 was $1.6 billion compared to $2.2 billion for the year ended December 31, 2025. The weighted average annualized interest cost of the facility borrowings and unsecured notes for the yearsyear ended December 31, 20232024 and 20222025 were 7.76%6.72% and 4.14%,6.17%, respectively.

Our net realized gain (loss) and net change in unrealized appreciateappreciation (depreciation) on investments for the yearsyear ended December 31, 2023 and 2022 werewas prior to the Mergers.

For the year ended December 31, 2024,2025, we recorded a net realized loss of $22.8$32.9 million. The net realized loss for was primarily driven by thetwo restructuringportfolio ofcompany. theIn June 2025, we restructured our first lien debt investmentsposition of Pluralsight,Coronis Health LLC in August 2024 which resulted in a net realized loss of $19.1$14.0 million partially offset by an unrealized gain.gain of $14.8 million. In October 2025, we restructured our first lien debt position of BCPE Oceandrive Buyer, Inc. which resulted in a net realized loss of $24.1 million offset by an unrealized gain of $24.5 million. This was offset by a net realized gain of $5.7 million on MCS Acquisition Corp.

For the year ended December 31, 2024,2025, we recorded unrealized appreciation of $31.4$64.3 million on 16074 portfolio company investments which was offset by $105.6$84.5 million of unrealized depreciation on 18393 portfolio company investments. The unrealized appreciation primarily resulted from improved performance of certain portfolio companies and the reversal of previously recorded unrealized depreciation. The unrealized depreciation was primarily due to isolated deterioration in the credit performance of a small number of portfolio companies. Additionally, $2.1$6.1 million of the net unrealized loss was driven by a change in deferred taxes. Additionally, $0.3 million of the net unrealized loss was driven by a change in unrealized appreciation on derivatives. The overall net unrealized depreciation on our portfolio was primarily driven by deterioration in the credit performance of certain portfolio companies.

(1) Represents amortization of purchase premium and incremental amortization of acquired FBLC investments as a result of the accounting treatment of the Mergers under ASC 805 for the periodperiods 1/24/January 1, 2025 to December 31, 2025 and January 24, 2024 to 12/31/2024.December 31, 2024, respectively.

Our non-GAAP supplemental disclosure for the yearsyear ended December 31, 2023 and 2022 werewas prior to the Mergers.

We generate cash primarily from the net proceeds of the purchase of shares of our Common Stock and Series A Preferred Stock via drawdowns on our investors’ capital commitments, cash flows from interest and fees earned from our investments and principal repayments and proceeds from sales of our investments. As of December 31, 2025, we had issued 135.5 million shares of our Common Stock for net proceeds of $2.0 billion, including shares issued pursuant to the DRIP. We had also issued 77,500 shares of Series A Preferred Stock for gross proceeds of $77.4 million. As of December 31, 2024, we had issued 135.5 million shares of our Common Stock for net proceeds of $2.0 billion, including shares issued pursuant to the DRIP. We had also issued 77,500 shares of Series A Preferred Stock for gross proceeds of $77.4 million. As of December 31, 2023, we had issued 26.1 million shares of our Common Stock for net proceeds of $395.9 million, including shares issued pursuant to the DRIP. We had also issued 77,500 shares of Series A Preferred Stock for gross proceeds of $77.4 million.

As of December 31, 2025, we had $120.7 million of cash. For the year ended December 31, 2025, net cash provided by operating activities was $6.1 million. The level of cash flows used in or provided by operating activities is affected by the timing of purchases, redemptions, and sales of portfolio investments. The cash flows used in operating activities for the year ended December 31, 2025 was a result of purchases of investments of $1.1 billion, offset by sales and repayments of investments of $965.8 million. As of December 31, 2024, we had $130.8 million of cash. For the year ended December 31, 2024, net cash used in operating activities was $210.3 million. The level of cash flows used in or provided by operating activities is affected by the timing of purchases, redemptions, and sales of portfolio investments. The cash flows used in operating activities for the year ended December 31, 2024 was primarily a result of purchases of investments of $1.1 billion, offset by sales and repayments of investments of $651.2 million as well as cash received in the Mergers of $58.5 million. As of December 31, 2023, we had $55.2 million of cash. For the year ended December 31, 2023, net cash provided by operating activities was $66.1 million. The level of cash flows used in or provided by operating activities is affected by the timing of purchases, redemptions, and sales of portfolio investments. The cash flows provided by operating activities for the year ended December 31, 2023 was primarily a result of purchases of investments of $77.0 million, partially offset by sales and repayments of investments of $101.7 million.

Net cash used in financing activities of $16.2 million during the year ended December 31, 2025 primarily related to repayments of secured borrowings of $29.1 million, payments on debt of $1.2 billion, payments of financing costs of $9.3 million, common stockholder distributions of $132.1 million, and preferred stockholder distributions of $6.3 million offset by proceeds from debt of $1.4 billion. Net cash provided by financing activities of $285.8 million during the year ended December 31, 2024 primarily related to payments on debt of $1.1 billion, payments of financing costs of $7.6 million, common stockholder distributions of $111.9 million, preferred stockholder distributions of $7.3 million, and repurchases of common stock of $43.0 million partially offset by proceeds from debt of $1.6 billion and proceeds from issuance of shares of common stock of $0.9 million. Net cash used in financing activities of $37.1 million during the year ended December 31, 2023 primarily related to payments on debt of $443.9 million, repayments on short-term borrowings of $89.4 million, common stockholder distributions of $31.2 million, and preferred stockholder distributions of $7.6 million partially offset by proceeds from issuance of shares of common stock of $9.9 million, proceeds from issuance of shares of preferred stock of $41.4 million, proceeds from debt of $384.0 million, proceeds from short-term borrowings of $68.6 million, and proceeds from secured borrowings of $33.3 million.

As of December 31, 2025, we had $864.8 million of availability under the JPM Credit Facility, JPM Revolver Facility, and Wells Fargo Credit Facility (subject to borrowing base availability). As of December 31, 2024, we had $240.1 million of availability under the JPM Credit Facility, JPM Revolver Facility, and Wells Fargo Credit Facility (subject to borrowing base availability). As of December 31, 2023, we had $78.0 million of availability under the JPM Credit Facility (subject to borrowing base availability), and had approximately $0.9 million of uncalled capital commitments to purchase shares of our Common Stock. WeStock.We expect to have sufficient liquidity for our investing activities and to conduct our operations for the next 12 months.

Our components of the distributions for the yearsyear ended December 31, 2023 and 2022 werewas prior to the Mergers.

We entered into an amendment and restatement of the Investment Advisory Agreement (the “Amended and Restated Investment Advisory Agreement”), dated as of January 24, 2024, which was approved by our Board of Directors and our stockholders in connection with the consummation of the Mergers,Mergers and reapproved by our Board of Directors on August 7, 2025, under which the Adviser, subject to the overall supervision of our Board of Directors manages the day-to-day operations of, and provides investment advisory services to us. Affiliates of the Adviser also provide investment advisory services to other funds that have investment mandates that are similar, in whole and in part, with ours. Affiliates of the Adviser also serve as investment adviser or sub-adviser to private funds and registered open-end funds, and as an investment adviser to a public real estate investment trust. The Adviser has adopted policies designed to manage and mitigate the conflicts of interest associated with the allocation of investment opportunities. In addition, any affiliated fund currently formed or formed in the future and managed by the Adviser or its affiliates may have overlapping investment objectives with our own and, accordingly, may invest in asset classes similar to those targeted by us. However, in certain instances due to regulatory, tax, investment, or other restrictions, certain investment opportunities may not be appropriate for either us or other funds managed by the Adviser or its affiliates.

Our investment objective is to generate both current income and capital appreciation through debt and equity investments. We intend to invest primarily in first and second lien senior secured loans, and to a lesser extent, mezzanine loans, unsecured loans and equity of predominantly private U.S. middle market companies. We define middle market companies as those with earnings before interest, taxes, depreciation, and amortization (“EBITDA”) of between $25 million and $100 million annually, although we may invest in larger or smaller companies. We also may purchase interests in loans or corporate bonds through secondary market transactions. We expect that each investment generally will range between approximately 0.5% and 3.0% of our total assets. As of MarchJune 31,30, 2026, 79.8%80.0% of our portfolio was invested in senior secured loans.

On December 18, 2020, we completed our Initial Closing of Capital Commitments to purchase shares of our Common Stock to investors in a private placement in reliance on exemptions from the registration requirements of the Securities Act. Since our Initial Closing, we held additional closings and received aggregate Capital Commitments to purchase Common Stock. As of MarchJune 31,30, 2026, investors had made aggregate Capital Commitments to purchase Common Stock of $375.5 million. At each closing of the private placement, each investor will make a Capital Commitment to purchase shares of Common Stock pursuant to a Subscription Agreement entered into with us. Investors will be required to fund drawdowns to purchase shares of Common Stock up to the amount of their respective Capital Commitments on an as-needed basis each time we deliver a notice to the investors. Closings of the private placement of our Common Stock occurred, from time to time, during the Initial Closing Period which our Board of Directors extended such that it ended December 18, 2023. After the Initial Closing Period, we may permit one or more additional closings of the private placement of our Common Stock with the approval of our Board of Directors.

On August 25, 2021, we filed the Certificate of Designation for the Series A Preferred Stock. On the same day, we entered into the Preferred Subscription Agreements with certain investors, pursuant to which investors made new Preferred Capital Commitments to purchase shares of our Series A Preferred Stock. As of MarchJune 31,30, 2026, total Preferred Capital Commitments of Series A Preferred Stock were $77.5 million.

During the threesix months ended MarchJune 31,30, 2026, we made $241.5$364.1 million of investments in portfolio companies and had $246.2$342.0 million in aggregate amount of sales and repayments, resulting in net investments of $(4.7)$22.1 million for the period. The total portfolio of debt investments at fair value consisted of 93.5% bearing variable interest rates and 6.5% bearing fixed interest rates.

Our portfolio composition, based on fair value at MarchJune 31,30, 2026 was as follows:

(1) As of MarchJune 31,30, 2026, FBLC Senior Loan Fund, LLC's holdings consisted of 94.5%93.2% senior secured debt, of which 92.4%91.8% represented senior secured first lien debt. As of MarchJune 31,30, 2026, we held investments in Siena Capital Finance, LLC ("Siena") consisting of subordinated debt and equity, which represented 2.1%1.8% and 2.1% of our total portfolio, respectively. As of MarchJune 31,30, 2026, we held investments in Post Road Equipment Finance, LLC (“Post Road”) consisting of subordinated debt and equity, which represented 2.5%2.3% and 3.2%3.4% of our total portfolio, respectively. The respective businesses of Siena and Post Road primarily involve making senior secured asset-based loans to middle market companies and equipment finance transactions secured by mission-critical equipment of middle market companies, respectively. If the underlying investments of FBLC Senior Loan Fund described above were held by us and we were to treat the investments in Siena and Post Road as senior secured first lien investments, given the underlying businesses of those portfolio companies, then our portfolio composition as of MarchJune 31,30, 2026 would be as follows:

The weighted average risk rating of our investments based on fair value was 2.2 and 2.1 as of bothJune March 31,30, 2026 and December 31, 2025.2025, respectively. As of MarchJune 31,30, 2026, we had eighteleven portfolio companies on non-accrual status with a total amortized cost of $59.5$112.7 million and fair value of $30.9$68.3 million, which represented 1.4%2.7% and 0.8%1.7% of the investment portfolio's total amortized cost and fair value, respectively. As of December 31, 2025, we had eight portfolio companies on non-accrual status with a total amortized cost of $100.3 million and fair value of $46.5 million, which represented 2.4% and 1.1% of the investment portfolio's total amortized cost and fair value, respectively. Refer to Note 2 - Summary of Significant Accounting Policies for additional details regarding our non-accrual policy.

On January 24, 2024, as a result of the consummation of the Mergers, we became party to the joint venture formed on January 20, 2021, between FBLC and Cliffwater Corporate Lending Fund (“CCLF”), FBLC Senior Loan Fund, LLC (“SLF”). SLF invests primarily in senior secured loans and, to a lesser extent, may invest in mezzanine loans, unsecured loans and equity of predominantly private U.S. middle market companies. SLF was formed as a Delaware limited liability company and is not consolidated by us for financial reporting purposes. We provide capital to SLF in the form of LLC equity interests. At formation, FBLC and CCLF owned 87.5% and 12.5%, respectively, of the LLC equity interests of SLF. On July 2, 2024, the Company contributed $100.0 million of additional capital into SLF. On February 28, 2025, SLF distributed $100.0 million to the Company as a return of capital. On October 15, 2025, SLF distributed $80.0 million to the Company as a return of capital. As of MarchJune 31,30, 2026, we and CCLF owned 80.0% and 20.0%, respectively, of the LLC equity interests of SLF. Profit and loss are allocated based on each members' ownership percentage of the joint venture's net asset value. SLF has an administrative and loan services agreement with BSP, our affiliate, pursuant to which BSP provides certain operational and valuation services for SLF's investments; as well as certain agreements with third-party service providers. We and CCLF each appoint two members to SLF's four-person board of members. All material decisions with respect to SLF, including those involving its investment portfolio, require unanimous approval of a quorum of the board of members. Quorum is defined as (i) the presence of two members of the board of members; provided that at least one individual is present that was elected, designated or appointed by each member; (ii) the presence of three members of the board of members; provided that the individual that was elected, designated or appointed by the member with only one individual present shall be entitled to cast two votes on each matter; and (iii) the presence of four members of the board of members; provided that two individuals are present that were elected, designated or appointed by each member.

As of MarchJune 31,30, 2026, our investment in SLF consisted of equity contributions of $225.0 million. Our investment in SLF is classified as “Equity/Other” on the consolidated schedules of investments, and other disclosures unless otherwise indicated.

Below is a summary of SLF’s portfolio as of MarchJune 31,30, 2026 and December 31, 2025. A listing of the individual investments in SLF’s portfolio as of such dates can be found in Note 3 – Fair Value of Financial Instruments in the notes to the accompanying consolidated financial statements (dollars in thousands):

Below is certain summarized financial information for SLF as of MarchJune 31,30, 2026 and December 31, 2025 and for the three and six months ended MarchJune 31,30, 2026 and 2025 (dollars in thousands):

Our operating results for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows (dollars in thousands):

The composition of our operating expenses for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows (dollars in thousands):

Incentive Fees decreased from $9.0$7.9 million for the three months ended MarchJune 31,30, 2025 to $7.4$6.8 million for the three months ended MarchJune 31,30, 2026. Incentive Fees decreased from $16.9 million for the six months ended June 30, 2025 to $14.2 million for the six months ended June 30, 2026. The decrease in Incentive Fees from Marchthe 31,three and six months ended June 30, 2025 to the Marchthree 31,and six months ended June 30, 2026 was driven by lower SOFR rates which resulted in a decrease in pre-incentive fee net investment income.

Interest and debt fees increased from $33.9$34.9 million for the three months ended MarchJune 31,30, 2025 to $34.6$36.4 million for the three months ended MarchJune 31,30, 2026. Interest and debt fees increased from $68.7 million for the six months ended June 30, 2025 to $71.0 million for the six months ended June 30, 2026. The increase fromfor Marchthe 31,three and six months ended June 30, 2025 to Marchthe 31,three and six months ended June 30, 2026 was primarily driven by the increase in the average daily debt outstanding for facility borrowings and unsecured notes partially offset by a lower weighted average annualized interest cost of the facility borrowings and unsecured notes. The average daily debt outstanding for the threesix months ended MarchJune 31,30, 2025 was $2.1 billion compared to $2.2 billion for the threesix months ended MarchJune 31,30, 2026. The weighted average annualized interest cost of the facility borrowings and unsecured notes for the threesix months ended MarchJune 31,30, 2025 and 2026 were 6.21%6.20% and 5.83%,5.99%, respectively.

Professional fees and other general and administrative expenses increaseddecreased from $3.9$4.2 million for the three months ended MarchJune 31,30, 2025 to $4.1 million for the three months ended MarchJune 31,30, 2026. Professional fees and other general and administrative expenses amounted to $8.2 million for the six months ended June 30, 2025 and $8.2 million for the six months ended June 30, 2026. The increase in professional fees and other general and administrative expenses fromfor Marchthe 31,three and six months ended June 30, 2025 remained relatively consistent compared to Marchthe 31,three 2026and wassix primarilymonths drivenended byJune an30, increase in costs associated with servicing a larger investment portfolio.2026.

Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments for thethree threeand six months ended MarchJune 31,30, 2026 and 2025 were as follows (dollars in thousands):

For the three months ended MarchJune 31,30, 2026, we recorded a net realized loss of $32.8$1.2 million. For the six months ended June 30, 2026, we recorded a net realized loss of $34.1 million. The net realized loss for the six months ended June 30, 2026, was primarily driven by one portfolio company. In January 2026, we sold our first lien debt position of MGTF Radio Company, LLC which resulted in a net realized loss of $33.0 million offsetand bya ancorresponding unrealized gain of $33.6 million.million from the reversal of previously recognized unrealized depreciation.

For the three months ended MarchJune 31,30, 2025, we recorded a net realized gainloss of $3.5$11.5 million. For the six months ended June 30, 2025, we recorded a net realized loss of $8.0 million. The net realized gainloss for the six months ended June 30, 2025, was primarily driven by twoone portfolio companies.company. In FebruaryJune 2025, we refinancedrestructured our first lien debt position of IndigoCoronis Buyer,Health Inc.LLC which resulted in a net realized loss of $14.0 million and a corresponding unrealized gain of $0.8$14.8 million.million Infrom Marchthe 2025, we fully exited our first lien debt positionreversal of Avalara,previously Inc.recognized whichunrealized resulted in a realized gain of $0.9 million.depreciation.

For the three months ended MarchJune 31,30, 2025,2026 we recorded unrealized appreciation of $13.8$20.2 million on 8540 portfolio company investments, which was offset by $35.3$22.8 million of unrealized depreciation on 229101 portfolio company investments. The unrealized appreciationdepreciation primarily resulted from improveddeteriorating credit performance of certain portfolio companiescompanies, including FBLC Senior Loan Fund, LLC and theAventine reversalHoldings, LLC, which resulted in unrealized losses of previously$4.5 recordedmillion and $3.5 million, respectively. These declines were partially offset by a $10.2 million unrealized depreciationgain uponon thePost realizationRoad ofEquipment certainFinance, investments.LLC. TheIn unrealizedaddition, depreciation was primarily due to isolated deterioration in the credit performance of a small number of portfolio companies. $2.0$3.0 million of the net unrealized loss was driven by a change in deferred taxes. Additionally, $0.2 million of the net unrealized loss was driven by a change in unrealized depreciation on derivatives. The overall net unrealized depreciation on our portfolio was primarily driven by deterioration in the credit performance of certain portfolio companies.

(1) Represents amortization of purchase premium and incremental amortization of acquired FBLC investments as a result of the accounting treatment of the Mergers under ASC 805 for the periods January 1, 2026 to MarchJune 31,30, 2026 and January 1, 2025 to MarchJune 31,30, 2025, respectively.

The table shows the components of the distributions we have declared and/or paid to common stockholders for the threesix months ended MarchJune 31,30, 2026 and 2025 (dollars in thousands):

The table shows the components of the distributions we have declared and/or paid to preferred stockholders during the threesix months ended MarchJune 31,30, 2026 and 2025 (dollars in thousands):

We may fund our cash distributions to stockholders from any sources of funds available to us, including advances from the Adviser that are subject to reimbursement, as well as offering proceeds, borrowings, net investment income from operations, capital gain proceeds from the sale of assets, and non-capital gain proceeds from the sale of assets. We have not established limits on the amount of funds we may use from available sources to make distributions. We may have distributions which could be characterized as a return of capital for tax purposes. During the threesix months ended MarchJune 31,30, 2026 and 2025, no portion of our distributions was characterized as return of capital for tax purposes. The specific tax characteristics of our distributions made in respect of our fiscal year ended December 31, 2026 are reported to stockholders shortly after the end of the calendar year 2026 as well as in our periodic reports with the SEC. Stockholders should read any written disclosure accompanying a distribution payment carefully and should not assume that the source of any distribution is our ordinary income or gain. Moreover, you should understand that any such distributions were not based on our investment performance and can only be sustained if we achieve positive investment performance in future periods and/or our Adviser continues to make such reimbursements. There can be no assurance that we will achieve the performance necessary to sustain our distributions or that we will be able to pay distributions at all.

On September 23, 2020, we entered into the Administration Agreement with BSP, pursuant to which BSP provides us with office facilities and administrative services. We reimburse BSP quarterly for all administrative costs and expenses incurred by our Adviser in performing our obligations under the Administration Agreement and annually for overhead expenses incurred in the course of performing our obligations under the Administration Agreement, including rent, travel and the allocable portion of the cost of our Chief Compliance Officer and Chief Financial Officer and their respective staffs, including operations and tax professionals, and administrative staff providing support services in respect of us. The Administration Agreement may be terminated by either party without penalty upon not less than 60 days’ written notice to the other. For the three and six months ended MarchJune 31,30, 2026 and 2025,2026, we incurred $0.8$0.9 million and $0.7$1.7 million, respectively, in administrative service fees under the administrative agreement, which are included in other general and administrative on the consolidated statements of operations in the accompanying consolidated financial statements. For the three and six months ended June 30, 2025, we incurred $0.7 million and $1.4 million, respectively, in administrative service fees under the administrative agreement, which are included in other general and administrative on the consolidated statements of operations in the accompanying consolidated financial statements.

We are only allowed to borrow money such that our asset coverage, which, as defined in the 1940 Act, measures the ratio of total assets less total liabilities not represented by senior securities to total borrowings, equals at least 150% after such borrowing, with certain limited exceptions. As of MarchJune 31,30, 2026, the aggregate principal amount outstanding of the senior securities issued by us was $2.3 billion and our asset coverage was 180%.178%. We are continually exploring forms of debt financing which could include new or expanded credit facilities or the issuance of senior securities that are debt or stock. We may use borrowed funds, known as “leverage,” to make investments and to attempt to increase returns to our stockholders by reducing our overall cost of capital. We currently have credit facilities with JPMorgan and Wells Fargo.

On April 29, 2024, we entered into a purchase agreement in connection with the issuance and sale of $300.0 million aggregate principal amount of our 7.20% Notes due 2029 (the “2029 Notes”). The net proceeds from the sale of the 2029 Notes were approximately $293.0 million. The 2029 Notes were issued on May 6, 2024, pursuant to a third supplemental indenture. The 2029 Notes will mature on June 15, 2029, and may be redeemed in whole or in part at our option at any time or from time to time at the redemption prices set forth in the indenture governing the 2029 Notes. The 2029 Notes bear interest at a rate of 7.20% per year payable semi-annually on June 15 and December 15 of each year, commencing on December 15, 2024. The 2029 Notes are subject to customary indemnification provisions and representations, warranties and covenants. In connection with the offer and sale of the 2029 Notes, we entered into a Registration Rights Agreement, dated as of May 6, 2024. Pursuant to the Registration Rights Agreement, we are obligated to file with the SEC a registration statement relating to an offer to exchange the 2029 Notes for new notes issued by us that are registered under the Securities Act and otherwise have terms substantially identical to those of the 2029 Notes, and to use its commercially reasonable efforts to cause such registration statement to be declared effective. If we are not able to effect the exchange offer, we will be obligated to file a shelf registration statement covering the resale of the 2029 Notes and use its commercially reasonable efforts to cause such registration statement to be declared effective. If we fail to satisfy its registration obligations by certain dates specified in the Registration Rights Agreement, it will be required to pay additional interest to the holders of the 2029 Notes.

In addition, on the occurrence of a “Change of Control Repurchase Event,” as defined in the Fourth Supplemental Indenture, the Company will generally be required to make an offer to purchase the outstanding 2030 Notes at a price equal to 100% of the principal amount of such 2030 Notes plus any accrued and unpaid interest on the 2030 Notes repurchased to, but not including, the date of purchase. In connection with the issuance of the 2030 Notes, the Company entered into a Registration Rights Agreement, dated as of October 2, 2025 (the “Registration Rights Agreement”), with J.P. Morgan Securities LLC, BofA Securities, Inc., SMBC Nikko Securities America, Inc. and Wells Fargo Securities, LLC, as the representatives of the initial purchasers of the 2030 Notes, pursuant to which, the Company is obligated to file with the Securities and Exchange Commission a registration statement relating to an offer to exchange the 2030 Notes for new notes issued by the Company that are registered under the Securities Act and otherwise have terms substantially identical to those of the 2030 Notes, and to use its commercially reasonable efforts to cause such registration statement to be declared effective. If the Company is not able to effect the exchange offer, the Company will be obligated to file a shelf registration statement covering the resale of the 2030 Notes and use its commercially reasonable efforts to cause such registration statement to be declared effective. If the Company fails to satisfy its registration obligations by certain dates specified in the Registration Rights Agreement, it will be required to pay additional interest to the holders of the 2030 Notes. See Recent Developments below for additional information about the exchange offer.

The following table shows our payment obligations for repayment of debt and other contractual obligations as of MarchJune 31,30, 2026 (dollars in thousands):

—–—–—–—–—– (1) As of MarchJune 31,30, 2026, we had $147.0$104.5 million in unused borrowing capacity under the JPM Credit Facility, subject to borrowing base limits.

(2) As of MarchJune 31,30, 2026, we had $472.8$472.3 million in unused borrowing capacity under the JPM Revolver Facility, subject to borrowing base limits.

(3) As of MarchJune 31,30, 2026, we had no$127.8 million in unused borrowing capacity under the Wells Fargo Credit Facility, subject to borrowing base limits.

In the ordinary course of business, we may enter into future funding commitments. As of MarchJune 31,30, 2026 and December 31, 2025, we had unfunded commitments of $638.5$678.3 million and $701.3 million, respectively. We maintain sufficient cash on hand, and available borrowings to fund such unfunded commitments. Please refer to Note 7 - Commitments and Contingencies in the notes to our consolidated financial statements for further detail of these unfunded commitments.

On MayAugust 11,10, 2026, our Board of Directors declared a regular quarterly distribution of $0.24 per share of Common Stock, which will be paid on or around JuneSeptember 30, 2026 to stockholders of record as of MaySeptember 11,24, 2026.

On MayAugust 11,10, 2026, our Board of Directors declared a distribution of $15.82 per share of Series A Preferred Stock, which will be paid on or around JuneSeptember 30, 2026 to stockholders of record as of MaySeptember 11,24, 2026.

We generate cash primarily from the net proceeds of the purchase of shares of our Common Stock and Series A Preferred Stock via drawdowns on our investors’ capital commitments, cash flows from interest and fees earned from our investments and principal repayments and proceeds from sales of our investments. As of MarchJune 31,30, 2026, we had issued 136.0133.5 million shares of our Common Stock foroutstanding, representing aggregate net proceeds of $2.0 billion, including shares issued pursuant to the DRIP. We had also issued 77,500 shares of Series A Preferred Stock for gross proceeds of $77.4 million. As of MarchJune 31,30, 2025, we had issued 136.2134.4 million shares of our Common Stock foroutstanding, representing aggregate net proceeds of $2.0 billion, including shares issued pursuant to the DRIP. We had also issued 77,500 shares of Series A Preferred Stock for gross proceeds of $77.4 million.

As of MarchJune 31,30, 2026, we had $89.7$45.1 million of cash. For the threesix months ended MarchJune 31,30, 2026, net cash provided by operating activities was $50.9$28.4 million. The level of cash flows used in or provided by operating activities is affected by the timing of purchases, redemptions, and sales of portfolio investments. The cash flows provided by operating activities for the threesix months ended MarchJune 31,30, 2026 was a result of sales and repayments of investments of $246.2$342.0 million, offset by purchases of investments of $241.5$364.1 million. As of MarchJune 31,30, 2025, we had $205.5$121.4 million of cash. For the threesix months ended MarchJune 31,30, 2025, net cash providedused byin operating activities was $73.8$96.4 million. The level of cash flows used in or provided by operating activities is affected by the timing of purchases, redemptions, and sales of portfolio investments. The cash flows providedused byin operating activities for the threesix months ended MarchJune 31,30, 2025 was primarily a result of purchases of investments of $282.5$653.1 million, offset by sales and repayments of investments of $323.9$520.7 million.

Net cash used in financing activities of $81.9$104.0 million during the threesix months ended MarchJune 31,30, 2026 primarily related to payments on debt of $497.0$592.9 million, repurchase of common stock of $34.0 million, common stockholder distributions of $25.7 million, and preferred stockholder distributions of $1.2 million offset by proceeds from debt of $442.0$553.1 million. Net cash provided by financing activities of $0.9$87.0 million during the threesix months ended MarchJune 31,30, 2025 primarily related to repayments of secured borrowings of $29.1 million, payments on debt of $125.0$329.3 million, payments of financing costs of $3.6$5.3 million, common stockholder distributions of $34.7$70.4 million, and preferred stockholder distributions of $1.7$3.4 million partially offset by proceeds from debt of $195.0$559.3 million.

We also fund a portion of our investments through borrowings from banks. Our primary use of cash will be investments in portfolio companies, payments of our expenses and payment of cash distributions to our stockholders. As of MarchJune 31,30, 2026, we are party to the JPM and Wells Fargo Credit Facilities, which are defined in and described in more detail in Note 5 - Borrowings. We are only allowed to borrow money such that our asset coverage, which, as defined in the 1940 Act, measures the ratio of total assets less total liabilities not represented by senior securities to total borrowings, equals at least 150% after such borrowing, with certain limited exceptions. As of MarchJune 31,30, 2026, our asset coverage ratio was 180%.178%.

As of MarchJune 31,30, 2026, we had $619.8$704.6 million of availability under the JPM Credit Facility, JPM Revolver Facility, and Wells Fargo Credit Facility (subject to borrowing base availability). As of MarchJune 31,30, 2025, we had $445.1$535.1 million of availability under the JPM Credit Facility, JPM Revolver Facility, and Wells Fargo Credit Facility (subject to borrowing base availability).