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

The market in which we operate is affected by a number of factors that are largely beyond our control but can nonetheless have a potentially significant, negative impact on us. These factors include, among other thingsinclude:

•the national and global political environment, including government shutdowns, war, armed conflicts, foreign relations and trading policies;

Generally, interest rate fluctuations and changes in credit spreads on floating rate loans may have a negative impact on our investments and investment opportunities and, accordingly, may have a material adverse effect on our rate of return on invested capital, our net investment income, our NAV and the market price of our securities. As interest rates increase, generally, the cost of borrowing under our Credit Facility increases, which may affect our ability to make new investments on favorable terms or at all. A substantial portion of our debt investments have variable interest rates that reset periodically and are generally based on SOFR. AsIf interest rates increase, the operating performance of certain of our portfolio companies hasmay beenbe affected by increasing debt service obligations and, therefore, may affect our results of operations. In addition, to the extent that further increases in interest rates make it difficult or impossible to make payments on outstanding indebtedness to us or other financial sponsors or refinance debt that is maturing in the near term, some of our portfolio companies may be unable to repay such debt at maturity and may be forced to sell assets, undergo a recapitalization or seek bankruptcy protection. Elevated interest rates could also cause borrowers to shift cash from other productive uses to the payment of interest, which may have a material adverse effect on their business and operations and could, over time, lead to increased defaults. Additionally, as interest rates increase and the corresponding risk of a default by borrowers increases, the liquidity of higher interest rate loans may decrease as fewer investors may be willing to purchase such loans in the secondary market in light of the increased risk of a default by the borrower and the heightened risk of a loss of an investment in such loans. Decreases in credit spreads on debt that pays a floating rate of return would have an impact on the income generation of our floating rate assets. Trading prices for debt that pays a fixed rate of return tend to fall as interest rates rise. Trading prices tend to fluctuate more for fixed rate securities that have longer maturities. If interest rates remain elevated or rise again in the future, it could have a negative effect on our investments, which could negatively impact our operating results, financial condition, and cash flows.

We anticipate usinguse a combination of equity and long-term and short-term borrowings to finance our investment activities. As a result, a portion of our income will dependdepends upon the spread between the rate at which we borrow funds and the rate at which we loan these funds. An increase or decrease in interest rates could reduce the spread between the rate at which we invest and the rate at which we borrow, and thus, adversely affect our profitability if we have not appropriately hedged against such event. Alternatively, interest rate hedging arrangements may limit our ability to participate in the benefits of lower interest rates with respect to the hedged portfolio.

As of September 30, 2024,2025, based on the total principal balance of debt investments outstanding, our portfolio consisted of approximately 93.9%86.9% of loans at variable rates with floors and approximately 6.1%13.1% at fixed rates.

•Lower middle market companies may have limited financial resources and may not be able to repay the loans we make to them. Our strategy includes providing financing to portfolio companies that typically do not have readily available access to financing. While we believe that this provides an attractive opportunity for us to generate profits, this may make it difficult for the portfolio companies to repay their loans to us upon maturity. A borrower’s ability to repay its loan may be adversely affected by numerous factors, including the failure to meet its business plan, a downturn in its industry, or negative economic conditions, including those created by the current market environment. Deterioration in a borrower’s financial condition and prospects usually will be accompanied by deterioration in the value of any collateral and a reduction in the likelihood of us realizing on any guaranties we may have obtained from the borrower’s management. As of September 30, 2024,2025, our loans to B+T Group Acquisition, Inc. (“B&T Group”),Inc., Edge Adhesives Holdings, Inc. (“Edge Adhesives”),Inc., and WB Xcel Holdings, LLC (“WB Xcel”) were on non-accrual status with a cost basis of $28.3$28.8 million, or 4.1%3.6% of the cost basis of all debt investments in our portfolio, and a fair value of $12.8$13.0 million, or 1.9%1.7% of the fair value of all debt investments in our portfolio. For any loans that are placed on non-accrual status, we cannot assure you that our efforts to improve profitability and cash flows of these companies will prove successful. In some of our portfolio companies we expect to be subordinated to a senior lender, and our interest in any collateral would, accordingly, likely be subordinate to another lender’s security interest.

Our NAV would be adversely affected if the fair valuevalues at which we record of our investments are higher than the values that we ultimately realize upon the disposal of such securities.

As of September 30, 2024,2025, we had investments in 4955 portfolio companies, of which our five largest investments comprised approximately $232.7$196.5 million, or 29.2%22.9% of our total investment portfolio, at fair value. A consequence of a concentration in a limited number of investments is that the aggregate returns we realize may be substantially adversely affected by the unfavorable performance of a small number of such investments or a substantial write-down of any one investment. Beyond our regulatory and income tax diversification requirements as well as Credit Facility requirements, we do not have fixed guidelines for industry concentration and our investments could potentially be concentrated in relatively few industries. In addition, while we do not intend to invest 25.0% or more of our total assets in a particular industry or group of industries at the time of investment, it is possible that as the values of our portfolio companies change, one industry or a group of industries may comprise in excess of 25.0% of the value of our total assets. As of September 30, 2024,2025, our largest industry concentrations of our total investments at fair value were in diversified/conglomeratehealthcare, serviceeducation, and childcare companies, representing 22.5%31.8%; diversified/conglomerate manufacturing companies, representing 20.1%23.6%; and aerospacediversified/conglomerate and defenseservice companies, representing 19.2%.17.7%. Therefore, we are susceptible to the economic circumstances in these industries, and a downturn in one or more of these industries could have a material adverse effect on our results of operations and financial condition.

We will have a continuing need for capital to finance our investments. As of September 30, 2024,2025, we had $70.6 million$0 in borrowings, at cost, outstanding under our Credit Facility, which provides for maximum borrowings of $293.7$320.0 million, with a revolving period end date of October 31, 20252027 (the “Revolving Period End Date”). Our Credit Facility permits us to fund additional loans and investments as long as we are within the conditions set forth in the credit agreement. Our Credit Facility contains covenants that require our wholly-owned subsidiary, Business Loan, to maintain its status as a separate legal entity, prohibit certain significant corporate transactions (such as mergers, consolidations, liquidations or dissolutions) and restrict material changes to our credit and collection policies without lenders’ consent. The Credit Facility also limits distributions to our stockholders on a fiscal year basis to the sum of our net investment income, net capital gains and amounts deemed to have been paid during the prior year in accordance with Section 855(a) of the Code. We are also subject to certain limitations on the type of loan investments we can make, including restrictions on geographic concentrations, sector concentrations, loan size, interest rate type, payment frequency and status, average life and lien property. Our Credit Facility further requires us to comply with other financial and operational covenants, which obligate us to, among other things, maintain certain financial ratios, including asset and interest coverage, and a minimum number of 25 obligors in the borrowing base. Additionally, we are required to maintain (i) a minimum net worth (defined in our Credit Facility to include any outstanding mandatorily redeemable preferred stock) of $325.0$500.0 million plus 50.0% of all equity and subordinated debt raised after MayJune 13,23, 20212025 less 50% of any equity and subordinated debt retired or redeemed after MayJune 13,23, 2021,2025, which equates to $418.8$581.0 million as of September 30, 2024,2025, (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. Continued compliance with the covenants in our Credit Facility depends on many factors, some of which are beyond our control.

•Senior Securities. We may issue “senior securities representing indebtedness” (such as borrowings under our Credit Facility and our notes payable) and “senior securities that are stock” (such as preferred stock) up to the maximum amount permitted by the 1940 Act. The 1940 Act currently permits us, as a BDC, to issue such senior securities in amounts such that our asset coverage, as defined in Section 18(h) of the 1940 Act, is at least 150% on such senior security immediately after each issuance of such senior security. As a result of issuing senior securities (in whatever form), we will be exposed to the risks associated with leverage. Although borrowing money for investments increases the potential for gain, it also increases the risk of a loss. A decrease in the value of our investments will have a greater impact on the value of our common stock to the extent that we have borrowed money to make investments. There is a possibility that the costs of borrowing could exceed the income we receive on the investments we make with such borrowed funds. In addition, our ability to pay distributions, issue senior securities or repurchase shares of our common stock would be restricted if the asset coverage on each of our senior securities is not at least 150%. If the aggregate value of our assets declines, we might be unable to satisfy that 150% requirement. To satisfy the 150% asset coverage requirement in the event that we are seeking to pay a distribution, we might either have to (i) liquidate a portion of our loan portfolio to repay a portion of our indebtedness or (ii) issue common stock. This may occur at a time when a sale of a portfolio asset may be disadvantageous, or when we have limited access to capital markets on agreeable terms. In addition, any amounts that we use to service our indebtedness, pay dividends on our preferred stock, or for offering expenses will not be available for distributions to common stockholders. Furthermore, if we have to issue common stock at below NAV per common share, any non-participating stockholders will be subject to dilution, as described below. Pursuant to Section 61(a)(3) of the 1940 Act, we are permitted to issue multiple classes of “senior securities representing indebtedness.” However, pursuant to Section 18(c) of the 1940 Act, we are permitted to issue only one class of “senior securities that are stock.”

•Common and Convertible Preferred Stock. Because we are constrained in our ability to issue debt or senior securities for the reasons given above, we aremay at times be dependent on the issuance of equity as a financing source. If we raise additional funds by issuing more common stock, the percentage ownership of our common stockholders at the time of the issuance would decrease and our existing common stockholderstockholders may experience dilution. In addition, under the 1940 Act, we will generally not be able to issue additional shares of our common stock at a price below NAV per common share to purchasers, other than to our existing common stockholders through a rights offering, without first obtaining the approval of our stockholders and our independent directors. If we were to sell shares of our common stock below our then-current NAV per common share, such sales would result in an immediate dilution to the NAV per common share. This dilution would occur as a result of the sale of common shares at a price below the then-current NAV per share of our common stock and a proportionately greater decrease in a common stockholder’s interest in our earnings and assets and voting percentage than the increase in our assets resulting from such issuance. For example, if we issue and sell an additional 10.0% of our common stock at a 5.0% discount to NAV, a common stockholder who does not participate in that offering for its proportionate interest will suffer NAV dilution of up to 0.5% or $5 per $1,000 of NAV. This imposes constraints on our ability to raise capital when our common stock is trading below NAV per common share. As noted above, the 1940 Act prohibits the issuance of multiple classes of “senior securities that are stock.”

The use of leverage, including through the issuance of senior securities that are debt or stock, magnifies the potential for gain or loss on amounts invested, and, if we incur additional leverage, this potential will be further magnified. As of September 30, 2024,2025, we incurred leverage through the Credit Facility, the Series A Preferred Stock, the 5.125% Notes due 2026 Notes,(the “2026 Notes”), the 2027 Notes, the 7.75% Notes due 2028 (the “2028 Notes”), and the 20282030 Convertible Notes. From time to time, we intend to incur additional leverage to the extent permitted under the 1940 Act. The use of leverage is generally considered a speculative investment technique and increases the risks associated with investing in our securities. In the future, we may borrow from, and issue senior securities, to banks and other lenders. Holders of these senior securities will have fixed dollar claims on our assets that are superior to the claims of our common stockholders, and we would expect such holders to seek recovery against our assets in the event of a default.

_____________ (A)The hypothetical return to common stockholders is calculated by multiplying our total assets as of September 30, 20242025 by the assumed rates of return and subtracting all interest on our debt to be paid during the 12 months following September 30, 2024,2025, and then dividing the resulting difference by our total net assets attributable to common stock as of September 30, 2024.2025. Based on $812.5$907.6 million in total assets, $70.6 million$0 drawn on our Credit Facility (at cost), $150.0 million in our 2026 Notes payable (at cost), $50.0 million in our 2027 Notes payable (at cost), $57.0 million in our 2028 Notes payable (at cost), $8.7$149.5 million in our 2030 Convertible Notes payable (at cost), $21.6 million in our Series A Preferred Stock (at cost), and $470.9$482.0 million in net assets, each as of September 30, 2024.2025.

To maintain our qualification as a RIC, we must meet income source, asset diversification, and annual distribution requirements. The annual distribution requirement is satisfied if we distribute at least 90.0% of our Investment Company Taxable Income to our stockholders on an annual basis. Because we use leverage, we are subject to certain asset coverage ratio requirements under the 1940 Act and could, under certain circumstances, be restricted from making distributions necessary to qualify as a RIC. Warrants we receive with respect to debt investments generally create OID, which we must recognize as ordinary income over the term of the debt investment. Similarly, PIK interest which is accrued generally over the term of the debt investment but not paid in cash, is recognized as ordinary income. Both OID and PIK interest will increase the amounts we are required to distribute to maintain our RIC status. Because such OIDs and PIK interest will not produce distributable cash for us at the same time as we are required to make distributions, we will need to use cash from other sources to satisfy such distribution requirements. For the year ended September 30, 2024,2025, we recognized $0.4 million of OID income and the unamortized balance of OID investments as of September 30, 20242025 totaled $0.6$0.2 million. As of September 30, 2024,2025, we had eightnine investments which had a PIK interest component and we recorded PIK interest income of $5.7$5.0 million during the year ended September 30, 2024.2025. We collected $0.2$7.2 million in PIK interest in cash for the year ended September 30, 2024.2025. Additionally, we must meet asset diversification and income source requirements at the end of each calendar quarter. If we fail to meet these tests, we may need to quickly dispose of certain investments to prevent the loss of RIC status. Since most of our investments will be illiquid, such dispositions, if even possible, may not be made at prices advantageous to us and may result in substantial losses. If we fail to qualify as a RIC as of a calendar quarter or annually for any reason and become fully subject to U.S. federal corporate income tax, the resulting corporate taxes could substantially reduce our net assets, the amount of income available for distribution, and the actual amount distributed. Such a failure would have a material adverse effect on us and our common stock.

Regulations governing our operation as a BDC and RIC will affect our ability to raise, and the way in which we raise, additional capital or borrow for investment purposes, which may have a negative effect on our growth. As a result of the annual distribution requirement to qualify as a RIC, we may need to periodically access the capital markets to raise cash to fund new investments. We may issue “senior securities representing indebtedness,” including borrowing money from banks or other financial institutions or “senior securities that are stock,” such as preferred stock, only in amounts such that our asset coverage on each senior security, as defined in the 1940 Act, equals at least 150% after each such incurrence or issuance. Further, we may not be permitted to declare a dividend or make any distribution to our outstanding stockholders or repurchase shares until such time as we satisfy these tests. Our ability to issue different types of securities is also limited. Compliance with these requirements may unfavorably limit our investment opportunities and reduce our ability in comparison to other companies to profit from favorable spreads between the rates at which we can borrow and the rates at which we can lend. As a BDC, therefore, we may issue equity at a rate more frequent than our privately owned competitors, which may lead to greater stockholder dilution. We have incurred leverage to generate capital to make additional investments. If the value of our assets declines, we may be unable to satisfy the asset coverage test under the 1940 Act, which could prohibit us from paying distributions and could prevent us from qualifying as a RIC. If we cannot satisfy the asset coverage test, we may be required to sell a portion of our investments and, depending on the nature of our debt financing, repay a portion of our indebtedness at a time when such sales and repayments may be disadvantageous. Such events, if they were to occur, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We are dependent upon our key management personnel and the key management personnel of the Adviser, particularly David Gladstone, Terry Lee BrubakerGladstone and Robert L. Marcotte, and on the continued operations of the Adviser, for our future success.

We have no employees. Our chief executive officer, chief operating officer, chief financial officer and treasurer, and the employees of the Adviser do not spend all of their time managing our activities and our investment portfolio. We are particularly dependent upon David Gladstone, Terry Lee Brubaker,Gladstone and Robert L. Marcotte for their experience, skills and networks. Our executive officers and the employees of the Adviser allocate some, and in some cases a material portion, of their time to businesses and activities that are not related to our business. We have no separate facilities and are completely reliant on the Adviser, which has significant discretion as to the implementation and execution of our business strategies and risk management practices. We are subject to the risk of discontinuation of the Adviser’s operations or termination of the Advisory Agreement and the risk that, upon such event, no suitable replacement will be found. We believe that our success depends to a significant extent upon the Adviser and that discontinuation of its operations or the loss of its key management personnel could have a material adverse effect on our ability to achieve our investment objectives.

The managementincentive compensationfee structure that has been implemented under the Advisory Agreement may cause the Adviser to invest in high-risk investments or take other risks. In addition to its management fee, the Adviser is entitled under the Advisory Agreement to receive incentive compensation based in part upon our achievement of specified levels of income. In evaluating investments and other management strategies, the opportunity to earn incentive compensation based on net investment income may lead the Adviser to place undue emphasis on the maximization of net investment income at the expense of other criteria, such as preservation of capital, maintaining sufficient liquidity, or management of credit risk or market risk, in order to achieve higher incentive compensation. Investments with higher yield potential are generally riskier or more speculative. This could result in increased risk to the value of our investment portfolio.

That part of the incentive fee payable by us that relates to our net investment income is computed and paid on income that may include interest that has been accrued but not yet received in cash, such as debt instruments with PIK interest or OID. If a portfolio company defaults on a loan, it is possible that such accrued interest previously used in the calculation of the incentive fee will become uncollectible. Consequently, we may make incentive fee payments on income accruals that we may not collect in the future and with respect to which we do not have a clawback right against the Adviser. Our OID investments totaled $56.9$49.0 million as of September 30, 2024,2025, at cost. For the year ended September 30, 2024,2025, we recognized $0.4 million of OID income and the unamortized balance of OID investments as of September 30, 20242025 totaled $0.6$0.2 million. As of September 30, 2024,2025, we had eightnine investments which had a PIK interest component and we recorded PIK interest income of $5.7$5.0 million during the year ended September 30, 2024.2025. We collected $0.2$7.2 million in PIK interest in cash for the year ended September 30, 2024.2025.

Our executive officers and directors, and the officers and directors of the Adviser, serve or may serve as officers, directors, or principals of entities that operate in the same or a related line of business as we do or of investment funds managed by our affiliates. Accordingly, they may have obligations to investors in those entities, the fulfillment of which might not be in our or our stockholders’ best interests. For example, Mr. Gladstone, our chairman and chief executive officer, is the chairman of the board and chief executive officer of each of the Gladstone Companies. In addition, Mr. Brubaker, our chief operating officer, is the vice chairman and chief operating officer of the Adviser and Administrator. Mr. Marcotte is an executive vice president of the Adviser. While portfolio managers and the officers and other employees of the Adviser devote as much time to the management of us as appropriate to enable the Adviser to perform its duties in accordance with the Advisory Agreement, the portfolio managers and other of the Adviser's officers may have conflicts in allocating their time and services among us, on the one hand, and other investment vehicles managed by the Adviser, on the other hand. These activities could be viewed as creating a conflict of interest insofar as the time and effort of the portfolio managers and the officers and employees of the Adviser will not be devoted exclusively to our business but will instead be allocated between our business and the management of these other investment vehicles. Moreover, the Adviser may establish or sponsor other investment vehicles which from time to time may have potentially overlapping investment objectives with ours and accordingly may invest in, whether principally or secondarily, asset classes we target. While the Adviser generally has broad authority to make investments on behalf of the investment vehicles that it advises, the Adviser has adopted investment allocation procedures to address these potential conflicts and intends to direct investment opportunities to us or the Affiliated Public Fund with the investment strategy that most closely fits the investment opportunity. Nevertheless, the management of the Adviser may face conflicts in the allocation of investment opportunities to other entities it manages. As a result, it is possible that we may not be given the opportunity to participate in certain investments made by other funds managed by the Adviser. In certain circumstances, we may make investments in a portfolio company in which one of our affiliates has or will have an investment, subject to satisfaction of any regulatory restrictions and, where required, to the prior approval of our Board of Directors. As of September 30, 2024,2025, our Board of Directors has approved the following types of co-investment transactions:

Risks Related to the 2026 Notes, 2027 Notes,Notes and 20282030 Convertible Notes (collectively, the “Notes”)

The Notes are obligations exclusively of the Company and not of any of our subsidiaries. None of our subsidiaries is a guarantor of the Notes and the Notes are not required to be guaranteed by any subsidiaries we may acquire or create in the future. Except to the extent we are a creditor with recognized claims against our subsidiaries, all claims of creditors of our subsidiaries will have priority over our equity interests in such subsidiaries (and therefore the claims of our creditors, including holders of the Notes) with respect to the assets of such subsidiaries. Even if we are recognized as a creditor of one or more of our subsidiaries, our claims would still be effectively subordinated to any security interests in the assets of any such subsidiary and to any indebtedness or other liabilities of any such subsidiary senior to our claims. Consequently, the Notes are structurally subordinated to all indebtedness and other liabilities of any of our subsidiaries and any subsidiaries that we may in the future acquire or establish. As of September 30, 2024,2025, there was $70.6 million$0 outstanding under the Credit Facility. Borrowings under the Credit Facility are the obligation of Business Loan, and are structurally senior to the Notes. In addition, our subsidiaries may incur substantial additional indebtedness in the future, all of which would be structurally senior to the Notes.

•with respect to the 2027 Notes, pay dividends on, or purchase or redeem or make any payments in respect of, capital stock or other securities ranking junior in right of payment to the Notes, including preferred stock and any subordinated indebtedness, other than, dividends, purchases, redemptions or payments that would cause our asset coverage to fall below the threshold specified in Section 18(a)(1)(B) as modified by Section 61(a)(2) of the 1940 Act or any successor provisions, giving effect to any no-action relief granted by the SEC to another BDC and upon which we may reasonably rely (or to us if we determine to seek such similar SEC no-action or other relief) permitting the BDC to declare any cash dividend or distribution notwithstanding the prohibition contained in Section 18(a)(1)(B) as modified by Section 61(a)(2) of the 1940 Act in order to maintain the BDC’s status as a RIC under Subchapter M of the Code;

In addition, the indenture with respect to the 2028 Notes does not require us to make an offer to purchase the 2028 Notes in connection with a change of control or any other event whereas, underUnder the terms of the respective indentures governing the 2026 Notes and the 2027 Notes, the holders of the 20262027 Notes and the2030 2027Convertible Notes, respectively,Notes may require us to repurchase 100% of such notes upon the occurrence of a “Change of Control Repurchase Event,” which would occur upon certain changes of control that result in a downgrade in such notes below investment grade.grade or “fundamental change”, respectively.

We have not listed, and do not intend to list in the future, the 20262027 Notes and 2027the 2030 Convertible Notes on any securities exchange or for quotation of the Notes on any automated dealer quotation system. Although the 2028 Notes are listed on Nasdaq, they may trade at a discount to their purchase price depending on prevailing interest rates, the market for similar securities, our credit ratings, our financial condition, performance and prospects, general economic conditions or other relevant factors. Accordingly, we cannot assure you that a liquid trading market will develop and/or be maintained for any of the Notes, that a holder will be able to sell its Notes at a particular time or that the price received when a holder sells its Notes will be favorable. To the extent an active trading market does not develop or is not maintained, the liquidity and trading price for the Notes may be harmed. Accordingly, the holder of a Note may be required to bear the financial risk of an investment in the Notes for an indefinite period of time.

The 2026 Notes and the 2027 Notes may be redeemed in whole or in part at any time or from time to time at the Company’s option prior to maturity at par plus a “make-whole” premium, if applicable. InWe addition,may not redeem the 20282030 Convertible Notes prior to October 6, 2028. We may beredeem redeemedfor incash wholeall or in part at any timeportion of the 2030 Convertible Notes (subject to the “partial redemption limitation”), at our optionoption, on a redemption date on or after SeptemberOctober 1,6, 2025.2028 and on or before the 45th scheduled trading day immediately prior to the maturity date if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the 2030 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. If prevailing rates are lower at the time of redemption, and we redeem the Notes, you likely would not be able to reinvest the redemption proceeds in a comparable security at an effective interest rate as high as the interest rate on the Notes being redeemed.

We may not be able to repurchase the 2026 Notes or 2027 Notes upon a Change of Control Repurchase Event.

We may not be able to repurchase the 2026 Notes or 2027 Notes upon a Change of Control Repurchase Event (as defined in the indenture governing such Notes) because we may not have sufficient funds. We would not be able to borrow under our Credit Facility to finance such a repurchase of the 2026 Notes or 2027 Notes, and we expect that any future credit facility would have similar limitations. Upon a Change of Control Repurchase Event, holders of the 2026 Notes or 2027 Notes may require us to repurchase for cash some or all of such Notes at a repurchase price equal to 100% of the aggregate principal amount of the Notes being repurchased, plus accrued and unpaid interest to, but not including, the repurchase date. The terms of our Credit Facility also provide that certain change of control events will constitute an event of default thereunder entitling the lenders to accelerate any indebtedness outstanding under our Credit Facility at that time and to terminate our Credit Facility. Our failure to purchase such tendered Notes upon the occurrence of such Change of Control Repurchase Event would cause an event of default under the indenture governing the Notes and a cross-default under the agreements governing the Credit Facility, which may result in the acceleration of such indebtedness requiring us to repay that indebtedness immediately. If the holders of the 2026 Notes or 2027 Notes exercise their right to require us to repurchase such Notes upon a Change of Control Repurchase Event, the financial effect of this repurchase could cause a default under our current and future debt instruments, and we may not have sufficient funds to repay any such accelerated indebtedness.

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 the Co-Investment Order that expanded our ability to co-invest, under certain circumstances, with certain of our affiliates, including Gladstone Investment, a BDC also managed by the Adviser, Gladstone Alternative, an interval fund also managed by the Adviser, 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. We believe the Co-Investment Order has enhanced and will continue to enhance our ability to further our investment objectives and strategies. If we are participating in an investment with one or more co-investors, whether or not an affiliate of ours, our investment is likely to be smaller than if we were investing alone.

During the year ended September 30, 2024,2025, we invested $53.3$310.7 million in four15 new portfolio companies and extended $124.4$86.1 million in investments to existing portfolio companies. In addition, we received a total of $136.3$352.3 million in combined net proceeds and principal repayments from portfolio company exits and principal repayments by existing portfolio companies during the year ended September 30, 2024.2025.

•In MayOctober 2024, our $15.0 million debt investment in GrayPerimeter MatterSolutions Systems, LLCGroup paid off at parpar. forWe netalso cash proceeds of $14.0 million includingreceived a $0.2$0.5 million prepayment penalty.penalty in conjunction with the payoff.

•In JulyNovember 2024, we invested an additional $6.5$28.9 million in TurnGiving KeyHome Health Clinics,Healthcare, LLC (“TurnGiving KeyHome”), an existing portfolio company, through secured first lien debt. WeIn alsoJune extended2025, Turnwe Keyinvested an additional $2.0$7.0 million line of credit commitment which was funded in JulyGiving 2024.Home through secured first lien debt.

•In SeptemberNovember 2024, we invested an additional $13.5$10.5 million in ArcWings Drilling‘N HoldingsMore LLC,Restaurants, anLLC existing portfolio company,(“Wings”) through secured first lien debt and common equity.debt. We also extended ArcWings Drillinga an additional $4.0$1.5 million secured first lien line of credit commitment and fundeda $0.9$5.0 million undersecured thefirst linelien delayed draw term loan commitment, both of creditwhich were unfunded at close.

•In JanuaryJuly 2024,2025, our $3.7 million debt investment in CHA8th Holdings,Avenue Food & Provisions, Inc. paid off at par for net proceeds of $3.0 million.par.

We have been able to meet our capital needs through extensions of and increases to our line of credit under the Credit Facility and by accessing the capital markets in the form of public equity offerings of common and preferred stock and public and private debt offerings. We have successfully extended the Credit Facility’s revolving period multiple times, most recently to October 2025,2027, and currently have a total commitment amount of $293.7$320.0 million. WeDuring the year ended September 30, 2025, we sold 476,138 and 8,774,101362,482 common shares under our at-the-market program for gross proceeds of $9.6 million. Additionally, we sold 518,321 shares of Series A Preferred Stock for gross proceeds of $13.0 million during the yearsyear ended September 30, 2024 and 2023, respectively.2025. In AugustSeptember 2023,2025, we completed an offering of $57.0$149.5 million aggregate principal amount of the2030 2028 Notes. In November 2021, we completed a private placement of $50.0 million aggregate principal amount of the 2027Convertible Notes. Refer to “Liquidity and Capital Resources — Revolving Line of Credit,” “Liquidity and Capital Resources — Equity — Common Stock,” and “Liquidity and Capital Resources — Notes Payable” for further discussion.

Although we were able to access the capital markets historically and in recent years, market conditions may affect the trading price of our capitalcommon stock and thus may inhibit our ability to finance new investments through the issuance of equitycommon stock in the future. When our common stock trades below NAV per common share, our ability to issue equitycommon stock is constrained by provisions of the 1940 Act, which generally prohibits the issuance and sale of our common stock below NAV per common share without first obtaining approval from our stockholders and our independent directors, other than through sales to our then-existing stockholders pursuant to a rights offering. On September 30, 2024,2025, the closing market price of our common stock was $24.05$21.87 per share, a 13.6%2.5% premium to our September 30, 20242025 NAV per share of $21.18.$21.34.

Interest income increaseddecreased by 12.4%6.4% for the year ended September 30, 2024,2025, as compared to the prior year. Generally, the level of interest income from investments is directly related to the 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 for the year ended September 30, 20242025 was $665.5$681.1 million, compared to $626.5$665.5 million for the year ended September 30, 2023,2024, an increase of $39.0$15.6 million, or 6.2%.2.3%. The weighted average yield on our interest-bearing investments is based on the current stated interest rate on interest-bearing investments, which increaseddecreased to 12.7% for the year ended September 30, 2025, compared to 13.9% for the year ended September 30, 2024, compared to 13.3% for the year ended September 30, 2023, inclusive of any allowances on interest receivables made during those periods. The increasedecrease in the weighted average yield was driven mainly by increasesdecreases in interest rates.

Other income decreased by 2.3%44.7% during the year ended September 30, 2024,2025, as compared to the prior year period primarily due to a $0.6$0.9 million decrease in dividend income and a $0.4 million decrease in success fees received and a $0.1 million decrease in dividend income year over year, partially offset by a $0.7 million increase in prepayment fees received year over year.

As of September 30, 2025, no single investment represented greater than 10% of the total investment portfolio at fair value. As of September 30, 2024, our investment in Antenna Research Associates, Inc. represented 11.4% of the total investment portfolio at fair value. As of September 30, 2023, no single investment represented greater than 10% of the total investment portfolio at fair value.

We were established for the purpose of investing in debt and equity securities of established private businesses operating in the U.S. Our investment objectives are to: (1) achieve and grow current income by investing in debt securities of established lower middle market companies in the U.S. that we believe will provide stable earnings and cash flow to pay expenses, make principal and interest payments on our outstanding indebtedness and make distributions to stockholders that grow over time; and (2) provide our stockholders with long-term capital appreciation in the value of our assets by investing in equity securities, in connection with our debt investments, that we believe can grow over time to permit us to sell our equity investments for capital gains. To achieve our investment objectives, our primary investment strategy is to invest in several categories of debt and equity securities, with each investment generally ranging from $8 million to $40 million, although investment size may vary, depending upon our total assets or available capital at the time of investment. We expect that our investment portfolio over time will consist of approximately 90.0% debt investments and 10.0% equity investments, at cost. As of MarchJune 31,30, 2026, our investment portfolio was made up of approximately 90.9%90.6% debt investments and 9.1%9.4% equity investments, at cost.

During the sixnine months ended MarchJune 31,30, 2026, we invested $71.8$138.5 million in fivenine new portfolio companies and extended $70.9$86.3 million in investments to existing portfolio companies. In addition, we exited five portfolio companies during the sixnine months ended MarchJune 31,30, 2026. We received a total of $99.1$139.3 million in combined net proceeds and principal repayments from the aforementioned portfolio company exits, as well as principal repayments by existing portfolio companies, during the sixnine months ended MarchJune 31,30, 2026. Our overall portfolio consists of 5559 portfolio companies as of MarchJune 31,30, 2026 and increased by $48.6$92.0 million at cost since September 30, 2025. From our initial public offering in August 2001 through MarchJune 31,30, 2026, we have made 724736 different loans to, or investments in, 297301 companies for a total of approximately $3.3$3.4 billion, before giving effect to principal repayments on investments and divestitures.

During the sixnine months ended MarchJune 31,30, 2026, the following significant transactions occurred:

Refer to Note 12 — Subsequent Events in the accompanying Consolidated Financial Statements included elsewhere in this Quarterly Report for portfolio activity occurring subsequent to MarchJune 31,30, 2026.

We have been able to meet our capital needs through extensions of and amendments to our line of credit with KeyBank National Association (“KeyBank”), as administrative agent, lead arranger and lender (as amended and/or restated from time to time, our “Credit Facility”) and by accessing the capital markets in the form of public equity offerings of common and preferred stock and public and private debt offerings. We have successfully extended the Credit Facility’s revolving period multiple times, most recently to October 2027, and currently have a total commitment amount of $365.0 million.million as of June 30, 2026. During the sixnine months ended MarchJune 31,30, 2026, we sold 743,4051,182,099 shares of 6.25% Series A Cumulative Redeemable Preferred Stock (the “Series A Preferred Stock”) for gross proceeds of $18.6$29.6 million. In September 2025, we completed an offering of $149.5 million aggregate principal amount of our 5.875% Convertible Notes due 2030 (the “2030 Convertible Notes”). In June 2026, we completed an offering of 7.00% Notes due 2029 with an aggregate principal amount of $60.0 million (the “2029 Notes”). Refer to “Liquidity and Capital Resources — Revolving Line of Credit,” “Liquidity and Capital Resources — Equity — Preferred Stock,” and “Liquidity and Capital Resources — Notes Payable” for further discussion.

Although we have been able to access the capital markets historically and in recent years, market conditions may affect the trading price of our capital stock and thus may inhibit our ability to finance new investments through the issuance of equity in the future. When our common stock trades below net asset value (“NAV”) per common share, our ability to issue equity is constrained by provisions of the 1940 Act, which generally prohibits the issuance and sale of our common stock below NAV per common share without first obtaining approval from our stockholders and our independent directors, other than through sales to our then-existing stockholders pursuant to a rights offering. On MarchJune 31,30, 2026, the closing market price of our common stock was $17.35$19.42 per share, a 18.8%9.7% discount to our MarchJune 31,30, 2026 NAV per share of $21.36.$21.50.

As of MarchJune 31,30, 2026, our asset coverage on our “senior securities representing indebtedness” was 225.7%218.6% and our asset coverage on our “senior securities that are stock” was 205.7%.196.2%.

On AprilJuly 14, 2026, our Board of Directors declared the following distributions to common and preferred stockholders:

Comparison of the Three Months Ended MarchJune 31,30, 2026 to the Three Months Ended MarchJune 31,30, 2025

Interest income increased by 8.7%16.5% for the three months ended MarchJune 31,30, 2026, as compared to the prior year period. Generally, the level of interest income from investments is directly related to the 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 for the three months ended MarchJune 31,30, 2026 was $794.0$822.4 million, compared to $682.6$647.2 million for the three months ended MarchJune 31,30, 2025, an increase of $111.4$175.2 million, or 16.3%.27.1%. The weighted average yield on our interest-bearing investments is based on the current stated interest rate on interest-bearing investments, which decreased to 11.8% for the three months ended MarchJune 31,30, 2026, compared to 12.6%12.8% for the three months ended MarchJune 31,30, 2025, inclusive of any allowances on interest receivables made during those periods. The decrease in the weighted average yield was driven mainly by decreases in interest rates.

As of MarchJune 31,30, 2026, our loans to B+T Group Acquisition, Inc., Edge Adhesives Holdings, Inc., Eegee Acquisition Corp., Lonestar EMS, LLC and WB Xcel Holdings, LLC were on non-accrual status with a cost basis of $28.8$46.0 million, or 3.4%5.2% of the cost basis of all debt investments in our portfolio, and a fair value of $13.0$26.7 million, or 1.6%3.1% of the fair value of all debt investments in our portfolio. As of September 30, 2025, our loans to B+T Group Acquisition, Inc., Edge Adhesives Holdings, Inc., and WB Xcel Holdings, LLC were on non-accrual status with a cost basis of $28.8 million, or 3.6% of the cost basis of all debt investments in our portfolio, and a fair value of $13.0 million, or 1.7% of the fair value of all debt investments in our portfolio.

Success fee, dividend and otherOther income increaseddecreased by $2.6$0.6 million during the three months ended MarchJune 31,30, 2026, as compared to the prior year period, primarily due to an increasedecreases in dividend income received and prepayment fees received period over period.

As of each of MarchJune 31,30, 2026 and September 30, 2025, no single investment represented greater than 10% of the total investment portfolio at fair value.

Expenses, net of any non-contractual, unconditional and irrevocable credits to fees from the Adviser, increased $3.8$3.1 million, or 37.1%,30.2%, for the three months ended MarchJune 31,30, 2026, as compared to the prior year period. This increase was primarily due to a $1.8$2.0 million increase in interest expense, a $0.7 million increase in the net incentive fee, a $0.8 million increase in interest expense, and a $0.6$0.3 million increase in the net base management fee earned by the Adviser.

Total interest expense on borrowings and notes payable increased by $0.8$2.0 million, or 15.9%,45.1%, during the three months ended MarchJune 31,30, 2026, driven by an increase in the weighted average balance outstanding on our Credit Facility, partially offset by a decrease in the effective interest rate on our Credit Facility and a decrease in interest expense on our notes payable. Interest expense on our Credit Facility increased by $1.6$2.5 million due primarily to an increase in the weighted average balance outstanding which was $183.7$206.1 million during the three months ended MarchJune 31,30, 2026, as compared to $53.7$6.6 million in the prior year period, an increase of 242.1%.$199.5 million. The effective interest rate on our Credit Facility, including unused commitment fees incurred, but excluding the impact of deferred financing costs, was 6.9%6.8% during the three months ended MarchJune 31,30, 2026, compared to 11.4%58.3% during the prior year period. The decrease in the effective interest rate was driven primarily by a $0.4$0.5 million decrease in unused commitment fees on the undrawn portion of the Credit Facility and a decrease in interest rates on the drawn portion of the Credit Facility during the three months ended MarchJune 31,30, 2026. Interest expense on our notes payable decreased by $0.8$0.5 million during the three months ended MarchJune 31,30, 2026 as compared to the prior year period, primarily due to the October 2025 redemptions of $57.0 million aggregate principal amount of our 7.75% Notes due 2028 (the “2028 Notes”) and $100.0$150.0 million aggregate principal amount of our 5.125% Notes due 2026 (the “2026 Notes”)., partially offset by the September 2025 issuance of the 2030 Convertible Notes and the June 2026 issuance of our the 2029 Notes.

The net base management fee earned by the Adviser increased by $0.6$0.3 million, or 22.6%,12.0%, for the three months ended MarchJune 31,30, 2026, as compared to the prior year period, resulting primarily from an increase in average total assets subject to the base management fee period over period, partially offset by an increase in credits to the base management fee from the Adviser for new deal origination fees period over period.

The income-based incentive fee increaseddecreased by $0.4$25 million,thousand, or 16.8%1.0% for the three months ended MarchJune 31,30, 2026, due to higherlower pre-incentive fee net investment income as compared to the prior year period. During the three months ended MarchJune 31,30, 2025, our Board of Directors accepted non-contractual, unconditional and irrevocable credits from the Adviser of $1.4$0.7 million to reduce the income-based incentive fee to the extent net investment income did not cover 100.0% of distributions to common stockholders. There were no such credits during the three months ended MarchJune 31,30, 2026.

For the three months ended MarchJune 31,30, 2025, we recorded a net realized gainloss on investments of $7.7$3.7 million, which resulted primarily from a $4.7$4.4 million realized gainloss recognized on the partial salerestructure of our common equity investment in SokolEegee’s andLLC, partially offset by a $3.0$0.7 million realized gain recognized on our investment in MCGGiving EnergyHome Solutions,Health Care, LLC. There was no realized gain or loss recorded on investments for the three months ended June 30, 2026.

During the three months ended MarchJune 31,30, 2026, we recorded net unrealized appreciation of investments in the aggregate amount of $4.8$3.0 million. The net realized gain (loss) and unrealized appreciation (depreciation) across our investments for the three months ended MarchJune 31,30, 2026 were as follows:

The primary driversdriver of net unrealized appreciation of $4.8$3.0 million for the three months ended MarchJune 31,30, 2026 werewas the improvement in the financial and operational performance of Engineering Manufacturing Technologies, LLC and Dutch Gold Honey, Inc. and OCI, LLC,Inc., partially offset by the decline in the financial and operational performance of LonestarEegee EMS,Acquisition LLC and Technical Resource Management, LLC.Corp.

During the three months ended MarchJune 31,30, 2025, we recorded net unrealized depreciation of investments in the aggregate amount of $9.9$34 million.thousand. The net realized gain (loss) and unrealized appreciation (depreciation) across our investments for the three months ended MarchJune 31,30, 2025 were as follows:

Comparison of the SixNine Months Ended MarchJune 31,30, 2026 to the SixNine Months Ended MarchJune 31,30, 2025

Interest income increased by 10.4%12.4% for the sixnine months ended MarchJune 31,30, 2026, as compared to the prior year period. Generally, the level of interest income from investments is directly related to the 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 for the sixnine months ended MarchJune 31,30, 2026 was $783.0$796.2 million, compared to $662.3$657.3 million for the sixnine months ended MarchJune 31,30, 2025, an increase of $120.7$138.9 million, or 18.2%.21.1%. The weighted average yield on our interest-bearing investments is based on the current stated interest rate on interest-bearing investments, which decreased to 12.0%11.9% for the sixnine months ended MarchJune 31,30, 2026, compared to 12.9%12.8% for the sixnine months ended MarchJune 31,30, 2025, inclusive of any allowances on interest receivables made during those periods. The decrease in the weighted average yield was driven mainly by decreases in interest rates.

As of MarchJune 31,30, 2026, our loans to B+T Group Acquisition, Inc., Edge Adhesives Holdings, Inc., Eegee Acquisition Corp., Lonestar EMS, LLC and WB Xcel Holdings, LLC were on non-accrual status with a cost basis of $28.8$46.0 million, or 3.4%5.2% of the cost basis of all debt investments in our portfolio, and a fair value of $13.0$26.7 million, or 1.6%3.1% of the fair value of all debt investments in our portfolio. As of September 30, 2025, our loans to B+T Group Acquisition, Inc., Edge Adhesives Holdings, Inc., and WB Xcel Holdings, LLC were on non-accrual status with a cost basis of $28.8 million, or 3.6% of the cost basis of all debt investments in our portfolio, and a fair value of $13.0 million, or 1.7% of the fair value of all debt investments in our portfolio.

Success fee, dividend and otherOther income increased by $2.5$1.9 million during the sixnine months ended MarchJune 31,30, 2026, as compared to the prior year period, primarily due to an increase in dividend income received period over period and an increase in prepayment fees received period over period.

As of each of MarchJune 31,30, 2026 and September 30, 2025, no single investment represented greater than 10% of the total investment portfolio at fair valuevalue.

Expenses, net of any non-contractual, unconditional and irrevocable credits to fees from the Adviser, increased $6.3$9.5 million, or 30.1%, for the sixnine months ended MarchJune 31,30, 2026, as compared to the prior year period. This increase was primarily due to a $2.1$4.0 million increase in interest expense, a $2.7 million increase in the net incentive fee, a $2.0 million increase in interest expense, and a $1.7$2.0 million increase in the net base management fee earned by the Adviser.

Total interest expense on borrowings and notes payable increased by $2.0$4.0 million, or 20.3%,28.1%, during the sixnine months ended MarchJune 31,30, 2026, driven by an increase in the weighted average balance outstanding on our Credit Facility, partially offset by a decrease in the effective interest rate on our Credit Facility and a decrease in interest expense on our notes payable. Interest expense on our Credit Facility increased by $2.8$5.4 million due primarily to an increase in the weighted average balance outstanding which was $152.4$170.3 million during the sixnine months ended MarchJune 31,30, 2026, as compared to $39.8$28.7 million in the prior year period, an increase of 282.9%.493.4%. The effective interest rate on our Credit Facility, including unused commitment fees incurred, but excluding the impact of deferred financing costs, was 7.4%7.1% during the sixnine months ended MarchJune 31,30, 2026, compared to 13.9%17.3% during the prior year period. The decrease in the effective interest rate was driven primarily by a $0.6$1.1 million decrease in unused commitment fees on the undrawn portion of the Credit Facility and a decrease in interest rates on the drawn portion of the Credit Facility during the sixnine months ended MarchJune 31,30, 2026. Interest expense on our notes payable decreased by $0.9$1.4 million during the sixnine months ended MarchJune 31,30, 2026 as compared to the prior year period, primarily due to the October 2025 redemptions of our 2026 Notes and 2028 Notes, partially offset by the September 2025 issuance of our 2030 Convertible Notes and the June 2026 issuance of our 2029 Notes.

The net base management fee earned by the Adviser increased by $1.7$2.0 million, or 41.7%,31.3%, for the sixnine months ended MarchJune 31,30, 2026, as compared to the prior year period, resulting primarily from an increase in average total assets subject to the base management fee period over period and a decrease in credits to base management fee from the Adviser for new deal origination fees period over period.

The income-based incentive fee increased by $0.4 million, or 7.8%,4.9%, for the sixnine months ended MarchJune 31,30, 2026, due to higher pre-incentive fee net investment income as compared to the prior year period. During the sixnine months ended MarchJune 31,30, 2025, our Board of Directors accepted non-contractual, unconditional and irrevocable credits from the Adviser of $1.7$2.3 million to reduce the income-based incentive fee to the extent net investment income did not cover 100.0% of distributions to common stockholders. There were no such credits during the sixnine months ended MarchJune 31,30, 2026.

For the sixnine months ended MarchJune 31,30, 2026, we recorded a net realized gain on investments of $1.5 million, which resulted primarily from a $1.8 million realized gain recognized on the redemption of our equity investment in Sokol, partially offset by a $0.3 million realized loss recognized on the exit of our investment in FES Resources Holdings LLC.

For the sixnine months ended MarchJune 31,30, 2025, we recorded a net realized gain on investments of $65.4$61.7 million, which resulted from a $59.3 million realized gain recognized on the sale of our investment in Antenna Research Associates, Inc., a $4.7 million realized gain recognized on the partial sale of our common equity investment in Sokol, a $3.0 million realized gain recognized on our investment in MCG Energy Solutions, LLC, and a $2.5 million realized gain recognized on our investment in Salt & Straw, LLC, partially offset by a $4.4 million realized loss recognized on the restructure of our investment in Eegee’s LLC and a $4.1 million realized loss recognized on the sale of our investment in DKI Ventures, LLC.

During the sixnine months ended MarchJune 31,30, 2026, we recorded net realized losses on other of $1.8 million, due primarily to the write-off of unamortized deferred offering costs upon the redemption of our 2026 Notes and 2028 Notes.

During the sixnine months ended MarchJune 31,30, 2026, we recorded net unrealized depreciationappreciation of investments in the aggregate amount of $0.9$2.2 million. The net realized gain (loss) and unrealized appreciation (depreciation) across our investments for the sixnine months ended MarchJune 31,30, 2026 were as follows:

The primary driversdriver of net unrealized depreciationappreciation of $0.9$2.2 million for the sixnine months ended MarchJune 31,30, 2026 werewas the improvement in the financial and operational performance of Dutch Gold Honey, Inc. and OCI,Engineering Manufacturing Technologies, LLC, partially offset by the decline in the financial and operational performance of Eegee Acquisition Corp. and Lonestar EMS, LLC and Technical Resource Management, LLC.

During the sixnine months ended MarchJune 31,30, 2025, we recorded net unrealized depreciation of investments in the aggregate amount of $51.8 million. The net realized gain (loss) and unrealized appreciation (depreciation) across our investments for the sixnine months ended MarchJune 31,30, 2025 were as follows:

The primary driver of net unrealized depreciation of $51.8 million for the sixnine months ended MarchJune 31,30, 2025 was the reversal of unrealized appreciation from the exit of our investment in Antenna Research Associates, Inc., partially offset by the increase in the financial and operational performance of certain of our other portfolio companies.

Our cash flows from operating activities are primarily generated from the interest payments on debt securities that we receive from our portfolio companies, as well as net proceeds received through repayments or sales of our investments. We utilize this cash primarily to fund new investments, make interest payments on our Credit Facility,Facility and secured notes, make distributions to our stockholders, pay management and administrative fees to the Adviser and Administrator, and for other operating expenses.

Net cash used in operating activities for the sixnine months ended MarchJune 31,30, 2026 was $17.2$54.1 million, as compared to net cash provided by operating activities of $70.7$91.1 million for the sixnine months ended MarchJune 31,30, 2025. The change was primarily due to a decrease in principal repayments and net proceeds from sales period over period, partially offset by a decrease in purchases of investments period over period. Repayments and net proceeds from sales were $98.7$138.9 million during the sixnine months ended MarchJune 31,30, 2026 compared to $246.7$329.0 million during the sixnine months ended MarchJune 31,30, 2025. Purchases of investments were $142.7$224.8 million during the sixnine months ended MarchJune 31,30, 2026, compared to $197.2$270.2 million during the sixnine months ended MarchJune 31,30, 2025.

As of MarchJune 31,30, 2026, we had loans to or equity investments in 5559 companies, with an aggregate cost basis of approximately $925.2$968.7 million. As of September 30, 2025, we had loans to or equity investments in 55 companies, with an aggregate cost basis of approximately $876.6 million.

The following table summarizes our total portfolio investment activity during the sixnine months ended MarchJune 31,30, 2026 and 2025:

The following table summarizes the contractual principal repayment and maturity of our investment portfolio by fiscal year, assuming no voluntary prepayments, as of MarchJune 31,30, 2026:

(A)Includes debt investments with contractual principal amounts totaling $0.2 million for which the maturity date has passed as of MarchJune 31,30, 2026.

Net cash usedprovided inby financing activities for the sixnine months ended MarchJune 31,30, 20252026 was $70.2$24.1 million, which consisted primarily of $45.5$177.5 million in net repaymentsborrowings on our Credit Facility and $31.0$60.0 million in proceeds from the issuance of long term debt, partially offset by $207.0 million used in gross redemptions of long term debt and $30.5 million in distributions to our common stockholders.

To qualify to be taxed as a RIC and thus avoid corporate level federal income tax on the income we distribute to our stockholders, we are required to distribute to our stockholders on an annual basis at least 90.0% of our Investment Company Taxable Income. Additionally, our Credit Facility has a covenant that generally restricts the amount of distributions to stockholders that we can pay out to be no greater than our aggregate net investment income, net capital gains and amounts elected to have been paid during the prior year in accordance with Section 855(a) of the Code. In accordance with these requirements, we paid monthly cash distributions of $0.15 per common share for each month during the sixnine months ended MarchJune 31,30, 2026. In AprilJuly 2026, our Board of Directors declared a monthly distribution of $0.15 per common share for each of April,July, May,August, and JuneSeptember 2026. Our Board of Directors declared these distributions to our stockholders based on our estimates of our Investment Company Taxable Income for the fiscal year ending September 30, 2026.

We paid monthly cash dividends of $0.130208 per share to holders of our Series A Preferred Stock for each month during the sixnine months ended MarchJune 31,30, 2026. In AprilJuly 2026, our Board of Directors declared monthly cash dividends of $0.130208 per share to holders of our Series A Preferred Stock for each of April,July, May,August, and JuneSeptember 2026. Dividend payments to our preferred stockholders are included in preferred stock dividends on our Consolidated Statements of Operations. For federal income tax purposes, the dividends paid by us to preferred stockholders generally constitute ordinary income to the extent of our current and accumulated earnings and profits and is reported after the end of the calendar year based on tax information for the full fiscal year.

Our common stockholders who hold their shares through our transfer agent, Computershare, Inc. (“Computershare”), have the option to participate in a dividend reinvestment plan offered by Computershare, as the plan agent. This is an “opt in” dividend reinvestment plan, meaning that common stockholders may elect to have their cash distributions automatically reinvested in additional shares of our common stock. Common stockholders who do not make such election will receive their distributions in cash. Common stockholders who receive distributions in the form of stock will be subject to the same federal, state and local tax consequences as stockholders who elect to receive their distributions in cash. The common stockholder will have an adjusted basis in the additional common shares purchased through the plan equal to the amount of the reinvested distribution. The additional shares will have a new holding period commencing on the day following the date on which the shares are credited to the common stockholder’s account. Computershare purchases shares in the open market in connection with the obligations under the plan.