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

Investcorp has an approximate 76% interest in the Adviser. Pursuant to the Investcorp Services Agreement, the Adviser is able to utilize personnel of Investcorp International and its affiliates to provide services to the Company from time-to-time on an as-needed basis related to human resources, compensation and technology services. The Adviser may rely on the Investcorp Services Agreement to satisfy its obligations under the Administration Agreement. The personnel of Investcorp International may also provide services for the funds managed by Investcorp, which could result in conflicts of interest and may distract them from their responsibilities to us.

The use of leverage magnifies the potential for gain or loss on amounts invested. The use of leverage is generally considered a speculative investment technique and increases the risks associated with investing in our securities. If we continue to use leverage to partially finance our investments through banks, insurance companies and other lenders, you will experience increased risks of investment in our common stock. Lenders of these funds have fixed dollar claims on our assets that are superior to the claims of our common stockholders, and we would expect such lenders to seek recovery against our assets in the event of a default. As of JuneDecember 30,31, 2024,2025, substantially all of our assets were pledged as collateral under the Capital One Revolving Financing. In addition, under the terms of the Capital One Revolving Financing and any borrowing facility or other debt instrument we may enter into, we are likely to be required to use the net proceeds of any investments that we sell to repay a portion of the amount borrowed under such facility or instrument before applying such net proceeds to any other uses. If the value of our assets decreases, leveraging would cause net asset value to decline more sharply than it otherwise would have had we not leveraged, thereby magnifying losses or eliminating our stake in a leveraged investment. Similarly, any decrease in our revenue or income will cause our net income to decline more sharply than it would have had we not borrowed. Such a decline would also negatively affect our ability to make distributions with respect to our common stock or preferred stock. Our ability to service any debt will depend largely on our financial performance and will be subject to prevailing economic conditions and competitive pressures. Moreover, as the Base Management Fee payable to the Adviser will be payable based on the value of our gross assets, including those assets acquired through the use of leverage, the Adviser will have a financial incentive to incur leverage, which may not be consistent with our stockholders’ interests. In addition, our common stockholders will bear the burden of any increase in our expenses as a result of our use of leverage, including interest expenses and any increase in the Base Management Fee payable to the Adviser.

Assumes $192.2$188.8 million in total assets, $106.2$123.9 million in debt outstanding,outstanding $75.0at par value, $61.3 million in net assets, and an average cost of funds of 5.00%. Actual interest payments may be different.

Because we borrow money to make investments, our net investment income will depend, in part, upon the difference between the rate at which we borrow funds and the rate at which we invest those funds. As a result, we can offer no assurance that a significant change in market interest rates would not have a material adverse effect on our net investment income in the event we use debt to finance our investments. In periods of rising interest rates, our cost of funds would increase, which could reduce our net investment income. In periods of declining interest rates, we may earn less interest income from investments and our cost of funds will also decrease, to a lesser extent, given certain of our currently outstanding indebtedness bears interest at fixed rates, resulting in lower net investment income. We may use interest rate risk management techniques in an effort to limit our exposure to interest rate fluctuations. Such techniques may include various interest rate hedging activities to the extent permitted by the 1940 Act. There is no limit on our ability to enter derivative transactions.

We expect to make most of our portfolio investments in the form of loans and securities that are not publicly traded and for which there are limited or no market-based price quotations available. As a result, our board of directors will determine the fair value of these loans and securities in good faith as described below in “—faith. Most of our portfolio investments will be recorded at fair value as determined in good faith by our board of directors and, as a result, there may be uncertainty as to the value of our portfolio investments.” In connection with that determination, investment professionals from the Adviser may provide our board of directors with valuations based upon the most recent portfolio company financial statements available and projected financial results of each portfolio company. While the valuations for portfolio investments will be reviewed by an independent valuation firm periodically, the ultimate determination of fair value will be made by our board of directors and not by such third-party valuation firm. In addition, Mr. Mauer, an interested member of our board of directors, has a direct or indirect pecuniary interest in the Adviser. The participation of the Adviser’s investment professionals in our valuation process, and the pecuniary interest in the Adviser by Mr. Mauer, could result in a conflict of interest as the Adviser’s management fee is based, in part, on the value of our gross assets, and our incentive fees will be based, in part, on realized gains and realized and unrealized losses.

To the extent any distributions by us are funded through waivers of the incentive fee portion of our investment advisory fees such distributions will not be based on our investment performance,performance and can only be sustained if we achieve positive investment performance in future periods and/or the Adviser continues to waive such fees. Any such waivers in no way imply that the Adviser will waive incentive fees in any future period. There can be no assurance that we will achieve the performance necessary or that the Adviser will waive all or any portion of the incentive fee necessary to be able to pay distributions at a specific rate or at all.

We may issue debt securities or preferred stock and/or borrow money from banks or other financial institutions, which we refer to collectively as “senior securities,” up to the maximum amount permitted by the 1940 Act. The 1940 Act generally prohibits us from incurring indebtedness unless immediately after such borrowing we have an asset coverage for total borrowings of at least 150% (i.e., the amount of debt may not exceed 66 and 2/3% of the value of our assets). On May 2, 2018, our board of directors, including a “required majority” approved the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act. As a result, our asset coverage requirements for senior securities changed from 200% to 150%, effective May 2, 2019. If the value of our assets declines, we may be unable to satisfy this test. If that happens, we would not be able to borrow additional funds until we were able to comply with the 150% asset coverage ratio under the 1940 Act. Also, any amounts that we use to service our indebtedness would not be available for distributions to our common stockholders. If we issue senior securities, we will be exposed to typical risks associated with leverage, including an increased risk of loss. Before the repayment of debt subsequent to year end, the Company's asset coverage ratio was near this 150% limit. If our asset coverage ratio falls below 150%, the 1940 Act limits us from incurring additional indebtedness, declaring dividends or other distributions to our shareholders under certain circumstances, or repurchasing shares of our common stock until such time as our asset coverage ratio would be at least 150%. We have engaged and may continue to engage in a variety of activities as a means to improve our asset coverage ratio and net asset value, including but not limited to: reducing our capacity to borrow under the Capital One Revolving Financing, foregoing or limiting dividend payments in order to retain capital and carefully managing our expenses. We expect to generate sufficient cash flows to meet obligations as they come due and provide ongoing liquidity as well as comply with applicable asset coverage requirements, however, there can be no assurance that we will do so.

We may invest in derivatives and other assets that are subject to many of the same types of risks related to the use of leverage. In October 2020, the SEC adopted Rule 18f-4 under the 1940 Act regarding the ability of a BDC to use derivatives and other transactions that create future payment or delivery obligations. Under Rule 18f-4, BDCs that use derivatives are subject to a value-at-risk leverage limit, a derivatives risk management program and testing requirements and requirements related to board reporting. These requirements apply unless the BDC qualifies as a “limited derivatives user,” as defined under Rule 18f-4. Under Rule 18f-4, a BDC may enter into an unfunded commitment agreement (which may include delayed draw and revolving loans) that will not be deemed to be a derivatives transaction, such as an agreement to provide financing to a portfolio company, if the BDC has, among other things, a reasonable belief, at the time it enters into such an agreement, that it will have sufficient cash and cash equivalents to meet its obligations with respect to all of its unfunded commitment agreements, in each case as it becomes due. Collectively, these requirements may limit our ability to use derivatives and/or enter into certain other financial contracts.

EffortsOur to complyCompliance with Section 404 of the Sarbanes-Oxley Act involveinvolves significant expenditures, and if we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the tradingmarket price of our common stock.

As of JuneDecember 30,31, 2024,2025, we are a non-accelerated filer under the Securities Exchange Act of 1934, as amended, and, therefore, we are not required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act. Therefore, our internal controls over financial reporting will not receive the level of review provided by the process relating to the auditor attestation included in annual reports of issuers that are subject to the auditor attestation requirements. In addition, we cannot predict if investors will find our common stock less attractive because we are not required to comply with the auditor attestation requirements. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and trading price for our common stock may be negatively affected.

The Adviser is entitled to incentive compensation for each fiscal quarter in an amount equal to a percentage of the excess of our investment income for that quarter (before deducting incentive compensation) above a threshold return for that quarter. The Advisory Agreement entitles our Adviser to receive an incentive fee based on our pre-incentive fee net investment income regardless of any capital losses. Thus, we may be required to pay the Adviser incentive compensation for a fiscal quarter even if there is a decline in the value of our portfolio or we incur a net loss for that quarter. If we pay an incentive fee of 20% of our realized capital gains (net of all realized capital losses and unrealized capital depreciation on a cumulative basis) and thereafter experience additional realized capital losses or unrealized capital depreciation, we will not be able to recover any portion of the incentive fee previously paid. Our board of directors is charged with protecting our stockholder’s interests by monitoring how the Adviser addresses these and other conflicts of interest associated with its management services and compensation.

Certain of our debt investments contain provisions providing for the payment of PIK interest. Because PIK interest results in an increase in the size of the loan balance of the underlying loan, the receipt by us of PIK interest will have the effect of increasing our assets under management. As a result, because the Base Management Fee that we pay to the Adviser is based on the value of our gross assets, receipt of PIK interest will result in an increase in the amount of the Base Management Fee payable by us. In addition, any such increase in a loan balance due to the receipt of PIK interest will cause such loan to accrue interest on the higher loan balance, which will result in an increase in our pre-incentive fee net investment income and, as a result, an increase in incentive fees that are payable to the Adviser. Additionally, the part of the incentive fees payable to our Adviser that relates to our net investment income is computed and paid on income that may include interest income that has been accrued but not yet received in cash, such as market discount, debt instruments with PIK interest, preferred units with PIK dividends, zero coupon securities, and other deferred interest instruments and may create an incentive for the Adviser to make investments on our behalf that are riskier or more speculative than would be the case in the absence of such compensation arrangement.

We have entered into a license agreement with the Adviser under which the Adviser has agreed to grant us a non-exclusive, royalty-free license to use the name “Investcorp.” See “Business — Management Agreements — License Agreement.” In addition, we have entered into the Administration Agreement with the Adviser pursuant to which we are required to pay to the Adviser our allocable portion of overhead and other expenses incurred by the Adviser in performing its obligations under such Administration Agreement, such as rent, equipment and our allocable portion of the cost of our Chief Financial Officer and Chief Compliance Officer and his respective staff’s compensation and compensation-related expenses. This will create conflicts of interest that our board of directors will monitor. For example, under the terms of the license agreement, we will be unable to preclude the Adviser from licensing or transferring the ownership of the “Investcorp” name to third parties, some of whom may compete against us. Consequently, we will be unable to prevent any damage to goodwill that may occur as a result of the activities of the Adviser or others. Furthermore, in the event the license agreement is terminated, we will be required to change our name and cease using “Investcorp” as part of our name. Any of these events could disrupt our recognition in the market place,marketplace, damage any goodwill we may have generated and otherwise harm our business.

As of JuneDecember 30,31, 2024, our investments in the commercial services and supplies industry represented approximately 13.50% of the fair value of our portfolio and2025, our investments in the professional services industry represented approximately 11.22%14.50% of the fair value of our portfolio. If an industry in which we have significant investments suffers from adverse business or economic conditions, as these industries have to varying degrees, a material portion of our investment portfolio could be affected adversely, which, in turn, could adversely affect our financial position and results of operations.

Our investments in portfolio companies that operate in the professional services industry represent approximately 11.22%14.50% of our total portfolio as of JuneDecember 30,31, 2024.2025. Our investments in portfolio companies in the professional services sectorindustry include those that provide services related to data and information, building, cleaning and maintenance services, and energy efficiency services. Portfolio companies in the professional services sectorindustry are subject to many risks, including the negative impact of regulation, changing technology, a competitive marketplace and difficulty in obtaining financing. Portfolio companies in the professional services industry must respond quickly to technological changes and understand the impact of these changes on customers’ preferences. Adverse economic, business, or regulatory developments affecting the professional services sectorindustry could have a negative impact on the value of our investments in portfolio companies operating in this industry, and therefore could negatively impact our business and results of operations.

We are subject to the risk that the debt investments we make in portfolio companies may be repaid prior to maturity. We expect that our investments will generally allow for repayment at any time subject to certain penalties. When this occurs, we intend to generally reinvest these proceeds in temporary investments, pending their future investment in accordance with our investment strategy. These temporary investments will typically have substantially lower yields than the debt being prepaid, and we could experience significant delays in reinvesting these amounts. Any future investment may also be at lower yields than the debt that was repaid. As a result, our results of operations could be materially adversely affected if one or more of our portfolio companies elects to prepay amounts owed to us. Additionally, prepayments could negatively impact our ability to make, or the amount of, stockholder distributions with respect to our common stock, which could result in a decline in the market price of our shares.

We may also make unsecured loans to portfolio companies, meaning that such loans will not benefit from any interest in collateral of such companies. Liens on such portfolio companies’ collateral, if any, will secure the portfolio company’s obligations under its outstanding secured debt and may secure certain future debt that is permitted to be incurred by the portfolio company under its secured loan agreements. The holders of obligations secured by such liens will generally control the liquidation of, and be entitled to receive proceeds from, any realization of such collateral to repay their obligations in full before us. In addition, the value of such collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors. There can be no assurance that the proceeds, if any, from sales of such collateral would be sufficient to satisfy our unsecured loan obligations after payment in full of all secured loan obligations. If such proceeds were not sufficient to repay the outstanding secured loan obligations, then our unsecured claims would rank equally with the unpaid portion of such secured creditors’ claims against the portfolio company’s remaining assets, if any.

Risks Relating to an Investment in Our Common StockSecurities

We may distribute taxable dividends that are payable in part in our stock. Under certain applicable provisions of the Code and the Treasury regulations,Regulations, distributions payable in cash or in shares of stock at the election of stockholders are treated as taxable dividends. The Internal Revenue Service has issued a revenueRevenue procedureProcedure indicating that this rule will apply if the total amount of cash to be distributed is not less than 20% of the total distribution. Under this revenueRevenue procedure,Procedure, if too many stockholders elect to receive their distributions in cash, each such stockholder would receive a pro rata share of the total cash to be distributed and would receive the remainder of their distribution in shares of stock. If we decide to make any distributions consistent with this revenueRevenue procedureProcedure that are payable in part in our stock, taxable stockholders receiving such dividends will be required to include the full amount of the dividend (whether received in cash, our stock, or combination thereof) as ordinary income (or as long-term capital gain to the extent such distribution is properly designatedreported as a capital gain dividend) to the extent of our current and accumulated earnings and profits for U.S. federal income tax purposes. As a result, a U.S. stockholder may be required to pay tax with respect to such dividends in excess of any cash received. If a U.S. stockholder sells the stock it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in stock. If a significant number of our stockholders determine to sell shares of our stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price of our stock.

Our two largest investors are Investcorp and Stifel. As of March 20, 2026, Investcorp owns approximately 25% and Stifel owns approximately 15%17% of our total outstanding common stock. The shares held by Investcorp and Stifel are generally freely tradable in the public market, subject to the volume limitations, applicable holding periods and other provisions of Rule 144 under the Securities Act. Sales of substantial amounts of our common stock, the availability of such common stock for sale or the registration of such common stock for sale and the ability of our stockholders, including Investcorp and Stifel to sell their respective shares at a price per share that is below our then current net asset value per share could adversely affect the prevailing market prices for our common stock. If this occurs and continues it could impair our ability to raise additional capital through the sale of securities should we desire to do so and negatively impact the market of our common stock.

As of JuneDecember 30,31, 2024,2025, we had, through SPV LLC, $43.0$58.9 million in outstanding indebtedness under the Capital One Revolving Financing, which are secured by the assets held at SPV LLC. The indebtedness under the Capital One Revolving Financing is effectively senior to the 2026 Notes to the extent of the value of the assets securing such indebtedness. The 2026 Notes also rank pari passu with, or equal to, our general liabilities, which consist of trade and other payables, including any outstanding dividend payable, base and incentive management fees payable, interest and debt fees payable, vendor payables and accrued expenses such as auditor fees, legal fees, director fees, etc. In total, these general liabilities were $11.0$4.4 million as of JuneDecember 30,31, 2024.2025.

To maintain our qualification as a RIC under Subchapter M of the Code, we must meet certain source-of-income, asset diversification and distribution requirements. The source-of-income requirement will be satisfied if we obtain at least 90% of our income for each year from dividends, interest, gains from the sale of stock or securities or similar sources. The distribution requirement for a RIC is satisfied if we distribute at least 90% of our net ordinary incomeincome, net exempt interest income, and net short-term capital gains in excess of net long-term capital losses, if any, to our stockholders on an annual basis. Because we incur debt, we will be subject to certain asset coverage ratio requirements under the 1940 Act and financial covenants under loan and credit agreements that could, under certain circumstances, restrict us from making distributions necessary to maintain our qualification as a RIC. If we are unable to obtain cash from other sources, we may fail to maintain our qualification as a RIC and, thus, may be subject to corporate-level U.S. federal income tax. To maintain our qualification as a RIC, we must also meet certain asset diversification requirements at the end of each calendar quarter. Failure to meet these tests may result in our having to dispose of certain investments quickly in order to prevent the loss of our qualification as a RIC. Because most of our investments are in private or thinly traded public companies, any such dispositions may be made at disadvantageous prices and may result in substantial losses. No certainty can be provided that we will satisfy the asset diversification requirements of the other requirements necessary to maintain our qualification as a RIC. If we fail to maintain our qualification as a RIC for any reason and become subject to corporate-level U.S. federal income tax, the resulting taxes could substantially reduce our net assets, the amount of income available for distributions to our stockholders and the amount of funds available for new investments. Such a failure would have a material adverse effect on us and our stockholders. See “Business — Taxation as a Regulated Investment Company.”

Legislative or other actions relating to taxes could have a negative effect on us. The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Treasury Department. Recent legislation has made many changes to the Code, including significant changes to the taxation of business entities, the deductibility of interest expense, and the tax treatment of capital investment. We cannot predict with certainty how any changes in the tax laws might affect us, our stockholders, or our portfolio investments. New legislation and any U.S. Treasury regulations, administrative interpretations or court decisions interpreting such legislation could significantly and negatively affect our ability to qualify for tax treatment as a RIC or the U.S. federal income tax consequences to us and our stockholders of such qualification, or could have other adverse consequences. Investors are urged to consult with their tax adviser regarding tax legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our securities.

TheOther effectsadverse of a public health emergencydevelopments may materiallyoccur andor adverselyreoccur, impactincluding: (i) the decline in value and performance of us and our portfolio companies,companies; (ii) the ability of our borrowers to continue to meet loan covenants or repay loans provided by us on a timely basis or at all, which may require us to restructure our investments or write down the value of our investments,investments; (iii) our ability to comply with the covenants and other terms of our debt obligations and to repay debtsuch obligations, on a timely basis or at all,all; (iv) our ability to comply with certain regulatory requirements, such as asset coverage requirements under the 1940 Act; (v) our ability to maintain our distributions at their current level or to pay them at all; or (ivvi) our ability to source, manage and divest investments and achieve our investment objectives, all of which could result in significant losses to us. We will also be negatively affected if the operations and effectiveness of theany Adviserof or aour portfolio companycompanies (or any of the key personnel or service providers of the foregoing) is compromised or if necessary or beneficial systems and processes are disrupted. The U.S. economy, as well as most other major economies, may experience economic recession, and we anticipate our businesses could be materially and adversely affected by a prolonged recession in the United States and other major global markets.

The occurrence of events similar to those in recent years, such as the aftermath of the war in Iraq, instability in Afghanistan, Pakistan, Egypt, Libya, Syria, Russia, Ukraine and the Middle East, ongoing epidemics of infectious diseases in certain parts of the world, such as the COVID-19 outbreak, terrorist attacks in the U.S. and around the world, social and political discord, debt crises, sovereign debt downgrades, continued tensions between North Korea and the United States and the international community generally, new and continued political unrest in various countries, such as Venezuela, the exit or potential exit of one or more countries from the EU or the Economic and Monetary Union, the change in the U.S. president and the new administration, among others, may result in market volatility, may have long term effects on the U.S. and worldwide financial markets, and may cause further economic uncertainties in the U.S. and worldwide.

Our business faces increasing public scrutiny related to environmental, social and governance (“ESG”) activities. We risk damage to our brand and reputation if we fail to act responsibly in a number of areas, such as environmental stewardship, corporate governance and transparency and considering ESG factors in our investment processes. Adverse incidents with respect to ESG activities could impact the value of our brand, the cost of our operations and relationships with investors, all of which could adversely affect our business and results of operations. The consideration of ESG factors as part of the Adviser’s investment process (to the extent that the Adviser considers such ESG factors) and the potential exclusion of certain investments due to ESG considerations (to the extent applicable) may reduce the types and number of investment opportunities available to us. As a result, we may underperform compared to other funds that do not consider ESG factors or exclude investments due to ESG considerations. However, the Adviser will likely not make investment decisions for us solely on the basis of ESG considerations. In evaluating an investment that may have scored less favorably on ESG factors initially,initially (to the extent applicable), the Adviser will consider other factors in its investment decision. Additionally, new regulatory initiatives related to ESG could adversely affect our business.

The occurrence of a disaster such as a cyber-attack against us or against a third-party that has access to our data or networks, a natural catastrophe, an industrial accident, a terrorist attack or war, disease pandemics, events unanticipated in our disaster recovery systems, consequential employee error or a support failure from external providers, could have an adverse effect on our ability to communicate or conduct business and on our results of operations and financial condition, particularly if those events affect our computer-based data processing, transmission, storage, and retrieval systems or impact the availability, integrity, or confidentiality of our data.

We depend heavily upon computer systems to perform necessary business functions. Despite our implementation of a variety of security measures, our computers, networks, and data, like those of other companies, could be subject to cyber-attacks and unauthorized access, use, alteration, or destruction, such as from physical and electronic break-ins or unauthorized tampering, employee personation, social engineering or “phishing” attempts. Like other companies, we may experience threats to our data and systems, including malware and computer virus attacks, unauthorized access, system failures and disruptions. If one or more of these events occurs, it could potentially jeopardize the confidential, proprietary and other information processed, stored in, and transmitted through our computer systems and networks. Cyber-attacks may also be carried out in a manner that does not require gaining unauthorized access, such as causing denial-of-service attacks (i.e., efforts to make network services unavailable to intended users) on websites, servers or other online systems. Cyber security incidents and cyber-attacks have been occurring more frequently and will likely continue to increase. Such an attack could cause interruptions or malfunctions in our operations, which could result in financial losses, litigation, regulatory penalties, client dissatisfaction or loss, reputational damage, and increased costs associated with mitigation of damages and remediation.

the impact of global health pandemics, such as the coronavirus pandemic orpandemics other large scale events,events on our or our portfolio companies’ business and the global economy;

the dependence of our future success on the general economy, interest rates and the effects of each on the industries in which we invest; the impact to us and our portfolio companies of rapid technological advances, including artificial intelligence;

our ability to obtain exemptive relief from the U.S. Securities and Exchange Commission (“SEC”);

We undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law or SEC rule or regulation. You are advised to consult any additional disclosures that we may make directly to you or through reports that we may file in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Investcorp Credit Management BDC, Inc. (“ICMB,” the “Company”, “us”, “we” or “our”), a Maryland corporation formed in May 2013, is a closed-end, externally managed, non-diversified management investment company that has elected to be regulated as a BDC under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for U.S. federal income tax purposes, we have elected to be treated and intend to continue to qualify as a RIC under Subchapter M of the Code. On August 30, 2019, we changed our name from CM Finance Inc. to Investcorp Credit Management BDC, Inc. On September 18, 2024, the Company changed its fiscal year end from June 30 to December 31.

CM Investment Partners LLC (the “Adviser”) serves as our investment adviser. On August 30, 2019, Investcorp Credit Management US LLC (“Investcorp”) acquired an approximate 76% ownership interest in the Adviser through the acquisition of the interests held by Stifel Venture Corp. (“Stifel”) and certain funds managed by Cyrus Capital and through a direct purchase of equity from the Adviser. On August 31, 2023, Investcorp isacquired approximately an additional 7% ownership interest in the Adviser. On December 12, 2024, Investcorp assigned its ownership of the Adviser to IVC Credit Management Financing, LLC its parent entity and the entity that manages Investcorp’s US credit management regulated entities. Investcorp and its credit advisory affiliates are a leading global credit investment platform with assets under management of $21.5$21.3 billion as of JuneDecember 30,31, 2024.2025. Investcorp managesand its credit advisory affiliates manage funds which invest primarily in senior secured corporate debt issued by mid and large-cap corporations in Western Europe and the United States. The business has a strongfavorable track record of consistent performance and growth, employing approximately 4560 investment professionals in London and New York. Investcorp is a subsidiary of Investcorp Holdings B.S.C. (“Investcorp Holdings”). Investcorp Holdings and its consolidated subsidiaries, including Investcorp, are referred to as “Investcorp Group”. Investcorp Group is a global provider and manager of alternative investments, offering such investments to its high-net-worth private and institutional clients on a global basis.

From time to time, we may form taxable subsidiaries (the “Taxable Subsidiaries”), which are taxed as corporations for U.S. federal income tax purposes, to allow the Company to hold equity securities of portfolio companies organized as pass-through entities while continuing to satisfy the requirements applicable to a RIC under the Code. As of JuneDecember 30,31, 20242025, December 31, 2024, and June 30, 2023,2024 we had no Taxable Subsidiaries.

The current inflationary environment and uncertainty as to the probability of, and length and depth of a global recession could affect our portfolio companies. Government spending, government policies, including recent increases in certain interest rates by the U.S. Federal Reserve and other global central banks, the failures of certain regional banks earlier this yearpolicies and the potential for disruptions in the availability of credit in the United States and elsewhere, in conjunction with other factors, including those described elsewhere in this AnnualTransition Report and in other filings we have made with the SEC, could affect our portfolio companies, our financial condition and our results of operations. We will continue to monitor the evolving market environment. In these circumstances, developments outside our control could require us to adjust our plan of operations and could impact our financial condition, results of operations or cash flows in the future. Despite these factors, we believe we and our portfolio are well positioned to manage the current environment. For additional information, see Part I, Item 1A. Risk Factors in this Annual Report on Form 10-K, as well as the risk factors listed in our subsequently filed Quarterly Reports on Form 10-Q.

Debt and equity securities for which market quotations are not readily available or for which market quotations are deemed not to represent fair value are valued at fair value as determined in good faith by our board of directors. Because a readily available market value for many of the investments in our portfolio is often not available, we value many of our portfolio investments at fair value as determined in good faith by our board of directors using a consistently applied valuation process in accordance with a documented valuation policy that has been reviewed and approved by our board of directors. Due to the inherent uncertainty and subjectivity of determining the fair value of investments that do not have a readily available market revalue,value, the fair value of our investments may differ significantly from the values that would have been used had a readily available market value existed for such investments and may differ materially from the values that we may ultimately realize. In addition, changes in the market environment and other events may have differing impacts on the market quotations used to value some of our investments than on the fair values of our investments for which market quotations are not readily available. Market quotations may also be deemed not to represent fair value in certain circumstances where we believe that facts and circumstances applicable to an issuer, a seller or purchaser, or the market for a particular security causes current market quotations not to reflect the fair value of the security. Examples of these events could include cases where a security trades infrequently, causing a quoted purchase or sale price to become stale, where there is a “forced” sale by a distressed seller, where market quotations vary substantially among market makers, or where there is a wide bid- ask spread or significant increase in the bid ask spread.

As of December 31, 2025 and December 31, 2024, our investments were classified as Level 2 and Level 3 investments. Level 3 investments were determined based on valuations by our board of directors. As of June 30, 2024, and June 30, 2023 all of our investments were classified as Level 3 investments,investments determined based on valuations by our board of directors.

Interest Income: Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis. Origination, closing, commitment,and commitment fees, and amendment fees, purchase and original issue discounts associated with loans to portfolio companies are accreted into interest income over the respective terms of the applicable loans. Accretion of discounts or premiums is calculated by the effective interest or straight-line method, as applicable, as of the purchase date and adjusted only for material amendments or prepayments. Upon the prepayment of a loan or debt security, any prepayment penalties are recorded as other fee income and unamortized fees and discounts are recorded as interest income and both are non-recurring in nature.

Non-accrual: Loans are placed on non-accrual status when principal or interest payments are past due 90 days or more or when there is reasonable doubt that principal or interest will be collected. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. However, capitalized PIK interest will not be reversed when a loan is placed on non-accrual status. Deferred fees (i.e. original issue discounts) are not amortized during periods in which a loan is placed on non-accrual status. Interest payments received on non-accrual loans mayare be recognizedapplied as income or appliedreductions to principal depending upon management’s judgment about ultimate collectability of principal. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current.current, although management may make exceptions to this general rule if the loan has sufficient collateral value and is in the process of collection. PIK interest is not accrued if wemanagement dodoes not expect the issuer to be able to pay all principal and interest when due. As of JuneDecember 30,31, 2024,2025, we had fourfive investments on non-accrual status, which represented approximately 5.00%6.93% of our portfolio at fair value. As of December 31, 2024, we had five investments on non-accrual, which represented approximately 3.64% of our portfolio at fair value. As of June 30, 2023,2024, we had sixfour investments on non-accrual, which represented approximately 4.08%5.00% of our portfolio at fair value.

As of JuneDecember 30,31, 2025, December 31, 2024 and June 30, 2023,2024, there were $43.0$58.9 million, $58.5 million and $71.9$43.0 million in borrowings outstanding under the Capital One Revolving Financing, respectively.

The 2026 Notes will mature on April 1, 2026, unless previously redeemed or repurchased in accordance with their terms, and bear interest at a rate of 4.875%. The 2026 Notes are our direct unsecured obligations and rank pari passu, which means equal in right of payment, with all of our outstanding and future unsecured, unsubordinated indebtedness. Because the 2026 Notes are not secured by any of our assets, they are effectively subordinated to all of our existing and future secured indebtedness (including indebtedness that is initially unsecured as to which we subsequently grant a security interest), to the extent of the value of the assets securing such indebtedness. The 2026 Notes are structurally subordinated to all existing and future indebtedness and other obligations of any of our existing and future subsidiaries and financing vehicles, including, without limitation, borrowings under the Capital One Financing. The 2026 Notes are exclusively our obligations and not of any of our subsidiaries. None of our subsidiaries is a guarantor of the 2026 Notes and the 2026 Notes will not be required to be guaranteed by any subsidiary we may acquire or create in the future.

The 2026 Notes may be redeemed in whole or in part at any time or from time to time at our option, upon not less than 30 days nor more than 60 days written notice by mail prior to the date fixed for redemption thereof, at a redemption price (as determined by us) equal to the greater of the following amounts, plus, in each case, accrued and unpaid interest to, but excluding, the redemption date: (1) 100% of the principal amount of the 2026 Notes to be redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest (exclusive of accrued and unpaid interest to the date of redemption) on the 2026 Notes to be redeemed, discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) using the applicable Treasury Rate (as defined in the 2026 Notes Indenture (as defined below)) plus 50 basis points; provided, however, that if we redeem any 2026 Notes on or after January 1, 2026 (the date falling three months prior to the maturity date of the 2026 Notes), the redemption price for the 2026 Notes will be equal to 100% of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption; provided, further, that no such partial redemption shall reduce the portion of the principal amount of a 2026 Note not redeemed to less than $2,000. Interest on the 2026 Notes is payable semi-annually on April 1 and October 1 of each year, commencing October 1, 2021. We may from time to time repurchase 2026 Notes in accordance with the 1940 Act and the rules promulgated thereunder. As of JuneDecember 30,31, 2025, December 31, 2024 and June 30, 2023,2024 the outstanding principal balance of the 2026 Notes was approximately $65.0 million and $65.0 million, respectively.million.

As a BDC, we are required to comply with certain regulatory requirements. For instance, as a BDC, we may not acquire any assets other than “qualifying assets” specified in the 1940 Act unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets (with certain limited exceptions). Qualifying assets include investments in “eligible portfolio companies.” Under the relevant SEC rules, the term “eligible portfolio company” includes all private companies, companies whose securities are not listed on a national securities exchange, and certain public companies that have listed their securities on a national securities exchange and have a market capitalization of less than $250 million. In each case, the company must be organized in the United States. As of JuneDecember 30,31, 2024,2025, approximately 1.68%none of our total assets were non-qualifying assets.

As of JuneDecember 30,31, 2024,2025, our investment portfolio of $184.6$172.7 million (at fair value) consisted of debt and equity investments in 4137 portfolio companies, of which 85.02%80.76% were first lien investments, 0% were second lien investments,investments and 14.98%19.24% were in equities, warrants and other positions. At JuneDecember 30,31, 2024,2025, our average and largest portfolio company investment at fair value was $4.6$4.7 million and $13.5$11.4 million,million respectively.

As of JuneDecember 30,31, 2023,2024, our investment portfolio of 220.1$191.6 million (at fair value) consisted of debt and equity investments in 3643 portfolio companies, of which 89.21%81.17% were first lien investments, 0% were second lien investments,investments and 10.79%18.83% were in equities, warrants and other positions. At JuneDecember 30,31, 2023,2024, our average and largest portfolio company investment at fair value was $6.1$4.5 million and $13.0$15.4 million, respectively.

As of JuneDecember 30,31, 2024,2025, December 31, 2024 and June 30, 2023,2024 our weighted average total yield of debt and income producing securities atweighted by amortized cost (which includes interest income and amortization of fees and discounts) was 12.47%10.34%, 10.60% and 12.46%,12.47%, respectively. As of JuneDecember 30,31, 2024,2025, December 31, 2024 and June 30, 2023,2024 our weighted average total yield on the total portfolio atweighted by amortized cost (which includes interest income and amortization of fees and discounts) was 10.60%7.71%, 8.72% and 11.32%,10.60%, respectively. The weighted average total yield was computed using an internal rate of return calculation of our debt investments based on contractual cash flows, including interest and amortization payments, and, for floating rate investments, the spot SOFR, as applicable, as of June 30, 2024 of all of our debt investments. The weighted average total yield of our debt investments is not the same as a return on investment for our stockholders but, rather, relates to a portion of our investment portfolio and is calculated before payment of all of our fees and expenses, including any sales load paid in connection with an offering of our securities. There can be no assurance that the weighted average total yield will remain at its current level.

We use Global Industry Classification Standard (“GICS”) codes to identify the industry groupings of our portfolio companies. At JuneDecember 30,31, 2025, December 31, 2024 and June 30, 2023,2024, respectively, the industry composition of our portfolio in accordance with GICS at fair value, as a percentage of our total portfolio, was as follows:

During the yeartwelve months ended JuneDecember 30,31, 2023,2025, we made investments in eighttwo new portfolio companies and foureight existing portfolio companies. These investments totaled approximately $41.3$25.6 million. Of these new investments, 98.25%97.27% consisted of first lien investments and 1.75%2.73% were in equity, warrants, and other investments.

At JuneDecember 30,31, 2024,2025, 97.4%98.0% of our debt investments bore interest based on floating rates based on indices such as SOFR, the Euro Interbank Offered Rate, the Federal Funds Rate or the Prime Rate (in certain cases, subject to interest rate floors), and 2.6%2.0% bore interest at fixed rates. At JuneDecember 30,31, 2023,2024, 99.6%96.4% of our debt investments bore interest based on floating rates based on indices such as LIBOR, SOFR, the Euro Interbank Offered Rate, the Federal Funds Rate or the Prime Rate (in certain cases, subject to interest rate floors), and 0.4%3.6% bore interest at fixed rates. At June 30, 2024, 97.4% of our debt investments bore interest based on floating rates based on indices such as London Interbank Offering Rate ("LIBOR"), SOFR, the Euro Interbank Offered Rate, the Federal Funds Rate or the Prime Rate (in certain cases, subject to interest rate floors), and 2.6% bore interest at fixed rates.

Our investment portfolio may contain loans that are in the form of lines of credit or revolving credit facilities, which require us to provide funding when requested by portfolio companies in accordance with the terms of the underlying loan agreements. As of December 31, 2025, we had nine investments with aggregate unfunded commitments of $3.7 million, as of December 31, 2024, we had eight investments with aggregate unfunded commitments of $4.6 million, and as of June 30, 2024, we had three investments with aggregate unfunded commitments of $1.8 million, and as of June 30, 2023, we had nine investments with aggregate unfunded commitments of $5.7 million. As of JuneDecember 30,31, 20242025, we had sufficient liquidity (through cash on hand and available borrowings under our Capital One Revolving Financing) to fund such unfunded loan commitments should the need arise.

The following table shows the investment rankingsratings of the investments in our portfolio, according to the Adviser’s investment rating system:

Investment income, attributable primarily to dividends, interest and fees on our debt investments, for the yeartwelve months ended JuneDecember 30,31, 20242025 decreased to $23.9$17.4 million from $26.7$23.4 million for the yeartwelve months ended JuneDecember 30,31, 2023,2024 primarily due to a decrease in interest income relateddue to lower index and interest rates and the sale of two portfolio companies and the repayment of twelve portfolio companies,companies and portfolioa companiesdecrease onin PIK interest income primarily related to the removal of the Klein Hersh, LLC Term Loan from non-accrual status,status during the twelve months ended December 31, 2024 as well as overall lower PIK rates and a decrease in PIK dividend income related to Fusion Connect, Inc. - Series A Preferred, partially offset by an increase in paymentother in-kind interestfee income earnedrelated to prepayment fee income on Crafty4L Apes,Technologies, LLC and American Nuts Holdings, LLC -Inc. Term Loan A, which were removed from non-accrual status during the quarter ended December 31, 2023.Loan.

TheThere was a net realized loss on investments totaledof $14.0$16.2 million for the yeartwelve months ended JuneDecember 30,31, 2024,2024 primarily due to the realization of losses fromassociated restructuringswith andthe loan modificationsrestructuring of our investments in AmericanKlein Nuts Holdings, LLC, Arborworks Acquisition LLC, ArborWorks,Hersh, LLC, Crafty Apes, LLC, Sandvine Corporation, andas Xenonwell Arc,as Inc. and the realization ofrealized losses associated with the sale and write offwrite-off of our investments in 1888 Industrial Services, LLC.

Comparison of the yearstwelve months ended June 30, 2024 and twelve months ended June 30, 2023 and June 30, 2022

There have been no material changes during the threesix months ended MarchJune 31,30, 2026 to the risk factors previously disclosed in our Annual Report on Form 10-K for the Annual Period ended December 31, 2025 (filed with the SEC on March 30, 2026)., except as set forth below. If any such changes or risks actually occur, our business, financial condition or results of operations could be materially adversely affected. If that happens, the value of our securities could decline, and you may lose all or part of your investment.

We undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law or U.S. Securities and Exchange Commission (“SEC”) rules or regulations. You are advised to consult any additional disclosures that we may make directly to you or through reports that we file from time to time with the SEC, including our annual reports on Form 10-K, quarterlyQuarterly reportsReports on Form 10-Q and current reports on Form 8-K.

CM Investment Partners LLC (the “Adviser”) serves as our investment adviser. On August 30, 2019, Investcorp Credit Management US LLC (“Investcorp”) acquired an approximate 76% ownership interest in the Adviser through the acquisition of the interests held by Stifel Venture Corp. (“Stifel”) and certain funds managed by Cyrus Capital and through a direct purchase of equity from the Adviser (the “Investcorp Transaction”). On August 31, 2023, Investcorp acquired approximately an additional 7% ownership interest in the Adviser. On December 12, 2024, Investcorp assigned its ownership of the Adviser to IVC Credit Management Financing, LLC its parent entity and the entity that manages Investcorp’s US credit management regulated entities. Investcorp and its credit advisory affiliates are a leading global credit investment platform with assets under management of $21.5$21.8 billion as of MarchJune 31,30, 2026. Investcorp and its credit advisory affiliates manage funds which invest primarily in senior secured corporate debt issued by mid and large-cap corporations in Western Europe and the United States. The business has a strong track record of consistent performance and growth, employing approximately 50 investment professionals in London and New York. Investcorp is a subsidiary of Investcorp Holdings B.S.C. (“Investcorp Holdings”). Investcorp Holdings and its consolidated subsidiaries, including Investcorp, are referred to as “Investcorp Group.” Investcorp Group is a global provider and manager of alternative investments, offering such investments to its high-net-worth private and institutional clients on a global basis.

From time to time, we may form taxable subsidiaries that are taxed as corporations for U.S. federal income tax purposes (the “Taxable Subsidiaries”) to allow the Company to hold equity securities of portfolio companies organized as pass-through entities while continuing to satisfy the requirements applicable to a RIC under the Code. As of MarchJune 31,30, 2026 and December 31, 2025, we had no Taxable Subsidiaries. See Note 16. “Subsequent Events” in this Quarterly Report on Form 10-Q for information on the Company's Taxable Subsidiaries.

As of MarchJune 31,30, 2026, our investment portfolio, valued at fair value in accordance with our board of directors-approved valuation policy, represented 92.0%84.2% of our total assets, as compared to 91.4% of our total assets as of December 31, 2025.

As of MarchJune 31,30, 2026 and December 31, 2025, there were $44,900,000$44.9 million and $58,900,000$58.9 million in borrowings outstanding under the Capital One Revolving Financing, respectively.

As of MarchJune 31,30, 2026, there was no outstanding principal balance on the 2026 Notes as the 2026 Notes were fully repaid on March 30, 2026 using the net proceeds from the issuance of the Company's Floating Rate Senior Unsecured Notes due 2029, as described below.

The 2029 Notes mature on July 1, 2029, unless previously redeemed in accordance with their terms. The 2029 Notes bear interest at a floating rate equal to the 3-month Term SOFR plus 5.50% (9.18223%9.23372% at MarchJune 31,30, 2026) per annum. Interest on the 2029 Notes is payable on the last business day of each calendar quarter, commencing June 30, 2026. The 2029 Notes are the Company’s direct unsecured obligations and rank pari passu with the Company’s existing and future unsecured, unsubordinated indebtedness.

As of MarchJune 31,30, 2026, the carrying amount of the 2029 Notes was $63.8$63.7 million, aggregate principal balance of $65.0 million net with deferred debt issuance costs of approximately $0.3$0.2 million and unamortized discount of $0.9$1.1 million. As of MarchJune 31,30, 2026, the fair value of the 2029 Notes was $64.4 million. The Company concluded that this was Level 3 fair value under ASC 820.

As a BDC, we are required to comply with certain regulatory requirements. For instance, as a BDC, we may not acquire any assets other than “qualifying assets” specified in the 1940 Act unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets (with certain limited exceptions). Qualifying assets include investments in “eligible portfolio companies.” Under the relevant SEC rules, the term “eligible portfolio company” includes all private companies, companies whose securities are not listed on a national securities exchange, and certain public companies that have listed their securities on a national securities exchange and have a market capitalization of less than $250 million. In each case, the company must be organized in the United States. As of MarchJune 31,30, 2026, the Company did not hold any non-qualifying assets in its portfolio.

As of MarchJune 31,30, 2026, our investment portfolio of $151.4$135.9 million (at fair value) consisted of debt and equity investments in 3430 portfolio companies, of which 82.54%81.85% were first lien investmentsinvestments, 0.09% were unsecured debt investments, and 17.46%18.06% were equities, warrants and other positions. At MarchJune 31,30, 2026, our average and largest portfolio company investment at fair value was $4.5 million and $11.6$13.2 million, respectively.

As of MarchJune 31,30, 2026 and December 31, 2025, our average total yield of debt and income producing securities weighted by amortized cost (which includes interest income and amortization of fees and discounts) was 11.85%9.68% and 10.34%, respectively. As of MarchJune 31,30, 2026 and December 31, 2025, our average total yield on the total portfolio weighted by amortized cost (which includes interest income and amortization of fees and discounts) was 8.63%7.31% and 7.71%, respectively. The weighted average total yield was computed using an internal rate of return calculation of our debt investments based on contractual cash flows, including interest and amortization payments, and, for floating rate investments, the spot SOFR, as applicable, as of MarchJune 31,30, 2026, of all of our debt investments. The weighted average total yield of our debt investments is not the same as a return on investment for our stockholders but, rather, relates to a portion of our investment portfolio and is calculated before payment of all of our fees and expenses, including any sales load paid in connection with an offering of our securities. There can be no assurance that the weighted average total yield will remain at its current level.

We use Global Industry Classification Standard (“GICS”) codes to identify the industry groupings of our portfolio companies. At MarchJune 31,30, 2026 and December 31, 2025, respectively, the industry composition of our portfolio in accordance with the GICS codes at fair value, as a percentage of our total portfolio, was as follows:

During the threesix months ended MarchJune 31,30, 2026, we made investments in onetwo existing portfolio company,companies, which totaled approximately $0.1$2.4 million. We made investments in one existing portfolio company, to which we were previously contractually committed to provide financial support through the terms of the revolvers and delayed draw term loans, which totaled approximately $0.7$1.0 million. Of these investments, 100.00% consisted of first lien investments.

During the threesix months ended MarchJune 31,30, 2025, we made investments in onetwo new portfolio companycompanies and twosix existing portfolio companies. TheseInvestments investmentsin new and existing portfolio companies, to which we were not previously contractually committed to provide financial support, totaled approximately $5.1$24.1 million. Of these investments, 86.71%97.20% consisted of first lien investments and 13.29%2.80% were in equity, warrants, and other investments.

At MarchJune 31,30, 2026, 97.8%97.6% of our debt investments bore interest based on floating rates based on indices such as SOFR, the Euro Interbank Offered Rate, the Federal Funds Rate or the Prime Rate (in certain cases, subject to interest rate floors), and 2.2%2.4% bore interest at fixed rates. At December 31, 2025, 98.0% of our debt investments bore interest based on floating rates based on indices such as SOFR, the Euro Interbank Offered Rate, the Federal Funds Rate or the Prime Rate (in certain cases, subject to interest rate floors), and 2.0% bore interest at fixed rates.

Our investment portfolio may contain loans that are in the form of lines of credit or revolving credit facilities, which require us to provide funding when requested by portfolio companies in accordance with the terms of the underlying loan agreements. As of MarchJune 31,30, 2026, we had nine investments with aggregate unfunded commitments of $3.6$3.8 million, and as of December 31, 2025, we had nine investments with aggregate unfunded commitments of $3.7 million. As of MarchJune 31,30, 2026, we had sufficient liquidity (through cash on hand and available borrowings under our Capital One Revolving Financing) to fund such unfunded loan commitments should the need arise.

Comparison of the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025

Investment income, attributable primarily to interest and fees on our debt investments, for the three months ended MarchJune 31,30, 2026 decreased to $3.6$3.1 million from $4.4$4.5 million for the three months ended MarchJune 31,30, 2025 primarily due to a decrease in interest income due to lower average assets and lower index and interest rates in 2026 compared to 2025 and Easy Way Leisure Corporation Term Loan changing to non-accrual status in the fourth quarter of 2025, and a decrease in PIK dividend income related to Fusion Connect, Inc. - Series A Preferred, which is on non-accrual status in 2026 compared to 2025.

Expenses, net of waivers for the three months ended MarchJune 31,30, 2026 decreased to $3.2$3.6 million compared to $3.7 million for the three months ended MarchJune 31,30, 2025 primarily due to a decrease in interest expense resulting from reduced index rates and lower borrowingsunused under the Revolving Credit Facilityfees in 2026 compared to 2025,2025 due to the decrease of the facility size from $100 million to $50 million based on the Sixth Amendment entered into on May 6, 2026 and an increase in the waiver of base management fees.

Net investment income (loss) before taxes

Net investment income (loss) before taxes decreased to $0.3($0.5) million for the three months ended MarchJune 31,30, 2026 from $0.7$0.8 million for the three months ended MarchJune 31,30, 2025 primarily due to a decrease in interest income due to lower average assets and lower index and interest rates in 2026 compared to 2025 and Easy Way Leisure Corporation Term Loan changing to non-accrual status in the fourth quarter of 2025, and thea lossdecrease ofin PIK dividend income related to Fusion Connect, Inc. - Series A Preferred, which is on non-accrual status in 2026 compared to 2025, partially offset by a decrease in interest expense resulting from reduced index rates and lower borrowings under the Revolving Credit Facility in 2026 compared to 2025,2025 and lower unused fees in 2026 compared to 2025 due to the decrease of the facility size from $100 million to $50 million based on the Sixth Amendment entered into on May 6, 2026, and an increase in the waiver of base management fees.

There was a net realized gainloss on investments of $19.3$2.1 thousandmillion for the three months ended MarchJune 31,30, 2026 due to the realization of gainslosses associated with the sale of Asurion,FWS Parent Holding, LLC - Equity Interest, Likewize Corporation Term Loan.Loan, and the Term Loan and Revolver positions held in Work Genius Holdings, Inc. and the equity positions held in Work Genius, LLC.

There was a net realized lossgain on investments of $1.6$2.2 million for the three months ended MarchJune 31,30, 2025 primarily due to the realization of lossesa gain associated with the restructuring of our investments in American Nuts Holdings, LLC and a write offsale of our investment in AmericanInvestcorp TeleconferencingTransformer Services,Aggregator Ltd.,LP partially- offsetEquity by a realization of gains associated with the restructuring of our investments in Sandvine Corporation.Interest.

We recorded a net change in unrealized depreciationappreciation of $8.8$1.4 million for the three months ended MarchJune 31,30, 2026 primarily due to changes in marks for AppLogic Networks Parent LLC - Equity Interest, ArborWorks, LLC A-1 - Preferred Units, Crafty Apes LLC - Common Stock, Discovery Behavioral Health, LLC - Preferred Equity, Easy Way Leisure Corporation Term Loan, Fusion Connect, Inc. - Series A Preferred, and Klein Hersh, LLC Term Loan - Last Out.Out, Max US Bidco Inc. Term Loan B, Work Genius, LLC - Equity Interest, Work Genius, LLC - A-1 Equity Units, Work Genius Holdings, Inc. Term Loan.

We recorded a net change in unrealized appreciationdepreciation of $3.2 million for the three months ended MarchJune 31,30, 2025, primarily due to changes in marks for ArborWorks, LLC A-1 - Preferred Units, CareerBuilder, LLC Term Loan B3, Fusion Connect, Inc. - Common Stock, 4L Technologies, Inc. - Preferred Stock, Crafty Apes LLC - Common Stock, Klein Hersh, LLC Term Loan - Last Out, Bioplan USA, Inc. - Common Stock and LABL, Inc. Term Loan B and due to the realization of previously unrealized lossesgains resulting from the restructuring of our investments in American Nuts Holdings, LLC and a write offsale of our investment in AmericanInvestcorp TeleconferencingTransformer Services,Aggregator Ltd.LP - Equity Interest.

For the threesix months ended MarchJune 31,30, 2026, our cash and cash equivalents and restricted cash and cash equivalents balance decreasedincreased by $3.4$5.9 million. During that period, $10.8$20.1 million in net cash was provided by operating activities, primarily from proceeds from sales and repayments of investments in portfolio companies of $14.0$32.1 million, offset by purchases of investments of $0.8$3.4 million in portfolio companies.companies and receivable for investments sold of $3.3 million. During that same period, $14.2$14.3 million in net cash was used in financing activities, primarily for the repayment of $14.0 million under the Capital One Revolving Financing and a full repayment of $65.0 million for the 2026 Notes using the proceeds of $65.0 million from the issuance of the 2029 Notes.

As of MarchJune 31,30, 2026, we had $2.7$10.9 million of cash and cash equivalents as well as $8.8$9.9 million in restricted cash and cash equivalents and $55.1$5.1 million of capacity under the Capital One Revolving Financing. As of MarchJune 31,30, 2026, we had $109.9 million of senior securities outstanding at par value and our asset coverage ratio based on par value was 148.0%.145.2%. We intend to generate additional cash primarily from future offerings of equity and/or debt securities, future borrowings or debt issuances, as well as cash flows from operations, including income earned from investments in our portfolio companies and, to a lesser extent, from the temporary investment of cash in U.S. government securities and other high-quality debt investments that mature in one year or less.

On May 2, 2018, our board of directors, including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) of the board of directors, approved the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act. As a result, effective May 2, 2019, our applicable minimum asset coverage ratio under the 1940 Act was decreased to 150% from 200%. Thus, we are permitted under the 1940 Act, under specified conditions, to issue multiple classes of debt and one class of stock senior to our common stock if our asset coverage, as defined in the 1940 Act, is at least equal to 150% immediately after each such issuance. As of MarchJune 31,30, 2026, our asset coverage for borrowed amounts was 148.0%.145.2%.

We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. As of MarchJune 31,30, 2026, our off-balance sheet arrangements consisted of $3.6$3.8 million in unfunded commitments to six of our portfolio companies. As of December 31, 2025, our off-balance sheet arrangements consisted of $3.7 million in unfunded commitments to six of our portfolio companies. We maintain sufficient liquidity (through cash on hand and available borrowings under our Capital One Revolving Financing) to fund such unfunded loan commitments should the need arise.

Subsequent to MarchJune 31,30, 2026, and through MayAugust 12,14, 2026, the Company invested a total of $2.0$0.2 million, at cost, which included investments in onetwo existing portfolio company.companies, and received approximately $0.7 million from the repayment of three positions. As of MayAugust 12,14, 2026, the Company had investments in 3430 portfolio companies.