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

Events outside of our control, including terrorist attacks, acts of war, natural disastersdisasters, significant tariffs or public health crises, could negatively affect the portfolio companies in which we invest and make the valuation of those investments more uncertain.

Periods of market volatility have occurred and could continue to occur in response to pandemics or other events outside of our control, including terrorist attacks, acts of war, natural disasters, significant tariffs, public health crises or similar events. These types of events have adversely affected and could continue to adversely affect operating results for us and for our portfolio companies.

The large-scale invasion of Ukraine by Russia in February 2022 resulted in sanctions and market disruptions, including declines in regional and global stock markets, unusual volatility in global commodity markets and significant devaluations of Russian currency. The extent and duration of the military action are impossible to predict but could be significant. Market disruption caused by the Russian military action, and any counter measures or responses thereto (including international sanctions, a downgrade in a country’s credit rating, purchasing and financing restrictions, boycotts, tariffs, changes in consumer or purchaser preferences, cyberattacks and espionage) could continue to have severe adverse impacts on regional and/or global securities and commodities markets, including markets for oil and natural gas. These impacts may include reduced market liquidity, distress in credit markets, further disruption of global supply chains, increased risk of inflation, and limited access to investments in certain international markets and/or issuers. In addition, the currentconflicts conflict in the Middle East and terrorist acts may cause significant volatility in the markets and/or market disruptions.

We have borrowed funds, including through the issuance of $57.5 million in aggregate principal amount of 5.25% unsecured notes due November 1, 2028 (the “Notes” or the “2028 Notes”) to leverage our capital structure, which is generally considered a speculative investment technique. In addition, on December 15, 2022, the Company entered into a 3-year $50.0 million revolving credit facility (the “Credit Facility”) with Woodforest Bank, N.A. (“Woodforest”), Valley National Bank, and Axiom Bank, (collectively, the “Lenders”), which was amended on February 21, 2024 to increase the principal amount of loan available under the Credit Facility by $12.5 million to $62.5 million. On August 5, 2024 (the “Second Amendment Effective Date”), in order to increase the size of the Credit Facility, the parties to the Credit Facility amended the Credit Facility, effective as of the Second Amendment Effective Date (the “Second Amendment”). The Second Amendment increased the principal amount of loan available under the Credit Facility by $25 million to $87.5 million. All other material terms of the Credit Facility remain unchanged. As a result:

As of September 30, 2024,2025, the Company’s asset coverage was 216.8%207.8% after giving effect to leverage and therefore the Company’s asset coverage is above 200%, the minimum asset coverage requirement applicable to the Company under the 1940 Act.

We are classified as a non-diversified investment company within the meaning of the 1940 Act, which means that we are not limited by the 1940 Act with respect to the proportion of our assets that we may invest in securities of a single issuer. We also have not adopted any policy restricting the percentage of our assets that may be invested in a single portfolio company. To the extent that we assume large positions in the securities of a small number of issuers, our NAV may fluctuate to a greater extent than that of a diversified investment company as a result of changes in the financial condition or the market’s assessment of the issuer. We may also be more susceptible to any single economic or regulatory occurrence than a diversified investment company. Beyond our income tax diversification requirements under Subchapter M of the Code, we do not have fixed guidelines for diversification, and our investments could be concentrated in relatively few portfolio companies. (Note our significant investmentinvestments in our affiliateaffiliates FlexFIN and NSG – see Risks Related to our Investments).

Loans under our current Credit Facility bear interest at a rate based upon the Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. Also, the secured terms loans that we make to our portfolio companies and the secured notes of our portfolio companies in which we invest bear interest at SOFR based rates. Previously, our credit facilities and our debt investments in portfolio companies bore interest at U.S dollar London Interbank Overnight (USD LIBOR) rates.

We cannot assure that we will achieve investment results that will allow us to pay cash distributions. Our ability to pay distributions might be adversely affected by, among other things, the impact of one or more of the risk factors described herein. In addition, the inability to satisfy the asset coverage test applicable to us as a BDC could limit our ability to pay distributions. As of September 30, 2024,2025, the Company’s asset coverage was 216.8%207.8% after giving effect to leverage and therefore the Company’s asset coverage is above 200%, the minimum asset coverage requirement applicable to us under the 1940 Act. All distributions will be paid at the discretion of our board of directors and will depend on our earnings, our financial condition, maintenance of our RIC tax treatment, compliance with applicable BDC regulations, and such other factors as our board of directors may deem relevant from time to time. We cannot assure you that we will pay distributions to our stockholders in the future.

We do not seek to compete primarily based on the interest rates we offer, and we believe that some of our competitors make loans with interest rates that are comparable to or lower than the rates we offer. We may lose investment opportunities if we do not match our competitors’ pricing, terms and structure. If we match our competitors’ pricing, terms and structure, we may experience decreased net interest income and increased risk of credit loss. A significant part of our competitive advantage stems from the fact that the market for investments in mid-sized companies is underserved by traditional commercial banks and other financial institutions. A significant increase in the number and/or size of our competitors in this target market could force us to accept less attractive investment terms. Furthermore, manyseveral of our competitors have greater experience operating under the regulatory restrictions of the 1940 Act and under an internalized management structure.

The occurrence of a disaster, such as a cyber-attack against us, certain of our portfolio companies, or against a third-party that has access to our data or networks, a natural catastrophe, an industrial accident, failure of our disaster recovery systems, or consequential employee error, could have an adverse effect on our ability to communicate or conduct business (including the business of certain portfolio companies), negatively impacting our operations and financial condition. This adverse effect can become particularly acute if those events affect our electronic data processing, transmission, storage, and retrieval systems, or impact the availability, integrity, or confidentiality of our data.

As of September 30, 2024,2025, 12.1%15.3% of our total assets were invested in FlexFIN,NSG, our affiliate’s asset-based lendinginsurance business.

A significant number of high yield loans in the market,market may consist of covenant-lite loans, or “Covenant-Lite Loans.” A significant portion of the loans in which we may invest or get exposure to through our investments may be deemed to be Covenant-Lite Loans. Such loans do not require the borrower to maintain debt service or other financial ratios and do not include terms which allow the lender to monitor the performance of the borrower and declare a default if certain criteria are breached. Ownership of Covenant-Lite Loans may expose us to different risks, including with respect to liquidity, price volatility, ability to restructure loans, credit risks and less protective loan documentation, than is the case with loans that contain financial maintenance covenants.

As of September 30, 2024,2025, investments in our affiliate’s asset-based lending business constituted 12.1%11.7% of our total assets. See above, under Item 1A for risk factors related to our investment in that business. See “Subsequent Events” for a discussion of our investment in an insurance business.

Our business requires a substantial amount of capital to operate and grow. We may acquire additional capital from the issuance of senior securities (including debt and preferred stock), the issuance of additional shares of our common stock or from securitization transactions. However, we may not be able to raise additional capital in the future on favorable terms or at all. Additionally, we may only issue senior securities up to the maximum amount permitted by the 1940 Act. The 1940 Act permits us to issue senior securities only in amounts such that our asset coverage, as defined in the 1940 Act, equals at least 200% (or 150% if, pursuant to the 1940 Act, certain requirements are met) after such issuance or incurrence. If our assets decline in value and we fail to satisfy this test, we may be required to liquidate a portion of our investments and repay a portion of our indebtedness at a time when such sales or repayment may be disadvantageous, which could have a material adverse impact on our liquidity, financial condition and results of operations. As of September 30, 2024,2025, the Company’s asset coverage was 216.8%207.8% after giving effect to leverage and therefore the Company’s asset coverage is above 200%, the minimum asset coverage requirement applicable to us under the 1940 Act.

The terms of the Credit Facility place restrictions on our and/or our subsidiariessubsidiaries’ activities.

The terms of the Credit Facility place restrictions on our and/or our subsidiaries’ ability to, among other things, issue securities or otherwise incur additional indebtedness or other obligations, and in certain cases we may need the approval of WoodForest,BankUnited, as the Administrative Agent, in order to incur further indebtedness. In addition, the Credit Facility contains customary events of default for credit facilities of this type, including (without limitation): nonpayment of principal, interest, fees or other amounts after a stated grace period; inaccuracy of material representations and warranties; change of control; violations of covenants, subject in certain cases to stated cure periods; and certain bankruptcies and liquidations. If an event of default occurs and is continuing, the Company may be required to repay all amounts outstanding under the Credit Facility, which would adversely affect our liquidity position and, in turn, could force us to dispose of investments at inopportune times at reduced prices. Repayment could also adversely affect our ability to implement our investment strategy and achieve our investment objectives.

NSG faces competition from specialty insurance companies, standard insurance companies and underwriting agencies. Competition among insurance companies is based on a number of factors, including reputation, name recognition, credit ratings, financial strength ratings, relationships with distribution partners, terms and conditions of products offered, and speed of claims payment. In recent years, the insurance industry has undergone increasing consolidation, which may further increase competition. In addition, some of NSG’s competitors are larger and have greater financial, marketing, and other resources than NSG has, and are able to absorb large losses more easily. NSG’s competitors may also offer more competitive pricing, a broader range of products and have greater claims-paying ability. NSG may not be able to continue to compete successfully in the insurance markets. Increased competition in these markets could result in a change in the supply and demand for insurance, affect NSG’s ability to price its products at risk-adequate levels, and lead to reduced profitability or loss of market share.

NSG’s products are distributed through independent retail agents and brokers. Retail agents and brokers generally own the renewal rights, making NSG’s business model dependent on its relationships with, and the success of, the retail agents and brokers with whom it does business. NSG relies on a core number of brokers that account for a substantial number of policies, and its relationships with its brokers and retail agents may be discontinued at any time. If one or more such distributors were to terminate its relationship with NSG or reduce the amount of sales it produces, NSG’s results of operations could be adversely affected. Even if the relationships do continue, they may not be on terms that are profitable for NSG. A deterioration in the relationships with distributors or failure to provide competitive compensation could lead these distributors to place more premium with other carriers and less premium with NSG. Also, NSG’s distributors may in any event choose to concentrate their efforts in selling their firm’s own products or NSG’s other competitors’ products instead of NSG’s.NSG’s products.

During periods of market disruption, including periods of significantly rising or high interest rates, rapidly widening credit spreads or illiquidity, it may be difficult to value certain of NSG’s securities if trading becomes less frequent or market data becomes less observable. In addition, in times of financial market disruption, certain asset classes that were in active markets with significant observable data may become illiquid. In those cases, the valuation process includes inputs that are less observable and require more subjectivity and management judgment. If NSG is forced to sell certain of its investments during periods of market volatility or disruption, market prices may be lower than their carrying. This could result in realized losses, which could have a material adverse effect on NSG’s financial condition and results of operations. It could also affect financial ratios, briningbringing NSG out of compliance with its credit instruments and rating agency capital adequacy measures.

A decline in NSG’s risk-based capital (“RBC”) ratio could result in in increased scrutiny by insurance regulators and rating agencies and could have a material adverse effect on its financial condition and results of operations.

The Company’s investment objective is to generate current income and capital appreciation. The management team seeks to achieve this objective primarily through making loans, private equity or other investments in privately-held companies. The Company may also make debt, equity or other investments in publicly-traded companies. These investments may also include investments in other BDCs, closed-end funds or REITs. We may also pursue other strategic opportunities and invest in other assets or operate other businesses to achieve our investment objective, such as operating and managing an asset-based lending business and an insurance business. The portfolio generally consists of senior secured first lien term loans, senior secured second lien term loans, senior secured bonds, preferred equity and common equity. Occasionally, we will receive warrants or other equity participation features which we believe will have the potential to increase total investment returns. Our loan and other debt investments are primarily rated below investment grade or are unrated. Investments in below investment grade securities are considered predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal when due.

The Target Performance Award for each executive officer for the 2022 2023 LTIP Plan, the 20232024 LTIP Plan, and the 20242025 LTIP Plan is set forth in the tabletables below:

During the years ended September 30, 20242025 and September 30, 2023,2024, the Company recorded an accrualexpense of $2,798,437$1,425,922 and $317,000,$2,798,437, respectively, for these awards. During the year ended September 30, 2025, the Company paid out $2,002,790 for the 2022 LTIP plan based on achievement of the Performance Goals. During the year ended September 30, 2024, the Company did not recordpay anout accrual.anything To date, no amounts have been paid underfor these awards.

As of September 30, 2025, our income-bearing investment portfolio based upon cost represented 64.8% of our total portfolio of which 58.8% bore interest based on floating rates, such as SOFR, 14.9% bore interest at fixed rates, and 26.3% are income-producing equity investments. As of September 30, 2024, our income-bearing investment portfolio based upon cost represented 84.5% of our total portfolio of which 57.9% bore interest based on floating rates, such as SOFR or LIBOR, 17.0% bore interest at fixed rates, and 25.1% are income-producing equity investments. As of September 30, 2023, our income-bearing investment portfolio based upon cost represented 88.2% of our total portfolio of which 59.5% bore interest based on floating rates, such as LIBOR or SOFR, while 13.9%17.0% bore interest at fixed rates and 26.6%25.1% are income-producing equity investments. As of September 30, 2025, the Company had a weighted average yield of 12.8% on debt and other income producing investments. As of September 30, 2024, the Company had a weighted average yield of 12.3% on debt and other income producing investments. As of September 30, 2023, the Company had aThe weighted average yield of 13.3% on debt and other income producing investments. The weighted average yield of our total portfolio does not represent the total return to our stockholders.

During the year ended September 30, 2023,2025, we recognized $11.5 $11.9 million of net realized losses on our portfolio investments. The realized losses were primarily due to thea restructuringrealized ofloss one investmenton andBlack theAngus fullSteakhouses, repaymentsLLC offor two$10.3 investments.million.

Certain consolidated subsidiaries of ours are subject to U.S. federal and state income taxes. These taxable subsidiaries are not consolidated with the Company for income tax purposes, but are consolidated for GAAP purposes, and may generate income tax liabilities or assets from temporary differences in the recognition of items for financial reporting and income tax purposes at the subsidiaries. For the year years ended September 30, 2024,2025 and 2024 the Company recorded a change in provision for deferred taxes on the unrealized (appreciation)/depreciation on investments of $0.2 million and $0.9 million.million, respectively. For the yearsyear ended September 30, 2023 and 2022,2023, the Company did not record a change in provision for deferred taxes.

For the year ended September 30, 2024,2025, we recorded a net increase in net assets resulting from operations of $18.6$4.2 million compared to a net increase in net assets resulting from operations of $18.6 million for the year ended September 30, 2024, and a net increase in net assets resulting from operations of $26.9 million for the year ended September 30, 2023, and a net decrease in net assets resulting from operations of $6.1 million for the year ended September 30, 20222023 as a result of the factors discussed above. Based on on2,015,157, 2,040,253, 2,092,3262,040,253 and 2,323,6012,092,326 weighted average common shares outstanding for the years ended September 30, 2025, 2024, 2023 and 2022,2023, respectively, our per share net increase (decrease) in net assets resulting from operations was $2.07, $9.13, $12.87 and $(2.63)$12.87 for the years ended September 30, 2024,2025, 20232024 and 2022,2023, respectively.

As a RIC, we distribute substantially all of our taxable net income to our stockholders and have an ongoing need to raise additional capital for for investment purposes. To fund growth, we have a number of alternatives available to increase capital, including raising equity, increasing debt, and funding from operational cash flow.

As of September 30, 20242025 and 2023,2024, we had commitments under loan and financing agreements to fund up to $5.5 million to six portfolio companies and $1.6 million to two portfolio companies and $3.4 million to four portfolio companies, respectively. These commitments are primarily composed of senior secured delayed draw term loans and revolvers, and the determination of their fair value is included in the Consolidated Schedules of Investments. The commitments are generally subject to the borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. The terms of the borrowings and financings subject to commitment are comparable to the terms of other loan and equity securities in our portfolio. A summary of the composition of the unfunded commitments as of September 30, 20242025 and September 30, 20232024 is shown in the table below (dollars in thousands):

On May 9, 2024, the Board of Directors declared a special dividend in the amount of $2,645,925. This dividend was paid on June 10, 2024 to stockholders of record as of May 27, 2024. DuringOn February 6, 2025, the yearBoard ended Septemberof 30,Directors 2022,declared a special dividend was declared in the amount of $2,888,283 $265,798for a record date of February 17, 2025 and paid on JuneFebruary 24,19, 2022 payable on July 13, 2022 to Stockholders of record on July 5, 2022.2025. The Company did not declare any regular distribution payments during the years ended September 30, 2024, 20232025, 2024 and 2022.2023.

The Company follows ASC 820 for measuring the fair value of portfolio investments. Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity. The Company’s fair value analysis includes an analysis of the value of any unfunded loan commitments. Financial investments recorded at fair value in the consolidated financial statements are categorized for disclosure purposes based upon the level of judgment associated with the inputs used to measure their value. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the investment as of the measurement date. Investments which are valued using NAV as a practical expedient are excluded from this hierarchy, and certain prior period amounts have been reclassified to conform to the current period presentation.hierarchy. The three levels are defined below:

Non-accrual: We place loans on non-accrual status when principal and interest payments are past due by 90 days or more, or when there is reasonable doubt that we will collect principal or interest. Accrued interest is generally reversed when a loan is placed on non-accrual. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in our management’s judgment, are likely to remain current. At September 30, 2025, a certain investment in one portfolio company held by the Company was on non-accrual status with a combined fair value of approximately $0.0 million, or 0.0% of the fair value of our portfolio, and a cost of $7.6 million. At September 30, 2024, certain investments in three portfolio companies held by the Company were on non-accrual status with a combined fair value of approximately $2.4 million, or 1.1% of the fair value of our portfolio.portfolio, At September 30, 2023, certain investments in four portfolio companies held by the Company were on non-accrual status withand a combined fair value of approximately $6.5 million, or 2.9%cost of the$20.2 fair value of our portfolio.million.

In addition to other information set forth in this report, you should carefully consider the “Risk Factors” discussed in our annual report on Form 10-K for the fiscal year ended September 30, 2025, filed with the SEC on December 12, 2025, which could materially affect our business, financial condition and/or operating results. Other than the items disclosed below (which are being re-disclosed in this report in light of the board of directors’ recent approval of the reduced minimum asset coverage ratio), there have been no material changes during the sixnine months ended MarchJune 31,30, 2026 to the risk factors discussed in “Item 1A. Risk Factors” of of our annual report on Form 10-K. Additional risks or uncertainties not currently known to us or that we currently deem to be immaterial also may materially affect our business, financial condition and/or operating results.

Because we use borrowed funds to make investments or fund our business operations, we are exposed to risks typically associated with leverage which increaseincreases the risk of investing in us.

We have borrowed funds, including through the issuance of $57.5 million in aggregate principal amount of 5.25% unsecured notes due November 1, 2028 (the “Notes” or the “2028 Notes”) to leverage our capital structure, which is generally considered a speculative investment technique. In addition, on December 15, 2022, the Company entered into a 3-year $50.0 million revolving credit facility (the “Credit Facility”) with with Woodforest Bank,National N.A.Bank (“Woodforest”), Valley National Bank, and Axiom Bank, (collectively, the “Lenders”), which was amended on February 21, 2024 to increase the principal amount of the loan available under the Credit Facility by $12.5 million to to $62.5 million. On August 5, 2024 (the “Second Amendment Effective Date”), in order to increase the size of the Credit Facility, Facility, the parties to the Credit Facility amended the Credit Facility, effective as of the Second Amendment Effective Date (the “Second Amendment”). The Second Amendment increased the principal amount of the loan available under the Credit Facility by $25 million to to $87.5 million.

As of MarchJune 31,30, 2026, the Company’s asset coverage was 204.3%207.0% after giving effect to leverage and therefore the Company’s asset coverage is above 200%, the minimum asset coverage requirement presently applicable to the Company under the 1940 Act.

As of MarchJune 31,30, 2026, there was $147.5 million of outstanding borrowings. The weighted average interest rate charged on our borrowings as of MarchJune 31,30, 2026 was 5.9%5.8% (exclusive of debt issuance costs). We will need to generate sufficient cash flow to make these required interest payments. If we are unable to meet the financial obligations under the Notes, the holders thereof will have the right to declare the principal amount and accrued and unpaid interest on the outstanding Notes to be due and payable immediately. If we are unable to meet the financial obligations under the Credit Facility or any other credit facility we enter into, the lenders thereunder would likely have a superior claim to our assets over our stockholders.

We have evaluated subsequent events from March 31,June 30, 2026, through the filing date of this quarterly report on Form 10-Q. However, as the discussion in this Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations relates to the Company’s financial statements for the quarterly period ended MarchJune 31,30, 2026, the analysis contained herein may not fully account for market event impacts. As of MarchJune 31,30, 2026, the Company valued its portfolio investments in conformity with U.S. generally accepted accounting principles (“GAAP”) based on the facts and circumstances known by the Company at that time or reasonably expected to be known at that time. Due to the overall volatility that market events may have caused during the months following our most recent valuation (as of March 31,June 30, 2026), any valuations conducted now or in the future in conformity with U.S. GAAP could result in a lower fair value of our portfolio.

In 2023, the Federal Reserve raised short-term interest rates. Additional interest rate increases may come. Changing interest rates may have unpredictable effects on markets, may result in heightened market volatility and may detract from our performance to the extent we are exposed to such interest rates and/or volatility. In periods of rising interest rates, such as the current interest rate environment, to the extent we borrow money subject to a floating interest rate, our cost of funds would increase, which could reduce our net investment income. Further, rising interest rates could also adversely affect our performance if such increases cause our borrowing costs to rise at a rate in excess of the rate that our investments yield. Further, rising interest rates could also adversely affect our performance if we hold investments with floating interest rates, subject to specified minimum interest rates (such as a SOFR floor), while at the same time engaging in borrowings subject to floating interest rates not subject to such minimums. In such a scenario, rising interest rates may increase our interest expense, even though our interest income from investments is not increasing in a corresponding manner as a result of such minimum interest rates.

During the three and sixnine months ended MarchJune 31, 30, 2026, the Company recorded an expense of $66,875$0 and $133,750,$0, respectively, for these awards. During the three and sixnine months ended March 31,June 30, 2025, the Company recorded an expense of $303,848$275,342 and $630,168,$905,510, respectively, for these awards.

As of MarchJune 31,30, 2026 and September 30, 2025, our portfolio had a fair market value of approximately $295.8$301.6 million and $302.3 million, respectively.

During the sixnine months ended MarchJune 31,30, 2026, we received proceeds from sale and settlements of investments of $30.4$47.9 million, including principal proceeds, net realized gains on investments of $0.4$0.0 million and invested $28.6$48.7 million.

During the sixnine months ended MarchJune 31,30, 2025, we received proceeds from sale and settlements of investments of $74.0$90.8 million, including principal proceeds, net realized gainslosses on investments of $0.1$(11.9) million and invested $132.9$159.5 million.

The following table summarizes the amortized cost and the fair value of investments as of MarchJune 31,30, 2026 (dollars in thousands):

As of MarchJune 31,30, 2026, our income-bearing investment portfolio based upon cost represented 61.1%63.0% of our total portfolio of which 63.6%63.9% bore interest based on floating rates, such as SOFR, 10.3%8.3% bore interest at fixed rates, and 26.1%27.8% are income-producing equity investments. As of September 30, 2025, our income-bearing investment portfolio based upon cost represented 64.8% of our total portfolio of which 58.8% bore interest based on floating rates, such as SOFR, 14.9% bore interest at fixed rates, and 26.3% are income-producing equity investments. As of MarchJune 31,30, 2026, the Company had a weighted average yield of 13.1%13.2% on debt and other income producing investments. As of September 30, 2025, the Company had a weighted average yield of 12.8% on debt and other income producing investments. The weighted average yield of our total portfolio does not represent the total return to our stockholders.

The following table shows the distribution of our investments on the 1 to 5 investment performance rating scale at fair value as of March 31,June 30, 2026 and September 30, 2025 (dollars in thousands):

Operating results for three and sixnine months ended March 31,June 30, 2026 and 2025 are as follows (dollars in thousands):

For the three months ended MarchJune 31,30, 2026, investment income totaled $5.2$6.5 million, of which $4.1$4.4 million was attributable to portfolio interest, approximately $0.9$1.8 million was attributable to dividend income, $0.2$0.3 million was attributable to fee and other income, and $0.0 million was attributable to interest on cash and cash equivalents. For the sixnine months ended MarchJune 31,30, 2026, investment income totaled $11.9$18.3 million, of which $8.0$12.4 million was attributable to portfolio interest, approximately $3.4$5.2 million was attributable to dividend income, $0.4$0.6 million was attributable to fee and other income, and $0.1 million was attributable to interest on cash and cash equivalents. Dividend income was received from nine investments during the sixnine months ended MarchJune 31,30, 2026.

For the three months ended MarchJune 31,30, 2025, investment income totaled $6.0$6.2 million, of which $3.9$4.6 million was attributable to portfolio interest, approximately $2.1$0.9 million was attributable to dividend income, $0.0$0.7 million was attributable to fee and other income, and $0.0$27.8 million thousand was attributable to interest on cash and cash equivalents. For the sixnine months ended MarchJune 31,30, 2025, investment income totaled $12.2$18.4 million, of which $7.8$12.4 million was attributable to portfolio interest, approximately $4.2$5.1 million was attributable to dividend income, $0.1$0.8 million was attributable to fee and other income, and $0.1 million was attributable to interest on cash and cash equivalents. Dividend income was received from eightseven investments during the sixnine months ended MarchJune 31,30, 2025.

Operating expenses for the three and sixnine months ended MarchJune 31,30, 2026 and 2025 are as follows (dollars in thousands):

For the three months ended MarchJune 31,30, 2026, total operating expenses decreased by $(0.6) million, or (11.912.5)% compared to the three months ended MarchJune 31,30, 2025. For the sixnine months ended MarchJune 31,30, 2026, total operating expenses decreased by $(0.71.3) million, or (6.88.8)% compared to the sixnine months ended MarchJune 31,30, 2025.

Interest and financing expenses for the three months ended MarchJune 31,30, 2026 decreased by $(0.3) million, or (10.412.8) % compared to the three months ended June 30, 2025. Interest and financing expenses for the nine months ended MarchJune 31,30, 2026 decreased by $(0.7) million, or (9.3)% compared to the nine months ended June 30, 2025. The decrease in interest and financing expenses for the three and sixnine months ended MarchJune 31, 30, 2026 was primarily due to borrowing at lower floating interest rates on the Credit Facility.

Professional fees and general and administrative expenses for the three months ended MarchJune 31,30, 2026 increaseddecreased by $(0.1) million, or (12.99.0)% compared to the three months ended MarchJune 31,30, 2025. Professional fees and general and administrative expenses for the nine months ended June 30, 2026 decreased by $(0.1) million, or (2.9)% compared to the nine months ended June 30, 2025.

During the three months ended MarchJune 31,30, 2026, we recognized $1.1$0.4 million of realized lossesgains on our portfolio investments. The realized lossesgains for the three months ended MarchJune 31,30, 2026 were primarily due to realized lossesgains of $0.3 million on salesCompass ofDiversified Copper Property CTL Pass Through Trust for $0.6 million and Chimera Investment Corp for $0.4 million.Holdings.

During the sixnine months ended MarchJune 31,30, 2026, we recognized $0.4$(14.2) millionthousand of realized losses on our portfolio investments. The realized losses for the sixnine months ended MarchJune 31,30, 2026 were were primarily due to realized losses on sales of Copper Property CTL Pass Through Trust forof $0.6$(0.6) million and Chimera Investment Corp forof $0.4$(0.4) million, offset by realized gains on salesCompass Diversified Holdings of Neptune Bidco US Inc. for $0.4 million andmillion, CB&L Associates Holdco I, LLC forof $0.3$0.4 million and Neptune Bidco US, Inc. of $0.4 million.

During the three months ended MarchJune 31,30, 2025, we recognized $1.1$(12.0) million of net realized losses on our portfolio investments. During the six nine months ended MarchJune 31,30, 2025, we recognized $0.1 $(11.9) million of net realized gainlosses on our portfolio investments. The net realized losses for the three months ended MarchJune 31,30, 2025 were due to the realized loss losses of $10.3 million on Black Angus Steakhouses, LLC, $1.0 million on Lighting Science Group Corporation, and $0.7 million on Velocity Pooling Vehicle, LLC. The net realized losses for nine months ended June 30, 2025 were primarily due to the realized losses of $10.3 million on Black Angus Steakhouses, LLC, $1.9 million on Point.360, $1.0 million on Lighting Science Group Corporation, and $0.7 million on Velocity Pooling Vehicle LLC, offset by a realized gain on PHH Mortgage Corp. for $0.8 million and realized gains on Altisource S.A.R.L., CB&L Associates Holdco I, LLC, and All Around Roustabout, Roustabout, LLC of $0.7 million. The realized gains for six months ended were primarily due to a realized gain on PHH Mortgage Corp. for $0.8 million, a realized gain on Chimera Investment Corp for $0.3 million, and realized gains on Altisource S.A.R.L., CB&L Associates Holdco I, LLC, and All Around Roustabout, LLC of $0.7 million, offset by a realized loss of $1.9 million on Point.360.

For the three months ended MarchJune 31,30, 2026, we had had $1.7$1.8 million of net unrealized appreciation on investments. The net unrealized appreciation resulted primarily from unrealized gains on FST Holdings Parent for $1.2 million, NVTN LLC for $1.2 million, and WHI Global LLC for $1.0 million, offset by unrealized losses on MBNSG PrecisionCaptive, Holdings LLC for $1.4 million.Inc.

For the sixnine months ended MarchJune 31,30, 2026, we had $(5.53.7) million of net unrealized depreciation on investments. The net unrealized depreciation resulted primarily from unrealized losses on NVTNNVTN, LLC forof $3.7$(3.8) million, Altisource S.A.R.L. forof $3.4$(2.8) million, MB Precision Investment Holdings LLC of $(2.5) million, Lucky Bucks, LLC of $(1.9) million, and MBAdvocates Precisionfor HoldingsDisabled Vets, LLC forof $1.5$(1.6) million, offset by unrealized gains on NSG Captive Inc. of $3.6 million, FST Holdings Parent, LLC of $2.0 million, Power Stop LLC of $1.1 million, ECC Capital CorpCorp. forof $3.0$0.9 million, and JFL-NGS-WCS Partners, LLC of $0.9 million.

Certain consolidated subsidiaries of ours are subject to U.S. federal and state income taxes. These taxable subsidiaries are not consolidated with the Company for income tax purposes, but are consolidated for GAAP purposes, and may generate income tax liabilities or assets from temporary differences in the recognition of items for financial reporting and income tax purposes at the subsidiaries. For the three and sixnine months ended March 31,June 30, 2026 the Company recorded a change in provision for deferred taxes of $(166,01586,737) and $(589,444676,181), respectively.

For the three months ended MarchJune 31,30, 2026, we recorded a net increase in net assets resulting from operations of $1.1$4.2 million compared to a net decrease in net assets resulting from operations of $(0.91.5) million for the three months ended MarchJune 31,30, 2025. Based on 1,972,9431,932,597 and 2,019,7782,017,330 weighted average common shares outstanding for the three months ended MarchJune 31,30, 2026 and 2025, respectively, our per share net increase (decrease) in net assets resulting from operations was $0.57$2.19 for the three months ended MarchJune 31,30, 2026 and $(0.440.74) for the three months ended March 31,June 30, 2025.

As of MarchJune 31,30, 2026 and September 30, 2025, we had $3.1$2.2 million and $7.3 million, respectively, in cash and cash equivalents.

On January 11, 2021, the Company announced that its board of directors approved a share repurchase program. On February 9, 2022, the Board of Directors approved the expansion of the amount authorized for repurchase under the Company’s share repurchase program from $15 million to $25 million. On February 8, 2023, the Board of Directors approved the further expansion of the amount authorized for repurchase under the Company’s share repurchase program from $25 million to $35 million. Under the share repurchase program, the Company repurchased an aggregate of 787,425791,236 shares of common stock through MarchJune 31,30, 2026, or 28.9%29.0% of shares outstanding as of the program’s inception, with a total cost of $32.2$32.3 million. The total remaining amount authorized under the expanded share repurchase program at MarchJune 31,30, 2026 was approximately $2.8$2.7 million.

On December 15, 2022, the Company and its wholly-owned subsidiaries executed a three-year, $50 million revolving credit facility (the “Credit Facility”) with WoodForestWoodforest Bank, N.A.National Bank (“WoodForest”Woodforest), Valley National Bank, and Axiom Bank, (collectively, the “Lenders”). WoodForest Woodforest was the administrative agent, sole bookrunner and sole lead arranger. The Credit Facility had an original maturity date of December 15, 2025.

On April 17, 2025 (the “Third Amendment Effective Date”), in order to extend the term and increase the size of the Credit Facility, the parties to the Credit Facility amended amended the terms of the Credit Facility, effective as of the Third Amendment Effective Date (the “Third Amendment”). The Third Amendment increased the principal amount of the loan available under the Credit Facility by $12.5 million to $100.0 million (with potential access to up to an additional $50,000,000 pursuant to an uncommitted accordion provision) and appointed BankUnited, N.A. to assume all agency and syndication responsibilities from the prior agent and lenders. Outstanding loans under the terms of the Amendment bear a monthly interest rate ranging from ABR + 1.35% to ABR + 1.75% for any alternative base rate loans and from Term SOFR + 2.35% to Term SOFR + 2.75% for any term benchmark loans based on the total debt to tangible net worth ratio. The Amendment also extended the term of the credit facility to April 17, 2030, five years from the Effective Date. Other material terms remain substantially unchanged. As of MarchJune 31,30, 2026, there was $90.0 million of outstanding borrowings by the Company under the Credit Facility. As of MarchJune 31,30, 2026, the Company was in compliance in all respects with the terms of the Credit FacilityFacility.

As of MarchJune 31,30, 2026 and September 30, 2025, we had commitments under loan and financing agreements to fund up to $3.4$10.6 million to sixeight portfolio companies and $5.5 million to six portfolio companies, respectively. These commitments are primarily composed of senior secured term loans and revolvers, and the determination of their fair value is included in the Consolidated Schedule of Investments. The commitments are generally subject to the borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. The terms of the borrowings and financings subject to commitment are comparable to the terms of other loan and equity securities in our portfolio. A summary of the composition of the unfunded commitments as of MarchJune 31,30, 2026 and September 30, 2025 is shown in the table below (dollars in thousands):

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

The CompanyBoard didof notDirectors declaredeclared anya distributionspecial paymentsdividend duringeffective theMay six5, months2026 endedof March$0.07 31,per share. This dividend was paid on May 28, 2026 to stockholders of record as of May 18, 2026. On February 6, 2025, the Board of Directors declared a special dividend of $1.43 per share. This dividend was paid on February 19, 2025 to stockholders of record as of February 17, 2025.

The Company has entered into contracts with its affiliated portfolio companies, The National Security Group (and certain of its affiliates) and ECC Capital Corporation, pursuant to which the Company (and/or certain of its subsidiaries) provide such affiliated portfolio companies certain services, including managing a portion of their assets. During the three and sixnine months ended MarchJune 31,30, 2026, the Company recognized $0.2 million and $0.3$0.5 million of income, respectively, related to these contracts. During the three and sixnine months ended MarchJune 31,30, 2025, the Company recognized $0.2$0.4 million and $0.3$0.6 million of income, respectively, related to these contracts.

Non-accrual: We place loans on non-accrual status when principal and interest payments are past due by 90 days or more, or when there is reasonable doubt that we will collect principal or interest. Accrued interest is generally reversed when a loan is placed on non-accrual. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in our management’s judgment, are likely to remain current. At MarchJune 31,30, 2026, a certain investment in one portfolio company held by the Company was on non-accrual status with a fair value of approximately $0.0 million, or 0%0.0% of the fair value of our portfolio, and a cost of $7.6 million. At September 30, 2025, a certain investment in one portfolio company held by the Company was on non-accrual status with a combined fair value of approximately $0.0 million, or 0.0% of the fair value of our portfolio, and a cost of $7.6 million.