Financial Data and Key Metrics Changes - Fundings for the quarter totaled $73 million, with exits and prepayments at $82 million, resulting in net originations of negative $9 million [6][7] - Interest income decreased by 2.3% to $20.9 million, while the weighted average portfolio yield increased by 20 basis points to 12.8% [12][7] - Net investment income remained flat at $11.3 million, with net realized losses of $3.6 million primarily related to a specific investment [7][13] Business Line Data and Key Metrics Changes - The portfolio turnover did not materially impact the investment mix, with 70% of new originations being first lien debt [9] - The company maintained a conservative leverage position with debt at 64% of NAV, which increased to 81% of NAV post-quarter [11][15] Market Data and Key Metrics Changes - The company continues to see a healthy flow of attractive lower middle market deal opportunities, with 88% of recent deals being first lien investments [10] - The average closing leverage for new deals was three times EBITDA, with an average margin over SOFR exceeding 7% [10] Company Strategy and Development Direction - The company remains focused on growth-oriented lower middle market investments backed by private equity sponsors [19] - The strategy includes recycling investment exits to support portfolio growth and shareholder distributions [11][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the health of the portfolio, citing well-articulated growth strategies among investments [24] - Concerns about economic headwinds were acknowledged, but the company believes its investments can withstand these challenges due to conservative leverage and cash flow generation [26][27] Other Important Information - Total assets rose to $780 million, with liabilities primarily consisting of senior notes and a line of credit [13][14] - Monthly distributions for August and September will be $0.0165 per common share, translating to an annual run rate of $1.98 per share [15] Q&A Session Summary Question: Impact of private credit growth on spreads - Management noted that while there is some pressure from sponsors, they have successfully resisted significant reductions in spreads, maintaining an average above 7% over SOFR [21][22] Question: Overall health of the portfolio amid economic uncertainty - Management indicated that most investments have solid growth strategies and can withstand economic headwinds, with a focus on long-term growth rather than short-term economic fluctuations [24][26] Question: Changes in portfolio structure to boost yields - Management clarified that there is no fundamental strategy change, but they are exploring opportunities to manage yield targets through selective second lien and asset-backed facilities [30][32] Question: Leverage ratio and prepayment patterns - Management confirmed the leverage ratio increase to 81% of NAV and noted that prepayments have been unpredictable, typically occurring when companies are up for sale [37][39] Question: Financing options for upcoming debt maturity - Management is evaluating various options for addressing the upcoming debt maturity, expressing some disappointment with current market spreads [41] Question: Future pipeline and backlog outlook - Management expects a healthy number of additional investments and anticipates net originations in the range of $50 million to $100 million per quarter [44][46] Question: Activity level and December quarter expectations - Management expressed cautious optimism for a strong Q4, traditionally a busy quarter, while acknowledging economic uncertainties that may affect deal closures [53][55]

Core Insights - Gladstone Capital reported steady net investment income per share at $0.50, slightly above expectations, while GAAP revenue was $21.7 million, just below the consensus of $21.88 million [1][2] - The company experienced significant realized losses of $3.62 million, marking an $11.33 million swing from the previous quarter's gain [1][7] - Net Asset Value (NAV) per share decreased by 0.7% quarter over quarter, indicating pressure on asset values [1][2] Financial Performance - Net investment income remained stable at $11.3 million, with a slight increase of 0.9% from the previous quarter [2] - Total investments at fair value decreased by $11.38 million, or 1.5%, despite a $72.95 million investment in new portfolio companies, a 60% increase from the prior quarter [5][7] - The weighted average yield on interest-bearing investments rose to 12.8% from 12.6% in the prior quarter, reflecting improved portfolio returns [6] Dividend Policy - The quarterly dividend distribution was maintained at $0.495 per share, resulting in a 100% payout ratio, indicating a commitment to income stability for shareholders [12][13] - Monthly distributions of $0.165 per share were declared for Q4 FY2025, showing consistency in shareholder returns [13] Business Overview - Gladstone Capital focuses on providing debt and equity financing to lower middle market companies, primarily through secured first lien and second lien loans [3][10] - The company emphasizes credit quality, with over 70% of debt investments being first lien loans, which offer a layer of protection against credit losses [4][10] Strategic Developments - Management expanded its credit facility to $320 million to enhance flexibility and support future investments [8] - Following the quarter-end, the company closed $76.7 million in new investments and $16.6 million in add-ons, indicating confidence in capital redeployment [9][8] Future Outlook - Management did not provide explicit forward guidance but highlighted a strong deal pipeline and the expectation of reduced portfolio repayments, which could support future earnings growth [14]

Gladstone Capital (GLAD) came out with quarterly earnings of $0.5 per share, in line with the Zacks Consensus Estimate . This compares to earnings of $0.57 per share a year ago. These figures are adjusted for non-recurring items. A quarter ago, it was expected that this real estate investment trust would post earnings of $0.5 per share when it actually produced earnings of $0.5, delivering no surprise. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in ...

[Summary of Financial Results](index=1&type=section&id=Summary%20Information) Gladstone Capital reported stable Net Investment Income (NII) of $0.50 per share for the third fiscal quarter of 2025, unchanged from the prior quarter, while Net Asset Value (NAV) per common share decreased slightly by 0.7% to $21.25, and the total fair value of investments saw a minor decline of 1.5% to $751.3 million Q3 2025 Financial Summary (vs. Q2 2025) | | June 30, 2025 (in thousands) | March 31, 2025 (in thousands) | Change (in thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | **For the Quarter Ended:** | | | | | | Total investment income | $21,657 | $21,569 | $88 | 0.4% | | Net investment income | $11,294 | $11,245 | $49 | 0.4% | | Net investment income per common share ($) | $0.50 | $0.50 | $0.00 | 0.0% | | Net increase (decrease) in net assets | $7,448 | $8,797 | $(1,349) | (15.3)% | | **As of:** | | | | | | Total investments, at fair value | $751,260 | $762,636 | $(11,376) | (1.5)% | | Net asset value per common share ($) | $21.25 | $21.41 | $(0.16) | (0.7)% | [Third Fiscal Quarter 2025 Highlights](index=1&type=section&id=Third%20Fiscal%20Quarter%202025%20Highlights) During the quarter, the company was active in its portfolio, investing a total of $73.0 million across new and existing companies, maintaining a conservative portfolio mix with over 70% in secured first lien assets, and successfully extending its credit facility to October 2029, increasing its total commitment to $320.0 million - Invested **$58.6 million** in two new portfolio companies and **$14.4 million** in existing ones[5](index=5&type=chunk) - The portfolio composition remains conservative, with secured first lien assets constituting over **70%** of debt investments at cost[5](index=5&type=chunk) - The credit facility was expanded to a total commitment of **$320.0 million**, with the revolving period extended to October 2027 and final maturity to October 2029[5](index=5&type=chunk) [Detailed Financial Performance Analysis](index=2&type=section&id=Third%20Fiscal%20Quarter%202025%20Results) For the quarter ended June 30, 2025, total investment income saw a marginal increase of 0.4%, driven by higher prepayment fees and dividend income, which offset a decrease in interest income from a smaller average portfolio balance, while expenses remained flat as lower interest expense was offset by higher management and incentive fees, resulting in a stable Net Investment Income of $11.3 million, or $0.50 per share, and a net increase in net assets from operations of $7.4 million, a decrease from the prior quarter, primarily due to a $3.6 million net realized loss - Total investment income increased slightly by **$88 thousand**, primarily due to a **$0.6 million** increase in other income (prepayment fees and dividends), which was partially offset by a **$0.5 million** decrease in interest income[6](index=6&type=chunk) - Total expenses were stable quarter-over-quarter, as a **$0.6 million** decrease in interest expense was offset by a **$0.5 million** increase in net base management and incentive fees[7](index=7&type=chunk) Quarterly Income and Net Asset Changes | Metric | Amount (in millions) | Per Share ($) | | :--- | :--- | :--- | | Net Investment Income | $11.3 | $0.50 | | Net Increase in Net Assets | $7.4 | $0.33 | [Subsequent Events](index=2&type=section&id=Subsequent%20Events) Following the quarter's end, Gladstone Capital was highly active, investing a total of $94.3 million in five new and existing portfolio companies during July and August 2025, and the company's Board of Directors also declared monthly distributions for its common and preferred stock for the upcoming quarter [Portfolio Activity](index=2&type=section&id=Portfolio%20Activity) In July and August 2025, the company deployed significant capital, investing in five companies across various sectors through secured first and second lien debt, as well as equity, with this activity including one debt payoff at par from 8th Avenue Food and Provisions, Inc - Subsequent to quarter-end, the company made several significant investments: - **$25.0 million** in MASSiv Brands, LLC (secured first lien debt) - **$15.0 million** in Alsay, Inc. (secured second lien debt and preferred equity) - **$23.7 million** in Snif-Snax, LLC (secured first lien debt and preferred equity) - **$13.0 million** in a precision manufacturing business (secured first lien debt and common equity) - An additional **$16.6 million** in existing portfolio company OCI, LLC[12](index=12&type=chunk) [Distributions and Dividends Declared](index=2&type=section&id=Distributions%20and%20Dividends%20Declared) In July 2025, the Board of Directors declared monthly cash distributions of $0.165 per common share for July, August, and September 2025, totaling $0.495 for the quarter, with dividends also declared for the Series A Preferred Stock Common Stock Distributions Declared | Record Date | Payment Date | Distribution per Share ($) | | :--- | :--- | :--- | | July 21, 2025 | July 31, 2025 | $0.165 | | August 20, 2025 | August 29, 2025 | $0.165 | | September 22, 2025 | September 30, 2025 | $0.165 | | **Total for the Quarter** | | **$0.495** | [Management Commentary](index=3&type=section&id=Comments%20from%20Gladstone%20Capital%27s%20President%2C%20Bob%20Marcotte) President Bob Marcotte stated that the company has successfully managed recent portfolio liquidity events, ending the quarter with a strong balance sheet and funding capacity, expressing confidence in the company's lower middle market strategy and its ability to grow the investment portfolio to support future shareholder distributions, which is evidenced by the robust funding activity that occurred after the quarter's end - Management believes the company has absorbed the recent surge in portfolio liquidity events and ended the quarter with a strong balance sheet and funding capacity[13](index=13&type=chunk) - The company is confident in its lower middle market deal focus and is on track to grow the investment portfolio to support shareholder distributions, as demonstrated by significant subsequent funding events[13](index=13&type=chunk) [Conference Call Information](index=3&type=section&id=Conference%20Call%20for%20Stockholders) The company will host a conference call for stockholders on Tuesday, August 5, 2025, at 8:30 a.m. Eastern Time to discuss the quarterly results, with details for participation via phone and online webcast, as well as for a replay, provided - The earnings conference call is scheduled for Tuesday, August 5, 2025, at **8:30 a.m. Eastern Time**[13](index=13&type=chunk) - To participate, call **(866) 424-3437**, and a replay will be available by dialing **(877) 660-6853** with conference number **13754182**[13](index=13&type=chunk) [About Gladstone Capital Corporation](index=3&type=section&id=About%20Gladstone%20Capital%20Corporation) Gladstone Capital Corporation is a publicly-traded business development company (BDC) whose primary investment strategy is to provide secured first and second lien term loans and equity securities to lower middle market businesses in the United States - Gladstone Capital is a business development company (BDC) that primarily invests in secured first and second lien term loans to lower middle market U.S. businesses[14](index=14&type=chunk) [Forward-looking Statements](index=3&type=section&id=Forward-looking%20Statements) This section contains a standard legal disclaimer, cautioning that statements in the press release regarding future growth and shareholder returns are forward-looking and subject to inherent risks and uncertainties, and the company does not commit to updating these statements unless required by law - The press release includes forward-looking statements concerning future growth and returns, which are subject to risks and uncertainties that could cause actual results to differ materially[17](index=17&type=chunk)

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents Gladstone Capital Corporation's unaudited consolidated financial statements, highlighting a **$21.25** NAV per share, **$43.2 million** net increase in net assets, and **$751.3 million** investment portfolio fair value [Consolidated Statements of Assets and Liabilities](index=4&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities) Gladstone Capital's total assets decreased to **$780.2 million** as of June 30, 2025, while total net assets increased to **$474.5 million**, with NAV per share rising to **$21.25** Consolidated Balance Sheet Highlights (in thousands, except per share data) | Metric | June 30, 2025 | September 30, 2024 | | :--- | :--- | :--- | | Total Investments, at fair value | $751,260 | $796,260 | | Total Assets | $780,198 | $812,468 | | Total Liabilities | $291,227 | $333,727 | | Total Net Assets | $474,454 | $470,895 | | **Net Asset Value Per Common Share** | **$21.25** | **$21.18** | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Total investment income for the three months ended June 30, 2025, was **$21.7 million**, with net investment income at **$11.3 million** and a **$43.2 million** net increase in net assets for the nine-month period Key Operating Results (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Investment Income | $21,657 | $25,689 | $65,186 | $72,907 | | Total Expenses, net of credits | $10,363 | $13,296 | $31,423 | $37,803 | | **Net Investment Income** | **$11,294** | **$12,393** | **$33,763** | **$35,104** | | Net Realized and Unrealized Gain (Loss) | ($3,605) | $6,751 | $10,060 | $27,681 | | **Net Increase in Net Assets** | **$7,448** | **$19,056** | **$43,220** | **$62,689** | | Net Investment Income Per Share | $0.50 | $0.57 | $1.50 | $1.61 | | Net Increase in Net Assets Per Share | $0.33 | $0.88 | $1.93 | $2.88 | [Consolidated Schedules of Investments](index=8&type=section&id=Consolidated%20Schedules%20of%20Investments) The investment portfolio's fair value was **$751.3 million** as of June 30, 2025, primarily comprising **70.4%** secured first lien debt, with Healthcare, Education, and Childcare as the largest industry concentration at **36.3%** Investment Portfolio Composition by Type (at Fair Value) | Security Type | June 30, 2025 (%) | September 30, 2024 (%) | | :--- | :--- | :--- | | Secured first lien debt | 70.4% | 69.7% | | Secured second lien debt | 19.2% | 14.3% | | Unsecured debt | 0.1% | 0.0% | | Preferred equity | 3.4% | 3.9% | | Common equity/equivalents | 6.9% | 12.1% | | **Total** | **100.0%** | **100.0%** | Top 5 Industry Concentrations (at Fair Value, June 30, 2025) | Industry Classification | Percentage of Total Investments | | :--- | :--- | | Healthcare, Education, and Childcare | 36.3% | | Diversified/Conglomerate Manufacturing | 23.2% | | Diversified/Conglomerate Service | 14.7% | | Beverage, Food, and Tobacco | 7.5% | | Automobile | 3.6% | - As of June 30, 2025, three portfolio company loans were on non-accrual status: B+T Group Acquisition, Inc., Edge Adhesives Holdings, Inc., and WB Xcel Holdings, LLC. These loans had a combined cost basis of **$28.8 million** (4.1% of total debt cost) and a fair value of **$11.5 million** (1.7% of total debt fair value)[66](index=66&type=chunk) [Notes to Consolidated Financial Statements](index=20&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Detailed notes cover accounting policies, BDC/RIC status, Level 3 investment valuation, related-party transactions, credit facilities, and **$1.89** per share distributions, with **$94.0 million** in subsequent investments - The company is externally managed by Gladstone Management Corporation (the "Adviser") and receives administrative services from Gladstone Administration, LLC (the "Administrator"), both of which are affiliates[49](index=49&type=chunk) - As of June 30, 2025, all investments were valued using **Level 3 inputs**, except for two fund investments valued at NAV as a practical expedient[56](index=56&type=chunk)[76](index=76&type=chunk) - For the nine months ended June 30, 2025, the company paid distributions of **$1.89 per common share**, including a supplemental distribution of **$0.40 per share** in December 2024[155](index=155&type=chunk) - Subsequent to quarter-end, in July and August 2025, the company made new and follow-on investments totaling approximately **$94.0 million** and had one investment pay off at par[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, portfolio activity, and liquidity, noting **$270.1 million** invested, a **$61.7 million** net realized gain, and **$320.0 million** credit facility availability [Results of Operations](index=53&type=section&id=Results%20of%20Operations) Net investment income decreased to **$11.3 million** for the quarter, while a **$61.7 million** net realized gain for the nine months was offset by **$51.8 million** in net unrealized depreciation Comparison of Operating Results (in thousands) | Metric | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total Investment Income | $65,186 | $72,907 | | Total Expenses, net of credits | $31,423 | $37,803 | | **Net Investment Income** | **$33,763** | **$35,104** | | Net Realized Gain on Investments | $61,718 | $1,895 | | Net Unrealized (Depreciation) Appreciation | ($51,840) | $21,936 | - The decrease in interest income for the nine months ended June 30, 2025 was driven by a lower weighted average yield on the investment portfolio (**12.8% vs 13.9% YoY**)[205](index=205&type=chunk) - The net realized gain of **$61.7 million** for the nine months ended June 30, 2025 was primarily driven by a **$59.3 million** gain on the sale of the investment in Antenna Research Associates, Inc.[214](index=214&type=chunk) - Net unrealized depreciation of **$51.8 million** for the nine months ended June 30, 2025 was primarily due to the reversal of previously recognized unrealized appreciation on the exited investment in Antenna Research Associates, Inc.[216](index=216&type=chunk) [Liquidity and Capital Resources](index=62&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is supported by a **$320.0 million** credit facility with **$277.7 million** availability, **$257.0 million** in notes payable, and **267.9%** asset coverage for senior debt Capital Resources as of June 30, 2025 (in millions) | Source | Amount | | :--- | :--- | | Credit Facility Commitment | $320.0 | | Credit Facility Outstanding | $27.5 | | Credit Facility Availability | $277.7 | | Notes Payable Outstanding | $257.0 | - As of June 30, 2025, the company was in compliance with all financial covenants, including a net worth of **$727.0 million** (vs. **$500.0 million** required) and asset coverage of **267.9%** on senior debt (vs. **150%** required)[240](index=240&type=chunk) - The company has an effective shelf registration statement permitting the issuance of up to **$700.0 million** in securities, with **$681.3 million** remaining available as of June 30, 2025[231](index=231&type=chunk) - Unfunded commitments to portfolio companies, including lines of credit and delayed draw term loans, totaled **$48.7 million** as of June 30, 2025[249](index=249&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=69&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Interest rate risk is the primary market exposure, with **90.1%** of the debt investment portfolio consisting of variable-rate loans indexed to SOFR - The company's primary market risk exposure is to interest rate fluctuations, as it borrows money to make investments[260](index=260&type=chunk) - As of June 30, 2025, **90.1%** of the debt portfolio consisted of variable-rate investments, while **9.9%** were fixed-rate[261](index=261&type=chunk) [Item 4. Controls and Procedures](index=69&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[262](index=262&type=chunk) - There were no changes in internal controls during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[263](index=263&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=70&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any material legal proceedings, nor is it aware of any pending or threatened actions - As of the filing date, the company is not a party to any material legal proceedings[264](index=264&type=chunk) [Item 1A. Risk Factors](index=70&type=section&id=Item%201A.%20Risk%20Factors) Supplements existing risk factors with a new disclosure on the potential adverse effects of tariffs on the company and its portfolio companies - A new risk factor was added regarding the potential negative impact of tariffs on the company and its portfolio companies' operations[265](index=265&type=chunk)[266](index=266&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=70&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or issuer purchases of equity securities occurred during the reporting period - There were no unregistered sales of equity securities or issuer repurchases during the reporting period[268](index=268&type=chunk)[269](index=269&type=chunk)

Group 1 - The stock has gained +117% over the last five years on the Nasdaq, indicating strong performance [1] - Mr. Mavroudis is a professional portfolio manager with expertise in risk management and financial market analysis [1] - The company, FAST FINANCE Investment Services, is registered with the Hellenic Capital Market Commission and offers a range of investment services [1] Group 2 - Mr. Mavroudis has successfully navigated major crises, including the COVID-19 pandemic [1] - He holds multiple advanced degrees and certifications, enhancing his credibility in the investment field [1] - The company aims to engage with a community of investors through platforms like Seeking Alpha, promoting knowledge sharing [1]

Group 1 - Gladstone Commercial Corporation (GLAD) has made a significant acquisition to expand its industrial portfolio, indicating a strategic focus on this sector [1] - The company is actively pursuing growth opportunities within the industrial real estate investment trust (REIT) space, which appears to be a sensible strategy [1] Group 2 - The investing group "Value In Corporate Events" provides insights on major corporate events such as IPOs, mergers & acquisitions, and earnings reports, aiming to identify the best investment opportunities [2] - The group covers approximately 10 major events each month, focusing on capitalizing on changes in corporate capital allocation [2]

Core Insights - The article emphasizes the importance of a hybrid investment strategy that combines classic dividend growth stocks with Business Development Companies, REITs, and Closed End Funds to enhance investment income while achieving total returns comparable to traditional index funds [1]. Investment Strategy - The investment approach focuses on high-quality dividend stocks and assets that provide long-term growth potential, which can significantly contribute to income generation [1]. - A balanced portfolio that includes both growth and income-generating assets can lead to efficient investment income while maintaining a total return aligned with the S&P [1].

Financial Data and Key Metrics Changes - Fundings totaled $46 million, with exits and repayments at $81 million, resulting in net originations of negative $35 million [6] - Interest income remained unchanged at $21.3 million, while the weighted average portfolio yield fell to 12.6% due to a decline in SOFR rates [7][12] - Net investment income was $11.2 million, with net realized gains of $7.7 million for the quarter [8][13] - Total assets decreased to $777 million, with net assets declining to $478 million [13][14] - NAV per share fell from $21.51 to $21.41, reflecting unrealized depreciation [14] Business Line Data and Key Metrics Changes - The portfolio turnover did not materially impact the investment mix, with senior debt representing 71% of the fair value of the portfolio [8] - Non-earning asset investments remained unchanged at four companies totaling $53.7 million at cost [9] Market Data and Key Metrics Changes - The company experienced a surge in portfolio liquidity events totaling $289 million, representing approximately 36% of the portfolio exited [10] - The current pipeline of expected fundings is healthy, with anticipated growth in the portfolio [10] Company Strategy and Development Direction - The company continues to focus on investing in growth-oriented lower middle market businesses with strong management [18] - The strategy includes supporting midsized private equity funds in buyouts and growth opportunities [18] - The company aims to increase leverage to reach $1 billion in total assets under management [57] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the portfolio's resilience despite market volatility and widening credit spreads [21][22] - The company is optimistic about the performance of its investments in sectors like precision manufacturing and lab testing, expecting improvements over the year [46][51] - Management noted that domestic-focused businesses are benefiting from changes in supply chains due to tariffs [25][26] Other Important Information - Monthly distributions for May and June will be $0.165 per common share, with an annual run rate of $1.98 per share [15] - The company maintains a conservative leverage position with debt at 62.5% of NAV [11] Q&A Session Summary Question: How do you see the portfolio and NAV performing with both broadly syndicated loan and private credit spreads widening in April? - Management indicated that they do not have syndicated loans and expect minimal degradation in value due to their portfolio's leverage profile and yield [21][22] Question: How do you see SeaLink and RPM freight performing as tariffs impact shipping volumes? - Management noted that domestically focused companies are adapting well to changes, with RPM's business actually up due to their responsiveness [25][26] Question: How much direct exposure is there to tariffs within the manufacturing segment? - Management highlighted that their investments in domestic manufacturing are performing well, with some companies expanding capacity despite facing tariff issues [28][30] Question: Is the EG's restructuring going to generate a realized loss? - Management anticipates a very small loss from the restructuring, with a significant equity investment going forward [34] Question: Can you provide an update on the pipeline and its size relative to three months ago? - Management reported a healthy backlog with 8 to 10 deals in advanced stages, potentially totaling $100 million to $150 million [39][40] Question: Do you have any exposure to government contracts given potential cuts? - Management stated they do not have significant exposure to government contracts, focusing instead on defense-oriented suppliers and healthcare [42][45] Question: Where do you see leverage going for the rest of the year? - Management aims to increase leverage towards 90% to 100% over the next few quarters, working to reach $1 billion in total assets [57][58]

Financial Data and Key Metrics Changes - Fundings totaled $46 million, with exits and repayments at $81 million, resulting in net originations of negative $35 million [6] - Interest income remained unchanged at $21.3 million, while the weighted average portfolio yield fell to 12.6% due to a decline in SOFR rates [7][12] - Net investment income was $11.2 million, with net realized gains of $7.7 million for the quarter [8][13] - Total assets decreased to $777 million, with net assets declining to $478 million [13][14] - NAV per share fell from $21.51 to $21.41, reflecting unrealized depreciation [14] Business Line Data and Key Metrics Changes - The portfolio turnover did not materially impact the investment mix, with senior debt representing 71% of the fair value of the portfolio [8] - Non-earning asset investments remained unchanged at four companies totaling $53.7 million at cost [9] Market Data and Key Metrics Changes - The company experienced a healthy pipeline of expected fundings, with a total of $289 million in portfolio liquidity events since September [10] - The current pipeline includes 8 to 10 deals in advanced stages, potentially totaling $100 million to $150 million [39] Company Strategy and Development Direction - The company continues to focus on investing in growth-oriented lower middle market businesses with strong management [18] - The strategy includes supporting midsized private equity funds in buyouts and growth opportunities [18] - The company aims to increase leverage towards $1 billion in total assets under management while maintaining yield and leverage discipline [58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the portfolio's resilience despite market volatility and widening credit spreads [22] - The company is optimistic about the performance of its investments in sectors like precision manufacturing and lab testing, expecting improvements over the year [46][51] - Management noted that domestic-focused businesses are benefiting from supply chain shifts due to tariffs [26][30] Other Important Information - Monthly distributions for May and June are set at $0.165 per common share, with an annual run rate of $1.98 per share, yielding approximately 7.8% [15] - The company has absorbed much of the anticipated surge in portfolio liquidity events, indicating a strong position for future growth [10] Q&A Session Summary Question: How do you see the portfolio and NAV performing with both broadly syndicated loan and private credit spreads widening in April? - Management indicated that they do not have syndicated loans and expect minimal degradation in value due to their portfolio's leverage profile and yield [21][22] Question: How do you see SeaLink and RPM freight performing as tariffs impact shipping volumes? - Management noted that domestically focused companies are adapting well to changes, with RPM's business actually up due to their responsiveness [25][26] Question: Is the EG's restructuring going to generate a realized loss for you? - Management anticipates a very small loss from the restructuring, with a significant equity investment going forward [34] Question: Can you provide an update on the pipeline and its size relative to three months ago? - Management reported a healthy backlog with 8 to 10 deals in advanced stages, potentially totaling $100 million to $150 million [39] Question: Do you have any exposure to government contracts given potential cuts? - Management stated they do not have significant exposure to government contracts, focusing instead on defense-oriented suppliers and healthcare [43][45] Question: Where do you see leverage going for the rest of the year? - Management aims to increase leverage towards 90% to 100% over the next few quarters, working to achieve $1 billion in total assets under management [58]