PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited consolidated financial statements for Q2 and H1 2025, detailing assets, operations, cash flows, and investment schedules [Consolidated Statements of Assets and Liabilities](index=3&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities) Total assets increased to **$224.1 million** by June 30, 2025, while net assets slightly decreased to **$76.0 million**, with NAV per share at **$5.27** Consolidated Balance Sheet Highlights (in millions) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Total Investments, at fair value | $204.1 | $191.6 | | Total Assets | $224.1 | $206.9 | | Debt, net | $134.4 | $122.0 | | Total Liabilities | $148.1 | $129.2 | | Total Net Assets | $76.0 | $77.6 | | **Net Asset Value Per Share** | **$5.27** | **$5.39** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 saw a net decrease in net assets of **$0.4 million**, an improvement from Q2 2024, driven by a **$2.2 million** net realized gain Key Operating Results (Unaudited) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Investment Income | $4,545,199 | $5,119,319 | $8,913,963 | $11,737,408 | | Net Investment Income After Taxes | $604,148 | $1,309,102 | $1,207,674 | $3,387,464 | | Net Realized Gain (Loss) | $2,208,625 | $(1,828,530) | $581,343 | $(8,100,498) | | Net Change in Unrealized (Depreciation) | $(3,247,071) | $(1,432,718) | $(17,023) | $5,172,628 | | **Net Increase (Decrease) in Net Assets** | **$(434,298)** | **$(1,952,146)** | **$1,771,994** | **$459,594** | | **Earnings Per Share (Basic & Diluted)** | **$(0.03)** | **$(0.14)** | **$0.12** | **$0.03** | [Consolidated Statements of Changes in Net Assets](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets) Net assets decreased by **$1.6 million** to **$76.0 million** for H1 2025, primarily due to stockholder distributions outweighing operational increases Reconciliation of Net Assets (Six Months Ended June 30) | Description | 2025 | 2024 | | :--- | :--- | :--- | | Net Assets at Beginning of Period | $77,602,130 | $78,840,983 | | Net Increase from Operations | $1,771,994 | $459,594 | | Net Decrease from Distributions | $(3,460,353) | $(4,319,679) | | Net Increase from Capital Transactions | $70,453 | $29,311 | | **Net Assets at End of Period** | **$75,984,224** | **$75,010,209** | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash increased by **$5.2 million** in H1 2025, driven by financing activities, reversing the prior year's decrease from debt repayments Cash Flow Summary (Six Months Ended June 30) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash (Used in) Provided by Operating Activities | $(1,641,178) | $24,904,835 | | Net Cash Provided by (Used in) Financing Activities | $6,881,351 | $(34,460,393) | | **Net Change in Cash** | **$5,240,173** | **$(9,555,558)** | | Cash and Restricted Cash at End of Period | $17,344,720 | $5,108,804 | [Consolidated Schedule of Investments](index=7&type=section&id=Consolidated%20Schedule%20of%20Investments) The investment portfolio reached **$204.1 million** by June 30, 2025, primarily in Senior Secured First Lien Debt, with diversified industry concentrations Portfolio Composition by Investment Type (at Fair Value) | Investment Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Senior Secured First Lien Debt | $161,727,463 (79.2%) | $155,530,390 (81.2%) | | Equity, Warrants and Other | $42,403,216 (20.8%) | $36,086,568 (18.8%) | | **Total Investments** | **$204,130,679** | **$191,616,958** | - The portfolio is diversified across various industries, with the top three being Professional Services, Insurance, and Containers & Packaging, collectively making up **32.55%** of the total portfolio at fair value as of June 30, 2025[111](index=111&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=17&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Detailed notes cover accounting policies, investment valuation, debt facilities, related-party transactions, and subsequent events like new dividends and share repurchases - The majority of the investment portfolio, **$176.3 million** out of **$204.1 million**, is classified as Level 3 in the fair value hierarchy, indicating their valuation is based on significant unobservable inputs[117](index=117&type=chunk) Outstanding Borrowings as of June 30, 2025 | Facility | Principal Amount | Maturity Date | | :--- | :--- | :--- | | Capital One Revolving Financing | $70.5 million | Jan 17, 2029 | | 4.875% Notes due 2026 | $65.0 million | Apr 1, 2026 | - Subsequent to quarter-end, on August 7, 2025, the Board declared a quarterly distribution of **$0.12 per share** plus a supplemental distribution of **$0.02 per share**; a new **$5 million** share repurchase program was also authorized for one year[178](index=178&type=chunk)[179](index=179&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, operating results, portfolio composition, investment activity, asset quality, liquidity, and capital resources [Portfolio and Investment Activity](index=53&type=section&id=Portfolio%20and%20Investment%20Activity) The **$204.1 million** investment portfolio, primarily first lien, maintained strong asset quality with **85.5%** rated performing at or above expectations - During the six months ended June 30, 2025, the company invested approximately **$24.1 million** in two new and six existing portfolio companies[224](index=224&type=chunk) Portfolio Asset Quality by Fair Value | Investment Rating | % of Portfolio (June 30, 2025) | % of Portfolio (Dec 31, 2024) | | :--- | :--- | :--- | | 1 - Above Expectations | 5.7% | 7.1% | | 2 - At Expectations | 79.8% | 74.6% | | 3 - Below Expectations | 10.4% | 14.6% | | 4 - Substantially Below (Return Loss) | 3.4% | 0.0% | | 5 - Substantially Below (Principal Loss) | 0.7% | 3.7% | [Results of Operations](index=56&type=section&id=Results%20of%20Operations) Total investment income decreased in Q2 and H1 2025 due to lower interest rates, but a significant net realized gain offset some declines - The decrease in investment income for Q2 and H1 2025 compared to 2024 was primarily driven by lower index and interest rates and reduced PIK interest from certain investments following restructurings[230](index=230&type=chunk)[236](index=236&type=chunk) - A net realized gain of **$2.2 million** in Q2 2025, mainly from the sale of an equity interest, contrasted sharply with a **$1.8 million** net realized loss in Q2 2024, which was related to a restructuring[233](index=233&type=chunk) [Liquidity and Capital Resources](index=59&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$2.9 million** cash, **$14.4 million** restricted cash, and **$29.5 million** available on its credit facility - The company's asset coverage ratio was **156.1%** as of June 30, 2025, providing a cushion over the **150%** regulatory requirement for BDCs[246](index=246&type=chunk)[248](index=248&type=chunk) - As of June 30, 2025, the company had unfunded commitments to portfolio companies totaling **$5.6 million**, an increase from **$4.6 million** at year-end 2024[227](index=227&type=chunk)[256](index=256&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=62&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to interest rate risk, with a favorable asset-liability structure benefiting from rising rates - The company is positioned to benefit from rising interest rates due to its asset-liability structure, with a higher proportion of floating-rate assets than floating-rate liabilities[261](index=261&type=chunk)[262](index=262&type=chunk) Interest Rate Sensitivity Analysis (as of June 30, 2025) | Change in Interest Rates | Estimated Impact on Net Interest Income | | :--- | :--- | | +1.00% | +8.91% | | +2.00% | +17.82% | [Item 4. Controls and Procedures](index=64&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[267](index=267&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[268](index=268&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=65&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any material legal proceedings beyond routine litigation incidental to its business - The company is not involved in any material legal proceedings[270](index=270&type=chunk) [Item 1A. Risk Factors](index=65&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the previously disclosed risk factors were reported for the six months ended June 30, 2025 - No material changes to risk factors were reported for the six months ended June 30, 2025[272](index=272&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=65&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, the company issued **17,169 shares** for **$47,738** under its dividend reinvestment plan, exempt from registration - In Q2 2025, **17,169 shares** were issued via the dividend reinvestment plan for proceeds of **$47,738**[273](index=273&type=chunk) [Item 5. Other Information](index=65&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated any Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements during the quarter - No directors or officers adopted or terminated Rule 10b5-1 trading plans during the quarter[277](index=277&type=chunk) [Item 6. Exhibits](index=66&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications and interactive data files

Financial Performance - Total assets as of March 31, 2025, were $207.6 million, with a net asset value per share of $5.42, reflecting an increase of $0.03 from the previous quarter[3][4][15] - Net investment income before taxes for the quarter was $0.7 million, or $0.05 per share, a decrease from $2.19 million in the same quarter last year[10][17] - The net increase in net assets from operations for the quarter was $2.2 million, or $0.15 per share, compared to $2.41 million in the same quarter last year[10][17] - The company declared a distribution of $0.12 per share for the quarter, representing a yield of 14.95% based on a share price of $3.21 as of March 31, 2025[4][7] Investment Activities - The company made investments totaling $5.1 million in one new portfolio company and two existing portfolio companies during the quarter, achieving a weighted average yield of 10.22% on these debt investments[4][8] - Total proceeds from repayments, sales, and amortization during the quarter amounted to $7.3 million, primarily from the realization of specific term loans[9] - The internal rate of return on fully realized investments during the quarter was 9.55%, with total net realized and unrealized gains contributing to a net increase in net assets[4][10] - Subsequent to March 31, 2025, the company invested an additional $2.0 million in two existing portfolio companies[13] Portfolio Composition - As of March 31, 2025, the investment portfolio consisted of 43 portfolio companies, with 77.04% in first lien investments and 98.18% of the debt portfolio in floating rate investments[11][15] - The company targets middle-market companies with annual revenues of at least $50 million and EBITDA of at least $15 million[18] Regulatory and Forward-Looking Statements - The company is regulated as a business development company under the Investment Company Act of 1940[18] - Forward-looking statements made during the earnings call are based on current expectations and involve substantial risks and uncertainties[19] - Investors are cautioned against placing undue reliance on forward-looking statements due to potential market volatility and other factors[20] - Actual results may differ materially from anticipated results due to various risks and uncertainties[20] - The company has no obligation to publicly update or revise forward-looking statements except as required by law[20] Cash and Liquidity - The company had $13.0 million in cash, with $10.7 million classified as restricted cash, and $44.0 million of unused capacity under its revolving credit facility[12]

Company Overview - Investcorp Credit Management BDC, Inc (ICMB) was formed as CM Finance LLC in 2012 and had its IPO in February 2014[12] - As of March 31, 2025, ICMB's market capitalization was $46.3 million[12] - The investment portfolio's fair value was $192.4 million[12] Portfolio Composition - As of March 31, 2025, 77.04% of the portfolio was in Senior Secured First Lien Debt[18] - 22.96% of the portfolio was in Equity / Warrants / Other[18] - The largest regional exposure is in the Northeast, accounting for 29.16% of the portfolio[18] Financial Performance - Total assets were $207.6 million as of March 31, 2025[21] - Net assets were $78.1 million as of March 31, 2025[21] - Net asset value increased by $0.03 per share to $5.42 as of March 31, 2025[23] Investment Activity - ICMB made investments totaling $5.13 million in one new and two existing portfolio companies during the quarter ended March 31, 2025[23] - ICMB fully realized investments in three portfolio companies during the quarter, totaling $5.7 million in proceeds[23] - The weighted average yield on debt investments, at fair value, for the quarter ended March 31, 2025, was 10.78%[23]

Financial Data and Key Metrics Changes - For the quarter ending March 31, 2025, the company reported net investment income before taxes of $700,000 or $0.05 per share, down from $0.06 per share in the prior quarter [4] - The net asset value per share increased by $0.02 to $5.42 compared to $5.39 as of September 30, 2024 [4] - The fair value of the portfolio was $192.4 million, an increase from $191.6 million on December 31 [14] - Net assets increased by $500,000 from the prior quarter to $78.1 million [14] - The weighted average yield of the debt portfolio increased to 10.8% from 10.4% in the previous quarter [14] Business Line Data and Key Metrics Changes - The company invested in one new portfolio company and two existing portfolio companies during the quarter, with total fundings for new investments amounting to $5.1 million [9] - The weighted average yield of debt investments made in the quarter was approximately 10.2% [9] - The five largest industry concentrations by fair market value were professional services (15.5%), containers and packaging (9.2%), trading companies and distributors (8.6%), commercial services and suppliers (8%), and IT services (7.9%) [12] Market Data and Key Metrics Changes - There was a noticeable slowdown in new deal activity, attributed to a decline in M&A volume and sponsor-less financing [6] - The company estimates that less than 20% of its portfolio may experience moderate direct effects from tariffs [7] Company Strategy and Development Direction - The company is focused on maintaining NAV stability and sustainable net investment income while selectively deploying capital in high-quality opportunities [18] - The management is optimistic about the second half of the year providing interesting investment opportunities due to current market volatility [18] Management's Comments on Operating Environment and Future Outlook - Management noted that the portfolio remains stable, with a significant reduction in non-accruals, now representing approximately 1.7% of the total portfolio at fair value [5] - There is cautious optimism that market fundamentals will improve, leading to a rebound in activity as macro uncertainty decreases [6] - Management indicated that they are currently in the process of raising another pool of capital, expected to benefit the company in the second half of 2025 [27] Other Important Information - The company declared a distribution of $0.12 per share payable in cash on June 14, 2025, to stockholders of record as of May 24, 2025 [16] - Gross leverage was 1.53x and net leverage was 1.37x as of March 31, compared to 1.57x and 1.42x in the previous quarter [17] Q&A Session Summary Question: How can the adviser scale or provide benefits to the BDC? - Management indicated that waiving fees is always a consideration and that they are working on scaling the private credit platform, which will help absorb overhead and expenses [21][23] Question: What is the timeline for capital raising? - Management confirmed that they are currently in the process of raising capital, which is expected to benefit shareholders in the second half of 2025 [27] Question: Why not consider share repurchases given the current stock price? - Management acknowledged that share repurchases are a tool they consider but have no immediate plans to implement [32] Question: Should there be an increase in net investment income in the second quarter? - Management suggested that there could be an increase in net investment income due to spread widening in new opportunities [34][35]

Financial Data and Key Metrics Changes - For the quarter ending March 31, 2025, the company reported net investment income before taxes of $700,000 or $0.05 per share, down from $0.06 per share in the prior quarter [4] - The net asset value per share increased by $0.02 to $5.42 compared to $5.39 as of September 30, 2024 [5] - The fair value of the portfolio was $192.4 million, up from $191.6 million on December 31 [14] - Net assets increased by $500,000 from the prior quarter to $78.1 million [14] - The weighted average yield of the debt portfolio increased to 10.8% from 10.4% in the previous quarter [14] Business Line Data and Key Metrics Changes - The company invested in one new portfolio company and two existing portfolio companies during the quarter, with total fundings for new investments amounting to $5.1 million [10] - Realized investments totaled $7.3 million with an internal rate of return (IRR) of approximately 9.6% [10] - The largest industry concentrations by fair market value included professional services at 15.5%, containers and packaging at 9.2%, and trading companies and distributors at 8.6% [13] Market Data and Key Metrics Changes - The company noted a noticeable slowdown in new deal activity, particularly in M&A volume and sponsor-less financing [6] - Less than 20% of the portfolio may experience moderate direct effects from tariffs, with proactive measures being implemented to mitigate impacts [8] Company Strategy and Development Direction - The company remains focused on maintaining net asset value stability and sustainable net investment income while selectively deploying capital in high-quality opportunities [17] - The management expressed cautious optimism about potential investment opportunities in the second half of 2025 as market volatility decreases [17] Management's Comments on Operating Environment and Future Outlook - Management highlighted that the portfolio remains stable despite reduced investment activity and prepayment trends, with a significant reduction in non-accrual investments [5][6] - The company expects more stabilized profiles for the remainder of 2025, notwithstanding any macroeconomic shocks [6] - Management is optimistic about the potential for increased net investment income in the second quarter due to spread widening in new opportunities [32] Other Important Information - The Board of Directors declared a distribution of $0.12 per share payable in cash on June 14, 2025 [16] - As of March 31, the company had approximately $13 million in cash, with $10.7 million being restricted cash [16] Q&A Session Summary Question: How can the adviser scale or provide benefits to the BDC? - Management indicated that waiving fees is always a consideration and that scaling the private credit platform is an ongoing effort that will help absorb overhead and expenses [20][22] Question: What is the timeline for capital raising? - Management confirmed that they are currently in the process of raising another pool of capital, expected to benefit shareholders in the second half of 2025 [26][27] Question: Why not consider share repurchases given the current stock price? - Management acknowledged that share repurchases are a tool they consider but have no immediate plans in place [30] Question: Should there be an increase in net investment income in the second quarter? - Management suggested that there could be an increase in net investment income due to spread widening, holding other factors constant [32]

Investment Objectives and Portfolio - Investcorp Credit Management BDC, Inc. has a primary investment objective to maximize total return to stockholders through investments in debt and equity of privately held middle-market companies [182]. - As of March 31, 2025, the investment portfolio was valued at $192.4 million, representing 92.7% of total assets, compared to 92.6% as of December 31, 2024 [200]. - The investment portfolio consisted of 43 portfolio companies, with 77.04% in first lien investments and 22.96% in equities, warrants, and other positions [216]. - The average investment per portfolio company was $4.5 million, while the largest investment was $13.6 million as of March 31, 2025 [216]. - The primary revenue source is interest on debt investments, supplemented by royalty income, dividends, and capital gains [213]. - The investment portfolio's industry composition showed an increase in Professional Services to 15.47% from 14.37% and a decrease in Containers & Packaging to 9.15% from 10.52% [220]. - During the three months ended March 31, 2025, the company made investments totaling approximately $5.1 million, with 86.71% in first lien investments [220]. - The company invested a total of $2.0 million in two existing portfolio companies between March 31, 2025, and May 13, 2025 [246]. Financial Performance - Investment income for the three months ended March 31, 2025, decreased to $4.4 million from $6.6 million for the same period in 2024 [226]. - Expenses decreased to $3.7 million for the three months ended March 31, 2025, compared to $4.4 million for the same period in 2024 [227]. - Net investment income before taxes decreased to $0.7 million for the three months ended March 31, 2025, from $2.2 million for the same period in 2024 [228]. - The company recorded a net realized loss on investments of $1.6 million for the three months ended March 31, 2025 [229]. - As of March 31, 2025, the average total yield of debt and income-producing securities was 11.02%, up from 10.60% as of December 31, 2024 [219]. Debt and Financing - As of March 31, 2025, there were $56.0 million in borrowings outstanding under the Capital One Revolving Financing, down from $58.5 million as of December 31, 2024 [204]. - The Capital One Revolving Financing was amended to decrease the applicable interest spread from SOFR plus 3.10% to SOFR plus 2.50% [204]. - The company closed a public offering of $65.0 million in aggregate principal amount of 4.875% notes due 2026, with net proceeds of approximately $63.1 million after expenses [205]. - The 2026 Notes will mature on April 1, 2026, and bear interest at a rate of 4.875% [206]. - As of March 31, 2025, the company's floating rate borrowings totaled $56.0 million, representing 46.3% of its outstanding debt [250]. - A 1.00% increase in interest rates would increase the company's net interest income by approximately 5.30%, while a 2.00% increase would increase it by approximately 15.82% [251]. - The company had no hedging transactions in place as of March 31, 2025, as it deemed the interest rate risk acceptable [253]. Regulatory and Compliance - The Company has no Taxable Subsidiaries as of March 31, 2025, and December 31, 2024 [188]. - The company did not hold any non-qualifying assets in its portfolio as of March 31, 2025, complying with regulatory requirements [211]. - The Adviser has been granted exemptive relief by the SEC to co-invest in certain private placement transactions, subject to conditions [190]. - The company intends to distribute between 90% and 100% of its annual taxable income to stockholders, which includes taxable interest and fee income [241]. - As of March 31, 2025, the company had off-balance sheet arrangements consisting of $5.7 million in unfunded commitments to five portfolio companies, up from $4.6 million to six companies as of December 31, 2024 [245]. Market Conditions and Risks - The current inflationary environment and potential global recession may impact the portfolio companies, necessitating adjustments to operational plans [191]. - The company is subject to financial market risks, including changes in interest rates, which could materially affect its net investment income [248]. - As of March 31, 2025, 98.2% of debt investments bore interest based on floating rates, an increase from 96.4% as of December 31, 2024 [222]. - The asset coverage ratio based on par value was 164.5% as of March 31, 2025 [235]. Ownership and Management Changes - The Company has undergone significant ownership changes, with Investcorp acquiring approximately 83% of the Adviser as of August 31, 2023 [183]. - The Company’s fiscal year end was changed from June 30 to December 31, effective September 18, 2024 [181]. - The board of directors declared a distribution of $0.12 per share for the quarter ended June 30, 2025, payable on June 14, 2025 [247].

Financial Performance - Net investment income for the quarter was $0.8 million, resulting in a net investment income per share of $0.06[3][10] - The net decrease in net assets from operations was $0.6 million, or $0.04 per share, reflecting a decrease of 2.86% in net assets during the quarter[5][10] - Total investment income for the six months ended December 31, 2024, was $11,622,757, a decrease of 51.3% compared to $23,878,302 for the same period in 2023[16] - Net investment income after taxes for the six months ended December 31, 2024, was $3,146,239, down 66.7% from $9,428,066 in the same period of 2023[16] - Total expenses for the six months ended December 31, 2024, were $8,293,178, a slight increase from $17,349,068 in the same period of 2023[16] - The company reported a net increase in net assets resulting from operations of $6,042,089 for the six months ended December 31, 2024, compared to a net decrease of $4,092,470 in the same period of 2023[16] - Earnings per share for the six months ended December 31, 2024, was $0.42, compared to a loss of $0.28 in the same period of 2023[16] Investments - The company made investments totaling $9.9 million during the quarter, with a weighted average yield of 11.81% on new debt investments[5][9] - As of December 31, 2024, the investment portfolio consisted of 43 companies, with 81.17% in first lien investments[11] - The internal rate of return on fully realized investments during the quarter was 17.20%, with total proceeds of $7.6 million[5][9] - The weighted average yield on debt investments at fair value decreased to 10.36% from 10.51% in the previous quarter[5] Company Assets and Liabilities - Total assets as of December 31, 2024, were $206.9 million, with a net asset value per share of $5.39[3][15] - The company had $12.1 million in cash, of which $11.3 million was restricted cash, and $41.5 million of unused capacity under its revolving credit facility[12] Corporate Governance - The company appointed Andrew Muns as the new Chief Operating Officer, effective March 24, 2025[4][14] Shareholder Returns - The company declared a distribution of $0.12 per share for the quarter ending March 31, 2025, representing a yield of 15.84% based on a share price of $3.03[5][8] - The weighted average shares of common stock outstanding increased slightly to 14,404,510 from 14,396,201 in the previous year[16] - The company aims to maximize total return to stockholders through debt and related equity investments in middle-market companies with annual revenues of at least $50 million[17] Forward-Looking Statements - Forward-looking statements indicate that actual results may differ materially from anticipated results due to various risks and uncertainties[18] - The company has no obligation to publicly update or revise any forward-looking statements unless required by law[19] Investor Relations - Investor relations contact information includes an email address and phone number for inquiries[20]

Financial Data and Key Metrics Changes - For the quarter ending December 31, 2024, the company reported net investment income of $0.8 million or $0.06 per share, down from $0.16 per share in the prior quarter [4] - The net asset value per share decreased by $0.16 to $5.39 compared to $5.55 as of September 30, 2024 [4] - The fair value of the portfolio was $191.6 million, an increase from $190.1 million at September 30 [17] - Net assets declined by $2.3 million from the prior quarter to $77.6 million [17] - The weighted average yield of the debt portfolio decreased slightly from 10.5% to 10.4% [17] Business Line Data and Key Metrics Changes - The median EBITDA of the portfolio remained flat at approximately $61.76 million, while the weighted average net leverage increased from 4.8 times to 5 times [9] - The percentage of covenant appeals increased from 70% to 77% [9] - The weighted average yield of debt investments made in the quarter was approximately 11.8% [11] Market Data and Key Metrics Changes - Approximately 30% of the portfolio may experience moderate effects from tariffs, with strategies in place to mitigate these risks [7] - The company is strategically targeting investments in critical sectors and defensive industries, including a recent investment in the data center sector [8] Company Strategy and Development Direction - The company remains focused on capital preservation and NAV stability, with a disciplined investment approach [22] - The management is adapting to market volatility and heightened competition among lenders, with a focus on quality assets [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating economic uncertainties and delivering value to shareholders [6] - The potential impact of tariffs on the portfolio and M&A market is being closely monitored [36] Other Important Information - The company appointed Andrew Muns as Chief Operating Officer, enhancing the executive team [3] - The company declared a distribution of $0.12 per share for the quarter ending March 31, 2025, payable in cash [19] Q&A Session Summary Question: What was the cause for the drop in PIK income quarter-over-quarter? - The drop in PIK income was due to a reversal of non-accrual for one portfolio company in the previous quarter, which inflated PIK income [25] Question: What are the comments on the sustainability of the dividend given lower yields and higher leverage? - The company is constantly evaluating the sustainability of the dividend and will monitor the portfolio's performance [26][27] Question: Is the company changing to a calendar fiscal year? - Yes, the company has changed its fiscal year from June to December [28][30] Question: What is the trend for investment yield over the next quarter or two? - The investment yield is expected to remain similar, around 10.5% plus or minus, unless there is a significant economic shock [34][36]

Financial Data and Key Metrics Changes - For the quarter ending December 31, 2024, the company reported net investment income of $0.8 million or $0.06 per share, down from $0.16 per share in the prior quarter [4] - The net asset value per share decreased by $0.16 to $5.39 compared to $5.55 as of September 30, 2024 [4] - The fair value of the portfolio was $191.6 million compared to $190.1 million at September 30 [17] - Net assets were $77.6 million, a decline of $2.3 million from the prior quarter [17] - The weighted average yield of the debt portfolio decreased slightly from 10.5% to 10.4% [17] Business Line Data and Key Metrics Changes - The median EBITDA of the portfolio remained flat at approximately $61.76 million, while the weighted average net leverage increased from 4.8 times to 5 times [9] - The percentage of covenant appeals increased from 70% to 77% [9] - The weighted average yield of debt investments made in the quarter was approximately 11.8% [11] Market Data and Key Metrics Changes - Approximately 30% of the portfolio may experience moderate effects from tariffs, with strategies in place to mitigate these risks [7] - The company is strategically targeting investments in critical sectors and defensive industries, including a recent investment in the data center sector [8] Company Strategy and Development Direction - The company remains focused on capital preservation and NAV stability, with a disciplined investment approach [22] - The management is adapting to economic uncertainties and believes the portfolio is well-positioned for the shifting economic environment [6][7] Management's Comments on Operating Environment and Future Outlook - Management noted that heightened market volatility has created a tightening spread environment, impacting investment yields [5] - There is optimism for a resurgence in M&A activity post-election, although risks from tariff wars and fiscal policy changes create uncertainty [5][6] - The company does not foresee significant changes in investment yields in the near term, expecting them to remain around 10.5% [34] Other Important Information - The company appointed Andrew Muns as Chief Operating Officer, enhancing the executive team [3] - The company has approximately $12.1 million in cash, with $11.3 million being restricted cash [20] - A distribution of $0.12 per share was declared for the quarter ending March 31, 2025, payable in cash [19] Q&A Session Summary Question: What was the cause for the drop in PIK income quarter-over-quarter? - The drop was due to a reversal of non-accrual for one portfolio company in the previous quarter, which inflated PIK income [25] Question: What are the comments on the sustainability of the dividend given lower yields and higher leverage? - The company is constantly evaluating the dividend sustainability and will monitor the portfolio's performance [26][27] Question: Is the company changing to a calendar fiscal year? - Yes, the company has changed its fiscal year from June to December [28][30] Question: Where does the company see the trend for investment yield over the next quarter or two? - The investment yield is expected to remain stable around 10.5%, barring any economic shocks [34][36]

Financial Performance - The Company reported net investment income of $2.3 million, or $0.16 per share, for the quarter[3]. - Total investment income for the three months ended September 30, 2024, was $6,846,775, an increase from $5,897,706 in the same period last year, representing a growth of approximately 16.1%[13]. - Net investment income for the quarter was $2,325,943, compared to $1,627,667 in the prior year, reflecting an increase of about 42.8%[13]. - The net increase in net assets resulting from operations was $6,606,629, a significant recovery from a net decrease of $1,684,362 in the previous year[13]. - Basic and diluted earnings per share for the quarter were $0.46, compared to a loss of $(0.12) per share in the same quarter last year[13]. - Total expenses for the quarter were $4,590,410, up from $4,356,669 in the prior year, marking an increase of approximately 5.4%[13]. Investment Activity - Total investments made during the quarter amounted to $13.1 million, with a weighted average yield of 10.73%[2][7]. - The Company realized investments totaling $13.4 million during the quarter, achieving an internal rate of return of 11.75%[2]. - The company reported a net realized loss from investments of $(4,056,505) for the quarter, while the net change in unrealized appreciation was $8,337,191, indicating a strong recovery in investment values[13]. - Interest income from non-controlled, non-affiliated investments was $4,674,329, down from $5,465,288, a decrease of about 14.4%[13]. Asset Management - Net asset value increased by $0.34 per share to $5.55, reflecting a 6.50% increase in net assets, totaling $4.9 million[2]. - Total assets as of September 30, 2024, were $203.0 million, with net assets of $79.89 million[3][12]. - Cash resources included $10.1 million, with $8.3 million classified as restricted cash[11]. - The weighted average yield on debt investments at cost for the quarter was 10.51%, down from 12.33% in the previous quarter[2]. - The Company had net repayments of $7,500 on existing credit commitments during the quarter[2][8]. - As of September 30, 2024, the investment portfolio consisted of 45 portfolio companies, with 82.47% in first lien investments[10]. Shareholder Returns - The Company declared a distribution of $0.12 per share for the quarter ending December 31, 2024, with a yield of 15.34% based on a share price of $3.13 as of September 30, 2024[2][6]. - The weighted average shares of common stock outstanding increased slightly to 14,403,752 from 14,392,714 year-over-year[13]. Strategic Outlook - The company has a strategy focused on investing in middle-market companies with annual revenues of at least $50 million and EBITDA of at least $15 million[14]. - Forward-looking statements indicate that the company anticipates potential market volatility and interest rate changes may impact future performance[15].