Financial Data and Key Metrics Changes - Total investment income for Q4 2020 was $5.7 million, down from $9.6 million in Q4 2019, primarily due to a decrease in debt investments outstanding [12] - Total expenses decreased to $5.7 million in Q4 2020 from $7.7 million in Q4 2019, with interest and financing expenses declining by $1.4 million [13] - Net realized gains were $0.6 million or $0.23 per share in Q4 2020, compared to $1.2 million in Q4 2019 [14] - Net assets at December 31, 2020, totaled $108.9 million or $40.19 per share, up from $39.99 per share at September 30, 2020 [15] - The company's total debt-to-equity ratio improved to 1.98:1 at December 31, 2020, from 2.72:1 at March 31, 2020 [16] Business Line Data and Key Metrics Changes - The investment portfolio included 36 investments with a fair value of $274.7 million and a cost basis of $277.7 million at year-end 2020 [17] - First lien debt investments comprised 60.9% of the portfolio, second lien debt investments represented 14.3%, and equity warrant investments accounted for 24.8% [17] - Four debt investments were on nonaccrual status with a cost basis of $37.5 million and a fair market value of $20.8 million [18] Market Data and Key Metrics Changes - The company generated $51 million of liquidity through repayments and the wind down of Capitala Senior Loan Fund II, LLC during Q2 2020 [7] - The company is currently sitting on over $50 million in cash and has an undrawn senior secured credit facility [9] Company Strategy and Development Direction - The company is focused on portfolio liquidity, reducing leverage, and supporting small businesses impacted by the pandemic to stabilize NAV [6] - There is a plan to monetize several larger investments over the next few quarters, particularly equity positions [22] - The company aims to obtain a subsequent SBIC license to leverage low-cost, long-term capital for growth [25] Management's Comments on Operating Environment and Future Outlook - Management noted that the pandemic negatively impacted the portfolio, but there has been stabilization and appreciation in NAV since March 2020 [6] - The management expressed optimism about the performance of portfolio companies, with many seeking exit opportunities [32] - The market for small businesses is described as robust, with significant deployment activity in private funds [34] Other Important Information - The company has a green light from the SBA for the submission of an additional SBIC license to replace the existing license [10] - The company repaid $20 million of SBA guaranteed debentures after year-end, with a portion maturing in March 2021 [16] Q&A Session Summary Question: How much of the monetization of investments will be from equity investments? - Management indicated that several larger investments are being engaged for sale or refinancing, expecting to monetize a substantial portion of equity in 2021 [22] Question: Is the priority to pay down SBA debt or redeeming the 2022 notes? - Management stated that all debt repayment is a priority, with a focus on repaying SBA debt to facilitate obtaining a subsequent SBIC license [23][24] Question: Is monetizing the investment portfolio more of a priority than reinstating the dividend? - Management emphasized that dividends are important, but the focus is on addressing debt maturities and reestablishing the SBIC license to grow earnings [25]

TABLE OF CONTENTS UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended December 31, 2020 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number Exact name of registrant as specified in its charter, address of principal executive office, telephone number and state or other jurisdiction of incorporation or organ ...

Capitala Finance Corp. (CPTA) Q3 2020 Earnings Conference Call November 4, 2020 8:30 AM ET Company Participants Joe Alala - Chairman & Chief Executive Officer Steve Arnall - Chief Financial Officer & Chief Operating Officer Conference Call Participants Christopher Nolan - Ladenburg Thalmann Kyle Joseph - Jefferies Operator At this time, I would like to welcome everyone to the Capitala Finance Corp's Conference Call for the Quarter Ended September 30, 2020. All participants are in a listen-only mode. A quest ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2020 ¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | | Exact name of registrant as specified in its charter, | | | --- | --- | --- | | Commission | address of principal executive office, telephone number, and | I.R.S. Employer | | File Number | state ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2020 ¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | Commission | Exact name of registrant as specified in its charter, address of principal executive office, telephone number, and | | I.R.S. Employer | | --- | --- | --- | --- | | File Number | state or o ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2020 ¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | Commission | Exact name of registrant as specified in its charter, address of principal executive office, telephone number, and | I.R.S. Employer | | --- | --- | --- | | File Number | state or other ju ...

TABLE OF CONTENTS | UNITED STATES | SECURITIES AND EXCHANGE COMMISSION | | | | | | --- | --- | --- | --- | --- | --- | | Washington, D.C. 20549 | FORM 10-K | | | | | | ☒ | Annual Report Pursuant to Section 13 or 15(d) | of the Securities Exchange Act of 1934 | | | | | For the Fiscal Year Ended December 31, 2019 | | | | | | | ☐ | Transition Report Pursuant to Section 13 or 15(d) | of the Securities Exchange Act of 1934 | | | | | Commission | Exact name of registrant as specified in its charter, address of pr ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2019 ¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | | Exact name of registrant as specified in its charter, | | | --- | --- | --- | | Commission | address of principal executive office, telephone number, and | I.R.S. Employer | | File Number | state ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2019 ¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | Exact name of registrant as specified in its charter, | | --- | | Commission address of principal executive office, telephone number and I.R.S. Employer | | File Number state or other jurisdiction of in ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2019 ¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | Commission | Exact name of registrant as specified in its charter, address of principal executive office, telephone number and | I.R.S. Employer | | --- | --- | --- | | File Number | state or other jur ...