Core Viewpoint - Prospect Capital Corp. (NASDAQ: PSEC) presents an attractive investment opportunity due to its significant discount to net asset value and a yield exceeding 20%, appealing particularly to income-focused investors [1]. Group 1 - The company is characterized as a lower-quality investment, which may tempt investors seeking high yields [1]. - The current yield of over 20% is highlighted as a key factor for income-focused investors [1]. - The article emphasizes the importance of conducting due diligence before making investment decisions [1]. Group 2 - The author expresses a personal investment philosophy focused on quality blue-chip stocks, BDCs, and REITs, aiming to supplement retirement income through dividends [1]. - There is a goal to assist lower and middle-class workers in building high-quality, dividend-paying investment portfolios [1].

Company Overview - Town & Country Living has been in the home furnishings industry since 1954, known for creating products for major retailers and brands globally, specializing in home textiles for various rooms [1][6] - The company is recognized as the "brand behind the brands" and has evolved into a cross-category giant in the home furnishings sector [1] Brand Recommitment - Town & Country Living is reintroducing its own brand after years of operating under various licensed brands and private label programs [2][3] - The Chief Revenue Officer, Susan Wojewoda, emphasized the company's expertise in creating innovative and trend-right designs, now focusing on their eponymous brand [3] Product Offering - The upcoming collection will include a wide range of products such as kitchen textiles, table linens, shower curtains, towels, and decorative items, set to launch in Spring 2026 [4][5] - The product line aims to merge modernity with traditional aesthetics, catering to contemporary consumer preferences [4] Market Positioning - The strategic timing of the brand's reintroduction addresses current retail challenges, including tariff pressures and heightened consumer expectations, which require stronger value propositions from vendors [5] - Retailers are seeking partners that can simplify categories and enhance margins, and Town & Country Living is positioned to meet these needs with its comprehensive capabilities in design, development, and supply chain [6] Financial Context - Town & Country Living is a portfolio company of Prospect Capital Corporation, which reported total assets of $6.8 billion as of June 30, 2025 [7]

Group 1 - Prospect Capital Corporation (NASDAQ:PSEC) has made an $18 million investment in The Ridge, a physician-led addiction treatment facility [1][2][3] - The investment includes a first lien senior secured term loan and equity investment, aimed at supporting The Ridge's growth in the high-end substance abuse market [2][3] - The Ridge offers a range of services from detoxification to outpatient care, integrating clinical treatments with holistic therapies [2] Group 2 - Wells Fargo analyst Finian O'Shea has reiterated a Sell rating on Prospect Capital, maintaining a price target of $2.5 [4] - The company's net debt to total assets ratio stands at 30.4%, indicating a relatively high level of leverage [4] - Prospect Capital is strategically exiting its real estate investments, which yield 4.5%, impacting income from this segment [4] - Despite challenges, Prospect has diversified its funding strategy with $12.2 billion of commitments from 48 banks as of Q2 FY2025 [4] Group 3 - Prospect Capital Corporation is a business development company focused on lending to and investing in private businesses, generating current income and long-term capital appreciation [5]

Core Viewpoint - Priority Income Fund, Inc. has declared monthly cash distributions for common shareholders for September, October, and November 2025, maintaining consistency with prior distributions [1][2]. Distribution Details - The annualized total cash distribution is $1.34016 per share, reflecting a 22.0% annualized rate based on the net asset value of $6.09 per common share as of July 31, 2025 [2]. - Monthly cash "base" distributions are set at $0.08056 for September, $0.10070 for October, and $0.08056 for November, totaling $0.26182 on a quarterly basis [3]. - The cash "bonus" distributions are fixed at $0.024167 per share for each of the three months, marking the 60th, 61st, and 62nd monthly "bonus" distributions [4]. Cumulative Distributions - Since inception in January 2014, the Fund has paid or declared cumulative cash distributions totaling $16.73 per common share through November 2025 [5]. Preferred Stock Distributions - The Fund has also declared distributions for its preferred stock series, including Series D, J, K, and L, with payments scheduled for September 30, 2025 [6]. Fund Overview - Priority Income Fund, Inc. is a registered closed-end fund focused on acquiring and growing a portfolio of senior secured loans, primarily through collateralized loan obligations (CLOs) [7]. - The Fund is managed by Priority Senior Secured Income Management, LLC, which is associated with Prospect Capital Management L.P., an investment adviser with over $7.5 billion in assets under management as of June 30, 2025 [8].

Group 1 - Prospect Capital announced a significant change in its portfolio strategy at the end of 2024 [1] - The company plans to reduce its second lien senior secured middle market loans and equity-linked investments [1]

Company Overview - Prospect Capital Corporation has provided approximately $18 million in financing to TCSPV Holdings IV, LLC, known as The Ridge, through a first lien senior secured term loan, a first lien senior secured revolving credit facility, and an equity investment in collaboration with Thesis Capital Partners [1] - The Ridge is a physician-led addiction treatment facility that offers personalized care in a luxurious residential setting, providing services ranging from detoxification to outpatient care, integrating evidence-based clinical treatments with holistic therapies [2] Investment Rationale - Prospect Capital Corporation aims to support the growth of The Ridge, which is positioned as a differentiated treatment facility targeting professionals in the high-end substance abuse market [3] - The Ridge's management team has developed a clinically unique model that emphasizes privacy, professionalism, and real outcomes, which aligns with the investment strategy of Prospect and Thesis Capital Partners [3] About the Companies - Prospect Capital Corporation is a business development company that primarily lends to and invests in middle market privately-held companies, focusing on generating current income and long-term capital appreciation [4] - Thesis Capital Partners, based in Houston, Texas, invests in family-owned businesses across the United States, partnering with entrepreneurs and management teams to support operational transformation and business growth [5]

[Executive Summary](index=1&type=section&id=Prospect%20Capital%20Announces%20Financial%20Results%20for%20June%202025) Prospect Capital reported a significant net loss, decreased Net Investment Income, and a notable decline in Net Asset Value per common share for the quarter and year ended June 30, 2025 [Financial Highlights (Quarter Ended June 30, 2025)](index=1&type=section&id=FINANCIAL%20RESULTS) Prospect Capital Corporation reported a significant net loss applicable to common shareholders and a decrease in Net Investment Income (NII) for the fiscal quarter and year ended June 30, 2025. The Net Asset Value (NAV) per common share also experienced a notable decline Key Financial Metrics (Quarter Ended June 30, 2025 vs. Prior Periods) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Net Investment Income ("NII") | $79.043 million | $83.489 million | $102.922 million | | NII per Common Share | $0.17 | $0.19 | $0.25 | | Net Income (Loss) Applicable to Common Shareholders | $(226.369) million | $(171.331) million | $(9.050) million | | Net Income (Loss) per Common Share | $(0.50) | $(0.39) | $(0.02) | | Distributions to Common Shareholders | $61.181 million | $59.966 million | $75.640 million | | Distributions per Common Share | $0.135 | $0.135 | $0.18 | | Total Assets | $6.805 billion | $6.996 billion | $7.857 billion | | Total Liabilities | $2.186 billion | $2.119 billion | $2.559 billion | | Net Asset Value ("NAV") to Common Shareholders | $2.989 billion | $3.245 billion | $3.712 billion | | NAV per Common Share | $6.56 | $7.25 | $8.74 | - NII per Common Share decreased to **$0.17** for Q2 2025 from **$0.25** in Q2 2024, representing a **32%** year-over-year decline[2](index=2&type=chunk) - Net Income (Loss) per Common Share significantly declined to **$(0.50)** for Q2 2025 from **$(0.02)** in Q2 2024, indicating a substantial increase in losses[2](index=2&type=chunk) - NAV per Common Share decreased to **$6.56** as of June 30, 2025, from **$8.74** as of June 30, 2024, a **25%** reduction[2](index=2&type=chunk) [Shareholder Distributions](index=2&type=section&id=CASH%20COMMON%20SHAREHOLDER%20DISTRIBUTION%20DECLARATION) Prospect declared consistent monthly cash distributions and has accumulated significant cumulative distributions to common shareholders since inception [Declared Monthly Distributions](index=2&type=section&id=Monthly%20Cash%20Common%20Shareholder%20Distribution) Prospect declared consistent monthly cash distributions of $0.0450 per common share for September and October 2025, maintaining the distribution rate from previous periods Monthly Cash Common Shareholder Distribution Declaration | Monthly Cash Common Shareholder Distribution | Record Date | Payment Date | Amount ($ per share) | | :--- | :--- | :--- | :--- | | September 2025 | 9/26/2025 | 10/22/2025 | $0.0450 | | October 2025 | 10/29/2025 | 11/18/2025 | $0.0450 | - Prospect anticipates declaring distributions for November 2025, December 2025, and January 2026 in November 2025[3](index=3&type=chunk) [Cumulative Distributions](index=2&type=section&id=Cumulative%20Paid%20and%20Declared%20Distributions%20to%20Common%20(1)%20Shareholders) Since its inception through the October 2025 declared distribution, Prospect will have distributed a significant cumulative amount of $21.66 per share to original common shareholders, totaling approximately $4.6 billion - Cumulative distributions since inception through October 2025 will amount to **$21.66** per share for original common shareholders[4](index=4&type=chunk) - The aggregate cumulative distributions to all common shareholders are approximately **$4.6 billion**[4](index=4&type=chunk) [Investment Strategy and Portfolio Update](index=2&type=section&id=PORTFOLIO%20UPDATE%20AND%20INVESTMENT%20ACTIVITY) Prospect has a history of substantial investments and exits, is optimizing its portfolio towards senior secured loans, and experienced net repayments in the latest quarter [Historical Investment Performance](index=2&type=section&id=Historical%20Investment%20Activity) Since its initial public offering in July 2004, Prospect has made substantial investments, deploying over $22 billion across more than 450 investments and successfully exiting over 350, achieving a realized gross internal rate of return (IRR) of approximately 12% - Over **$22 billion** invested across more than **450** investments since the July 2004 IPO[5](index=5&type=chunk) - Over **350** investments have been exited, generating an approximate **12%** realized gross IRR on total capital invested of **$12.6 billion** and total proceeds of **$16.0 billion**[6](index=6&type=chunk) [Strategic Portfolio Optimization and Mix](index=2&type=section&id=Strategic%20Drivers%20and%20Portfolio%20Mix) Prospect is actively optimizing its investment portfolio by increasing its focus on first lien senior secured middle market loans, significantly reducing second lien loans and exiting subordinated structured notes. The company also manages equity-linked assets and enhances portfolio company operating performance - Increased first lien senior secured middle market loans mix by **642 basis points** to **70.5%** (based on cost) from the prior year[7](index=7&type=chunk)[12](index=12&type=chunk) - Reduced second lien senior secured middle market loans mix by **202 basis points** to **14.4%** (based on cost) from the prior year[7](index=7&type=chunk)[12](index=12&type=chunk) - Substantially completed the exit of the subordinated structured notes portfolio, decreasing its mix by **781 basis points** to **0.6%** (based on cost) from **8.4%** as of June 30, 2024[7](index=7&type=chunk)[9](index=9&type=chunk)[12](index=12&type=chunk) - The middle market lending strategy constituted **85%** of investments at cost as of June 30, 2025[8](index=8&type=chunk) - The real estate property portfolio (NPRC) represented **14%** of investments at cost, with **52** exited properties yielding an unlevered investment-level gross cash IRR of **24.0%** and a **2.4 times** cash on cash multiple[10](index=10&type=chunk) Investment Portfolio Mix (at cost) | Investment Type (at cost) | June 30, 2025 (%) | March 31, 2025 (%) | June 30, 2024 (%) | | :--- | :--- | :--- | :--- | | First Lien Debt | 70.5% | 67.7% | 64.1% | | Second Lien Debt | 14.4% | 13.6% | 16.4% | | Total Senior and Secured Debt | 84.9% | 81.3% | 80.5% | | Subordinated Structured Notes | 0.6% | 5.9% | 8.4% | | Unsecured Debt | 0.1% | 0.1% | 0.1% | | Equity Investments | 14.4% | 12.7% | 11.0% | | Total Investments | 100.0% | 100.0% | 100.0% | [Quarterly Investment Activity](index=4&type=section&id=Investment%20Originations%20and%20Repayments) For the quarter ended June 30, 2025, total investment originations were $270.9 million, predominantly in middle-market loans. However, repayments and sales significantly outpaced originations, resulting in net repayments of $(174.5) million Investment Originations and Repayments (Quarter Ended) | Metric | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Total Originations | $270.859 million | $196.144 million | | Middle-Market Originations | 90.6% | 85.9% | | Real Estate Originations | 9.4% | 14.1% | | Total Repayments and Sales | $445.327 million | $191.656 million | | Originations, Net of Repayments and Sales | $(174.468) million | $4.488 million | - Net originations shifted from positive **$4.5 million** in Q1 2025 to negative **$(174.5) million** in Q2 2025, indicating a period of significant portfolio reduction[15](index=15&type=chunk) [Capital and Liquidity](index=5&type=section&id=CAPITAL%20AND%20LIQUIDITY) Prospect maintains a diversified funding profile, strong liquidity, and manages debt maturities and costs effectively, utilizing preferred stock programs [Funding Profile and Debt Management](index=5&type=section&id=Funding%20Profile%20and%20Debt%20Maturities) Prospect maintains a diversified, laddered funding profile and has successfully retired substantial debt maturities, leaving only $2.4 million of debt maturing in calendar year 2025. The next significant institutional bond maturity is scheduled for November 2026 - Successfully retired a **$156.2 million** convertible bond in March 2025 and **$400.0 million** of 3.706% Notes in June 2025[16](index=16&type=chunk) - Only **$2.4 million** of debt remains maturing during calendar year 2025[16](index=16&type=chunk) - The next institutional bond maturity is **$300 million** in November 2026[16](index=16&type=chunk) [Liquidity and Capital Structure](index=5&type=section&id=Liquidity%20and%20Capital%20Ratios) The company reported strong liquidity with over $1.3 billion in cash and undrawn revolving credit facility commitments. Its net of cash debt to total assets ratio remained stable at 30.4%, and unencumbered assets represented 62.1% of total assets - Balance Sheet Cash + Undrawn Revolving Credit Facility Commitments totaled **$1.316 billion** as of June 30, 2025[18](index=18&type=chunk) - Unfunded eligible commitments to portfolio companies aggregate approximately **$40.7 million**, representing **0.6%** of total assets[17](index=17&type=chunk) Key Capital and Liquidity Ratios | Metric | June 30, 2025 (%) | March 31, 2025 (%) | June 30, 2024 (%) | | :--- | :--- | :--- | :--- | | Net of Cash Debt to Total Assets Ratio | 30.4% | 28.7% | 30.5% | | Net of Cash Debt to Equity Ratio (1) | 44.4% | 40.8% | 44.7% | | % of Interest-Bearing Assets at Floating Rates | 76.8% | 77.5% | 82.1% | | Unsecured Debt + Preferred Equity as % of Total Debt + Preferred Equity | 77.1% | 87.5% | 80.3% | | Unencumbered Assets % of Total Assets | 62.1% | 63.5% | 63.4% | [Debt Cost and Preferred Stock Programs](index=5&type=section&id=Cost%20of%20Debt%20and%20Preferred%20Stock) The weighted average cost of unsecured debt financing increased to 4.52% as of June 30, 2025. Prospect leverages perpetual preferred stock offerings as a diversified and programmatic capital source, mitigating scheduled maturity risk - Weighted average cost of unsecured debt financing increased to **4.52%** as of June 30, 2025, up **0.19%** from March 31, 2025, and **0.27%** from June 30, 2024[19](index=19&type=chunk) - Perpetual preferred stock offerings provide a diversified source of programmatic capital without creating scheduled maturity risk[19](index=19&type=chunk) [Dividend Reinvestment Plan (DRIP)](index=6&type=section&id=DIVIDEND%20REINVESTMENT%20PLAN) Prospect's DRIP offers a 5% discount on reinvested distributions, requiring shareholders to actively enroll through their brokers for this benefit [DRIP Structure and Shareholder Benefits](index=6&type=section&id=DRIP%20Overview%20and%20Benefits) Prospect's Dividend Reinvestment Plan (DRIP) allows shareholders to reinvest distributions, offering a 5% discount on the market price for newly-issued shares, providing a direct benefit to participants - The DRIP provides for reinvestment of distributions on behalf of shareholders, unless a cash election is made[20](index=20&type=chunk) - Newly-issued shares under the DRIP are determined by dividing the distribution amount by 95% of the closing market price, offering a **5%** discount[20](index=20&type=chunk) [How to Participate in DRIP](index=6&type=section&id=Participation%20Instructions) Shareholders holding shares through a broker must proactively instruct their broker to enroll them in Prospect's DRIP through DTC to receive the 5% discount, as brokers may default to synthetic plans without this benefit. Direct registered shareholders can contact the transfer agent for dividend changes - Shareholders holding shares with a broker must contact their broker to ensure participation in the 'Prospect Capital Corporation DRIP through DTC' to receive the **5%** pricing discount, as brokers may automatically 'opt out' or use their own 'synthetic DRIP' plans[21](index=21&type=chunk) - Shareholders registered directly with the transfer agent can contact Equiniti Trust Company, LLC to make changes to their dividend receipt method[22](index=22&type=chunk) [Earnings Conference Call](index=6&type=section&id=EARNINGS%20CONFERENCE%20CALL) Prospect Capital will host an earnings call on Wednesday, August 27, 2025, at 9:00 a.m. Eastern Time, with replay options available online and via phone - An earnings call is scheduled for Wednesday, August 27, 2025, at 9:00 a.m. Eastern Time[23](index=23&type=chunk) - A replay will be available after August 27, 2025, on www.prospectstreet.com or by calling 877-344-7529 with passcode 7458818[23](index=23&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=PROSPECT%20CAPITAL%20CORPORATION%20AND%20SUBSIDIARIES) Prospect's financial statements show a decrease in total assets and investments, a net loss from operations, and a decline in NAV per common share for the period [Consolidated Statements of Assets and Liabilities](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20ASSETS%20AND%20LIABILITIES) As of June 30, 2025, Prospect's total assets decreased to $6.8 billion from $7.8 billion year-over-year, primarily driven by a reduction in total investments at fair value. Total liabilities also decreased, contributing to a lower Net Asset Value per Common Share of $6.56 Consolidated Statements of Assets and Liabilities (Selected Items) | Metric | June 30, 2025 | June 30, 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Total investments at fair value | $6.674 billion | $7.718 billion | $(1.045) billion | | Cash and cash equivalents | $50.788 million | $85.872 million | $(35.084) million | | Total Assets | $6.805 billion | $7.857 billion | $(1.052) billion | | Revolving Credit Facility | $856.322 million | $794.796 million | $61.526 million | | Public Notes | $593.444 million | $987.567 million | $(394.123) million | | Convertible Notes | $0 | $155.519 million | $(155.519) million | | Total Liabilities | $2.186 billion | $2.559 billion | $(372.905) million | | Preferred Stock | $1.630 billion | $1.586 billion | $43.712 million | | Net Assets Applicable to Common Shares | $2.989 billion | $3.712 billion | $(722.961) million | | Net Asset Value Per Common Share | $6.56 | $8.74 | $(2.18) | - Total investments at fair value decreased by over **$1 billion**, reflecting a significant reduction in the investment portfolio year-over-year[25](index=25&type=chunk) - The Convertible Notes liability was fully retired, decreasing from **$155.5 million** to **$0** as of June 30, 2025[25](index=25&type=chunk) [Consolidated Statements of Operations](index=8&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For the quarter ended June 30, 2025, total investment income decreased, and substantial net realized and unrealized losses from investments led to a net loss applicable to common stockholders of $(226.4) million, a significant deterioration compared to the prior year Consolidated Statements of Operations (Selected Items, Three Months Ended June 30) | Metric | 2025 | 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Total Investment Income | $166.946 million | $212.260 million | $(45.314) million | | Total Operating Expenses | $87.903 million | $109.338 million | $(21.435) million | | Net Investment Income | $79.043 million | $102.922 million | $(23.879) million | | Net realized gains (losses) | $(308.479) million | $(140.314) million | $(168.165) million | | Net change in unrealized gains (losses) | $33.662 million | $66.984 million | $(33.322) million | | Net Realized and Net Change in Unrealized Gains (Losses) from Investments | $(274.817) million | $(73.330) million | $(201.487) million | | Net Increase (Decrease) in Net Assets Resulting from Operations applicable to Common Stockholders | $(226.369) million | $(9.050) million | $(217.319) million | - Net Investment Income decreased by **$23.9 million** (**23.2%**) year-over-year for the quarter ended June 30, 2025[27](index=27&type=chunk) - Net realized losses from investments more than doubled year-over-year, increasing by **$168.2 million**, significantly impacting overall profitability[27](index=27&type=chunk) - For the full year ended June 30, 2025, the net decrease in net assets applicable to common stockholders was **$(593.762) million**, a substantial reversal from a net increase of **$147 thousand** in the prior year[27](index=27&type=chunk) [Rollforward of Net Asset Value Per Common Share](index=9&type=section&id=ROLLFORWARD%20OF%20NET%20ASSET%20VALUE%20PER%20COMMON%20SHARE) The Net Asset Value per common share declined from $7.25 at the beginning of the quarter to $6.56 at the end, primarily due to significant net realized and unrealized losses from investments and distributions to common stockholders Rollforward of Net Asset Value Per Common Share (Selected Items, Three Months Ended June 30) | Per Share Data | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Net asset value per common share at beginning of period | $7.25 | $8.99 | | Net investment income | $0.17 | $0.25 | | Net realized and change in unrealized gains (losses) | $(0.62) | $(0.20) | | Net increase (decrease) from operations applicable to common stockholders | $(0.50) | $(0.01) | | Total distributions to common stockholders | $(0.14) | $(0.18) | | Net asset value per common share at end of period | $6.56 | $8.74 | - Net realized and change in unrealized losses per share significantly increased to **$(0.62)** for Q2 2025 from **$(0.20)** for Q2 2024[28](index=28&type=chunk) - For the full year ended June 30, 2025, NAV per common share decreased from **$8.74** to **$6.56**, with net increase (decrease) from operations applicable to common stockholders being **$(1.35)** per share[28](index=28&type=chunk) [Additional Disclosures](index=10&type=section&id=INTERNAL%20RATE%20OF%20RETURN) This section defines Internal Rate of Return (IRR) and details Prospect's primary origination strategies, focusing on middle-market senior secured loans and equity-linked investments [Internal Rate of Return (IRR) Definition](index=10&type=section&id=Internal%20Rate%20of%20Return%20(%22IRR%22)) Internal Rate of Return (IRR) is defined as the discount rate that equates the net present value of all cash flows related to a specific investment to zero. These calculations are gross of general expenses and are unaudited - IRR is the discount rate that makes the net present value of all cash flows for a particular investment equal to zero[31](index=31&type=chunk) - IRR calculations are gross of general expenses not allocable to specific investments and are unaudited[31](index=31&type=chunk) [Primary Origination Strategies](index=10&type=section&id=PRIMARY%20ORIGINATION%20STRATEGIES) Prospect's primary investment strategy focuses on originating senior and secured loans, typically under $250 million, to private middle-market U.S. companies with annual revenues below $750 million and enterprise values under $1 billion. The company also engages in equity-linked investments and real estate REITs, directly originating most investments through established relationships - Primary investment strategy involves investing in private, middle-market U.S. companies (annual revenues < **$750M**, enterprise values < **$1B**) for various capital needs[32](index=32&type=chunk) - Typical investments are senior and secured loans of less than **$250 million**, ranking ahead of unsecured debt and equity, often with security interests on assets[32](index=32&type=chunk)[33](index=33&type=chunk) - Also makes equity and equity-linked investments with capital-appreciation potential, such as convertible debt, preferred equity, common equity, and warrants[33](index=33&type=chunk) - Invests a lesser amount in senior and secured debt and controlling equity positions in real estate investment trusts (REITs), specifically National Property REIT Corp. (NPRC), focused on developed and occupied cash flow multifamily properties[34](index=34&type=chunk) - The significant majority of investments are directly originated through long-term relationships with private equity sponsors, financial intermediaries, and management teams[36](index=36&type=chunk) [Company Information](index=12&type=section&id=About%20Prospect%20Capital%20Corporation) Prospect Capital is a BDC focused on middle-market lending, aiming for income and appreciation, with forward-looking statements subject to material variation, and provides contact details [About Prospect Capital Corporation](index=12&type=section&id=About%20Prospect%20Capital%20Corporation) Prospect Capital Corporation operates as a business development company (BDC) primarily focused on lending to and investing in middle-market privately-held companies. Its objective is to generate both current income and long-term capital appreciation, and it is treated as a regulated investment company (RIC) for tax purposes - Prospect is a business development company (BDC) that primarily lends to and invests in middle market privately-held companies[38](index=38&type=chunk) - The company's investment objective is to generate both current income and long-term capital appreciation[38](index=38&type=chunk) - Prospect has elected to be treated as a regulated investment company (RIC) under the Internal Revenue Code of 1986[38](index=38&type=chunk) [Caution Concerning Forward-Looking Statements](index=12&type=section&id=Caution%20Concerning%20Forward-Looking%20Statements) This press release contains forward-looking statements that are subject to various future events and conditions, which may cause actual developments and results to differ materially. The company explicitly states it undertakes no obligation to update these statements - The press release contains forward-looking statements that are highly likely to be affected by unknowable future events and conditions[39](index=39&type=chunk) - Actual developments and results are highly likely to vary materially from any forward-looking statements[39](index=39&type=chunk) - The company undertakes no obligation to update any such statement now or in the future[39](index=39&type=chunk) [Contact Information](index=12&type=section&id=For%20additional%20information,%20contact:) For additional information, interested parties can contact Grier Eliasek, President and Chief Operating Officer, via email or telephone - Grier Eliasek, President and Chief Operating Officer, is the contact for additional information[40](index=40&type=chunk)

Financial Data and Key Metrics Changes - For the quarter ended June 2025, the net investment income (NII) was $79 million, equating to $0.17 per common share, with a net asset value (NAV) of approximately $3 billion or $6.56 per common share [3] - The net debt to total assets ratio stood at 30.4%, with unsecured debt and preferred shares comprising 77.1% of total debt [3] Business Line Data and Key Metrics Changes - The company has increased its focus on first lien senior secured middle market loans, with the first lien mix rising by 642 basis points to 70.5% from the previous year [4][5] - The second lien mix decreased by 202 basis points to 14.4%, and further reduced to 13.7% after two additional second lien loans were repaid [5] - Subordinated structured notes decreased to 0.6% of the investment portfolio, down 781 basis points from the prior year [5][9] Market Data and Key Metrics Changes - The company has invested $12.6 billion in over 350 exited investments, achieving a 12% unlevered investment level gross cash IRR [8] - As of June 2025, the portfolio comprised 97 companies across 33 industries, with an aggregate fair value of $6.7 billion [8] Company Strategy and Development Direction - The company is strategically rotating its asset mix towards first lien senior secured loans, which are expected to generate higher yields compared to real estate investments [10][21] - The focus is on companies with less than $50 million in EBITDA, targeting a market of over 200,000 companies in the U.S. [5][25] - The company aims to enhance portfolio company operations and utilize a cost-efficient floating rate revolver [6][10] Management's Comments on Operating Environment and Future Outlook - Management noted a significant slowdown in inflation affecting property costs, which is favorable for net operating income (NOI) growth, projecting double-digit growth in the future [21] - The company is strategically exiting investments at value-maximizing prices while focusing on middle market lending, which is seen as a value driver [22][26] Other Important Information - The company announced monthly common shareholder distributions of $0.45 per share for September and October, with a total distribution of approximately $4.6 billion since its IPO [4] - The company has a strong liquidity position with $1.3 billion in combined cash and undrawn revolving credit facilities, and 62% of its assets are unencumbered [12][13] Q&A Session Summary Question: Outlook for the REIT and income trajectory amidst industry challenges - Management acknowledged industry challenges but noted a substantial improvement in their portfolio, with a 7% increase in same property NOI over the last year and expectations for double-digit growth going forward [19][21] Question: Strategy regarding real estate investments - Management emphasized a selective exit strategy for real estate investments, focusing on maximizing value and transitioning from lower-yielding real estate to higher-yielding middle market loans [22][26]

Financial Data and Key Metrics Changes - For June, the net investment income (NII) was $79 million, or $0.17 per common share, with a net asset value (NAV) of approximately $3 billion, or $6.56 per common share [4] - The net debt to total assets ratio stood at 30.4%, with unsecured debt plus unsecured preferred accounting for 77.1% of total debt plus preferred [4] - Monthly common shareholder distributions of $0.45 per share were announced for September and October, with a total distribution of approximately $4.6 billion, or $21.66 per share, since the IPO [5] Business Line Data and Key Metrics Changes - The company has increased its focus on first lien senior secured middle market loans, with the first lien mix rising by 642 basis points to 70.5% from the previous year [5] - The second lien mix decreased by 202 basis points to 14.4%, and further repayments reduced it to 13.7% [6] - Subordinated structured notes decreased to 0.6% of the investment portfolio, down 781 basis points from the prior year [6] Market Data and Key Metrics Changes - The portfolio comprised 85% senior and secured debt, with 97 portfolio companies across 33 different industries, totaling a fair value of $6.7 billion [9] - The middle market lending strategy represented 85% of investments at cost, an increase of 878 basis points from the prior year [9] - Interest income accounted for 95% of total investment income, indicating a strong recurring revenue profile [12] Company Strategy and Development Direction - The company is strategically rotating assets towards first lien senior secured loans, focusing on companies with less than $50 million in EBITDA [6][10] - The real estate portfolio, which represented 14% of investments at cost, is being selectively exited to maximize value [10][24] - The company aims to generate attractive risk-adjusted yields, with an annualized yield of 12.2% for the quarter ended June 2025 [11] Management's Comments on Operating Environment and Future Outlook - Management noted a significant slowdown in inflation affecting property taxes, insurance, and payroll, which is favorable for net operating income (NOI) growth [23] - The company anticipates double-digit growth in NOI going forward, driven by strategic focus on middle market lending [23] - Management emphasized the importance of avoiding upper middle market deals with tight spreads and loose covenants, maintaining a focus on the middle market [26][28] Other Important Information - The company has a strong balance sheet with $1.3 billion in combined cash and undrawn revolving credit facility commitments, and 62% of assets are unencumbered [13][14] - The weighted average cost of unsecured debt financing was 4.52% as of June 30, 2025 [16] Q&A Session Summary Question: Outlook for multifamily income trajectory amidst industry challenges - Management acknowledged industry challenges but noted a substantial turning point in their portfolio, with healthy rent growth in diversified geographic areas [21] - They expect a significant increase in NOI, with a 7% increase in the last year and an anticipation of double-digit growth going forward [23] - The company is strategically focused on middle market first lien senior secured lending, viewing the rotation from lower-yielding real estate to higher-yielding loans as a value driver [25][28]

[FORWARD-LOOKING STATEMENTS](index=4&type=section&id=FORWARD-LOOKING%20STATEMENTS) [Forward-Looking Statements Disclosure](index=4&type=section&id=Forward-Looking%20Statements%20Disclosure) This section outlines the nature of forward-looking statements within the report, emphasizing that they are not historical and are subject to various risks and uncertainties - The report contains forward-looking statements identified by words like 'believe,' 'expect,' 'intend,' 'estimate,' 'anticipate,' 'project,' 'will,' 'should,' 'could,' 'may,' 'plan,' which are not historical in nature[12](index=12&type=chunk) - Key risks and uncertainties that could cause actual results to differ materially include future operating results of the company and its portfolio companies, impact of current/future investments, contractual arrangements, general economic conditions, global events (e.g., Russia-Ukraine conflict, Middle East), inflation, potential trade wars, financing difficulties, interest rate volatility, regulatory changes, and tax treatment[13](index=13&type=chunk) - The company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law[12](index=12&type=chunk) [PART I](index=6&type=section&id=PART%20I) [Item 1. Business](index=6&type=section&id=Item%201.%20Business) Prospect Capital Corporation is a closed-end investment company regulated as a Business Development Company (BDC) and a Regulated Investment Company (RIC), focused on generating current income and long-term capital appreciation by investing primarily in U.S. middle-market companies through senior and secured loans, and equity-linked investments - Prospect Capital Corporation is a closed-end investment company, incorporated in Maryland, regulated as a Business Development Company (BDC) under the **1940 Act** and elected to be treated as a Regulated Investment Company (RIC) under the Code[17](index=17&type=chunk) - The company's investment objective is to generate both current income and long-term capital appreciation, primarily investing in privately owned U.S. middle-market companies through senior and secured first lien loans, second lien loans, and equity/equity-linked investments[19](index=19&type=chunk) - As of June 30, 2025, Prospect is one of the longest-running and largest BDCs with approximately **$7 billion of total assets**[17](index=17&type=chunk) [General](index=6&type=section&id=General) Prospect Capital Corporation is a Maryland-incorporated closed-end investment company, regulated as a BDC and RIC, established in 2004, externally managed by Prospect Capital Management L.P. and focuses on lending to and investing in middle-market privately-held companies - Prospect is a financial services company that primarily lends to and invests in middle market privately-held companies[17](index=17&type=chunk) - The company was organized on April 13, 2004, and completed its initial public offering on July 27, 2004[17](index=17&type=chunk) - Prospect is externally managed by its investment adviser, Prospect Capital Management L.P., with administrative services provided by Prospect Administration LLC[18](index=18&type=chunk) [Our Investment Objective and Policies](index=6&type=section&id=Our%20Investment%20Objective%20and%20Policies) Prospect's investment objective is to achieve both current income and long-term capital appreciation by primarily targeting private U.S. middle-market companies for various capital needs - The investment objective is to generate both current income and long-term capital appreciation[19](index=19&type=chunk) - Primary investment strategy focuses on private, U.S. middle-market companies (annual revenues < **$750 million**, enterprise values < **$1 billion**) for refinancings, acquisitions, growth, and recapitalizations[20](index=20&type=chunk) - Investments include senior and secured first/second lien loans, and equity/equity-linked instruments (convertible debt, preferred/common equity, warrants); up to **30% of the portfolio** may be in broadly-traded public or non-U.S. companies[19](index=19&type=chunk)[21](index=21&type=chunk)[27](index=27&type=chunk) [Industry Sectors](index=8&type=section&id=Industry%20Sectors) The company's investment portfolio is diversified across 32 industry categories, with no single industry (excluding CLO investments) exceeding 19.5% of the portfolio - The portfolio is invested across **32 industry categories**[29](index=29&type=chunk) - Excluding CLO investments, no individual industry comprises more than **19.5% of the portfolio** on either a cost or fair value basis[29](index=29&type=chunk) [Ongoing Relationships with Portfolio Companies](index=8&type=section&id=Ongoing%20Relationships%20with%20Portfolio%20Companies) Prospect Capital Management continuously monitors portfolio companies' financial trends and adherence to business plans, performing quarterly fair value valuations - Prospect Capital Management monitors portfolio companies' financial trends and compliance with covenants[30](index=30&type=chunk)[32](index=32&type=chunk) - The investment portfolio is fair valued quarterly in accordance with ASC 820, with unrealized gains/losses reflected in the Consolidated Statement of Operations[31](index=31&type=chunk) - As a BDC, the company is obligated to provide significant managerial assistance to certain portfolio companies, including guidance on management, operations, and business objectives[33](index=33&type=chunk) [Investment Adviser](index=9&type=section&id=Investment%20Adviser) Prospect Capital Management, a Delaware limited partnership registered under the Advisers Act, manages the company's investments and receives base management and incentive fees - Prospect Capital Management, a Delaware limited partnership, is the registered investment adviser[35](index=35&type=chunk) - The Investment Adviser is led by John F. Barry III and M. Grier Eliasek, whose continued service is significant for the company's future success[35](index=35&type=chunk) - The company pays Prospect Capital Management investment advisory fees, comprising an annual base management fee (**2.00% of total assets**) and a two-part incentive fee based on performance[35](index=35&type=chunk)[37](index=37&type=chunk) [Investment Advisory Agreement](index=9&type=section&id=Investment%20Advisory%20Agreement) The Investment Advisory Agreement outlines Prospect Capital Management's services, including a 2.00% annual base management fee and a two-part incentive fee, renewed until June 20, 2026 - The Investment Advisory Agreement was renewed by the Board of Directors on June 18, 2025, for a term expiring June 20, 2026[56](index=56&type=chunk) Investment Advisory Fees Structure | Fee Type | Calculation Basis | | :--- | :--- | | **Base Management Fee** | 2.00% annually on total assets, payable quarterly in arrears. | | **Income Incentive Fee** | Calculated quarterly based on pre-incentive fee net investment income. No fee if income is below 1.75% hurdle rate. 100% of income between 1.75% and 2.1875% (catch-up). 20% of income exceeding 2.1875%. | | **Capital Gains Incentive Fee** | 20.00% of realized capital gains for the calendar year, net of all realized capital losses and unrealized capital depreciation, payable in arrears annually. | - The Board considered factors such as service quality, comparative advisory fees, operating expenses, profitability of the Investment Adviser, and organizational capability when approving the renewal[58](index=58&type=chunk) [Administration Agreement](index=16&type=section&id=Administration%20Agreement) The Administration Agreement with Prospect Administration covers administrative services and facilities, with the company reimbursing allocable overhead costs and including indemnification clauses - Prospect Administration provides administrative services and facilities, including financial record-keeping, SEC reporting, and tax return preparation[60](index=60&type=chunk) - The company reimburses Prospect Administration for allocable overhead costs, including rent and salaries of key officers and staff[60](index=60&type=chunk) - The Administration Agreement includes indemnification for Prospect Administration, its officers, and affiliates, except in cases of willful misfeasance, bad faith, gross negligence, or reckless disregard of duties[61](index=61&type=chunk) [Human Capital](index=16&type=section&id=Human%20Capital) The company does not directly employ staff; all necessary services are provided by personnel from Prospect Capital Management and Prospect Administration - The company does not have any direct employees; all operational services are provided by Prospect Capital Management and Prospect Administration personnel[62](index=62&type=chunk) - Executive officers are employees or affiliates of Prospect Capital Management or Prospect Administration[62](index=62&type=chunk) [Portfolio Managers](index=16&type=section&id=Portfolio%20Managers) John F. Barry III and M. Grier Eliasek serve as primary portfolio managers, both with 21 years of service, and beneficially own over $1,000,000 in common stock Portfolio Managers and Length of Service | Name | Position | Length of Service with Company (Years) | | :--- | :--- | | John F. Barry III | Chairman and Chief Executive Officer | 21 | | M. Grier Eliasek | President and Chief Operating Officer | 21 | - Neither Mr. Barry nor Mr. Eliasek receives direct compensation from the company; their compensation is from Prospect Capital Management, reflecting their roles and performance[64](index=64&type=chunk) Beneficial Ownership of Common Stock by Portfolio Managers (as of June 30, 2025) | Name | Aggregate Dollar Range of Common Stock Beneficially Owned | | :--- | :--- | | John F. Barry III | Over $1,000,000 | | M. Grier Eliasek | Over $1,000,000 | [Payment of Our Expenses](index=17&type=section&id=Payment%20of%20Our%20Expenses) The Investment Adviser covers its investment professionals' compensation and overhead, while the company bears all other operational and transactional costs - The Investment Adviser pays for its investment professionals' compensation and routine overhead[66](index=66&type=chunk) - The company is responsible for all other operational and transactional expenses, including organizational and offering costs, valuation fees, interest on debt, dividends on preferred stock, investment advisory fees, and administrative costs[66](index=66&type=chunk) [License Agreement](index=17&type=section&id=License%20Agreement) The company has a non-exclusive, royalty-free license to use the 'Prospect Capital' name, valid as long as Prospect Capital Management or an affiliate serves as the Investment Adviser - The company has a non-exclusive, royalty-free license to use the name 'Prospect Capital' from Prospect Capital Management[67](index=67&type=chunk) - The license agreement remains in effect as long as Prospect Capital Management or one of its affiliates is the Investment Adviser[67](index=67&type=chunk) [Determination of Net Asset Value Applicable to Common Stockholders](index=18&type=section&id=Determination%20of%20Net%20Asset%20Value%20Applicable%20to%20Common%20Stockholders) Net asset value (NAV) per common share is calculated quarterly, with illiquid investments fair valued by the Board of Directors with independent assistance - NAV per common share is determined quarterly by dividing total assets minus liabilities and preferred stock carrying value by total common shares outstanding[68](index=68&type=chunk) - Investments with readily available market quotations are valued at market quotes; short-term investments (**60 days or less**) are at amortized cost, others at current market quotations[69](index=69&type=chunk) - Most illiquid investments are fair valued in good faith by the Board of Directors, with assistance from an independent valuation service and review by the Audit Committee, considering factors like portfolio company performance, collateral, and market comparisons[70](index=70&type=chunk)[71](index=71&type=chunk) [Common Stock Dividend Reinvestment and Direct Stock Purchase Plan](index=18&type=section&id=Common%20Stock%20Dividend%20Reinvestment%20and%20Direct%20Stock%20Purchase%20Plan) The company offers a common stock dividend reinvestment and direct stock purchase plan (DRIP), allowing stockholders to reinvest dividends at a 5% discount or make optional cash investments - The company has a common stock dividend reinvestment and direct stock purchase plan (DRIP)[73](index=73&type=chunk) - Cash dividends are automatically reinvested in new common shares at **95% of the closing market price** (a **5% discount**)[73](index=73&type=chunk)[77](index=77&type=chunk) - Stockholders can make optional cash investments (**$25 to $10,000 per transaction**) to purchase additional shares in the open market, incurring a **$2.50 fee** plus **$0.10 per share** brokerage commission[80](index=80&type=chunk) [Preferred Stock Dividend Reinvestment Plan](index=20&type=section&id=Preferred%20Stock%20Dividend%20Reinvestment%20Plan) The company offers a Preferred Stock Dividend Reinvestment Plan (Preferred Stock DRIP) for various series, allowing reinvestment into additional preferred shares at specified prices - The company has a Preferred Stock Dividend Reinvestment Plan (Preferred Stock DRIP) for its various series of preferred stock (**5.50%**, **6.50%**, Floating Rate, **7.50%**)[83](index=83&type=chunk) - Shares of **5.50%** and **6.50% Preferred Stock** are purchased at **$23.75 per share** (**95% of stated value**); Floating Rate and **7.50% Preferred Stock** are purchased at **$25.00 per share**[87](index=87&type=chunk) - The aggregate number of preferred shares, including those issued under the Preferred Stock Plan, cannot exceed **847,900,000**[95](index=95&type=chunk) [Material U.S. Federal Income Tax Considerations](index=23&type=section&id=Material%20U.S.%20Federal%20Income%20Tax%20Considerations) This section summarizes U.S. federal income tax considerations, focusing on the company's intent to qualify as a Regulated Investment Company (RIC) to avoid corporate-level taxes - The company intends to qualify as a Regulated Investment Company (RIC) under Subchapter M of the Code to avoid corporate-level U.S. federal income taxes on distributed income and capital gains[110](index=110&type=chunk)[114](index=114&type=chunk) - To qualify as a RIC, the company must meet a **90% Income Test**, Diversification Tests, and an Annual Distribution Requirement (distribute at least **90% of investment company taxable income**)[111](index=111&type=chunk) - For the 2024 calendar year, **54.82% of taxable ordinary dividends** qualified as interest-related dividends (generally exempt from U.S. withholding tax for non-U.S. stockholders) and **91.81%** qualified as Section 163(j) interest dividends (beneficial for shareholders facing interest expense limitations)[146](index=146&type=chunk)[147](index=147&type=chunk) [Regulation as a Business Development Company](index=30&type=section&id=Regulation%20as%20a%20Business%20Development%20Company) As a BDC, the company is subject to the 1940 Act, requiring it to invest at least 70% of assets in 'qualifying assets' and adhere to a 150% asset coverage ratio for senior securities - As a BDC, the company is a closed-end, non-diversified investment company regulated under the **1940 Act**[150](index=150&type=chunk) - The company must invest at least **70% of its total assets** in 'qualifying assets,' which are generally privately offered securities issued by U.S. private or thinly-traded companies[152](index=152&type=chunk) - The asset coverage requirement for issuing senior securities was reduced from **200% to 150%** (a **2:1 debt to equity ratio**) effective May 6, 2020, following stockholder approval[156](index=156&type=chunk) [Qualifying Assets](index=31&type=section&id=Qualifying%20Assets) Qualifying assets for a BDC primarily include privately offered securities from eligible U.S. middle-market companies, securities of controlled entities, and short-term high-quality debt - Qualifying assets include securities purchased in private offerings from 'eligible portfolio companies' (generally U.S. private or thinly-traded companies)[152](index=152&type=chunk) - An 'eligible portfolio company' is typically a U.S. company that is not an investment company and either has no margin credit securities, is controlled by a BDC, is a small solvent company, has no listed securities, or has listed securities with common equity market value under **$250 million**[152](index=152&type=chunk) - Other qualifying assets include securities of controlled eligible portfolio companies, securities from distressed U.S. issuers, and cash, cash equivalents, U.S. government securities, or high-quality debt maturing in **one year or less**[152](index=152&type=chunk) [Managerial Assistance to Portfolio Companies](index=32&type=section&id=Managerial%20Assistance%20to%20Portfolio%20Companies) To qualify portfolio securities as assets, a BDC must either control the issuer or offer significant managerial assistance, which Prospect Administration provides - To qualify assets, a BDC must either control the issuer or offer significant managerial assistance[154](index=154&type=chunk) - Significant managerial assistance includes advice on marketing, operations, strategy, capital budgeting, human resources, and evaluating opportunities[154](index=154&type=chunk) - Prospect Administration, utilizing personnel from Prospect Capital Management, provides this assistance on the company's behalf[154](index=154&type=chunk) [Temporary Investments](index=32&type=section&id=Temporary%20Investments) Pending investment in other qualifying assets, the company may hold temporary investments such as cash, U.S. government securities, or high-quality debt, with repurchase agreements limited to 25% of total assets - Temporary investments may include cash, cash equivalents, U.S. government securities, or high-quality debt maturing in **one year or less**[155](index=155&type=chunk) - Investments in repurchase agreements are permitted, but limited to **25% of total assets** with a single counterparty to meet RIC diversification tests[155](index=155&type=chunk) [Senior Securities](index=32&type=section&id=Senior%20Securities) BDCs can issue senior securities if asset coverage is at least 150% after issuance, a reduction from 200% approved by stockholders in May 2020, increasing leverage and potential risk - BDCs can issue senior securities if asset coverage is at least **150%** after issuance, reduced from **200%** in March 2018 and approved by stockholders on May 5, 2020[156](index=156&type=chunk) - This change allows the company to borrow **$2 for every $1 of investor equity**, increasing potential investment risk and management fees[156](index=156&type=chunk) Asset Coverage Ratios (as of June 30, 2025) | Metric | Ratio | | :--- | :--- | | Asset coverage ratio (indebtedness) | 319.4% | | Asset coverage ratio (stock) | 173.3% | [Code of Ethics](index=33&type=section&id=Code%20of%20Ethics) The company, Prospect Capital Management, and Prospect Administration have adopted codes of ethics under Rule 17j-1 of the 1940 Act, regulating personal investments by personnel - The company, its Investment Adviser, and Administrator have adopted codes of ethics under Rule 17j-1 of the **1940 Act**[158](index=158&type=chunk) - These codes establish procedures for personal investments, allowing personnel to invest in securities also purchased or held by the company, in accordance with the code's requirements[158](index=158&type=chunk) [Compliance Policies and Procedures](index=33&type=section&id=Compliance%20Policies%20and%20Procedures) The company and its Investment Adviser have established written compliance policies and procedures to prevent violations of U.S. federal securities laws, reviewed annually for adequacy - The company and its Investment Adviser have adopted and implemented written policies and procedures to prevent violations of U.S. federal securities laws[159](index=159&type=chunk) - These compliance policies and procedures are reviewed annually for adequacy and effectiveness, with a Chief Compliance Officer (Kristin L. Van Dask) responsible for administration[159](index=159&type=chunk) [Proxy Voting Policies and Procedures](index=33&type=section&id=Proxy%20Voting%20Policies%20and%20Procedures) The company delegates proxy voting responsibility to Prospect Capital Management, which has fiduciary duties to act in clients' best interests, with oversight from a Proxy Voting Committee - Proxy voting responsibility is delegated to Prospect Capital Management, which has a fiduciary duty to vote client securities in a timely manner, free of conflicts of interest, and in clients' best interests[160](index=160&type=chunk)[161](index=161&type=chunk) - General policies favor management proposals but allow for case-by-case review for matters not covered by guidelines, material conflicts of interest, or when voting contrary to guidelines maximizes stockholder value[163](index=163&type=chunk) - A Proxy Voting Committee establishes general policies, considers specific matters, and monitors adherence, with strict requirements for disclosing potential conflicts of interest[175](index=175&type=chunk)[176](index=176&type=chunk) [Sarbanes-Oxley Act of 2002](index=35&type=section&id=Sarbanes-Oxley%20Act%20of%202002) The company is subject to the Sarbanes-Oxley Act of 2002, requiring CEO and CFO certifications on financial reporting accuracy and an audit of internal control effectiveness - The Sarbanes-Oxley Act of 2002 imposes regulatory requirements, including CEO and CFO certifications on financial reporting accuracy[180](index=180&type=chunk) - The company must disclose the effectiveness of its disclosure controls and procedures and report on management's assessment of internal controls over financial reporting, which must be audited[180](index=180&type=chunk) [Available Information](index=36&type=section&id=Available%20Information) The company files annual, quarterly, and current reports, and proxy statements with the SEC, available free of charge on its website and the SEC's EDGAR database - The company files annual, quarterly, and current periodic reports, proxy statements, and other information with the SEC[183](index=183&type=chunk) - This information is available free of charge on the company's website (www.prospectstreet.com) and the SEC's EDGAR database (www.sec.gov)[183](index=183&type=chunk) - The company uses its website to disclose material non-public information and comply with Regulation FD[184](index=184&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) This section details various risks that could materially and adversely affect the company's business, financial condition, and results of operations, categorized by business, BDC operations, investments, securities, and general factors - The company faces risks related to corporate social responsibility, inflation, capital market disruption, global economic/political instability, and legislative actions on taxes[187](index=187&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk)[204](index=204&type=chunk)[210](index=210&type=chunk) - Risks specific to BDC operations include failure to invest in qualifying assets, failure to qualify as a RIC, difficulty paying distributions, and regulatory constraints on capital raising[260](index=260&type=chunk)[261](index=261&type=chunk)[266](index=266&type=chunk)[268](index=268&type=chunk) - Investment-related risks include not realizing gains, fair value uncertainty for illiquid investments, risks in middle-market companies, lack of liquidity, economic downturns impacting portfolio companies, and risks associated with CLOs and covenant-lite loans[280](index=280&type=chunk)[281](index=281&type=chunk)[283](index=283&type=chunk)[286](index=286&type=chunk)[289](index=289&type=chunk)[291](index=291&type=chunk)[293](index=293&type=chunk)[304](index=304&type=chunk)[319](index=319&type=chunk)[336](index=336&type=chunk) - Risks related to securities include credit rating impacts, leverage risks from senior securities (debt and preferred equity), potential dilution from preferred stock conversions, and fluctuations in common stock trading price[337](index=337&type=chunk)[338](index=338&type=chunk)[341](index=341&type=chunk)[354](index=354&type=chunk)[366](index=366&type=chunk)[384](index=384&type=chunk)[389](index=389&type=chunk)[391](index=391&type=chunk)[393](index=393&type=chunk)[406](index=406&type=chunk)[414](index=414&type=chunk)[415](index=415&type=chunk)[417](index=417&type=chunk) [Risks Relating to Our Business](index=38&type=section&id=Risks%20Relating%20to%20Our%20Business) The company's business faces risks from ESG scrutiny, inflation, capital market disruptions, global instability, dependence on key personnel, conflicts of interest, and cybersecurity threats - The company is subject to increasing public scrutiny related to environmental, social, and governance (ESG) activities, risking brand damage and increased costs[193](index=193&type=chunk) - Inflation can adversely impact the cost of capital and the value of portfolio investments, potentially reducing returns to common stockholders and decreasing debt investment values[194](index=194&type=chunk) - Capital markets may experience disruption and instability, making it difficult to raise debt and equity capital, which could negatively affect business and operations[195](index=195&type=chunk)[196](index=196&type=chunk)[198](index=198&type=chunk)[200](index=200&type=chunk) - Dependence on Prospect Capital Management's key personnel (John F. Barry III and M. Grier Eliasek) means their departure could materially affect the ability to achieve investment objectives[229](index=229&type=chunk) - The incentive fee structure may encourage the Investment Adviser to make more speculative investments or favor deferred interest features, potentially creating conflicts of interest[244](index=244&type=chunk)[245](index=245&type=chunk) - Cybersecurity incidents and system failures could disrupt business operations, leading to financial losses, reputational damage, and regulatory penalties[251](index=251&type=chunk)[253](index=253&type=chunk)[258](index=258&type=chunk) [Risks Relating to Our Operation as a Business Development Company](index=49&type=section&id=Risks%20Relating%20to%20Our%20Operation%20as%20a%20Business%20Development%20Company) Operating as a BDC imposes specific regulatory risks, including asset qualification requirements, corporate-level taxes if RIC status is lost, distribution challenges, and capital raising restrictions - Failure to invest a sufficient portion of assets in 'qualifying assets' could lead to violation of the **1940 Act** and adverse effects on business[260](index=260&type=chunk) - If the company fails to qualify as a RIC, it would be subject to corporate-level taxes, substantially reducing net assets and income available for distribution[261](index=261&type=chunk)[265](index=265&type=chunk) - Difficulty in paying required distributions may arise if income is recognized before cash is received (e.g., original issue discount, PIK interest), potentially forcing asset sales or limiting new investments[266](index=266&type=chunk)[267](index=267&type=chunk) - Regulations limit the ability to raise additional capital, especially issuing common stock below net asset value without stockholder approval, which can hinder growth[268](index=268&type=chunk)[269](index=269&type=chunk) - Securitization of assets, while a funding source, exposes the company to risks of loss on retained equity, greater risk on remaining portfolio assets, and potential restrictive covenants[271](index=271&type=chunk)[273](index=273&type=chunk)[274](index=274&type=chunk) [Risks Relating to Our Investments](index=52&type=section&id=Risks%20Relating%20to%20Our%20Investments) The company's investments carry significant risks, including potential for no gains, fair value uncertainty for illiquid securities, economic downturn impacts, and risks from CLOs and covenant-lite loans - Investments may not appreciate in value or generate income, and debt issuers may default, leading to potential losses[280](index=280&type=chunk) - Most portfolio investments are recorded at fair value, which is subjective and uncertain, especially for private securities, potentially leading to significant fluctuations and unrealized depreciation[281](index=281&type=chunk)[282](index=282&type=chunk)[283](index=283&type=chunk)[284](index=284&type=chunk) - Investments in middle-market companies are risky due to limited financial resources, shorter operating histories, dependence on small management teams, and difficulty accessing capital markets[286](index=286&type=chunk)[290](index=290&type=chunk) - Investments in CLOs are highly leveraged, less transparent, and subject to risks from underlying debt investments, including potential payment reductions if financial covenants are not met[319](index=319&type=chunk)[320](index=320&type=chunk)[322](index=322&type=chunk)[323](index=323&type=chunk) - A significant portion of investments may be 'covenant-lite loans,' which lack maintenance covenants, increasing exposure to losses due to liquidity and price volatility risks[336](index=336&type=chunk) [Risks Relating to Our Securities](index=61&type=section&id=Risks%20Relating%20to%20Our%20Securities) The company's securities face risks from credit ratings, leverage from senior securities, potential dilution from preferred stock, and common stock trading at a discount to NAV - Credit ratings may not reflect all risks, and senior securities (debt and preferred equity) expose the company to additional leverage risks, including increased volatility in NAV and market price of common stock[337](index=337&type=chunk)[341](index=341&type=chunk) - Preferred stock offerings, especially convertible ones, could result in significant dilution to existing common stockholders, and preferred stockholders have rights to elect directors and class voting rights on certain matters[354](index=354&type=chunk)[357](index=357&type=chunk)[369](index=369&type=chunk)[392](index=392&type=chunk) - The trading market and market value of publicly traded preferred stock may fluctuate due to interest rates, market conditions, and the company's financial performance[393](index=393&type=chunk)[394](index=394&type=chunk)[395](index=395&type=chunk) - Common stock currently trades at a discount from net asset value and may continue to do so, limiting the ability to raise additional equity capital without stockholder approval[406](index=406&type=chunk)[407](index=407&type=chunk) - Stockholders may not receive dividends or experience dividend growth, and those opting out of the dividend reinvestment plan may face dilution[408](index=408&type=chunk)[409](index=409&type=chunk)[414](index=414&type=chunk) [General Risk Factors](index=38&type=section&id=General%20Risk%20Factors) The company's quarterly results may fluctuate due to various factors, including structuring fees, interest/dividend rates on investments, default rates, expenses, and general economic conditions - Quarterly operating results may fluctuate due to factors such as structuring fees, interest/dividend rates on debt/equity securities, default rates, expenses, competition, and general economic conditions[437](index=437&type=chunk) [Item 1B. Unresolved Staff Comments](index=79&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This section states that there are no unresolved staff comments applicable to the company [Item 1C. Cybersecurity](index=79&type=section&id=Item%201C.%20Cybersecurity) The company relies on Prospect Capital Management's cybersecurity program for risk management, which includes threat assessment, third-party reviews, and an incident response plan, with Board oversight - The company relies on Prospect Capital Management's cybersecurity policies and procedures for assessing, identifying, and managing material risks from cybersecurity threats[439](index=439&type=chunk)[440](index=440&type=chunk) - The cybersecurity program includes third-party reviews, an incident response plan, and regular phishing tests with supplementary training[441](index=441&type=chunk)[442](index=442&type=chunk)[443](index=443&type=chunk) - The Board of Directors provides strategic oversight, receiving periodic updates from the Chief Compliance Officer (CCO), who manages the program and relies on the Adviser's technology team[445](index=445&type=chunk)[446](index=446&type=chunk) [Item 2. Properties](index=81&type=section&id=Item%202.%20Properties) The company does not own any material real estate or physical properties; its office space is leased by Prospect Administration and deemed suitable for current operations - The company does not own any real estate or other physical properties materially important to its operation[448](index=448&type=chunk) - Office facilities are leased by Prospect Administration and are considered suitable and adequate for the business[448](index=448&type=chunk) [Item 3. Legal Proceedings](index=81&type=section&id=Item%203.%20Legal%20Proceedings) The company may be involved in various legal proceedings in the ordinary course of business, which could incur significant costs, but no material legal proceedings are known as of June 30, 2025 - The company may become involved in various investigations, claims, and legal proceedings in the ordinary course of business[449](index=449&type=chunk) - As of June 30, 2025, the company is not aware of any material legal proceedings[450](index=450&type=chunk) [Item 4. Mine Safety Disclosures](index=81&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company [PART II](index=82&type=section&id=PART%20II) [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=82&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ under 'PSEC', often at a discount to NAV, with stockholders approving sales below NAV under certain conditions - The company's common stock is traded on the NASDAQ Global Select Market under the symbol 'PSEC'[453](index=453&type=chunk) Common Stock NAV and Market Price Performance | Period | NAV (per share) | High Stock Price | Low Stock Price | Premium (Discount) of High to NAV | Premium (Discount) of Low to NAV | | :--- | :--- | :--- | :--- | :--- | :--- | | **Year Ended June 30, 2024** | | | | | | | First quarter | $9.25 | $6.65 | $5.94 | (28.1)% | (35.8)% | | Second quarter | $8.92 | $6.18 | $5.08 | (30.7)% | (43.0)% | | Third quarter | $8.99 | $6.24 | $5.33 | (30.6)% | (40.7)% | | Fourth quarter | $8.74 | $5.69 | $5.21 | (34.9)% | (40.4)% | | **Year Ended June 30, 2025** | | | | | | | First quarter | $8.10 | $5.60 | $4.75 | (30.9)% | (41.4)% | | Second quarter | $7.84 | $5.34 | $4.16 | (31.9)% | (46.9)% | | Third quarter | $7.25 | $4.45 | $4.10 | (38.6)% | (43.4)% | | Fourth quarter | $6.56 | $4.06 | $3.14 | (38.1)% | (52.1)% | - Stockholders reauthorized the company on June 17, 2025, to sell common stock below NAV until June 17, 2026, subject to certain conditions[456](index=456&type=chunk)[417](index=417&type=chunk) - The company maintains a monthly distribution policy, with common stockholders' cash distributions automatically reinvested in additional shares at a **5% discount** to market price, unless they opt out[458](index=458&type=chunk)[465](index=465&type=chunk)[468](index=468&type=chunk) Common Stock Distributions Declared and Payable | Period | Total Amount Distributed (in thousands) | | :--- | :--- | | Year Ended June 30, 2025 | $264,059 | | Year Ended June 30, 2024 | $297,633 | - The company has a share repurchase plan for up to **$100 million of common stock** at prices below NAV, with **$65.9 million remaining** as of June 30, 2025; it also authorized repurchases for Series A Preferred Stock[470](index=470&type=chunk)[471](index=471&type=chunk)[472](index=472&type=chunk) [Recent Sales of Common Stock Below Net Asset Value](index=82&type=section&id=Recent%20Sales%20of%20Common%20Stock%20Below%20Net%20Asset%20Value) Stockholders have repeatedly approved the company's ability to sell common stock below its net asset value (NAV) per share, with the current approval valid until June 17, 2026 - Stockholders approved the ability to sell common stock below NAV per share at annual meetings since 2009, and most recently on June 17, 2025, valid until June 17, 2026[456](index=456&type=chunk) - Sales below NAV are subject to conditions, including that the number of shares sold on any given date does not exceed **25% of outstanding common stock** immediately prior to such sale[456](index=456&type=chunk) [Distribution Policy](index=83&type=section&id=Distribution%20Policy) The company shifted to monthly distributions in June 2010 and intends to continue this policy, distributing at least 90% of taxable income as a RIC to avoid corporate-level taxes - The company changed its distribution policy from quarterly to monthly payments in June 2010 and intends to continue monthly distributions[458](index=458&type=chunk) - As a RIC, the company must distribute at least **90% of its investment company taxable income** to avoid U.S. federal income tax and a **4% non-deductible excise tax**[459](index=459&type=chunk) - The company did not have an excise tax liability for the calendar year ended December 31, 2024, and does not expect one for 2025[460](index=460&type=chunk) Common Stock Distributions Declared and Payable | Period | Total Amount Distributed (in thousands) | | :--- | :--- | | Year Ended June 30, 2025 | $264,059 | | Year Ended June 30, 2024 | $297,633 | [Dividend Reinvestment Plan](index=85&type=section&id=Dividend%20Reinvestment%20Plan) The company operates an 'opt-out' common stock dividend reinvestment and direct stock purchase plan (DRIP), automatically reinvesting cash dividends into new common shares at a 5% discount - The company maintains an 'opt out' common stock dividend reinvestment and direct stock purchase plan (DRIP)[465](index=465&type=chunk) - Cash dividends are automatically reinvested in newly-issued common shares at a **5% discount** to the market price[465](index=465&type=chunk)[468](index=468&type=chunk) Common Shares Issued Through DRIP | Year Ended June 30, | Shares Issued | | :--- | :--- | | 2025 | 7,505,661 | | 2024 | 6,736,142 | [Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=87&type=section&id=Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company has a share repurchase plan for common stock below NAV, with no repurchases in fiscal years 2025 or 2024, and authorized repurchases for preferred stock - The company has a share repurchase plan to buy back up to **$100 million of common stock** below NAV, with **$65.9 million remaining** as of June 30, 2025[470](index=470&type=chunk)[471](index=471&type=chunk) - No common stock was repurchased under the program in fiscal years 2025 or 2024[471](index=471&type=chunk) - The Board authorized repurchases of Series A Preferred Stock, but no repurchases occurred during the three months ended June 30, 2025[472](index=472&type=chunk) - During Q4 2025, the company exchanged **43,040 Series M1 Preferred Stock** for Series M5 Preferred Stock and **16,960 Series M3 Preferred Stock** for Series M4 and M5 Preferred Stock, under Section 3(a)(9) of the Securities Act[473](index=473&type=chunk) [Stock Performance Graph](index=88&type=section&id=Stock%20Performance%20Graph) This section presents a graph comparing the company's common stock cumulative total return against various indices over five fiscal years, assuming daily dividend reinvestment - The graph compares the company's common stock cumulative total return against the S&P 500 Index, S&P BDC Index, and S&P/LSTA U.S. Leveraged Loan 100 Index[475](index=475&type=chunk) - The comparison is based on a hypothetical **$100 investment** on June 30, 2020, assuming daily dividend reinvestment[476](index=476&type=chunk) - The stock performance graph is for illustrative purposes only and not indicative of future stock performance[476](index=476&type=chunk) [Fees and Expenses](index=88&type=section&id=Fees%20and%20Expenses) This section details the fees and expenses borne by common stockholders, including management fees, incentive fees, interest expense, and other operating expenses, with a hypothetical example illustrating cumulative costs Annual Expenses (as a percentage of net assets attributable to common stock) - June 30, 2025 | Expense Category | Percentage | | :--- | :--- | | Management fees | 5.40 % | | Incentive fees payable | 1.36 % | | Total advisory fees | 6.76 % | | Total interest expense | 6.79 % | | Other expenses | 1.53 % | | Total annual expenses | 15.08 % | | Dividends on Preferred Stock | 3.58 % | | Total annual expenses after dividends on Preferred Stock | 18.66 % | Hypothetical Cumulative Expenses on a $1,000 Investment (assuming 5% annual return) | Period | Expenses (no capital gains) | Expenses (with capital gains) | | :--- | :--- | :--- | | 1 Year | $173 | $183 | | 3 Years | $458 | $479 | | 5 Years | $677 | $702 | | 10 Years | $1,028 | $1,046 | - The base management fee is **2% of gross assets**, which includes borrowed amounts; assuming **$2.1 billion in borrowings**, this equates to approximately **5.40% of net assets**[488](index=488&type=chunk) - The incentive fee is based on net investment income and realized capital gains, with the income incentive fee being the only component incurred for the year ended June 30, 2025[489](index=489&type=chunk) [Item 6. [Reserved]](index=94&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no content [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=95&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of Prospect Capital Corporation's financial condition and results of operations, highlighting investment activities, debt and equity issuances, portfolio performance, and key financial metrics - The company's investment objective is to generate both current income and long-term capital appreciation, primarily investing in private U.S. middle-market companies[519](index=519&type=chunk) - As of June 30, 2025, the company had **$6,673,516 in 97 portfolio investments** and CLOs, representing **223.3% of net assets** applicable to common shares[539](index=539&type=chunk) Key Financial Highlights (Years Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Total Investment Income | $719,436 | $861,662 | | Total Operating Expenses | $380,596 | $441,826 | | Net Investment Income | $338,840 | $419,836 | | Net Realized Gains (Losses) from Investments | $(518,682) | $(417,443) | | Net Change in Unrealized Gains (Losses) from Investments | $(291,054) | $260,689 | | Net Increase (Decrease) in Net Assets Resulting from Operations | $(469,924) | $262,834 | | Net Asset Value per Common Share | $6.56 | $8.74 | [Overview](index=95&type=section&id=Overview) Prospect Capital Corporation is a BDC and RIC focused on middle-market private companies, aiming for current income and capital appreciation through various debt and equity investments, externally managed by Prospect Capital Management - Prospect is a financial services company primarily lending to and investing in middle-market privately-held companies, operating as a BDC and RIC[515](index=515&type=chunk) - The investment objective is to generate both current income and long-term capital appreciation, focusing on senior and secured first/second lien loans and equity/equity-linked investments[519](index=519&type=chunk) - The company consolidates wholly-owned subsidiaries like Prospect Capital Funding LLC (PCF) and Prospect Yield Corporation, LLC (PYC), along with several Consolidated Holding Companies[516](index=516&type=chunk)[517](index=517&type=chunk) [Fourth Quarter Highlights](index=96&type=section&id=Fourth%20Quarter%20Highlights) In Q4 2025, the company originated $270,859 in gross investments, repaid $342,947 of 2026 Notes, and held $6,673,516 in investments with a 12.2% annualized current yield Q4 2025 Investment Transactions (in thousands) | Activity | Amount | | :--- | :--- | | New Investments | $181,383 | | Follow-on Investments | $59,644 | | Revolver Advances | $12,500 | | PIK Interest | $17,332 | | **Gross Investment Originations** | **$270,859** | | Full Repayments | $53,000 | | Sales | $315,601 | | Revolver Paydowns | $4,563 | | Partial Prepayments/Amortization/Return of Capital | $72,162 | | **Total Repayments** | **$445,326** | Q4 2025 Debt Issuances and Redemptions (in thousands) | Activity | Amount | | :--- | :--- | | InterNotes® Repaid | $1,399 | | 2026 Notes Repurchased (tender offer) | $135,731 | | 2026 Notes Redeemed (remaining) | $207,216 | | InterNotes® Issued | $5,733 | Q4 2025 Equity Issuances and Redemptions | Activity | Shares Issued/Converted | | :--- | :--- | | Common Stock (DRIP) | 2,110,260 | | Preferred Stock Converted to Common Stock | 6,448,188 | | Series A5 Preferred Stock Issued | 616,374 | | Series M5 Preferred Stock Issued | 164,218 | | Preferred Stock (DRIP) | 41,250 | - As of June 30, 2025, the company had **$6,673,516 in 97 portfolio investments**, with an annualized current yield of **12.2%** on performing interest-bearing investments[539](index=539&type=chunk)[540](index=540&type=chunk) [Portfolio Investment Activity](index=101&type=section&id=Portfolio%20Investment%20Activity) The company's origination efforts focus on secured lending to non-control investments, primarily first and second lien loans, with gross originations of $892,598 and repayments of $1,302,673 in fiscal year 2025 - Origination efforts are focused on secured lending to non-control investments, primarily first and second lien loans, and select equity investments[549](index=549&type=chunk) Gross Investment Activity (Years Ended June 30, in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Investments in new portfolio companies | $523,710 | $193,590 | | Follow-on investments in existing portfolio companies | $236,554 | $399,083 | | Revolver advances | $36,095 | $37,278 | | PIK interest | $96,239 | $134,505 | | **Total investments in portfolio companies** | **$892,598** | **$764,456** | | Partial repayments | $324,046 | $269,024 | | Full repayments | $605,474 | $234,473 | | Investments sold | $357,637 | $70,002 | | Revolver paydowns | $15,516 | $10,694 | | **Total investments repaid or sold** | **$1,302,673** | **$584,193** | Weighted Average Interest Rates for New Investments by Portfolio Composition (Years Ended June 30) | Investment Type | 2025 | 2024 | | :--- | :--- | :--- | | First Lien Debt | 12.17 % | 12.23 % | | Second Lien Debt | 24.00 % | N/A | [Investment Valuation](index=102&type=section&id=Investment%20Valuation) The company values its investment portfolio quarterly at fair value, with most investments classified as Level 3 and valued using discounted cash flow, enterprise value waterfall, or asset recovery analysis - Investments with readily available market quotations are valued at market quotes (Level 1 or 2); most investments lack such quotes and are classified as **Level 3**[552](index=552&type=chunk)[553](index=553&type=chunk) - Level 3 debt investments (excluding CLOs and controlling portfolio companies) are valued using discounted cash flow techniques based on estimated credit ratings and yields[554](index=554&type=chunk) - CLO investments are valued using a discounted multi-path cash flow model with Monte Carlo simulations to generate probability-weighted cash flows[555](index=555&type=chunk) - The Board of Directors determines the fair value of each investment in good faith, based on input from the Investment Adviser, independent valuation firms, and the Audit Committee[557](index=557&type=chunk) [Control Company Investments](index=103&type=section&id=Control%20Company%20Investments) Control investments offer increased risk and reward, with values susceptible to operating results and market multiples; as of June 30, 2025, controlled investments were valued at $280,123 above amortized cost - Control investments offer increased risk and reward, with values susceptible to dramatic changes from operating results and market multiples[559](index=559&type=chunk) - As of June 30, 2025, the company's controlled investments were valued at **$280,123** above their amortized cost[587