Core Viewpoint - The company's net asset value per share has decreased to $1.69 from $1.95, primarily due to significant unrealized losses in the CLO equity portion of the portfolio [1] Group 1: Financial Performance - The valuation pressure during the quarter is attributed to a challenging year-end for CLO equity and broader volatility in the U.S. loan market [1] - The distress ratio increased notably to 4.34% from 2.88%, indicating growing concerns within the software private credit and syndicated loan markets [1] - The portfolio's performance was negatively impacted by a 265 basis point average decrease in CCC-rated loan prices, despite a slight improvement in B-rated loan pricing [1] Group 2: Investment Activity - Investment activity was concentrated on first-lien B2B loans, with $18 million in new purchases aimed at capturing value during periods of market pricing dispersion [1] - There is a general market pushback against the rapid growth of the private credit asset class, which has contributed to wider U.S. syndicated corporate loan spreads [1] Group 3: Strategic Positioning - The company continues to leverage its structure as a permanent capital vehicle to maintain a long-term investment horizon, despite short-term primary market slowdowns [1]

Financial Data and Key Metrics Changes - For the fourth quarter ended December 2025, the company's net investment income was approximately $5.4 million or $0.07 per share, a slight decrease from approximately $5.6 million or $0.07 per share in the prior quarter [4] - The net asset value per share decreased to $1.69 from $1.95 in the prior quarter [4] - Total investment income for the quarter was approximately $10.4 million, compared to approximately $10.2 million in the prior quarter [4] - The company recorded combined net unrealized and realized losses on investments of approximately $18.3 million or $0.22 per share, compared to losses of approximately $7.5 million or $0.09 per share in the prior quarter [5] Business Line Data and Key Metrics Changes - The investment activity during the quarter included purchases of approximately $18 million and repayments of approximately $7.4 million [5] - The company issued approximately 4.3 million shares of common stock, resulting in net proceeds of approximately $7.9 million [5] Market Data and Key Metrics Changes - U.S. loan market performance declined, with U.S. loan prices decreasing from 97.06% of par to 96.64% of par [7] - The 12-month trailing default rate for the loan index decreased to 1.23% from 1.47% [8] - The distress ratio, defined as loans with prices below 80% of par, increased to 4.34% from 2.88% [8] - U.S. leveraged loan primary market issuance was $70.7 billion, representing a 27% decrease compared to the same quarter in the previous year [8] Company Strategy and Development Direction - The company focuses on portfolio management strategies aimed at maximizing long-term total return, leveraging its status as a permanent capital vehicle to adopt a longer-term investment strategy [9] Management's Comments on Operating Environment and Future Outlook - Management noted that the current state of the software market reflects real concerns, contributing to wider corporate loan spreads and lower pricing in the syndicated loan markets [16] - The company sees opportunities in both primary and secondary markets despite the slowdown in the primary market due to volatility [13] Other Important Information - The board of directors declared monthly distributions of $0.035 per share for the months ending April, May, and June of 2026 [5] - Additional performance information is available on the company's website [10] Q&A Session Summary Question: Details on $18 million of new investment purchases - The company is focused on first lien loans, particularly B2B loans, and sees opportunities in both primary and secondary markets despite market volatility [12][13] Question: Distress ratio increase and its implications - Management confirmed that the increase in the distress ratio reflects concerns in the software market and broader market volatility, which may create investment opportunities at lower prices [14][16] Question: Drivers of unrealized appreciation in the quarter - The primary driver of unrealized appreciation was a markdown of the CLO equity portion of the investment book, which faced challenges during the quarter [17][18]