(All figures in this item are in thousands except share, per share and other data.) The following discussion should be read in conjunction with our consolidated financial statements and related notes and other financial information appearing elsewhere in this Annual Report. In addition to historical information, the following discussion and other parts of this Annual Report contain forward-looking information that involves risks and uncertainties. Our actual results may differ significantly from any results expressed or implied by these forward-looking statements due to the factors discussed in Part II, “Item 1A. Risk Factors” and “Forward-Looking Statements” appearing elsewhere herein. Overview The terms “Prospect”, “the Company”, “we”, “us” and “our” mean Prospect Capital Corporation and its subsidiaries unless the context specifically requires otherwise. Prospect is a financial services company that primarily lends to and invests in middle market privately-held companies. We are a closed-end investment company incorporated in Maryland. We have elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). As a BDC, we have elected to be treated as a regulated investment company (“RIC”), under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). We were organized on April 13, 2004, and were funded in an initial public offering completed on July 27, 2004. On May 15, 2007, we formed a wholly owned subsidiary Prospect Capital Funding LLC (“PCF”), a Delaware limited liability company and a bankruptcy remote special purpose entity, which holds certain of our portfolio loan investments that are used as collateral for the revolving credit facility at PCF. On September 30, 2014, we formed a wholly-owned subsidiary Prospect Yield Corporation, LLC (“PYC”) and effective October 23, 2014, PYC holds a portion of our collateralized loan obligations (“CLOs”), which we also refer to as subordinated structured notes (“SSNs”). Each of these subsidiaries have been consolidated since operations commenced. We consolidate certain of our wholly owned and substantially wholly owned holding companies formed by us in order to facilitate our investment strategy. The following companies are included in our consolidated financial statements and are collectively referred to as the “Consolidated Holding Companies”: Belnick Holdings of Delaware, LLC (“Belnick Delaware”); CP Holdings of Delaware LLC (“CP Holdings”); Credit Central Holdings of Delaware, LLC (“Credit Central Delaware”); Energy Solutions Holdings Inc.; First Tower Holdings of Delaware LLC (“First Tower Delaware”); MITY Holdings of Delaware Inc. (“MITY Delaware”); Nationwide Acceptance Holdings LLC; NMMB Holdings, Inc. (“NMMB Holdings”); NPH Property Holdings, LLC (“NPH”); NPH Holdco LLC (“NPH Holdco”); Prospect Opportunity Holdings I, Inc. (“POHI”); R-V Holdings of Delaware, LLC (“R-V Holdings”); SB Forging Company, Inc. (“SB Forging”); STI Holding, Inc.; UTP Holdings Group Inc. (“UTP Holdings”); Valley Electric Holdings I, Inc. (“Valley Holdings I”); Valley Electric Holdings II, Inc. (“Valley Holdings II”); and Victor Holdings of Delaware, LLC (“Victor Holdings”). We are externally managed by our investment adviser, Prospect Capital Management L.P. (“Prospect Capital Management” or the “Investment Adviser”). Prospect Administration LLC (“Prospect Administration”), a wholly-owned subsidiary of the Investment Adviser, provides administrative services and facilities necessary for us to operate. Our investment objective is to generate both current income and long-term capital appreciation. We intend to invest primarily in privately owned United States (“U.S.”) middle market companies, in senior and secured first lien loans and, to a lesser extent, second lien loans, as well as equity and equity-linked investments with capital-appreciation potential (such as senior and secured convertible debt, preferred equity, common equity and warrants). Most of our investments will be in private U.S. companies; however, we may also invest to some extent in broadly-traded public companies and non-U.S. companies (subject to compliance with BDC requirements to invest at least 70% of assets in “eligible portfolio companies,” which are generally privately offered securities issued by U.S. private or thinly-traded companies). We are a non-diversified company within the meaning of the 1940 Act. Our primary investment strategy is investing in private, middle-market companies in the U.S. in need of capital for refinancings, acquisitions, capital expenditures, growth initiatives, recapitalizations and other purposes. Typically, we focus on making investments in middle-market companies with annual revenues of less than $750 million and enterprise values of less than $1 billion. These private, middle-market companies are primarily owned by private equity funded and independent sponsors or us, as well as by a portfolio company’s management team, founder(s), or other investors. Our typical investment involves a senior and secured loan of less than $250 million. 88 Our investments in senior and secured loans are generally senior debt instruments that rank ahead of unsecured debt and equity of a given portfolio company. These loans also have the benefit of security interests on assets of the applicable portfolio company, which often rank ahead of any other security interests. We also make equity and equity-linked investments with capital-appreciation potential (such as senior and secured convertible debt, preferred equity, common equity and warrants). We also invest a lesser amount of our assets in senior and secured debt and controlling equity positions in real estate investment trusts (“REIT” or “REITs”). The real estate investments of National Property REIT Corp. (“NPRC”) are in various classes of developed and occupied real estate properties that generate current yields, including multi-family properties and other tenant-diversified properties; historically, NPRC made investments in structured credit (primarily debt tranches). We historically invested in structured credit (primarily equity tranches). We may also invest in other strategies and opportunities from time to time that the Investment Adviser views as attractive. The Investment Adviser may continue to evaluate other origination strategies in the ordinary course of business with no specific top-down allocation to any single origination strategy. We directly originate the significant majority of our investments through our long-term relationships with private equity funded and independent sponsors, financial intermediaries, and management teams, as well as other sources. We seek to maximize returns, including both current yield and capital-appreciation potential, and minimize risk for our investors by applying rigorous credit and other analyses and cash-flow and asset-based lending techniques to originate, close, and monitor our investments. We are consistently pursuing multiple investment opportunities. There can be no assurance that we will successfully consummate any investment opportunity we pursue. If any of these opportunities are consummated, there can be no assurance that investors will share our view of valuation or that any assets acquired will not be subject to future write downs, each of which could have an adverse effect on our stock price. We hold many of our control investments in a two-tier structure consisting of a holding company and one or more related operating companies for tax purposes. These holding companies serve various business purposes including concentration of management teams, optimization of third-party borrowing costs, improvement of supplier, customer, and insurance terms, and enhancement of co-investments by the management teams. In these cases, our investment, which is generally equity in the holding company, the holding company’s equity investment in the operating company and any debt from us directly to the operating company structure represents our total exposure for the investment. As of June 30, 2026, as shown in our Consolidated Schedule of Investments, the cost basis and fair value of our investments in controlled companies was $3,367,618 and $3,644,274, respectively. This structure gives rise to several of the risks described in our public documents and highlighted elsewhere in this Annual Report. We consolidate all wholly owned and substantially wholly owned holding companies formed by us for the purpose of holding our controlled investments in operating companies. There is no significant effect of consolidating these holding companies as they hold minimal assets other than their investments in the controlled operating companies. Investment company accounting prohibits the consolidation of any operating companies. On July 7, 2026, at a special meeting of stockholders, our stockholders authorized us to sell shares of our common stock (during the next 12 months) at a price or prices below our net asset value per share at the time of sale in one or more offerings, subject to certain conditions as set forth in the proxy statement relating to the special meeting (including that the number of shares sold on any given date does not exceed 25% of its outstanding common stock immediately prior to such sale). Our previously outstanding 6.375% convertible notes due 2025, which matured during the fiscal year ended June 30, 2025, are referred to as the “2025 Notes” or the “Convertible Notes”. Our previously outstanding 3.706% unsecured notes due 2026, which were redeemed during the fiscal year ended June 30, 2025, are referred to as the “2026 Notes”. Our $264.5 million of 3.364% unsecured notes due 2026 are referred to as the “3.364% 2026 Notes”. Our $254.7 million of 3.437% unsecured notes due 2028 are referred to as the “3.437% 2028 Notes”. Our $182.2 million of 5.50% unsecured notes due 2030 are referred to as the “5.50% 2030 Notes”, and collectively with the 2026 Notes, the 3.364% 2026 Notes, and the 3.437% 2028 Notes, as the “Public Notes”. Any corporate notes issued pursuant to our medium term notes program with InspereX LLC are referred to as “Prospect Capital InterNotes®”. The Public Notes and Prospect Capital InterNotes® are collectively referred to as the “Unsecured Notes”. Fourth Quarter Highlights Investment Transactions We seek to be a long-term investor with our portfolio companies. During the three months ended June 30, 2026 we acquired $97,170 of new investments, completed follow-on investments in existing portfolio companies totaling approximately $27,644, funded $20,800 of revolver advances, and recorded PIK interest of $20,707, resulting in gross investment originations of 89 $166,321. During the three months ended June 30, 2026 we received full repayments totaling $21,432, received $35 of revolver paydowns, received $0 in sales, and received $24,360 in partial prepayments, scheduled principal amortization payments, and return of capital distributions, resulting in repayments of approximately $45,827. Debt Issuances and Redemptions During the three months ended June 30, 2026 we repaid $1,854 aggregate principal amount of Prospect Capital InterNotes® at par in accordance with the Survivor’s Option, as defined in the InterNotes® Offering prospectus. As a result of these transactions, we recorded a loss in the amount of the unamortized debt issuance costs. The net loss on the extinguishment of Prospect Capital InterNotes® in the three months ended June 30, 2026 was $37. During the three months ended June 30, 2026 we issued $6,917 aggregate principal amount of Prospect Capital InterNotes® with a weighted average stated interest rate of 7.01%, to extend our borrowing base. The newly issued notes mature between April 15, 2029 and June 15, 2033 and generated net proceeds of $6,832. During the three months ended June 30, 2026 we repurchased $677 aggregate principal amount of the 3.364% 2026 Notes at a weighted average price of 99.02%, including commissions, plus accrued and unpaid interest. As a result, we recognized a net realized gain of $6 from the extinguishment of debt in the amount of the difference between the reacquisition price and the net carrying amount of the repurchased 3.364% 2026 Notes During the three months ended June 30, 2026, we repurchased $25,001 aggregate principal amount of the 3.437% 2028 Notes at a weighted average price of 93.44%, including commissions, plus accrued and unpaid interest. As a result, we recognized a net realized gain of $1,517 from the extinguishment of debt in the amount of the difference between the reacquisition price and the net carrying amount of the repurchased 3.437% 2028 Notes. Equity Issuances and Redemptions On April 21, 2026, May 19, 2026 and June 18, 2026 we issued 998,885, 1,275,870, and 985,754 shares of our common stock in connection with the dividend reinvestment plan, respectively. During the three months ended June 30, 2026, 1,597,774 shares of our Series A1 Preferred Stock, 568,950 shares of our Series A3 Preferred Stock, 19,289 shares of our Series M1 Preferred Stock, and 106,743 shares of our Series M3 Preferred Stock were converted to 21,457,011 shares of our common stock, in connection with Holder Optional Conversions and Optional Redemptions Following Death of a Holder, resulting in a loss from redemption of preferred stock of $5,335. On May 8, 2026, we entered into an equity distribution agreement by and among us, Prospect Capital Management L.P., Prospect Administration LLC, and A.G.P. / Alliance Global Partners (“AGP”), with AGP as sales agent, relating to the offer and sale, by means of an at-the-market offering, of up to 16,000,000 shares, or $400,000 in aggregate liquidation preference, of our Series A Preferred Stock. During the three months ended June 30, 2026 we issued 626,888 shares of Series A5 Preferred Stock for net proceeds of $14,103, 88,489 shares of Series M5 Preferred Stock for net proceeds of $2,146, and 65,692 shares of Series A Preferred Stock for net proceeds of $1,098 each excluding offering costs and preferred stock dividend reinvestment. In connection with our Preferred Stock Dividend Reinvestment Plan, we issued additional Series A1 Preferred Stock, Series A3 Preferred Stock, Series A4 Preferred Stock, Series A5 Preferred Stock, Series M1 Preferred Stock, Series M3 Preferred Stock, Series M4 Preferred Stock, and Series M5 Preferred Stock of 13,149, 12,988, and 12,797 throughout April, May, and June, respectively. On July 7, 2026, at a special meeting of our stockholders, our stockholders authorized us sell shares of our common stock (during the next 12 months) at a price or prices below our then current net asset value per share in one or more offerings subject to certain conditions as set forth in the proxy statement relating to the special meeting (including that the number of shares sold on any given date does not exceed 25% of our outstanding common stock immediately prior to such sale). Investment Holdings As of June 30, 2026, we have $6,342,558, or 216.5%, of our net assets applicable to common shares, invested in 91 portfolio companies and other portfolio investments. Our annualized current yield was 11.8% and 12.2% as of June 30, 2026 and June 30, 2025, respectively, across all performing interest bearing investments, excluding equity investments and non-accrual loans. Our annualized current yield was 9.0% and 90 9.6% as of June 30, 2026 and June 30, 2025, respectively, across all investments. In many of our portfolio companies we hold equity positions, ranging from minority interests to majority stakes, which we expect over time to contribute to our investment returns. Some of these equity positions include features such as contractual minimum internal rates of returns, preferred distributions, flip structures and other features expected to generate additional investment returns, as well as contractual protections and preferences over junior equity, in addition to the yield and security offered by our cash flow and collateral debt protections. We are a non-diversified company within the meaning of the 1940 Act. As required by the 1940 Act, we classify our investments by level of control. As defined in the 1940 Act, “Control Investments” are those where there is the ability or power to exercise a controlling influence over the management or policies of a company. Control is generally deemed to exist when a company or individual possesses a beneficial ownership of 25% or more of the voting securities of an investee company. Under the 1940 Act, “Affiliate Investments” are defined by a lesser degree of influence and are deemed to exist through owning, controlling, or holding with power to vote, 5% or more of the outstanding voting securities of another person. “Non-Control/Non-Affiliate Investments” are those that are neither Control Investments nor Affiliate Investments. As of June 30, 2026, we own controlling interests in the following portfolio companies: Belnick, LLC (“Belnick”); CP Energy Services Inc. (“CP Energy”); Credit Central Loan Company, LLC (“Credit Central”); Echelon Transportation, LLC (“Echelon”); First Tower Finance Company LLC (“First Tower Finance”); Freedom Marine Solutions, LLC (“Freedom Marine”); InterDent, Inc. (“InterDent”); Kickapoo Ranch Pet Resort (“Kickapoo”); MITY, Inc. (“MITY”); NPRC; Nationwide Loan Company LLC (“Nationwide”); NMMB, Inc. (“NMMB”); Pacific World Corporation (“Pacific World”); QC Holdings TopCo, LLC (“QC Holdings”); R-V Industries, Inc. (“R-V”); Universal Turbine Parts, LLC (“UTP”); Strategic Chemical Solutions Corp. (f/k/a USES Corp.); Valley Electric Company, Inc. (“Valley Electric”); and Victor Technology, LLC (“Victor”). In June 2019, CP Energy purchased a controlling interest of the common equity of Spartan Energy Holdings, Inc. (“Spartan Holdings”), which owns 100% of Spartan Energy Services, LLC (“Spartan”), a portfolio company of Prospect with $61,429 and $51,477 in first lien term loans (the “Spartan Term Loan A”) due to us as of June 30, 2026 and June 30, 2025, respectively. As a result of CP Energy’s purchase, and given Prospect’s controlling interest in CP Energy, we report our investments in Spartan as a control investment. Spartan remains the direct borrower and guarantor to Prospect for the Spartan Term Loan A. As of June 30, 2026, we also own affiliated interests in Nixon, Inc. (“Nixon”) and RGIS Services, LLC, (“RGIS”). The following shows the composition of our investment portfolio by level of control as of June 30, 2026 and June 30, 2025: June 30, 2026 June 30, 2025 Level of Control Cost % of Portfolio Fair Value % of Portfolio Cost % of Portfolio Fair Value % of Portfolio Control Investments $ 3,367,618 53.3 % $ 3,644,274 57.5 % $ 3,416,244 51.0 % $ 3,696,367 55.4 % Affiliate Investments 12,835 0.2 % 30,447 0.5 % 11,735 0.2 % 27,057 0.4 % Non-Control/Non-Affiliate Investments 2,934,916 46.5 % 2,667,837 42.1 % 3,265,522 48.8 % 2,950,092 44.2 % Total Investments $ 6,315,369 100.0 % $ 6,342,558 100.0 % (1) $ 6,693,501 100.0 % $ 6,673,516 100.0 % (1) Does not foot due to rounding 91 The following shows the composition of our investment portfolio by type of investment as of June 30, 2026 and June 30, 2025: June 30, 2026 June 30, 2025 Type of Investment Cost % of Portfolio Fair Value % of Portfolio Cost % of Portfolio Fair Value % of Portfolio First Lien Revolving Line of Credit $ 78,795 1.2 % $ 72,378 1.1 % $ 83,721 1.3 % $ 81,551 1.2 % First Lien Debt 4,494,789 71.3 % 4,216,556 66.5 % 4,636,795 69.3 % 4,381,227 65.7 % Second Lien Revolving Line of Credit 1,854 — % 1,854 — % — — % — — % Second Lien Debt 752,658 11.9 % 577,354 9.1 % 965,712 14.4 % 765,806 11.5 % Unsecured Debt 7,200 0.1 % 5,195 0.1 % 7,200 0.1 % 5,403 0.1 % Subordinated Structured Notes 2,108 — % 2,794 — % 37,840 0.6 % 35,002 0.5 % Preferred Stock 430,251 6.8 % 175,984 2.8 % 429,426 6.4 % 117,961 1.8 % Common Stock 313,509 5.0 % 583,188 9.2 % 294,505 4.4 % 814,757 12.2 % Membership Interest 227,259 3.6 % 683,341 10.8 % 238,302 3.5 % 438,206 6.5 % Participating Interest (1) — — % 16,968 0.3 % — — % 33,603 0.5 % Warrants 6,946 0.1 % 6,946 0.1 % — — % — — % Total Investments $ 6,315,369 100.0 % $ 6,342,558 100.0 % $ 6,693,501 100.0 % $ 6,673,516 100.0 % (1)Participating Interest includes our participating equity investments, such as net profits interests, net operating income interests, net revenue interests, revenue interests, liquidating trusts and overriding royalty interests. The following shows our investments in interest bearing securities, including non-accrual investments, by type of investment as of June 30, 2026 and June 30, 2025: June 30, 2026 June 30, 2025 Type of Investment Cost % of Portfolio Fair Value % of Portfolio Cost % of Portfolio Fair Value % of Portfolio First Lien Debt and First Lien Revolving Line of Credit $ 4,573,584 85.8 % $ 4,288,934 88.0 % $ 4,720,516 82.4 % $ 4,462,778 84.7 % Second Lien Debt and Second Lien Revolving Line of Credit 754,512 14.1 % 579,208 11.8 % 965,712 16.8 % 765,806 14.5 % Unsecured 7,200 0.1 % 5,195 0.1 % 7,200 0.1 % 5,403 0.1 % Subordinated Structured Notes 2,108 — % 2,794 0.1 % 37,840 0.7 % 35,002 0.7 % Total Interest Bearing Investments $ 5,337,404 100.0 % $ 4,876,131 100.0 % $ 5,731,268 100.0 % $ 5,268,989 100.0 % 92 The following shows the composition of our investment portfolio by industry as of June 30, 2026 and June 30, 2025: June 30, 2026 June 30, 2025 Industry Cost % of Portfolio Fair Value % of Portfolio Cost % of Portfolio Fair Value % of Portfolio Aerospace & Defense $ 93,459 1.5 % $ 124,259 2.0 % $ 87,528 1.3 % $ 102,728 1.5 % Air Freight & Logistics 216,447 3.4 % 167,633 2.6 % 204,924 3.1 % 184,641 2.8 % Automobile Components 126,314 2.0 % 30,209 0.5 % 114,731 1.7 % 82,272 1.2 % Capital Markets — — % — — % 21,500 0.3 % 21,500 0.3 % Commercial Services & Supplies 441,997 7.0 % 445,892 7.0 % 553,016 8.3 % 504,313 7.6 % Construction & Engineering 118,507 2.0 % 316,449 5.0 % 95,912 1.4 % 351,291 5.3 % Consumer Finance 760,592 12.0 % 1,149,153 18.1 % 741,932 11.1 % 953,320 14.2 % Distributors 390,830 6.2 % 354,629 5.6 % 397,405 5.9 % 269,707 4.0 % Diversified Consumer Services 106,292 1.7 % 13,439 0.2 % 104,156 1.6 % 44,069 0.7 % Diversified Telecommunication Services 245,758 3.9 % 190,435 3.0 % 254,876 3.8 % 198,549 3.0 % Electrical Equipment — — % — — % 61,367 0.9 % 61,367 0.9 % Energy Equipment & Services 345,126 5.5 % 141,279 2.2 % 324,321 4.8 % 122,189 1.8 % Residential Real Estate Investment Trusts (REITs) 896,889 14.2 % 1,081,596 17.1 % 922,647 13.8 % 1,300,972 19.5 % Financial Services 77,832 1.2 % 77,832 1.2 % 67,830 1.0 % 67,830 1.0 % Food Products 87,520 1.4 % 84,257 1.3 % 150,213 2.2 % 145,966 2.2 % Health Care Providers & Services 776,917 12.3 % 758,688 12.0 % 767,993 11.5 % 731,527 11.0 % Health Care Technology 126,176 2.0 % 123,898 2.0 % 132,153 2.0 % 130,246 2.0 % Hotels, Restaurants & Leisure 30,681 0.5 % 28,097 0.4 % 28,485 0.4 % 26,249 0.4 % Household Durables 99,757 1.6 % 108,565 1.7 % 109,864 1.6 % 71,506 1.1 % Interactive Media & Services 87,850 1.4 % 87,850 1.4 % 75,076 1.1 % 75,076 1.1 % IT Services 74,008 1.2 % 57,573 0.9 % 103,226 1.5 % 75,619 1.1 % Leisure Products 70,189 1.1 % 70,188 1.1 % 102,149 1.5 % 102,373 1.5 % Machinery 81,796 1.3 % 112,083 1.8 % 101,360 1.6 % 151,914 2.3 % Marine Transport 47,967 0.8 % 12,077 0.2 % 47,117 0.7 % 11,660 0.2 % Media 115,928 1.8 % 164,712 2.6 % 118,472 1.8 % 160,612 2.4 % Personal Care Products 373,627 5.9 % 124,017 2.0 % 348,913 5.2 % 125,356 1.9 % Pharmaceuticals 122,789 1.9 % 141,316 2.2 % 125,918 1.9 % 133,576 2.0 % Professional Services 94,156 1.5 % 92,172 1.5 % 85,531 1.3 % 88,059 1.3 % Software 183,988 2.9 % 148,472 2.3 % 180,500 2.7 % 172,755 2.6 % Specialty Retail 34,689 0.5 % 7,829 0.1 % 32,076 0.5 % 5,914 0.1 % Textiles, Apparel & Luxury Goods 85,180 1.3 % 125,165 2.0 % 84,150 1.3 % 99,705 1.5 % Trading Companies & Distributors — — % — — % 110,320 1.6 % 65,653 1.0 % Subtotal 6,313,261 100.0 % 6,339,764 100.0 % 6,655,661 99.4 % 6,638,514 99.5 % Structured Finance(1) 2,108 — % 2,794 — % 37,840 0.6 % 35,002 0.5 % Total Investments $ 6,315,369 100.0 % $ 6,342,558 100.0 % $ 6,693,501 100.0 % $ 6,673,516 100.0 % (1) Our SSN investments do not have industry concentrations and as such have been separated in the tables above. Portfolio Investment Activity Our current origination efforts are focused primarily on secured lending to middle market investments to mitigate downside risk in the portfolio by investing primarily in first lien loans and second lien loans, though we also continue to invest in select equity investments. For information regarding investment activity for the year ended June 30, 2024, see the Company’s Form 10-K for the fiscal year ended June 30, 2025. 93 Our gross investment activity for the years ended June 30, 2026 and June 30, 2025 are presented below: Years Ended June 30, 2026 2025 Investments in portfolio companies Investments in new portfolio companies $ 138,808 $ 523,710 Follow-on investments in existing portfolio companies (1) 196,269 236,554 Revolver advances 42,648 36,095 PIK interest and dividends 75,872 96,239 Total investments in portfolio companies $ 453,597 $ 892,598 Investments by portfolio composition First Lien Debt $ 365,404 $ 720,336 Second Lien Debt 19,378 58,036 Equity 68,815 114,226 Total investments by portfolio composition $ 453,597 $ 892,598 Investments repaid or sold Partial repayments (2) $ 236,243 $ 324,046 Full repayments 267,100 605,474 Investments sold 55,849 357,637 Revolver paydowns 22,802 15,516 Total investments repaid or sold $ 581,994 $ 1,302,673 Investments repaid or sold by portfolio composition First Lien Debt $ 470,430 $ 754,673 Second Lien Debt 107,679 232,540 Subordinated Structured Notes 639 315,601 Equity 3,246 (141) (4) Total investments repaid or sold by portfolio composition $ 581,994 $ 1,302,673 Weighted average interest rates for new investments by portfolio composition (3) First Lien Debt 11.30 % 12.17 % Second Lien Debt 12.70 % 24.00 % (1) Includes follow-on investments in existing portfolio companies and refinancings, if any. (2) Includes partial prepayments of principal, scheduled amortization payments, and refinancings, if any. (3) The annual weighted average interest rates for new investments by portfolio composition is calculated with the interest rate as of the respective quarter end date when the investment activity occurred. In addition, Revolving Line of Credit and Delayed Draw Term Loans are excluded from the calculation. (4) Negative denotes reversal of receipts previously recorded as return of capital. 94 Key developments in the Company’s portfolio during the year ended June 30, 2026 are as follows: On July 11, 2025, the National Property REIT Corp. loan agreement was amended, extending the maturity date of the First Lien Term Loan facilities (A, D and E) to March 31, 2027. On July 18, 2025, the USG Intermediate, LLC loan agreement was amended, extending the maturity date of the First Lien Revolving Line of Credit to February 9, 2029. On September 30, 2025, the PeopleConnect Holdings, Inc loan agreement was amended, extending the maturity date of First Lien Term Loan to July 22, 2026 On November 14, 2025, the Belnick, LLC (d/b/a The Ubique Group) loan agreement was amended, extending the maturity date of the First Lien Term Loan to May 14, 2029. On February 9, 2026, the PeopleConnect Holdings, Inc loan agreement was amended, extending the maturity date of First Lien Term Loan to January 22, 2028. On May 1, 2026, the Spartan Energy Services, LLC loan agreement was amended, extending the maturity date of the First Lien Term Loans to January 26, 2030. On May 6, 2026, the CP Energy Services, Inc. loan agreement was amended, extending the maturity date of the First Lien Term Loans to April 4, 2030. On June 18, 2026, the Credit Central Loan Company, LLC loan agreement was amended, extending the maturity date of the First Lien Term Loan to November 30, 2029. Investment Valuation Investments for which market quotations are readily available are valued at such market quotations. In order to validate market quotations, management and the independent valuation firm look at a number of factors to determine if the quotations are representative of fair value, including the source and nature of the quotations. These investments are classified as Level 1 or Level 2 in the fair value hierarchy. The fair value of debt investments specifically classified as Level 2 in the fair value hierarchy are generally valued by an independent pricing agent or more than one principal market maker, if available, otherwise a principal market maker or a primary market dealer. We generally value over-the-counter securities by using the prevailing bid and ask prices from dealers during the relevant period end, which were provided by an independent pricing agent and screened for validity by such service. Certain derivative instruments are valued as Level 2 assets or liabilities using pricing information obtained from third-party pricing services, including IHS Markit. These valuations are based on prevailing market data as of the measurement date and are derived using models that apply well-recognized financial principles. Significant inputs to the valuation models include observable market data such as interest rate curves, forward curves, credit spreads, foreign exchange rates, volatilities, and other market-corroborated inputs. Management and the independent valuation firm evaluate the methodologies and inputs to assess whether the resulting values are representative of fair value. In determining the range of values for debt instruments where market quotations are not readily available, and are therefore classified as Level 3 in the fair value hierarchy, except CLOs and debt investments in controlling portfolio companies, management and the independent valuation firm estimated corporate and security credit ratings and identified corresponding yields to maturity for each loan from relevant market data. A discounted cash flow technique was then applied using the appropriate yield to maturity as the discount rate, to determine a range of values. In determining the range of values for debt investments of controlled companies and equity investments, the enterprise value was determined by applying a market approach such as using earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples, net income and/or book value multiples for similar guideline public companies and/or similar recent investment transactions and/or an income approach, such as the discounted cash flow technique. The enterprise value technique may also be used to value debt investments which are credit impaired. For stressed debt and equity investments, asset recovery analysis was used. 95 In determining the range of values for our investments in CLOs, the independent valuation firm uses a discounted multi-path cash flow model. The valuations were accomplished through the analysis of the CLO deal structures to identify the risk exposures from the modeling point of view as well as to determine an appropriate call date (i.e., expected maturity). These risk factors are sensitized in the multi-path cash flow model using Monte Carlo simulations, which are simulations used to model the probability of different outcomes, to generate probability-weighted (i.e., multi-path) cash flows for the underlying assets and liabilities. These cash flows are discounted using appropriate market discount rates, and relevant data in the CLO market and certain benchmark credit indices are considered, to determine the value of each CLO investment. In addition, we generate a single-path cash flow utilizing our best estimate of expected cash receipts, and assess the reasonableness of the implied discount rate that would be effective for the value derived from the corresponding multi-path cash flow model. These investments are classified as Level 3 in the fair value hierarchy. The Board of Directors looked at several factors in determining where within the range to value the asset including: recent operating and financial trends for the asset, independent ratings obtained from third parties, comparable multiples for recent sales of companies within the industry and discounted cash flow models for our investments in CLOs. The composite of all these various valuation techniques, applied to each investment, was a total valuation of $6,342,558. Our portfolio companies are generally lower middle-market companies, outside of the financial sector, with less than $100,000 of annual EBITDA. We believe our investment portfolio has experienced less volatility than others because we believe there are more buy and hold investors who own these less liquid investments. Control Company Investments Control investments offer increased risk and reward over straight debt investments. Operating results and changes in market multiples can result in dramatic changes in values from quarter to quarter. Significant downturns in operations can further result in our looking to recoveries on sales of assets rather than the enterprise value of the investment. Equity positions in our portfolio are susceptible to potentially significant changes in value, both increases as well as decreases, due to changes in operating results and market multiples. Our controlled companies discussed below experienced such changes and we recorded corresponding fluctuations in valuations during the year ended June 30, 2026. Belnick, LLC (d/b/a The Ubique Group) On March 31, 2025, Prospect exercised certain rights and remedies under its loan documents to exercise voting rights in respect of the equity of Belnick and certain of its subsidiaries to, among other things, appoint new officers, all of whom are our Investment Adviser’s professionals. As a result, Prospect’s investment in Belnick is classified as a control investment. Effective May 22, 2025, Prospect established 100% ownership of Belnick Delaware, a Consolidated Holding Company. On May 23, 2025, Belnick Delaware acquired a 100% voting interest in Belnick’s Class P Preferred units, which together with the voting rights obtained through proxy over the remaining Class A units, provides Prospect with 100% of the voting interest in Belnick as of March 31, 2026. Belnick Delaware executed a share transfer agreement for the remaining Class A units and effective December 31, 2025, owns 100% of the membership units in Belnick. Belnick is a provider of high-volume, value-oriented furniture and furnishings to a broad range of residential and commercial end markets. The fair value of our investment in Belnick was $108,565 as of June 30, 2026, a premium of $8,808 to its amortized cost basis, compared to a fair value of $51,166 as of June 30, 2025, a discount of $37,086 to its amortized cost. The premium to amortized cost resulted from an improvement in financial performance and resolution of tariff refund receivables. Credit Central Loan Company, LLC Prospect owns 100% of the equity of Credit Central Delaware, a Consolidated Holding Company. Credit Central Delaware owns 99.8% of the equity of Credit Central, with entities owned by Credit Central management owning the remaining equity. Credit Central owns 100% of each of Credit Central, LLC; Credit Central South, LLC; Credit Central of Texas, LLC; and Credit Central of Tennessee, LLC. Credit Central is a branch-based provider of installment loans. The fair value of our investment in Credit Central was $56,537 as of June 30, 2026, a discount of $67,606 to its amortized cost basis, compared to a fair value of $78,736 as of June 30, 2025, a discount of $42,693 to its amortized cost basis. The increase in discount to amortized cost resulted from a decline in financial performance. Echelon Transportation, LLC Prospect owns 100% of the membership interests of Echelon. Echelon owns 60.7% of the equity of AerLift Leasing Limited (“AerLift”). Echelon is a transportation leasing company. 96 The fair value of our investment in Echelon was $0 as of June 30, 2026, equal to its amortized cost, compared to a fair value of $65,653 as of June 30, 2025, a discount of $44,667 to its amortized cost. During the year ended June 30, 2026, Echelon received proceeds from AerLift for the sale of its planes and all core assets. Echelon primarily used the proceeds to fully repay our $54,739 first lien term loan at par (including accrued interest), distribute $3,247 as a return of capital on our preferred equity investment, and maintain cash-on-hand for residual operating and wind-down expenses. Following Echelon’s receipt of the final plane proceeds in the year ended June 30, 2026, we wrote-off the remaining cost basis of our equity interest and recognized a realized loss of $52,334. First Tower Finance Company LLC Prospect owns 100% of the equity of First Tower Delaware, a Consolidated Holding Company. First Tower Delaware owns 80.10% of the voting interest of First Tower Finance, resulting in 78.06% ownership. First Tower Finance owns 100% of First Tower, LLC, a multiline specialty finance company. The fair value of our investment in First Tower was $960,778 as of June 30, 2026, a premium of $469,368 to its amortized cost basis, compared to a fair value of $760,518 as of June 30, 2025, a premium of $277,200 to its amortized cost basis. The increase in premium to amortized cost resulted from an improvement in financial performance, higher projected performance, and an expansion of comparable company trading multiples. InterDent, Inc. Prospect owns 100% of the equity of InterDent. InterDent is a dental support organization (“DSO”). InterDent provides business and administrative support services to a regionally-diversified set of dental practices so that dentists can focus on delivering high-quality clinical care and patient satisfaction. The fair value of our investment in InterDent was $340,451 as of June 30, 2026, a discount of $89,490 to its amortized cost basis, compared to a fair value of $338,781 as of June 30, 2025, a discount of $55,244 to its amortized cost basis. The increase in discount to amortized cost resulted from increased debt in the capital structure. MITY, Inc. Prospect owns 100% of the equity of MITY Delaware, a Consolidated Holding Company. MITY Delaware owns 100% of the equity of MITY, Inc. MITY owns 100% of each of MITY-Lite, Inc.; Broda USA, Inc.; and Broda Enterprises ULC. MITY is a designer, manufacturer and seller of multipurpose room furniture and specialty healthcare seating products. The fair value of our investment in MITY decreased to $82,436 as of June 30, 2026, representing a discount of $18,999 to its amortized cost basis, compared to a fair value of $94,418 as of June 30, 2025, representing a premium of $106 to its amortized cost basis. The discount to amortized cost resulted from lower projected performance and increased debt in the capital structure. National Property REIT Corp. NPRC is a Maryland corporation and a qualified REIT for federal income tax purposes. NPRC was formed to hold for investment, operate, finance, lease, manage, and sell a portfolio of real estate assets and engage in any and all other activities as may be necessary, incidental or convenient to carry out the foregoing. NPRC acquires real estate assets, including, but not limited to, industrial, commercial, multi-family, self-storage, and student housing properties. NPRC may acquire real estate assets directly or through joint ventures by making a majority equity investment in a property-owning entity. Additionally, through its wholly owned subsidiaries, NPRC invests in online consumer loans and RSSNs. As of June 30, 2026 and June 30, 2025, we own 100% of the fully-diluted common equity of NPRC. During the year ended June 30, 2026, we provided $47,564 of debt financing to NPRC to fund real estate capital expenditures and provide working capital. During the year ended June 30, 2026, we received partial repayments of $73,323 of our loans previously outstanding with NPRC and its wholly owned subsidiary. During the year ended June 30, 2025, we provided $96,995 of debt financing to NPRC to fund real estate capital expenditures and provide working capital. During the year ended June 30, 2025, we received partial repayments of $285,386 of our loans previously outstanding with NPRC and its wholly owned subsidiary. 97 As of June 30, 2026, our investment in NPRC and its wholly owned subsidiaries had an amortized cost of $896,889 and a fair value of $1,081,596, primarily related to NPRC’s real estate portfolio. The real estate portfolio was comprised of forty-four multi-family properties, two student housing properties, four senior living properties, and two commercial properties. The following table shows the location, acquisition date, purchase price, and mortgage outstanding due to other parties for each of the properties held by NPRC as of June 30, 2026: No. Property Name City Acquisition Date Purchase Price Mortgage Outstanding 1 Taco Bell, OK Yukon, OK 6/4/2014 $ 1,719 $ — 2 Taco Bell, MO Marshall, MO 6/4/2014 1,405 — 3 Abbie Lakes OH Partners, LLC Canal Winchester, OH 9/30/2014 12,600 21,569 4 Kengary Way OH Partners, LLC Reynoldsburg, OH 9/30/2014 11,500 22,945 5 Lakeview Trail OH Partners, LLC Canal Winchester, OH 9/30/2014 26,500 43,656 6 Lakepoint OH Partners, LLC Pickerington, OH 9/30/2014 11,000 25,935 7 Sunbury OH Partners, LLC Columbus, OH 9/30/2014 13,000 21,372 8 Heatherbridge OH Partners, LLC Blacklick, OH 9/30/2014 18,416 31,810 9 Jefferson Chase OH Partners, LLC Blacklick, OH 9/30/2014 13,551 27,625 10 Goldenstrand OH Partners, LLC Hilliard, OH 10/29/2014 7,810 17,195 11 Vesper Corpus Christi, LLC Corpus Christi, TX 9/28/2016 14,250 9,905 12 Vesper Campus Quarters, LLC Corpus Christi, TX 9/28/2016 18,350 13,000 13 9220 Old Lantern Way, LLC Laurel, MD 1/30/2017 187,250 147,934 14 7915 Baymeadows Circle Owner, LLC Jacksonville, FL 10/31/2017 95,700 85,465 15 8025 Baymeadows Circle Owner, LLC Jacksonville, FL 10/31/2017 15,300 14,892 16 23275 Riverside Drive Owner, LLC Southfield, MI 11/8/2017 52,000 52,245 17 23741 Pond Road Owner, LLC Southfield, MI 11/8/2017 16,500 18,073 18 150 Steeplechase Way Owner, LLC Largo, MD 1/10/2018 44,500 34,505 19 Olentangy Commons Owner LLC Columbus, OH 6/1/2018 113,000 91,417 20 Villages of Wildwood Holdings LLC Fairfield, OH 7/20/2018 46,500 57,729 21 Falling Creek Holdings LLC Richmond, VA 8/8/2018 25,000 29,652 22 Lorring Owner LLC Forestville, MD 10/30/2018 58,521 46,561 23 Hamptons Apartments Owner, LLC Beachwood, OH 1/9/2019 96,500 79,107 24 5224 Long Road Holdings, LLC Orlando, FL 6/28/2019 26,500 21,200 25 Druid Hills Holdings LLC Atlanta, GA 7/30/2019 96,000 74,962 26 Sterling Place Holdings LLC Columbus, OH 10/28/2019 41,500 34,196 27 SPCP Hampton LLC Dallas, TX 11/2/2020 36,000 38,503 28 Palmetto Creek Holdings LLC North Charleston, SC 11/10/2020 33,182 25,668 29 Valora at Homewood Holdings LLC Homewood, AL 11/19/2020 81,250 62,718 30 NPRC Fairburn LLC Fairburn, GA 12/14/2020 52,140 43,900 31 NPRC Taylors LLC Taylors, SC 1/27/2021 18,762 13,980 32 Parkside at Laurel West Owner LLC Spartanburg, SC 2/26/2021 57,005 41,817 33 Willows at North End Owner LLC Spartanburg, SC 2/26/2021 23,255 18,519 34 SPCP Edge CL Owner LLC Webster, TX 3/12/2021 34,000 25,496 35 Jackson Pear Orchard LLC Ridgeland, MS 6/28/2021 50,900 42,975 36 Jackson Lakeshore Landing LLC Ridgeland, MS 6/28/2021 22,600 17,955 37 Jackson Reflection Pointe LLC Flowood, MS 6/28/2021 45,100 33,203 38 Jackson Crosswinds LLC Pearl, MS 6/28/2021 41,400 38,601 39 Elliot Apartments Norcross, LLC Norcross, GA 11/30/2021 128,000 106,850 40 Orlando 442 Owner, LLC (West Vue Apartments) Orlando, FL 12/30/2021 97,500 62,223 41 NPRC Wolfchase LLC Memphis, TN 3/18/2022 82,100 60,000 42 NPRC Twin Oaks LLC Hattiesburg, MS 3/18/2022 44,850 37,105 43 NPRC Lancaster LLC Birmingham, AL 3/18/2022 37,550 29,961 44 NPRC Rutland LLC Macon, GA 3/18/2022 29,750 24,700 45 Southport Owner LLC (Southport Crossing) Indianapolis, IN 3/29/2022 48,100 36,075 46 TP Cheyenne, LLC Cheyenne, WY 5/26/2022 27,500 17,656 47 TP Pueblo, LLC Pueblo, CO 5/26/2022 31,500 20,166 48 TP Stillwater, LLC Stillwater, OK 5/26/2022 26,100 15,328 98 No. Property Name City Acquisition Date Purchase Price Mortgage Outstanding 49 TP Kokomo, LLC Kokomo, IN 5/26/2022 20,500 12,753 50 Terraces at Perkins Rowe JV LLC Baton Rouge, LA 11/14/2022 41,400 29,403 51 NPRC Apex Holdings LLC Cincinnati, OH 1/19/2024 34,225 27,712 52 NPRC Parkton Holdings LLC Cincinnati, OH 1/19/2024 45,775 37,090 $ 2,255,316 $ 1,943,307 As of June 30, 2025, our investment in NPRC and its wholly owned subsidiaries had an amortized cost of $922,647 and a fair value of $1,300,972. The fair value of $1,289,092 related to NPRC’s real estate portfolio was comprised of forty-seven multi-family properties, five student housing properties, four senior living properties, and two commercial properties. The following table shows the location, acquisition date, purchase price, and mortgage outstanding due to other parties for each of the properties held by NPRC as of June 30, 2025: No. Property Name City Acquisition Date Purchase Price Mortgage Outstanding 1 Taco Bell, OK Yukon, OK 6/4/2014 $ 1,719 $ — 2 Taco Bell, MO Marshall, MO 6/4/2014 1,405 — 3 Abbie Lakes OH Partners, LLC Canal Winchester, OH 9/30/2014 12,600 21,569 4 Kengary Way OH Partners, LLC Reynoldsburg, OH 9/30/2014 11,500 22,945 5 Lakeview Trail OH Partners, LLC Canal Winchester, OH 9/30/2014 26,500 43,656 6 Lakepoint OH Partners, LLC Pickerington, OH 9/30/2014 11,000 25,935 7 Sunbury OH Partners, LLC Columbus, OH 9/30/2014 13,000 21,372 8 Heatherbridge OH Partners, LLC Blacklick, OH 9/30/2014 18,416 31,810 9 Jefferson Chase OH Partners, LLC Blacklick, OH 9/30/2014 13,551 27,625 10 Goldenstrand OH Partners, LLC Hilliard, OH 10/29/2014 7,810 17,195 11 Vesper Tuscaloosa, LLC Tuscaloosa, AL 9/28/2016 54,500 40,312 12 Vesper Corpus Christi, LLC Corpus Christi, TX 9/28/2016 14,250 10,112 13 Vesper Campus Quarters, LLC Corpus Christi, TX 9/28/2016 18,350 13,272 14 Vesper College Station, LLC College Station, TX 9/28/2016 41,500 30,016 15 Vesper Statesboro, LLC Statesboro, GA 9/28/2016 7,500 7,323 16 9220 Old Lantern Way, LLC Laurel, MD 1/30/2017 187,250 150,423 17 7915 Baymeadows Circle Owner, LLC Jacksonville, FL 10/31/2017 95,700 87,031 18 8025 Baymeadows Circle Owner, LLC Jacksonville, FL 10/31/2017 15,300 15,156 19 23275 Riverside Drive Owner, LLC Southfield, MI 11/8/2017 52,000 53,231 20 23741 Pond Road Owner, LLC Southfield, MI 11/8/2017 16,500 18,417 21 150 Steeplechase Way Owner, LLC Largo, MD 1/10/2018 44,500 35,185 22 Olentangy Commons Owner LLC Columbus, OH 6/1/2018 113,000 92,876 23 Villages of Wildwood Holdings LLC Fairfield, OH 7/20/2018 46,500 58,393 24 Falling Creek Holdings LLC Richmond, VA 8/8/2018 25,000 25,075 25 Crown Pointe Passthrough LLC Danbury, CT 8/30/2018 108,500 89,400 26 Lorring Owner LLC Forestville, MD 10/30/2018 58,521 47,274 27 Hamptons Apartments Owner, LLC Beachwood, OH 1/9/2019 96,500 79,520 28 5224 Long Road Holdings, LLC Orlando, FL 6/28/2019 26,500 21,200 29 Druid Hills Holdings LLC Atlanta, GA 7/30/2019 96,000 77,261 30 Bel Canto NPRC Parcstone LLC Fayetteville, NC 10/15/2019 45,000 42,329 31 Bel Canto NPRC Stone Ridge LLC Fayetteville, NC 10/15/2019 21,900 21,313 32 Sterling Place Holdings LLC Columbus, OH 10/28/2019 41,500 34,196 33 SPCP Hampton LLC Dallas, TX 11/2/2020 36,000 38,843 34 Palmetto Creek Holdings LLC North Charleston, SC 11/10/2020 33,182 25,865 35 Valora at Homewood Holdings LLC Homewood, AL 11/19/2020 81,250 63,844 36 NPRC Fairburn LLC Fairburn, GA 12/14/2020 52,140 43,900 37 NPRC Taylors LLC Taylors, SC 1/27/2021 18,762 14,075 38 Parkside at Laurel West Owner LLC Spartanburg, SC 2/26/2021 57,005 42,025 39 Willows at North End Owner LLC Spartanburg, SC 2/26/2021 23,255 18,906 40 SPCP Edge CL Owner LLC Webster, TX 3/12/2021 34,000 25,496 41 Jackson Pear Orchard LLC Ridgeland, MS 6/28/2021 50,900 42,975 42 Jackson Lakeshore Landing LLC Ridgeland, MS 6/28/2021 22,600 17,955 43 Jackson Reflection Pointe LLC Flowood, MS 6/28/2021 45,100 33,203 99 No. Property Name City Acquisition Date Purchase Price Mortgage Outstanding 44 Jackson Crosswinds LLC Pearl, MS 6/28/2021 41,400 38,601 45 Elliot Apartments Norcross, LLC Norcross, GA 11/30/2021 128,000 106,850 46 Orlando 442 Owner, LLC (West Vue Apartments) Orlando, FL 12/30/2021 97,500 70,723 47 NPRC Wolfchase LLC Memphis, TN 3/18/2022 82,100 60,000 48 NPRC Twin Oaks LLC Hattiesburg. MS 3/18/2022 44,850 36,704 49 NPRC Lancaster LLC Birmingham, AL 3/18/2022 37,550 29,673 50 NPRC Rutland LLC Macon, GA 3/18/2022 29,750 24,383 51 Southport Owner LLC (Southport Crossing) Indianapolis, IN 3/29/2022 48,100 36,075 52 TP Cheyenne, LLC Cheyenne, WY 5/26/2022 27,500 17,656 53 TP Pueblo, LLC Pueblo, CO 5/26/2022 31,500 20,166 54 TP Stillwater, LLC Stillwater, OK 5/26/2022 26,100 15,328 55 TP Kokomo, LLC Kokomo, IN 5/26/2022 20,500 12,753 56 Terraces at Perkins Rowe JV LLC Baton Rouge, LA 11/14/2022 41,400 29,566 57 NPRC Apex Holdings LLC Cincinnati, OH 1/19/2024 34,225 27,712 58 NPRC Parkton Holdings LLC Cincinnati, OH 1/19/2024 45,775 37,090 $ 2,534,216 $ 2,191,789 The fair value of our investment in NPRC was $1,081,596 as of June 30, 2026, a premium of $184,707 from its amortized cost basis, compared to a fair value of $1,300,972 as of June 30, 2025, a premium of $378,325 to its amortized cost. The decrease in premium to amortized cost was primarily driven by a softening in cash flow projections across NPRC’s real estate portfolio, an increase in discount and terminal capitalization rates, and higher leverage within the capital structure. Pacific World Corporation Prospect owns 100% of the preferred equity of Pacific World Corporation, which represents a 99.99% fully-diluted ownership interest of Pacific World as of June 30, 2026. Pacific World supplies nail and beauty care products to food, drug, mass, and value retail channels worldwide. The fair value of our investment in Pacific World was $112,412 as of June 30, 2026, a discount of $248,527 to its amortized cost compared to a fair value of $107,970 as of June 30, 2025, a discount of $228,143 to its amortized cost. The increase in discount to amortized cost resulted from increased debt in the capital structure and additional preferred equity funding provided by Prospect. QC Holdings TopCo, LLC On June 30, 2025, Prospect acquired a 99.55% equity interest in QC Holdings, representing a controlling beneficial interest in QC Holdings under the Investment Company Act of 1940. Prospect now holds a 95.4% equity interest in the company. QC Holdings is a consumer-focused provider of alternative financial services and credit solutions. The fair value of our investment in QC Holdings was $100,106 as of June 30, 2026, a premium of $16,015 to its amortized cost basis, compared to a fair value of $77,286 as of June 30, 2025, equal to its amortized cost basis. The increase in premium to amortized cost resulted from an improvement in financial performance. R-V Industries Inc. Prospect owns 100% of the equity of R-V Holdings, a Consolidated Holding Company. R-V Holdings owns 90.28% of the fully-diluted equity of R-V, with R-V management owning the remaining 9.72% of the equity. R-V is a provider of engineering and manufacturing services to chemical, paper, pharmaceutical, and power industries. The fair value of our investment in R-V was $98,475 as of June 30, 2026, a premium of $30,287 to its amortized cost basis, compared to a fair value of $105,577 as of June 30, 2025, a premium of $51,389 to its amortized cost basis. The decrease in premium to amortized cost was primarily driven by Prospect’s incremental investment to R-V made in connection with a dividend recapitalization. Strategic Chemical Solutions Corp. (f/k/a USES Corp.) Prospect owns 99.96% of the equity of Strategic Chemical Solutions Corp. as of June 30, 2026. Strategic Chemical Solutions Corp. provides industrial, environmental, and maritime services in the Gulf States region. 100 The fair value of our investment in Strategic Chemical Solutions Corp. was $9,375 as of June 30, 2026, a discount of $12,587 to its amortized cost basis, compared to a fair value of $14,518 as of June 30, 2025, a discount of $72,258 to its amortized cost basis. The decrease in discount is due to a realized loss recorded in the December 2025 quarter, which reduced amortized cost basis following a period of decreased performance and core asset sales. Universal Turbine Parts, LLC On December 10, 2018, UTP Holdings purchased all of the voting stock of Universal Turbine Parts, LLC (“UTP”) and appointed a new board of directors to UTP Holdings, consisting of three employees of the Investment Adviser. At the time UTP Holdings acquired UTP, UTP Holdings (f/k/a Harbortouch Holdings of Delaware) was a wholly-owned holding company controlled by Prospect and therefore Prospect’s investment in UTP is classified as a control investment. The fair value of our investment in UTP was $124,259 as of June 30, 2026, a premium of $30,800 to its amortized cost basis, compared to a fair value of $102,728 as of June 30, 2025, a premium of $15,200 to its amortized cost basis. The increase in premium to amortized cost resulted from increased profitability. Valley Electric Company, Inc. Prospect owns 100% of the common stock of Valley Holdings I, a Consolidated Holding Company. Valley Holdings I owns 100% of Valley Holdings II, a Consolidated Holding Company. Valley Holdings II owns 94.99% of Valley Electric Company, Inc., with Valley Electric management owning the remaining 5.01% of the equity. Valley Electric owns 100% of the equity of VE Company, Inc., which owns 100% of the equity of Valley Electric Co. of Mt. Vernon, Inc. (“Valley”) and Comet Electric, Inc (“Comet”), leading providers of specialty electrical services in the states of Washington and California. Valley and Comet are amongst the top 50 electrical contractors in the United States. The fair value of our investment in Valley Electric was $293,854 as of June 30, 2026, a premium of $197,942 to its amortized cost basis, compared to a fair value of $351,291 as of June 30, 2025, a premium of $255,379 to its amortized cost basis. The decrease in premium to amortized cost reflects a reduction in comparable company multiples and the results of the sale transaction, which closed on July 1, 2026. See Recent Developments for additional details. Our controlled investments, including those discussed above, are valued at $276,656 above their amortized cost as of June 30, 2026. Affiliate and Non-Control Company Investments We hold two affiliate investments as of June 30, 2026 (Nixon, Inc. and RGIS Services, LLC, (“RGIS”)) with a total fair value of $30,447, a premium of $17,612 from their combined amortized cost, compared to a fair value of $27,057 as of June 30, 2025, representing a $15,322 premium to its amortized cost. The increase in premium to amortized cost was driven by an improvement in RGIS’ financial performance. With the non-control/non-affiliate investments, generally, there is less volatility related to our total investments because our equity positions tend to be smaller than with our control/affiliate investments, and debt investments are generally not as susceptible to large swings in value as equity investments. For debt investments, the fair value is generally limited on the high side to each loan’s par value, plus any prepayment premium that could be imposed. Note that some of our non-control/non-affiliate investments have larger equity or convertible debt option positions and are therefore more susceptible to changes in value than the rest of our non-control/non-affiliate investments. As of June 30, 2026, our non-control/non-affiliate portfolio is valued at a discount to amortized cost primarily due to nine of our non-control/ non-affiliate investments, Credit.com Holdings, LLC (“Credit.com”), First Brands Group, Aventiv Technologies, LLC, STG Distribution, LLC (f/k/a Reception Purchaser, LLC), Medical Solutions Holdings, Inc., Town & Country Holdings, Inc., Rising Tide Holdings, Inc. (“West Marine”), Precisely Software Incorporated (“Precisely”), and K&N HoldCo, LLC (“K&N”), which are valued at discounts to amortized cost of $93,603, $69,279, $58,108, $48,895, $33,042, $30,098, $26,860, $25,733, and $25,363, respectively. Excluding those non-control/non-affiliate investments discussed above, our remaining non-control/non-affiliate portfolio is valued at a premium of $143,902 to amortized cost as of June 30, 2026. Capitalization Our investment activities are capital intensive and the availability and cost of capital is a critical component of our business. We capitalize our business with a combination of debt and equity. Our debt as of June 30, 2026 consists of: a Revolving Credit Facility availing us of the ability to borrow debt subject to borrowing base determinations; Public Notes which we issued in May 2021, September 2021, and October 2025; and Prospect Capital InterNotes® which we issue from time to time. As of June 30, 2026, our equity capital is comprised of common and preferred equity. 101 The following table shows our outstanding debt as of June 30, 2026: Principal Outstanding Unamortized Discount & Debt Issuance Costs Net Carrying Value Fair Value Effective Interest Rate Revolving Credit Facility $ 562,328 $ 14,128 $ 562,328 $ 562,328 1M SOFR + 2.05 % 3.364% 2026 Notes 264,486 435 264,051 261,169 3.89 % 3.437% 2028 Notes 254,749 2,743 252,006 239,729 3.97 % 5.50% 2030 Notes 182,153 7,369 174,784 165,650 6.76 % Public Notes 701,388 690,841 666,548 Prospect Capital InterNotes® 614,879 7,399 607,480 588,081 6.04 % Total $ 1,878,595 $ 1,860,649 $ 1,816,957 The following table shows our outstanding debt as of June 30, 2025: Principal Outstanding Unamortized Discount & Debt Issuance Costs Net Carrying Value Fair Value Effective Interest Rate Revolving Credit Facility $ 856,322 $ 18,842 $ 856,322 $ 856,322 1M SOFR + 2.05 % 3.364% 2026 Notes 300,000 2,019 297,981 286,707 3.87 % 3.437% 2028 Notes 300,000 4,537 295,463 268,671 3.93 % Public Notes 600,000 593,444 555,378 Prospect Capital InterNotes® 647,232 8,687 638,545 607,339 5.85 % Total $ 2,103,554 $ 2,088,311 $ 2,019,039 The following table shows the contractual maturities by fiscal year of our Revolving Credit Facility, Public Notes and Prospect Capital InterNotes® as of June 30, 2026: Payments Due by Fiscal Year ending June 30, Total 2027 2028 2029 2030 2031 After 5 Years Revolving Credit Facility $ 562,328 $ — $ — $ 562,328 $ — $ — $ — Public Notes 701,388 264,486 — 254,749 — 182,153 — Prospect Capital InterNotes® 614,879 114,422 74,853 92,954 70,093 42,520 220,037 Total Contractual Obligations $ 1,878,595 $ 378,908 $ 74,853 $ 910,031 $ 70,093 $ 224,673 $ 220,037 We may from time to time seek to cancel or purchase our outstanding debt through cash purchases and/or exchanges, in open market purchases, privately negotiated transactions or otherwise. The amounts involved may be material. In addition, we may from time to time enter into additional debt facilities, increase the size of existing facilities or issue additional debt securities, including secured debt, unsecured debt and/or debt securities convertible into common stock. Any such purchases or exchanges of outstanding debt would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors. Historically, we have funded a portion of our cash needs through borrowings from banks, issuances of senior securities, including secured, unsecured and convertible debt securities, or issuances of common equity. For flexibility, we maintain a universal shelf registration statement that allows for the public offering and sale of our debt securities, common stock, preferred stock, subscription rights, and warrants and units to purchase such securities up to an indeterminate amount. We may from time to time issue securities pursuant to the shelf registration statement or otherwise pursuant to private offerings. The issuance of debt or equity securities will depend on future market conditions, funding needs and other factors and there can be no assurance that any such issuance will occur or be successful. 102 Each of our Public Notes and Prospect Capital InterNotes® (collectively, our “Unsecured Notes”) are our general, unsecured obligations and rank equal in right of payment with all of our existing and future unsecured indebtedness and will be senior in right of payment to any of our subordinated indebtedness that may be issued in the future. The Unsecured Notes are effectively subordinated to our existing secured indebtedness, such as our credit facility, and future secured indebtedness to the extent of the value of the assets securing such indebtedness and structurally subordinated to any existing and future liabilities and other indebtedness of any of our subsidiaries. Revolving Credit Facility On May 15, 2007, we formed our wholly owned subsidiary, PCF, a Delaware limited liability company and a bankruptcy remote special purpose entity, which holds certain of our portfolio loan investments that are used as collateral for the revolving credit facility at PCF. Since origination of the revolving credit facility, we have renegotiated the terms and extended the commitments of the revolving credit facility several times. Most recently, effective June 28, 2024, we completed an extension and upsizing of the revolving credit facility (the “Revolving Credit Facility”). The lenders have extended commitments of $2,121,500 as of June 30, 2026. The Revolving Credit Facility includes an accordion feature which allows commitments to be increased up to $2,250,000 in the aggregate. The extension and upsizing of the Revolving Credit Facility extended the maturity date to June 28, 2029 and the revolving period through June 28, 2028, followed by an additional one-year amortization period, with distributions allowed to Prospect after the completion of the revolving period. During such one-year amortization period, all principal payments on the pledged assets will be applied to reduce the balance. At the end of the one-year amortization period, the remaining balance will become due. As of June 30, 2026 and June 30, 2025, we had $623,891 and $570,532, respectively, available to us for borrowing under the Revolving Credit Facility, net of $562,328 and $856,322 outstanding borrowings as of the respective balance sheet dates. See Note 4. Revolving Credit Facility within our consolidated financial statements for additional details. Convertible Notes On March 1, 2019, we issued $175,000 aggregate principal amount of senior convertible notes that mature on March 1, 2025 (the “2025 Notes”), unless previously converted or repurchased in accordance with their terms. We granted the underwriters a 13-day over-allotment option to purchase up to an additional $26,250 aggregate principal amount of the 2025 Notes. The underwriters fully exercised the over-allotment option on March 11, 2019 and we issued $26,250 aggregate principal amount of 2025 Notes at settlement on March 13, 2019. The 2025 Notes bore interest at a rate of 6.375% per year, payable semi-annually on March 1 and September 1 each year, beginning September 1, 2019. Total proceeds from the issuance of the 2025 Notes, net of underwriting discounts and offering costs, were $198,674. On March 3, 2025 we repaid the remaining outstanding principal amount of $156,168 of the 2025 Notes, plus interest, at maturity. Following the maturity of the 2025 Notes during the year ended June 30, 2025, none of the 2025 Notes remained outstanding. See Note 5. Convertible Notes within our consolidated financial statements for additional details. Public Notes On January 22, 2021, we issued $325,000 aggregate principal amount of unsecured notes that mature on January 22, 2026 (the “Original 2026 Notes”). The Original 2026 Notes bore interest at a rate of 3.706% per year, payable semi-annually on July 22, and January 22 of each year, beginning on July 22, 2021. Total proceeds from the issuance of the 2026 Notes, net of underwriting discounts and offering costs, were $317,720. On February 19, 2021, we issued an additional $75,000 aggregate principal amount of unsecured notes that mature on January 22, 2026 (the “Additional 2026 Notes”, and together with the Original 2026 Notes, the “2026 Notes”). The Additional 2026 Notes were a further issuance of, and are fully fungible and rank equally in right of payment with, the Original 2026 Notes and bore interest at a rate of 3.706% per year, payable semi-annually on July 22 and January 22 of each year, beginning July 22, 2021. Total proceeds from the issuance of the Additional 2026 Notes, net of underwriting discounts and offering costs, were $74,061. 103 During the year ended June 30, 2025, we repurchased $57,053 aggregate principal amount of the 2026 Notes at a weighted average price of 97.44%, including commissions, plus accrued and unpaid interest. As a result, we recognized a net realized gain of $1,264 from the extinguishment of debt in the amount of the difference between the reacquisition price and the net carrying amount of the repurchased 2026 Notes. During the year ended June 30, 2025, we commenced a tender offer to purchase for cash any and all of the aggregate principal amount of our outstanding 2026 Notes at a purchase price of 99.00%, plus accrued and unpaid interest. As a result, $135,731 aggregate principal amount of the 2026 Notes were validly tendered and accepted, and we recognized a net realized gain of $874 from the extinguishment of debt in the amount of the difference between the reacquisition price and the net carrying amount of the tendered 2026 Notes. On June 18, 2025, we redeemed the remaining outstanding principal amount of $207,216 of the 2026 Notes, at a price of 100.00%, plus accrued and unpaid interest. The transaction resulted in our recognizing a loss of $998 during the year ended June 30, 2025. Following the redemption, none of the 2026 Notes remained outstanding. On May 27, 2021, we issued $300,000 aggregate principal amount of unsecured notes that mature on November 15, 2026 (the “3.364% 2026 Notes”). The 3.364% 2026 Notes bear interest at a rate of 3.364% per year, payable semi-annually on November 15, and May 15 of each year, beginning on November 15, 2021. Total proceeds from the issuance of the 3.364% 2026 Notes, net of underwriting discounts and offering costs, were $293,283. During the year ended June 30, 2026, we repurchased $35,514 aggregate principal amount of the 3.364% 2026 Notes at a weighted average price of 96.91%, including commissions, plus accrued and unpaid interest. As a result, we recognized a net realized gain of $1,011 from the extinguishment of debt in the amount of the difference between the reacquisition price and the net carrying amount of the repurchased 3.364% 2026 Notes. As of June 30, 2026 and June 30, 2025, the outstanding aggregate principal amount of the 3.364% 2026 Notes were $264,486 and $300,000, respectively. On September 30, 2021, we issued $300,000 aggregate principal amount of unsecured notes that mature on October 15, 2028 (the “3.437% 2028 Notes”). The 3.437% 2028 Notes bear interest at a rate of 3.437% per year, payable semi-annually on April 15 and October 15 of each year, beginning on April 15, 2022. Total proceeds from the issuance of the 3.437% 2028 Notes, net of underwriting discounts and offering costs, were $291,798. During the year ended June 30, 2026, we repurchased $45,251 aggregate principal amount of the 3.437% 2028 Notes at a weighted average price of 91.66%, including commissions, plus accrued and unpaid interest. As a result, we recognized a net realized gain of $3,526 from the extinguishment of debt in the amount of the difference between the reacquisition price and the net carrying amount of the repurchased 3.437% 2028 Notes. As of June 30, 2026 and June 30, 2025, the outstanding aggregate principal amount of the 3.437% 2028 Notes was $254,749 and $300,000, respectively. On October 30, 2025, we issued approximately $167,637 in aggregate principal amount of 5.50% Series A Notes due 2030 (the “5.50% 2030 Notes”) that mature on December 31, 2030 and bear interest at a rate of 5.50% per annum payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, commencing on March 31, 2026. The 5.50% 2030 Notes are denominated in Israeli Shekels. After the deduction of offering discounts, fees and other offering expenses, we received net proceeds of approximately $159,531. As of June 30, 2026 and June 30, 2025, the outstanding aggregate principal amount of the 5.50% 2030 Notes were $182,153 and $0, respectively. The 2026 Notes, the 3.364% 2026 Notes, the 3.437% 2028 Notes, and the 5.50% 2030 Notes (collectively, the “Public Notes”) are direct unsecured obligations and rank equally with all of our unsecured indebtedness from time to time outstanding. See Note 6. Public Notes within our consolidated financial statements for additional details. 104 In connection with the issuance of the 5.50% 2030 Notes, the Company entered into a series of forward currency contracts designated as hedging instruments under ASC 815. The Company uses derivative instruments in connection with its risk management activities to reduce exposure to foreign currency exchange rate risk arising from foreign-denominated interest payments and foreign-denominated principal on the 5.50% 2030 Notes. Derivative instruments are carried at fair value on the Consolidated Statement of Assets and Liabilities. As of June 30, 2026 and June 30, 2025, the fair value of the derivative assets and derivative liabilities were $18,900 and $0, and $0 and $0, respectively. Prospect Capital InterNotes® On February 13, 2020, we entered into a new selling agent agreement with InspereX LLC (formerly known as “Incapital LLC”) (as amended, the “Selling Agent Agreement”), authorizing the issuance and sale from time to time of up to $1,000,000 of Prospect Capital InterNotes® (collectively with previously authorized selling agent agreements, the “InterNotes® Offerings”). Additional agents may be appointed by us from time to time in connection with the InterNotes® Offering and become parties to the Selling Agent Agreement. Certain notes issued through the InterNotes® Offerings have been repaid and we have, from time to time, repurchased or redeemed such other notes and, therefore, as of June 30, 2026 and June 30, 2025, the aggregate principal amount of Prospect Capital InterNotes® outstanding were $614,879 and $647,232, respectively. See Note 7. Prospect Capital InterNotes® within our consolidated financial statements for additional details. Net Asset Value Applicable to Common Stockholders During the year ended June 30, 2026, our net asset value applicable to common shares decreased by $59,926, or $0.85 per basic weighted average common share. While our net asset value applicable to common shareholders increased $27,484 and $126,656 due to shares issued at the then-current market prices through reinvestment of dividends and conversions of preferred stock to common stock, respectively, these combined increases in total net asset value resulted in dilution of $0.41 per basic weighted average common share. Also contributing to the decrease were net realized and net change in unrealized losses of $189,914, or $0.40 per basic weighted average common share. Additionally, distributions to common and preferred stockholders of $356,340, or $0.74 per basic weighted average common share, exceeded net investment income of $326,387, or $0.68 per basic weighted average common share, resulting in a net decrease of $0.06 per basic weighted average common share. These decreases were partially offset by other comprehensive income of $5,801, or $0.01 per basic weighted average common share, attributable to gains on forward contracts designated as cash flow hedges. The following table shows the calculation of net asset value per common share as of June 30, 2026 and June 30, 2025: June 30, 2026 June 30, 2025 Net assets applicable to common stockholders $ 2,928,846 $ 2,988,772 Shares of common stock issued and outstanding 512,746,556 455,902,826 Net asset value per common share $ 5.71 $ 6.56 105 Results of Operations For information regarding results of operations for the year ended June 30, 2024, see the Company's Form 10-K for the fiscal year ended June 30, 2025. Operating results for the years ended June 30, 2026 and June 30, 2025 were as follows: Years Ended June 30, 2026 2025 Investment income $ 639,454 $ 719,436 Total operating expenses 330,192 380,596 Reimbursement of administration expenses (17,125) — Total net operating expenses 313,067 380,596 Net investment income 326,387 338,840 Net realized gains (losses) from investments (223,719) (518,682) Net change in unrealized gains (losses) from investments 47,174 (291,054) Net realized gains (losses) on extinguishment of debt 4,219 972 Net realized gains (losses) from derivative instruments and foreign currency transactions (1,042) — Net change in unrealized gains (losses) from derivative instruments and foreign currency transactions 643 — Net increase (decrease) in net assets resulting from operations 153,662 (469,924) Preferred stock dividend (106,645) (106,822) Net gain (loss) on redemptions of preferred stock (9,592) (1,937) Gain (loss) on Accretion to Redemption Value of Preferred Stock (7,597) (15,079) Net Increase (Decrease) in Net Assets Resulting from Operations applicable to Common Stockholders $ 29,828 $ (593,762) While we seek to maximize gains and minimize losses, our investments in portfolio companies can expose our capital to risks greater than those we may anticipate. These companies typically do not issue securities rated investment grade, and have limited resources, limited operating history, and concentrated product lines or customers. These are generally private companies with limited operating information available and are likely to depend on a small core of management talents. Changes in any of these factors can have a significant impact on the value of the portfolio company. These changes, along with those discussed in Investment Valuation above, can cause significant fluctuations in our net change in unrealized gains (losses) from investments, and therefore our net increase (decrease) in net assets resulting from operations applicable to common stockholders, quarter over quarter. 106 Investment Income We generate revenue in the form of interest income on the debt securities that we own, dividend income on any common or preferred stock that we own, and fees generated from the structuring of new deals. Our investments, if in the form of debt securities, will typically have a term of one to ten years and bear interest at a fixed or floating rate. To the extent achievable, we will seek to collateralize our investments by obtaining security interests in our portfolio companies’ assets. We also may acquire minority or majority equity interests in our portfolio companies, which may pay cash or in-kind dividends on a recurring or otherwise negotiated basis. In addition, we may generate revenue in other forms including prepayment penalties and possibly consulting fees. Any such fees generated in connection with our investments are recognized as earned. Investment income consists of interest income, including accretion of loan origination fees and prepayment penalty fees, dividend income and other income, including settlement of net profits interests, overriding royalty interests and structuring fees. The following table describes the various components of investment income and the related levels of debt investments: Years Ended June 30, 2026 2025 Interest income $ 581,932 $ 671,109 Dividend income 46,967 19,378 Other income 10,555 28,949 Total investment income $ 639,454 $ 719,436 Average debt principal of performing interest bearing investments(1) $ 4,897,025 $ 5,524,103 Weighted average interest rate earned on performing interest bearing investments(1) 11.88 % 11.89 % Average debt principal of all interest bearing investments(2) $ 5,702,280 $ 6,115,722 Weighted average interest rate earned on all interest bearing investments(2) 10.21 % 10.74 % (1) Excludes equity investments, Subordinated Structured Notes and non-accrual loans. (2) Excludes equity investments and Subordinated Structured Notes. The weighted average interest rate earned on performing interest bearing assets remained relatively flat at 11.88% for the year ended June 30, 2026 from 11.89% for the year ended June 30, 2025. The weighted average interest rate earned on all interest bearing investments decreased to 10.21% for the year ended June 30, 2026 from 10.74% for the year ended June 30, 2025. The decrease is due to an increase in foregone interest due to non-accrual investments. Investment income is also generated from dividends and other income which is less predictable than interest income. The following table describes dividend income earned for the years ended June 30, 2026 and June 30, 2025, respectively: Years Ended June 30, 2026 2025 Dividend income R-V Industries, Inc. $ 13,288 $ 8,774 Valley Electric Company, Inc. 10,924 — Universal Turbine Parts, LLC 6,179 — Shoes West, LLC (d/b/a Taos Footwear) 4,075 — The RK Logistics Group, Inc. 2,534 — NMMB, Inc. 2,112 — RGIS Services, LLC 1,612 681 Other transactions 6,243 9,923 Total dividend income $ 46,967 $ 19,378 Other income is comprised of structuring fees, advisory fees, amendment fees, royalty interests, receipts for residual net profit and revenue interests, administrative agent fees and other miscellaneous and sundry cash receipts. The following table describes other income earned for the years ended June 30, 2026 and June 30, 2025, respectively: 107 For the Years Ended June 30, 2026 2025 Structuring and amendment fees Help/Systems Holdings, Inc. $ 1,313 $ — Eyefive, LLC (d/b/d Shipoffers) 1,040 — QC Holdings, LLC — 2,319 PeopleConnect Holdings, Inc 974 531 USG Intermediate, LLC 978 1,922 Druid City Infusion, LLC 191 1,379 Shoes West, LLC (d/b/a Taos Footwear) — 1,648 Verify Diagnostics LCC — 1,146 Other transactions 4,504 3,403 Total structuring and amendment fees $ 9,000 $ 12,348 Royalty, net profit and revenue interests National Property REIT Corp. $ — $ 14,825 Other transactions 668 1,013 Total royalty and net revenue interests $ 668 $ 15,838 Administrative agent fees Other transactions $ 887 $ 763 Total administrative agent fees $ 887 $ 763 Total other income $ 10,555 $ 28,949 Other income for the year ended June 30, 2026 decreased by $18,394 compared to the year ended June 30, 2025 primarily due to a $14,825 decrease in royalty and net revenue interests from our investment in National Property REIT Corp. (“NPRC”) and a $3,348 decrease in structuring and amendment fees. Income recognized from dividend income, prepayment premium from early repayments, structuring fees and amendment fees related to specific loan positions and royalty, net profit and revenue interests are considered to be non-recurring income. For the years ended June 30, 2026 and June 30, 2025, we recognized $57,242 and $49,858 of non-recurring income, respectively. The $7,384 increase in nonrecurring income during the year ended June 30, 2026 is primarily due to a $27,589 increase in dividend income, partially offset by a $15,170 decrease in royalty and net revenue interests, a $3,348 decrease in structuring and amendment fees and a $1,687 decrease in prepayment premium. 108 Operating Expenses Our primary operating expenses consist of investment advisory fees (base management and income incentive fees), borrowing costs, legal and professional fees, overhead-related expenses and other operating expenses. These expenses include our allocable portion of overhead under the Administration Agreement with Prospect Administration under which Prospect Administration provides administrative services and facilities for us. Our investment advisory fees compensate the Investment Adviser for its work in identifying, evaluating, negotiating, closing and monitoring our investments. We bear all other costs and expenses of our operations and transactions. The following table describes the various components of our operating expenses: Years Ended June 30, 2026 2025 Base management fee $ 130,934 $ 145,756 Income incentive fee 26,508 40,772 Interest and credit facility expenses 129,885 148,275 Allocation of overhead from Prospect Administration 22,095 22,257 Audit, compliance and tax related fees 1,701 4,137 Directors’ fees 600 600 Other general and administrative expenses 18,469 18,799 Total operating expenses $ 330,192 $ 380,596 Reimbursement of administration expenses $ (17,125) $ — Total net operating expenses $ 313,067 $ 380,596 Total gross and net base management fee was $130,934 and $145,756 for the years ended June 30, 2026 and 2025, respectively. The decrease in total gross base management fee is directly related to a decrease in average total assets. For the years ended June 30, 2026 and 2025, we incurred $26,508 and $40,772 of income incentive fees, respectively. This decrease was driven by a corresponding decrease in pre-incentive fee net investment income (net of preferred stock dividends) to $246,250 from $272,790 for the years ended June 30, 2026 and 2025, respectively. No capital gains incentive fee has yet been incurred pursuant to the Investment Advisory Agreement. During the years ended June 30, 2026 and 2025, we incurred $129,885 and $148,275, respectively, of interest and credit facility expenses related to our Revolving Credit Facility, Convertible Notes, Public Notes and Prospect Capital InterNotes® (collectively, our “Notes”). These expenses are related directly to the leveraging capacity put into place for each of those periods and the levels of indebtedness actually undertaken in those periods. The table below describes the various expenses of our Notes and the related indicators of leveraging capacity and indebtedness during these years: Years Ended June 30, 2026 2025 Interest on borrowings $ 109,656 $ 127,171 Amortization of deferred financing costs 8,736 8,530 Accretion of discount on unsecured debt 1,923 2,937 Facility commitment fees 9,570 9,637 Total interest and credit facility expenses $ 129,885 $ 148,275 Average principal debt outstanding $2,112,487 $2,448,302 Annualized weighted average stated interest rate on borrowings(1) 5.20 % 5.19 % Annualized weighted average interest rate on borrowings(2) 6.15 % 6.06 % (1)Includes only the stated interest expense. (2)Includes the stated interest expense, amortization of deferred financing costs, accretion of discount on Convertible and Public Notes and commitment fees on the undrawn portion of our Revolving Credit Facility. 109 Interest expense was $109,656 and $127,171 for the years ended June 30, 2026 and 2025, respectively. The weighted average stated interest rate on borrowings (excluding amortization, accretion and undrawn facility fees) was 5.20% and 5.19% for the years ended June 30, 2026 and 2025, respectively. The stable rate was primarily due to a mixture of events with offsetting effects. Increasing effects came primarily from the extinguishment of the Original 2026 Notes, which carried a below average stated rate, an increase to both the average outstanding balance and the stated interest rate on the Prospect Capital InterNotes®, and the issuance of the 5.50% 2030 Notes. These increases were substantially offset by a decrease in the weighted average stated interest rate on the Revolving Credit Facility, driven by a decrease in SOFR rates across a stable average drawn balance, and by the maturity of the Convertible Notes, which carried an above average stated rate. The weighted average interest rate on borrowings was 6.15% and 6.06% for the years ended June 30, 2026 and 2025, respectively. The increase was primarily due to the extinguishment of the Original 2026 Notes, which carried a comparatively lower all‑in rate during the prior‑year period, an increase in the all‑in rate on the Prospect Capital InterNotes®, and the issuance of the 5.50% 2030 Notes. The increase was partially offset by a decrease in the all‑in rate on the Revolving Credit Facility and the maturity of the Convertible Notes. In December 2025, Prospect Administration finalized a litigation settlement related to a portfolio company owned by the Company that provided $20,500 in proceeds to Prospect Administration. As of June 30, 2026, Prospect Administration sent $2,369 of the proceeds to the Company for reimbursement of external legal fees previously incurred by us related to the litigation, which is recorded within the reimbursement of administrative expenses presented in the Consolidated Statement of Operations for the year ended June 30, 2026. From the remaining proceeds, $3,375 was sent to the portfolio company involved in the litigation settlement, $14,756 was used to offset the below allocations of overhead expense from Prospect Administration to the Company during the year ended June 30, 2026. The gross allocation of overhead expense from Prospect Administration was $22,095 and $22,257 for the years ended June 30, 2026 and June 30, 2025, respectively. The $17,125 in litigation settlement proceeds discussed above was recorded in the year ended June 30, 2026 to offset this allocation of overhead expense and is presented as a reimbursement of administrative expenses to arrive at the total net operating expenses reported in the Consolidated Statement of Operations. Prospect Administration received estimated payments of $1,534 and $2,615 directly from our portfolio companies for legal, tax, and other administrative services during the years ended June 30, 2026 and 2025, respectively. We were given a credit for these payments as a reduction of the administrative services cost payable by us to Prospect Administration. Had Prospect Administration not received these payments during the years ended June 30, 2026 and June 30, 2025, Prospect Administration’s charges for its administrative services during the respective periods would have increased by this amount. Total operating expenses, excluding investment advisory fees, interest and credit facility expenses, and allocation of overhead from Prospect Administration, net of any expense reimbursements, were $20,770 and $23,536 for the years ended June 30, 2026 and June 30, 2025, respectively. The decrease was primarily attributable to the decrease in legal, audit, compliance and tax related fees, offset by an increase in other general and administrative expenses. 110 Net Realized Gains (Losses) The following table details net realized gains (losses) from investments for the years ended June 30, 2026 and June 30, 2025: Years Ended June 30, Portfolio Company 2026 2025 NMMB, Inc. $ 2,108 $ 6,366 Global Tel*Link Corporation (d./b/a ViaPath Technologies) 473 — Engine Group, Inc 27 Other transactions, net 14 671 Research Now Group, LLC and Dynata, LLC (1) 2 (48,118) Wellful, Inc. — (3,750) STG Distribution, LLC (f/k/a Reception Purchaser, LLC) — (5,511) Strategic Materials Holding Corp. — 2 Wellpath Holdings, Inc. — (33,750) Easy Gardener Products, Inc. — (2,000) Structured Subordinated Notes, net (3) (4,936) (432,592) Redstone Holdco 2 LP (4) (29,124) — Echelon Transportation, LLC (2) (52,334) — USES Corp.(2) (66,219) — United Sporting Companies, Inc. (2) (73,730) — Net realized gains (losses) from investments $ (223,719) $ (518,682) (1)Our Research Now Group, LLC and Dynata, LLC Second Lien Term Loan was restructured to 100,000 shares of Common Stock of New Insight Holdings, Inc. and 285,714 Warrants (to purchase shares of Common Stock of New Insight Holdings, Inc.) during the year ended June 2025. A portion of the cost basis exchanged was written-off for tax purposes and we recorded a realized loss of $48,118 to our investment in Research Now Group, LLC and Dynata, LLC. (2)See endnote 1 of Change in Unrealized Gains (Losses) for the year ended June 30, 2026 below. (3)During fiscal year 2025, the Company elected to exit its exposure to SSN investments. As a result, the Company ceased new originations in that asset class and initiated a full wind‑down of the portfolio. For the year ended June 30, 2025, the Company recognized realized losses of $432,592 and a change in unrealized gain of $89,170. (4)See endnote 2 of Change in Unrealized Gains (Losses) for the year ended June 30, 2026 below. Net Realized Gain/Loss from Extinguishment of Debt During the years ended June 30, 2026 and June 30, 2025, we recorded a net realized gain from extinguishment of debt of $4,219 and net realized gain from extinguishment of debt of $972, respectively. Refer to Capitalization for additional discussion. Net Realized Gain/Loss from Redemptions of Preferred Stock During the year ended June 30, 2026, we recorded a net realized loss of $7,597 from the accretion to redemption value of redeemable securities. During the year ended June 30, 2025, we recorded a net realized loss of $15,079 from the accretion to redemption value of redeemable securities. During the year ended June 30, 2026, we recorded a net realized loss of $9,811 from the conversions of preferred stock to common, and a gain of $220 from the redemptions of preferred stock to cash, resulting in a net realized loss of $9,592. During the year ended June 30, 2025 we recorded a net realized loss of $2,023 from the conversions of preferred stock to common, and a gain of $86 from the redemptions of preferred stock to cash, resulting in a net realized loss of $1,937. Refer to Financial Condition, Liquidity, and Capital Resources for additional discussion. 111 Net Realized Gain/Loss from Derivative Instruments and Foreign Currency Transactions During the year ended June 30, 2026, we recorded a net realized loss of $1,042 from derivative instruments and foreign currency transactions. During the year ended June 30, 2025, there were no realized gains or losses from derivative instruments and foreign currency transactions. Change in Unrealized Gains (Losses) The following table details net change in unrealized gains (losses) for our portfolio for the years ended June 30, 2026 and June 30, 2025, respectively: Years Ended June 30, 2026 2025 Control investments $ (3,466) $ (300,131) Affiliate investments 2,291 8,847 Non-control/non-affiliate investments 48,349 230 Net change in unrealized gains (losses) $ 47,174 $ (291,054) 112 The following table reflects net change in unrealized gains (losses) on investments for the year ended June 30, 2026: Net Change in Unrealized Gains (Losses) First Tower Finance Company LLC $ 192,168 United Sporting Companies, Inc. (1) 72,477 Strategic Chemical Solutions Corp. (f/k/a USES Corp.) (1) 59,671 Belnick, LLC (d/b/a The Ubique Group) 45,894 Echelon Transportation, LLC (1) 44,667 Shoes West, LLC (d/b/a Taos Footwear) 24,430 Town & Country Holdings, Inc. 23,459 New WPCC Parent, LLC 22,172 Recovery Solutions Parent, LLC 21,195 Redstone Holdco 2 LP (2) 20,141 QC Holdings TopCo, LLC 16,015 Universal Turbine Parts, LLC 15,600 Verify Diagnostics LLC 12,605 The RK Logistics Group, Inc. 9,634 Druid City Infusion, LLC 7,665 NMMB, Inc. 7,597 Other investments, net (535) Nationwide Loan Company LLC (6,097) Help/Systems Holdings, Inc. (d/b/a Forta, LLC) (6,254) Medical Solutions Holdings, Inc. (7,217) Barracuda Parent, LLC (9,134) MITY, Inc. (19,105) Pacific World Corporation (20,384) R-V Industries, Inc. (21,102) Precisely Software Incorporated (21,505) Credit Central Loan Company, LLC (24,913) STG Distribution, LLC (28,498) Credit.com Holdings, LLC (32,677) InterDent, Inc. (34,246) Valley Electric Company, Inc. (57,437) First Brands Group (65,495) National Property REIT Corp. (193,617) Net change in unrealized gains (losses) $ 47,174 (1) Due to decreased performance and following the completion of core asset sales in the current period, we recorded a write-down of the remaining cost-basis, net of any repayments received during the period, and reversed all previously recorded unrealized losses related to our investment. (2) Upon restructuring, our debt investment was exchanged for new debt and equity investments, and a portion of our cost basis was written-off for tax purposes. We recorded a realized loss while reversing our previously recorded unrealized losses related to our investment in the same amount. 113 The following table reflects net change in unrealized gains (losses) on investments for the year ended June 30, 2025: Net Change in Unrealized Gains (Losses) First Tower Finance Company LLC $ 127,411 Subordinated Structured Notes, net (2) 89,170 Research Now Group, LLC and Dynata, LLC (1) 45,805 Valley Electric Company, Inc. 34,872 Recovery Solutions Parent, LLC 31,375 New WPCC Parent, LLC. 16,066 Shoes West, LLC (d/b/a Taos Footwear) 15,555 Universal Turbine Parts, LLC 14,768 Wellpath Holdings, Inc. 14,113 Druid City Infusion, LLC 11,438 RGIS Services, LLC 8,847 Reception Purchaser, LLC 7,983 United Sporting Companies, Inc. 6,152 Other investments, net 1,709 Rising Tide Holdings, Inc. (6,192) R-V Industries, Inc. (6,825) Credit Central Loan Company, LLC (8,443) USES Corp. (9,809) Pacific World Corporation (12,410) Nationwide Loan Company LLC (12,866) CP Energy Services Inc. (13,492) Medical Solutions Holdings, Inc. (16,368) STG Distribution, LLC (f/k/a Reception Purchaser, LLC) (20,397) Redstone Holdco 2 LP (21,912) NMMB, Inc. (22,058) Belnick, LLC (d/b/a The Ubique Group) (36,784) Credit.com Holdings, LLC (43,330) Aventiv Technologies, LLC (48,084) Town & Country Holdings, Inc. (69,940) InterDent, Inc. (157,581) National Property REIT Corp. (209,827) Net change in unrealized gains (losses) $ (291,054) (1)Our Research Now Group, LLC and Dynata, LLC Second Lien Term Loan was restructured to 100,000 shares of Common Stock of New Insight Holdings, Inc. and 285,714 Warrants (to purchase shares of Common Stock of New Insight Holdings, Inc.). A portion of the cost basis exchanged was written-off for tax purposes and we recorded a realized loss of $48,118 while reversing our previous previously recorded unrealized losses related to our investment in Research Now Group, LLC and Dynata, LLC. (2)During fiscal year 2025, the Company elected to exit its exposure to SSN investments. As a result, the Company ceased new originations in that asset class and initiated a full wind‑down of the portfolio. For the year ended June 30, 2025, the Company recognized realized losses of $432,592 and a change in unrealized gain of $89,170. Net Change in Unrealized Gain/Loss from Derivative Instruments and Foreign Currency Transactions During the year ended June 30, 2026, we recorded a net change in unrealized gain of $643 from derivative instruments and foreign currency transactions. During the year ended June 30, 2025, there were no net changes in unrealized gains or losses from derivative instruments and foreign currency transactions. 114 Financial Condition, Liquidity and Capital Resources For the years ended June 30, 2026 and June 30, 2025, our operating activities provided $516,306 and provided $523,171 of cash, respectively. The $6,865 decrease is primarily driven by a $474,386 decrease in repayments and sales of investments and a $48,955 decrease in net reductions to Subordinated Structured Notes and related investment costs, offset partially by a $420,021 decrease in payments for purchases of investments and a $65,992 decrease in due from broker for the year ended June 30, 2026 compared to the year ended June 30, 2025. There were no investing activities for the year ended June 30, 2026 and June 30, 2025. Financing activities used $523,598 and used $558,255 of cash during the years ended June 30, 2026 and June 30, 2025, respectively, which included dividend payments and distributions to common and preferred stockholders of $335,548 and $332,392, respectively. The $34,657 decrease in cash used by financing activities is primarily driven by a $423,849 decrease in redemptions and repurchases of Unsecured Notes, and a $42,659 increase in issuances of Unsecured Notes. These increases were partially offset by a $355,520 decrease in net borrowings under the Revolving Credit facility, and a $70,864 decrease in net proceeds from issuances of preferred stock, for the year ended June 30, 2026 compared to the year ended June 30, 2025. Our primary uses of funds have been to continue to invest in portfolio companies, through both debt and equity investments, to repay outstanding borrowings and to make cash distributions to our stockholders. Our primary sources of funds have historically been issuances of debt and common equity, and beginning with our year ended June 30, 2021, issuances of preferred equity. We have and may continue to fund a portion of our cash needs through repayments and opportunistic sales of our existing investment portfolio. We may also securitize a portion of our investments in unsecured or senior secured loans or other assets. Our objective is to put in place such borrowings in order to enable us to expand our portfolio. During the year ended June 30, 2026, we borrowed $1,217,999 and we made repayments totaling $1,511,993 under the Revolving Credit Facility. As of June 30, 2026, our outstanding balance on the Revolving Credit Facility was $562,328. As of June 30, 2026, we had, net of unamortized discount and debt issuance costs, $690,841 outstanding on the Public Notes and $607,480 outstanding on the Prospect Capital InterNotes® (See “Capitalization” above). Undrawn committed revolvers and delayed draw term loans to our portfolio companies incur commitment and unused fees ranging from 0.00% to 3.00%. As of June 30, 2026 and June 30, 2025, we had $64,611 and $40,707, respectively, of undrawn revolver and delayed draw term loan commitments to our portfolio companies, of which $52,446 and $15,900 are considered at the Company’s sole discretion. The fair value of our undrawn committed revolvers and delayed draw term loans was zero as of June 30, 2026 and June 30, 2025, as they were all floating rate instruments that repriced frequently. On February 10, 2026, we filed a registration statement on Form N-2 (File No. 333-293349) that was effective upon filing pursuant to Rule 462(e) under the Securities Act of 1933, as amended (the “Securities Act”), and which replaced our previously effective registration statement on Form N-2 that had been filed on February 10, 2023 and which was also effective upon filing pursuant to Rule 462(e) under the Securities Act. The registration statement permits us to issue, through one or more transactions, an indeterminate amount of securities, consisting of common stock, preferred stock, debt securities, subscription rights to purchase our securities, warrants representing rights to purchase our securities or separately tradable units combining two or more of our securities. Preferred Stock On August 3, 2020, we entered into a Dealer Manager Agreement with Preferred Capital Securities, LLC (“PCS”), as amended on June 9, 2022, October 7, 2022, February 10, 2023, December 29, 2023, October 17, 2024, December 27, 2024, and February 10, 2026, pursuant to which PCS has agreed to serve as the Company’s agent, principal distributor and dealer manager for the Company’s offering of up to 105,858,302 shares, par value $0.001 per share, of preferred stock, with a liquidation preference of $25.00 per share. Such preferred stock may be issued in multiple series, including the 5.50% Series A1 Preferred Stock (“Series A1 Preferred Stock”), the 5.50% Series M1 Preferred Stock (“Series M1 Preferred Stock”), the 5.50% Series M2 Preferred Stock (“Series M2 Preferred Stock”), the 6.50% Series A3 Preferred Stock (“Series A3 Preferred Stock”), the 6.50% Series M3 Preferred Stock (“Series M3 Preferred Stock”), the Floating Rate Series A4 Preferred Stock (“Series A4 Preferred Stock”), the Floating Rate Series M4 Preferred Stock (“Series M4 Preferred Stock,” and together with the Series A4 Preferred Stock, the “Floating Rate Preferred Stock”), the 7.50% Series A5 Preferred Stock (“Series A5 Preferred Stock”), and the 7.50% Series M5 Preferred Stock (“Series M5 Preferred Stock,” and together with the Series A5 Preferred Stock, the “7.50% Preferred Stock”). However, as disclosed in the Supplement No. 1 dated September 6, 2024 and Supplement No. 3 dated December 27, 2024 to the Prospectus Supplement dated December 29, 2023, the Company is no longer offering the Series A1 Preferred Stock, the Series M1 Preferred Stock, the Series M2 Preferred Stock, the Series A3 Preferred Stock, the Series M3 Preferred Stock, and the Floating Rate Preferred Stock and, as a result, any additional preferred stock offered under this offering will be only in any combination of our 7.50% Preferred Stock, which are not convertible. In connection with such offering, on August 3, 2020, June 9, 2022, October 11, 2022, February 10, 2023, December 28, 2023 (two filings), October 17, 2024, and December 27, 115 2024 we filed Articles Supplementary with the State Department of Assessments and Taxation of Maryland (“SDAT”), reclassifying and designating 120,000,000, 60,000,000, 120,000,000, 60,000,000, 160,000,000, 40,000,000, 20,000,000, and 180,000,000 shares, respectively, of the Company’s authorized and unissued shares of common stock into shares of preferred stock. On October 30, 2020, and as amended on February 18, 2022, October 7, 2022, and February 10, 2023, we entered into a Dealer Manager Agreement with InspereX LLC, pursuant to which InspereX LLC has agreed to serve as the Company’s agent and dealer manager for the Company’s offering of up to 10,000,000 shares, par value $0.001 per share, of preferred stock, with a liquidation preference of $25.00 per share. Such preferred stock will initially be issued in multiple series, including the 5.50% Series AA1 Preferred Stock (the “Series AA1 Preferred Stock”), the 5.50% Series MM1 Preferred Stock (the “Series MM1 Preferred Stock”), the 6.50% Series AA2 Preferred Stock (the “Series AA2 Preferred Stock”), and the 6.50% Series MM2 Preferred Stock (the “Series MM2 Preferred Stock” and together with the Series M1 Preferred Stock, the Series M2 Preferred Stock, the Series M3 Preferred Stock, and the Series MM1 Preferred Stock, the “Series M Preferred Stock” and the Series MM2 Preferred Stock, together with the Series AA2 Preferred Stock, the Series A3 Preferred Stock and the Series M3 Preferred Stock, the “6.50% Preferred Stock”); however as disclosed in the Supplement No. 2 dated September 6, 2024 to the Prospectus Supplement dated February 10, 2023, the Company is no longer offering the Series AA1 Preferred Stock, the Series MM1 Preferred Stock, the Series AA2 Preferred Stock and the Series MM2 Preferred Stock. On October 30, 2020, February 17, 2022, and October 11, 2022, we filed Articles Supplementary with the SDAT, reclassifying and designating an additional 80,000,000 shares of the Company’s authorized and unissued shares of common stock into shares of preferred stock as convertible preferred stock. On May 6, 2026, we filed Articles Supplementary with the SDAT, reclassifying and designating 80,000,000 authorized but unissued shares of Series AA1 Preferred Stock, Series MM1 Preferred Stock, Series AA2 Preferred Stock and Series MM2 Preferred Stock as additional shares of common stock. As a result of such reclassification and designation, we no longer have any authorized shares of Series AA1 Preferred Stock, Series MM1 Preferred Stock, Series AA2 Preferred Stock or Series MM2 Preferred Stock. On May 19, 2021, we entered into an Underwriting Agreement with UBS Securities LLC, relating to the offer and sale of 187,000 shares, par value $0.001 per share, of 5.50% Series A2 Preferred Stock, with a liquidation preference of $25.00 per share (the “Series A2 Preferred Stock”, and together with the Series A1 Preferred Stock, Series M1 Preferred Stock, Series M2 Preferred Stock, Series AA1 Preferred Stock, and Series MM1 Preferred Stock, the “5.50% Preferred Stock”). The issuance of the Series A2 Preferred Stock settled on May 26, 2021. In connection with such offering, on May 19, 2021, we filed Articles Supplementary with the SDAT, reclassifying and designating an additional 1,000,000 shares of the Company’s authorized and unissued shares of common stock into shares of preferred stock as Convertible Preferred Stock. In connection with the offerings of the 5.50% Preferred Stock, the 6.50% Preferred Stock, the Floating Rate Preferred Stock, and the 7.50% Preferred Stock, we adopted and amended, respectively, a preferred stock dividend reinvestment plan (the “Preferred Stock Plan” or the “Preferred Stock DRIP”), pursuant to which (i) holders of the Floating Rate Preferred Stock and the 7.50% Preferred Stock will have dividends on their Floating Rate Preferred Stock and 7.50% Preferred Stock reinvested in additional shares of such Floating Rate Preferred Stock and 7.50% Preferred Stock at a price per share of $25.00, and (ii) holders of the 5.50% Preferred Stock and the 6.50% Preferred Stock will have dividends on their 5.50% Preferred Stock and 6.50% Preferred Stock automatically reinvested in additional shares of such 5.50% Preferred Stock and 6.50% Preferred Stock, at a price per share of $23.75 (95% of the stated value of $25.00 per share), if they elect. At any time prior to the listing of the 5.50% Preferred Stock and the 6.50% Preferred Stock on a national securities exchange, shares of the 5.50% Preferred Stock and the 6.50% Preferred Stock are convertible, at the option of the holder of the 5.50% Preferred Stock and the 6.50% Preferred Stock (the “Holder Optional Conversion”). We will settle any Holder Optional Conversion by paying or delivering, as the case may be, (A) any portion of the Settlement Amount (as defined below) that we elect to pay in cash and (B) a number of shares of our common stock at a conversion rate equal to (1) (a) the Settlement Amount, minus (b) any portion of the Settlement Amount that we elect to pay in cash, divided by (2) the arithmetic average of the daily volume weighted average price of shares of our common stock over each of the five consecutive trading days ending on the Holder Conversion Exercise Date (such arithmetic average, the “5-day VWAP”). For the Series A1 Preferred Stock, the Series A3 Preferred Stock, the Series AA1 Preferred Stock, the Series AA2 Preferred Stock and the Series A2 Preferred Stock, “Settlement Amount” means (A) $25.00 per share (the “Stated Value”), plus (B) unpaid dividends accrued to, but not including, the Holder Conversion Exercise Date, minus (C) the applicable Holder Optional Conversion Fee for the respective Holder Conversion Deadline. For the Series M Preferred Stock, “Settlement Amount” means (A) the Stated Value, plus (B) unpaid dividends accrued to, but not including, the Holder Conversion Exercise Date, minus (C) the applicable Series M Clawback, if any. “Series M Clawback”, if applicable, means an amount equal to the aggregate amount of all dividends, whether paid or accrued, on such share of Series M stock in the three full months prior to the Holder Conversion Exercise Date. Subject to certain limited exceptions, we will not pay any portion of the Settlement Amount in cash (other than cash in lieu of fractional shares of our common stock) until the five year anniversary of the date on which a share of 5.50% Preferred Stock or 6.50% Preferred Stock has been issued. Beginning on the five year anniversary of the date on which a share of 5.50% Preferred Stock 116 or 6.50% Preferred Stock is issued, we may elect to settle all or a portion of any Holder Optional Conversion in cash without limitation or restriction. The right of holders to convert a share of 5.50% Preferred Stock or 6.50% Preferred Stock will terminate upon the listing of such share on a national securities exchange. Shares of the Floating Rate Preferred Stock and 7.50% Preferred Stock do not have a Holder Optional Conversion feature. Subject to certain limited exceptions allowing earlier redemption, beginning on the earlier of the five year anniversary of the date on which a share of 5.50% Preferred Stock or 6.50% Preferred Stock has been issued, or the two year anniversary of the date on which a share of Floating Rate Preferred Stock or 7.50% Preferred Stock has been issued or, for listed shares of 5.50% Preferred Stock or 6.50% Preferred Stock, five years from the earliest date on which any series that has been listed was first issued and, for listed shares of Floating Rate Preferred Stock or 7.50% Preferred Stock, two years from the earliest date on which any series that has been listed was first issued (the earlier of such dates as applicable to a series of Preferred Stock, the “Redemption Eligibility Date”), such share of Preferred Stock may be redeemed at any time or from time to time at our option (the “Issuer Optional Redemption”), at a redemption price of 100% of the Stated Value of the shares to be redeemed plus unpaid dividends accrued to, but not including, the date fixed for redemption. Shares of the Floating Rate Preferred Stock and 7.50% Preferred Stock are redeemable, at the option of the holder of such Floating Rate Preferred Stock and 7.50% Preferred Stock, on a monthly basis (the “Holder Optional Redemption”). For all shares of Floating Rate Preferred Stock and 7.50% Preferred Stock duly submitted for redemption on or before a monthly Holder Redemption Deadline (defined in the prospectus supplement dated December 29, 2023), the HOR Settlement Amount (as defined below) is determined on any business day after such Holder Redemption Deadline but before the Holder Redemption Deadline occurring two months thereafter (such date, the “Holder Redemption Exercise Date”). Within such period, we may select the Holder Redemption Exercise Date in our sole discretion. We will settle any Holder Optional Redemption by paying the HOR Settlement Amount in cash. The aggregate amount of Holder Optional Redemptions by the holder of Floating Rate Preferred Stock is subject to the following redemption limits: (i) no more than 2% of the outstanding Floating Rate Preferred Stock, in aggregate, as of the end of the most recent fiscal quarter will be redeemed per calendar month; (ii) no more than 5% of the outstanding Floating Rate Preferred Stock, in aggregate, as of the end of the most recent fiscal quarter will be redeemed per fiscal quarter and (iii) no more than 20% of the outstanding Floating Rate Preferred Stock, in aggregate, as of the end of the most recent fiscal quarter will be redeemed per Annual Redemption Period. Redemption capacity of the Floating Rate Preferred Stock will be allocated on a pro rata basis based on the number of shares of Floating Rate Preferred Stock, as applicable, submitted in the event that a monthly redemption is oversubscribed, based on any of the foregoing redemption limits. The aggregate amount of Holder Optional Redemptions by the holders of 7.50% Preferred Stock is subject to the following redemption limits: (i) no more than 2% of the outstanding 7.50% Preferred Stock, in aggregate, as of the end of the most recent fiscal quarter will be redeemed per calendar month; (ii) no more than 5% of the outstanding 7.50% Preferred Stock, in aggregate, as of the end of the most recent fiscal quarter will be redeemed per fiscal quarter; and (iii) no more than 20% of the outstanding 7.50% Preferred Stock, in aggregate, as of the end of the most recent fiscal quarter will be redeemed per Annual Redemption Period; plus, for each redemption limit set forth above in clauses (i) through (iii) of this paragraph, an amount of such 7.50% Preferred Stock equal to the lowest excess, if any, between the corresponding applicable 2% / 5% / 20% redemption limits for Floating Rate Preferred Stock as set forth above and the respective amounts requested for the Floating Rate Preferred Stock on a Holder Redemption Deadline for the Floating Rate Preferred Stock. Additionally, we have covenanted to waive the applicable 2% / 5% / 20% redemption limits for the Floating Rate Preferred Stock as set forth in the terms of the Floating Rate Preferred Stock such that holders of the Floating Rate Preferred Stock may, in addition to the amount of Floating Rate Preferred Stock such holders are entitled to redeem pursuant to the terms of the Floating Rate Preferred Stock, also redeem an amount of such Floating Rate Preferred Stock equal to the lowest excess, if any, between the corresponding applicable 2% / 5% / 20% redemption limits for the 7.50% Preferred Stock as set forth in the terms of the 7.50% Preferred Stock and the respective amounts requested for the 7.50% Preferred Stock on a Holder Redemption Deadline for the 7.50% Preferred Stock. Redemption capacity of the 7.50% Preferred Stock will be allocated on a pro rata basis based on the number of 7.50% Preferred Stock, as applicable, submitted in the event that a monthly redemption is oversubscribed based on any of the foregoing redemption limits. An “Annual Redemption Period” means our then current fiscal quarter and the three fiscal quarters immediately preceding our then current fiscal quarter. Shares of Series A4 Preferred Stock and Series A5 Preferred Stock are subject to an early redemption fee if it is redeemed by its holder within five years of issuance. We may waive the foregoing redemption limits in our sole discretion at any time. 117 For the Series A4 Preferred Stock and Series A5 Preferred Stock, “HOR Settlement Amount” means (A) the stated value, plus (B) unpaid dividends accrued to, but not including, the Holder Redemption Exercise Date, minus (C) the Series A4 Preferred Stock or Series A5 Preferred Stock Holder Optional Redemption fee, as applicable on the respective Holder Redemption Deadline. For the Series M4 Preferred Stock and Series M5 Preferred Stock, “HOR Settlement Amount” means (A) the stated value, plus (B) unpaid dividends accrued to, but not including, the Holder Redemption Exercise Date, but if a holder of Series M4 Preferred Stock or Series M5 Preferred Stock exercises a Holder Optional Redemption within the first twenty-four months of issuance of such Series M4 Preferred Stock or Series M5 Preferred Stock, the HOR Settlement Amount payable to such holder will be reduced by (i) during the first twelve months of issuance of such Series M4 Preferred Stock or Series M5 Preferred Stock, the aggregate amount of all dividends, whether paid or accrued, on such Series M4 Preferred Stock or Series M5 Preferred Stock, respectively, in the six-month period prior to the Holder Redemption Exercise Date, and (ii) during the second twelve months of issuance of such Series M4 Preferred Stock or Series M5 Preferred Stock, the aggregate amount of all dividends, whether paid or accrued, on such Series M4 Preferred Stock or Series M5 Preferred Stock in the three-month period prior to the Holder Redemption Exercise Date (such amount, the “Series M4 Shares Clawback” and “Series M5 Shares Clawback,” respectively). We are permitted to waive the Series M4 Shares Clawback and Series M5 Shares Clawback through public announcement of the terms and duration of such waiver. Any such waiver would apply to any holder of Preferred Stock qualifying for the waiver and exercising a Holder Optional Redemption during the pendency of the term of such waiver. Although we have retained the right to waive the Series M4 Shares Clawback and Series M5 Shares Clawback in the manner described above, we are not required to establish any such waivers and we may never establish any such waivers. Subject to certain limitations, each share of 5.50% Preferred Stock or 6.50% Preferred Stock may be converted at our option (the “Issuer Optional Conversion”). We will settle any Issuer Optional Conversion by paying or delivering, as the case may be, (A) any portion of the IOC Settlement Amount (as defined below) that we elect to pay in cash and (B) a number of shares of our common stock at a conversion rate equal to (1) (a) the IOC Settlement Amount, minus (b) any portion of the IOC Settlement Amount that we elect to pay in cash, divided by (2) the 5-day VWAP, subject to our ability to obtain or maintain any stockholder approval that may be required under the 1940 Act to permit us to sell our common stock below net asset value if the 5-day VWAP represents a discount to our net asset value per share of common stock. For the 5.50% Preferred Stock and 6.50% Preferred Stock, “IOC Settlement Amount” means (A) the Stated Value, plus (B) unpaid dividends accrued to, but not including, the date fixed for conversion. In connection with an Issuer Optional Conversion, we will use commercially reasonable efforts to obtain or maintain any stockholder approval that may be required under the 1940 Act to permit us to sell our common stock below net asset value. If we do not have or obtain any required stockholder approval under the 1940 Act to sell our common stock below net asset value and the 5-day VWAP is at a discount to our net asset value per share of common stock, we will settle any conversions in connection with an Issuer Optional Conversion by paying or delivering, as the case may be, (A) any portion of the IOC Settlement Amount that we elect to pay in cash and (B) a number of shares of our common stock at a conversion rate equal to (1) (a) the IOC Settlement Amount, minus (b) any portion of the IOC Settlement Amount that we elect to pay in cash, divided by (2) the NAV per share of common stock at the close of business on the business day immediately preceding the date of conversion. We will not pay any portion of the IOC Settlement Amount from an Issuer Optional Conversion in cash (other than cash in lieu of fractional shares of our common stock) until the Redemption Eligibility Date. Beginning on the Redemption Eligibility Date, we may elect to settle any Issuer Optional Conversion in cash without limitation or restriction. In the event that we exercise an Issuer Optional Conversion with respect to any shares of 5.50% Preferred Stock or 6.50% Preferred Stock, the holder of such 5.50% Preferred Stock or 6.50% Preferred Stock may instead elect a Holder Optional Conversion with respect to such 5.50% Preferred Stock or 6.50% Preferred Stock provided that the date of conversion for such Holder Optional Conversion would occur prior to the date of conversion for an Issuer Optional Conversion. Shares of the Floating Rate Preferred Stock and 7.50% Preferred Stock do not have an Issuer Optional Conversion feature. The Company actively manages its offerings of preferred stock and, although it may or may not be presently offering a particular series of its preferred stock, the Company may determine to issue any of its authorized series of preferred stock (and, in connection therewith, to relaunch the offering of any particular series, if previously terminated) based on its assessment of market conditions, demand, and appropriate cost of capital in light of the foregoing and the overall construction of its portfolio and capital structure. On July 12, 2021, we entered into an underwriting agreement by and among us, Prospect Capital Management L.P., Prospect Administration LLC, and Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and UBS Securities LLC, as representatives of the underwriters, relating to the offer and sale of 6,000,000 shares, or $150,000 in aggregate liquidation preference, of our 5.35% Series A Fixed Rate Cumulative Perpetual Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock” or “5.35% Preferred Stock”), at a public offering price of $25.00 per share. Pursuant to the Underwriting Agreement, we also granted the underwriters a 30-day option to purchase up to an additional 900,000 shares of Series A Preferred Stock solely to cover over-allotments. The offer settled on July 19, 2021, and no additional shares of the Series A Preferred Stock were issued pursuant to the option. In connection with such offering, on July 15, 2021, we filed Articles Supplementary with SDAT, 118 reclassifying and designating 6,900,000 shares of the Company’s authorized and unissued shares of common stock into shares of Series A Preferred Stock. On May 8, 2026, we entered into an equity distribution agreement by and among us, Prospect Capital Management L.P., Prospect Administration LLC, and A.G.P. / Alliance Global Partners (“AGP”), with AGP as sales agent, relating to the offer and sale, by means of an at-the-market (“ATM”) offering, of up to 16,000,000 shares, or $400,000 in aggregate liquidation preference, of our Series A Preferred Stock (the “Series A Preferred Stock ATM Program”). In connection with such offering, on May 8, 2026, we filed Articles Supplementary with SDAT, reclassifying and designating 16,000,000 shares of the Company’s authorized and unissued shares of common stock into additional shares of Series A Preferred Stock. During the year ended June 30, 2026, we issued and sold $1,642 aggregate liquidation preference of the Series A Preferred Stock under the Series A Preferred Stock ATM Program, for net proceeds of $1,098, after commissions, discounts, and offering costs. As of June 30, 2026, there were 5,316,849 shares, or $132,921 aggregate liquidation preference, of the Series A Preferred Stock outstanding. Each series of 5.50% Preferred Stock, 6.50% Preferred Stock, Floating Rate Preferred Stock, 7.50% Preferred Stock and Series A Preferred Stock ranks (with respect to the payment of dividends and rights upon liquidation, dissolution or winding up) (a) senior to our common stock, (b) on parity with each other series of our preferred stock, and (c) junior to our existing and future secured and unsecured indebtedness. See Note 8. Fair Value and Maturity of Debt Outstanding for further discussion on our senior securities. We may from time to time seek to purchase and cancel our outstanding preferred stock through cash purchases and/or exchanges, in open market purchases, privately negotiated transactions or otherwise. The amounts involved may be material. Any such purchases or exchanges of preferred stock would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors. On June 16, 2022, our Board of Directors authorized the repurchase of up to 1.5 million shares our Series A Preferred Stock and further on October 11, 2023, authorized any and all outstanding Series A Preferred Stock to be repurchased. The manner, price, volume and timing of preferred share repurchases are subject to a variety of factors, including market conditions and applicable SEC rules. Each share of preferred stock converted into shares of common stock, redeemed, exchanged or acquired by the Company is canceled and retired and is not reissued, and is returned to the status of authorized but unissued common stock. During the years ended June 30, 2026 and June 30, 2025, we did not repurchase shares of Series A Preferred Stock. During the year ended June 30, 2026, we exchanged an aggregate of 44,894 Series M1 Preferred Stock for an aggregate of 44,894 newly-issued Series M5 Preferred Stock pursuant to Section 3(a)(9) of the Securities Act. During the year ended June 30, 2026, we exchanged an aggregate of 59,132 Series M3 Preferred Stock for an aggregate of 59,132 newly-issued Series M5 Preferred Stock pursuant to Section 3(a)(9) of the Securities Act. During the year ended June 30, 2025, we exchanged an aggregate of 195,938 Series M1 Preferred Stock for an aggregate of 10,842, 142,054, and 43,040 newly-issued Series M3 Preferred Stock, Series M4 Preferred Stock, and Series M5 Preferred Stock respectively, pursuant to Section 3(a)(9) of the Securities Act. During the year ended June 30, 2025, we exchanged an aggregate of 294,040 Series M3 Preferred Stock for an aggregate of 266,878 and 27,160 newly-issued Series M4 Preferred Stock and newly-issued Series M5 Preferred Stock, respectively, pursuant to Section 3(a)(9) of the Securities Act. The Series M3 Preferred Stock, Series M4 Preferred Stock, and Series M5 Preferred Stock issued in the exchanges were issued in each case to an existing security holder of the Company exclusively in exchange for such holder’s securities. No commission or other remuneration was paid or given for soliciting the exchange. Stockholders who exchange Series M1 Preferred Stock for Series M3 Preferred Stock, Series M4 Preferred Stock or Series M5 Preferred Stock or Series M3 Preferred Stock for Series M4 Preferred Stock or Series M5 Preferred Stock will receive unpaid dividends on their Series M1 Preferred Stock or Series M3 Preferred Stock accrued to, but not including, the Exchange Exercise Date, plus any fractional amount of a Series M1 Preferred Stock or Series M3 Preferred Stock exchanged multiplied by $25.00 in cash. Upon settlement, the carrying amount (including any premiums or discounts and a proportional amount of any issuance costs) of the Series M1 Preferred Stock or Series M3 Preferred Stock are reclassified to Series M3 Preferred Stock, Series M4 Preferred Stock, or Series M5 Preferred Stock, respectively, with no gain or loss recognized. Subject to certain limited exceptions allowing earlier redemption, at any time after the close of business on July 19, 2026 (any such date, an “Optional Redemption Date”), at our sole option, we may redeem the Series A Preferred Stock in whole or, from time to time, in part, out of funds legally available for such redemption, at a price per share equal to the liquidation preference of $25.00 per share, plus an amount equal to all unpaid dividends on such shares (whether or not earned or declared, but excluding interest thereon) accumulated up to, but excluding, the date fixed for redemption. We may also redeem the Series A 119 Preferred Stock at any time, in whole or, from time to time, in part, including prior to the Optional Redemption Date, pro rata, based on liquidation preference, with all other series of our then outstanding preferred stock, in the event that our Board of Directors determines to redeem any series of our preferred stock, in whole or, from time to time, in part, because such redemption is deemed necessary by our Board of Directors to comply with the asset coverage requirements of the 1940 Act or for us to maintain RIC status. In the event of a Change of Control Triggering Event (as defined below), we may, at our option, exercise our special optional redemption right to redeem the Series A Preferred Stock, in whole or in part, within 120 days after the first date on which such Change of Control Triggering Event has occurred by paying the liquidation preference, plus an amount equal to all unpaid dividends on such shares (whether or not earned or declared, but excluding interest thereon) accumulated up to, but excluding, the date fixed for such redemption. To the extent that we exercise our optional redemption right or our special optional redemption right relating to the Series A Preferred Stock, the holders of Series A Preferred Stock will not be permitted to exercise the conversion right described below in respect of their shares called for redemption. Except to the extent that we have elected to exercise our optional redemption right or our special optional redemption right by providing notice of redemption prior to the Change of Control Conversion Date (as defined below), upon the occurrence of a Change of Control Triggering Event, each holder of Series A Preferred Stock will have the right to convert some or all of the Series A Preferred Stock held by such holder on the Change of Control Conversion Date into a number of our shares of common stock per Series A Preferred Stock to be converted equal to the lesser of: •the quotient obtained by dividing (i) the sum of the Liquidation Preference per share plus an amount equal to all unpaid dividends thereon (whether or not earned or declared, but excluding interest thereon) accumulated up to, but excluding, the Change of Control Conversion Date (unless the Change of Control Conversion Date is after a Record Date for a Series A Preferred Stock dividend payment and prior to the corresponding Series A Preferred Stock dividend payment date, in which case no additional amount for such accrued and unpaid dividends will be included in this sum) by (ii) the Common Stock Price (as defined below); and •6.03865, subject to certain adjustments, subject, in each case, to provisions for the receipt of alternative consideration upon conversion as described in the applicable prospectus supplement. If we have provided or provide a redemption notice with respect to some or all of the Series A Preferred Stock, holders of any Series A Preferred Stock that we have called for redemption will not be permitted to exercise their Change of Control Conversion Right in respect of any of their Series A Preferred Stock that have been called for redemption, and any Series A Preferred Stock subsequently called for redemption that have been tendered for conversion will be redeemed on the applicable date of redemption instead of converted on the Change of Control Conversion Date. For purposes of the foregoing discussion of a redemption upon the occurrence of a Change of Control Triggering Event, the following definitions are applicable: “Change of Control Triggering Event” means the occurrence of any of the following: •the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation and other than an Excluded Transaction) in one or a series of related transactions, of all or substantially all of the assets of the Company and its Controlled Subsidiaries taken as a whole to any “person” or “group” (as those terms are used in Section 13(d)(3) of the Exchange Act) (other than to any Permitted Holders); provided that, for the avoidance of doubt, a pledge of assets pursuant to any of our secured debt instruments or the secured debt instruments of our Controlled Subsidiaries shall not be deemed to be any such sale, lease, transfer, conveyance or disposition; or •the consummation of any transaction (including, without limitation, any merger or consolidation and other than an Excluded Transaction) the result of which is that any “person” or “group” (as those terms are used in Section 13(d)(3) of the Exchange Act) (other than any Permitted Holders) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of our outstanding Voting Stock, measured by voting power rather than number of shares. Notwithstanding the foregoing, the consummation of any of the transactions referred to in the bullet points above will not be deemed a Change of Control Triggering Event if we or the acquiring or surviving consolidated entity has or continues to have a class of common securities (or ADRs representing such securities) listed on the NYSE, the NYSE American or NASDAQ, or listed or quoted on an exchange or quotation system that is a successor to the NYSE, the NYSE American or NASDAQ, or is otherwise listed or quoted on a national securities exchange. The “Change of Control Conversion Date” is the date the shares of Series A Preferred Stock are to be converted, which will be a business day selected by us that is no fewer than 20 days nor more than 35 days after the date on which we provide the notice described above to the holders of Series A Preferred Stock. 120 The “Common Stock Price” will be (i) if the consideration to be received in the Change of Control Triggering Event by the holders of our common stock is solely cash, the amount of cash consideration per share of our common stock or (ii) if the consideration to be received in the Change of Control Triggering Event by holders of our common stock is other than solely cash (x) the average of the closing sale prices per share of our common stock (or, if no closing sale price is reported, the average of the closing bid and ask prices or, if more than one in either case, the average of the average closing bid and the average closing ask prices) for the ten consecutive trading days immediately preceding, but not including, the effective date of the Change of Control Triggering Event as reported on the principal U.S. securities exchange on which our common stock is then traded, or (y) the average of the last quoted bid prices for our common stock in the over-the-counter market as reported by OTC Markets Group Inc. or similar organization for the ten consecutive trading days immediately preceding, but not including, the effective date of the Change of Control Triggering Event, if our common stock is not then listed for trading on a U.S. securities exchange. “Controlled Subsidiary” means any of our subsidiaries, 50% or more of the outstanding equity interests of which are owned by us and our direct or indirect subsidiaries and of which we possess, directly or indirectly, the power to direct or cause the direction of the management or policies, whether through the ownership of voting equity interests, by agreement or otherwise. “Excluded Transaction” means (i) any transaction that does not result in any reclassification, conversion, exchange or cancellation of all or substantially all of the outstanding shares of our Voting Stock; (ii) any changes resulting from a subdivision or combination or a change solely in par value; (iii) any transaction where the shares of our Voting Stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving “person” (as that term is used in Section 13(d)(3) of the Exchange Act) or any direct or indirect parent company of the surviving “person” (as that term is used in Section 13(d)(3) of the Exchange Act) immediately after giving effect to such transaction; (iv) any transaction if (A) we become a direct or indirect wholly-owned subsidiary of a holding company and (B)(1) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of our Voting Stock immediately prior to that transaction or (2) immediately following that transaction no “person” (as that term is used in Section 13(d)(3) of the Exchange Act) is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of such holding company; or (v) any transaction primarily for the purpose of changing our jurisdiction of incorporation or form of organization. “Permitted Holders” means (i) us, (ii) one or more of our Controlled Subsidiaries and (iii) Prospect Capital Management or any affiliate of Prospect Capital Management that is organized under the laws of a jurisdiction located in the United States of America and in the business of managing or advising clients. “Voting Stocks” as applied to stock of any person, means shares, interests, participations or other equivalents in the equity interest (however designated) in such person having ordinary voting power for the election of the directors (or the equivalent) of such person, other than shares, interests, participations or other equivalents having such power only by reason of the occurrence of a contingency. Except as provided above in connection with a Change of Control Triggering Event, the Series A Preferred Stock is not convertible into or exchangeable for any other securities or property. For so long as the Series A Preferred Stock, the Floating Rate Preferred Stock, or 7.50% Preferred Stock are outstanding, we will not exercise any option we have to convert any other series of our outstanding preferred stock to common stock, including the Issuer Optional Conversion, or any other security ranking junior to such preferred stock. As a result, if dividends on the Preferred Stock have accumulated and been unpaid for a period of two years, a possibility of redemption outside of the Company’s control exists and, in accordance with ASC 480, we have presented our 5.50% Preferred Stock, 6.50% Preferred Stock, and Series A Preferred Stock within temporary equity on our Consolidated Statement of Assets and Liabilities as of June 30, 2026 and June 30, 2025. The Floating Rate Preferred Stock and 7.50% Preferred Stock are redeemable at the election of the holder at any time; therefore, is probable of redemption outside of the Company’s control. As a result, the Floating Rate Preferred Stock and 7.50% Preferred Stock are classified within temporary equity on our Consolidated Statement of Assets and Liabilities as of June 30, 2026 and are accreted to redemption value upon issuance. Accretion to redemption value is treated as an adjustment to net increase (decrease) in net assets resulting from operations applicable to common stockholders on our Consolidated Statement of Operations. We determined the estimated value as of June 30, 2026 of our 5.50% Preferred Stock, 6.50% Preferred Stock, Floating Rate Preferred Stock, and 7.50% Preferred Stock was a $25.00 stated value per share. We engaged a third-party valuation service to assist in our determination based on the calculation resulting from the total equity on our Consolidated Statements of Assets and Liabilities in our Annual Report on Form 10-K for the year ended June 30, 2026 (the “Form 10-K”), which was prepared in 121 accordance with U.S. generally accepted accounting principles in the United States of America, adjusted for the fair value of our investments (i.e. from our Consolidated Schedule of Investments) and total liabilities, divided by the number of shares of our Preferred Stock outstanding. Based on this methodology and because the result from the calculation above is greater than the $25.00 per share stated value of our 5.50% Preferred Stock, 6.50% Preferred Stock, Floating Rate Preferred Stock, and 7.50% Preferred Stock, the estimated value of our 5.50% Preferred Stock, 6.50% Preferred Stock, Floating Rate Preferred Stock, and 7.50% Preferred Stock as of June 30, 2026 is $25.00 per share. Common Stock Our common stockholders’ equity accounts as of June 30, 2026 and June 30, 2025 reflect cumulative shares issued, net of shares previously repurchased, as of those respective dates. Our common stock has been issued through public offerings, a registered direct offering, the exercise of over-allotment options on the part of the underwriters, our common stock dividend reinvestment plan in connection with the acquisition of certain controlled portfolio companies and in connection with our 5.50% and 6.50% Preferred Stock Holder Optional Conversion and Optional Redemptions Following Death of a Holder. When our common stock is issued, the related offering expenses have been charged against paid-in capital in excess of par. All underwriting fees and offering expenses were borne by us. We did not repurchase any shares of our common stock under the Repurchase Program for the years ended June 30, 2026 and June 30, 2025. As of June 30, 2026, the approximate dollar value of shares that may yet be purchased under the Repurchase Program is $65,860. On July 7, 2026, at a special meeting of stockholders, our stockholders authorized us to sell shares of our common stock (during the next 12 months) at a price or prices below our net asset value per share at the time of sale in one or more offerings, subject to certain conditions as set forth in the proxy statement relating to the special meeting (including that the number of shares sold on any given date does not exceed 25% of its outstanding common stock immediately prior to such sale). As of June 30, 2026, we have reserved 612,825,656 shares of our common stock for issuance upon conversion of the 5.50% Preferred Stock and the 6.50% Preferred Stock and 89,165,178 shares of our common stock for issuance to common stock holders pursuant to our common stock dividend reinvestment and direct stock purchase plan. 122 Recent Developments On August 20, 2026, we announced the declaration of monthly dividends for our for 7.50% Preferred Stock holders of record on the following dates based on an annual dividend rate equal to 7.50% of the stated value of $25.00 per share as set forth in the Articles Supplementary for the Preferred Stock, from the date of issuance or, if later from the most recent dividend payment date (the first business day of the month, with no additional dividend accruing in November as a result), as follows: Monthly Cash 7.50% Preferred Shareholder Distribution Record Date Payment Date Monthly Amount ($ per share), before pro ration for partial periods September 2026 9/21/2026 10/1/2026 $0.156250 October 2026 10/21/2026 11/2/2026 $0.156250 November 2026 11/18/2026 12/1/2026 $0.156250 On August 20, 2026, we announced the declaration of monthly dividends for our Floating Rate Preferred Stock for holders of record on the following dates based on an annualized rate equal to 6.50% of the stated value of $25.00 per share as set forth in the Articles Supplementary for the Preferred Stock, from the date of issuance or, if later from the most recent dividend payment date (the first business day of the month, with no additional dividend accruing in November as a result), authorized on August 19, 2026, as follows: Monthly Cash Floating Rate Preferred Shareholder Distribution Record Date Payment Date Monthly Amount ($ per share), before pro ration for partial periods September 2026 9/21/2026 10/1/2026 $0.135417 October 2026 10/21/2026 11/2/2026 $0.135417 November 2026 11/18/2026 12/1/2026 $0.135417 On August 20, 2026, we announced the declaration of monthly dividends for our 5.50% Preferred Stock for holders of record on the following dates based on an annual dividend rate equal to 5.50% of the stated value of $25.00 per share as set forth in the Articles Supplementary for the Preferred Stock, from the date of issuance or, if later from the most recent dividend payment date (the first business day of the month, with no additional dividend accruing in November as a result), as follows: Monthly Cash 5.50% Preferred Shareholder Distribution Record Date Payment Date Monthly Amount ($ per share), before pro ration for partial periods September 2026 9/21/2026 10/1/2026 $0.114583 October 2026 10/21/2026 11/2/2026 $0.114583 November 2026 11/18/2026 12/1/2026 $0.114583 On August 20, 2026, we announced the declaration of monthly dividends for our 6.50% Preferred Stock for holders of record on the following dates based on an annual dividend rate equal to 6.50% of the stated value of $25.00 per share as set forth in the Articles Supplementary for the Preferred Stock, from the date of issuance or, if later from the most recent dividend payment date (the first business day of the month, with no additional dividend accruing in November as a result), as follows: Monthly Cash 6.50% Preferred Shareholder Distribution Record Date Payment Date Monthly Amount ($ per share), before pro ration for partial periods September 2026 9/21/2026 10/1/2026 $0.135417 October 2026 10/21/2026 11/2/2026 $0.135417 November 2026 11/18/2026 12/1/2026 $0.135417 123 On August 20, 2026, we announced the declaration of quarterly dividends for our 5.35% Preferred Stock for holders of record on the following dates based on an annual dividend rate equal to 5.35% of the stated value of $25.00 per share as set forth in the Articles Supplementary for the 5.35% Preferred Stock, from the date of issuance or, if later from the most recent dividend payment date (the first business day of the month, with no additional dividend accruing in November as a result), as follows: Quarterly Cash 5.35% Preferred Shareholder Distribution Record Date Payment Date Amount ($ per share) August 2026 - October 2026 10/21/2026 11/2/2026 $0.334375 On August 20, 2026, we announced the declaration of monthly dividends on our common stock as follows: Monthly Cash Common Stockholder Distribution Record Date Payment Date Amount ($ per share) September 2026 9/28/2026 10/21/2026 $0.0350 October 2026 10/28/2026 11/18/2026 $0.0350 Monthly Cash Common Stockholder Distribution Record Date Payment Date Amount ($ per share) September 2026 9/28/2026 10/21/2026 $0.0350 October 2026 10/28/2026 11/18/2026 $0.0350 On July 1, 2026, we sold our 94.99% equity interests in Valley Electric for total consideration of $280,779, including fees and escrowed amounts. The consideration includes repayment in full of the $10,452 First Lien Term Loan, $34,777 First Lien Term B, and $38,630 First Lien Term Loan receivable to us, together with $35 of accrued interest and a $2,516 prepayment premium for early repayment, as well as a $9,840 advisory fee for the transaction. We received $143,874 of cash at closing and recorded a realized gain of $131,821 on the sale of our equity position in Valley Electric. In addition, there is $40,655 being held in escrow and additional future earn-out potential that will be recognized as additional realized gain if and when it is received. On August 19, 2026, the Company filed an amendment to its charter (the “Articles of Amendment”) with the SDAT to increase the Company’s authorized shares of stock from 2,000,000,000 shares of stock to 4,000,000,000 shares of stock. The foregoing description of the Articles of Amendment is only a summary and is qualified in its entirety by reference to the full text of the Articles of Amendment, a copy of which is filed as Exhibit 3.21 to this Annual Report on Form 10-K. On August 19, 2026, the Board of Directors of the Company amended and restated the bylaws of the Company (the “Amended and Restated Bylaws”) to change the voting standard for uncontested director elections from absolute majority to majority of the votes cast. The foregoing description of the Amended and Restated Bylaws is only a summary and is qualified in its entirety by reference to the full text of the Amended and Restated Bylaws, a copy of which is filed as Exhibit 3.2 to this Annual Report on Form 10-K. Critical Accounting Estimates We prepare our Financial Statements in accordance with U.S. GAAP. In applying many of these accounting principles, we make estimates that affect the reported amounts of assets, liabilities, revenues and expenses in our consolidated financial statements. We base our estimates on historical experience and other factors that we believe are reasonable under the circumstances. Changes in the economic environment, financial markets and any other parameters used in determining such estimates could cause actual results to differ materially. These estimates, however, are subjective and subject to change, and actual results may differ materially from our current estimates due to the inherent nature of these estimates. Our critical accounting estimates, including those relating to the valuation of our investment portfolio, are described below. The critical accounting estimates should be read in conjunction with our risk factors as disclosed in “Item 1A. Risk Factors.” See Note 2 to our consolidated financial statements for more information on how fair value of our investment portfolio is determined, and Note 3 to our consolidated financial statements for information about the inputs and assumptions used to measure fair value of our investment portfolio. Fair Value of Financial Instruments To value our investments, we follow the guidance of ASC 820, Fair Value Measurement (“ASC 820”), that defines fair value, establishes a framework for measuring fair value in conformity with GAAP, and requires disclosures about fair value measurements. In accordance with ASC 820, the fair value of our investments is defined as the price that we would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market in which that investment is transacted. 124 ASC 820 classifies the inputs used to measure these fair values into the following hierarchy: •Level 1: Quoted prices in active markets for identical assets or liabilities, accessible by us at the measurement date. •Level 2: Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or other observable inputs other than quoted prices, including valuations derived from observable market data such as interest rate curves, forward curves, foreign exchange rates, and credit spreads. •Level 3: Unobservable inputs for the asset or liability. In all cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each investment. All of our investments carried at fair value are classified as Level 2 or Level 3 as of June 30, 2026 and June 30, 2025, with a significant portion of our investments classified as Level 3. Investments We determine the fair value of our investments on a quarterly basis, with changes in fair value reflected as a net change in unrealized gains (losses) from investments in the Consolidated Statement of Operations. The Company applies the SEC’s Rule 2a-5 in determining fair value of its investments. Rule 2a-5 establishes a consistent, principles-based framework for boards of directors to use in creating their own specific processes in order to determine fair values in good faith. Investments for which market quotations are readily available are valued at such market quotations. In order to validate market quotations, management and the independent valuation firm look at a number of factors to determine if the quotations are representative of fair value, including the source and nature of the quotations. Certain derivative instruments are valued using pricing information obtained from third-party pricing services, including IHS Markit. These valuations are based on prevailing market data as of the measurement date and are derived using models that apply well-recognized financial principles. Significant inputs to the valuation models include observable market data such as interest rate curves, forward curves, credit spreads, foreign exchange rates, volatilities, and other market-corroborated inputs. Management and the independent valuation firm evaluate the methodologies and inputs to assess whether the resulting values are representative of fair value. In determining the range of values for debt and equity instruments where market quotations are not readily available, we perform a multiple step valuation process with our investment professionals alongside our independent valuation firms. The independent valuation firms prepare valuations for each investment which are presented by the independent valuation firms to the Audit Committee of our Board of Directors. The Audit Committee makes a recommendation to the Board of Directors of the value for each investment and the Board of Directors approves the values with the input of the Investment Adviser. Management and the independent valuation firms may consider various factors in determining the fair value of our investments. One prominent factor is the enterprise value of a portfolio company determined by applying a market approach such as using earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples, net income and/or book value multiples for similar guideline public companies and/or similar recent investment transactions and/or an income approach, such as the discounted cash flow technique. If relevant, management and the independent valuation firms will consider the pricing indicated by external events such as a purchase or sale transaction to corroborate the valuation. Changes in market yields, discount rates, capitalization rates or EBITDA multiples, each in isolation, may change the fair value measurement of certain of our investments. Generally, an increase in market yields, discount rates or capitalization rates, or a decrease in EBITDA (or other) multiples may result in a decrease in the fair value measurement of certain of our investments. Our investments that are classified as Level 3 are primarily valued utilizing a discounted cash flow, enterprise value (“EV”) waterfall, asset recovery analysis, deficiency claims analysis, or an option pricing model. The discounted cash flow converts future cash flows or earnings to a range of fair values from which a single estimate may be derived utilizing an appropriate discount rate. The fair value measurement is based on the net present value indicated by current market expectations about those future amounts. Under the EV waterfall, the EV of a portfolio company is first determined and allocated over the portfolio company’s securities in order of their preference relative to one another (i.e., “waterfall” allocation). To determine the EV, we typically use a market (multiples) valuation approach that considers relevant and applicable market trading data of guideline public companies, transaction metrics from precedent merger and acquisitions transactions, and/or a discounted cash flow. The asset recovery analysis is intended to approximate the net recovery value of an investment based on, among other things, 125 assumptions regarding liquidation proceeds based on a hypothetical liquidation of a portfolio company’s assets. The deficiency claim analysis approximates the potential recoveries from claims after liquidation. The option pricing model considers the optionality of certain equity positions when there is a limitation to exit or effectuate a sale. The model utilizes the underlying price, the strike or exercise price, interest rate, volatility, and time to expiration date. In determining the range of values for our investments in CLOs, the independent valuation firm uses a discounted multi-path cash flow model. Various risk factors are sensitized in the multi-path cash flow model using Monte Carlo simulations to generate probability-weighted (i.e., multi-path) cash flows for the underlying assets and liabilities. These cash flows are discounted using appropriate market discount rates, and relevant data in the CLO market and certain benchmark credit indices are considered, to determine the value of each CLO investment. As of June 30, 2026, $2,969,844, $3,304,228, $35,496, $19,493, and $12,264 of our total investments were valued using the discounted cash flow, enterprise value waterfall, option pricing model, asset recovery analysis, and deficiency claims analysis, respectively, compared to $3,623,701, $2,909,659, $27,014, $24,577, and $6,500, respectively, as of June 30, 2025. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Additionally, the fair value of our investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that we may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we could realize significantly less than the value at which we have recorded it. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected in the currently assigned valuations. Recent Accounting Pronouncements For discussion of recent accounting pronouncements, see Note 2 within the accompanying notes to the consolidated financial statements.