Strategic Evolution and Portfolio Resilience

• Management attributed 2025 performance to a disciplined investment approach during a year of high volatility driven by tariff uncertainty, interest rate shifts, and AI disruption.

• The company is actively transitioning toward a lower-risk profile by reducing average position sizes and increasing sector diversification to enhance risk-adjusted returns.

• The pending acquisition of SWK Holdings is a central strategic pivot to strengthen capabilities in health care and life sciences, providing optionality beyond the core technology focus.

• Management maintains high conviction in its software portfolio, emphasizing that their underwriting focuses on mission-critical functions with high switching costs and AI-resilient business models.

• Operational integration with the BC Partners credit ecosystem has expanded the deal funnel, allowing for larger-scale opportunities and shared resources in portfolio monitoring.

• The company is prioritizing first-lien senior secured positions to late-stage companies to ensure durable growth and capital preservation across economic cycles.

Outlook and Integration Milestones

• The SWK Holdings transaction is now expected to close in early April 2026, which management anticipates will stabilize the asset base against elevated prepayments.

• Q1 2026 earnings are expected to face a $0.02 per share headwind due to one-time charges from the full redemption of 8% notes and partial redemption of 7.5% notes.

• Management projects the SWK deal will be accretive to net investment income in the mid-single digits and support modest ROE expansion upon closing.

• The company plans to target a fully levered run rate between 1.2x and 1.3x post-acquisition, with flexibility to temporarily exceed this to protect earnings power during portfolio resets.

• The first distribution from the CADMA joint venture is expected in Q2 2026, signaling a renewed effort to scale that partnership's earnings contribution.

Structural Adjustments and Risk Factors

• A one-time charge is anticipated in Q1 2026 related to the strategic refinancing of unsecured notes to extend the debt maturity ladder and reduce the cost of funds.

• The loan to Domingo Healthcare remains the sole non-accrual item, representing only 0.25% of the total investment portfolio at fair value.

• Stock repurchases were legally restricted during Q4 due to the pending SWK acquisition and associated blackout periods, with a potential restart in May 2026.

• The weighted average portfolio risk rating saw a slight increase to 2.45, reflecting ongoing monitoring and the deliberate exiting or resizing of certain positions.