Good morning. Welcome to our first quarter 2026 earnings call.

I'm joined today by our Chief Financial Officer, Brandon Satoren, and our Chief Investment Officer, Patrick Schafer. Following my opening remarks on the company's performance and activities during the first quarter, Patrick will provide commentary on our investment portfolio and our markets, and Brandon will discuss our operating results and financial condition in greater detail.

2025 was an important year of execution for us, and we entered 2026 on stronger footing. The key strategic and shareholder-focused actions we outlined in connection with the Logan Ridge merger are now largely in place, including our rebranding, tender offer, share repurchase program, and transition to monthly dividends, while preserving flexibility for quarterly supplemental distributions.

We also executed liability management actions that diversified our funding base and extended our maturity profile. Taken together, these actions have improved our financial flexibility, reduced near-term refinancing risk, and better positioned the company to support a more consistent shareholder return framework and long-term value creation.

During the quarter, we continued to execute against our plan and delivered growth in both total investment income and core investment income relative to the prior quarter and first quarter of 2025. We generated net investment income of $6.9 million, or 55 cents per share, which exceeded our base distribution, and our share repurchase activity in the first quarter of 2026 was accretive to NAV by 7 cents per share.

We also saw improvement in underlying credit performance, with non-accruals declining to 6.2% of the portfolio at amortized cost from 7.1% in the prior quarter, and the number of portfolio companies on non-accrual declining to 9 from 10. Reflecting that earnings profile, our board declared a supplemental cash distribution of 3 cents per share for the second quarter, bringing total second quarter distributions to 30 cents per share.

In addition, our board approved a third quarter 2026 base distribution of 27 cents per share, payable in monthly installments of 9 cents per share in July, August, and September. With our monthly dividend structure now in place and the first monthly distribution paid in April, we believe this framework provides shareholders with a more regular cadence of cash distributions while maintaining flexibility to declare supplemental distributions when supported by earnings.

We also continued to enhance our capital structure through proactive liability management. During the first quarter, we issued $50 million of 7.5% notes due 2029, and in April used a portion of the proceeds to redeem $40 million of the LRFC 5.25% notes due 2026.

These actions further diversified our funding base, extended our maturity profile, and enhanced our financial flexibility. Turning to net asset value, net asset value declined during the quarter, driven primarily by unrealized markdowns on our portfolio.

Approximately 40% of the quarter's unrealized markdowns were attributable to investments classified as software in our consolidated schedules of investments, and approximately 70% when including software or AI-exposed names. Furthermore, 70% of these markdowns are from portfolio investments with at least one publicly quoted security, which negatively impacted the valuation of all securities in the capital structure.

We believe the majority of these markdowns reflect sector-specific valuation pressure and broader mid-market dislocation rather than fundamental credit deterioration. Importantly, underlying credit performance remained relatively stable, as most of our software exposure is in mission-critical, vertically specialized businesses that we believe are well positioned to weather the current AI-driven uncertainty.

Despite continued macroeconomic uncertainty and volatility in portions of the software market, we remain disciplined in our deployment across the lower middle market, prioritizing credit quality, strong documentation, and downside protection. We continue to see more attractive opportunities in smaller and more complex transactions where structure and selectivity are critical, and we are actively managing and repositioning the portfolio in response to evolving market conditions.

Competition remains more pronounced in larger and more commoditized transactions, which reinforces our focus on selectivity over volume. As we look ahead, we remain focused on active portfolio management, disciplined underwriting, and prudent capital allocation, with the goal of driving long-term value for shareholders.

As noted last quarter, we have begun to see increased M&A activity and expect to capitalize on opportunities in our pipeline throughout the remainder of 2026. With that, I will turn the call over to Patrick Schafer, our Chief Investment Officer, for a review of our investment activity.

Thanks, Ted. Before getting into the specifics of the quarter, I would like to make a few comments on our core market as a whole.

Deal activity has remained fairly active and orderly over the course of 2026, despite public headlines around private credit, software, and AI. Excluding the software sector, the M&A markets and private credit markets remain wide open for business, and we continue to see attractive opportunities in both our sponsored and non-sponsored segments.

With respect to software, we do continue to see certain high-quality software businesses being acquired and financed with minor lender concessions relative to 2025 transactions. Regardless of industry, we continue to focus on our core market of 15 to 50 of EBITDA in industries or business models where we have an edge, and ideally in non-sponsored or non-traditionally sponsored transactions, where competition is lower and we have the ability to drive pricing and structure.

During the first quarter of 2026, our investment activity remained measured and selective. We completed two new portfolio investments and one follow-on investment during the period.

At the same time, we experienced a higher level of repayments and sales, which we believe is consistent with a more active realization environment and the increased M&A activity that Ted and myself mentioned earlier. As a result, originations for the quarter were $13.3 million, and repayments and sales were $28.3 million, resulting in net repayments and sales of approximately $15 million.

Turning to slide 11 of our presentation, the overall yield on par of new investments during the quarter was 10.7%. This compares to 12.8% weighted average annualized yield, excluding income from non-accruals and collateralized loan obligations, as of March 31st, 2026.

Given the limited number of transactions completed during the quarter, we view the yield on new investments in the context of the specific mix of deals executed, rather than as a broader indicator of the opportunity set. Our focus remains on credit quality, structure, and overall risk-adjusted return.

Our investment portfolio, as of March 31st, 2026, remained highly diversified. We ended the quarter with a debt investment portfolio, excluding our investments in CLO funds, equities, and joint ventures, spread across 72 different portfolio companies and 33 different industries, with an average par balance of $3.3 million per investment.

Turning to slide 11, we saw improvement in our non-accrual profile during the quarter, reflecting improved underlying credit performance. At the end of the quarter, we had 12 investments on non-accrual status attributable to nine portfolio companies, representing 2.6% and 6.2% of the portfolio at fair value and cost, respectively.

This compares to 13 investments attributable to 10 portfolio companies on non-accrual status as of December 31st, 2025, representing 4% and 7.1% of the portfolio at fair value and cost, respectively. On slide 12, excluding our non-accrual investments, we had an aggregate debt investment portfolio of $371.8 million at fair value, representing a blended price of 90.3% of par value, and 81.3% of that portfolio was comprised of first lien loans at par value.

Assuming par recovery, our March 31st, 2026 fair values imply approximately $40.1 million of incremental NAV value, or a 20.8% increase to NAV. Applying an illustrative 10% default rate and 70% recovery rate, the debt portfolio would imply approximately $2.24 per share of incremental NAV, or a 14.4% increase, as it rotates.

Now I'll turn the call over to Brandon to further discuss our financial results for the period.

Thanks, Patrick. For the quarter ended March 31st, 2026, the company generated $17.6 million in investment income, an increase of $0.1 million as compared to $17.5 million reported for the quarter ended December 31st, 2025.

For the same period, expenses were $10.7 million, a $0.6 million increase as compared to $10.1 million reported for the prior quarter. The increase in expenses was primarily due to the increase in incentive fees driven by higher investment income in the current quarter, as well as elevated general and administrative expenses.

Accordingly, our net investment income for the first quarter of 2026 was $6.9 million, or 55 cents per share, which constitutes a decrease of $0.5 million, or 2 cents per share, from $7.4 million, or 57 cents per share, reported for the prior quarter. Core net investment income for the first quarter was $4.1 million, or 33 cents per share, compared to $4.1 million, or 32 cents per share, for the fourth quarter of 2025.

As of March 31st, 2026, our net asset value, or NAV, totaled $193 million, a decrease of $16.2 million, or 7.7%, from the prior quarter NAV of $209.2 million. On a per share basis, NAV was $15.60 as of March 31st, 2026, representing a $1.08 decrease, or 6.5%, as compared to the prior quarter's NAV per share of $16.68.

As Ted noted, the decline in NAV during the quarter was primarily driven by unrealized depreciation on the portfolio. While those markdowns were meaningful, they were largely concentrated in the software and software-exposed portfolio and were driven by broader indiscriminate market volatility in the sector.

Management does not believe the majority of these markdowns reflect deterioration in underlying credit performance or fundamentals of such companies. As of March 31st, 2026, our gross and net leverage ratios were 1.8 times and 1.5 times, respectively, compared to 1.5 times and 1.4 times in the prior quarter.

The quarter-over-quarter increase was primarily reflected the timing of our March issuance of $50 million of 7.5% notes due 2029 ahead of the April 27th partial redemption of the LRFC 2026 notes for $40 million, which temporarily elevated quarter-end borrowings. Excluding the $40 million of 2026 notes we called in March and repaid in April, our gross and net leverage ratios were 1.6 times and 1.5 times, respectively.

Importantly, this financing transaction largely de-risked our remaining 2026 maturities, further staggered our maturity ladder, diversified our funding base, and provided additional financial flexibility. Specifically, we ended the quarter with $342.2 million of borrowings outstanding at a weighted average contractual interest rate of 6.9%, when excluding the April $40 million partial redemption of the LRFC 2026 notes, compared to $312 million of borrowings outstanding at a weighted average contractual interest rate of 6.7% in the prior quarter.

We also finished the quarter with $69.8 million of available borrowing capacity under our senior secured revolving credit facilities, subject to borrowing base restrictions. With that, I will turn the call back over to Ted.

Unmute.

Ahead of questions, I'd like to re-emphasize our commitment to our shareholders. Our focus remains on active portfolio management, disciplined underwriting, and diligent capital management, with the goal of delivering sustainable long-term value creation for our shareholders.

Thank you once again to all of our shareholders, employees, and partners for your ongoing support. This concludes our prepared remarks, and I'll turn the call over for any questions.

Thank you. Good morning, guys.

Wanted to start with a question on the unrealized depreciation and you mentioned if you kind of include software-exposed, about 70% of that unrealized depreciation was driven by software and software-exposed. I'm curious if you could talk a little bit more in depth about which particular inputs to your valuation models drove the valuation change.

I guess I'm just curious if you look at what public equity markets have done in April and in early May here, we've certainly seen a rebound there and curious if things were to stay that way, if we'd potentially see a little bit of unwinding of that depreciation that you experienced in 1Q.

Hey, Erik, can you hear us?

Yes, I can.

Okay. Sorry, we're having some issues with our phone here.

To take your question a couple different steps, as an example, one of the names sort of within that unrealized is a healthcare, kind of data analytics business. It's a third-party valuation that's done on it, but one of the inputs, because we own some amount of the overall exposure that we have in the company is an equity security, and so the third-party valuation firm looked at comps in the space, and the comp set that they used is sort of healthcare, IT-type comparables.

Between December 31st and March 31st, the multiples kind of for the comp set declined, and so the multiple compressed by I want to say three-quarters of a turn. That kind of drove some of the unrealized.

To your point, I think, again, assuming some of that stuff rebounds or kind of rebounds by the time we get to 6/30, you would expect some of that to return. I would say, though, the biggest impact broadly within sort of both software and software-exposed is really where there is a public security in the capital structure.

We either own a first lien that is quoted, and so we mark to market, and obviously the BSL market has been very challenged for software in the quarter through March, and so a lot of that movement is priced on that security. Another example would be if we have a second lien non-quoted security or a private security, if there is a first lien in the capital structure that is also quoted, generally speaking, kind of our valuation firms use a relative value approach when valuing the rest of the capital structure.

The markdown in the first lien, even though it's just kind of a quoted mark, also has an impact and pushes out our discount rate kind of applied to other securities in the capital structure.

Great. That's helpful.

Thanks, Patrick. Then, noted a couple of the kind of the funding changes you made with some of the redemptions, the new issues, and just curious if you could kind of refresh me on your targeted leverage range at this point, and if there's any other kind of levers you have to pull to reach that target if you're not there today.

It's Patrick again. I'll talk about the targets, and if there's anything more specific, Brandon can kind of talk about the individual inputs.

Our target range remains sort of 1.25 to 1.4 times leverage on a net basis. We're sort of at the high end of that, but as you kind of saw in Q1, we think there is still a pretty robust, or a pretty ordinary course in kind of normal market condition M&A environment.

We would expect just kind of to have a little bit of natural delevering as a couple of deals that sort of we know are in the process of sort of being refinanced out, and we're kind of comfortable getting taken out of those names, and don't want to kind of continue on with those portfolio companies, kind of as that sort of naturally rotates in Q2, you'd kind of expect to see that. We don't think there's any real levers specifically we need to pull on the liability side, it's just going to kind of be naturally the portfolio churning.

That's right. And...

Then the last one -- yeah, go ahead, Brandon.

I was just going to say, Erik, it obviously spiked a little bit at quarter-end as a result of the broader market volatility and some of the unrealized depreciation that we had to take because of the software sell-off.

Yeah. Yes, yep.

Understood. The last one, I think it was Ted in your comments, you mentioned some optimism around the pipeline as you look at it today, and wondering if you could talk a little bit just maybe on two points: one, what you're seeing in terms of spreads today for new opportunities relative to the existing portfolio yield, and also just from a kind of industry and sector perspective, if there's any particular areas of opportunity that you feel are more attractive today.

Good question. I would say on the sector-specific stuff, we're actually really as a firm, very focused on sector specialization.

I wouldn't say there's any broad theme. I would say the market's definitely slowed the last couple weeks given some of the volatility, and we're seeing spreads wider actually in middle market credit.

We probably've had 50 basis points of spread widening, and obviously that's not what you're seeing in the liquid markets. It's the opposite.

The high-yield markets tighter today than where it was pre-Iran. I think the bar for new investments has gone up in the industry, like in private credit, and I think people are kind of thinking about capital optimization.

I think we're pretty optimistic that spreads will either go wider or stay relatively where they are.

Thanks for taking my questions today.

Thanks.

Hey, guys. On the software exposure, that's the BDC's second-largest industry exposure.

I note that fair value is now 75% of cost for that sector versus 82% last quarter. If you're using outside valuation firms for this, does this simply reflect M&A events happening in software where people are just trying to run for the exits in an M&A?

The way I describe the software situation is there's a huge dichotomy for where private credit players are valued and where private equity is valued. If you look at where private equity is carrying certain of these assets, I'm speaking purely valuation-wise.

It shows a very, very big buffer in terms of downside protection. Now again, I would probably estimate a lot of those valuations will have to come down.

The reason you're seeing a dichotomy across private credit players and software and valuations is it's what Patrick mentioned earlier. The liquid markets have been very punitive on software, and a lot of it's to do with risk around LME and things that don't come into play in a private credit situation.

We have certain securities that are illiquid that we originated, but they happen to have a security in the capital structure that's liquid. When that happens, you see a huge dichotomy in valuations between capital structures that are 100% private versus those that have a little bit of liquid securities in them.

Again, fundamentally, our software portfolio is performing very well. Revenues are up, generating cash, and again, I'm not saying there's not going to be issues.

The biggest problem that we see is two things: one is access to credit, who's going to refinance all this stuff, because most people have come out and are trying to reduce software exposure. Then number two is no exits.

It's going to be very difficult exit environment for these companies, and so it's probably going to reduce the velocity of our book in that sector. I just don't see a big wave of software sales over the next 12 months.

Now actually that raises an interesting question. If this is a potential, and I highlight potential, stress point in private credit, what does that mean for the private equity sector in general?

Because if private credit gets a cold, private equity is getting pneumonia.

Yeah. Yeah.

All right. Catch up with you later.

Thanks.

Thanks, Chris.

Thank you all for attending our call. As always, please feel free to reach out to us with any questions, which we're happy to discuss.

We look forward to speaking to you again in August when we announce our second quarter 2026 results. Thank you so much, and have a great weekend.