Triplepoint Private Venture Credit Inc

03/10/2026 | Press release | Distributed by Public on 03/10/2026 15:13

Annual Report for Fiscal Year Ending DECEMBER 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
The information contained in this section should be read in conjunction with our consolidated financial statements and related notes and schedules thereto appearing elsewhere in this Annual Report on Form 10-K. Except as otherwise specified, references to "the Company", "we", "us", and "our" refer to TriplePoint Private Venture Credit Inc. and its subsidiaries.
This Annual Report on Form 10-K contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our current and prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as "anticipates," "expects," "intends," "plans," "will," "may," "continue," "believes," "seeks," "estimates," "would," "could," "should," "targets," "projects," and variations of these words and similar expressions are intended to identify forward-looking statements. The forward-looking statements contained in this Annual Report on Form 10-K include statements as to:
•our and our portfolio companies' future operating results and financial condition, including our and our portfolio companies' ability to achieve our respective objectives;
•our business prospects and the prospects of our portfolio companies;
•our relationships with third parties, including but not limited to lenders and venture capital investors, including other investors in our portfolio companies;
•the impact and timing of our unfunded commitments;
•the expected market for venture capital investments;
•the performance of our existing portfolio and other investments we may make in the future;
•the impact of investments that we expect to make;
•actual and potential conflicts of interest with TPC, the Adviser and its senior investment team and Investment Committee;
•our contractual arrangements and relationships with third parties;
•the dependence of our future success on the U.S. and global economies, including with respect to the industries in which we invest;
•our expected financings and investments;
•the ability of the Adviser to locate suitable investments for us and to monitor and administer our investments;
•the ability of our Adviser to attract, retain and have access to highly talented professionals, including our Adviser's senior management team;
•our ability to maintain our qualification as a RIC and as a BDC;
•the adequacy of our and our portfolio companies' available liquidity, cash resources, including undrawn capital commitments from investors and the ability of our investors to fulfill their obligations under their respective subscription agreements, and working capital and compliance with covenants under our borrowing arrangements;
•the ability of our portfolio companies to obtain financing on attractive terms or at all;
•the timing of cash flows, if any, from the operations of our portfolio companies; and
•the declaration, payment, amount and/or timing of future dividends or distributions.
These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation:
•changes in laws and regulations, changes in political, economic or industry conditions, and changes in the interest rate environment or other conditions affecting the financial and capital markets;
•the potential emergence (or re-emergence) of a widespread health pandemic, and the length and duration thereof in the United States as well as worldwide, and the magnitude of its impact and time required for economic recovery;
•the potential for an economic downturn and the time period required for robust economic recovery therefrom;
•a contraction of available credit, an inability or unwillingness of our lenders to fund their commitments to us and/or an inability to access capital markets or additional sources of liquidity could have a material adverse effect on our results of operations and financial condition and impair our lending and investment activities;
•interest rate volatility could adversely affect our results, particularly given that we use leverage as part of our investment strategy;
•disruptions related to tariffs and other trade or sanctions issues, which may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States;
•currency fluctuations could adversely affect the results of our investments in foreign companies, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars;
•risks associated with possible disruption in our or our portfolio companies' operations due to the effect of, and uncertainties stemming from, adverse developments affecting the financial services industry and the venture banking ecosystem, including the potential for the failure of additional banking institutions, as well as due to wars and other forms of conflict, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics; and
•the risks, uncertainties and other factors we identify in "Risk Factors" in this Annual Report on Form 10-K under Part I, Item 1A, and in our other filings with the SEC that we make from time to time.
Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. Important assumptions include, without limitation, our ability to originate new loans and investments, borrowing costs and levels of profitability and the availability of additional capital. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Annual Report on Form 10-K should not be regarded as a representation by us that our plans and objectives will be achieved. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Annual Report on Form 10-K.
Overview
We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a BDC under the 1940 Act. We have elected to be treated, and intend to qualify annually, as a RIC under Subchapter M of the Code for U.S. federal income tax purposes.
We were formed in October 2019 to capitalize on the strong worldwide demand from venture capital-backed companies for debt financing originated by the TPC global investment platform and commenced investment operations on May 27, 2020. We participate in and benefit from TPC's multi-stage Lifespan Approach by lending to early, later, and venture growth stage companies focused in technology and other high growth industries that are backed by TPC's select group of leading venture capital investors and may have a global business strategy and products or services that appeal to customers and consumers worldwide. We generally view high growth industries as industries which we believe may experience a higher than average growth rate as compared to others as a result of demand for new products or services offered by companies in these industries.
Our investment objective is to maximize our total return to shareholders primarily in the form of current income from our secured loans and, to a lesser extent, through capital gains from equity "kickers" in the form of warrants and direct equity investments.
We operate as one operating unit and one segment for financial reporting purposes, consistent with how the CEO and CFO, who collectively are our CODM, evaluate financial performance and allocate resources.
Portfolio Composition, Investment Activity and Asset Quality
Portfolio Composition
We originate and invest primarily in loans that have a secured collateral position and are used by venture capital-backed companies to finance their continued expansion and growth, and, on a select basis, equipment financings and revolving loans, together with, in many cases, attached equity "kickers" in the form of warrant investments, and direct equity investments. We believe these investments will provide us with a stable, fixed-income revenue stream along with the potential for our returns to be enhanced by equity-related gains. We underwrite our investments seeking an unlevered yield-to-maturity on our growth capital loans and equipment financings generally ranging from 10% to 18% and on our revolving loans generally ranging from 1% to 10% above the applicable prime rate, in each case, with potential for higher returns in the event we are able to exercise warrant investments and realize gains or sell our related equity investments at a profit. We make investments that our Adviser's senior investment team believes have a low probability of loss due to their expertise and either the existence of or the near-term potential for strong revenue or revenue growth, product validation, customer commitments, intellectual property, financial condition and enterprise value of the potential opportunity. The Adviser's senior investment team also generally seeks to invest no more than 5% of our total assets in equity investments.
The following tables show certain information relating to the composition of our portfolio as of December 31, 2025 and December 31, 2024:
December 31, 2025
Investments by Type
(dollars in thousands) 		Cost Fair Value Net Unrealized Gains (losses) Number of
Investments 		Number of
Companies
Debt investments $ 328,881 $ 302,379 $ (26,502) 147 77
Warrant investments 16,008 30,287 14,279 227 166
Equity investments 22,607 26,734 4,127 81 64
Total Investments in Portfolio Companies $ 367,496 $ 359,400 $ (8,096) 455 185
(1)
_______________
(1)Represents non-duplicative number of companies.
December 31, 2024
Investments by Type
(dollars in thousands) 		Cost Fair Value Net Unrealized Gains (losses) Number of
Investments 		Number of
Companies
Debt investments $ 339,436 $ 318,838 $ (20,598) 192 75
Warrant investments 14,846 24,111 9,265 204 146
Equity investments 18,028 16,948 (1,080) 69 55
Total Investments in Portfolio Companies $ 372,310 $ 359,897 $ (12,413) 465 160
(1)
_______________
(1)Represents non-duplicative number of companies.
The following tables show the fair value of the portfolio of investments, by industry and the percentage of the total investment portfolio, as of December 31, 2025 and December 31, 2024:
December 31, 2025
Investments in Portfolio Companies by Industry
(dollars in thousands) 		At Fair Value Percentage of Total Portfolio Company Investments
Consumer Products and Services $ 53,232 14.8 %
Business/Productivity Software 42,122 11.7
Business Applications Software 29,149 8.1
Business Products and Services 23,931 6.7
E-Commerce - Personal Goods 22,843 6.4
E-Commerce - Clothing and Accessories 22,102 6.1
Healthcare Services 17,890 5.0
Aerospace and Defense 15,872 4.4
Energy 14,563 4.1
Network Management Software 14,218 4.0
Information Technology 11,955 3.3
Financial Software 11,699 3.3
Computer Hardware 11,315 3.1
Healthcare Technology Systems 7,414 2.1
Real Estate Services 7,399 2.1
Other Financial Services 6,190 1.7
Environmental Services 6,181 1.7
Educational Software 5,887 1.6
Database Software 5,560 1.5
Communications and Networking 5,222 1.5
Multimedia and Design Software 4,711 1.3
Social/Platform Software 4,065 1.1
Commercial Transportation 3,012 0.8
Medical Software and Information Services 2,895 0.8
Consumer Finance 2,411 0.7
Entertainment Software 1,884 0.5
Human Capital Services 1,058 0.3
Infrastructure 764 0.2
Business to Business Marketplace 704 0.2
Consumer Non-Durables 625 0.2
Application Software 522 0.1
Elder and Disabled Care 486 0.1
Software Development Applications 397 0.1
December 31, 2025
Investments in Portfolio Companies by Industry
(dollars in thousands) 		At Fair Value Percentage of Total Portfolio Company Investments
Life and Health Insurance 349 0.1
Information Services (B2C) 285 0.1
Financial Services 142 *
General Media and Content 103 *
Automation/Workflow Software 88 *
Communication Software 54 *
Logistics 51 *
Food Products 50 *
Total portfolio company investments $ 359,400 100.0 %
_______________
*Amount represents less than 0.05% of the total portfolio investments.
December 31, 2024
Investments in Portfolio Companies by Industry
(dollars in thousands) 		At Fair Value Percentage of Total Portfolio Company Investments
Consumer Products and Services $ 75,970 21.1 %
E-Commerce - Clothing and Accessories 28,838 8.0
Business/Productivity Software 27,182 7.6
Business Products and Services 23,846 6.6
Real Estate Services 22,148 6.2
Healthcare Services 21,941 6.1
Business Applications Software 21,051 5.8
E-Commerce - Personal Goods 20,038 5.6
Healthcare Technology Systems 14,496 4.0
Energy 10,347 2.9
Information Services (B2C) 9,448 2.6
Consumer Non-Durables 8,875 2.5
Computer Hardware 8,317 2.3
Other Financial Services 8,058 2.2
Aerospace and Defense 7,772 2.2
Network Management Software 5,727 1.6
Social/Platform Software 5,639 1.6
Communications and Networking 4,947 1.4
Financial Software 4,946 1.4
Human Capital Services 4,381 1.2
Multimedia and Design Software 4,130 1.1
Environmental Services 4,003 1.1
Educational Software 3,170 0.9
Entertainment Software 2,982 0.8
Medical Software and Information Services 2,701 0.8
Application Software 2,503 0.7
Life and Health Insurance 1,286 0.4
Consumer Finance 1,121 0.3
Infrastructure 777 0.2
Information Technology 750 0.2
Business to Business Marketplace 704 0.2
Database Software 504 0.1
Elder and Disabled Care 486 0.1
Software Development Applications 405 0.1
Financial Services 143 *
General Media and Content 104 *
Communication Software 54 *
Logistics 51 *
Food Products 50 *
Commercial Services 6 *
December 31, 2024
Investments in Portfolio Companies by Industry
(dollars in thousands) 		At Fair Value Percentage of Total Portfolio Company Investments
Total portfolio company investments $ 359,897 100.0 %
_______________
*Amount represents less than 0.05% of the total portfolio investments.
The following table shows the financing product type of our debt investments as of December 31, 2025 and December 31, 2024:
December 31, 2025 December 31, 2024
Debt Investments By Financing Product
(dollars in thousands) 		Fair Value Percentage of Total Debt Investments Fair Value Percentage of Total Debt Investments
Growth capital loans $ 288,586 95.4 % $ 295,830 92.8 %
Revolver loans 13,237 4.4 21,987 6.9
Convertible notes 556 0.2 1,021 0.3
Total debt investments $ 302,379 100.0 % $ 318,838 100.0 %
Growth capital loans in which the borrower held a term loan facility, with or without an accompanying revolving loan, in priority to our senior lien represented 17.6% and 10.7% of our debt investments at fair value as of December 31, 2025 and December 31, 2024, respectively.
Investment Activity
During the year ended December 31, 2025, we entered into debt commitments with 35 new portfolio companies and 9 existing portfolio companies totaling $246.8 million, funded debt investments to 46 portfolio companies for $152.5 million in principal value, acquired warrant investments representing $3.8 million of fair value at acquisition, and made direct equity investments of $2.8 million. Debt investments funded during the year ended December 31, 2025 carried a weighted average annualized portfolio yield of 12.4% at origination.
During the year ended December 31, 2024 we entered into debt commitments with 15 new portfolio companies and 19 existing portfolio companies totaling $161.2 million, funded debt investments to 37 portfolio companies for $130.0 million in principal value, acquired warrant investments representing $2.9 million of fair value at acquisition, and made direct equity investments of $8.0 million. Debt investments funded during the year ended December 31, 2024 carried a weighted average annualized portfolio yield of 14.9% at origination.
During the year ended December 31, 2025, we received $92.7 million of principal prepayments and early repayments from 27 portfolio companies and $48.0 million of scheduled principal amortization. During the year ended December 31, 2024, we received $93.6 million of principal prepayments and early repayments from 15 portfolio companies and $55.5 million of scheduled principal amortization.
The following table shows the total portfolio investment activity for the years ended December 31, 2025 and December 31, 2024:
For the Year Ended December 31,
(in thousands) 2025 2024
Beginning portfolio at fair value $ 359,897 $ 400,195
New debt investments, net(1)
149,132 125,803
Scheduled principal amortization (47,994) (55,513)
Principal prepayments and early repayments (92,738) (93,638)
Accretion of debt investment fees 5,474 3,160
Payment-in-kind coupon 5,310 3,499
New warrant investments 3,773 2,855
New equity investments 2,835 7,997
Proceeds and dispositions from investments (5,007) (13,740)
Net realized losses on investments (25,599) (14,547)
Net unrealized gains/(losses) on investments 4,317 (6,174)
Ending portfolio at fair value $ 359,400 $ 359,897
_______________
(1)Debt balance is net of fees and discounts applied to the loan at origination.
Our level of investment activity can vary substantially from period to period as our Adviser chooses to slow or accelerate new business originations depending on market conditions, rate of investment of TPC's select group of leading venture capital investors, our Adviser's knowledge, expertise and experience, our funding capacity (including availability under our Credit Facility and our ability or inability to raise equity or debt capital), the amount of our outstanding unfunded commitments and other market dynamics.
The following table shows the debt commitments and fundings of debt investments (principal balance) and equity investments for the years ended December 31, 2025 and December 31, 2024:
For the Year Ended December 31,
Commitments and Fundings
(in thousands) 		2025 2024
Debt Commitments
New portfolio companies $ 170,570 $ 68,525
Existing portfolio companies 76,275 92,672
Total(1)
$ 246,845 $ 161,197
Funded Debt Investments $ 152,488 $ 130,010
Equity Investments $ 2,835 $ 3,820
_______________
(1)Includes backlog of potential future commitments, as applicable.
We may enter into commitments with certain portfolio companies that permit an increase in the commitment amount in the future in the event that conditions to such increases are met ("backlog of potential future commitments"). If such conditions to increase are met, these amounts may become unfunded commitments if not drawn prior to expiration. As of December 31, 2025, we had a $2.3 million backlog of future commitments. As of December 31, 2024, there was no backlog of future commitments.
Asset Quality
Consistent with TPC's existing policies, our Adviser maintains a credit watch list which places borrowers into five risk categories based upon our Adviser's senior investment team's judgment and in consultation with, among others, the Adviser's Portfolio Group Committee and Originations Professionals and Investment and Credit Analysis Professionals, where 1 is the best rating and all new loans are generally assigned a rating of 2.
Category Category Definition Action Item
Clear (1) Performing above expectations and/or strong financial or enterprise profile, value or coverage. Review quarterly.
White (2) Performing at expectations and/or reasonably close to it. Reasonable financial or enterprise profile, value or coverage. Generally, all new loans are initially graded White (2). Contact portfolio company periodically; in no event less than quarterly.
Yellow (3) Performing generally below expectations and/or some proactive concern due to industry, business, financial and/or related factors. Adequate financial or enterprise profile, value or coverage. Contact portfolio company monthly or more frequently as determined by our Adviser; contact venture capital investors.
Orange (4) Needs close attention due to performance materially below expectations, weak financial and/or enterprise profile, concern regarding additional capital or exit equivalent. Possibility exists for some investment loss if deterioration continues. Contact portfolio company weekly or more frequently as determined by our Adviser; contact venture capital investors regularly; our Adviser forms a workout group to minimize risk of loss.
Red (5) Serious concern/trouble due to pending or actual default or equivalent. May experience partial and/or full investment loss. Maximize value from assets.
The following table shows the credit rankings for the portfolio companies that had outstanding debt obligations to us as of December 31, 2025 and December 31, 2024:
December 31, 2025 December 31, 2024
Credit Category
(dollars in thousands) 		Fair Value Percentage of Total Debt Investments Number of Portfolio Companies Fair Value Percentage of Total Debt Investments Number of Portfolio Companies
Clear (1) $ 33,569 11.1 % 9 $ 21,470 6.7 % 4
White (2) 242,707 80.3 54 267,419 83.9 56
Yellow (3) 12,579 4.2 4 11,966 3.8 4
Orange (4) 13,121 4.3 7 16,888 5.3 9
Red (5) 403 0.1 3 1,095 0.3 2
$ 302,379 100.0 % 77 $ 318,838 100.0 % 75
As of December 31, 2025 and December 31, 2024, the weighted average investment ranking of our debt investment portfolio was 2.02 and 2.09, respectively. During the three months ended December 31, 2025, portfolio company credit category changes, excluding fundings and repayments, consisted of the following: 3 portfolio companies with an aggregate principal balance of $7.3 million were upgraded from White (2) to Clear (1), 1 portfolio company with a de minimis principal balance was upgraded from Orange (4) to White (2), 1 portfolio company with a principal balance of $7.4 million was downgraded from Yellow (3) to Orange (4), and 2 portfolio companies with an aggregate principal balance of $5.2 million were downgraded from Orange (4) to Red (5).
As of December 31, 2025, we had investments in ten portfolio companies that were on non-accrual status, with an aggregate cost and fair value of $32.2 million and $12.6 million, respectively. As of December 31, 2024, we had investments in ten portfolio companies that were on non-accrual status, with an aggregate cost and fair value of $28.4 million and $16.5 million, respectively.
Results of Operations
Set forth below is a comparison of the results of operations for the years ended December 31, 2025 and December 31, 2024. The comparison of the fiscal years ended December 31, 2024 and December 31, 2023 can be found within "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" included in Part II of our annual report on Form 10-K for the fiscal year ended December 31, 2024, which is incorporated herein by reference.
Comparison of operating results for the year ended December 31, 2025 and 2024
An important measure of our financial performance is net increase (decrease) in net assets resulting from operations, which includes net investment income (loss), net realized gains (losses) and net unrealized gains (losses). Net investment income (loss) is the difference between our income from interest, dividends, fees and other investment income and our operating expenses, including interest on borrowed funds. Net realized gains (losses) on investments is the difference between the proceeds received from dispositions of portfolio investments and their amortized cost. Net unrealized gains (losses) on investments is the net change in the fair value of our investment portfolio.
For the year ended December 31, 2025, our net increase in net assets resulting from operations was $5.6 million, which was comprised of $26.4 million of net investment income and $20.7 million of net realized and unrealized losses. On a per common share basis for year ended December 31, 2025, net investment income was $1.11 per share and the net increase in net assets resulting from operations was $0.24 per share.
For the year ended December 31, 2024, our net increase in net assets resulting from operations was $15.9 million, which was comprised of $36.1 million of net investment income and $20.1 million of net realized and unrealized losses. On a per common share basis for year ended December 31, 2024, net investment income was $1.52 per share and the net increase in net assets resulting from operations was $0.67 per share.
Investment Income
Total investment and other income for the years ended December 31, 2025 and December 31, 2024 was $50.6 million and $63.5 million, respectively.
The decrease in total investment and other income for the year ended December 31, 2025, compared to the year ended December 31, 2024, is due to a lower weighted average principal amount outstanding on income earning investments, coupled with a lower weighted average yield during the 2025 fiscal year compared to the 2024 fiscal year.
Operating Expenses
Total operating expenses consist of our base management fee, income incentive fee, capital gains incentive fee, interest expenses and amortization of fees, administration agreement expenses, and general and administrative expenses. We anticipate that our operating expenses would increase over time to the extent that our investment portfolio grows. However, we anticipate operating expenses, as a percentage of total assets and net assets, would generally decrease over time to the extent that our investment portfolio and capital base expand. We expect that base management and income incentive fees would increase to the extent that we grow our capital base and our earnings. The capital gains incentive fee depends on realized and unrealized gains and losses. Interest expenses will generally increase if we draw down on the Credit Facility or issue debt securities, and we generally expect expenses under the Administration Agreement and general and administrative expenses to increase over time to the extent that our investment portfolio grows, to meet the additional requirements associated with servicing a larger portfolio.
Total operating expenses for the years ended December 31, 2025 and December 31, 2024 were $24.2 million and $27.4 million, respectively.
Base management fees for each of the years ended December 31, 2025 and December 31, 2024 totaled $6.2 million. Base management fees remained flat during the year ended December 31, 2025, as we did not issue common stock during the period.
We did not incur an incentive fee for each of the years ended December 31, 2025 and December 31, 2024, as the income incentive fees were reduced by $4.2 million and $7.2 million, respectively, due to the total return requirement under the Advisory Agreement. We did not incur a capital gains incentive fee for each of the years ended December 31, 2025 and December 31, 2024, due to the current and cumulative realized and unrealized losses we recorded on our investment portfolio during the periods.
For the years ended December 31, 2025 and December 31, 2024, interest and fees on our borrowings totaled $12.6 million and $16.3 million, respectively. The decrease in interest and fees on our borrowings was primarily due to the Fourth Amendment to the Credit Facility we entered into on July 2, 2025 (the "Fourth Amendment"), which, among other things, reduced the applicable margin to 3.05% during the revolving period and reduced the minimum principal utilization threshold. In addition we had a decrease in the weighted average principal balance outstanding during the year ended December 31, 2025 compared to the year ended December 31, 2024.
Administration Agreement expenses during the years ended December 31, 2025 and December 31, 2024 totaled $2.2 million and $2.2 million, respectively. General and administrative expenses during the years ended December 31, 2025 and December 31, 2024 totaled $3.1
million and $2.7 million, respectively. The increase was primarily driven by higher excise tax and legal fees during the year ended December 31, 2025.
Net Realized Gains and Losses and Net Unrealized Gains and Losses
Realized gains and losses are included in "net realized losses on investments" in the consolidated statements of operations.
For the year ended December 31, 2025, we recognized net realized losses of $24.6 million, primarily as a result of the write-off of investments in certain portfolio companies and foreign currency adjustments. For the year ended December 31, 2024, we recognized net realized losses of $14.8 million, primarily as a result of the write-off of investments in certain portfolio companies and foreign currency adjustments.
Unrealized gains and losses are included in "net change in unrealized gains/(losses) on investments" in the consolidated statements of operations.
Net change in unrealized gains during the year ended December 31, 2025 was $3.9 million, resulting primarily from mark-to-market adjustments and foreign currency adjustments, net of reversals of previously recognized unrealized losses on investments exited during the year. Net change in unrealized losses during the year ended December 31, 2024 was $5.3 million, resulting primarily from mark-to-market adjustments and foreign currency adjustments, net of reversals of previously recognized unrealized losses on investments exited during the year.
Net change in realized and unrealized gains or losses in subsequent periods may be volatile as such results depend on changes in the market, changes in the underlying performance of our portfolio companies and their respective industries, and other market factors.
Portfolio Yield and Total Return
Investment income includes interest income on our debt investments, utilizing the effective yield method, including cash interest income as well as the amortization of any purchase premium, accretion of purchase discount, original issue discount, facilities fees, and the amortization and payment of the EOT payments.
The following table shows the weighted average portfolio yield on our debt investments, excluding non-income producing investments, comprising of cash interest income, accretion of the net purchase discount, facilities fees and the value of warrant investments received, accretion of EOT payments and the accelerated receipt of EOT payments on prepayments:
For the Year Ended December 31,
Ratios
(Percentages)(1)
2025 2024
Weighted average portfolio yield on debt investments(2)
15.0 % 16.7 %
Coupon income 10.6 % 12.5 %
Accretion of discount 1.2 % 1.2 %
Accretion of end-of-term payments 1.6 % 1.8 %
Impact of prepayments during the period 1.6 % 1.2 %
_____________
(1)Weighted average portfolio yields on debt investments for periods shown are the rates of interest income recognized during the period divided by the average amortized cost of debt investments in the portfolio during the period. The calculation of weighted average portfolio yields on debt investments excludes any non-income producing debt investments, but includes debt investments on non-accrual status. The weighted average yields reported for these periods reflect the weighted average yields to maturities.
(2)The weighted average portfolio yields on debt investments reflected above do not represent actual investment returns to our shareholders.
Our weighted average annualized portfolio yield on debt investments may be higher than an investor's yield on an investment in shares of our common stock. Our weighted average annualized portfolio yield on debt investments does not reflect operating expenses that may be incurred by us and, thus, by our stockholders. In addition, our weighted average annualized portfolio yield on debt investments and total return figures disclosed in this Annual Report on Form 10-K do not consider the effect of any sales commissions or charges that may be incurred in connection with the sale of shares of our common stock. Our weighted average annualized portfolio yield on debt investments and total return based on net asset value do not represent actual investment returns to common stockholders. Our weighted average annualized portfolio yield on debt investments and total return figures are subject to change and, in the future, may be greater or less than the rates set forth in this Annual Report on Form 10-K.
For the years ended December 31, 2025 and December 31, 2024, our total return based on the change in net asset value was 2.2% and 5.5%, respectively. Total return based on net asset value is the change in ending net asset value per common share plus distributions per common share paid during the period divided by the beginning net asset value per common share for the period.
The following table shows our return on average total assets and return on average net asset value for the periods indicated:
For the Year Ended December 31,
Returns on Net Asset Value and Total Assets(1)
(dollars in thousands)
2025 2024
Net investment income $ 26,361 $ 36,088
Net increase (decrease) in net assets $ 5,632 $ 15,944
Average net asset value(2)
$ 252,683 $ 285,313
Average total assets(2)
$ 394,570 $ 450,016
Net investment income to average net asset value 10.4 % 12.6 %
Net increase in net assets to average net asset value 2.2 % 5.6 %
Net investment income to average total assets 6.7 % 8.0 %
Net increase in net assets to average total assets 1.4 % 3.5 %
_______________
(1)Net asset value used in ratios represents net asset value to common shareholders and excludes preferred shareholders' equity.
(2)The average net asset values and the average total assets are computed based on daily balances.
Critical Accounting Policies
The preparation of our consolidated financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates, including with respect to the valuation of our investments, could cause actual results to differ.
Understanding our accounting policies and the extent to which we use management's judgment and estimates in applying these policies is integral to understanding our financial statements. We describe our most significant accounting policies in "Note 2. Significant Accounting Policies" in our consolidated financial statements. Critical accounting policies are those that require the application of management's most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that may change in subsequent periods. Management has utilized available information, including our past history, industry standards and the current economic environment, among other factors, in forming the estimates and judgments, giving due consideration to materiality. We have identified the valuation of our investment portfolio, including our investment valuation policy (which has been approved by the Board), as our critical accounting policy and estimates. The critical accounting policies should be read in conjunction with our risk factors in this Annual Report on Form 10-K.
Investment Valuation
Investment transactions are recorded on a trade-date basis. Our investments are carried at fair value in accordance with the 1940 Act and ASC Topic 946 and measured in accordance with Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosure, or "ASC Topic 820," issued by the FASB. ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is a market-based measure considered from the perspective of the market's participant who holds the financial instrument rather than an entity-specific measure. When market assumptions are not readily available, our own assumptions are set to reflect those that the Adviser believes market participants would use in pricing the financial instruments on the measurement date.
The availability of observable inputs can vary depending on the financial instrument and is affected by a variety of factors. To the extent the valuation is based on models or inputs that are less observable, the determination of fair value requires more judgment. Our valuation methodology is approved by the Board, and the Board is responsible for the fair values determined. As markets change, new types of investments are made, or pricing for certain investments becomes more or less observable, management, with oversight from the Board, may refine our valuation methodologies to best reflect the fair value of our investments appropriately.
Our investment portfolio, valued at fair value in accordance with our Board-approved valuation policy, represented 90.5% and 82.8% of our total assets, as of December 31, 2025 and December 31, 2024, respectively.
See "Note 2. Significant Accounting Policies" and "Note 4. Investments" in the notes to the consolidated financial statements included in this Annual Report on Form 10-K for more information on our valuation process.
Liquidity and Capital Resources
Set forth below is a discussion of our liquidity and capital resources as of and for the years ended December 31, 2025 and 2024. A discussion of our liquidity and capital resources as of and for the year ended December 31, 2023 can be found within "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" included in Part II of our annual report on Form 10-K for the fiscal year ended December 31, 2024, which is incorporated herein by reference.
We believe that our current cash and cash equivalents on hand, our available borrowing capacity under the Credit Facility and our anticipated cash flows from operations, including from contractual monthly portfolio company payments and cash flows, prepayments, and the ability to liquidate any publicly traded investments, will be adequate to meet our cash needs for our daily operations, including to fund our unfunded commitment obligations.
Cash Flows
During the year ended December 31, 2025, net cash provided by operating activities, consisting primarily of sales and repayments of investments, net of fundings and purchases and the items described in "Results of Operations" above was $8.8 million, and net cash used in financing activities was $43.3 million primarily from distributions paid of $21.6 million on our common stock and from net repayments under the Credit Facility of $22.0 million. As of December 31, 2025, cash, including restricted cash, was $35.3 million.
During the year ended December 31, 2024, net cash provided by operating activities, consisting primarily of sales and repayments of investments, net of fundings and purchases and the items described in "Results of Operations" above, was $51.2 million and net cash used in financing activities was $42.2 million, primarily from distributions paid of $42.7 million on our common stock, partially offset by net borrowings under the Credit Facility of $0.5 million. As of December 31, 2024, cash, including restricted cash, was $69.8 million.
Capital Resources and Borrowings
As a BDC, we generally have an ongoing need to raise additional capital for investment purposes. As a result, we expect, from time to time, to access the debt and equity markets when we believe it is necessary and appropriate to do so. In this regard, we continue to explore various options for obtaining additional debt or equity capital for investments. This may include expanding or extending the Credit Facility, the issuance of additional shares of our common stock in exchange for capital contributions or the issuance of debt securities. If we are unable to obtain leverage or raise capital on terms that are acceptable to us, our ability to grow our portfolio could be substantially impacted.
As of December 31, 2025, we had received Capital Commitments totaling $386.8 million, of which $354.7 million had been funded. Upon termination of our Investment Period, which occurred on December 19, 2023, our stockholders were released from funding obligations for any remaining undrawn Capital Commitments under their respective Subscription Agreements with us, subject to limited exceptions set forth in the subscription agreements.
Credit Facility
We have $75.0 million in total commitments available under the Credit Facility, subject to various covenants and borrowing base requirements. The Credit Facility also includes an accordion feature, which allows the Financing Subsidiary to request an increase in the size of the Credit Facility to an amount not to exceed $125.0 million (including by adding additional lenders under the Credit Facility), subject to certain conditions and the consent of DBNY, as the sole lender. The revolving period under the Credit Facility is scheduled to expire on July 15, 2027 and the maturity date of the Credit Facility is scheduled for January 15, 2029, unless terminated earlier. Advances under the Credit Facility accrue interest at a per annum rate equal to the applicable margin plus the greater of 3-month Term SOFR and 0.50%, and are subject to certain minimum principal utilization amounts during the revolving period. As of December 31, 2025, the applicable margin is equal to 3.05% during the revolving period and increases to 4.05% during the amortization period. See "Note 6. Borrowings" in the notes to consolidated financial statements for more information regarding the terms of the Credit Facility.
As of December 31, 2025, we had outstanding borrowings of $66.0 million under the Credit Facility, excluding deferred credit facility costs of $1.4 million, which are included as assets in the consolidated statements of assets and liabilities. We had $9.0 million of remaining capacity on our Credit Facility as of December 31, 2025.
As of December 31, 2024, we had outstanding borrowings of $88.0 million under the Credit Facility, excluding deferred credit facility costs of $2.0 million, which are included as assets in the consolidated statements of assets and liabilities. We had $162.0 million of remaining capacity on our Credit Facility as of December 31, 2024.
2027 Notes
On April 6, 2022, we issued $75.0 million in aggregate principal amount of the 2027 Notes with a fixed interest rate of 5.86% per year. The 2027 Notes were issued in a private placement to certain qualified institutional investors, pursuant to the terms of the Note Purchase Agreement. The 2027 Notes will mature on April 6, 2027, unless redeemed, purchased or prepaid prior to such date in accordance with their terms. In the event that a Below Investment Grade Event (as defined in the Note Purchase Agreement) occurs, the 2027 Notes will bear interest at a fixed rate of 6.86% per year from the date of the occurrence of the Below Investment Grade Event to and until the date on which the Below Investment Grade Event is no longer continuing.
The 2027 Notes may be redeemed in whole or in part at any time or from time to time at the Company's option at par plus accrued interest to the prepayment date and, if applicable, a make-whole premium. In addition, we are obligated to offer to prepay the 2027 Notes at par plus accrued and unpaid interest up to, but excluding, the date of prepayment, if certain change in control events occur. The 2027 Notes are general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by us; provided however, in the event that we create, incur, assume or permit to exist liens on or with respect to any of our property or assets in connection with future secured indebtedness of more than an aggregate principal amount of $25 million, the 2027 Notes will generally become secured concurrently therewith, equally and ratably with such indebtedness. See "Note 6. Borrowings" in the notes to consolidated financial statements for more information regarding the 2027 Notes and the Note Purchase Agreement.
Series A Preferred Stock
On May 27, 2020, we sold 525 shares of Series A Cumulative Preferred Stock (the "Series A Preferred Stock") at a price of $1,000.00 per share, resulting in gross proceeds of $525,000. Distributions, including the payment of dividends and distribution of our assets upon dissolution, liquidation, or winding up, on the Series A Preferred Stock are senior to all other classes and series of our common stock to the extent of the aggregate liquidation preference of the Series A Preferred Stock ($1,000 per share, or the "Liquidation Value") and all accrued but unpaid dividends and any applicable redemption premium on the Series A Preferred Stock. Dividends on each share of the Series A Preferred Stock are payable semiannually on June 30 and December 31 of each year and accrue at the rate of 12.0% per annum of the sum of the Liquidation Value thereof plus all accumulated and unpaid dividends thereon, from and including the date of issuance to and including the earlier of (1) the date of any liquidation, dissolution, or winding up of the Company or (2) the date on which such share of Series A Preferred Stock is redeemed. Such dividends are generally cumulative with the result that all accrued and unpaid dividends must be fully paid or declared with funds irrevocably set apart for payment for all past dividend periods before any dividend, distribution or payment may be made to holders of outstanding shares of our common stock.
Each holder of Series A Preferred Stock or other series of preferred stock is or will be entitled to one vote for each share held by such holder on each matter submitted to a vote of our stockholders, and the holders of the outstanding shares of our common stock, Series A Preferred Stock and all other series of preferred stock will vote together as a single class; provided, however, that the holders of outstanding shares of Series A Preferred Stock together with the holders of all other series of preferred stock outstanding, if any, will be entitled, voting as a separate class on a one-vote-per-share basis (to the exclusion of the holders of all other securities and classes of our capital stock) to elect two of our directors at all times. We refer to these directors as to the Preferred Directors (currently James P. Labe and Sajal K. Srivastava). Except as set forth below, the holders of outstanding shares of our common stock, Series A Preferred Stock and all other series of preferred stock, voting together as a single class, will elect the balance of our directors, subject to the prior rights, if any, of the holders of any other class of senior securities outstanding. Moreover, if at any time dividends on the outstanding shares of Series A Preferred Stock, together with all other series of preferred stock, are unpaid in an amount equal to two full years' dividends on the Series A Preferred Stock, the holders of such outstanding shares of Series A Preferred Stock will be entitled, voting as a separate class on a one-vote-per-share basis (to the exclusion of the holders of all other securities and classes of our capital stock), to elect a majority of our directors until all dividends in arrears are paid or otherwise provided for. The consent of the holders of "a majority of the outstanding shares," as defined under the 1940 Act, of the Series A Preferred Stock, voting as a separate class, is generally required to take certain actions that affect the rights and preferences of the holders of Series A Preferred Stock.
The outstanding shares of Series A Preferred Stock are subject to redemption by us at any time by notice of such redemption at a price per share of Series A Preferred Stock, payable in cash on the redemption date, equal to 100% of such share's Liquidation Value, plus all accrued and unpaid dividends to the redemption date.
For so long as any Series A Preferred Stock is outstanding, we are not permitted to: (i) declare any dividend or other distribution (other than a dividend or distribution paid in shares of our common stock) in respect of shares of our common stock or (ii) call for redemption, redeem, purchase or otherwise acquire for consideration any shares of our common stock, unless, in each case, immediately thereafter, each class of our "senior securities" (as defined in the 1940 Act) will have an asset coverage of at least 150% (as calculated in accordance with the 1940 Act) after deducting the amount of such dividend or distribution or redemption or purchase price.
The shares of Series A Preferred Stock are not convertible into any other class or series of shares. The above is a summary of the material terms of the Series A Preferred Stock and is qualified in its entirety by reference to the Articles Supplementary governing the Series A Preferred Stock, a copy of which is incorporated by reference as an exhibit to this Annual Report on Form 10-K.
Asset Coverage Requirements
We are required under the 1940 Act to meet a coverage ratio of total assets (less all liabilities and indebtedness not represented by senior securities) to the aggregate amount of our senior securities, which generally includes all of our borrowings and any preferred stock, of at least 150%. As of December 31, 2025, our asset coverage for total borrowings and other senior securities was 275%.
Unfunded Commitments
We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. As of December 31, 2025, our unfunded commitments totaled $119.4 million to 33 portfolio companies, of which $13.2 million were dependent upon the portfolio companies reaching certain milestones before the debt commitment becomes available to them. As of December 31, 2024, our unfunded commitments totaled $67.1 million to 22 portfolio companies, of which none were dependent upon the portfolio companies reaching certain milestones before the debt commitment becomes available to them.
The following table shows our unfunded commitments by portfolio company as of December 31, 2025 and December 31, 2024:
Unfunded Commitments(1)
(in thousands)
December 31, 2025 December 31, 2024
Observe, Inc. $ 8,000 $ -
All Inspire Health, Inc. 7,000 -
Eightfold AI, Inc. 7,000 -
Incode Technologies, Inc. 7,000 -
ThoughtSpot, Inc. 7,000 -
Equafin Corp. 6,123 -
Minted, Inc. 5,714 -
Etched.ai, Inc. 5,500 10,000
Artisan AI, Inc. 5,000 -
Bidgely Inc. 5,000 -
Rudderstack, Inc 5,000 -
Union Systems Inc. 5,000 -
Waymark, Inc. 5,000 -
Signal Advisors USA, Inc. 4,833 -
Deep Sentinel Corp. 4,500 -
Pair Team, PBC 3,600 -
Simpplr Inc. 3,500 -
Bitonic Technology Labs, Inc. 3,250 -
Contoro Inc. 3,000 -
Earth Services, Inc. 3,000 -
Total Expert, Inc. 2,500 -
Muon Space, Inc. 2,131 5,000
Lightbeam.ai, Inc. 2,000 -
Lively, Inc. 1,750 -
Hover Inc. 1,500 1,000
Radar Labs, Inc. 1,500 -
Ao1 Holdings, Inc. 1,200 2,280
Hydrow Inc. 842 324
Worldwide Freight Logistics Ltd. 753 351
Planhub Holdings, LLC 438 -
Panorama Education, Inc. 300 2,140
Flashparking, Inc. 250 250
Join Digital, Inc. 175 2,100
Activehours, Inc. - 10,000
Cresta Intelligence, Inc. - 5,000
Haven Energy Inc. - 2,700
Hermeus Corporation - 3,212
Karat Financial Technologies, Inc. - 6,719
Luxury Presence, Inc. - 5,500
Mirelo AI GmbH - 862
Ocrolus Inc. - 1,714
Overtime Sports, Inc. - 1,143
Planet A Foods GmbH - 1,198
Quantum Circuits, Inc. - 1,000
Thoughtful Automation, Inc. - 4,061
Workmate Labs, Inc. - 500
Total $ 119,359 $ 67,054
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(1)Does not include backlog of potential future commitments. Refer to "Investment Activity" above.
During the years ended December 31, 2025 and December 31, 2024, $46.7 million and $34.8 million of unfunded commitments expired or were terminated, respectively. The following table shows additional information on our unfunded commitments regarding milestones and expirations as of December 31, 2025 and December 31, 2024:
Unfunded Commitments(1)
(in thousands)
December 31, 2025 December 31, 2024
Dependent on milestones $ 13,175 $ -
Expiring during:
2025 $ - $ 55,989
2026 84,075 11,065
2027 24,952 -
2028 $ 10,332 -
Total $ 119,359 $ 67,054
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(1)Does not include backlog of potential future commitments.
Our credit agreements contain customary lending provisions that allow us relief from funding obligations for previously made commitments in instances where the underlying portfolio company experiences material adverse events that affect the financial condition or business outlook for the portfolio company. Since these commitments may expire without being drawn upon, unfunded commitments do not necessarily represent future cash requirements or future earning assets for us. We generally expect 50% - 75% of our gross unfunded commitments to eventually be drawn before the expiration of their corresponding availability periods.
The fair value at the inception of the delay draw credit agreements with our portfolio companies is equal to the fees and/or warrants received to enter into these agreements, taking into account the remaining terms of the agreements and the counterparties' credit profile. The unfunded commitment liability reflects the fair value of these future funding commitments.
Common Stock Distributions
We have elected to be treated, and intend to qualify annually, as a RIC under the Code. To maintain RIC tax treatment, we must distribute at least 90% of our net ordinary income and net realized short-term capital gains in excess of our net realized long-term capital losses, if any, to our stockholders. In order to avoid a non-deductible 4% U.S. federal excise tax on certain of our undistributed income, we would need to distribute during each calendar year an amount at least equal to the sum of: (a) 98% of our ordinary income (not taking into account any capital gains or losses) for such calendar year; (b) 98.2% of the amount by which our capital gains exceed our capital losses (adjusted for certain ordinary losses) for a one-year period ending on October 31 of the calendar year (unless an election is made by us to use our taxable year); and (c) certain undistributed amounts from previous years on which we paid no U.S. federal income tax. For the tax years ended December 31, 2025 and December 31, 2024, we were subject to a 4% U.S. federal excise tax and we may be subject to this tax in future years. In such cases, we will be liable for the tax only on the amount by which we do not meet the foregoing distribution requirement.
To the extent our taxable earnings fall below the total amount of our distributions for the year, a portion of those distributions may be deemed a return of capital to our stockholders. Our Adviser monitors available taxable earnings, including net investment income and realized capital gains, to determine if a return of capital may occur for the year. We estimate the source of our distributions as required by Section 19(a) of the 1940 Act to determine whether payment of dividends are expected to be paid from any other source other than net investment income accrued for current period or certain cumulative periods, but we will not be able to determine whether any specific distribution will be treated as made out of our taxable earnings or as a return of capital until after the end of our taxable year. Any amount treated as a return of capital will reduce a stockholder's adjusted tax basis in his or her common stock, thereby increasing his or her potential gain or reducing his or her potential loss on the subsequent sale or other disposition of his or her common stock. On a quarterly basis, for any payment of dividends estimated to be paid from any other source other than net investment income accrued for current period or certain cumulative periods based on the requirements of Section 19(a) of the 1940 Act, we will send a written Section 19(a) notice to our registered stockholders along with the dividend payment. The estimates of the source of the distribution are interim estimates based on GAAP that are subject to revision, and the exact character of the distributions for tax purposes cannot be determined until the final books and records are finalized for the calendar year. Therefore, these estimates are made solely in order to comply with the requirements of Section 19(a) of the 1940 Act and should not be relied upon for tax reporting or any other purposes and could differ significantly from the actual character of distributions for tax purposes. The specific tax characteristics of our distributions will be reported to stockholders after the end of the taxable year. We intend to pay quarterly distributions to our common stockholders.
The following table shows our cash distributions per common share that have been authorized by our Board since commencement of operations to December 31, 2025:
Date Declared Record Date Payment Date Per Share Amount
November 12, 2020 November 13, 2020 November 20, 2020 $ 0.15
December 21, 2020 December 22, 2020 December 30, 2020 0.30
December 21, 2020 December 22, 2020 December 30, 2020 0.14
(1)
May 12, 2021 May 13, 2021 May 19, 2021 0.30
August 11, 2021 August 13, 2021 August 27, 2021 0.30
October 29, 2021 November 1, 2021 November 12, 2021 0.30
December 8, 2021 December 10, 2021 December 29, 2021 0.30
December 8, 2021 December 10, 2021 December 29, 2021 0.10
(2)
April 28, 2022 May 13, 2022 May 19, 2022 0.33
July 26, 2022 August 5, 2022 August 26, 2022 0.40
October 28, 2022 November 1, 2022 November 11, 2022 0.40
December 9, 2022 December 15, 2022 December 30, 2022 0.40
December 9, 2022 December 15, 2022 December 30, 2022 0.10
(2)
April 27, 2023 May 12, 2023 May 19, 2023 0.42
July 27, 2023 August 4, 2023 August 25, 2023 0.42
October 27, 2023 October 30, 2023 November 15, 2023 0.47
December 5, 2023 December 12, 2023 December 29, 2023 0.47
December 5, 2023 December 12, 2023 December 29, 2023 0.12
(2)
April 25, 2024 April 29, 2024 May 17, 2024 0.47
August 1, 2204 August 5, 2024 August 23, 2024 0.41
October 31, 2024 November 1, 2024 November 15, 2024 0.41
December 13, 2024 December 13, 2024 December 27, 2024 0.41
December 13, 2024 December 13, 2024 December 27, 2024 0.10
(2)
May 15, 2025 May 16, 2025 May 23, 2025 0.35
July 30, 2025 August 1, 2025 August 22, 2025 0.28
November 11, 2025 November 13, 2025 November 26, 2025 0.28
December 22, 2025 January 2, 2026 January 16, 2026 0.28
Total cash distributions $ 8.41
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(1)Represents a special distribution sourced from net realized short-term capital gains.
(2)Represents a special distribution sourced from net investment income.
For the year ended December 31, 2025, distributions paid were comprised of interest-sourced distributions (qualified interest income). As of December 31, 2025, we estimated that we had undistributed taxable earnings from distributable earnings (or "Spillover Income") of $16.9 million, or $0.71 per common share.
Recent Accounting Pronouncements
In December 2023, the FASB issued Accounting Standards Update ("ASU") 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures", which requires additional disaggregated disclosures on an entity's effective tax rate reconciliation and additional details on income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and is to be adopted on a prospective basis with the option to apply retrospectively. The adoption of these rules did not have a material impact on the consolidated financial statements.
Recent Developments
None.
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