PennantPark Investment (PNNT) 10-Q 2024 Q3 Quarterly report

0001383414Investments in Non-Controlled, Non-Affiliated Portfolio Companies—173.9% First Lien Secured Debt—115.7% Broder Bros., Co. Maturity 12/04/2025 Consumer Products Current Coupon 11.60% Basis Point Spread Above Index 3M SOFR+6262023-10-012024-06-30

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER: 814-00736

PENNANTPARK INVESTMENT CORPORATION

(Exact name of registrant as specified in its charter)

MARYLAND	20-8250744
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1691 Michigan Avenue, Miami Beach, Florida	33139
(Address of principal executive offices)	(Zip Code)

(786) 297-9500

(Registrant’s Telephone Number, Including Area Code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share	PNNT	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☑
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☐

The number of shares of the registrant’s common stock, $0.001 par value per share, outstanding as of August 7, 2024 was 65,296,094.

PENNANTPARK INVESTMENT CORPORATION

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2024

TABLE OF CONTENTS

PART I. CONSOLIDATED FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Statements of Assets and Liabilities as of June 30, 2024 (unaudited) and September 30, 2023	4
Consolidated Statements of Operations for the three and nine months ended June 30, 2024 and 2023 (unaudited)	5
Consolidated Statements of Changes in Net Assets for the three and nine months ended June 30, 2024 and 2023 (unaudited)	6
Consolidated Statements of Cash Flows for the nine months ended June 30, 2024 and 2023 (unaudited)	7
Consolidated Schedules of Investments as of June 30, 2024 (unaudited) and September 30, 2023	8
Notes to Consolidated Financial Statements (unaudited)	23
Report of Independent Registered Public Accounting Firm (PCAOB ID 49)	42
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	44
Item 3. Quantitative and Qualitative Disclosures About Market Risk	58
Item 4. Controls and Procedures	59
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	60
Item 1A. Risk Factors	60
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	60
Item 3. Defaults Upon Senior Securities	60
Item 4. Mine Safety Disclosures	60
Item 5. Other Information	60
Item 6. Exhibits	61
SIGNATURES	62

2

PART I—CONSOLIDATED FINANCIAL INFORMATION

We are filing this Quarterly Report on Form 10-Q (the "Report"), in compliance with Rule 13a-13 as promulgated by the Securities and Exchange Commission, or the SEC, under the Securities Exchange Act of 1934, as amended, or the Exchange Act. In this Report, except where context suggest otherwise, the terms “Company,” “we,” “our” or “us” refers to PennantPark Investment Corporation and its consolidated subsidiaries; “PennantPark Investment” refers to only PennantPark Investment Corporation; “our SBIC Fund” refers collectively to our consolidated subsidiaries, PennantPark SBIC II LP, or SBIC II, and its general partner, PennantPark SBIC GP II, LLC; “Funding I” refers to PennantPark Investment Funding I, LLC, a wholly-owned subsidiary prior to deconsolidation on July 31, 2020; “Taxable Subsidiary” refers collectively to our consolidated subsidiaries, PNNT Investment Holdings II, LLC and PNNT Investment Holdings, LLC; “PSLF” refers to PennantPark Senior Loan Fund, LLC, an unconsolidated joint venture; “PTSF II” refers to PennantPark-TSO Senior Loan Fund II, LP, an unconsolidated limited partnership; “PennantPark Investment Advisers” or “Investment Adviser” refers to PennantPark Investment Advisers, LLC; “PennantPark Investment Administration” or “Administrator” refers to PennantPark Investment Administration, LLC; “SBA” refers to the Small Business Administration; “SBIC” refers to a small business investment company under the Small Business Investment Act of 1958, as amended; “BNP Credit Facility” refers to our revolving credit facility with BNP Paribas prior to deconsolidation of Funding I; “Truist Credit Facility” refers to our multi-currency, senior secured revolving credit facility with Truist Bank, as amended and restated; “2026 Notes” refers to our 4.50% Notes due May 2026; “2026 Notes-2” refers to our 4.00% Notes due November 2026; “BDC” refers to a business development company under the Investment Company Act of 1940, as amended, or the “1940 Act”; “SBCAA” refers to the Small Business Credit Availability Act; “Code” refers to the Internal Revenue Code of 1986, as amended; and “RIC” refers to a regulated investment company under the Code. References to our portfolio, our investments and our business include investments we make through SBIC II and other consolidated subsidiaries.

3

Item 1. Consolidated Financial Statements

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(In thousands, except share and per share data)

	June 30, 2024			September 30, 2023
	(unaudited)
Assets
Investments at fair value
Non-controlled, non-affiliated investments (amortized cost—$854,364 and $816,754, respectively)	$	854,027		$	830,808
Non-controlled, affiliated investments (amortized cost—$56,193 and $55,787, respectively)		33,274			54,771
Controlled, affiliated investments (amortized cost—$342,429 and $245,386, respectively)		372,574			216,068
Total investments (amortized cost—$1,252,986 and $1,117,927, respectively)		1,259,875			1,101,647
Cash and cash equivalents (cost—$59,151 and $38,784, respectively)		59,152			38,775
Interest receivable		5,568			6,820
Distribution receivable		7,964			5,079
Due from affiliates		139			—
Prepaid expenses and other assets		—			4,656
Total assets		1,332,698			1,156,977
Liabilities
Truist Credit Facility payable, at fair value (cost—$450,456 and $212,420, respectively)		446,554			206,940
2026 Notes payable, net (par— $150,000)		148,345			147,669
2026 Notes-2 payable, net (par— $165,000)		162,866			162,226
Payable for investment purchased		64,551			99,949
Distributions payable		5,224			13,697
Base management fee payable		4,216			3,915
Incentive fee payable		3,345			3,310
Accounts payable and accrued expenses		3,218			6,754
Interest payable on debt		3,124			6,231
Due to affiliates		33			4,099
Total liabilities		841,476			654,790
Commitments and contingencies (See Note 11)
Net assets
Common stock, 65,296,094 and 65,224,500 shares issued and outstanding, respectively    Par value $0.001 per share and 100,000,000 shares authorized		65			65
Paid-in capital in excess of par value		746,768			746,466
Accumulated deficit		(255,611	)		(244,344	)
Total net assets	$	491,222		$	502,187
Total liabilities and net assets	$	1,332,698		$	1,156,977
Net asset value per share	$	7.52		$	7.70

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except per share data)

	Three Months Ended June 30,						Nine Months Ended June 30,
	2024			2023			2024			2023
Investment income:
From non-controlled, non-affiliated investments:
Interest	$	17,383		$	23,189		$	61,353		$	72,179
Payment-in-kind		1,904			5			2,093			16
Dividend income		977			11,786			2,292			12,917
Other income		392			595			2,595			1,428
From non-controlled, affiliated investments:
Interest		—			—			—		81
Payment-in-kind		—			297			347			310
From controlled, affiliated investments:
Interest		7,966			4,392			19,389			10,898
Payment-in-kind		995			361			2,484			2,150
Dividend income		7,387			4,386			16,765			11,344
Total investment income		37,004			45,011			107,318			111,323
Expenses:
Interest and expenses on debt		11,482			10,139			32,906			30,455
Base management fee		4,216			3,993			12,357			12,635
Incentive fee		3,345			4,870			9,684			10,591
General and administrative expenses		1,030			1,032			3,623			2,707
Administrative services expenses		450			840			1,189			1,373
Expenses before provision for taxes		20,523			20,874			59,759			57,761
Provision for taxes on net investment income		735			1,181			1,902			3,631
Net expenses		21,258			22,055			61,661			61,392
Net investment income		15,746			22,956			45,657			49,931
Realized and unrealized gain (loss) on investments and debt:
Net realized gain (loss) on investments and debt:
Non-controlled, non-affiliated investments		(1,590	)		(5,193	)		(444	)		(15,742	)
Non-controlled and controlled, affiliated investments		(5,305	)		—			(35,474	)		(133,098	)
Debt extinguishment		—			—			—			(289	)
Provision for taxes on realized gain on investments		—			(1,700	)		(177	)		(2,417	)
Net realized gain (loss) on investments and debt		(6,895	)		(6,893	)		(36,095	)		(151,546	)
Net change in unrealized appreciation (depreciation) on:
Non-controlled, non-affiliated investments		(1,614	)		13,056			(15,412	)		(33,513	)
Non-controlled and controlled, affiliated investments		(3,483	)		223			38,592			90,634
Provision for taxes on unrealized appreciation (depreciation) on investments		—			—			(680	)		896
Debt appreciation (depreciation)		(8	)		(8,393	)		(1,578	)		(2,474	)
Net change in unrealized appreciation (depreciation) on investments and debt		(5,105	)		4,886			20,922			55,543
Net realized and unrealized gain (loss) from investments and debt		(12,000	)		(2,007	)		(15,173	)		(96,003	)
Net increase (decrease) in net assets resulting from operations	$	3,746		$	20,949		$	30,484		$	(46,072	)
Net increase (decrease) in net assets resulting from operations per common share	$	0.06		$	0.32		$	0.47		$	(0.71	)
Net investment income per common share	$	0.24		$	0.35		$	0.70		$	0.77

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)

(In thousands, except share data)

	Three Months Ended June 30,						Nine Months Ended June 30,
	2024			2023			2024			2023
Net increase (decrease) in net assets resulting from operations:
Net investment income	$	15,746		$	22,956		$	45,657		$	49,931
Net realized gain (loss) on investments and debt		(6,895	)		(5,193	)		(35,918	)		(149,129	)
Net change in unrealized appreciation (depreciation) on investments		(5,097	)		13,279			23,180			57,121
Net change in provision for taxes on net realized gain (loss) on investments		—			(1,700	)		(177	)		(2,417	)
Net change in provision for taxes on unrealized appreciation (depreciation) on investments		—			—			(680	)		896
Net change in unrealized (appreciation) depreciation on debt		(8	)		(8,393	)		(1,578	)		(2,474	)
Net increase (decrease) in net assets resulting from operations		3,746			20,949			30,484			(46,072	)
Distributions to stockholders:
Distribution of net investment income		(14,355	)		(13,045	)		(41,751	)		(35,874	)
Total distributions to stockholders		(14,355	)		(13,045	)		(41,751	)		(35,874	)
Capital Transactions:
Public offering		552			—			552			—
Offering costs		(250	)		—			(250	)		—
Net increase in net assets resulting from capital transactions		302			—			302			—
Net increase (decrease) in net assets		(10,307	)		7,904			(10,965	)		(81,946	)
Net assets:
Beginning of period		501,529			495,715			502,187			585,565
End of period	$	491,222		$	503,619		$	491,222		$	503,619
Capital share activity:
Shares issued from public offering		71,594			—			71,594			—

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)

	Nine Months Ended June 30,
	2024			2023
Cash flows from operating activities:
Net increase (decrease) in net assets resulting from operations	$	30,484		$	(46,072	)
Adjustments to reconcile net increase (decrease) in net assets resulting from    operations to net cash provided by (used in) operating activities:
Net change in net unrealized (appreciation) depreciation on investments		(23,180	)		(57,121	)
Net change in unrealized appreciation (depreciation) on debt		1,578			2,474
Net realized (gain) loss on investments		35,918			148,840
Debt extinguishment realized loss		—			289
Net accretion of discount and amortization of premium		(2,102	)		(5,210	)
Purchases of investments		(752,062	)		(214,355	)
Payment-in-kind income		(4,924	)		(2,476	)
Proceeds from dispositions of investments		589,390			280,467
Amortization of deferred financing costs		1,316			1,341
(Increase) decrease in:
Interest receivable		1,252			(1,377	)
Receivables from investments sold		—			13,864
Distribution receivable		(2,885	)		(2,659	)
Due from affiliate		(139	)		—
Prepaid expenses and other assets		3,386			(8,000	)
Increase (decrease) in:
Due to affiliate		(4,066	)		1,774
Payable for investments purchased		(35,398	)		-
Interest payable on debt		(3,107	)		(3,464	)
Base management fee payable, net		301			(856	)
Incentive fee payable		35			4,870
Deferred tax liability		—			(896	)
Accounts payable and accrued expenses		(3,536	)		4,288
Net cash provided by (used in) operating activities		(167,739	)		115,721
Cash flows from financing activities:
Proceeds from public offering	$	552		$	—
Offering costs		(250	)		—
Distributions paid to stockholders		(50,222	)		(32,612	)
Repayments under SBA debetures		—			(20,000	)
Borrowings under Truist Credit Facility		423,036			122,500
Repayments under Truist Credit Facility		(185,000	)		(194,000	)
Net cash provided by (used in) financing activities		188,116			(124,112	)
Net increase (decrease) in cash equivalents		20,377			(8,391	)
Effect of exchange rate changes on cash		-			275
Cash and cash equivalents, beginning of period		38,775			54,775
Cash and cash equivalents, end of period	$	59,152		$	46,659
Supplemental disclosure of cash flow information:
Interest paid	$	34,697		$	32,578
Taxes paid	$	6,308		$	1,900
Non-cash exchanges and conversions	$	28,835		$	15,720

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited)

JUNE 30, 2024

(In thousands, except share data)

Issuer Name	Maturity / Expiration	Industry	Current  Coupon			Basis Point  Spread Above  Index (4)		Par /  Shares		Cost		Fair Value (3)
Investments in Non-Controlled, Non-Affiliated Portfolio Companies—173.9% of Net Assets (1), (2)
First Lien Secured Debt—115.7% of Net Assets
A1 Garage Merger Sub, LLC	12/22/2028	Personal, Food and Miscellaneous Services		11.44	%	3M SOFR+610			5,105	$	5,042	$	5,105
A1 Garage Merger Sub, LLC - Unfunded Term Loan (8)	12/21/2024	Personal, Food and Miscellaneous Services		—			—		1,788		—		27
A1 Garage Merger Sub, LLC - Revolver (8)	12/22/2028	Personal, Food and Miscellaneous Services		—			—		2,532		—		—
ACP Avenu Buyer, LLC	10/02/2029	Business Services		10.57	%	3M SOFR+525			1,247		1,230		1,209
ACP Avenu Buyer, LLC - Unfunded Term Loan (8)	04/02/2025	Business Services		—			—		1,799		—		(29	)
ACP Avenu Buyer, LLC - Revolver	10/02/2029	Business Services		10.58	%	3M SOFR+525			149		149		145
ACP Avenu Buyer, LLC - Revolver (8)	10/02/2029	Business Services		—			—		1,069		—		(32	)
ACP Falcon Buyer, Inc. - Revolver (8)	08/01/2029	Business Services		—			—		2,533		—		—
Ad.net Acquisition, LLC - Revolver (8)	05/07/2026	Media		—			—		444		—		—
Adweek Purchaser, LLC	05/30/2027	Printing and Publishing		12.33	%	3M SOFR+700			2,000		1,961		1,960
Adweek Purchaser, LLC - Unfunded Term Loan (8)	11/30/2025	Printing and Publishing		—			—		400		—		—
Aeronix, Inc. - Revolver (8)	12/12/2028	Aerospace and Defense		—			—		2,489		—		—
AFC Dell Holding Corp.	04/09/2027	Distribution		11.75	%	3M SOFR+640			13,340		13,340		13,206
Atlas Purchaser, Inc. - Third Out	05/06/2028	Telecommunications		12.46	%	3M SOFR+700			8,840		7,440		7,717
Atlas Purchaser, Inc. - Fourth Out	05/06/2028	Telecommunications		12.46	%	3M SOFR+700			4,760		655		652
Anteriad Holdings Inc (fka MeritDirect)	06/30/2026	Media		11.23	%	3M SOFR+590			1,189		1,184		1,189
Anteriad, LLC (f/k/a MeritDirect, LLC) - Funded Revolver	06/30/2026	Media		11.18	%	3M SOFR+585			230		230		230
Anteriad, LLC (f/k/a MeritDirect, LLC) - Revolver (8)	06/30/2026	Media		—			—		1,382		—		—
Applied Technical Services, LLC	12/29/2026	Environmental Services		11.23	%	3M SOFR+585			1,991		1,976		1,961
Applied Technical Services, LLC - Unfunded Term Loan (8)	07/17/2025	Environmental Services		—			—		2,637		—		(13	)
Applied Technical Services LLC - Revolver	12/29/2026	Environmental Services		13.25	%	3M SOFR+475			1,081		1,081		1,065
Applied Technical Services, LLC - Revolver (8)	12/29/2026	Environmental Services		—			—		721		—		(11	)
Arcfield Acquisition Corp. - Revolver (8)	08/04/2028	Aerospace and Defense		—			—		3,521		—		(18	)
Beacon Behavioral Support Service, LLC	06/21/2029	Healthcare, Education and Childcare		10.85	%	3M SOFR+550			15,000		14,775		14,775
Beacon Behavioral Support Service, LLC - Unfunded Term Loan (8)	12/21/2025	Healthcare, Education and Childcare		—			—		6,143		—		—
Beacon Behavioral Support Service, LLC - Revolver (8)	06/21/2029	Healthcare, Education and Childcare		—			—		1,206		—		—
Berwick Industrial Park	05/02/2024	Buildings and Real Estate		11.50	%		—		4,000		4,062		3,972
Beta Plus Technologies, Inc.	07/01/2029	Business Services		11.08	%	3M SOFR+575			4,925		4,855		4,827
Big Top Holdings, LLC - Unfunded Revolver (8)	02/07/2030	Manufacturing/Basic Industry		—			—		1,155		—		(9	)
BioDerm, Inc. - Revolver	01/31/2028	Healthcare, Education and Childcare		11.82	%	3M SOFR+650			589		589		582
BioDerm, Inc. - Revolver (8)	01/31/2028	Healthcare, Education and Childcare		—			—		482		—		(6	)
Blackhawk Industrial Distribution, Inc.	09/17/2026	Distribution		11.73	%	3M SOFR+640			6,295		6,251		6,247
			(PIK 2.0%)
Blackhawk Industrial Distribution, Inc. - Unfunded Term Loan (8)	09/17/2026	Distribution		—			—		2,368		—		(24	)
BlackHawk Industrial Distribution, Inc. - Revolver	09/17/2026	Distribution		11.73	%	3M SOFR+640			1,487		1,487		1,480
Blackhawk Industrial Distribution, Inc. - Revolver (8)	09/17/2026	Distribution		—			—		1,945		—		(10	)
BlueHalo Financing Holdings, LLC	10/31/2025	Aerospace and Defense		10.08	%	3M SOFR+475			1,112		1,097		1,096
Broder Bros., Co.	12/04/2025	Consumer Products		11.60	%	3M SOFR+626			9,589		9,589		9,589
Carisk Buyer, Inc. - Unfunded Term Loan (8)	12/01/2029	Healthcare, Education and Childcare		—			—		4,813		—		24
Carisk Buyer, Inc. - Revolver (8)	12/01/2029	Healthcare, Education and Childcare		—			—		1,750		—		(9	)
Carnegie Dartlet, LLC	02/07/2030	Education		10.84	%	3M SOFR+550			12,968		12,776		12,773
Carnegie Dartlet, LLC - Unfunded Term Loan (8)	02/07/2026	Education		—			—		10,017		—		(50	)
Carnegie Dartlet, LLC - Unfunded Revolver (8)	02/07/2030	Education		—			—		3,339		—		(50	)
Cartessa Aesthetics, LLC	06/14/2028	Distribution		11.08	%	3M SOFR+575			28,810		28,385		28,810
Cartessa Aesthetics, LLC - Revolver	06/14/2028	Distribution		11.08	%	3M SOFR+575			1,265		1,265		1,265
Cartessa Aesthetics, LLC - Revolver (8)	06/14/2028	Distribution		—			—		2,297		—		—
CF512, Inc.	08/20/2026	Media		11.53	%	3M SOFR+619			6,542		6,488		6,444

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited) —(Continued)

JUNE 30, 2024

(In thousands, except share data)

Issuer Name	Maturity / Expiration	Industry	Current  Coupon			Basis Point  Spread Above  Index (4)		Par /  Shares		Cost		Fair Value (3)
CF512, Inc. - Revolver (8)	08/20/2026	Media		—			—		909		—	$	(14	)
Compex Legal Services, Inc.	02/09/2026	Business Services		10.88	%	3M SOFR+555			941		935		941
Compex Legal Services, Inc. - Revolver	02/07/2025	Business Services		10.88	%	3M SOFR+555			459		459		459
Compex Legal Services, Inc. - Revolver (8)	02/07/2025	Business Services		—			—		197		—		—
Confluent Health, LLC	11/30/2028	Healthcare, Education and Childcare		12.84	%	3M SOFR+750			1,975		1,854		1,975
Connatix Buyer, Inc. - Revolver (8)	07/13/2027	Media		—			—		1,875		—		(38	)
Crane 1 Services, Inc. - Revolver	08/16/2027	Personal, Food and Miscellaneous Services		10.19	%	3M SOFR+486			287		283		287
Crane 1 Services, Inc. - Revolver (8)	08/16/2027	Personal, Food and Miscellaneous Services		—			—		435		—		(1	)
Dr. Squatch, LLC	08/31/2027	Personal and Non-Durable Consumer Products		11.17	%	3M SOFR+585			8,142		8,079		8,142
Dr. Squatch, LLC - Funded Revolver	08/31/2027	Personal, Food and Miscellaneous Services		11.19	%	3M SOFR+585			2,326		2,326		2,326
DRS Holdings III, Inc.	11/03/2025	Consumer Products		11.69	%	3M SOFR+635			6		6		6
DRS Holdings III, Inc. - Revolver (8)	11/03/2025	Consumer Products		—			—		1,783		—		(7	)
EDS Buyer, LLC	12/22/2028	Aerospace and Defense		11.08	%	3M SOFR+575			17,292		17,073		17,033
EDS Buyer, LLC - Revolver Loan (8)	12/22/2028	Aerospace and Defense		—			—		1,915		—		(29	)
ETE Intermediate II, LLC - Revolver	05/25/2029	Personal, Food and Miscellaneous Services		11.83	%	3M SOFR+650			1,215		1,215		1,215
ETE Intermediate II, LLC - Revolver (8)	05/25/2029	Personal, Food and Miscellaneous Services		—			—		442		—		—
Eval Home Health Solutions Intermediate, LLC	05/10/2030	Healthcare, Education and Childcare		11.09	%	3M SOFR+575			7,980		7,861		7,860
Eval Home Health Solutions Intermediate, LLC - Revolver (8)	05/10/2030	Healthcare, Education and Childcare		—			—		822		—		(12	)
Exigo Intermediate II, LLC	03/15/2027	Business Services		11.69	%	3M SOFR+635			24,189		23,959		24,008
Exigo Intermediate II, LLC - Revolver (8)	03/15/2027	Business Services		—			—		1,856		—		(14	)
Five Star Buyer, Inc.	02/23/2028	Leisure, Amusement, Motion Pictures, Entertainment		12.50	%	3M SOFR+710			196		196		195
Five Star Buyer, Inc. - Revolver (8)	02/23/2028	Leisure, Amusement, Motion Pictures, Entertainment		—			—		741		—		(6	)
Gauge ETE Blocker, LLC - Promissory Note	05/19/2029	Personal, Food and Miscellaneous Services		12.56	%		—		215		215		215
Graffiti Buyer, Inc.	08/10/2027	Distribution		10.93	%	3M SOFR+560			884		877		875
Graffiti Buyer, Inc. - Unfunded Term Loan (8)	08/10/2027	Distribution		—			—		1,079		—		(3	)
Graffiti Buyer, Inc. - Revolver (8)	08/10/2027	Distribution		—			—		769		—		(8	)
Halo Buyer, Inc.	06/30/2025	Consumer Products		9.94	%	3M SOFR+460			1,660		1,502		1,498
Hancock Roofing and Construction L.L.C.	12/31/2026	Insurance		10.94	%	1M SOFR+560			680		680		639
Hancock Roofing and Construction L.L.C. - Revolver (8)	12/31/2026	Insurance		—			—		70		—		(4	)
HEC Purchaser Corp.	06/17/2029	Healthcare, Education and Childcare		10.84	%	3M SOFR+550			8,000		7,900		7,900
Hills Distribution, Inc. - Unfunded Term Loan (8)	11/07/2025	Distribution		—			—		9,144		—		—
HV Watterson Holdings, LLC	12/17/2026	Business Services		11.73	%	1M SOFR+640			276		275		264
HV Watterson Holdings, LLC - Revolver	12/17/2026	Business Services		11.73	%	1M SOFR+640			1,200		1,200		1,146
HV Watterson Holdings, LLC - Revolver (8)	12/17/2026	Business Services		—			—		50		—		(2	)
HW Holdco, LLC	05/10/2026	Media		11.68	%	3M SOFR+640			11,182		11,153		11,182
HW Holdco, LLC - Revolver (8)	05/10/2026	Media		—			—		3,387		—		—
IG Investment Holdings LLC	09/22/2028	Business Services		11.33	%	3M SOFR+600			105		104		103
IG Investments Holdings, LLC - Revolver (8)	09/22/2027	Business Services		—			—		722		—		(13	)
Imagine Acquisitionco, LLC - Revolver (8)	11/15/2027	Business Services		—			—		1,685		—		(8	)
Infinity Home Services Holdco, Inc.	12/28/2028	Personal, Food and Miscellaneous Services		12.19	%	3M SOFR+685			3,749		3,739		3,749
Infinity Home Services Holdco, Inc. (CAD) (11)	12/28/2028	Personal, Food and Miscellaneous Services		10.96	%	3M SOFR+600			CAD 2,562		1,845		1,845
Infinity Home Services Holdco, Inc. - 1st Amendment Unfunded Term Loan (8)	11/17/2025	Personal, Food and Miscellaneous Services		—			—		8,241		—		(21	)
Infinity Home Services Holdco, Inc. - Revolver	12/28/2028	Personal, Food and Miscellaneous Services		14.25	%	3M SOFR+575			194		194		194
Infinity Home Services Holdco, Inc. - Revolver (8)	12/28/2028	Personal, Food and Miscellaneous Services		—			—		1,098		—		—
Infolinks Media Buyco, LLC	11/01/2026	Media		10.84	%	3M SOFR+550			2,697		2,669		2,670
Integrity Marketing Acquisition, LLC	08/27/2026	Insurance		11.48	%	3M SOFR+615			10,597		10,564		10,544
Integrity Marketing Acquisition, LLC - Unfunded Term Loan (8)	08/31/2025	Insurance		—			—		1,614		—		—
Integrity Marketing Acquisition, LLC - Revolver (8)	08/31/2025	Insurance		—			—		160		—		—
Inventus Power, Inc. - Revolver (8)	06/30/2025	Electronics		—			—		1,729		—		(35	)

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited)—(Continued)

JUNE 30, 2024

(In thousands, except share data)

Issuer Name	Maturity / Expiration	Industry	Current  Coupon			Basis Point  Spread Above  Index (4)		Par /  Shares		Cost		Fair Value (3)
ITI Holdings, Inc.	03/03/2028	Business Services		10.98	%	3M SOFR+565			8,770	$	8,662	$	8,770
ITI Holdings, Inc. - Revolver	03/03/2028	Business Services		13.00	%	3M SOFR+450			1,180		1,180		1,180
ITI Holdings, Inc. - Revolver (8)	03/03/2028	Business Services		—			—		310		—		—
Kinetic Purchaser, LLC	11/10/2027	Consumer Products		11.48	%	3M SOFR+615			3,099		3,019		3,099
Kinetic Purchaser, LLC - Revolver (8)	11/10/2026	Consumer Products		—			—		4,854		—		—
Lash OpCo, LLC	02/18/2027	Consumer Products		13.18	%	1M SOFR+785			2,865		2,831		2,836
			(PIK 5.1%)
Lash OpCo, LLC - Revolver	08/16/2026	Consumer Products		13.18	%	1M SOFR+785			2,650		2,650		2,624
			(PIK 5.1%)
Lash OpCo, LLC - Revolver (8)	08/16/2026	Consumer Products		—			—		317		—		(3	)
LAV Gear Holdings, Inc.	10/31/2025	Leisure, Amusement, Motion Pictures, Entertainment		11.76	%	1M SOFR+643			2,037		2,037		2,013
Ledge Lounger, Inc.	11/09/2026	Consumer Products		11.98	%	3M SOFR+665			9,016		8,921		8,835
Ledge Lounger, Inc. - Revolver	11/09/2026	Consumer Products		11.98	%	3M SOFR+665			644		644		631
Ledge Lounger, Inc. - Revolver (8)	11/09/2026	Consumer Products		—			—		1,288		—		(26	)
Lightspeed Buyer Inc.	02/03/2026	Healthcare, Education and Childcare		10.69	%	1M SOFR+535			2,181		2,173		2,181
Lightspeed Buyer Inc. - Revolver (8)	02/03/2026	Healthcare, Education and Childcare		—			—		1,166		—		—
LJ Avalon Holdings, LLC	02/01/2030	Environmental Services		10.58	%	1M SOFR+525			569		561		569
LJ Avalon Holdings, LLC - Unfunded Term Loan (8)	07/31/2024	Environmental Services		—			—		3,313		—		26
LJ Avalon Holdings, LLC - Revolver (8)	01/31/2030	Environmental Services		—			—		587		—		—
Loving Tan Intermediate II, Inc.	05/31/2028	Consumer Products		12.34	%	3M SOFR+700			4,950		4,864		4,913
Loving Tan Intermediate II, Inc. - Revolver	05/31/2028	Consumer Products		12.34	%	3M SOFR+700			347		347		344
Loving Tan Intermediate II, Inc. - Revolver (8)	05/31/2028	Consumer Products		—			—		284		—		(2	)
Mars Acquisition Holdings Corp.	05/14/2026	Media		10.98	%	3M SOFR+565			2,814		2,784		2,814
Mars Acquisition Holdings Corp. - Revolver	05/14/2026	Media		10.98	%	3M SOFR+565			806		806		806
Mars Acquisition Holdings Corp. - Revolver (8)	05/14/2026	Media		—			—		403		—		—
MBS Holdings, Inc. - Revolver (8)	04/16/2027	Telecommunications		—			—		694		—		—
MDI Buyer, Inc.	07/25/2028	Chemicals, Plastics and Rubber		11.34	%	3M SOFR+600			19,982		19,722		19,686
MDI Buyer, Inc. - Revolver	07/25/2028	Chemicals, Plastics and Rubber		10.82	%	3M SOFR+550			1,381		1,381		1,360
MDI Buyer, Inc. - Revolver (8)	07/25/2028	Chemicals, Plastics and Rubber		—			—		846		—		(4	)
Meadowlark Acquirer, LLC	12/10/2027	Business Services		11.23	%	3M SOFR+590			1,927		1,911		1,879
Meadowlark Acquirer, LLC - Unfunded Revolver (8)	12/10/2027	Business Services		—			—		1,685		—		(42	)
Medina Health, LLC	10/20/2028	Healthcare, Education and Childcare		11.58	%	3M SOFR+625			9,900		9,745		9,900
Medina Health, LLC - Revolver (8)	10/20/2028	Healthcare, Education and Childcare		—			—		2,774		—		—
Megawatt Acquisitionco, Inc. - Revolver	03/01/2030	Electronics		10.59	%	3M SOFR+525			390		390		390
Megawatt Acquisitionco, Inc. - Unfunded Revolver (8)	03/01/2030	Electronics		—			—		1,467		—		—
Mineola 212, LLC	06/24/2025	Buildings and Real Estate		13.00	%		—		3,500		3,483		3,483
MOREGroup Holdings, Inc.	01/16/2030	Business Services		11.08	%	3M SOFR+575			12,469		12,296		12,344
MOREGroup Holdings, Inc. - Unfunded Term Loan (8)	01/16/2026	Business Services		—			—		6,124		—		—
MOREGroup Holdings, Inc. - Unfunded Revolver (8)	01/16/2030	Business Services		—			—		3,675		—		(37	)
Municipal Emergency Services, Inc.	09/28/2027	Distribution		10.50	%	3M SOFR+515			786		786		786
Municipal Emergency Services, Inc. - Unfunded Term Loan A (8)	12/16/2024	Distribution		—			—		464		—		—
Municipal Emergency Services, Inc. - Unfunded Term Loan B (8)	12/16/2024	Distribution		—			—		2,510		—		—
Municipal Emergency Services, Inc. - Revolver (8)	09/28/2027	Distribution		—			—		1,880		—		—
NBH Group LLC - Revolver (8)	08/19/2026	Healthcare, Education and Childcare		—			—		1,163		—		(58	)
NORA Acquisition, LLC	08/31/2029	Healthcare, Education and Childcare		11.68	%	3M SOFR+635			5,459		5,359		5,459
NORA Acquisition, LLC - Revolver (8)	08/31/2029	Healthcare, Education and Childcare		—			—		2,707		—		—
NP Riverhead Industrial, LLC	05/24/2025	Buildings and Real Estate		14.50	%		—		5,000		4,978		4,975
Omnia Exterior Solutions, LLC	12/29/2029	Diversified Conglomerate Service		10.83	%	3M SOFR+550			6,294		6,260		6,199
Omnia Exterior Solutions, LLC - Unfunded Term Loan 2 (8)	12/29/2025	Diversified Conglomerate Service		—			—		1,400		—		(7	)

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited) —(Continued)

JUNE 30, 2024

(In thousands, except share data)

Issuer Name	Maturity / Expiration	Industry	Current  Coupon			Basis Point  Spread Above  Index (4)		Par /  Shares		Cost		Fair Value (3)
Omnia Exterior Solutions, LLC - Revolver (8)	12/29/2029	Diversified Conglomerate Service		—			—		1,400		—	$	(21	)
ORL Acquisition, Inc.	09/03/2027	Business Services		14.73	%	3M SOFR+940			4,107		4,056		3,203
			(PIK 7.5%)
ORL Acquisition, Inc. - Revolver (8)	09/03/2027	Business Services		—			—		149		—		(33	)
OSP Embedded Purchaser, LLC	12/15/2029	Aerospace and Defense		11.18	%	3M SOFR+585			6,468		6,359		6,280
OSP Embedded Purchaser, LLC - Revolver (8)	12/15/2029	Aerospace and Defense		—			—		1,477		—		(43	)
Ox Two, LLC	05/18/2026	Building Materials		11.85	%	1M SOFR+651			13,460		13,363		13,460
Ox Two, LLC - Revolver (8)	05/18/2026	Building Materials		—			—		2,419		—		—
Pacific Purchaser, LLC - Unfunded Term Loan (8)	09/30/2028	Business Services		—			—		2,747		—		58
Pacific Purchaser, LLC - Revolver (8)	09/30/2028	Business Services		—			—		1,373		—		8
PCS MIDCO INC	03/01/2030	Financial Services		11.10	%	1M SOFR+575			468		463		463
PCS MIDCO INC - Unfunded Term Loan (8)	03/01/2026	Financial Services		—			—		3,955		—		—
PCS MIDCO INC - Funded Revolver	03/01/2030	Financial Services		11.10	%	1M SOFR+575			308		308		305
PCS MIDCO INC - Unfunded Revolver (8)	03/01/2030	Financial Services		—			—		1,454		—		(15	)
PlayPower, Inc.	05/10/2026	Leisure, Amusement, Motion Pictures, Entertainment		10.95	%	3M SOFR+550			5,246		4,959		5,167
PL Acquisitionco, LLC - Revolver (8)	11/09/2027	Retail		—			—		3,236		—		(647	)
Pragmatic Institute, LLC (7)	07/06/2028	Business Services		12.85	%	3M SOFR+750			35,762		35,134		22,977
			(PIK 12.8%)
Pragmatic Institute, LLC - Revolver (7)	07/06/2028	Business Services		12.82	%	3M SOFR+750			4,938		4,905		3,173
			(PIK 12.8%)
Quantic Electronics, LLC	11/19/2026	Aerospace and Defense		11.68	%	3M SOFR+635			1,472		1,465		1,457
Quantic Electronics, LLC - Funded Revolver	08/17/2026	Aerospace and Defense		11.70	%	3M SOFR+635			264		264		263
Quantic Electronics, LLC - Unfunded Revolver (8)	08/17/2026	Aerospace and Defense		—			—		264		—		(3	)
Radius Aerospace, Inc. - Revolver	03/31/2025	Aerospace and Defense		11.24	%	3M SOFR+575			631		631		618
Radius Aerospace, Inc. - Revolver (8)	03/31/2025	Aerospace and Defense		—			—		1,596		—		(32	)
Rancho Health MSO, Inc.	12/18/2025	Healthcare, Education and Childcare		10.90	%	3M SOFR+550			362		362		362
Rancho Health MSO, Inc. - Unfunded Term Loan (8)	12/18/2025	Healthcare, Education and Childcare		—			—		210		—		—
Rancho Health MSO, Inc. - Revolver	12/18/2025	Healthcare, Education and Childcare		10.90	%	3M SOFR+550			210		210		210
Rancho Health MSO, Inc. - Revolver (8)	12/18/2025	Healthcare, Education and Childcare		—			—		315		—		—
Reception Purchaser, LLC	02/28/2028	Transportation		11.48	%	3M SOFR+615			10,818		9,633		8,654
Recteq, LLC - Revolver (8)	01/29/2026	Consumer Products		—			—		1,127		—		(17	)
Research Now Group, LLC and Dynata, LLC (6)	12/20/2024	Business Services		—			—		124		124		105
Riverpoint Medical, LLC - Revolver	06/20/2025	Healthcare, Education and Childcare		10.93	%	3M SOFR+560			182		182		182
Riverpoint Medical, LLC - Revolver (8)	06/20/2025	Healthcare, Education and Childcare		—			—		182		—		—
RTIC Subsidiary Holdings, LLC	05/03/2029	Consumer Products		11.09	%	3M SOFR+575			30,000		29,554		29,400
RTIC Subsidiary Holdings, LLC - Revolver (8)	05/03/2029	Consumer Products		—			—		5,422		—		(108	)
Rural Sourcing Holdings, Inc.	06/15/2029	Business Services		11.08	%	3M SOFR+575			1,143		1,126		1,132
Rural Sourcing Holdings, Inc. - Unfunded Term Loan (8)	06/27/2026	Business Services		—			—		1,146		—		(6	)
Rural Sourcing Holdings, Inc. - Revolver (8)	06/15/2029	Business Services		—			—		860		—		(9	)
S101 Holdings, Inc. - Term Loan B	12/29/2026	Electronics		11.45	%	3M SOFR+615			2,265		2,244		2,243
S101 Holdings, Inc. - Term Loan C	12/29/2026	Electronics		11.45	%	3M SOFR+615			356		352		352
S101 Holdings, Inc. - Unfunded Term Loan 2 (8)	12/15/2024	Electronics		—			—		4,955		—		—
Safe Haven Defense US LLC - Term Loan	05/23/2029	Building Materials		10.58	%	3M SOFR+525			9,000		8,865		8,865
Safe Haven Defense US LLC - Revolver (8)	05/23/2029	Building Materials		—			—		1,114		—		—
Sales Benchmark Index LLC - Revolver (8)	01/03/2025	Business Services		—			—		732		—		—
Sargent & Greenleaf Inc. - Revolver	12/20/2024	Electronics		11.94	%	3M SOFR+650			457		457		457
			(PIK 1.0%)
Sargent & Greenleaf Inc. - Revolver (8)	12/20/2024	Electronics		—			—		155		—		—

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited) —(Continued)

JUNE 30, 2024

(In thousands, except share data)

Issuer Name	Maturity / Expiration	Industry	Current  Coupon			Basis Point  Spread Above  Index (4)		Par /  Shares		Cost		Fair Value (3)
Schlesinger Global, Inc.	07/14/2025	Business Services		13.69	%	3M SOFR+835			4,811	$	4,788	$	4,739
			(PIK 5.6%)
Schlesinger Global, Inc. - Revolver	07/14/2025	Business Services		13.69	%	3M SOFR+835			32		32		31
			(PIK 5.6%)
Schlesinger Global, Inc. - Revolver (8)	07/14/2025	Business Services		—			—		8		—		—
Seaway Buyer, LLC	06/13/2029	Chemicals, Plastics and Rubber		11.48	%	3M SOFR+615			4,716		4,660		4,563
Seaway Buyer, LLC - Revolver	06/13/2029	Chemicals, Plastics and Rubber		11.48	%	3M SOFR+615			313		313		302
Seaway Buyer, LLC - Revolver (8)	06/13/2029	Chemicals, Plastics and Rubber		—			—		2,814		—		(91	)
Shiftkey, LLC	06/21/2027	Business Services		11.35	%	3M SOFR+601			17,640		17,516		16,917
Sigma Defense Systems, LLC	12/18/2027	Telecommunications		12.49	%	1M SOFR+715			25,901		25,331		25,642
Sigma Defense Systems, LLC - Revolver	12/18/2027	Telecommunications		12.49	%	1M SOFR+715			1,701		1,701		1,684
Sigma Defense Systems, LLC - Revolver (8)	12/18/2027	Telecommunications		—			—		1,984		—		(20	)
Simplicity Financial Marketing Group Holdings Inc.	12/02/2026	Financial Services		11.67	%	3M SOFR+625			3,420		3,414		3,380
Simplicity Financial Marketing Group Holdings Inc. - Unfunded Term Loan (8)	02/09/2026	Financial Services		—			—		5,310		—		(53	)
				—			—
Simplicity Financial Marketing Group Holdings Inc. - Unfunded Revolver (8)	12/02/2026	Financial Services		—			—		1,043		—		(13	)
Smartronix, LLC	11/23/2028	Aerospace and Defense		11.58	%	3M SOFR+600			5,579		5,493		5,579
Smartronix, LLC - Unfunded Revolver (8)	11/23/2027	Aerospace and Defense		—			—		3,941		—		—
Solutionreach, Inc. - Revolver (8)	07/17/2025	Communications		—			—		833		—		—
Spendmend Holdings LLC	03/01/2028	Business Services		10.98	%	3M SOFR+565			284		282		284
Spendmend Holdings LLC - Unfunded Term Loan (8)	03/01/2025	Business Services		—			—		2,497		—		19
Spendmend Holdings LLC - Revolver	03/01/2028	Business Services		10.98	%	3M SOFR+565			561		561		561
Spendmend Holdings LLC - Revolver (8)	03/01/2028	Business Services		—			—		841		—		—
System Planning and Analysis, Inc.	08/16/2027	Aerospace and Defense		11.16	%	3M SOFR+590			1,286		1,277		1,286
System Planning and Analysis, Inc. - Unfunded Term Loan (8)	08/16/2027	Aerospace and Defense		—			—		7,068		—		53
System Planning and Analysis, Inc. - Unfunded Revolver (8)	08/16/2027	Aerospace and Defense		—			—		2,925		—		—
TCG 3.0 Jogger Acquisitionco, Inc.	01/26/2029	Media		11.84	%	3M SOFR+650			8,978		8,833		8,888
TCG 3.0 Jogger Acquisitionco, Inc. - Unfunded Revolver (8)	01/26/2029	Media		—			—		1,725		—		(17	)
The Bluebird Group LLC	07/27/2026	Business Services		11.98	%	3M SOFR+665			2,539		2,512		2,539
The Bluebird Group LLC - Revolver (8)	07/27/2026	Business Services		—			—		734		—		—
The Vertex Companies, LLC	08/30/2027	Business Services		11.69	%	3M SOFR+635			184		181		186
The Vertex Companies, LLC - Revolver	08/30/2027	Business Services		11.44	%	3M SOFR+610			361		361		361
The Vertex Companies, LLC - Revolver (8)	08/30/2027	Business Services		—			—		379		—		—
TPC US Parent, LLC	11/22/2025	Food		10.93	%	3M SOFR+560			5,985		5,917		5,985
TPCN Midco, LLC	06/26/2029	Diversified Conglomerate Service		11.09	%	3M SOFR+575			4,000		3,940		3,940
TPCN Midco, LLC - Unfunded Term Loan (8)	06/26/2026	Diversified Conglomerate Service		—			—		5,894		—		—
TPCN Midco, LLC - Unfunded Revolver (8)	06/26/2029	Diversified Conglomerate Service		—			—		1,160		—		—
TransGo, LLC	12/29/2028	Machinery		11.34	%	3M SOFR+600			4,790		4,722		4,790
TransGo, LLC - Revolver (8)	12/29/2028	Machinery		—			—		2,775		—		—
TWS Acquisition Corporation	06/16/2025	Education		11.74	%	3M SOFR+640			638		637		638
TWS Acquisition Corporation - Revolver (8)	06/16/2025	Education		—			—		1,644		—		—
Tyto Athene, LLC (New Issue) - Revolver	04/01/2026	Aerospace and Defense		10.99	%	3M SOFR+565			160		160		149
Tyto Athene, LLC (New Issue) - Revolver (8)	04/01/2026	Aerospace and Defense		—			—		204		—		(14	)
Urology Management Holdings, Inc.	06/15/2026	Healthcare, Education and Childcare		11.76	%	3M SOFR+650			7,201		7,201		7,151
Watchtower Intermediate, LLC	12/01/2029	Electronics		11.33	%	3M SOFR+600			12,319		12,140		12,208
Watchtower Intermediate, LLC. - Unfunded Term Loan (8)	12/01/2025	Electronics		—			—	2100			—		5
Watchtower Intermediate, LLC. - Revolver (8)	12/01/2029	Electronics		—			—		6,300		—		(57	)
Wildcat Buyerco, Inc.	02/27/2027	Electronics		11.08	%	3M SOFR+575			4,597		4,558		4,597
Wildcat Buyerco, Inc. - Unfunded Term Loan (8)	02/27/2027	Electronics		—			—		2,737		—		27
Wildcat Buyerco, Inc. - Revolver (8)	02/27/2027	Electronics		—			—		551		—		—
Zips Car Wash, LLC	12/31/2024	Auto Sector		12.68	%	3M SOFR+735			2,596		2,589		2,499
			(PIK 1.5%)
Total First Lien Secured Debt											584,995		568,266

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited) —(Continued)

JUNE 30, 2024

(In thousands, except share data)

Issuer Name	Maturity / Expiration		Industry	Current  Coupon			Basis Point  Spread Above  Index (4)		Par /  Shares		Cost		Fair Value (3)
Second Lien Secured Debt—13.3% of Net Assets
Best Practice Associates LLC	06/29/2027		Aerospace and Defense		14.48	%	3M SOFR+915			17,825	$	17,601	$	17,290
Burgess Point Purchaser Corporation	07/28/2030		Auto Sector		14.44	%	3M SOFR+910			8,000		7,689		7,920
ENC Parent Corporation	08/19/2029		Business Services		13.10	%	3M SOFR+776			7,500		7,445		6,375
Halo Buyer, Inc.	07/06/2026		Consumer Products		13.69	%	1M SOFR+835			32,500		32,284		31,850
QuantiTech LLC	02/04/2027		Aerospace and Defense		15.44	%	3M SOFR+1010			150		148		150
Team Services Group, LLC	12/18/2028		Healthcare, Education and Childcare		14.58	%	3M SOFR+943			2,000		1,998		1,990
Total Second Lien Secured Debt												67,165		65,575
Subordinated Debt/Corporate Notes—5.4% of Net Assets
Beacon Behavioral Holdings LLC	06/21/2030		Healthcare, Education and Childcare		15.00	%		—		3,105		3,058		3,058
Express Wash Acquisition Company, LLC	01/15/2029		Auto Sector		17.60	%	3M SOFR+1226			23,217		22,633		23,333
				(PIK 12.0%)
Schlesinger Global, LLC - Promissory Note	07/26/2024		Business Services		12.33	%	3M SOFR+700			—		—		—
Total Subordinated Debt/Corporate Notes												25,691		26,391
Preferred Equity/Partnership Interests—3.0% of Net Assets (6)
Ad.net Holdings, Inc.		—	Media		—			—		2,400		240		248
AFC Acquisitions, Inc. Preferred Equity (10)		—	Distribution		—			—		507		780		920
AH Newco Equityholdings, LLC		—	Healthcare, Education and Childcare		6.00	%		—		211		500		505
Anteriad Holdings, LP (f/k/a MeritDirect Holdings, LP) (10)		—	Media		—			—		1,135		1,135		1,304
Cartessa Aesthetics, LLC (10)		—	Distribution		—			—		3,562,500		3,563		5,969
Gauge Schlesinger Coinvest, LLC - Class A-2 Preferred Equity		—	Business Services		—			—		1		1		1
EvAL Home Health Solutions, LLC - Preferred Equity (10)		—	Healthcare, Education and Childcare		—			—		272,771		453		453
Hancock Claims Consultants Investors, LLC - Class A Preferred Equity (10)		—	Insurance		—			—		48,049		31		38
Imagine Topco, LP Preferred		—	Business Services		8.00	%		—		743,826		744		835
Magnolia Topco LP - Class A Preferred Equity (10)		—	Auto Sector		—			—		1,545		1,545		1,660
Magnolia Topco LP - Class B Preferred Equity (10)		—	Auto Sector		—			—		1,018		643		187
Mars Intermediate Holdings II, Inc.		—	Media		—			—		414		414		600
Megawatt Acquisition Partners, LLC - Preferred A		—	Electronics		—			—		5,349		535		493
NXOF Holdings, Inc. (Tyto Athene, LLC)		—	Aerospace and Defense		—			—		160		160		136
ORL Holdco, Inc.		—	Business Services		—			—		575		57		—
					—			—
PL Acquisitionco, LLC - Preferred Equity		—	Retail		—			—		37		37		—
RTIC Parent Holdings, LLC - Class A Preferred Equity (10)		—	Consumer Products		—			—		5		5		—
RTIC Parent Holdings, LLC - Class C Preferred Equity (10)		—	Consumer Products		—			—		10,624		699		1,029
RTIC Parent Holdings, LLC - Class D Preferred Equity (10)		—	Consumer Products		—			—		11,276		113		119
TPC Holding Company, LP		—	Food		—			—		219		219		345
TWD Parent Holdings, LLC (The Vertex Companies, LLC)		—	Business Services		—			—		30		30		34
Total Preferred Equity/Partnership Interests												11,904		14,876
Common Equity/Partnership Interests/Warrants—24.2% of Net Assets (6)
A1 Garage Equity, LLC (10)		—	Personal, Food and Miscellaneous Services		—			—		2,193,038		2,193		2,639
ACP Big Top Holdings, L.P. - Common Equity		—	Manufacturing/Basic Industry		—			—		773,800		774		819
Ad.net Holdings, Inc.		—	Media		—			—		2,667		27		—
Aftermarket Drivetrain Products Holdings, LLC		—	Machinery		—			—		1,645		1,645		1,988
AG Investco LP (10)		—	Business Services		—			—		805,164		805		992
AG Investco LP (8), (10)		—	Business Services		—			—		194,836		—		—
Altamira Intermediate Company II, Inc.		—	Aerospace and Defense		—			—		125,000		125		137
AMCSI Crash Co-Invest, LP		—	Auto Sector		—			—		2,489,777		2,490		2,940
AMCSI Crash Co-Invest, LP (8)		—	Auto Sector		—			—		510,223		—		—
Anteriad Holdings, LP (f/k/a MeritDirect Holdings, LP) (10)		—	Media		—			—		1,135		—		—
Athletico Holdings, LLC (10)		—	Healthcare, Education and Childcare		—			—		9,357		10,000		8,715
Atlas Investment Aggregator, LLC		—	Telecommunications		—			—		1,700,000		1,613		—
BioDerm, Inc.		—	Healthcare, Education and Childcare		—			—		1,312		1,312		1,093
Burgess Point Holdings, LP		—	Auto Sector		—			—		680		680		609
Carnegie Holdco, LLC - Common Equity (10)		—	Education		—			—		1,680,300		1,663		1,680
Carisk Parent, L.P. - Common Equity		—	Healthcare, Education and Childcare		—			—		169,231		169		176
Connatix Parent, LLC		—	Media		—			—		57,416		632		359
Consello Pacific Aggregator, LLC (10)		—	Business Services		—			—		782,891		745		762
Cowboy Parent LLC (Blackhawk Industrial Distribution, Inc.)		—	Distribution		—			—		27,778		3,015		5,686
Crane 1 Acquisition Parent Holdings, L.P.		—	Personal, Food and Miscellaneous Services		—			—		113		104		197
Delta InvestCo LP (Sigma Defense Systems, LLC) (10)		—	Telecommunications		—			—		913,649		878		1,606
Delta InvestCo LP (Sigma Defense Systems, LLC) (8), (10)		—	Telecommunications		—			—		227,395		—		—
eCommission Holding Corporation (12)		—	Financial Services		—			—		80		1,005		2,441

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited) —(Continued)

JUNE 30, 2024

(In thousands, except share data)

Issuer Name	Maturity / Expiration		Industry	Current  Coupon		Basis Point  Spread Above  Index (4)		Par /  Shares		Cost		Fair Value (3)
EDS Topco, LP		—	Aerospace and Defense		—		—		937,500	$	938	$	1,174
Exigo, LLC		—	Business Services		—		—		1,458,333		1,458		1,561
FedHC InvestCo LP (10)		—	Aerospace and Defense		—		—		14,578		489		1,318
FedHC InvestCo LP (8), (10)		—	Aerospace and Defense		—		—		5,150		—		—
FedHC InvestCo II LP (10)		—	Aerospace and Defense		—		—		20,882		2,175		1,994
Five Star Parent Holdings, LLC		—	Leisure, Amusement, Motion Pictures, Entertainment		—		—		655,714		656		715
Gauge ETE Blocker, LLC - Common Equity		—	Personal, Food and Miscellaneous Services		—		—		374,444		374		326
Gauge Lash Coinvest LLC		—	Consumer Products		—		—		992,792		651		3,634
Gauge Loving Tan, LP - Common Equity		—	Consumer Products		—		—		462,827		463		435
Gauge Schlesinger Coinvest LLC		—	Business Services		—		—		9		10		6
GCOM InvestCo LP		—	Business Services		—		—		2,434		1,003		476
GMP Hills, LP - Common Equity		—	Distribution		—		—		3,747,470		3,747		3,785
Hancock Claims Consultants Investors, LLC (10)		—	Insurance		—		—		450,000		450		32
HPA SPQ Aggregator LP- Common Equity		—	Business Services		—		—		750,399		750		672
HV Watterson Holdings, LLC		—	Business Services		—		—		1,600,000		1,600		636
Icon Partners V C, L.P.		—	Business Services		—		—		1,122,549		1,123		1,124
Icon Partners V C, L.P. (8)		—	Business Services		—		—		377,451		—		—
IHS Parent Holdings, L.P.		—	Personal, Food and Miscellaneous Services		—		—		1,218,045		1,218		1,534
Imagine Topco, LP		—	Business Services		—		—		743,826		—		—
Infogroup Parent Holdings, Inc. (Data Axle, Inc.)		—	Other Media		—		—		181,495		2,040		2,554
Ironclad Holdco, LLC (Applied Technical Services, LLC) (10)		—	Environmental Services		—		—		4,859		504		758
ITC Infusion Co-invest, LP (10)		—	Healthcare, Education and Childcare		—		—		162,445		1,645		2,312
Kentucky Racing Holdco, LLC (Warrants) (10)		—	Hotels, Motels, Inns and Gaming		—		—		161,252		—		1,842
Kinetic Purchaser, LLC		—	Consumer Products		—		—		1,308,814		1,309		1,836
KL Stockton Co-Invest LP (Any Hour Services) (10)		—	Personal, Food and Miscellaneous Services		—		—		382,353		385		957
Lariat ecoserv Co-Invest Holdings, LLC (10)		—	Environmental Services		—		—		363,656		—		16
LEP Pequod Holdings, LP - Common Equity		—	Financial Services		—		—		350		865		927
Lightspeed Investment Holdco LLC		—	Healthcare, Education and Childcare		—		—		273,143		273		906
LJ Avalon, LP		—	Environmental Services		—		—		851,087		851		1,004
Lorient Peregrine Investment, LP		—	Business Services		—		—		335,590		4,530		4,452
Magnolia Topco LP - Class A (10)		—	Auto Sector		—		—		1,545,460		—		—
Magnolia Topco LP - Class B (10)		—	Auto Sector		—		—		1,017,840		—		—
Mars Intermediate Holdings II, Inc.		—	Media		—		—		414		—		224
MDI Aggregator, LP		—	Chemicals, Plastics and Rubber		—		—		30,993		3,103		3,355
Meadowlark Title, LLC (10)		—	Business Services		—		—		815,385		802		—
Megawatt Acquisition Partners, LLC		—	Electronics		—		—		594		59		52
Municipal Emergency Services, Inc.		—	Distribution		—		—		3,920,145		3,984		6,390
NEPRT Parent Holdings, LLC (Recteq, LLC) (10)		—	Consumer Products		—		—		1,299		1,250		97
New Medina Health, LLC (10)		—	Healthcare, Education and Childcare		—		—		1,429,480		1,429		1,782
NORA Parent Holdings, LLC (10)		—	Healthcare, Education and Childcare		—		—		1,257		1,248		1,280
North Haven Saints Equity Holdings, LP (10)		—	Business Services		—		—		351,553		352		426
NXOF Holdings, Inc. (Tyto Athene, LLC)		—	Aerospace and Defense		—		—		3,261		3		—
OceanSound Discovery Equity, LP (Holdco Sands Intermediate, LLC) (10)		—	Aerospace and Defense		—		—		98,286		983		957
OES Co-Invest, LP Class A		—	Diversified Conglomerate Service		—		—		840		840		840
OHCP V BC COI, L.P.		—	Distribution		—		—		694,943		695		551
OHCP V BC COI, L.P. (8)		—	Distribution		—		—		55,057		—		(11	)
ORL Holdco, Inc.		—	Business Services		—		—		638		6		—
OSP Embedded Aggregator, LP		—	Aerospace and Defense		—		—		870,536		871		714
PCS Parent, LP		—	Financial Services		—		—		421,304		421		421
PennantPark-TSO Senior Loan Fund II, LP (12)		—	Financial Services		—		—		8,415,794		8,416		8,737
Pink Lily Holdco, LLC (10)		—	Retail		—		—		1,044		1,044		—
Pragmatic Institute, LLC		—	Business Services		—		—		1,918,047		1,918		—
Quad (U.S.) Co-Invest, L.P.		—	Business Services		—		—		2,958,706		2,959		3,725
QuantiTech InvestCo LP (10)		—	Aerospace and Defense		—		—		712		68		402
QuantiTech InvestCo LP (8), (10)		—	Aerospace and Defense		—		—		955		—		—
QuantiTech InvestCo II LP (10)		—	Aerospace and Defense		—		—		40		24		24
RFMG Parent, LP (Rancho Health MSO, Inc.)		—	Healthcare, Education and Childcare		—		—		1,050,000		1,050		1,288
Safe Haven Defense MidCo, LLC (10)		—	Building Materials		—		—		227		227		227
SBI Holdings Investments LLC (Sales Benchmark Index LLC)		—	Business Services		—		—		36,585		366		331
Seaway Topco, LP		—	Chemicals, Plastics and Rubber		—		—		2,981		2,981		2,097
SP L2 Holdings, LLC		—	Consumer Products		—		—		881,966		882		159
SSC Dominion Holdings, LLC - Class B (US Dominion, Inc.)		—	Electronics		—		—		36		36		4,242
StellPen Holdings, LLC (CF512, Inc.)		—	Media		—		—		153,846		154		149
SV Aero Holdings, LLC (10)		—	Aerospace and Defense		—		—		25		219		333
TAC LifePort Holdings, LLC (10)		—	Aerospace and Defense		—		—		254,206		239		434

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited) —(Continued)

JUNE 30, 2024

(In thousands, except share data)

Issuer Name	Maturity / Expiration		Industry	Current  Coupon			Basis Point  Spread Above  Index (4)		Par /  Shares		Cost		Fair Value (3)
TCG 3.0 Jogger Co-Invest, LP - Common Equity		—	Media		—			—		6,475	$	1,252	$	1,068
Tower Arch Infolinks Media, LP (10)		—	Media		—			—		542,000		251		844
Tower Arch Infolinks Media, LP (8), (10)		—	Media		—			—		353,444		—		—
TPC Holding Company, LP (9)		—	Food		—			—		11,527		12		140
TPCN Holdings, LLC - Common Equity (9)		—	Diversified Conglomerate Service		—			—		473,400		473		473
TWD Parent Holdings, LLC (The Vertex Companies, LLC)		—	Business Services		—			—		608		1		9
UniVista Insurance (10)		—	Business Services		—			—		400		338		742
Urology Partners Co., L.P.		—	Healthcare, Education and Childcare		—			—		1,111,111		1,111		1,078
Watchtower Holdings, LLC (10)		—	Electronics		—			—		12,419		1,242		1,297
WCP Ivyrehab Coinvestment, LP (10)		—	Healthcare, Education and Childcare		—			—		208		208		189
WCP Ivyrehab QP CF Feeder, LP (10)		—	Healthcare, Education and Childcare		—			—		3,754		3,793		3,416
WCP Ivyrehab QP CF Feeder, LP - Unfunded (8), (10)		—	Healthcare, Education and Childcare		—			—		246		—		(22	)
Wildcat Parent, LP (Wildcat Buyerco, Inc.)		—	Electronics		—			—		2,314		98		826
Total Common Equity/Partnership Interests/Warrants												104,790		119,111
US Government Securities—12.2% of Net Assets
U.S. Treasury Bill (5)	07/23/2024		Short-Term U.S. Government Securities		5.24	%		—		60,000		59,820		59,808
Total US Government Securities												59,820		59,808
Total Investments in Non-Controlled, Non-Affiliated Portfolio Companies												854,365		854,027
Investments in Non-Controlled, Affiliated Portfolio Companies—6.8% of Net Assets (1), (2)
First Lien Secured Debt—1.2% of Net Assets
Walker Edison Furniture Company LLC (6)	03/01/2029		Home and Office Furnishings		—			—		9,930		9,512		2,880
Walker Edison Furniture Company, LLC - Unfunded Term Loan (6), (8)	03/01/2029		Home and Office Furnishings		—			—		708		—		(503	)
Walker Edison Furniture Company LLC - Junior Revolver (6)	03/01/2029		Home and Office Furnishings		—			—		3,333		3,333		3,333
Total First Lien Secured Debt												12,845		5,710
Preferred Equity/Partnership Interests—5.6% of Net Assets(6)
Cascade Environmental Holdings, LLC (Preferred)		—	Environmental Services		—			—		5,887,236		32,791		26,304
Cascade Environmental Holdings, LLC - Series B		—	Environmental Services		—			—		918		918		1,260
Total Preferred Equity/ Partnership Interests												33,709		27,564
Common Equity/Partnership Interests/Warrants—0.0% of Net Assets (6)
Cascade Environmental Holdings, LLC		—	Environmental Services		—			—		7,444,347	$	2,852	$	-
Walker Edison Furniture		—	Home and Office Furnishings		—			—		72,917		6,786		—
Total Common Equity/Partnership Interests/Warrants												9,638		—
Total Investments in Non-Controlled, Affiliated Portfolio Companies												56,192		33,274
Investments in Controlled, Affiliated Portfolio Companies—75.8% of Net Assets (1), (2)
First Lien Secured Debt—20.8% of Net Assets
AKW Holdings Limited (9), (11), (12)	03/15/2027		Healthcare, Education and Childcare		12.32	%	3M SOFR+700		£	41,869		57,286		52,926
				(PIK 6.8)
MidOcean JF Holdings Corp.	07/31/2026		Distribution		11.38	%	3M SOFR+605			49,750		49,172		49,004
Total First Lien Secured Debt												106,458		101,930
Second Lien Secured Debt—0.0% of Net Assets
Total Second Lien Secured Debt
Subordinated Debt—27.9% of Net Assets
Flock Financial, LLC (6), (12)	10/19/2027		Financial Services		14.5	%		—		21,398		21,398		21,398
				(PIK 14.5%)
PennantPark Senior Loan Fund, LLC (12)	7/31/2027		Financial Services		13.33	%	3M SOFR+800			115,886		115,886		115,886
Total Subordinated Debt												137,284		137,284
Preferred Equity—5.4% of Net Assets (6)
Flock Financial Class A Preferred Equity(12)		—	Financial Services		—			—		2,047,727		7,313		7,313
Flock Financial Class B Preferred Equity(12)		—	Financial Services		—			—		5,409,091		19,318		19,318
Total Preferred Equity												26,631		26,631
Common Equity—21.7% of Net Assets (6)
AKW Holdings Limited - Common Equity (9), (11), (12)		—	Healthcare, Education and Childcare		—			—	£	950		132		4,418
JF Intermediate, LLC		—	Distribution		—			—		43,918		4,488		32,593
PennantPark Senior Loan Fund, LLC (12)		—	Financial Services		—			—		67,373,319		67,436		69,718
Total Common Equity												72,056		106,729
Total Investments in Controlled, Affiliated Portfolio Companies												342,429		372,574
Total Investments—256.5% of Net Assets												1,252,986		1,259,875
Cash and Cash Equivalents—12.0% of Net Assets
BlackRock Federal FD Institutional 30												47,300		47,300
Non-Money Market Cash												11,851		11,852
Total Cash and Cash Equivalents												59,151		59,152
Total Investments and Cash Equivalents—268.5% of Net Assets												1,312,137	$	1,319,027
Liabilities in Excess of Other Assets—(168.5%) of Net Assets														(827,805	)
Net Assets—100.0%									`				$	491,222

(1)

The provisions of the 1940 Act classify investments based on the level of control that we maintain in a particular portfolio company. As defined in the 1940 Act, a company is generally presumed to be “non-controlled” when we own 25% or less of the portfolio company’s voting securities and “controlled” when we own more than 25% of the portfolio company’s voting securities.

(2)

The provisions of the 1940 Act classify investments further based on the level of ownership that we maintain in a particular portfolio company. As defined in the 1940 Act, a company is generally deemed as “non-affiliated” when we own less than 5% of a portfolio company’s voting securities and “affiliated” when we own 5% or more of a portfolio company’s voting securities.

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited) —(Continued)

JUNE 30, 2024

(In thousands, except share data)

(3)

Valued based on our accounting policy (See Note 2).

(4)

Represents floating rate instruments that accrue interest at a predetermined spread relative to an index, typically the applicable Secured Overnight Financing Rate (SOFR), or Prime rate (P), or
Sterling Overnight Index Average (SONIA). The spread may change based on the type of rate used. The terms in the Schedule of Investments disclose the actual interest rate in effect as of the reporting
period. SOFR loans are typically indexed to a 30-day, 90-day or 180-day SOFR rates (1M S, 3M S, or 6M S, respectively) at the borrower’s option. SONIA loans are typically indexed daily for GBP loans
with a quarterly frequency payment. All securities are subject to a SOFR or Prime rate floor where a spread is provided, unless noted. The spread provided includes payment-in-kind or "PIK" interest and other fee rates, if any.

(5)

The security was not valued using significant unobservable inputs. The value of all other securities was determined using significant unobservable inputs (See Note 5).

(6)

Non-income producing securities.

(7)

Partial non-accrual PIK securities

(8)

Represents the purchase of a security with delayed settlement or a revolving line of credit that is currently an unfunded investment. This security does not earn a basis point spread above an index while it is unfunded.

(9)

Non-U.S. company or principal place of business outside the United States.

(10)

Investment is held through our Taxable Subsidiary (See Note 1).

(11)

Par / Shares amount is denominated in British Pounds (£) and in Canadian (CAD) as denoted.

(12)

The investment is treated as a non-qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, we may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of our total assets. As of June 30, 2024, qualifying assets represent 77% of the Company’s total assets and non-qualifying assets represent 23% of the Company’s total assets.

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

16

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2023

(In thousands, except share data)

Issuer Name	Maturity / Expiration	Industry	Current  Coupon			Basis Point  Spread Above  Index (4)		Par /  Shares		Cost		Fair Value (3)
Investments in Non-Controlled, Non-Affiliated Portfolio Companies—165.4% of Net Assets (1), (2)
First Lien Secured Debt—93.2% of Net Assets
A1 Garage Merger Sub, LLC	12/22/2028	Personal, Food and Miscellaneous Services		11.99	%	3M SOFR+660			5,144	$	5,073	$	5,119
A1 Garage Merger Sub, LLC - Unfunded Term Loan	12/21/2024	Personal, Food and Miscellaneous Services		—			—		1,788		—		18
A1 Garage Merger Sub, LLC (Revolver) (7)	12/22/2028	Personal, Food and Miscellaneous Services		—			—		2,532		—		(13	)
Ad.net Acquisition, LLC (Revolver)	05/07/2026	Media		11.65	%	3M SOFR+626			222		222		221
Ad.net Acquisition, LLC (Revolver) (7)	05/07/2026	Media		—			—		222		—		(1	)
Anteriad, LLC (f/k/a MeritDirect, LLC)	05/23/2024	Media		12.04	%	3M SOFR+665			1,237		1,223		1,221
Anteriad, LLC (f/k/a MeritDirect, LLC) (Revolver) (7)	05/23/2024	Media		—			—		1,612		—		(28	)
Any Hour Services	07/21/2027	Personal, Food and Miscellaneous Services		11.22	%	3M SOFR+585			3,023		3,014		2,962
Any Hour Services (Revolver) (7)	07/21/2027	Personal, Food and Miscellaneous Services		—			—		1,147		—		(23	)
Apex Service Partners, LLC	07/31/2025	Personal, Food and Miscellaneous Services		10.77	%	3M SOFR+525			1,330		1,330		1,327
Apex Service Partners, LLC Term Loan C	07/31/2025	Personal, Food and Miscellaneous Services		10.79	%	3M SOFR+525			1,863		1,850		1,859
Apex Service Partners, LLC (Revolver)	07/31/2025	Personal, Food and Miscellaneous Services		10.79	%	3M SOFR+525			582		583		581
Apex Service Partners, LLC (Revolver) (7)	07/31/2025	Personal, Food and Miscellaneous Services		—			—		350		—		(1	)
Applied Technical Services, LLC	12/29/2026	Environmental Services		11.54	%	3M SOFR+615			824		818		808
Applied Technical Services, LLC (Revolver)	12/29/2026	Environmental Services		13.25	%	3M SOFR+475			400		400		392
Applied Technical Services, LLC (Revolver) (7)	12/29/2026	Environmental Services		—			—		600		—		(12	)
Arcfield Acquisition Corp. (Revolver)	08/03/2029	Aerospace and Defense		11.62	%	1M SOFR+615			8,090		7,970		8,009
Arcfield Acquisition Corp. (Revolver) (7)	08/04/2028	Aerospace and Defense		—			—		3,521		—		(35	)
Berwick Industrial Park	11/02/2023	Buildings and Real Estate		11.50	%		—		4,000		4,030		3,924
Beta Plus Technologies, Inc.	07/01/2029	Business Services		11.14	%	3M SOFR+575			4,950		4,869		4,604
BioDerm, Inc. (Revolver)	01/31/2028	Healthcare, Education and Childcare		11.81	%	1M SOFR+650			107		107		107
BioDerm, Inc. (Revolver) (7)	01/31/2028	Healthcare, Education and Childcare		—			—		964		—		(5	)
Blackhawk Industrial Distribution, Inc.	09/17/2026	Distribution		11.79	%	3M SOFR+640			1,851		1,833		1,823
Blackhawk Industrial Distribution, Inc.(7)	09/17/2026	Distribution		—			—		3,354		—		(34	)
Blackhawk Industrial Distribution, Inc.	09/17/2026	Distribution		11.79	%	3M SOFR+640			343		343		338
Blackhawk Industrial Distribution, Inc. (Revolver) (7)	09/17/2026	Distribution		—			—		3,089		—		(46	)
Broder Bros., Co.	12/04/2025	Consumer Products		11.65	%	3M SOFR+626			9,838		9,838		9,838
Cartessa Aesthetics, LLC	06/14/2028	Distribution		11.39	%	3M SOFR+600			34,056		33,496		34,056
Cartessa Aesthetics, LLC - (Revolver)	06/14/2028	Distribution		11.39	%	3M SOFR+600			1,265		1,265		1,265
Cartessa Aesthetics, LLC - (Revolver) (7)	06/14/2028	Distribution		—			—		2,297		—		—
CF512, Inc.	08/20/2026	Media		11.59	%	3M SOFR+600			6,592		6,524		6,460
CF512, Inc.(Revolver) (7)	08/20/2026	Media		—			—		909		—		(18	)
Compex Legal Services, Inc.	02/09/2026	Business Services		10.94	%	3M SOFR+555			949		939		949
Compex Legal Services, Inc. (Revolver)	02/07/2025	Business Services		10.94	%	3M SOFR+555			66		66		66
Compex Legal Services, Inc. (Revolver) (7)	02/07/2025	Business Services		—			—		590		—		—
Connatix Buyer, Inc. (Revolver) (7)	07/13/2027	Media		—			—		1,875		—		(66	)
Confluent Health, LLC	11/30/2028	Healthcare, Education and Childcare		12.82	%	3M SOFR+750			1,990		1,855		2,000
Crane 1 Services, Inc. (Revolver)	08/16/2027	Personal, Food and Miscellaneous Services		10.90	%	3M SOFR+551			117		117		116
Crane 1 Services, Inc. (Revolver) (7)	08/16/2027	Personal, Food and Miscellaneous Services		—			—		175		—		(1	)
Dr. Squatch, LLC	08/31/2027	Personal and Non-Durable Consumer Products		11.23	%	3M SOFR+585			8,276		8,190		8,276
Dr. Squatch, LLC (7)	08/27/2026	Personal and Non-Durable Consumer Products		—			—		2,000		—		20
Dr. Squatch, LLC (Revolver) (7)	08/31/2027	Personal and Non-Durable Consumer Products		—			—		2,326		—		—
DRS Holdings III, Inc.	11/03/2025	Consumer Products		11.79	%	3M SOFR+640			7		7		7
DRS Holdings III, Inc. (Revolver) (7)	11/03/2025	Consumer Products		—			—		1,783		—		(21	)
EDS Buyer, LLC	12/22/2028	Aerospace and Defense		11.64	%	3M SOFR+625			6,219		6,133		6,125
EDS Buyer, LLC - Unfunded Term Loan	12/22/2028	Aerospace and Defense		—			—		5,625		—		(14	)
EDS Buyer, LLC - (Revolver) (7)	12/22/2028	Aerospace and Defense		—			—		1,688		—		(25	)
ETE Intermediate II, LLC (Revolver) (7)	05/25/2029	Personal, Food and Miscellaneous Services		—			—		1,656		—		(28	)
Exigo Intermediate II, LLC	03/15/2027	Business Services		11.17	%	3M SOFR+585			24,375		24,097		23,888
Exigo Intermediate II, LLC (Revolver) (7)	03/15/2027	Business Services		—			—		1,856		—		(37	)

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

17

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued)

September 30, 2023

(In thousands, except share data)

Issuer Name	Maturity / Expiration	Industry	Current  Coupon			Basis Point  Spread Above  Index (4)		Par /  Shares		Cost		Fair Value (3)
Five Star Buyer, Inc.	02/23/2028	Leisure, Amusement, Motion Pictures, Entertainment		12.42	%	3M SOFR+710			196	$	196	$	193
Five Star Buyer, Inc. - Unfunded Term Loan	02/23/2028	Leisure, Amusement, Motion Pictures, Entertainment		—			—		837		—		(13	)
Five Star Buyer, Inc. (Revolver) (7)	02/23/2028	Leisure, Amusement, Motion Pictures, Entertainment		—			—		741		—		(11	)
Gauge ETE Blocker, LLC - Promissory Note	05/19/2029	Personal, Food and Miscellaneous Services		12.56	%		—		215		215		215
Graffiti Buyer, Inc.	08/10/2027	Distribution		10.98	%	3M SOFR+560			613		608		607
Graffiti Buyer, Inc. (7)	12/08/2023	Distribution		—			—		276		—		—
Graffiti Buyer, Inc. (Revolver)	08/10/2027	Distribution		11.77	%	3M SOFR+560			239		239		237
Graffiti Buyer, Inc. (Revolver) (7)	08/10/2027	Distribution		—			—		529		—		(5	)
Hancock Roofing and Construction L.L.C.	12/31/2026	Insurance		10.92	%	1M SOFR+560			335		335		327
Hancock Roofing and Construction L.L.C. (Revolver) (7)	12/31/2026	Insurance		—			—		415		—		(10	)
Holdco Sands Intermediate, LLC	11/23/2028	Aerospace and Defense		11.32	%	6M SOFR+585			1,898		1,868		1,898
Holdco Sands Intermediate, LLC (Revolver) (7)	11/23/2027	Aerospace and Defense		—			—		3,941		—		—
HV Watterson Holdings, LLC	12/17/2026	Business Services		11.79	%	1M SOFR+625			279		278		279
HV Watterson Holdings, LLC (7)	12/17/2026	Business Services		—			—		2,219		—		12
HV Watterson Holdings, LLC - (Revolver)	12/17/2026	Business Services		11.79	%	3M SOFR+625			1,200		1,200		1,198
HV Watterson Holdings, LLC - (Revolver)(7)	12/17/2026	Business Services		—			—		50		—		—
HW Holdco, LLC	12/10/2024	Media		11.28	%	3M SOFR+640			11,237		11,167		11,069
HW Holdco, LLC (Revolver)	12/10/2024	Media		11.82	%	3M SOFR+640			271		271		267
HW Holdco, LLC (Revolver) (7)	12/10/2024	Media		—			—		3,116		—		(47	)
IG Investments Holdings, LLC (Revolver) (7)	09/22/2027	Business Services		—			—		477		—		(7	)
Imagine Acquisitionco, LLC (7)	11/15/2027	Business Services		—			—		2,341		—		(12	)
Imagine Acquisitionco, LLC (Revolver) (7)	11/15/2027	Business Services		—			—		1,685		—		(25	)
Inception Fertility Ventures, LLC	12/07/2023	Healthcare, Education and Childcare		12.49	%	3M SOFR+715			20,300		20,100		20,300
Infinity Home Services Holdco, Inc.	12/28/2028	Personal, Food and Miscellaneous Services		12.24	%	3M SOFR+685			2,089		2,089		2,089
Infinity Home Services Holdco, Inc. - Unfunded Term Loan	12/28/2023	Personal, Food and Miscellaneous Services		—			—		1,135		—		—
Infinity Home Services Holdco, Inc.(Revolver) (7)	12/28/2028	Personal, Food and Miscellaneous Services		—			—		1,292		—		—
Infolinks Media Buyco, LLC	11/01/2026	Media		11.17	%	1M SOFR+585			1,420		1,416		1,420
Infolinks Media Buyco, LLC (7)	11/01/2023	Media		—			—		949		—		10
Integrated Data Services - Term Loan	08/01/2029	Business Services		11.87	%	3M SOFR+650			15,467		15,161		15,106
Integrated Data Services - (Revolver)	08/01/2029	Business Services		—			—		2,533		—		(59	)
Integrity Marketing Acquisition, LLC	08/27/2026	Insurance		11.41	%	3M SOFR+615			9,880		9,839		9,781
Integrity Marketing Acquisition, LLC - Unfunded Term Loan	08/31/2025	Insurance		—			—		2,500		—		(13	)
Integrity Marketing Acquisition, LLC (Revolver) (7)	08/31/2025	Insurance		—			—		160		—		—
Inventus Power, Inc.	06/30/2025	Electronics		12.93	%	1M SOFR+761			13,234		12,998		12,969
Inventus Power, Inc. (Revolver) (7)	06/30/2025	Electronics		—			—		1,729		—		(35	)
ITI Holdings, Inc.	03/03/2028	Business Services		11.06	%	3M SOFR+615			8,838		8,718		8,661
ITI Holdings, Inc. (Revolver)	03/03/2028	Business Services		10.70	%	1M SOFR+560			1,121		1,121		1,098
ITI Holdings, Inc. (Revolver) (7)	03/03/2028	Business Services		—			—		370		—		(7	)
K2 Pure Solutions NoCal, L.P.	12/20/2023	Chemicals, Plastics and Rubber		13.42	%	1M SOFR+810			9,409		9,402		9,409
K2 Pure Solutions NoCal, L.P. (Revolver) (7)	12/20/2023	Chemicals, Plastics and Rubber		—			—		1,938		—		—
Kinetic Purchaser, LLC	11/10/2027	Consumer Products		11.54	%	3M SOFR+615			9,173		8,957		9,035
Kinetic Purchaser, LLC (Revolver) (7)	11/10/2026	Consumer Products		—			—		4,854		—		(73	)
Lash OpCo, LLC	02/18/2027	Consumer Products		11.88	%	1M SOFR+700			2,807		2,764		2,779
Lash OpCo, LLC (Revolver)	08/16/2026	Consumer Products		12.15	%	1M SOFR+700			1,977		1,977		1,957
Lash OpCo, LLC (Revolver) (7)	08/16/2026	Consumer Products		—			—		935		—		(9	)
LAV Gear Holdings, Inc.	10/31/2024	Leisure, Amusement, Motion Pictures, Entertainment		11.79	%	1M SOFR+640			51		51		51
			(PIK 5.50%)
Ledge Lounger, Inc.	11/09/2026	Consumer Products		11.79	%	3M SOFR+625			9,085		8,964		8,971
Ledge Lounger, Inc. (Revolver) (7)	11/09/2026	Consumer Products		—			—		1,933		—		(24	)
Lightspeed Buyer Inc.	02/03/2026	Healthcare, Education and Childcare		10.67	%	1M SOFR+535			2,198		2,187		2,176
Lightspeed Buyer Inc. (Revolver) (7)	02/03/2026	Healthcare, Education and Childcare		—			—		1,166		—		(12	)
LJ Avalon Holdings, LLC	07/31/2024	Environmental Services		11.79	%	3M SOFR+640			208		205		204
LJ Avalon Holdings, LLC - Unfunded Term Loan	07/31/2024	Environmental Services		—			—		1,260		—		(6	)
LJ Avalon Holdings, LLC (Revolver)(7)	01/31/2030	Environmental Services		—			—		587		—		(12	)
LSF9 Atlantis Holdings, LLC	03/31/2029	Retail		12.64	%	3M SOFR+725			5,625		5,436		5,381
Loving Tan Intermediate II, Inc.	05/31/2028	Consumer Products		12.39	%	3M SOFR+700			4,988		4,892		4,913
Loving Tan Intermediate II, Inc. (Revolver)	05/31/2028	Consumer Products		12.39	%	3M SOFR+700			347		347		342
Loving Tan Intermediate II, Inc. (Revolver)(7)	05/31/2028	Consumer Products		—			—		284		—		(4	)
Mars Acquisition Holdings Corp.	05/14/2026	Media		11.04	%	3M SOFR+565			1,835		1,807		1,817
Mars Acquisition Holdings Corp. (Revolver)(7)	05/14/2026	Media		—			—		1,209		—		(12	)
MBS Holdings, Inc. (Revolver)	04/16/2027	Telecommunications		11.17	%	1M SOFR+585			111		111		109
MBS Holdings, Inc. (Revolver) (7)	04/16/2027	Telecommunications		—			—		583		—		(9	)
MDI Buyer, Inc.	07/25/2028	Chemicals, Plastics and Rubber		11.27	%	3M SOFR+600			20,135		19,835		19,685
MDI Buyer, Inc. (Revolver)	07/25/2028	Chemicals, Plastics and Rubber		10.92	%	3M SOFR+600			1,039		1,039		1,016
MDI Buyer, Inc. (Revolver) (7)	07/25/2028	Chemicals, Plastics and Rubber		—			—		1,188		—		(15	)
Meadowlark Acquirer, LLC	12/10/2027	Business Services		10.66	%	3M SOFR+550			1,937		1,919		1,888
Meadowlark Acquirer, LLC Term Loan I	12/10/2027	Business Services		—			—		1,038		—		(16	)
Meadowlark Acquirer, LLC Term Loan II	12/10/2027	Business Services		—			—		8,922		—		(134	)
Meadowlark Acquirer, LLC (Revolver) (7)	12/10/2027	Business Services		—			—		1,685		—		(43	)

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

18

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued)

September 30, 2023

(In thousands, except share data)

Issuer Name	Maturity / Expiration	Industry	Current  Coupon			Basis Point  Spread Above  Index (4)		Par /  Shares		Cost		Fair Value (3)
Municipal Emergency Services, Inc.	09/28/2027	Distribution		11.05	%	3M SOFR+565			484	$	484	$	474
Municipal Emergency Services, Inc. - Unfunded Term Loan A	06/16/2023	Distribution		—			—		769		—		(17	)
Municipal Emergency Services, Inc. - Unfunded Term Loan B	12/16/2024	Distribution		—			—		2,510		—		(55	)
Municipal Emergency Services, Inc. (Revolver)	09/28/2027	Distribution		11.04	%	3M SOFR+565			752		752		736
Municipal Emergency Services, Inc. (Revolver) (7)	09/28/2027	Distribution		—			—		1,128		—		(25	)
NBH Group LLC (Revolver) (7)	08/19/2026	Healthcare, Education and Childcare		—			—		1,163		—		(23	)
Neptune Flood Incorporated (Revolver) (7)	05/09/2029	Insurance		—			—		541		—		—
NORA Acquisition, LLC	08/31/2029	Healthcare, Education and Childcare		11.74	%	3M SOFR+635			20,500		20,092		20,090
NORA Acquisition, LLC (Revolver) (7)	08/31/2029	Healthcare, Education and Childcare		—			—		2,707		—		(54	)
ORL Acquisition, Inc.	09/03/2027	Business Services		12.84	%	3M SOFR+725			4,409		4,347		4,012
ORL Acquisition, Inc. (Revolver) (7)	09/03/2027	Business Services		—			—		597		—		(54	)
Ox Two, LLC	05/18/2026	Building Materials		12.90	%	1M SOFR+725			13,578		13,445		13,340
Ox Two, LLC (Revolver) (7)	05/18/2026	Building Materials		—			—		2,419		—		(42	)
Pequod Merger Sub, Inc. - Unfunded Term Loan	12/02/2026	Financial Services		—			—		2,847		—		(57	)
Pequod Merger Sub, Inc. (Revolver) (7)	12/02/2026	Financial Services		—			—		757		—		(15	)
PL Acquisitionco, LLC (Revolver) (7)	11/09/2027	Retail		—			—		3,236		—		(324	)
Pragmatic Institute, LLC	07/06/2028	Business Services		11.17	%	3M SOFR+575			34,987		34,547		33,412
Pragmatic Institute, LLC Unfunded Term Loan	07/06/2028	Business Services		—			—		7,193		—		(252	)
Pragmatic Institute, LL (Revolver)	07/06/2028	Business Services		11.17	%	3M SOFR+575			4,795		4,795		4,579
Quantic Electronics, LLC	11/19/2026	Aerospace and Defense		11.74	%	3M SOFR+635			1,484		1,474		1,461
Quantic Electronics, LLC (Revolver)	11/19/2026	Aerospace and Defense		11.74	%	3M SOFR+635			528		528		521
Questex, LLC	09/09/2024	Media		9.81	%	3M SOFR+425			20,193		20,115		20,193
Questex, LLC (Revolver) (7)	09/09/2024	Media		—			—		3,590		—		—
Radius Aerospace, Inc. (Revolver)	03/31/2025	Aerospace and Defense		11.29	%	3M SOFR+575			668		668		661
Radius Aerospace, Inc. (Revolver) (7)	03/31/2025	Aerospace and Defense		—			—		1,559		—		(16	)
Rancho Health MSO, Inc. (7)	12/18/2025	Healthcare, Education and Childcare		11.22	%	3M SOFR+575			79		79		79
Rancho Health MSO, Inc. - Unfunded Term Loan	12/18/2025	Healthcare, Education and Childcare		—			—		494		—		—
Rancho Health MSO, Inc. (Revolver)	12/18/2025	Healthcare, Education and Childcare		11.24	%	3M SOFR+575			210		210		210
Rancho Health MSO, Inc. (Revolver) (7)	12/18/2025	Healthcare, Education and Childcare		—			—		315		—		—
Reception Purchaser, LLC	02/28/2028	Transportation		11.54	%	3M SOFR+615			5,863		5,791		5,628
Recteq, LLC (Revolver) (7)	01/29/2026	Consumer Products		—			—		1,127		—		(34	)
Research Now Group, Inc. and Dynata, LLC	12/20/2024	Business Services		11.13	%	3M SOFR+576			124		124		108
Riverpoint Medical, LLC (Revolver)	06/20/2025	Healthcare, Education and Childcare		10.42	%	3M SOFR+510			45		45		45
Riverpoint Medical, LLC (Revolver) (7)	06/20/2025	Healthcare, Education and Childcare		—			—		318		—		(4	)
Riverside Assessments, LLC	03/10/2025	Education		11.24	%	3M SOFR+575			11,699		11,588		11,582
Rural Sourcing Holdings, Inc. - Unfunded Term Loan	06/15/2029	Business Services		—			—		1,146		—		—
Rural Sourcing Holdings, Inc. (Revolver) (7)	06/15/2029	Business Services		—			—		861		—		(13	)
Sales Benchmark Index LLC (Revolver) (7)	01/03/2025	Business Services		—			—		732		—		(4	)
Sargent & Greenleaf Inc. (Revolver)	12/20/2024	Electronics		12.92	%	1M SOFR+650			158		158		157
Sargent & Greenleaf Inc. (Revolver) (7)	12/20/2024	Electronics		—			—		453		—		(5	)
Schlesinger Global, Inc.	07/14/2025	Business Services		13.15	%	3M SOFR+775			4,647		4,611		4,496
Schlesinger Global, Inc. (Revolver)	07/14/2025	Business Services		12.52	%	3M SOFR+775			30		30		29
			(PIK 0.5%)
Schlesinger Global, Inc. (Revolver)(7)	07/14/2025	Business Services		—			—		8		—		—
Seaway Buyer, LLC	06/13/2029	Chemicals, Plastics and Rubber		11.54	%	3M SOFR+605			4,752		4,691		4,609
Seaway Buyer, LLC (Revolver)	06/13/2029	Chemicals, Plastics and Rubber		11.54	%	3M SOFR+605			729		729		708
Seaway Buyer, LLC (Revolver)(7)	06/13/2029	Chemicals, Plastics and Rubber		—			—		2,397		—		(72	)
Shiftkey, LLC	06/21/2027	Business Services		11.40	%	3M SOFR+601			17,775		17,636		17,331
Sigma Defense Systems, LLC	12/18/2025	Telecommunications		14.04	%	3M SOFR+865			29,681		29,190		29,236
Sigma Defense Systems, LLC (Revolver)	12/18/2025	Telecommunications		14.04	%	3M SOFR+865			2,083		2,083		2,052
Sigma Defense Systems, LLC (Revolver) (7)	12/18/2025	Telecommunications		—			—		893		—		(13	)
Signature Systems Holding Company (Revolver) (7)	05/03/2024	Chemicals, Plastics and Rubber		—			—		2,016		—		—
Solutionreach, Inc. (Revolver) (7)	07/17/2025	Communications		—			—		1,665		—		(7	)
Spendmend Holdings LLC	03/01/2028	Business Services		11.04	%	1M SOFR+565			99		99		97
Spendmend Holdings LLC (7)	03/01/2028	Business Services		—			—		2,684		—		(39	)
Spendmend Holdings LLC - Funded Revolver	03/01/2028	Business Services		11.20	%	1M SOFR+565			561		561		548
Spendmend Holdings LLC - (Revolver) (7)	03/01/2028	Business Services		—			—		841		—		(18	)
System Planning and Analysis, Inc. - (Revolver) (7)  (f/k/a Management Consulting & Research, LLC)	08/16/2027	Aerospace and Defense		—			—		2,925		—		(32	)
The Aegis Technologies Group, LLC	10/31/2025	Aerospace and Defense		11.66	%	3M SOFR+665			1,121		1,097		1,104
The Bluebird Group LLC	07/27/2026	Business Services		12.79	%	3M SOFR+740			2,271		2,239		2,262
The Bluebird Group LLC (Revolver) (7)	07/27/2026	Business Services		—			—		734		—		(3	)
The Vertex Companies, LLC	08/30/2027	Business Services		11.93	%	1M SOFR+635			186		182		185
The Vertex Companies, LLC (Revolver)	08/30/2027	Business Services		11.67	%	1M SOFR+635			248		248		246
The Vertex Companies, LLC (Revolver) (7)	08/30/2027	Business Services		—			—		492		—		(4	)
TWS Acquisition Corporation (Revolver) (7)	06/16/2025	Education		—			—		1,644		—		—
Tyto Athene, LLC (Revolver) (7)	04/01/2026	Aerospace and Defense		—			—		364		—		(32	)
Urology Management Holdings, Inc. - Unfunded Term Loan	02/01/2024	Healthcare, Education and Childcare		—			—		7,222		—		(150	)
Wildcat Buyerco, Inc.	02/27/2026	Electronics		10.57	%	3M SOFR+515			3,805		3,762		3,767
Wildcat Buyerco, Inc. (Revolver)	02/27/2026	Electronics		10.17	%	3M SOFR+585			88		88		87
Wildcat Buyerco, Inc. (Revolver) (7)	02/27/2026	Electronics		—			—		486		—		(5	)
Zips Car Wash, LLC	03/01/2024	Auto Sector		12.67	%	1M SOFR+735			2,589		2,583		2,504
Total First Lien Secured Debt											472,975		468,007
U.S. Government Securities—19.9% of Net Assets
U.S. Treasury Bill (5)	10/19/2023	Short-Term U.S. Government Securities		5.31	%		—		100,000		99,768		99,751
Total U.S. Government Securities											99,768		99,751

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

19

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued)

September 30, 2023

(In thousands, except share data)

Issuer Name	Maturity / Expiration		Industry	Current  Coupon			Basis Point  Spread Above  Index (4)		Par /  Shares		Cost		Fair Value (3)
Second Lien Secured Debt—16.0% of Net Assets
Ascensus Holdings, Inc.	08/02/2028		Financial Services		12.03	%	3M SOFR+676			3,000	$	2,717	$	2,837
Atlas Purchaser, Inc	05/07/2029		Telecommunications		14.66	%	3M SOFR+900			17,000		16,600		13,821
Best Practice Associates LLC	06/29/2027		Aerospace and Defense		14.54	%	3M SOFR+915			17,825		17,559		17,469
Burgess Point Purchaser Corporation	07/28/2030		Auto Sector		14.42	%	1M SOFR+910			8,000		7,680		7,920
ENC Parent Corporation	08/19/2029		Business Services		13.15	%	3M SOFR+776			7,500		7,440		6,675
Halo Buyer, Inc.	07/06/2026		Consumer Products		13.67	%	1M SOFR+835			32,500		32,232		31,525
QuantiTech LLC	02/04/2027		Aerospace and Defense		11.74	%	3M SOFR+635			150		148		149
Total Second Lien Secured Debt												84,376		80,396
Subordinated Debt/Corporate Notes—10.7% of Net Assets
Express Wash Acquisition Company, LLC	01/15/2029		Auto Sector		15.15	%	3M SOFR+976			22,219		21,568		21,597
Flock Financial, LLC (11)	05/26/2027		Financial Services		14.50	%		—		34,000		33,329		32,300
Total Subordinated Debt/Corporate Notes												54,897		53,897
Preferred Equity/Partnership Interests—2.6% of Net Assets (6)
Ad.net Holdings, Inc.		—	Media		—			—		2,400		240		271
AH Newco Equityholdings, LLC		—	Healthcare, Education and Childcare		6.00	%		—		211		500		1,066
Anteriad Holdings, LP (f/k/a MeritDirect Holdings, LP) (9)		—	Media		—			—		1,135		1,135		918
Cartessa Aesthetics, LLC (9)		—	Distribution		—			—		3,562,500		3,563		4,975
Gauge Lash Coinvest, LLC - Preferred Equity		—	Consumer Products		—			—		64,967		351		789
Gauge Schlesinger Coinvest, LLC - Class A-2 Preferred Equity		—	Business Services		—			—		1		1		1
Imagine Topco, LP		—	Business Services		8.00	%		—		743,826		744		750
Magnolia Topco LP - Class A Preferred Equity (9)		—	Auto Sector		—			—		169		169		172
Magnolia Topco LP - Class B Preferred Equity (9)		—	Auto Sector		—			—		929		554		794
Mars Intermediate Holdings II, Inc		—	Media		—			—		414		414		551
NXOF Holdings, Inc. (Tyto Athene, LLC)		—	Aerospace and Defense		—			—		160		160		107
ORL Holdco, Inc.		—	Business Services		—			—		575		57		—
PL Acquisitionco, LLC - Preferred Equity		—	Retail		—			—		37		37		39
Signature CR Intermediate Holdco, Inc.		—	Chemicals, Plastics and Rubber		12.00	%		—		1,527		1,527		2,490
TPC Holding Company, LP (8),(11)		—	Food		—			—		219		219		320
TWD Parent Holdings, LLC		—	Business Services		—			—		30		30		37
(The Vertex Companies, LLC)
Total Preferred Equity/Partnership Interests												9,701		13,280
Common Equity/Partnership Interests/Warrants—23.0% of Net Assets (6)
A1 Garage Equity, LLC (9)		—	Personal, Food and Miscellaneous Services		—			—		2,193,038		2,193		2,340
Ad.net Holdings, Inc.		—	Media		—			—		2,667		27		—
Affinion Group Holdings, Inc. (Warrants)	04/10/2024		Consumer Products		—			—		77,190		2,126		—
AG Investco LP (9)		—	Business Services		—			—		805,164		805		1,074
AG Investco LP (7), (9)		—	Business Services		—			—		194,836		—		—
Altamira Intermediate Company II, Inc.		—	Aerospace and Defense		—			—		125,000		125		127
AMCSI Crash Co-Invest, LP		—	Auto Sector		—			—		2,489,777		2,490		3,318
AMCSI Crash Co-Invest, LP (7)		—	Auto Sector		—			—		510,223		—		—
Anteriad Holdings, LP (f/k/a MeritDirect Holdings, LP) (9)		—	Media		—			—		1,135		—		—
Athletico Holdings, LLC (9)		—	Healthcare, Education and Childcare		—			—		9,357		10,000		9,032
Atlas Investment Aggregator, LLC		—	Telecommunications		—			—		1,700,000		1,613		293
BioDerm, Inc.		—	Healthcare, Education and Childcare		—			—		1,312		1,312		1,513
Burgess Point Holdings, LP		—	Auto Sector		—			—		680		680		740
Connatix Parent, LLC		—	Media		—			—		57,416		632		333
Cowboy Parent LLC		—	Distribution		—			—		27,778		3,015		5,451
(Blackhawk Industrial Distribution, Inc.)
Crane 1 Acquisition Parent Holdings, L.P.		—	Personal, Food and Miscellaneous Services		—			—		113		104		173
Delta InvestCo LP		—	Telecommunications		—			—		863,299		848		1,542
(Sigma Defense Systems, LLC) (9)
Delta InvestCo LP (7)		—	Telecommunications		—			—		277,745		—		—
(Sigma Defense Systems, LLC) (7), (9)
eCommission Holding Corporation (11)		—	Financial Services		—			—		80		1,005		1,854
EDS Topco, LP		—	Aerospace and Defense		—			—		937,500		938		885
Exigo, LLC		—	Business Services		—			—		1,458,333		1,458		1,648
FedHC InvestCo LP (9)		—	Aerospace and Defense		—			—		14,578		489		2,060
FedHC InvestCo LP (7),(9)		—	Aerospace and Defense		—			—		5,150		—		—
FedHC InvestCo II LP (9)		—	Aerospace and Defense		—			—		20,882		2,175		2,951
Five Star Parent Holdings, LLC		—	Leisure, Amusement, Motion Pictures, Entertainment		—			—		655,714		656		800
Gauge ETE Blocker, LLC - Common Equity		—	Personal, Food and Miscellaneous Services		—			—		374,444		374		371
Gauge Lash Coinvest LLC		—	Consumer Products		—			—		889,376		136		4,076
Gauge Loving Tan, LP - Common Equity		—	Consumer Products		—			—		462,827		463		389
Gauge Schlesinger Coinvest, LLC		—	Business Services		—			—		9		10		7
Gauge TVC Coinvest, LLC		—	Transportation		—			—		810,645		—		2,390
(TVC Enterprises, LLC)

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

20

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued)

September 30, 2023

(In thousands, except share data)

Issuer Name	Maturity / Expiration		Industry	Current  Coupon		Basis Point  Spread Above  Index (4)		Par /  Shares		Cost		Fair Value (3)
GCOM InvestCo LP		—	Business Services		—		—		2,434	$	1,003	$	401
Go Dawgs Capital III, LP		—	Building Materials		—		—		675,325		675		1,479
(American Insulated Glass, LLC) (9)
Hancock Claims Consultants Investors, LLC (9)		—	Insurance		—		—		450,000		450		338
HPA SPQ Aggregator LP- Common Equity		—	Business Services		—		—		750,399		750		751
HV Watterson Holdings, LLC		—	Business Services		—		—		1,600,000		1,600		1,778
Icon Partners V C, L.P.		—	Business Services		—		—		1,118,318		1,118		1,002
Icon Partners V C, L.P. (7)		—	Business Services		—		—		381,682		—		(40	)
IHS Parent Holdngs, L.P.			Personal, Food and Miscellaneous Services						1,218,045		1,218		1,642
Imagine Topco, LP		—	Business Services		—		—		743,826		—		—
Infogroup Parent Holdings, Inc.		—	Other Media		—		—		181,495		2,040		2,327
(Data Axle, Inc.)
Ironclad Holdco, LLC		—	Environmental Services		—		—		4,566		450		663
(Applied Technical Services, LLC) (9)
ITC Infusion Co-invest, LP(9)		—	Healthcare, Education and Childcare		—		—		162,445		1,624		1,775
ITC Rumba, LLC		—	Healthcare, Education and Childcare		—		—		375,675		8		1,158
(Cano Health, LLC) (9)
Kentucky Racing Holdco, LLC (Warrants)(9)		—	Hotels, Motels, Inns and Gaming		—		—		161,252		—		1,630
Kinetic Purchaser, LLC		—	Consumer Products		—		—		1,308,814		1,309		1,892
KL Stockton Co-Invest LP		—	Personal, Food and Miscellaneous Services		—		—		382,353		382		775
(Any Hour Services) (9)
Lariat ecoserv Co-Invest Holdings, LLC (9)		—	Environmental Services		—		—		363,656		—		22
LEP Pequod Holdings, LP		—	Financial Services		—		—		350		865		1,006
Lightspeed Investment Holdco LLC		—	Healthcare, Education and Childcare		—		—		273,143		273		741
LJ Avalon, LP		—	Environmental Services		—		—		851,087		851		902
Lorient Peregrine Investments, LP		—	Business Services		—		—		335,590		4,530		4,452
Magnolia Topco LP - Class A Common Equity (9)		—	Auto Sector		—		—		169,230		—		—
Magnolia Topco LP - Class B Common Equity (9)		—	Auto Sector		—		—		929,200		—		—
Mars Intermidiate Holdings II, Inc.		—	Media		—		—		414		—		232
MDI Aggregator, LP		—	Chemicals, Plastics and Rubber		—		—		30,993		3,103		3,326
Meadowlark Title, LLC (9)		—	Business Services		—		—		815,385		802		—
Municipal Emergency Services, Inc.		—	Distribution		—		—		3,920,145		3,984		4,430
NEPRT Parent Holdings, LLC		—	Consumer Products		—		—		1,299		1,259		88
(Recteq, LLC) (9)
NORA Parent Holdings, LLC		—	Healthcare, Education and Childcare		—		—		1,257		1,257		1,257
North Haven Saints Equity Holdings, LP(9)		—	Business Services		—		—		351,553		352		351
NXOF Holdings, Inc.		—	Aerospace and Defense		—		—		3,261		3		—
(Tyto Athene, LLC)
OceanSound Discovery Equity, LP		—	Aerospace and Defense		—		—		98,286		913		2,133
(Holdco Sands Intermediate, LLC) (9)
OHCP V BC COI, L.P.		—	Distribution		—		—		446,250		446		390
OHCP V BC COI, L.P. (7)		—	Distribution		—		—		303,750		—		(38	)
ORL Holdco, Inc.		—	Business Services		—		—		638		6		—
PennantPark-TSO Senior Loan Fund II, LP (11)		—	Financial Services		—		—		12,269,640		12,270		12,485
Pink Lily Holdco, LLC (9)		—	Retail		—		—		1,044		1,044		33
Pragmatic Institute, LLC		—	Business Services		—		—		1,918,047		1,918		747
Quad (U.S.) Co-Invest, L.P.		—	Business Services		—		—		2,958,706		2,959		3,461
QuantiTech InvestCo LP (9)		—	Aerospace and Defense		—		—		712		68		446
QuantiTech InvestCo LP (7),(9)		—	Aerospace and Defense		—		—		955		—		—
QuantiTech InvestCo II LP (9)		—	Aerospace and Defense		—		—		40		24		26
RFMG Parent, LP		—	Healthcare, Education and Childcare		—		—		1,050,000		1,050		1,052
(Rancho Health MSO, Inc.)
SBI Holdings Investments LLC		—	Business Services		—		—		36,585		366		291
(Sales Benchmark Index LLC)
Seaway Topco, LP		—	Chemicals, Plastics and Rubber		—		—		2,981		2,981		2,372
Signature CR Intermediate Holdco, Inc.		—	Chemicals, Plastics and Rubber		—		—		80		80		2,059
SP L2 Holdings, LLC		—	Consumer Products		—		—		881,966		882		604
SSC Dominion Holdings, LLC		—	Electronics		—		—		71		71		3,294
Class B (US Dominion, Inc.)
StellPen Holdings, LLC		—	Media		—		—		153,846		154		169
(CF512, Inc.)
TAC LifePort Holdings, LLC (9)		—	Aerospace and Defense		—		—		254,206		250		405
Tower Arch Infolinks Media, LP (9)		—	Media		—		—		536,514		504		951
Tower Arch Infolinks Media, LP (7), (9)		—	Media		—		—		358,931		—		—
TPC Holding Company, LP (8). (11)		—	Food		—		—		11,527		12		113
TWD Parent Holdings, LLC		—	Business Services		—		—		608		1		1
(The Vertex Companies, LLC)

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

21

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued)

September 30, 2023

(In thousands, except share data)

Issuer Name	Maturity / Expiration		Industry	Current  Coupon			Basis Point  Spread Above  Index (4)		Par /  Shares		Cost		Fair Value (3)
UniVista Insurance (9)		—	Business Services		—			—		400	$	362	$	555
Urology Partners Co., L.P.		—	Healthcare, Education and Childcare		—			—		1,111,111		1,111		1,044
WCP Ivyrehab (QP) CF Feeder, LP (9)		—	Healthcare, Education and Childcare		—			—		3,715,012		3,754		4,319
WCP Ivyrehab QP CF Feeder, LP - Unfunded (7) (9)		—	Healthcare, Education and Childcare		—			—		284,988		—		—
Wildcat Parent, LP		—	Electronics		—			—		2,314		231		820
(Wildcat Buyerco, Inc.)
Total Common Equity/Partnership Interests/Warrants												95,037		115,477
Total Investments in Non-Controlled, Non-Affiliated Portfolio Companies												816,754		830,808
Investments in Non-Controlled, Affiliated Portfolio Companies—10.9% of Net Assets (1), (2)
First Lien Secured Debt—2.1% of Net Assets
Walker Edison Furniture Company LLC	03/31/2027		Home and Office Furnishings		12.18	%	1M SOFR+685			7,042		7,042		7,043
Walker Edison Furniture Company, LLC - Unfunded Term Loan	03/31/2027		Home and Office Furnishings		—			—		667		—		—
Walker Edison Furniture Company LLC - Junior Revolver	03/31/2027		Home and Office Furnishings		11.68	%	1M SOFR+685			3,333		3,333		3,333
Total First Lien Secured Debt												10,375		10,376
Preferred Equity/Partnership Interests—6.4% of Net Assets(6)
Cascade Environmental Holdings, LLC		—	Environmental Services		—			—		5,887,236		32,791		31,032
Cascade Environmental Holdings, LLC - Series B		—	Environmental Services		—			—		918		918		1,073
Total Preferred Equity/Partnership Interests												33,709		32,105
Common Equity/Partnership Interests/Warrants—2.4% of Net Assets (6)
Cascade Environmental Holdings, LLC		—	Environmental Services		—			—		7,444,347		2,852		—
JF Intermediate, LLC		—	Distribution		—			—		19,687		2,065		8,759
Walker Edison Furniture		—	Home and Office Furnishings		—			—		72,917		6,786		3,531
Total Common Equity/Partnership Interests/Warrants												11,703		12,290
Total Investments in Non-Controlled, Affiliated Portfolio Companies												55,787		54,771
Investments in Controlled, Affiliated Portfolio Companies—43.0% of Net Assets (1), (2)
First Lien Secured Debt—9.8% of Net Assets
AKW Holdings Limited (8), (10), (11)	03/15/2027		Healthcare, Education and Childcare		12.21	%	3M SONIA+700		£	40,371		55,388		49,275
Total First Lien Secured Debt												55,388		49,275
Second Lien Secured Debt—0.0% of Net Assets
Mailsouth Inc. (6)	04/23/2025		Printing and Publishing		—			—		14,896		12,383		—
Total Second Lien Secured Debt												12,383		—
Subordinated Debt—20.4% of Net Assets
PennantPark Senior Loan Fund, LLC (11)	07/31/2027		Financial Services		13.37	%	3M SOFR+800			102,325		102,325		102,325
Total Subordinated Debt												102,325		102,325
Common Equity—12.8% of Net Assets (6)
AKW Holdings Limited (8), (10), (11)		—	Healthcare, Education and Childcare		—			—	£	950		131		2,385
MSpark, LLC		—	Printing and Publishing		—			—		51,151		16,516		—
PennantPark Senior Loan Fund, LLC (11)		—	Financial Services		—			—		58,580,060		58,643		62,083
Total Common Equity												75,290		64,468
Total Investments in Controlled, Affiliated Portfolio Companies												245,386		216,068
Total Investments—219.4% of Net Assets												1,117,927		1,101,647
Cash and Cash Equivalents—7.7% of Net Assets
BlackRock Federal FD Institutional 30												24,683		24,683
Non-Money Market Cash												14,101		14,092
Total Cash and Cash Equivalents												38,784		38,775
Total Investments and Cash Equivalents—227.1% of Net Assets											$	1,156,711	$	1,140,422
Liabilities in Excess of Other Assets—(127.1%) of Net Assets														(638,235	)
Net Assets—100.0%													$	502,187

(1)

The provisions of the 1940 Act classify investments based on the level of control that we maintain in a particular portfolio company. As defined in the 1940 Act, a company is generally presumed to be “non-controlled” when we own 25% or less of the portfolio company’s voting securities and “controlled” when we own more than 25% of the portfolio company’s voting securities.

(2)

The provisions of the 1940 Act classify investments further based on the level of ownership that we maintain in a particular portfolio company. As defined in the 1940 Act, a company is generally deemed as “non-affiliated” when we own less than 5% of a portfolio company’s voting securities and “affiliated” when we own 5% or more of a portfolio company’s voting securities.

(3)

Valued based on our accounting policy (See Note 2).

(4)

Represents floating rate instruments that accrue interest at a predetermined spread relative to an index, typically the applicable Secured Overnight Financing Rate (SOFR) or Prime rate, (P), or
Sterling Overnight Index Average, (SONIA). The spread may change based on the type of rate used. The terms in the Schedule of Investments disclose the actual interest rate in effect as of the reporting
period. SOFR loans are typically indexed to a 30-day, 90-day or 180-day SOFR rates (1M S, 3M S, or 6M S, respectively) at the borrower’s option. SONIA loans are typically indexed daily for GBP loans
with a quarterly frequency payment. All securities are subject to a SOFR or Prime rate floor where a spread is provided, unless noted. The spread provided includes PIK interest and other fee rates, if any.

(5)

The security was not valued using significant unobservable inputs. The value of all other securities was determined using significant unobservable inputs (See Note 5).

(6)

Non-income producing securities.

(7)

Represents the purchase of a security with delayed settlement or a revolving line of credit that is currently an unfunded investment. This security does not earn a basis point spread above an index while it is unfunded.

(8)

Non-U.S. company or principal place of business outside the United States.

(9)

Investment is held through our Taxable Subsidiary (See Note 1).

(10)

Par / Shares amount is denominated in British Pounds (£) as denoted.

(11)

The investment is treated as a non-qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, we may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of our total assets. As of September 30, 2023, qualifying assets represent 77% of the Company’s total assets and non-qualifying assets represent 23% of the Company’s total assets.

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

22

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JUNE 30, 2024

1. ORGANIZATION

PennantPark Investment Corporation was organized as a Maryland corporation in January 2007. We are a closed-end, externally managed, non-diversified investment company that has elected to be treated as a BDC under the 1940 Act. Our investment objective is to generate both current income and capital appreciation while seeking to preserve capital through debt and equity investments. We invest primarily in U.S. middle-market companies in the form of first lien secured debt, second lien secured debt, subordinated debt and, to a lesser extent, equity investments. On April 24, 2007, we closed our initial public offering. On April 14, 2022, trading of the Company's common stock commenced on the New York Stock Exchange after the Company voluntarily withdrew the principal listing of its common stock from the Nasdaq Stock Market LLC effective at market close on April 13, 2022. Our common stock trades on the New York Stock Exchange under the symbol “PNNT.”

We execute our investment strategy directly and through our wholly owned subsidiaries, our unconsolidated joint venture and unconsolidated limited partnership. The term “subsidiary” means entities that primarily engage in investment activities in securities or other assets and are wholly owned by us. The Company does not intend to create or acquire primary control of any entity which primarily engages in investment activities of securities or other assets other than entities wholly owned by the Company. We comply with the provisions of Section 18 of the 1940 Act governing capital structure and leverage on an aggregate basis with our subsidiaries. Our subsidiaries comply with the provisions of Section 17 of the 1940 Act related to affiliated transactions and custody. To the extent that the Company forms a subsidiary advised by an investment adviser other than the Investment Adviser, the investment adviser to such subsidiaries will comply with the provisions of the 1940 Act relating to investment advisory contracts, including but not limited to, Section 15, as if it were an investment adviser to the Company under Section 2(a)(20) of the 1940 Act.

We have entered into an investment management agreement, (the "Investment Management Agreement"), with PennantPark Investment Advisors, LLC (the "Investment Adviser"), an external adviser that manages our day-to-day operations. We have also entered into an administration agreement, (the "Administration Agreement"), with PennantPark Investment Administrator LLC (the "Administrator"), which provides the administrative services necessary for us to operate. PennantPark Investment, through the Administrator, also provides similar services to SBIC II under a separate administration agreement.

On July 31, 2020, we and certain entities and managed accounts of the private credit investment manager of Pantheon Ventures (UK) LLP, or Pantheon, entered into a limited liability company agreement to co-manage PSLF, a newly-formed unconsolidated joint venture. In connection with this transaction, we contributed in-kind our formerly wholly-owned subsidiary, Funding I. As a result of this transaction, Funding I became a wholly-owned subsidiary of PSLF and was deconsolidated from our financial statements. PSLF invests primarily in middle-market and other corporate debt securities consistent with our strategy. PSLF was formed as a Delaware limited liability company. See Note 4.

In April 2021, we issued $150.0 million in aggregate principal amount of our 2026 Notes at a public offering price per note of 99.4%. Interest on the 2026 Notes is

paid semi-annually on May 1 and November 1 of each year, at a rate of 4.50% per year, commencing November 1, 2021. The 2026 Notes mature on May 1, 2026 and may

be redeemed in whole or in part at our option subject to a make-whole premium if redeemed more than three months prior to maturity. The 2026 Notes are general,

unsecured obligations and rank equal in right of payment with all of our existing and future senior unsecured indebtedness. The 2026 Notes are effectively subordinated to all of our existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries, financing vehicles, or similar facilities. We do not intend to list the 2026 Notes on any securities exchange or automated dealer quotation system.

In October 2021, we issued $165.0 million in aggregate principal amount of our 2026 Notes-2 at a public offering price per note of 99.4%. Interest on the 2026

Notes is paid semi-annually on May 1 and November 1 of each year, at a rate of 4.00% per year, commencing May 1, 2022. The 2026 Notes-2 mature on November 1, 2026 and may be redeemed in whole or in part at our option subject to a make-whole premium if redeemed more than three months prior to maturity. The 2026 Notes-2 are

general, unsecured obligations and rank equal in right of payment with all of our existing and future senior unsecured indebtedness. The 2026 Notes-2 are effectively

subordinated to all of our existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries, financing vehicles, or similar facilities. We do not intend to list the 2026 Notes-2 on any securities exchange or automated dealer quotation system.

On November 22, 2021, we formed PNNT Investment Holdings II, LLC, a Delaware limited liability company (“Holdings II”), as a wholly owned subsidiary. On December 31, 2022, we contributed 100% of our interests in PNNT Investment Holdings, LLC (“Holdings”) to Holdings II . Effective as of January 1, 2024, Holdings II made an election to be treated as a corporation for U.S. federal income tax purposes. On January 3, 2024, we purchased an equity interest in Holdings from Holdings II and Holdings became a partnership for U.S. federal income tax purposes. The Company and Holdings II entered into a limited liability company agreement with respect to Holdings that provides for certain payments and the sharing of income, gain, loss and deductions attributable to Holdings’ investments.

In January 2022, we formed PennantPark-TSO Senior Loan Fund II LP, ("PTSF II"), an unconsolidated limited partnership, organized as a Delaware limited partnership. We sold $82.3 million in investments to a wholly-owned subsidiary of PTSF II in exchange for cash in the amount of $75.7 million and an $6.6 million equity interest in PTSF II representing 23.1% of the total outstanding Class A Units of PTSF II. We recognized $0.2 million of realized gain upon the formation of PTSF II. As of June 30, 2024, our capital commitment of $15.0 million is 100% funded and we hold 23.1% of the total outstanding Class A Units of PTSF II and a 4.99% voting interest in the general partner which manages PTSF II.

We are operated by a person who has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act of 1936, as amended, or the Commodity Exchange Act, and therefore, is not subject to registration or regulation as a commodity pool operator under the Commodity Exchange Act.

2. SIGNIFICANT ACCOUNTING POLICIES

The preparation of our consolidated financial statements, in conformity with U.S. generally accepted accounting principles, or GAAP requires management to make estimates and assumptions that affect the reported amount of our assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reported periods. In the opinion of management, all adjustments, which are of a normal recurring nature, considered necessary for the fair presentation of financial statements have been included. Changes in the economic and regulatory environment, financial markets, the credit worthiness of our portfolio companies and any other parameters used in determining these estimates and assumptions could cause actual results to differ from such estimates and assumptions. We may reclassify certain prior period amounts to conform to the current period presentation. We have eliminated all intercompany balances and transactions in consolidation. References to the Financial Accounting Standards Board’s ("FASB’s") or Accounting Standards Codification, as amended ("ASC"), serve as a single source of accounting literature. Subsequent events are evaluated and disclosed as appropriate for events occurring through the date the consolidated financial statements are issued.

23

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)

June 30, 2024

Our consolidated financial statements are prepared in accordance with GAAP, consistent with ASC Topic 946, Financial Services – Investment Companies, and pursuant to the requirements for reporting on Form 10-K/Q and Articles 6, 10 and 12 of Regulation S-X, as appropriate. In accordance with Article 6-09 of Regulation S-X, we have provided a consolidated statement of changes in net assets in lieu of a consolidated statement of changes in stockholders’ equity.

Restatement of Previously Issued Financial Statement

As noted in the Annual Report on Form 10-K for the year ended September 30, 2023, during the preparation of the financial statements as of and for the year ended September 30, 2023, Management identified an error in the classification and presentation of cash pertaining to the Company’s affiliates – PSLF and PTSF II in the September 30, 2022 financial statements. The Company recorded cash activity and due to affiliates pertaining to their investments as a reduction of the cash account instead of presenting the related cash and cash equivalents as an asset and a due to affiliates as a liability. This misclassification also existed at June 30, 2023, and the impact of the error correction is reflected on the consolidated statement of cash flows for the nine months ended June 30, 2023 as an increase to cash and cash equivalents, beginning of period totaling $2.1 million, an increase to cash and cash equivalents, end of period totaling $3.9 million, and increase in due to affiliates of $1.8 million.

There was no impact from the error correction to total net assets and net asset value per share as reported on the consolidated statement of assets and liabilities as of June 30, 2023. In addition, there was no impact from the error correction on net investment income or net increase (decrease) in net assets resulting from operations in total or on a per common share basis as reported on the consolidated statements of operations for the nine months ended June 30, 2023. The corrections related to the prior year comparative cash flow statement amounts were reported in the quarter ended June 30, 2024.

Our significant accounting policies consistently applied are as follows:

(a)

Investment Valuations

We expect that there may not be readily available market values for many of the investments which are or will be in our portfolio, and we value such investments at fair value as determined in good faith by or under the direction of our board of directors using a documented valuation policy and a consistently applied valuation process, as described in this Report. With respect to investments for which there is no readily available market value, the factors that our board of directors may take into account in pricing our investments at fair value include, as relevant, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, comparison to publicly traded securities and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we consider the pricing indicated by the external event to corroborate or revise our valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the price used in an actual transaction may be different than our valuation and the difference may be material. See Note 5.

Our portfolio generally consists of illiquid securities, including debt and equity investments. With respect to investments for which market quotations are not readily available, or for which market quotations are deemed not reflective of the fair value, our board of directors undertakes a multi-step valuation process each quarter, as described below:

(1)

Our quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals of the Investment Adviser responsible for the portfolio investment;

(2)

Preliminary valuation conclusions are then documented and discussed with the management of the Investment Adviser;

(3)

Our board of directors also engages independent valuation firms to conduct independent appraisals of our investments for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment. The independent valuation firms review management’s preliminary valuations in light of their own independent assessment and also in light of any market quotations obtained from an independent pricing service, broker, dealer or market maker;

(4)

The audit committee of our board of directors reviews the preliminary valuations of the Investment Adviser and those of the independent valuation firms on a quarterly basis, periodically assesses the valuation methodologies of the independent valuation firms, and responds to and supplements the valuation recommendations of the independent valuation firms to reflect any comments; and

(5)

Our board of directors discusses these valuations and determines the fair value of each investment in our portfolio in good faith, based on the input of our Investment Adviser, the respective independent valuation firms and the audit committee.

Our board of directors generally uses market quotations to assess the value of our investments for which market quotations are readily available. We obtain these market values from independent pricing services or at the bid prices obtained from at least two brokers or dealers, if available, or otherwise from a principal market maker or a primary market dealer. The Investment Adviser assesses the source and reliability of bids from brokers or dealers. If our board of directors has a bona fide reason to believe any such market quote does not reflect the fair value of an investment, it may independently value such investments by using the valuation procedure that it uses with respect to assets for which market quotations are not readily available.

(b)

Security Transactions, Revenue Recognition, and Realized/Unrealized Gains or Losses

Security transactions are recorded on a trade-date basis. We measure realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, using the specific identification method, without regard to unrealized appreciation or depreciation previously recognized, but considering prepayment penalties. Net change in unrealized appreciation or depreciation reflects, as applicable, the change in the fair values of our portfolio investments and the Credit Facility during the reporting period, including the reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.

24

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)

June 30, 2024

We record interest income on an accrual basis to the extent that we expect to collect such amounts. For loans and debt investments with contractual PIK interest, which represents interest accrued and added to the loan balance that generally becomes due at maturity, we will generally not accrue PIK interest when the portfolio company valuation indicates that such PIK interest is not collectable. We do not accrue as a receivable interest on loans and debt investments if we have reason to doubt our ability to collect such interest. Loan origination fees, original issue discount ("OID"), market discount or premium and deferred financing costs on liabilities, which we do not fair value, are capitalized and then accreted or amortized using the effective interest method as interest income or, in the case of deferred financing costs, as interest expense. We record prepayment penalties earned on loans and debt investments as income. Dividend income, if any, is recognized on an accrual basis on the ex-dividend date to the extent that we expect to collect such amounts. From time to time, the Company receives certain fees from portfolio companies, which may or may not be recurring in nature. Such fees include loan prepayment penalties, structuring fees, amendment fees, and agency fees and are recorded as other investment income when earned.

Loans are placed on non-accrual status when principal or interest payments are past due 30 days or more and/or if there is reasonable doubt that principal or interest will be collected. Accrued interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current. As of June 30, 2024, we had three portfolio companies on non-accrual, representing 4.2% and 2.5% percent of overall portfolio on a cost and fair value basis, respectively. As of September 30, 2023, we had one portfolio company on non-accrual, representing 1.2% and zero percent of our overall portfolio on a cost and fair value basis, respectively.

(c)

Income Taxes

We have complied with the requirements of Subchapter M of the Code and have qualified to be treated as a RIC for federal income tax purposes. In this regard, we account for income taxes using the asset and liability method prescribed by ASC Topic 740, Income Taxes, or ASC 740. Under this method, income taxes are provided for amounts currently payable and for amounts deferred as tax assets and liabilities based on differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. Based upon our qualification and election to be treated as a RIC for U.S. federal income tax purposes, we typically do not incur material federal income taxes. However, we may choose to retain a portion of our calendar year income, which may result in the imposition of an excise tax. Additionally, certain of the Company’s consolidated subsidiaries are subject to federal, state and local income taxes. For the three and nine months ended June 30, 2024, we recorded a provision for taxes on net investment income of $0.7 million and $1.9 million respectively, which pertains to U.S. federal excise tax. For the three and nine months ended June 30, 2023, we recorded a provision for taxes on net investment income of $1.2 million and $3.6 million respectively, which pertains to U.S. federal excise tax.

We recognize the effect of a tax position in our Consolidated Financial Statements in accordance with ASC 740 when it is more likely than not, based on the technical merits, that the position will be sustained upon examination by the applicable tax authority. Tax positions not considered to satisfy the “more-likely-than-not” threshold would be recorded as a tax expense or benefit. Penalties or interest, if applicable, that may be assessed relating to income taxes would be classified as other operating expenses in the financial statements. There were no tax accruals relating to uncertain tax positions and no amounts accrued for any related interest or penalties with respect to the periods presented herein. The Company’s determinations regarding ASC 740 may be subject to review and adjustment at a later date based upon factors including, but not limited to, an on-going analysis of tax laws, regulations and interpretations thereof. Although the Company files both federal and state income tax returns, the Company’s major tax jurisdiction is federal.

Holdings II, is subject to U.S. federal, state and local corporate income taxes. The income tax expense and related tax liabilities of the Taxable Subsidiary are reflected in the Company’s consolidated financial statements.

For the three and nine months ended June 30, 2024, the Company recognized a provision for taxes of zero and $0.2 million, respectively, on net realized gain (loss) on investments by the Taxable Subsidiary. For the three and nine months ended June 30, 2023, the Company recognized a provision for taxes of $1.7 million and $2.4 million, respectively, on net realized gain on investments by the Taxable Subsidiary. For the three months and nine months ended June 30, 2024, the Company recognized a provision for taxes of zero and $0.7 million, respectively, on net realized gain (loss) on investments by the Taxable Subsidiary. For the three and nine months ended June 30, 2023, the Company recognized a provision for taxes of zero and $(0.9) million, respectively, on net unrealized gain (loss) on investments by the Taxable Subsidiary. The provision for taxes on net realized and unrealized gains on investments is the result of netting (i) the expected tax liability on the gains from the sales of investments which is likely to be realized and unrealized during fiscal year ending September 30, 2024 and (ii) the expected tax benefit resulting from the use of loss carryforwards to offset such gains. As of June 30, 2024 and September 30, 2023, the Company recognized a provision for taxes of $0.9 million and $3.4 million, respectively, on net realized and unrealized gains on investments by the Taxable Subsidiary.

During the three months and nine months ended June 30, 2024, the Company paid zero, respectively, in federal taxes on realized gains on the sale of investments held by the Taxable Subsidiary. The state and local tax liability is zero as of June 30, 2024 is included under accrued other expenses in the consolidated statement of assets and liabilities.

We operate in a manner to maintain our election to be subject to tax as a RIC and to eliminate corporate-level U.S. federal income tax (other than the 4% excise tax) by distributing sufficient investment company taxable income and capital gain net income (if any). As a result, we will have an effective tax rate equal to 0% before the excise tax and income taxes incurred by the Taxable Subsidiary. As such, a reconciliation of the differences between our reported income tax expense and its tax expense at the federal statutory rate of 21% is not meaningful.

Because federal income tax regulations differ from GAAP, distributions characterized in accordance with tax regulations may differ from net investment income and net realized gains recognized for financial reporting purposes. Differences between tax regulations and GAAP may be permanent or temporary. Permanent differences are reclassified among capital accounts in the Consolidated Financial Statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.

(d)

Distributions and Capital Transactions

Distributions to common stockholders are recorded on the ex-dividend date. The amount to be paid, if any, as a distribution is determined by our board of directors each quarter and is generally based upon the earnings estimated by management. Net realized capital gains, if any, are distributed at least annually. The tax attributes for distributions will generally include ordinary income and capital gains but may also include certain tax-qualified dividends and/or a return of capital.

Capital transactions, in connection with our dividend reinvestment plan or through offerings of our common stock, are recorded when issued and offering costs are charged as a reduction of capital upon issuance of our common stock.

25

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)

June 30, 2024

On June 4, 2024, we entered into equity distribution agreements with Truist Securities, Inc. and Keefe, Bruyette & Woods, Inc. (together, the "Equity Distribution Agreements"), as sales agents (each a "Sales Agent" and together, the "Sales Agents") in connection with the sale of shares of our common stock, with an aggregate offering price of up to $100 million under an at-the-market offering ("ATM Program"). We may offer and sell shares of our common stock from time to time through a Sales Agent in amounts and at times to be determined by us. Actual sales will depend on a variety of factors to be determined by us from time to time, including, market conditions and the trading price of our common stock. The Investment Adviser may, from time to time, in its sole discretion, pay some or all of the commissions payable under the Equity Distribution Agreements or make additional supplemental payments to ensure that the sales price per share of our common stock in connection with all of the offerings made hereunder will not be less than our current NAV per share. Any such payments made by the Investment Adviser will not be subject to reimbursement by us.

During the three and nine months ended June 30, 2024, we issued 71,594 and 71,594 shares of common stock through the ATM Program at an average price of $7.72 and $7.72 per share, raising $0.6 million and $0.6 million of net proceeds after commissions to the sales agents and inclusive of proceeds from the Investment Adviser to ensure that all shares were sold at or above NAV, respectively. In connection with the share issuance, we expensed $0.3 million of deferred offering costs incurred related to establishing the ATM Program to additional paid in capital.

(e)

Foreign Currency Translation

Our books and records are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis:

1.

Fair value of investment securities, other assets and liabilities – at the exchange rates prevailing at the end of the applicable period; and

2.

Purchases and sales of investment securities, income and expenses – at the exchange rates prevailing on the respective dates of such transactions.

Although net assets and fair values are presented based on the applicable foreign exchange rates described above, we do not isolate that portion of the results of operations due to changes in foreign exchange rates on investments, other assets and debt from the fluctuations arising from changes in fair values of investments and liabilities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments and liabilities.

Foreign security and currency translations may involve certain considerations and risks not typically associated with investing in U.S. companies and U.S. government securities. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices to be more volatile than those of comparable U.S. companies or U.S. government securities.

(f)

Consolidation

As permitted under Regulation S-X and as explained by ASC paragraph 946-810-45-3, PennantPark Investment will generally not consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to us. Accordingly, we have consolidated the results of our SBIC Funds and our Taxable Subsidiary in our Consolidated Financial Statements. We do not consolidate our non-controlling interests in PSLF or PTSF II. See further description of our investment in PSLF in Note 4.

(g)

Asset Transfers and Servicing

Asset transfers that do not meet ASC Topic 860, Transfers and Servicing, requirements for sale accounting treatment are reflected in the Consolidated Statements of Assets and Liabilities and the Consolidated Schedules of Investments as investments.

(h) Recent Accounting Pronouncements

In March 2020, the FASB issued Accounting Standards Update ("ASU, No. 2020-04"), “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The guidance provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other transactions, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued because of the reference rate reform. ASU 2020-04 is effective for all entities as of March 12, 2020 through June 30, 2023. The FASB approved an (optional) two year extension to December 31, 2024, for transitioning away from LIBOR. The Company utilized the optional expedients and exceptions provided by ASU 2020-04 during the three and nine months ended June 30, 2024, the effect of which was not material to the consolidated financial statements and the notes thereto.

In March 2022, the FASB issued ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326)”, which is intended to address issues identified during the post-implementation review of ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendment, among other things, eliminates the accounting guidance for troubled debt restructurings by creditors in Subtopic 310-40, “Receivables - Troubled Debt Restructurings by Creditors”, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The new guidance is effective for interim and annual periods beginning after December 15, 2022. The Company has adopted the new accounting standard implementing appropriate controls and procedures, the effect of which was not material to the consolidated financial statements and the notes thereto.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions ("ASU 2022-03"), which changed the fair value measurement disclosure requirements of ASC Topic 820, Fair Value Measurements and Disclosures ("ASC 820"). The amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods therein. Early application is permitted. The Company is currently evaluating the impact the adoption of this new accounting standard will have on its consolidated financial statements, but the impact of the adoption is not expected to be material.

In December 2023, the FASB issued ASU 2023 - 09 "Improvements to Income Tax Disclosures" ("ASU 2023 - 09"). ASU 2023 - 09 intends to improve the transparency of income tax disclosures. 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. We are currently assessing the impact of this guidance, however, we do not expect a material impact to our financial statements.

26

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)

June 30, 2024

3. AGREEMENTS AND RELATED PARTY TRANSACTIONS

(a) Investment Management Agreement

The Investment Management Agreement with the Investment Adviser was reapproved by our board of directors, including a majority of our directors who are not interested persons of us or the Investment Adviser, in May 2024. Under the Investment Management Agreement, the Investment Adviser, subject to the overall supervision of our board of directors, manages the day-to-day operations of and provides investment advisory services to, us. The Investment Adviser serves as the servicer to Funding I and has irrevocably directed that the management fee owed to it with respect to such services be paid to the Company so long as the Investment Adviser remains the servicer. SBIC II’s investment management agreement does not affect the management or incentive fees that we pay to the Investment Adviser on a consolidated basis. For providing these services, the Investment Adviser receives a fee from us, consisting of two components— a base management fee and an incentive fee or, collectively, Management Fees.

Base Management Fee

The base management fee is calculated at an annual rate of 1.50% of our “average adjusted gross assets,” which equals our gross assets (exclusive of U.S. Treasury Bills, temporary draws under any credit facility, cash and cash equivalents, repurchase agreements or other balance sheet transactions undertaken at the end of a fiscal quarter for purposes of preserving investment flexibility for the next quarter and unfunded commitments, if any) and is payable quarterly in arrears. In addition, on November 13, 2018, in connection with our board of directors’ approval of the application of the modified asset coverage requirements under the 1940 Act to the Company, our board of directors also approved an amendment to the Investment Management Agreement reducing the Investment Adviser’s annual base management fee from 1.50% to 1.00% on gross assets that exceed 200% of the Company’s total net assets as of the immediately preceding quarter-end. This amendment became effective on February 5, 2019 with the amendment and restatement of the Investment Management Agreement on April 12, 2019. The base management fee is calculated based on the average adjusted gross assets at the end of the two most recently completed calendar quarters, and appropriately adjusted for any share issuances or repurchases during the current calendar quarter. For example, if we sold shares on the 45th day of a quarter and did not use the proceeds from the sale to repay outstanding indebtedness, our gross assets for such quarter would give effect to the net proceeds of the issuance for only 45 days of the quarter during which the additional shares were outstanding. For the three and nine months ended June 30, 2024, the Investment Adviser earned base management fees of $4.2 million and $12.4 million, respectively, from us. For the three and nine months ended June 30, 2023, the Investment Adviser earned base management fee of $4.0 million and $12.6 million respectively, from us.

Incentive Fee

The incentive fee has two parts, as follows:

One part is calculated and payable quarterly in arrears based on our Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter. For this purpose, Pre-Incentive Fee Net Investment Income means interest income, dividend income and any other income, including any other fees (other than fees for providing managerial assistance), such as amendment, commitment, origination, prepayment penalties, structuring, diligence and consulting fees or other fees received from portfolio companies, accrued during the calendar quarter, minus our operating expenses for the quarter (including the base management fee, any expenses payable under the Administration Agreement and any interest expense or amendment fees under any credit facility and distribution paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as OID, debt instruments with PIK interest and zero-coupon securities), accrued income not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, computed net of all realized capital losses or unrealized capital appreciation or depreciation. Pre-Incentive Fee Net Investment Income, expressed as a percentage of the value of our net assets at the end of the immediately preceding calendar quarter, is compared to the hurdle rate of 1.75% per quarter (7.00% annualized). We pay the Investment Adviser an incentive fee with respect to our Pre- Incentive Fee Net Investment Income in each calendar quarter as follows: (1) no incentive fee in any calendar quarter in which our Pre-Incentive Fee Net Investment Income does not exceed the hurdle rate of 1.75%, (2) 100% of our Pre-Incentive Fee Net Investment Income with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle rate but is less than 2.1212% in any calendar quarter (8.4848% annualized), and (3) 17.5% of the amount of our Pre-Incentive Fee Net Investment Income, if any, that exceeds 2.1212% in any calendar quarter. These calculations are pro-rated for any share issuances or repurchases during the relevant quarter, if applicable.

For the three and nine months ended June 30, 2024, the Investment Adviser earned $3.3 million and $9.7 million, respectively, in incentive fees on net investment income from us. For the three and nine months ended June 30, 2023, the Investment Adviser earned an incentive fee of $4.9 million and $10.6 million, respectively, in incentive fees on net investment income from us.

The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Management Agreement, as of the termination date) and, effective January 1, 2018, equals 17.5% of our realized capital gains, (20.0% for periods prior to January 1, 2018), if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees. For each of the three and nine months ended June 30, 2024 and 2023, the Investment Adviser did not accrue an incentive fee on capital gains as calculated under the Investment Management Agreement (as described above).

Under GAAP, we are required to accrue a capital gains incentive fee based upon net realized capital gains and net unrealized capital appreciation and depreciation on investments held at the end of each period. In calculating the capital gains incentive fee accrual, we considered the cumulative aggregate unrealized capital appreciation in the calculation, as a capital gains incentive fee would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Management Agreement. This accrual is calculated using the aggregate cumulative realized capital gains and losses and cumulative unrealized capital appreciation or depreciation. If such amount is positive at the end of a period, then we record a capital gains incentive fee equal to 17.5% of such amount, less the aggregate amount of actual capital gains related to incentive fees paid in all prior years, if any. If such amount is negative, then there is no accrual for such year. There can be no assurance that such unrealized capital appreciation will be realized in the future. For each of the three and nine months ended June 30, 2024 and 2023, the Investment Adviser did not accrue an incentive fee on capital gains as calculated under GAAP.

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PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)

June 30, 2024

(b) Administration Agreement

The Administration Agreement with the Administrator was reapproved by our board of directors, including a majority of our directors who are not interested persons of us, in May 2024. Under the Administration Agreement, the Administrator provides administrative services and office facilities to us. For providing these services, facilities and personnel, we have agreed to reimburse the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including rent and our allocable portion of the costs of compensation and related expenses of our Chief Financial Officer, Chief Compliance Officer, Corporate Counsel and their respective staffs. The amount billed by the Administrator may include credits related to its administrative agreement with PSLF. The Administrator also offers, on our behalf, significant managerial assistance to portfolio companies to which we are required to offer such assistance. Reimbursement for certain of these costs is included in administrative services expenses in the Consolidated Statements of Operations. For the three and nine months ended June 30, 2024, we recorded the Investment Administrator expense of approximately $0.5 million and $1.2 million, respectively, for the services described above. For the three and nine months ended June 30, 2023, we recorded the Investment Administrator expense of approximately $0.8 million and $1.4 million, respectively, for the services described above.

On July 1, 2022, the Administration Agreement with the Administrator was amended to clarify that the Administrator may be reimbursed by the Company for certain (i) tax and general legal advice and/or services provided to the Company by in-house professionals of the Administrator related to ongoing operations of the Company; and (ii) transactional legal advice and/or services provided to the Company or portfolio companies by in-house professionals of the Administrator or its affiliates on matters related to potential or actual investments and transactions, including tax structuring and/or due diligence.

(c) Other Related Party Transactions

The Company, the Investment Adviser and certain other affiliates have been granted an order for exemptive relief by the SEC for the Company to co-invest with other funds managed by the Investment Adviser. If we co-invest with other affiliated funds, our Investment Adviser would not receive compensation except to the extent permitted by the exemptive order and applicable law, including the limitations set forth in Section 57(k) of the 1940 Act.

There were no transactions subject to Rule 17a-7 under the 1940 Act during each of the three and nine months ended June 30, 2024 and 2023.

For the three and nine months ended June 30, 2024, we sold $37.8 million and $191.8 million in investments to PSLF at fair value, respectively, and recognized less than $0.1 million and less than $0.1 million of net realized gains, respectively. For the three and nine months ended June 30, 2023, we sold $61.8 million and $80.2 million in investments to PSLF at fair value, respectively, and recognized less than $0.2 million and less than $0.3 million of net realized gains, respectively.

For the three and nine months ended June 30, 2024, we sold zero in investments to PTSF II at fair value, respectively, and recognized zero of net realized gains, respectively. For the three and nine months ended June 30, 2023, we sold zero in investments to PTSF II at fair value, respectively, and recognized zero of net realized gains, respectively.

As of June 30, 2024 and September 30, 2023, PNNT had a payable to PSLF and PTSF II of less than $0.1 million and $4.1 million, respectively, presented as a due to affiliates on the consolidated statement of assets and liabilities. These amounts are related to cash owed to PSLF and PTSF II from PNNT in connection with trades between the funds.

As of June 30, 2024 and September 30, 2023, PNNT had a receivable from Administrator of $0.1 million and zero, respectively, presented as a due from affiliates on the consolidated statement of assets and liabilities. These amounts are related to agency fees collected on behalf of the Company.

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PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)

June 30, 2024

4. INVESTMENTS

Purchases of investments, including PIK interest, for the three and nine months ended June 30, 2024 totaled $225.8 million and $757.0 million, respectively. For the three and nine months ended June 30, 2023, purchases of investments, including PIK interest, totaled $70.5 million and $216.8 million. Sales and repayments of investments for the three and nine months ended June 30, 2024 totaled $192.6 million and $589.4 million, respectively. For the three and nine months ended June 30, 2023, sales and repayments of investments totaled $135.7 million and $280.5 million, respectively.

Investments and cash and cash equivalents consisted of the following:

	June 30, 2024				September 30, 2023
Investment Classification ($ in thousands)	Cost		Fair Value		Cost		Fair Value
First lien	$	704,300	$	675,906	$	538,737	$	527,657
U.S. Government Securities		59,820		59,808		99,768		99,751
Second lien		67,165		65,575		96,759		80,396
Subordinated debt / corporate notes		47,090		47,790		54,897		53,897
Subordinated notes in PSLF		115,885		115,885		102,325		102,325
Equity		191,290		225,193		166,798		175,538
Equity in PSLF		67,436		69,718		58,643		62,083
Total investments		1,252,986		1,259,875		1,117,927		1,101,647
Cash and cash equivalents		59,151		59,152		38,784		38,775
Total investments and cash and cash equivalents	$	1,312,137	$	1,319,027	$	1,156,711	$	1,140,422

The table below describes investments by industry classification and enumerates the percentage, by fair value, of the total portfolio assets (excluding cash and cash equivalents) in such industries as of:

Industry Classification	June 30, 2024 (1)			September 30, 2023 (1)
Distribution		15	%		7	%
Business Services		13			16
Healthcare, Education and Childcare		13			13
Consumer Products		10			8
Financial Services		6			5
Short-Term U.S. Government Securities		6			11
Aerospace and Defense		5			5
Auto Sector		4			4
Media		4			5
Telecommunications		3			5
Environmental Services		3			4
Chemicals, Plastics and Rubber		3			5
Electronics		3			2
Building Materials		2			1
Personal, Food and Miscellaneous Services		2			2
Education		1			1
Buildings and Real Estate		1			—
Diversified Conglomerate Service		1			—
Insurance		1			1
Transportation		1			1
Personal and Non-Durable Consumer Products		1			1
Other		2			3
Total		100.00	%		100	%

(1)

Excludes investments in PSLF.

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PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)

June 30, 2024

PennantPark Senior Loan Fund, LLC

In July 2020, we and Pantheon formed PSLF, an unconsolidated joint venture. PSLF invests primarily in middle-market and other corporate debt securities consistent with its strategy. PSLF was formed as a Delaware limited liability company. As of June 30, 2024 and September 30, 2023, PSLF had total assets of $977.0 million and $872.8 million, respectively and its investment portfolio consisted of debt investments in 101 and 90 portfolio companies, respectively. As of the same dates, we and Pantheon had remaining commitments to fund subordinated debt of zero and $22.4 million, respectively, and equity interest of zero and $14.5 million, respectively, in PSLF. As of June 30, 2024, at fair value, the largest investment in a single portfolio company in PSLF was $21.5 million and the five largest investments totaled $100.1 million. As of September 30, 2023, at fair value, the largest investment in a single portfolio company in PSLF was $19.7 million and the five largest investments totaled $97.5 million. PSLF invests in portfolio companies in the same industries in which we may directly invest.

We provide capital to PSLF in the form of subordinated notes and equity interests. As of June 30, 2024 and September 30, 2023, we and Pantheon owned 60.5% and 39.5%, respectively, of each of the outstanding subordinated notes and equity interests of PSLF. As of June 30, 2024 and September 30, 2023, our investment in PSLF consisted of subordinated notes of $115.9 million and $102.3 million, respectively, and equity interests of $67.4 million and $58.6 million, respectively.

We and Pantheon each appointed two members to PSLF’s four-person Member Designees’ Committee, or the Member Designees’ Committee. All material decisions with respect to PSLF, including those involving its investment portfolio, require unanimous approval of a quorum of the Member Designees’ Committee. Quorum is defined as (i) the presence of two members of the Member Designees’ Committee; provided that at least one individual is present that was elected, designated or appointed by each of us and Pantheon; (ii) the presence of three members of the Member Designees’ Committee, provided that the individual that was elected, designated or appointed by each of us or Pantheon, as the case may be, with only one individual present shall be entitled to cast two votes on each matter; and (iii) the presence of four members of the Member Designees’ Committee shall constitute a quorum, provided that two individuals are present that were elected, designated or appointed by each of us and Pantheon.

Additionally, PSLF, through its wholly-owned subsidiary, has entered into a $325.0 million (increased from $225.0 million on September 2, 2022) senior secured revolving credit facility, with BNP Paribas, which bears interest at SOFR (or an alternative risk-free interest rate index) plus 260 basis points during the investment period and is subject to leverage and borrowing base restrictions.

In March 2022, PSLF completed a $304.0 million debt securitization in the form of a collateralized loan obligation, or the “2034 Asset-Backed Debt”. The 2034 Asset-Backed Debt is secured by a diversified portfolio of PennantPark CLO IV, LLC., a wholly-owned and consolidated subsidiary of PSLF, consisting primarily of middle market loans and participation interests in middle market loans. The 2034 Asset-Backed Debt is scheduled to mature in April 2034. On the closing date of the transaction, in consideration of PSLF’s transfer to PennantPark CLO IV, LLC of the initial closing date loan portfolio, which included loans distributed to PSLF by certain of its wholly owned subsidiaries and us, PennantPark CLO IV, LLC transferred to PSLF 100% of the Preferred Shares of PennantPark CLO IV, LLC and 100% of the Subordinated Notes issued by PennantPark CLO IV, LLC. As of June 30, 2024 and September 30, 2023, there was $246.0 million of external 2034 Asset-Back Debt.

On July 26, 2023, CLO VII , LLC ("CLO VII") completed a $300 million debt securitization in the form of a collateralized loan obligation (the "2035 Debt Securitization" or "2035 Asset-Backed Debt"). The 2035 Asset-Backed Debt is secured by a diversified portfolio consisting primarily of middle market loans. The 2035 Debt Securitization was executed through a private placement of: (i) $151.0 million Class A-1a Notes maturing 2035, which bear interest at the three-month SOFR plus 2.7%, (ii) $20.0 million Class A-1b Loans 2035, which bear interest at 6.5%, (iii) $12.0 million Class A-2 Senior Secured Floating Rate Notes due 2035, which bear interest at the three-month SOFR plus 3.2%, (iv) $21.0 million Class B Senior Secured Floating Rate Notes due 2035, which bear interest at the three-month SOFR plus 4.1%, (v) $24.0 million Class C Secured Deferrable Floating Rate Notes due 2035, which bear interest at the three-month SOFR plus 4.7%, (vi) $18.0 million Class D Secured Deferrable Floating Rate Notes due 2035, which bear interest at the three-month SOFR plus 7.0%. As of June 30, 2024 and September 30, 2023, there was $246.0 million of external 2035 Asset-Backed Debt.

Below is a summary of PSLF’s portfolio at fair value:

($ in thousands)	June 30, 2024 (Unaudited)			September 30, 2023
Total investments	$	926,103		$	804,187
Weighted average cost yield on income producing investments		11.8	%		12.1	%
Number of portfolio companies in PSLF		101			90
Largest portfolio company investment at fair value	$	21,520		$	19,737
Total of five largest portfolio company investments at fair value	$	100,056		$	97,526

30

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)

June 30, 2024

Below is a listing of PSLF’s individual investments as of June 30, 2024 ($ in thousands)

Issuer Name	Maturity	Industry	Current  Coupon			Basis Point Spread Above Index 1	Par		Cost		Fair Value 2
First Lien Secured Debt - 803.6%
A1 Garage Merger Sub, LLC	12/22/28	Personal, Food and Miscellaneous Services		10.83	%	SOFR+ 550		14,775	$	14,533	$	14,775
ACP Avenu Buyer, LLC	10/02/29	Business Services		10.55	%	SOFR+ 525		6,468		6,359		6,273
ACP Falcon Buyer, Inc.	08/01/29	Business Services		10.80	%	SOFR+ 550		15,389		15,096		15,512
AFC - Dell Holding Corp.	04/09/27	Distribution		11.75	%	SOFR+ 640		2,282		2,256		2,260
Ad.net Acquisition, LLC	05/07/26	Media		11.60	%	SOFR+ 600		4,850		4,850		4,850
Aeronix, Inc. - Term Loan	12/18/28	Aerospace and Defense		10.83	%	SOFR+ 550		14,925		14,728		14,925
Alpine Acquisition Corp II	11/30/26	Containers, Packaging and Glass		11.43	%	SOFR+ 610		14,725		14,475		14,136
Amsive Holding Corporation (f/k/a Vision Purchaser Corporation)	06/10/25	Media		11.73	%	SOFR+ 640		13,849		13,793		13,642
Anteriad Holdings Inc (fka MeritDirect)	06/30/26	Media		11.23	%	SOFR+ 575		13,744		13,673		13,744
Applied Technical Services, LLC	12/29/26	Environmental Services		11.25	%	SOFR+ 590		13,750		13,623		13,544
Arcfield Acquisition Corp.	08/03/29	Aerospace and Defense		11.58	%	SOFR+ 625		21,628		21,323		21,520
Beta Plus Technologies, Inc.	07/01/29	Business Services		11.08	%	SOFR+ 575		14,775		14,554		14,480
Big Top Holdings, LLC	02/28/30	Manufacturing / Basic Industries		11.58	%	SOFR+ 625		6,983		6,867		6,930
Bioderm, Inc.	01/31/28	Healthcare, Education and Childcare		11.83	%	SOFR+ 650		8,910		8,815		8,799
Blackhawk Industrial Distribution, Inc.	09/17/26	Distribution		11.66	%	SOFR+ 640		19,645		19,388		19,517
BlueHalo Global Holdings, LLC	10/31/25	Aerospace and Defense		10.09	%	SOFR+ 475		12,228		12,158		12,045
Broder Bros., Co.	12/04/25	Personal and Non-Durable Consumer Products		11.60	%	SOFR+ 626		9,438		9,438		9,438
Burgess Point Purchaser Corporation	09/26/29	Auto Sector		10.69	%	SOFR+ 535		887		834		857
Carisk Buyer, Inc.	11/30/29	Healthcare, Education and Childcare		11.08	%	SOFR+ 575		5,486		5,412		5,459
Carnegie Dartlet, LLC	02/07/30	Education		10.84	%	SOFR+ 550		9,975		9,835		9,825
Cartessa Aesthetics, LLC	06/14/28	Distribution		11.08	%	SOFR+ 575		17,150		16,910		17,150
CF512, Inc.	08/20/26	Media		11.54	%	SOFR+ 619		2,899		2,883		2,855
Connatix Buyer, Inc.	07/13/27	Media		11.11	%	SOFR+ 576		8,739		8,726		8,564
Crane 1 Services, Inc.	08/16/27	Personal, Food and Miscellaneous Services		10.35	%	SOFR+ 501		2,555		2,535		2,549
Dr. Squatch, LLC	08/31/27	Personal and Non-Durable Consumer Products		11.18	%	SOFR+ 575		10,615		10,578		10,615
DRI Holding Inc.	12/21/28	Media		10.69	%	SOFR+ 535		5,845		5,420		5,604
DRS Holdings III, Inc.	11/03/25	Consumer Products		11.73	%	SOFR+ 640		14,049		14,025		13,993
EDS Buyer, LLC	01/10/29	Aerospace and Defense		11.08	%	SOFR+ 575		6,172		6,110		6,079
ETE Intermediate II, LLC	05/29/29	Personal, Food and Miscellaneous Services		11.85	%	SOFR+ 650		12,280		12,074		12,402
Exigo Intermediate II, LLC	03/15/27	Business Services		11.69	%	SOFR+ 625		9,676		9,574		9,603
Fairbanks Morse Defense	06/17/28	Aerospace and Defense		10.35	%	SOFR+ 475		3,491		3,413		3,494
Five Star Buyer, Inc.	02/23/28	Hotels, Motels, Inns and Gaming		12.47	%	SOFR+ 700		4,274		4,204		4,242
Global Holdings InterCo LLC	03/16/26	Banking, Finance, Insurance & Real Estate		11.48	%	SOFR+ 610		6,971		6,958		6,622
Graffiti Buyer, Inc.	08/10/27	Distribution		10.93	%	SOFR+ 560		3,126		3,087		3,095
Hancock Roofing and Construction L.L.C.	12/31/26	Insurance		10.93	%	SOFR+ 550		6,146		6,146		5,777
Hills Distribution, Inc	11/08/29	Distribution		11.33	%	SOFR+ 600		14,328		14,139		14,185
HV Watterson Holdings, LLC	12/17/26	Business Services		11.73	%	SOFR+ 615		14,987		14,851		14,313
HW Holdco, LLC	05/10/26	Media		11.70	%	SOFR+ 640		18,451		18,380		18,451
IG Investments Holdings, LLC	09/22/28	Business Services		11.43	%	SOFR+ 600		4,394		4,330		4,317
Imagine Acquisitionco, LLC	11/15/27	Business Services		10.43	%	SOFR+ 510		5,523		5,451		5,495
Infinity Home Services Holdco, Inc.	12/28/28	Personal, Food and Miscellaneous Services		12.18	%	SOFR+ 685		10,969		10,807		10,969
Infolinks Media Buyco, LLC	11/01/26	Media		10.83	%	SOFR+ 550		10,902		10,838		10,793
Integrity Marketing Acquisition, LLC	08/27/26	Insurance		11.50	%	SOFR+ 605		19,571		19,527		19,473
Inventus Power, Inc.	06/30/25	Consumer Products		12.96	%	SOFR+ 761		13,117		12,961		12,855
Kinetic Purchaser, LLC	11/10/27	Consumer Products		11.48	%	SOFR+ 615		13,701		13,510		13,701
LAV Gear Holdings, Inc.	10/31/25	Leisure, Amusement, Motion Pictures, Entertainment		11.72	%	SOFR+ 640		4,625		4,615		4,569
Lash OpCo, LLC	02/18/27	Consumer Products		8.06	%	SOFR+ 275		20,184		20,069		19,982
Lightspeed Buyer Inc.	02/03/26	Healthcare, Education and Childcare		10.69	%	SOFR+ 535		12,123		12,011		12,123
LJ Avalon Holdings, LLC	01/31/30	Environmental Services		11.74	%	SOFR+ 625		6,271		6,165		6,271
MAG DS Corp.	04/01/27	Aerospace and Defense		10.93	%	SOFR+ 550		7,539		7,173		7,275
Magenta Buyer, LLC	07/31/28	Software		10.59	%	SOFR+ 526		3,756		3,552		2,072
Mars Acquisition Holdings Corp.	05/14/26	Media		10.98	%	SOFR+ 565		10,802		10,746		10,802
MBS Holdings, Inc.	04/16/27	Telecommunications		11.27	%	SOFR+ 585		8,352		8,274		8,360
Meadowlark Acquirer, LLC	12/10/27	Business Services		11.23	%	SOFR+ 575		2,930		2,889		2,857
Medina Health, LLC	10/20/28	Healthcare, Education and Childcare		11.58	%	SOFR+ 625		9,950		9,796		9,950
Megawatt Acquisitionco, Inc.	03/01/30	Business Services		10.58	%	SOFR+ 525		8,000		7,887		8,000
MOREgroup Holdings, LLC	01/16/30	Business Services		11.08	%	SOFR+ 575		7,481		7,379		7,406
Municipal Emergency Services, Inc.	10/01/27	Distribution		10.49	%	SOFR+ 515		5,928		5,833		5,928
NBH Group LLC	08/19/26	Healthcare, Education and Childcare		11.18	%	SOFR+ 575		7,372		7,327		7,004
NORA Acquisition, LLC	08/31/29	Healthcare, Education and Childcare		11.68	%	SOFR+ 635		14,888		14,625		14,888
Omnia Exterior Solutions, LLC	12/29/29	Diversified Conglomerate Service		10.83	%	SOFR+ 550		3,491		3,443		3,439
One Stop Mailing, LLC	05/07/27	Transportation		11.71	%	SOFR+ 636		8,403		8,271		8,403
Owl Acquisition, LLC	02/04/28	Education		10.69	%	SOFR+ 535		3,893		3,807		3,834
Ox Two, LLC (New Issue)	05/18/26	Distribution		11.85	%	SOFR+ 651		4,340		4,304		4,340
PCS Midco, Inc.	03/01/30	Financial Services		11.10	%	SOFR+ 575		5,826		5,745		5,768
PL Acquisitionco, LLC	11/09/27	Retail		12.44	%	SOFR+ 710		8,143		8,047		6,514
Pacific Purchaser, LLC	10/02/28	Business Services		11.26	%	SOFR+ 600		12,935		12,705		13,013
PlayPower, Inc.	05/08/26	Consumer Products		10.96	%	SOFR+ 565		2,529		2,477		2,491
Quantic Electronics, LLC	11/19/26	Aerospace and Defense		11.68	%	SOFR+ 635		3,288		3,251		3,255
Radius Aerospace, Inc.	03/31/25	Aerospace and Defense		11.38	%	SOFR+ 575		12,599		12,567		12,347
Rancho Health MSO, Inc.	12/18/25	Healthcare, Education and Childcare		10.92	%	SOFR+ 550		5,560		5,560		5,560
Reception Purchaser, LLC	04/28/28	Transportation		11.48	%	SOFR+ 615		4,962		4,910		3,970
Recteq, LLC	01/29/26	Consumer Products		12.49	%	SOFR+ 715		9,675		9,609		9,530
Research Now Group, LLC and Dynata, LLC 3	12/20/24	Business Services		0.00	%	SOFR+ 576		14,351		14,318		12,198
Research Now Group, LLC and Dynata, LLC-DIP	08/06/24	Business Services		14.21	%	SOFR+ 886		617		570		617
Riverpoint Medical, LLC	06/21/25	Healthcare, Education and Childcare		10.78	%	SOFR+ 550		3,942		3,925		3,946

31

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)

June 30, 2024

Issuer Name	Maturity	Industry	Current  Coupon			Basis Point Spread Above Index 1	Par		Cost		Fair Value 2
Rural Sourcing Holdings, Inc. (HPA SPQ Merger Sub, Inc.)	06/16/29	Professional Services		11.02	%	SOFR+ 575		4,347	$	4,276	$	4,303
S101 Holdings Inc.	12/29/26	Electronics		11.45	%	SOFR+ 615		4,218		4,156		4,176
Sales Benchmark Index LLC	01/03/25	Business Services		11.53	%	SOFR+ 620		6,676		6,660		6,676
Sargent & Greenleaf Inc.	12/20/24	Electronics		11.92	%	SOFR+ 650		4,675		4,675		4,675
Seaway Buyer, LLC	06/13/29	Chemicals, Plastics and Rubber		11.48	%	SOFR+ 615		14,738		14,540		14,259
Sigma Defense Systems, LLC	12/18/27	Telecommunications		12.49	%	SOFR+ 715		14,687		14,518		14,540
Simplicity Financial Marketing Group Holdings, Inc	12/02/26	Banking, Finance, Insurance & Real Estate		11.71	%	SOFR+ 640		11,387		11,220		11,274
Skopima Consilio Parent, LLC	05/17/28	Business Services		9.96	%	SOFR+ 450		1,294		1,271		1,295
Smartronix, LLC	11/23/28	Aerospace and Defense		11.33	%	SOFR+ 600		19,564		19,274		19,564
Solutionreach, Inc.	07/17/25	Communications		12.48	%	SOFR+ 700		9,239		9,208		9,239
SpendMend Holdings, LLC	03/01/28	Business Services		10.98	%	SOFR+ 565		9,534		9,314		9,534
Summit Behavioral Healthcare, LLC	11/24/28	Healthcare, Education and Childcare		9.60	%	SOFR+ 425		3,554		3,391		3,566
System Planning and Analysis, Inc. (f/k/a Management Consulting & Research, LLC)	08/16/27	Aerospace and Defense		11.16	%	SOFR+ 575		15,844		15,624		15,844
TCG 3.0 Jogger Acquisitionco, Inc.	01/23/29	Media		11.84	%	SOFR+ 650		9,975		9,819		9,875
Team Services Group, LLC	11/24/28	Healthcare, Education and Childcare		10.50	%	SOFR+ 515		2,668		2,581		2,659
Teneo Holdings LLC	03/13/31	Business Services		10.09	%	SOFR+ 475		2,993		2,963		2,996
The Bluebird Group LLC	07/27/26	Business Services		11.98	%	SOFR+ 665		11,933		11,889		11,933
The Vertex Companies, LLC	08/31/27	Business Services		11.48	%	SOFR+ 610		7,631		7,552		7,641
TPC US Parent, LLC	11/24/25	Food		10.95	%	SOFR+ 550		5,437		5,369		5,437
Transgo, LLC	12/29/28	Auto Sector		11.34	%	SOFR+ 600		14,952		14,742		14,952
TWS Acquisition Corporation	06/06/25	Education		11.74	%	SOFR+ 625		3,628		3,624		3,628
Tyto Athene, LLC	04/03/28	Aerospace and Defense		10.95	%	SOFR+ 550		11,393		11,305		10,596
Urology Management Holdings, Inc.	06/15/26	Healthcare, Education and Childcare		11.76	%	SOFR+ 625		3,831		3,780		3,804
Watchtower Buyer, LLC	12/01/29	Consumer Products		11.33	%	SOFR+ 600		8,978		8,843		8,897
Wildcat Buyerco, Inc.	02/27/27	Electronics		11.08	%	SOFR+ 575		19,305		19,162		19,305
Zips Car Wash, LLC	12/31/24	Business Services		12.69	%	SOFR+ 725		19,736		19,645		18,998
Total First Lien Secured Debt										930,700		926,103
Total Investments - 803.6%
Cash and Cash Equivalents - 38.8%
BlackRock Federal FD Institutional 30										44,765		44,765
Total Cash and Cash Equivalents										44,765		44,765
Total Investments and Cash Equivalents - 842.5)%									$	975,465	$	970,868
Liabilities in Excess of Other Assets — (716.9)%												(855,630	)
Members' Equity—100.0%											$	115,238

(1)

Represents floating rate instruments that accrue interest at a predetermined spread relative to an index, typically the applicable Secured Overnight Financing Rate (“SOFR”) or Prime rate ("P”). The spread may change based on the type of rate used. The terms in the Schedule of Investments disclose the actual interest rate in effect as of the reporting period. SOFR loans are typically indexed to a 30-day, 60-day, 90-day or 180-day SOFR rate (1M S, 2M S, 3M S, or 6M S, respectively), at the borrower’s option. All securities are subject to a SOFR or Prime rate floor where a spread is provided, unless noted. The spread provided includes PIK interest and other fee rates, if any.

(2)

Valued based on PSLF’s accounting policy.

(3)

Non-income producing security.

32

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)

June 30, 2024

Below is a listing of PSLF’s individual investments as of September 30, 2023 ($ in thousands):

Issuer Name	Maturity	Industry	Current  Coupon			Basis Point Spread Above Index 1	Par		Cost		Fair Value 2
First Lien Secured Debt - 783.7%
A1 Garage Merger Sub, LLC	12/22/28	Personal, Food and Miscellaneous Services		11.84	%	SOFR+650		14,925	$	14,668	$	14,850
Ad.net Acquisition, LLC	05/07/26	Media		11.65	%	SOFR+600		4,888		4,888		4,863
Alpine Acquisition Corp II	11/30/26	Containers, Packaging and Glass		11.26	%	SOFR+600		14,837		14,528		14,244
Amsive Holding Corporation (f/k/a Vision Purchaser Corporation)	06/10/25	Media		11.79	%	SOFR+675		13,958		13,869		13,749
Anteriad, LLC (f/k/a MeritDirect, LLC)	05/23/24	Media		12.04	%	SOFR+650		14,354		14,319		14,103
Any Hour Services	07/21/27	Personal, Food and Miscellaneous Services		11.22	%	SOFR+575		10,882		10,847		10,665
Apex Service Partners, LLC	07/31/25	Personal, Food and Miscellaneous Services		10.52	%	SOFR+525		6,424		6,380		6,408
Apex Service Partners, LLC Term Loan B	07/31/25	Personal, Food and Miscellaneous Services		11.11	%	SOFR+550		3,316		3,299		3,308
Apex Service Partners, LLC - Term Loan C	07/31/25	Personal, Food and Miscellaneous Services		10.76	%	SOFR+525		7,531		7,531		7,512
Applied Technical Services, LLC	12/29/26	Environmental Services		11.51	%	SOFR+575		11,394		11,271		11,166
Applied Technical Services, LLC - Unfunded Term Loan 3	12/29/26	Environmental Services						513		-		(5	)
Arcfield Acquisition Corp.	08/03/29	Aerospace and Defense		11.62	%	SOFR+625		11,820		11,642		11,702
Beta Plus Technologies, Inc.	07/01/29	Business Services		11.14	%	SOFR+575		14,850		14,604		13,811
Bioderm, Inc.	01/31/28	Healthcare, Education and Childcare		11.83	%	SOFR+650		8,978		8,874		8,933
Blackhawk Industrial Distribution, Inc.	09/17/24	Distribution		11.79	%	SOFR+625		17,823		17,588		17,556
Broder Bros., Co.	12/04/25	Personal and Non-Durable Consumer Products		11.50	%	SOFR+600		9,683		9,683		9,683
Burgess Point Purchaser Corporation	09/26/29	Auto Sector		10.67	%	SOFR+525		893		836		841
Cartessa Aesthetics, LLC	06/14/28	Distribution		11.39	%	SOFR+600		17,281		17,013		17,281
CF512, Inc.	08/20/26	Media		11.60	%	SOFR+600		2,921		2,901		2,862
Connatix Buyer, Inc.	07/13/27	Media		11.16	%	SOFR+550		8,808		8,792		8,500
Crane 1 Services, Inc.	08/16/27	Personal, Food and Miscellaneous Services		10.90	%	SOFR+575		2,575		2,550		2,562
Dr. Squatch, LLC	08/31/27	Personal and Non-Durable Consumer Products		11.24	%	SOFR+575		10,882		10,834		10,882
DRI Holding Inc.	12/21/28	Media		10.67	%	SOFR+525		4,382		3,959		3,993
DRS Holdings III, Inc.	11/03/25	Consumer Products		11.77	%	SOFR+640		14,395		14,345		14,222
Duraco Specialty Tapes LLC	06/30/24	Manufacturing / Basic Industries		11.93	%	SOFR+650		8,635		8,561		8,505
EDS Buyer, LLC	01/10/29	Aerospace and Defense		11.64	%	SOFR+625		6,219		6,148		6,125
Electro Rent Corporation	01/17/24	Electronics		10.93	%	SOFR+550		3,712		3,665		3,632
ETE Intermediate II, LLC	05/29/29	Personal, Food and Miscellaneous Services		11.89	%	SOFR+650		12,404		12,171		12,193
Exigo Intermediate II, LLC	03/15/27	Business Services		11.17	%	SOFR+575		9,750		9,637		9,555
Fairbanks Morse Defense	06/17/28	Aerospace and Defense		10.40	%	SOFR+475		1,518		1,470		1,506
Five Star Buyer, Inc.	02/23/28	Hotels, Motels, Inns and Gaming		12.43	%	SOFR+700		4,373		4,291		4,307
Global Holdings InterCo LLC	03/16/26	Banking, Finance, Insurance & Real Estate		11.96	%	SOFR+650		7,027		7,008		6,676
Graffiti Buyer, Inc.	08/10/27	Distribution		10.99	%	SOFR+575		1,954		1,925		1,935
Hancock Roofing and Construction L.L.C.	12/31/26	Insurance		10.93	%	SOFR+550		6,423		6,423		6,262
Holdco Sands Intermediate, LLC	11/23/28	Aerospace and Defense		11.32	%	SOFR+600		19,717		19,388		19,717
HV Watterson Holdings, LLC	12/17/26	Business Services		11.79	%	SOFR+600		15,140		14,974		15,110
HW Holdco, LLC	12/10/24	Media		11.70	%	SOFR+625		14,250		14,171		14,036
IG Investments Holdings, LLC	09/22/28	Business Services		11.45	%	SOFR+600		4,428		4,355		4,362
Imagine Acquisitionco, LLC	11/15/27	Business Services		10.72	%	SOFR+550		5,565		5,481		5,482
Inception Fertility Ventures, LLC	12/31/24	Healthcare, Education and Childcare		12.50	%	SOFR+715		19,737		19,410		19,737
Infinity Home Services Holdco, Inc.	12/28/28	Personal, Food and Miscellaneous Services		12.24	%	SOFR+685		11,053		10,867		11,053
Infolinks Media Buyco, LLC	11/01/26	Media		11.17	%	SOFR+575		6,364		6,364		6,364
Integrity Marketing Acquisition, LLC	08/27/26	Insurance		11.57	%	SOFR+575		19,701		19,639		19,504
K2 Pure Solutions NoCal, L.P.	12/20/23	Chemicals, Plastics and Rubber		13.42	%	SOFR+800		12,061		12,040		12,061
Kinetic Purchaser, LLC	11/10/27	Consumer Products		11.54	%	SOFR+615		16,920		16,641		16,666
LAV Gear Holdings, Inc.	10/31/24	Leisure, Amusement, Motion Pictures, Entertainment		11.46	%	SOFR+565		4,658		4,631		4,603
Lash OpCo, LLC	02/18/27	Consumer Products		12.13	%	SOFR+700		19,723		19,565		19,526
Lightspeed Buyer Inc.	02/03/26	Healthcare, Education and Childcare		10.67	%	SOFR+575		12,218		12,056		12,096
LJ Avalon Holdings, LLC	01/31/30	Environmental Services		11.77	%	SOFR+665		6,318		6,206		6,192
MAG DS Corp.	04/01/27	Aerospace and Defense		10.99	%	SOFR+550		7,601		7,153		7,202
Magenta Buyer, LLC	07/31/28	Software		10.63	%	SOFR+500		3,785		3,550		2,805
Mars Acquisition Holdings Corp.	05/14/26	Media		11.04	%	SOFR+550		10,885		10,811		10,776
MBS Holdings, Inc.	04/16/27	Telecommunications		11.22	%	SOFR+575		7,859		7,780		7,749
Meadowlark Acquirer, LLC	12/10/27	Business Services		10.58	%	SOFR+550		2,958		2,911		2,884
Municipal Emergency Services, Inc.	10/01/27	Distribution		11.04	%	SOFR+550		5,975		5,860		5,843
NBH Group LLC	08/19/26	Healthcare, Education and Childcare		10.93	%	SOFR+525		7,429		7,369		7,280
Neptune Flood Incorporated	05/09/29	Financial Services		11.97	%	SOFR+660		8,020		7,910		8,020
One Stop Mailing, LLC	05/07/27	Transportation		11.68	%	SOFR+625		8,470		8,311		8,470
Owl Acquisition, LLC	02/04/28	Education		10.80	%	SOFR+575		3,893		3,794		3,834
Ox Two, LLC (New Issue)	05/18/26	Distribution		12.90	%	SOFR+725		4,378		4,343		4,301
Pequod Merger Sub, Inc.	12/02/26	Banking, Finance, Insurance & Real Estate		11.79	%	SOFR+640		11,474		11,267		11,244
PL Acquisitionco, LLC	11/09/27	Retail		12.42	%	SOFR+700		7,930		7,818		7,137
PlayPower, Inc.	05/08/26	Consumer Products		10.92	%	SOFR+565		2,551		2,481		2,436
Quantic Electronics, LLC	11/19/26	Aerospace and Defense		11.74	%	SOFR+625		3,314		3,267		3,264
Radius Aerospace, Inc.	03/31/25	Aerospace and Defense		11.29	%	SOFR+575		12,703		12,641		12,576
Rancho Health MSO, Inc.	12/18/25	Healthcare, Education and Childcare		11.22	%	SOFR+550		5,603		5,603		5,603
Reception Purchaser, LLC	4/28/2028	Transportation		11.54	%	SOFR+600		5,000		4,937		4,800
Recteq, LLC	1/29/2026	Consumer Products		12.54	%	SOFR+700		9,750		9,655		9,458
Research Now Group, LLC and Dynata, LLC	12/20/2024	Business Services		11.13	%	SOFR+550		14,389		14,332		12,591
Riverpoint Medical, LLC	6/20/2025	Healthcare, Education and Childcare		10.54	%	SOFR+575		3,176		3,162		3,131
Riverside Assessments, LLC	3/10/2025	Education		11.29	%	SOFR+625		10,895		10,834		10,786
Rural Sourcing Holdings, Inc. (HPA SPQ Merger Sub, Inc.)	6/16/2029	Professional Services		11.52	%	SOFR+625		3,749		3,678		3,692

33

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)

June 30, 2024

Issuer Name	Maturity	Industry	Current  Coupon			Basis Point Spread Above Index 1	Par		Cost		Fair Value 2
Sales Benchmark Index LLC	1/3/2025	Business Services		11.59	%	SOFR+600		6,859	$	6,815	$	6,825
Sargent & Greenleaf Inc.	12/20/2024	Electronics		12.92	%	SOFR+750		4,872		4,872		4,823
Seaway Buyer, LLC	6/13/2029	Chemicals, Plastics and Rubber		11.54	%	SOFR+605		14,850		14,633		14,405
Signature Systems Holding Company	5/3/2024	Chemicals, Plastics and Rubber		12.04	%	SOFR+650		11,201		11,173		11,201
Skopima Consilio Parent, LLC	5/17/2028	Business Services		9.93	%	SOFR+450		1,300		1,274		1,272
Solutionreach, Inc.	7/17/2025	Communications		12.37	%	SOFR+700		9,239		9,206		9,202
SpendMend Holdings, LLC	3/1/2028	Business Services		11.04	%	SOFR+575		9,607		9,352		9,396
STV Group Incorporated	12/11/2026	Transportation		10.67	%	SOFR+525		12,099		12,045		11,857
Summit Behavioral Healthcare, LLC	11/24/2028	Healthcare, Education and Childcare		10.43	%	SOFR+475		3,572		3,389		3,559
System Planning and Analysis, Inc. (f/k/a Management Consulting & Research, LLC)	8/16/2027	Aerospace and Defense		11.49	%	SOFR+600		15,966		15,695		15,790
Team Services Group, LLC	11/24/2028	Healthcare, Education and Childcare		10.75	%	SOFR+515		2,688		2,584		2,627
Teneo Holdings LLC	7/18/2025	Financial Services		10.67	%	SOFR+525		2,936		2,927		2,931
The Aegis Technologies Group, LLC	10/31/2025	Aerospace and Defense		12.04	%	SOFR+650		11,095		11,008		10,929
The Bluebird Group LLC	7/27/2026	Business Services		12.79	%	SOFR+725		7,855		7,872		7,823
The Vertex Companies, LLC	8/31/2027	Business Services		11.70	%	SOFR+635		7,690		7,596		7,628
TPC Canada Parent, Inc. and TPC US Parent, LLC	11/24/2025	Food		10.68	%	SOFR+550		5,479		5,378		5,479
TWS Acquisition Corporation	6/6/2025	Education		11.80	%	SOFR+625		7,177		7,161		7,177
Tyto Athene, LLC	4/3/2028	Aerospace and Defense		10.90	%	SOFR+550		11,393		11,285		10,391
Urology Management Holdings, Inc.	6/15/2026	Healthcare, Education and Childcare		11.79	%	SOFR+625		3,860		3,792		3,780
Wildcat Buyerco, Inc.	2/27/2026	Electronics		10.54	%	SOFR+515		11,386		11,323		11,272
Zips Car Wash, LLC	3/1/2024	Business Services		12.67	%	SOFR+725		19,682		19,582		19,042
Total First Lien Secured Debt										810,737		804,187
Total Investments - 783.7%
Cash and Cash Equivalents - 57.6%
BlackRock Federal FD Institutional 30										59,096		59,096
Total Cash and Cash Equivalents										59,096		59,096
Total Investments and Cash Equivalents - 841.3%									$	869,833	$	863,283
Liabilities in Excess of Other Assets — (741.3)%												(760,665	)
Members' Equity—100.0%											$	102,618

(1)

Represents floating rate instruments that accrue interest at a predetermined spread relative to an index, typically the applicable Secured Overnight Financing Rate, or “SOFR” or Prime rate or
“P”. The spread may change based on the type of rate used. The terms in the Schedule of Investments disclose the actual interest rate in effect as of the reporting period. SOFR loans are typically
indexed to a 30-day, 60-day, 90-day or 180-day SOFR rate (1M S, 2M S, 3M S, or 6M S, respectively), at the borrower’s option. All securities are subject to a SOFR or Prime rate floor where a
spread is provided, unless noted. The spread provided includes PIK interest and other fee rates, if any.

(2)

Valued based on PSLF’s accounting policy.

(3)

Represents the purchase of a security with delayed settlement or a revolving line of credit that is currently an unfunded investment. This security does not earn a basis point spread above an
index while it is unfunded.
 

Below are the consolidated statements of assets and liabilities for PSLF ($ in thousands):

	June 30, 2024 (Unaudited)		September 30, 2023
Assets
Investments at fair value (amortized cost—$930,700 and $810,737, respectively)	$	926,103	$	804,187
Cash and cash equivalents (cost—$44,765 and $59,096, respectively)		44,765		59,096
Interest receivable		5,648		5,248
Prepaid expenses and other assets		430		936
Due from affiliate		64		3,296
Total assets		977,010		872,763
Liabilities
2034 Asset-backed debt, net (par—$246,000)		244,575		244,284
2035 Asset-backed debt, net (par—$246,000)		244,021		243,727
Notes payable to members		191,546		169,131
Credit facility payable		152,600		88,600
Interest payable on credit facility and asset backed debt		11,413		10,421
Distribution payable to members		12,210		7,250
Interest payable on notes to members		4,397		3,895
Accounts payable and accrued expenses		885		835
Due to affiliate		125		—
Payable for investments purchased		—		2,002
Total liabilities		861,772		770,145
Commitments and contingencies 1
Members' equity		115,238		102,618
Total liabilities and members' equity	$	977,010	$	872,763

———————————

(1)

As of June 30, 2024 and September 30, 2023, PSLF had zero and $0.5 million, respectively, of unfunded commitments to fund investments

34

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)

June 30, 2024

Below are the consolidated statements of operations for PSLF ($ in thousands):

	Three Months Ended June 30,						Nine Months Ended June 30,
	2024			2023			2024		2023
Investment income:
Interest	$	28,866		$	22,848		$	83,812	$	62,916
Other income		222			422			696		1,270
Total investment income		29,088			23,270			84,508		64,186
Expenses:
Interest expense on credit facility and asset-backed debt		13,635			9,798			39,613		26,487
Interest expense on notes to members		6,450			5,397			18,361		15,123
Administration fees		778			513			1,948		1,733
General and administrative expenses		305			194			725		485
Total expenses		21,168			15,902			60,647		43,828
Net investment income		7,920			7,368			23,861		20,358
Realized and unrealized gain (loss) on investments:
Net realized gain (loss) on investments		—			(43	)		—		(22	)
Net change in unrealized appreciation (depreciation) on investments		(400	)		1,683			1,935		(3,934	)
Net realized and unrealized gain (loss) on investments		(400	)		1,640			1,935		(3,956	)
Net increase (decrease) in members' equity resulting from operations	$	7,520		$	9,008		$	25,796	$	16,402

———————————

(1) No management or incentive fees are payable by PSLF.

5. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value, as defined under ASC 820, is the price that we would receive upon selling an investment or pay to transfer a liability in an orderly transaction to a market participant in the principal or most advantageous market for the investment or liability. ASC 820 emphasizes that valuation techniques maximize the use of observable market inputs and minimize the use of unobservable inputs. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing an asset or liability based on market data obtained from sources independent of us. Unobservable inputs reflect the assumptions market participants would use in pricing an asset or liability based on the best information available to us on the reporting period date.

ASC 820 classifies the inputs used to measure these fair values into the following hierarchies:

Level 1:	Inputs that are quoted prices (unadjusted) in active markets for identical assets or liabilities, accessible by us at the measurement date.
Level 2:	Inputs that are quoted prices for similar assets or liabilities in active markets, or that are quoted prices for identical or similar assets or liabilities in markets that are not active and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term, if applicable, of the financial instrument.
Level 3:	Inputs that are unobservable for an asset or liability because they are based on our own assumptions about how market participants would price the asset or liability.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Generally, most of our investments and our Truist Credit Facility are classified as Level 3. Our 2026 Notes and 2026 Notes-2 are classified as Level 2, as they are financial instruments with readily observable market inputs. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the price used in an actual transaction may be different than our valuation and those differences may be material.

The inputs into the determination of fair value may require significant management judgment or estimation. Even if observable market data is available, such information may be the result of consensus pricing information, disorderly transactions or broker quotes which include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level 3 information, assuming no additional corroborating evidence were available. Corroborating evidence that would result in classifying these non-binding broker/dealer bids as a Level 2 asset includes observable orderly market-based transactions for the same or similar assets or other relevant observable market-based inputs that may be used in pricing an asset.

Our investments are generally structured as debt and equity investments in the form of first lien secured debt, second lien secured debt, subordinated debt and equity investments. The transaction price, excluding transaction costs, is typically the best estimate of fair value at inception. Ongoing reviews by our Investment Adviser and independent valuation firms are based on an assessment of each underlying investment, incorporating valuations that consider the evaluation of financing and sale transactions with third parties, expected cash flows and market-based information including comparable transactions, performance multiples and yields, among other factors. These non-public investments valued using unobservable inputs are included in Level 3 of the fair value hierarchy.

A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in our ability to observe valuation inputs may result in a reclassification for certain financial assets or liabilities.

In addition to using the above inputs to value cash equivalents, investments, our 2026 Notes, our 2026 Notes -2 and our Truist Credit Facility, we employ the valuation policy approved by our board of directors that is consistent with ASC 820. Consistent with our valuation policy, we evaluate the source of inputs, including any markets in which our investments are trading, in determining fair value. See Note 2.

35

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)

June 30, 2024

As outlined in the table below, some of our Level 3 investments using a market approach valuation technique are valued using the average of the bids from brokers or dealers. The bids include a disclaimer, may not have corroborating evidence, may be the result of a disorderly transaction and may be the result of consensus pricing. The Investment Adviser assesses the source and reliability of bids from brokers or dealers. If the board of directors has a bona fide reason to believe any such bids do not reflect the fair value of an investment, it may independently value such investment by using the valuation procedure that it uses with respect to assets for which market quotations are not readily available. In accordance with ASC 820, we do not categorize any investments for which fair value is measured using the net asset value per share within the fair value hierarchy.

The remainder of our investment portfolio and our long-term Truist Credit Facility are valued using a market comparable or an enterprise market value technique. With respect to investments for which there is no readily available market value, the factors that our board of directors may take into account in pricing our investments at fair value include, as relevant, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and discounted cash flow, the markets in which the portfolio company does business, comparison to publicly traded securities and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, the pricing indicated by the external event, excluding transaction costs, is used to corroborate the valuation. When using earnings multiples to value a portfolio company, the multiple used requires the use of judgment and estimates in determining how a market participant would price such an asset. These non-public investments using unobservable inputs are included in Level 3 of the fair value hierarchy. Generally, the sensitivity of unobservable inputs or combination of inputs such as industry comparable companies, market outlook, consistency, discount rates and reliability of earnings and prospects for growth, or lack thereof, affects the multiple used in pricing an investment. As a result, any change in any one of those factors may have a significant impact on the valuation of an investment. Generally, an increase in a market yield will result in a decrease in the valuation of a debt investment, while a decrease in a market yield will have the opposite effect. Generally, an increase in an earnings before interest, taxes, depreciation and amortization ("EBITDA"), multiple will result in an increase in the valuation of an investment, while a decrease in an EBITDA multiple will have the opposite effect.

Our Level 3 valuation techniques, unobservable inputs and ranges were categorized as follows for ASC 820 purposes:

Asset Category ($ in thousands)	Fair value at June 30, 2024		Valuation Technique	Unobservable Input	Range of Input (Weighted Average) (1)
First lien	$	7,717	Market Comparable	Broker/Dealer bids or quotes	N/A
First lien		659,820	Market Comparable	Market yield	6.4% - 20.6% (10.4%)
First lien		8,369	Enterprise Market Value	EBITDA multiple	7.2x
Second lien		65,575	Market Comparable	Market yield	14.3% - 18.4% (15.1%)
Subordinated debt / corporate notes		163,675	Market Comparable	Market yield	13.3% - 16.9% (14.1%)
Equity		216,457	Enterprise Market Value	EBITDA multiple	0.4x - 21.8x (9.5x)
Total Level 3 investments	$	1,121,613
Debt Category ($ in thousands)
Truist Credit Facility	$	446,554	Market Comparable	Market yield	1.9%

(1)

The weighted averages disclosed in the table above were weighted by their relative fair value.

Asset Category ($ in thousands)	Fair value at September 30, 2023		Valuation Technique	Unobservable Input	Range of Input (Weighted Average) (1)
First lien	$	15,090	Market Comparable	Broker/Dealer bids or quotes	N/A
First lien		512,567	Market Comparable	Market yield	7.0% – 25.0% (11.4%)
Second lien		9,512	Market Comparable	Broker/Dealer bids or quotes	N/A
Second lien		70,884	Market Comparable	Market yield	14.2% - 20.8% (15.9%)
Subordinated debt / corporate notes		156,222	Market Comparable	Market yield	13.4% - 18.8% (14.3%)
Equity		161,895	Enterprise Market Value	EBITDA multiple	0.5x - 17.7x (10.9x)
Equity		1,158	Enterprise Market Value	DLOM(2)	27.9%
Total Level 3 investments	$	927,328
Debt Category ($ in thousands)
Truist Credit Facility	$	206,940	Market Comparable	Market yield	2.4%

1.

The weighted averages disclosed in the table above were weighted by their relative fair value.

2.

DLOM is defined as discount for lack of marketability.

36

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)

June 30, 2024

Our investments, cash and cash equivalents, Truist Credit Facility, 2026 Notes and 2026 Notes-2 were categorized as follows in the fair value hierarchy:

	Fair Value at June 30, 2024
Description ($ in thousands)	Fair Value		Level 1		Level 2		Level 3		Measured at Net Asset Value (1)
Debt investments	$	905,155	$	—	$	—	$	905,155	$	—
U.S. Government Securities(3)		59,808		—		59,808		—		—
Equity investments		294,912		—		—		216,458		78,454
Total investments		1,259,875		—		59,808		1,121,613		78,454
Cash and cash equivalents		59,152		59,152		—		—		—
Total investments and cash and cash equivalents	$	1,319,027	$	59,152	$	59,808	$	1,121,613	$	78,454
Truist Credit Facility	$	446,554	$	—	$	—	$	446,554	$	—
2026 Notes(2)		148,345		—		148,345		—		—
2026 Notes-2(2)		162,866		—		162,866		—		—
Total debt	$	757,765	$	—	$	311,211	$	446,554	$	—

(1)

In accordance with ASC Subtopic 820-10, Fair Value Measurements and Disclosures ("ASC 820-10"), our equity investment in PSLF and PTSF II are measured using the net asset value per share (or its equivalent) as a practical expedient for fair value, and thus has not been classified in the fair value hierarchy.

(2)

We elected not to apply ASC 825-10 to the 2026 Notes and the 2026 Notes-2, and thus the balance reported in the Consolidated Statement of Assets and Liabilities represents the carrying value.

(3)

Our U.S. Treasury Bills are classified as Level 2, as they were valued by the pricing service who utilize broker-supplied prices.

	Fair Value at September 30, 2023
Description ($ in thousands)	Fair Value		Level 1		Level 2		Level 3		Measured at Net Asset Value (1)
Debt investments	$	764,275	$	—	$	—	$	764,275	$	—
U.S. Government Securities(3)		99,751		—		99,751		—		—
Equity investments		237,621		—		—		163,053		74,568
Total investments		1,101,647		—		99,751		927,328		74,568
Cash and cash equivalents		38,775		38,775		—		—		—
Total investments and cash and cash equivalents	$	1,140,422	$	38,775	$	99,751	$	927,328	$	74,568
Truist Credit Facility	$	206,940	$	—	$	—	$	206,940	$	—
2026 Notes(2)		147,669		—		147,669		—		—
2026 Notes-2(2)		162,226		—		162,226		—		—
Total debt	$	516,835	$	—	$	309,895	$	206,940	$	—

(1)

In accordance with ASC Subtopic 820-10, Fair Value Measurements and Disclosures ("ASC 820-10"), our equity investment in PSLF is measured using the net asset value per share (or its equivalent) as a practical expedient for fair value, and thus has not been classified in the fair value hierarchy.

(2)

We elected not to apply ASC 825-10 to the SBA debentures and the 2026 Notes and thus the balance reported in the Consolidated Statement of Assets and Liabilities represents the carrying value.

(3)

Our U.S. Treasury Bills are classified as Level 2, as they were valued by the pricing service who utilize broker-supplied prices.

The tables below show a reconciliation of the beginning and ending balances for investments measured at fair value using significant unobservable inputs (Level 3):

	Nine Months Ended June 30, 2024
Description ($ in thousands)	Debt  investments			Equity  investments			Totals
Beginning balance	$	764,275		$	163,053		$	927,328
Net realized gain (loss)		(23,256	)		(11,401	)		(34,657	)
Net change in unrealized appreciation (depreciation)		(842	)		25,058			24,216
Purchases, PIK interest, net discount accretion and non-cash exchanges		537,661			43,463			581,124
Sales, repayments and non-cash exchanges		(372,683	)		(3,715	)		(376,398	)
Transfers in/out of Level 3	—			—				—
Ending balance	$	905,155		$	216,458		$	1,121,613
Net change in unrealized appreciation reported within the net change in    unrealized appreciation on investments in our consolidated statements of operations    attributable to our Level 3 assets still held at the reporting date	$	(16,458	)	$	14,138		$	(2,320	)

	Nine Months Ended June 30, 2023
Description ($ in thousands)	Debt  investments			Equity  investments			Totals
Beginning balance	$	902,165		$	257,162		$	1,159,327
Net realized gain (loss)		(17,013	)		(128,201	)		(145,214	)
Net change in unrealized appreciation (depreciation)		9,320			47,121			56,441
Purchases, PIK interest, net discount accretion and non-cash exchanges		190,764			22,345			213,109
Sales, repayments and non-cash exchanges		(245,179	)		(33,748	)		(278,927	)
Transfers in/out of Level 3		—			—			—
Ending balance	$	840,057		$	164,679		$	1,004,736
Net change in unrealized appreciation reported within the net change in    unrealized appreciation on investments in our consolidated statements of operations    attributable to our Level 3 assets still held at the reporting date	$	1,974		$	(37,397	)	$	(35,423	)

37

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)

June 30, 2024

The table below shows a reconciliation of the beginning and ending balances for liabilities measured at fair value using significant unobservable inputs (Level 3):

	Nine months ended June 30,
Long-Term Credit Facility	2024			2023
Beginning balance (cost – $212,420 and $385,920, respectively)	$	206,940		$	376,687
Net change in unrealized appreciation (depreciation) included in earnings		1,578			2,474
Borrowings (1)		423,036			122,500
Repayments (1)		(185,000	)		(194,000	)
Transfers in and/or out of Level 3		—			—
Ending balance (cost – $450,456 and $314,420, respectively)	$	446,554		$	307,661
Temporary draws outstanding, at cost		—			—
Ending balance (cost – $450,456 and $314,420, respectively)	$	446,554		$	307,661

(1)

Excludes temporary draws.

As of June 30, 2024, we had outstanding non-U.S. dollar borrowings on our Credit Facility. Net change in fair value on foreign currency translation on outstanding borrowings is listed below ($ in thousands):

Foreign Currency	Amount Borrowed		Borrowing Cost		Current Value		Reset Date	Change in Fair Value
British Pound	£	36,000	$	49,420	$	45,508	September 26, 2024	$	(3,912	)
Canadian dollar	$	2,800	$	2,036	$	2,046	July 22, 2024	$	10

As of September 30, 2023, we had outstanding non-U.S. dollar borrowings on our Truist Credit Facility. Net change in fair value on foreign currency translation on outstanding borrowings is listed below ($ in thousands):

Foreign Currency	Amount Borrowed		Borrowing Cost		Current Value		Reset Date	Change in Fair Value
British Pound	£	36,000	$	49,420	$	43,940	December 28, 2023	$	(5,480	)

Generally, the carrying value of our consolidated financial liabilities approximates fair value. We have adopted the principles under ASC Subtopic 825-10, Financial Instruments ("ASC 825-10"), which provides companies with an option to report selected financial assets and liabilities at fair value, and made an irrevocable election to apply ASC 825-10 to our Truist Credit Facility. We elected to use the fair value option for the Truist Credit Facility to align the measurement attributes of both our assets and liabilities while mitigating volatility in earnings from using different measurement attributes. Due to that election and in accordance with GAAP, we did not incur any expenses relating to amendment costs on the Truist Credit Facility during the three and nine months ended June 30, 2024 and 2023. ASC 825-10 establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities and to more easily understand the effect on earnings of a company’s choice to use fair value. ASC 825-10 also requires us to display the fair value of the selected assets and liabilities on the face of the Consolidated Statements of Assets and Liabilities and changes in fair value of the Truist Credit Facility is reported in our Consolidated Statements of Operations. We did not elect to apply ASC 825-10 to any other financial assets or liabilities, including the, 2026 Notes, and 2026 Notes-2.

For the three and nine months ended June 30, 2024, the Truist Credit Facility had a net change in unrealized (appreciation) depreciation of less than $(0.1) million and $(1.6) million, respectively. For the three and nine months ended June 30, 2023, the Truist Credit Facility had a net change in unrealized (appreciation) depreciation of $(8.4) million and $(2.5) million, respectively. As of June 30, 2024 and September 30, 2023, the net unrealized depreciation on the Truist Credit Facility totaled $3.9 million and $5.5 million, respectively. We use an independent valuation service to measure the fair value of our Truist Credit Facility in a manner consistent with the valuation process that our board of directors uses to value our investments.

38

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)

June 30, 2024

6. TRANSACTIONS WITH AFFILIATED COMPANIES

An affiliated portfolio company is a company in which we have ownership of 5% or more of its voting securities. A portfolio company is generally presumed to be a non-controlled affiliate when we own at least 5% but 25% or less of its voting securities and a controlled affiliate when we own more than 25% of its voting securities. Transactions related to our funded investments with both controlled and non-controlled affiliates for the nine months ended June 30, 2024 were as follows ($ in thousands):

Name of Investment	Fair Value at September 30, 2023		Gross Additions(1)		Gross Reductions			Net Change in Appreciation / (Depreciation)			Fair Value at June 30, 2024		Interest Income		PIK Income		Dividend Income		Net Realized Gains (Losses)
Controlled Affiliates
AKW Holdings Limited	$	51,660	$	1,897	$	—		$	3,787		$	57,344	$	2,893	$	1,897	$	—	$	—
Flock Financial, LLC (5)		32,300		20,006		(5,306	)		1,029			48,029		1,358		587		—		(5,305	)
JF Intermediate, LLC (MidOcean JF Holdings Corp.) (2)		8,759		51,846		(250	)		21,243			81,598		4,029		—		—		—
Mailsouth Inc.		—		—		(28,899	)		28,899			—		—		—		—		(28,899	)
PennantPark Senior Loan Fund, LLC (3)		164,408		22,353		—			(1,158	)		185,603		11,109		—		16,765		—
RAM Energy LLC (4)		—		—		—			—			—		—		—		—		(1,270	)
Total Controlled Affiliates	$	257,127	$	96,102	$	(34,455	)	$	53,800		$	372,574	$	19,389	$	2,484	$	16,765	$	(35,474	)
Non-Controlled Affiliates
Cascade Environmental Holdings, LLC	$	32,105	$	—	$	—		$	(4,541	)	$	27,564	$	—	$	—	$	—	$	—
Walker Edison Furniture Company LLC		13,907		2,470		—			(10,667	)		5,710		—		347		—		—
Total Non-Controlled Affiliates	$	46,012	$	2,470	$	—		$	(15,208	)	$	33,274	$	—	$	347	$	—	$	—
Total Controlled and    Non-Controlled Affiliates	$	303,139	$	98,572	$	(34,455	)	$	38,592		$	405,848	$	19,389	$	2,831	$	16,765	$	(35,474	)

(1)

Includes PIK.

(2)

JF Intermediate, LLC became a controlled affiliate during the quarter end December 31, 2023.

(3)

We and Pantheon are the members of PSLF, a joint venture formed as a Delaware limited liability company that is not consolidated by us for financial reporting purposes. The members of PSLF make investments in the PSLF in the form of subordinated debt and equity interests, and all portfolio and other material decision regarding PSLF must be submitted to PSFL’s board of directors or investment committee, both of which are comprised of two members appointed by each of us and Pantheon. Because management of PSLF is shared equally between us and Pantheon, we do not believe we control PSLF for purposes of the 1940 Act or otherwise.

(4)

RAM Energy LLC was fully realized in January 2023, during the nine months ended June 30, 2024 there was realized loss due to reduction of the escrow receivable.

(5)

Flock Financial, LLC became a controlled affiliate during the quarter ended June 30, 2024.

7. CHANGE IN NET ASSETS FROM OPERATIONS PER COMMON SHARE

The following information sets forth the computation of basic and diluted per share net increase in net assets resulting from operations ($ in thousands, except per share data):

	Three Months Ended June 30,				Nine Months Ended June 30,
	2024		2023		2024		2023
Numerator for net increase (decrease) in net assets resulting from operations	$	3,746	$	20,949	$	30,484	$	(46,072	)
Denominator for basic and diluted weighted average shares		65,238,634		65,224,500		65,229,194		65,224,500
Basic and diluted net increase (decrease) in net assets per share resulting from operations	$	0.06	$	0.32	$	0.47	$	(0.71	)

8. CASH AND CASH EQUIVALENTS

Cash equivalents represent cash in money market funds pending investment in longer-term portfolio holdings and for other general corporate purposes. Our portfolio may consist of temporary investments in U.S. Treasury Bills (of varying maturities), repurchase agreements, money market funds or repurchase agreement-like treasury securities. These temporary investments with original maturities of 90 days or less are deemed cash equivalents and are included in the Consolidated Schedule of Investments. At the end of each fiscal quarter, we may take proactive steps to preserve investment flexibility for the next quarter by investing in cash equivalents, which is dependent upon the composition of our total assets at quarter-end. We may accomplish this in several ways, including purchasing U.S. Treasury Bills and closing out positions on a net cash basis after quarter-end, temporarily drawing down on the Credit Facility, or utilizing repurchase agreements or other balance sheet transactions as are deemed appropriate for this purpose. These amounts are excluded from average adjusted gross assets for purposes of computing the Investment Adviser’s management fee. U.S. Treasury Bills with maturities greater than 60 days from the time of purchase are valued consistent with our valuation policy. As of June 30, 2024 and September 30, 2023, cash and cash equivalents consisted of money market funds, and non-money market in the amounts of $59.2 million and $38.8 million at fair value, respectively.

39

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)

June 30, 2024

9. FINANCIAL HIGHLIGHTS

Below are the financial highlights ($ in thousands, except share and per share data):

	Nine Months Ended June 30,
	2024			2023
Per Share Data:
Net asset value, beginning of period	$	7.70		$	8.98
Net investment income (1)		0.70			0.77
Net change in realized and unrealized gain (loss) (1)		(0.24	)		(1.48	)
Net increase (decrease) in net assets resulting from operations (1)		0.46			(0.71	)
Distributions to stockholders (1), (2)		(0.64	)		(0.55	)
Repurchase of common stock (1)		—			—
Net asset value, end of period	$	7.52		$	7.72
Per share market value, end of period	$	7.55		$	5.89
Total return* (3)		25.84	%		18.72	%
Shares outstanding at end of period		65,296,094			65,224,500
Ratios** / Supplemental Data:
Ratio of operating expenses to average net assets (4)		7.65	%		7.70	%
Ratio of debt related expenses to average net assets (5)		8.76	%		7.72	%
Ratio of total expenses to average net assets (5)		16.41	%		15.42	%
Ratio of net investment income to average net assets (5)		12.15	%		12.11	%
Net assets at end of period	$	491,222		$	503,619
Weighted average debt outstanding	$	675,406		$	677,883
Weighted average debt per share (1)	$	10.35		$	10.39
Asset coverage per unit (6)	$	1,645		$	1,791
Portfolio turnover ratio* (7)		30.03	%		14.38	%

* Not annualized for periods less than one year.

**Re-occurring investment income and expenses included in these ratios are annualized for periods less than one year.

***The expense and investment income ratios do not reflect the Company's proportionate share of income and expenses of PSLF and PTSF II.

(1)

Based on the weighted average shares outstanding for the respective periods.

(2)

The tax status of distributions is calculated in accordance with income tax regulations, which may differ from amounts determined under GAAP, and reported on Form 1099-DIV each calendar year.

(3)

Based on the change in market price per share during the periods and assumes distributions, if any, are reinvested.

(4)

Excludes debt-related costs.

(5)

Includes interest and expenses on debt (annualized) as well as Credit Facility amendment, debt issuance costs and excludes debt extinguishment cost, if any, (not annualized).

(6)

The asset coverage ratio for a class of senior securities representing indebtedness is calculated as our consolidated total assets, less all liabilities and indebtedness not represented by senior securities, divided by the senior securities representing indebtedness at par (changed from fair value). This asset coverage ratio is multiplied by $1,000 to determine the asset coverage per unit. These amounts exclude SBA debentures from our asset coverage per unit computation pursuant to exemptive relief received from the SEC in June 2011.

(7)

Excludes short-term U.S. Government Securities

10. DEBT

The annualized weighted average cost of debt for the nine months ended June 30, 2024 and 2023, inclusive of the fee on the undrawn commitment and amendment costs on the Truist Credit Facility and amortized upfront fees on SBA debentures, 2026 Notes and 2026 Notes-2, was 6.5% and 6.0%, respectively. As of June 30, 2024, in accordance with the 1940 Act, with certain limited exceptions, we are only allowed to borrow amounts such that we are in compliance with a 150% asset coverage ratio after such borrowing.

On February 5, 2019, our stockholders approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act, as amended by the Consolidated Appropriations Act of 2018 (which includes the Small Business Credit Availability Act, or "SBCAA") as approved by our board of directors on November 13, 2018. As a result, the asset coverage requirement applicable to us for senior securities was reduced from 200% (i.e., $1 of debt outstanding for each $1 of equity) to 150% (i.e., $2 of debt outstanding for each $1 of equity), subject to compliance with certain disclosure requirements. As of June 30, 2024 and September 30, 2023, our asset coverage ratio, as computed in accordance with the 1940 Act, was 164% and 195%, respectively.

Truist Credit Facility

As of June 30, 2024, we had the multi-currency Truist Credit Facility for up to $475.0 million (decreased from $500.0 million in September 2023), which may be further increased up to $750.0 million in borrowings with certain lenders and Truist Bank, acting as administrative agent, Regions Bank, acting as an additional multicurrency lender, and JPMorgan Chase Bank, N.A., acting as syndication agent for the lenders. As of June 30, 2024 and September 30, 2023, we had $450.5 million and $212.4 million, respectively, in outstanding borrowings under the Truist Credit Facility. The Truist Credit Facility had a weighted average interest rate of 7.7% and 7.7%, respectively, exclusive of the fee on undrawn commitment, as of June 30, 2024 and September 30, 2023. The Truist Credit Facility is a revolving facility with a stated maturity date of July 29, 2027 and pricing set at 235 basis points over SOFR (or an alternative risk-free floating interest rate index). As of June 30, 2024 and September 30, 2023, we had $24.5 million and $262.6 million of unused borrowing capacity under the Truist Credit Facility, respectively, subject to leverage and borrowing base restrictions. The Truist Credit Facility is secured by substantially all of our assets. As of June 30, 2024, we were in compliance with the terms of the Truist Credit Facility.

40

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)

June 30, 2024

SBA Debentures

SBIC II was historically able to borrow funds from the SBA against regulatory capital (which approximates equity capital) that is paid-in and is subject to customary regulatory requirements including an examination by the SBA. We previously funded SBIC II with $75.0 million of equity capital and it had SBA debentures outstanding of zero as of June 30, 2024 and September 30, 2023, respectively. SBA debentures are non-recourse to us and may be prepaid at any time without penalty. The interest rate of SBA debentures is fixed at the time of issuance, often referred to as pooling, at a market-driven spread over 10-year U.S. Treasury Notes. Under current SBA regulations, a SBIC may individually borrow up to a maximum of $175.0 million, which is up to twice its potential regulatory capital, and as part of a group of SBICs under common control may borrow a maximum of $350 million in the aggregate. As of both June 30, 2024 and September 30, 2023, SBIC II had zero in debt commitments, all of which was drawn as of September 30, 2022. We repaid the remaining SBA debentures during the year ended September 30, 2023.

2026 Notes

In April 2021, we issued $150.0 million in aggregate principal amount of our 2026 Notes at a public offering price per note of 99.4%. Interest on the 2026 Notes is paid semi-annually on May 1 and November 1 of each year, at a rate of 4.50% per year, commencing November 1, 2021. The 2026 Notes mature on May 1, 2026 and may be redeemed in whole or in part at our option subject to a make-whole premium if redeemed more than three months prior to maturity. The 2026 Notes are general, unsecured obligations and rank equal in right of payment with all of our existing and future senior unsecured indebtedness. The 2026 Notes are effectively subordinated to all of our existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries, financing vehicles, or similar facilities. We do not intend to list the 2026 Notes on any securities exchange or automated dealer quotation system.

2026 Notes-2

In October 2021, we issued $165.0 million in aggregate principal amount of our 2026 Notes-2 at a public offering price per note of 99.4%. Interest on the 2026 Notes-2 is paid semi-annually on May 1 and November 1 of each year, at a rate of 4.00% per year, commencing May 1, 2022. The 2026 Notes-2 mature on November 1, 2026 and may be redeemed in whole or in part at our option subject to a make-whole premium if redeemed more than three months prior to maturity. The 2026 Notes-2 are general, unsecured obligations and rank equal in right of payment with all of our existing and future senior unsecured indebtedness. The 2026 Notes-2 are effectively subordinated to all of our existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries, financing vehicles, or similar facilities. We do not intend to list the 2026 Notes-2 on any securities exchange or automated dealer quotation system.

11. COMMITMENTS AND CONTINGENCIES

From time to time, we, may be a party to legal proceedings, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations.

Unfunded debt and equity investments, if any, are disclosed in the Consolidated Schedules of Investments. Under these arrangements, we may be required to supply a letter of credit to a third party if the portfolio company were to request a letter of credit. As of June 30, 2024 and September 30, 2023, we had $231.5 million and $160.8 million, respectively, in commitments to fund investments. Additionally, the Company had unfunded commitments of zero and up to $22.4 million to PSLF as of June 30, 2024 and September 30, 2023, respectively, that may be contributed primarily for the purpose of funding new investments approved by PSLF board of directors or investment committee.

12. UNCONSOLIDATED SIGNIFICANT SUBSIDIARIES

We must determine which, if any, of our unconsolidated controlled portfolio companies is a "significant subsidiary" within the meaning of Regulation S-X. We have determined that, as of September 30, 2023, PennantPark Senior Loan Fund, LLC triggered at least one of the significance tests. As a result and in accordance with Rule 3-09 of Regulation S-X, separate audited financial statements of PSLF, LLC for the years ended September 30, 2023, 2022, and 2021 were filed as exhibits to our Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

41

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of

PennantPark Investment Corporation and its Subsidiaries

Results of Review of Interim Financial Statements

We have reviewed the accompanying consolidated statement of assets and liabilities of PennantPark Investment Corporation and its subsidiaries (the Company), including the consolidated schedules of investments, as of June 30, 2024, the related consolidated statements of operations and changes in net assets for the three-month and nine-month periods ended June 30, 2024 and 2023, and cash flows for the nine-month periods ended June 30, 2024 and 2023, and the related notes to the consolidated financial statements (collectively, the interim financial information or financial statements). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statement of assets and liabilities of the Company, including the consolidated schedule of investments, as of September 30, 2023, and the related consolidated statements of operations, changes in net assets, and cash flows for the year then ended (not presented herein); and in our report dated December 7, 2023, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated statement of assets and liabilities, including the consolidated schedule of investments, as of September 30, 2023, is fairly stated, in all material respects, in relation to the consolidated statement of assets and liabilities, including the consolidated schedule of investments, from which it has been derived.

Emphasis of Matter

As discussed in Note 2 of the consolidated financial statements, the consolidated statement of cash flows for the nine months ended June 30, 2023 has been restated to reclassify certain amounts presented within.

Basis for Review Results

These interim financial statements are the responsibility of the Company’s management. We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

/s/ RSM US LLP
 

New York, New York

August 7, 2024
 

42

Awareness Letter of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

PennantPark Investment Corporation and its Subsidiaries

We have reviewed, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the unaudited interim financial information of PennantPark Investment Corporation and its Subsidiaries for the periods ended June 30, 2024 and 2023, as indicated in our report dated August 7, 2024; because we did not perform an audit, we expressed no opinion on that information.

We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, is incorporated by reference in Registration Statement No. 333-263564 on Form N-2.

We are also aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

/s/ RSM US LLP

New York, New York

August 7, 2024

43

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This Report, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains statements that constitute forward-looking statements, which relate to us and our consolidated subsidiaries regarding future events or our future performance or future financial condition. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about our Company, our industry, our beliefs and our assumptions. The forward-looking statements contained in this Report involve risks and uncertainties, including statements as to:

•

our future operating results;

•

our business prospects and the prospects of our prospective portfolio companies;

•

changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets that could result in changes to the value of our assets;

•

the dependence of our future success on the general economy and its impact on the industries in which we invest;

•

the impact of a protracted decline in the liquidity of credit markets on our business;

•

the impact of investments that we expect to make;

•

the impact of fluctuations in interest rates and foreign exchange rates on our business and our portfolio companies;

•

our contractual arrangements and relationships with third parties;

•

the valuation of our investments in portfolio companies, particularly those having no liquid trading market;

•

the ability of our prospective portfolio companies to achieve their objectives;

•

our expected financings and investments;

•

the adequacy of our cash resources and working capital;

•

the timing of cash flows, if any, from the operations of our prospective portfolio companies;

•

the impact of price and volume fluctuations in the stock market;

•

increasing levels of inflation, and its impact on us and our portfolio companies;

•

the ability of our Investment Adviser to locate suitable investments for us and to monitor and administer our investments;

•

the impact of future legislation and regulation on our business and our portfolio companies;

•

the impact of the ongoing invasion of Ukraine by Russia and other world economic and political issues; and

•

the inability to develop and maintain effective internal control over financial reporting.

We use words such as “anticipates,” “believes,” “expects,” “intends,” “seeks,” “plans,” “estimates” and similar expressions to identify forward-looking statements. You should not place undue influence on the forward-looking statements as our actual results could differ materially from those projected in the forward-looking statements for any reason, including the factors in “Risk Factors” and elsewhere in this Report.

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 our ability to originate new loans and investments, certain margins 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 Report should not be regarded as a representation by us that our plans and objectives will be achieved.

We have based the forward-looking statements included in this Report on information available to us on the date of this Report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements in this Report, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including reports on Form 10-Q/K and current reports on Form 8-K.

You should understand that under Section 27A(b)(2)(B) of the Securities Act and Section 21E(b)(2)(B) of the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports we file under the Exchange Act.

The following analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and the related notes thereto contained elsewhere in this Report.

44

Overview

PennantPark Investment Corporation is a BDC whose objectives are to generate both current income and capital appreciation while seeking to preserve capital through debt and equity investments primarily made to U.S. middle-market companies in the form of first lien secured debt, second lien secured debt, subordinated debt and equity investments.

We believe middle-market companies offer attractive risk-reward to investors due to a limited amount of capital available for such companies. We seek to create a diversified portfolio that includes first lien secured debt, second lien secured debt, subordinated debt and equity investments by investing approximately $10 million to $50 million of capital, on average, in the securities of middle-market companies. We expect this investment size to vary proportionately with the size of our capital base. We use the term “middle-market” to refer to companies with annual revenues between $50 million and $1 billion. The companies in which we invest are typically highly leveraged, and, in most cases, are not rated by national rating agencies. If such companies were rated, we believe that they would typically receive a rating below investment grade (between BB and CCC under the Standard & Poor’s system) from the national rating agencies. Securities rated below investment grade are often referred to as “leveraged loans” or “high yield” securities or “junk bonds” and are often higher risk compared to debt instruments that are rated above investment grade and have speculative characteristics. Our debt investments may generally range in maturity from three to ten years and are made to U.S. and, to a limited extent, non-U.S. corporations, partnerships and other business entities which operate in various industries and geographical regions.

Our investment activity depends on many factors, including the amount of debt and equity capital available to middle-market companies, the level of merger and acquisition activity for such companies, the general economic environment and the competitive environment for the types of investments we make. We have used, and expect to continue to use, our debt capital, proceeds from the rotation of our portfolio and proceeds from public and private offerings of securities to finance our investment objectives.

Organization and Structure of PennantPark Investment Corporation

PennantPark Investment Corporation, a Maryland corporation organized in January 2007, is a closed-end, externally managed, non-diversified investment company that has elected to be treated as a BDC under the 1940 Act. In addition, for federal income tax purposes we have elected to be treated, and intend to qualify annually, as a RIC under the Code.

Our investment activities are managed by the Investment Adviser. Under our Investment Management Agreement, we have agreed to pay our Investment Adviser an annual base management fee based on our average adjusted gross assets as well as an incentive fee based on our investment performance. PennantPark Investment, through the Investment Adviser, provided similar services to SBIC II under its investment management agreement. SBIC II’s investment management agreement does not affect the management and incentive fees on a consolidated basis. We have also entered into an Administration Agreement with the Administrator. Under our Administration Agreement, we have agreed to reimburse the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under our Administration Agreement, including rent and our allocable portion of the costs of compensation and related expenses of our Chief Financial Officer, Chief Compliance Officer, Corporate Counsel and their respective staffs. PennantPark Investment, through the Administrator, provided similar services to SBIC II under its administration agreement with us. Our board of directors, a majority of whom are independent of us, provides overall supervision of our activities, and the Investment Adviser supervises our day-to-day activities.

Revenues

We generate revenue in the form of interest income on the debt securities we hold and capital gains and dividends, if any, on investment securities that we may acquire in portfolio companies. Our debt investments, whether in the form of first lien secured debt, second lien secured debt or subordinated debt, typically have a term of three to ten years and bear interest at a fixed or a floating rate. Interest on debt securities is generally payable quarterly or semiannually. In some cases, our investments provide for deferred interest payments and PIK interest. The principal amount of the debt securities and any accrued but unpaid interest generally becomes due at the maturity date. In addition, we may generate revenue in the form of amendment, commitment, origination, structuring or diligence fees, fees for providing significant managerial assistance and possibly consulting fees. Loan origination fees, OID and market discount or premium and deferred financing costs on liabilities, which we do not fair value, are capitalized and accreted or amortized using the effective interest method as interest income or, in the case of deferred financing costs, as interest expense. Dividend income, if any, is recognized on an accrual basis on the ex-dividend date to the extent that we expect to collect such amounts. From time to time, the Company receives certain fees from portfolio companies, which may or may not be non-recurring in nature. Such fees include loan prepayment penalties, structuring fees, amendment fees, and agency fees and are recorded as other investment income when earned.

Expenses

Our primary operating expenses include interest expense on the outstanding debt and unused commitment fees on undrawn amounts, under our various debt facilities, the payment of a management fee and the payment of an incentive fee to our Investment Adviser, if any, our allocable portion of overhead under our Administration Agreement and other operating costs as detailed below. Our management fee compensates our Investment Adviser for its work in identifying, evaluating, negotiating, consummating and monitoring our investments. We bear all other direct or indirect costs and expenses of our operations and transactions, including:

•

the cost of calculating our net asset value, including the cost of any third-party valuation services;

•

the cost of effecting sales and repurchases of shares of our common stock and other securities;

•

fees payable to third parties relating to, or associated with, making investments, including fees and expenses associated with performing due diligence and reviews of prospective investments or complementary businesses;

•

expenses incurred by the Investment Adviser in performing due diligence and reviews of investments; including expenses incurred by the Investment Adviser
payable to third parties (including agents and consultants) in monitoring financial and legal affairs for the Company and in monitoring the Company's
investments;

•

transfer agent and custodial fees;

•

fees and expenses associated with marketing efforts;

•

federal and state registration fees and any exchange listing fees;

•

federal, state, local and foreign taxes;

•

independent directors’ fees and expenses;

•

brokerage commissions;

45

•

fidelity bond, directors and officers, errors and omissions liability insurance and other insurance premiums;

•

direct costs such as printing, mailing, long distance telephone and staff;

•

fees and expenses associated with independent audits and outside legal costs;

•

costs associated with our reporting and compliance obligations under the 1940 Act, and applicable federal and state securities laws; and

•

all other expenses incurred by either the Administrator or us in connection with administering our business, including payments under our Administration Agreement that will be based upon our allocable portion of overhead, and other expenses incurred by the Administrator in performing its obligations under our Administration Agreement, including rent and our allocable portion of the costs of compensation and related expenses of our Chief Financial Officer, Chief Compliance Officer, Corporate Counsel and their respective staffs.

Generally, during periods of asset growth, we expect our general and administrative expenses to be relatively stable or to decline as a percentage of total assets and increase during periods of asset declines. Incentive fees, interest expense and costs relating to future offerings of securities would be additive to the expenses described above.

Restatement of Previously Issued Financial Statement

As noted in the Annual Report on Form 10-K for the year ended September 30, 2023, during the preparation of the financial statements as of and for the year ended September 30, 2023, Management identified an error in the classification and presentation of cash pertaining to the Company’s affiliates – PSLF and PTSF II in the September 30, 2022 financial statements. The Company recorded cash activity and due to affiliates pertaining to their investments as a reduction of the cash account instead of presenting the related cash and cash equivalents as an asset and a due to affiliates as a liability. This misclassification also existed at June 30, 2023, and the impact of the error correction is reflected on the consolidated statement of cash flows for the nine months ended June 30, 2023 as an increase to cash and cash equivalents, beginning of period totaling $2.1 million, an increase to cash and cash equivalents, end of period totaling $3.9 million, and increase in due to affiliates of $1.8 million.

There was no impact from the error correction to total net assets and net asset value per share as reported on the consolidated statement of assets and liabilities as of June 30, 2023. In addition, there was no impact from the error correction on net investment income or net increase (decrease) in net assets resulting from operations in total or on a per common share basis as reported on the consolidated statements of operations for the nine months ended June 30, 2023. The corrections related to the prior year comparative cash flow statement amounts were reported in the quarter ended June 30, 2024.

As a result of the error in the classification and presentation of cash described above, we conducted an analysis to determine whether incentive-based compensation was erroneously awarded, thereby necessitating recovery under the Clawback Policy we adopted effective December 1, 2023. Because we do not pay or otherwise award incentive-based compensation to the Company’s executives, we concluded that the error did not result in erroneously-awarded incentive-based compensation, and therefore no compensation recovery is required.

PORTFOLIO AND INVESTMENT ACTIVITY

As of June 30, 2024, our portfolio totaled $1,259.9 million and consisted of $675.9 million or 54% of first lien secured debt, $59.8 million or 5% of U.S. Government Securities, $65.6 million or 5% of second lien secured debt, $163.7 million or13% of subordinated debt (including $115.9 million or 9% in PSLF) and $294.9 million or 23% of preferred and common equity (including $69.7 million or 6% in PSLF). Our interest bearing debt portfolio consisted of 96% variable-rate investments and 4% fixed-rate investments. As of June 30, 2024, we had three portfolio companies on non-accrual, representing 4.2% and 2.5% percent of our overall portfolio on a cost and fair value basis, respectively. Overall, the portfolio had net unrealized appreciation of $6.9 million as of June 30, 2024. Our overall portfolio consisted of 144 companies with an average investment size of $8.3 million (excluding U.S. Government Securities), had a weighted average yield on interest bearing debt investments of 12.7%.

As of September 30, 2023, our portfolio totaled $1,101.7 million and consisted of $527.7 million or 48% of first lien secured debt, $99.8 million or 9% of U.S. Government Securities, $80.4 million or 7% of second lien secured debt, $156.2 million or 14% of subordinated debt (including $102.3 million or 9% in PSLF) and $237.6 million or 22% of preferred and common equity (including $62.1 million or 6% in PSLF). Our interest bearing debt portfolio consisted of 95% variable-rate investments and 5% fixed-rate investments. As of September 30, 2023, we had one portfolio company on non-accrual, representing 1.2% and zero percent of our overall portfolio on a cost and fair value basis, respectively. Overall, the portfolio had net unrealized depreciation of $(16.3) million as of September 30, 2023. Our overall portfolio consisted of 129 companies with an average investment size of $7.8 million (excluding U.S. Government Securities), had a weighted average yield on interest bearing debt investments of 13.0%.

For the three months ended June 30, 2024, we invested $163.1 million in 11 new and 42 existing portfolio companies with a weighted average yield on debt investments of 12.0% (excluding U.S. Government Securities). For the three months ended June 30, 2024, sales and repayments of investments totaled $132.9 million (excluding U.S. Government Securities). For the nine months ended June 30, 2024, we invested $752.1 million in 29 new and 65 existing portfolio companies with a weighted average yield on debt investments of 11.9% (excluding U.S. Government Securities). For the nine months ended June 30, 2024, sales and repayment of investments totaled $380.1 million (excluding U.S. Government Securities).

For the three months ended June 30, 2023, we invested $69.9 million in three new and 43 existing portfolio companies with a weighted average yield on debt investments of 12.6%. For the three months ended June 30, 2023, sales and repayments of investments totaled $135.7 million. For the nine months ended June 30, 2023, we invested $214.4 million in 15 new and 60 existing portfolio companies with a weighted average yield on debt investments of 11.9%. For the nine month ended June 30, 2023, sales and repayment of investments totaled $280.5 million.

46

PennantPark Senior Loan Fund, LLC

As of June 30, 2024, PSLF’s portfolio totaled $926.1 million, consisted of 101 companies with an average investment size of $9.2 million and had a weighted average yield interest bearing debt investments of 11.8%.

As of September 30, 2023, PSLF’s portfolio totaled $804.2 million, consisted of 90 companies with an average investment size of $8.9 million and had a weighted average yield interest bearing debt investments of 12.1%.

For the three months ended June 30, 2024, PSLF invested $56.0 million (including $37.8 million were purchased from the Company) in five new and seven existing portfolio companies at weighted average yield interest bearing debt investments of 11.5%. PSLF’s sales and repayments of investments for the same period totaled $54.9 million. For the nine months ended June 30, 2024, PSLF invested $250.2 million (of which $191.8 million was purchased from the Company) in 21 new and 16 existing portfolio companies with a weighted average yield on debt investments of 12.0%. PSLF Sales and repayments of investments for the same period totaled $133.8 million.

For the three months ended June 30, 2023, PSLF invested $64.0 million (of which $61.8 were purchased from the Company) in eight new and one existing portfolio companies at weighted average yield on interest bearing debt investments of 12.0%. PSLF’s sales and repayments of investments for the same period totaled $20.0 million. For the nine months ended June 30, 2023, PSLF invested $119.3 million (of which $80.2 million was purchased from the Company) in 16 new and six existing portfolio companies with a weighted average yield on debt investments of 11.8%. PSLF's sales and repayments of investments for the same period totaled $54.0 million.

At-the-Market Offering

On June 4, 2024, we entered into equity distribution agreements with Truist Securities, Inc. and Keefe, Bruyette & Woods, Inc. (together, the "Equity Distribution Agreements"), as sales agents (each a "Sales Agent" and together, the "Sales Agents") in connection with the sale of shares of our common stock, with an aggregate offering price of up to $100 million under an at-the-market offering ("ATM Program"). We may offer and sell shares of our common stock from time to time through a sales agent in amounts and at times to be determined by us. Actual sales will depend on a variety of factors to be determined by us from time to time, including, market conditions and the trading price of our common stock. The Investment Adviser may, from time to time, in its sole discretion, pay some or all of the commissions payable under the equity distribution agreements or make additional supplemental payments to ensure that the sales price per share of our common stock in connection with all of the offerings made hereunder will not be less than our current NAV per share. Any such payments made by the Investment Adviser will not be subject to reimbursement by us.

During the three and nine months ended June 30, 2024, we issued 71,594 and 71,594 shares of common stock through the ATM Program at an average price of $7.72 and $7.72 per share, raising $0.6 million and $0.6 million of net proceeds after commissions to the sales agents and inclusive of proceeds from the Investment Adviser to ensure that all shares were sold at or above NAV, respectively. In connection with the share issuance, we expensed $0.3 million of deferred offering costs incurred related to establishing the ATM Program to additional paid in capital.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of our Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of our assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of income and expenses during the reported periods In the opinion of management, all adjustments, which are of a normal recurring nature, considered necessary for the fair presentation of financial statements have been included. Actual results could differ from these estimates due to changes in the economic and regulatory environment, financial markets and any other parameters used in determining such estimates and assumptions, including the credit worthiness of our portfolio companies. We may reclassify certain prior period amounts to conform to the current period presentation. We have eliminated all intercompany balances and transactions. References to ASC serve as a single source of accounting literature. Subsequent events are evaluated and disclosed as appropriate for events occurring through the date the Consolidated Financial Statements are issued. In addition to the discussion below, we
describe our critical accounting policies in the notes to our Consolidated Financial Statements. We discuss our critical accounting estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Annual Report on Form 10-K. There have been no significant changes in our critical accounting estimates during the nine months from those disclosed in our 2023 Annual Report on Form 10-K.

Investment Valuations

We expect that there may not be readily available market values for many of the investments which are or will be in our portfolio, and we value such investments at fair value as determined in good faith by or under the direction of our board of directors using a documented valuation policy and a consistently applied valuation process, as described in this Report. With respect to investments for which there is no readily available market value, the factors that our board of directors may take into account in pricing our investments at fair value include, as relevant, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, comparison to publicly traded securities and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we consider the pricing indicated by the external event to corroborate or revise our valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the price used in an actual transaction may be different than our valuation and the difference may be material.

Our portfolio generally consists of illiquid securities, including debt and equity investments. With respect to investments for which market quotations are not readily available, or for which market quotations are deemed not reflective of the fair value, our board of directors undertakes a multi-step valuation process each quarter, as described below:

(1)

Our quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals of our Investment Adviser responsible for the portfolio investment;

(2)

Preliminary valuation conclusions are then documented and discussed with the management of the Investment Adviser;

(3)

Our board of directors also engages independent valuation firms to conduct independent appraisals of our investments for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment. The independent valuation firms review management’s preliminary valuations in light of their own independent assessment and also in light of any market quotations obtained from an independent pricing service, broker, dealer or market maker;

(4)

The audit committee of our board of directors reviews the preliminary valuations of the Investment Adviser and those of the independent valuation firms on a quarterly basis, periodically assesses the valuation methodologies of the independent valuation firms, and responds to and supplements the valuation recommendations of the independent valuation firms to reflect any comments; and

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(5)

Our board of directors discusses these valuations and determines the fair value of each investment in our portfolio in good faith, based on the input of our Investment Adviser, the respective independent valuation firms and the audit committee.

Our board of directors generally uses market quotations to assess the value of our investments for which market quotations are readily available. We obtain these market values from independent pricing services or at the bid prices obtained from at least two brokers or dealers, if available, or otherwise from a principal market maker or a primary market dealer. The Investment Adviser assesses the source and reliability of bids from brokers or dealers. If our board of directors has a bona fide reason to believe any such market quote does not reflect the fair value of an investment, it may independently value such investments by using the valuation procedure that it uses with respect to assets for which market quotations are not readily available.

Fair value, as defined under ASC 820, is the price that we would receive upon selling an investment or pay to transfer a liability in an orderly transaction to a market participant in the principal or most advantageous market for the investment or liability. ASC 820 emphasizes that valuation techniques maximize the use of observable market inputs and minimize the use of unobservable inputs. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing an asset or liability based on market data obtained from sources independent of us. Unobservable inputs reflect the assumptions market participants would use in pricing an asset or liability based on the best information available to us on the reporting period date.

ASC 820 classifies the inputs used to measure these fair values into the following hierarchies:

Level 1:	Inputs that are quoted prices (unadjusted) in active markets for identical assets or liabilities, accessible by us at the measurement date.
Level 2:	Inputs that are quoted prices for similar assets or liabilities in active markets, or that are quoted prices for identical or similar assets or liabilities in markets that are not active and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term, if applicable, of the financial instrument.
Level 3:	Inputs that are unobservable for an asset or liability because they are based on our own assumptions about how market participants would price the asset or liability.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Generally, most of our investments, and our are classified as Level 3. Our 2026 Notes and 2026 Notes-2 are classified as Level 2, as they are financial instruments with readily observable market inputs. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the price used in an actual transaction may be different than our valuation and those differences may be material.

On December 3, 2020, the SEC adopted Rule 2a-5 under the 1940 Act, which establishes an updated regulatory framework for determining fair value in good faith for purposes of the 1940 Act. The new rule clarifies how fund boards of directors can satisfy their valuation obligations and requires, among other things, the board of directors to periodically assess material valuation risks and take steps to manage those risks. The rule also permits boards of directors, subject to board oversight and certain other conditions, to designate the fund’s investment adviser to perform fair value determinations. The new rule went into effect on March 8, 2021 and had a compliance date of September 8, 2022. We came into compliance with Rule 2a-5 under the 1940 Act before the compliance date. While our board of directors has not elected to designate the Investment Adviser as the valuation designee at this time, we have adopted certain revisions to our valuation policies and procedures in order comply with the applicable requirements of Rule 2a-5 under the 1940 Act.

In addition to using the above inputs to value cash equivalents, investments, our 2026 Notes, 2026 Notes-2 and our Truist Credit Facility valuations, we employ the valuation policy approved by our board of directors that is consistent with ASC 820. Consistent with our valuation policy, we evaluate the source of inputs, including any markets in which our investments are trading, in determining fair value.

Generally, the carrying value of our consolidated financial liabilities approximates fair value. We have adopted the principles under ASC Subtopic 825-10, Financial Instruments ("ASC 825-10"), which provides companies with an option to report selected financial assets and liabilities at fair value, and made an irrevocable election to apply ASC 825-10 to our Truist Credit Facility. We elected to use the fair value option for the Truist Credit Facility to align the measurement attributes of both our assets and liabilities while mitigating volatility in earnings from using different measurement attributes. Due to that election and in accordance with GAAP, we did not incur any expenses relating to amendment costs on the Truist Credit Facility for both the three and nine months ended June 30, 2024 and 2023. ASC 825-10 establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities and to more easily understand the effect on earnings of a company’s choice to use fair value. ASC 825-10 also requires entities to display the fair value of the selected assets and liabilities on the face of the Consolidated Statements of Assets and Liabilities and changes in fair value of the Truist Credit Facility is reported in our Consolidated Statements of Operations. We elect not to apply ASC 825-10 to any other financial assets or liabilities, including the 2026 Notes, and 2026 Notes-2.

For the three and nine months ended June 30, 2024, the Truist Credit Facility had a net change in unrealized appreciation (depreciation) of less than $(0.1) million and $(1.6) million, respectively. For the three and nine months ended June 30, 2023, the Truist Credit Facility had a net change in unrealized appreciation (depreciation) of $(8.4) million and $(2.5) million, respectively. As of June 30, 2024 and September 30, 2023, the net unrealized depreciation on the Truist Credit Facility totaled $3.9 million and $5.5 million, respectively. We use a nationally recognized independent valuation service to measure the fair value of our Truist Credit Facility in a manner consistent with the valuation process that the board of directors uses to value our investments.

Revenue Recognition

We record interest income on an accrual basis to the extent that we expect to collect such amounts. For loans and debt investments with contractual PIK interest, which represents interest accrued and added to the loan balance that generally becomes due at maturity, we will generally not accrue PIK interest when the portfolio company valuation indicates that such PIK interest is not collectable. We do not accrue as a receivable interest on loans and debt investments if we have reason to doubt our ability to collect such interest. Loan origination fees, OID, market discount or premium and deferred financing costs on liabilities, which we do not fair value, are capitalized and then accreted or amortized using the effective interest method as interest income or, in the case of deferred financing costs, as interest expense. We record prepayment penalties on loans and debt investments as income. Dividend income, if any, is recognized on an accrual basis on the ex-dividend date to the extent that we expect to collect such amounts. From time to time, the Company receives certain fees from portfolio companies, which may or may not be non-recurring in nature. Such fees include loan prepayment penalties, structuring fees, amendment fees, and agency fees and are recorded as other investment income when earned.

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Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation

We measure realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, using the specific identification method, without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized upfront fees and prepayment penalties. Net change in unrealized appreciation or depreciation reflects the change in fair values of our portfolio investments and our Truist Credit Facility, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.

Foreign Currency Translation

Our books and records are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis:

1.

Fair value of investment securities, other assets and liabilities – at the exchange rates prevailing at the end of the applicable period; and

2.

Purchases and sales of investment securities, income and expenses – at the exchange rates prevailing on the respective dates of such transactions.

Although net assets and fair values are presented based on the applicable foreign exchange rates described above, we do not isolate that portion of the results of operations due to changes in foreign exchange rates on investments, other assets and debt from the fluctuations arising from changes in fair values of investments and liabilities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments and liabilities.

Payment-in-Kind, or PIK Interest

We have investments in our portfolio which contain a PIK interest provision. PIK interest is added to the principal balance of the investment and is recorded as income. In order for us to maintain our ability to be subject to tax as a RIC, substantially all of this income must be paid out to stockholders in the form of dividends for U.S. federal income tax purposes, even though we may not have collected any cash with respect to interest on PIK securities.

Federal Income Taxes

We have elected to be treated, and intend to qualify annually to maintain our election to be treated, as a RIC under Subchapter M of the Code. To maintain our RIC tax election, we must, among other requirements, meet certain annual source-of-income and quarterly asset diversification requirements. We also must annually distribute dividends for U.S. federal income tax purposes to our stockholders out of the assets legally available for distribution of an amount generally at least equal to 90% of the sum of our net ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, or investment company taxable income, determined without regard to any deduction for dividends paid.

Although not required for us to maintain our RIC tax status, in order to preclude the imposition of a 4% nondeductible U.S. federal excise tax imposed on RICs, we must distribute dividends for federal income tax purposes to our stockholders in respect of each calendar year of an amount at least equal to the sum of (1) 98% of our net ordinary income (subject to certain deferrals and elections) for the calendar year, (2) 98.2% of the excess, if any, of our capital gains over our capital losses, or capital gain net income (adjusted for certain ordinary losses) for the one-year period ending on October 31 of the calendar year plus (3) the sum of any net ordinary income plus capital gain net income for preceding years that was realized but not distributed during such years and on which we did not incur any U.S. federal income tax, or the Excise Tax Avoidance Requirement. In addition, although we may distribute realized net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually, out of the assets legally available for such distributions in the manner described above, we have retained and may continue to retain such net capital gains or investment company taxable income, contingent on maintaining our ability to be subject to tax as a RIC, in order to provide us with additional liquidity.

Because federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and net realized gain recognized for financial reporting purposes. Differences between tax regulations and GAAP may be permanent or temporary. Permanent differences are reclassified among capital accounts in the Consolidated Financial Statements to reflect their appropriate tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.

For the three and nine months ended June 30, 2024, we recorded a provision for taxes on net investment income of $0.7 million and $1.9 million respectively, pertaining to federal excise tax. For the three and nine months ended June 30, 2023, we recorded a provision for taxes on net investment income of $1.2 million and $3.6 million respectively, all of which pertains to U.S. federal excise tax.

On November 22, 2021, we formed PNNT Investment Holdings II, LLC, a Delaware limited liability company (“Holdings II”), as a wholly owned subsidiary. On December 31, 2022, we contributed 100% of our interests in PNNT Investment Holdings, LLC (“Holdings”) to Holdings II . Effective as of January 1, 2024, Holdings II made an election to be treated as a corporation for U.S. federal income tax purposes. On January 3, 2024, we purchased an equity interest in Holdings from Holdings II and Holdings became a partnership for U.S. federal income tax purposes. The Company and Holdings II entered into a limited liability company agreement with respect to Holdings that provides for certain payments and the sharing of income, gain, loss and deductions attributable to Holdings’ investments.

For the three and nine months ended June 30, 2024, the Company recognized a provision for taxes of zero and $0.2 million, respectively, on net realized gain (loss) on investments by the Taxable Subsidiary. For the three and nine months ended June 30, 2023, the Company recognized a provision for taxes of $1.7 million and $2.4 million, respectively, on net realized gain on investments by the Taxable Subsidiary. For the three months and nine months ended June 30, 2024, the Company recognized a provision for taxes of zero and $0.7 million, respectively, on net realized gain (loss) on investments by the Taxable Subsidiary. For the three and nine months ended June 30, 2023, the Company recognized a provision for taxes of zero and $(0.9) million, respectively, on net unrealized gain (loss) on investments by the Taxable Subsidiary. The provision for taxes on net realized and unrealized gains on investments is the result of netting (i) the expected tax liability on the gains from the sales of investments which is likely to be realized and unrealized during fiscal year ending September 30, 2024 and (ii) the expected tax benefit resulting from the use of loss carryforwards to offset such gains. As of June 30, 2024 and September 30, 2023, the Company recognized a provision for taxes of $0.9 million and $3.4 million, respectively, on net realized and unrealized gains on investments by the Taxable Subsidiary.

During the three months and nine months ended June 30, 2024, the Company paid zero, respectively, in federal taxes on realized gains on the sale of investments held by the Taxable Subsidiary. The state and local tax liability is zero as of June 30, 2024 is included under accrued other expenses in the consolidated statement of assets and liabilities.

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We operate in a manner to maintain our election to be subject to tax as a RIC and to eliminate corporate-level U.S. federal income tax (other than the 4% excise tax) by distributing sufficient investment company taxable income and capital gain net income (if any). As a result, we will have an effective tax rate equal to 0% before the excise tax and income taxes incurred by the Taxable Subsidiary. As such, a reconciliation of the differences between our reported income tax expense and its tax expense at the federal statutory rate of 21% is not meaningful.

The Taxable Subsidiary, which is subject to tax as a corporation, allows us to hold equity securities of certain portfolio companies treated as pass-through entities for U.S. federal income tax purposes while facilitating our ability to qualify as a RIC under the Code.

RESULTS OF OPERATIONS

Set forth below are the results of operations for the three and nine months ended June 30, 2024 and 2023.

Investment Income

For the three and nine months ended June 30, 2024, investment income was $37.0 million and $107.3 million, respectively, which was attributable to $25.9 million and $78.5 million from first lien secured debt, $2.1 million and $7.6 million from second lien secured debt, $0.6 million and $1.9 million from subordinated debt and $8.4 million and $19.3 million from other investments, respectively. For the three and nine months ended June 30, 2023, investment income was $45.0 million and $111.3 million, respectively, which was attributable to $24.1 million and $72.7 million from first lien secured debt, $3.5 million and $10.9 million from second lien secured debt, $1.2 million and $3.4 million from subordinated debt and $16.2 million and $24.3 million from preferred and common equity, respectively. The decrease in investment income for the nine months ended June 30, 2024 was primarily due to the decrease in dividend income.

Expenses

For the three and nine months ended June 30, 2024, expenses totaled $21.3 million and $61.7 million, respectively and were comprised of; $11.5 million and $32.9 million of debt related interest and expenses, $4.2 million and $12.4 million of base management fees, $3.3 million and $9.7 million of incentive fees, $1.5 million and $4.8 million of general and administrative expenses and $0.7 million and $1.9 million of provision for excise taxes. For the three and nine months ended June 30, 2023, expenses totaled $22.1 million and $61.4 million, respectively and were comprised of; $10.1 million and $30.5 million of debt-related interest and expenses, $4.0 million and $12.6 million of base management fees, $4.9 million and $10.6 million of incentive fees, $1.9 million and $4.1 million of general and administrative expenses and $1.2 million and $3.6 million of provision for excise taxes, respectively. The increase in expenses for the nine months ended June 30, 2024 was primarily due an increase in debt related interest and expenses.

Net Investment Income

For the three and nine months ended June 30, 2024, net investment income totaled $15.7 million and $45.7 million, or $0.24 per share, and $0.70 per share, respectively. For the three and nine months ended June 30, 2023, net investment income totaled $23.0 million and $49.9 million, or $0.35 per share and $0.77 per share, respectively. The decrease in net investment income for the nine months ended June 30, 2024 was primarily due to decrease in investment income.

Net Realized Gains or Losses

For the three and nine months ended June 30, 2024, net realized gains (losses) totaled $(6.9) million and $(36.1) million, respectively. For the three and nine months ended June 30, 2023, net realized gains (losses) totaled $(6.9) million and $(151.5) million, respectively. The change in realized gains (losses) was primarily due to changes in the market conditions of our investments and the values at which they were realized.

Unrealized Appreciation or Depreciation on Investments and Debt

For the three and nine months ended June 30, 2024, we reported net change in unrealized appreciation (depreciation) on investments of $(5.1) million and $23.2 million, respectively. For the three and nine months ended June 30, 2023, the net unrealized appreciation (depreciation) on investments totaled $13.3 million and $57.1 million, respectively. As of June 30, 2024 and September 30, 2023, our net unrealized appreciation (depreciation) on investments totaled $6.9 million and $(16.3) million, respectively. The net change in unrealized depreciation on our investments was primarily due to changes in the capital market conditions of our investments and the values at which they were realized.

For the three and nine months ended June 30, 2024, the Truist Credit Facility had a net change in unrealized appreciation (depreciation) less than $(0.1) million and $(1.6) million, respectively. For the three and nine months ended June 30, 2023, the Truist Credit Facility had a net change in unrealized (appreciation) depreciation of $(8.4) million and $(2.5) million, respectively. As of June 30, 2024 and September 30, 2023, the net unrealized depreciation on the Truist Credit Facility totaled $3.9 million and $5.5 million, respectively. Net change in unrealized appreciation was primarily due to changes in the capital markets.

Net Change in Net Assets Resulting from Operations

For the three and nine months ended June 30, 2024, net increase (decrease) in net assets resulting from operations totaled $3.7 million and $30.5 million, or $0.06 per share, and $0.47 per share, respectively. For the three and nine months ended June 30, 2023, net increase (decrease) in net assets resulting from operations totaled $20.9 million and $(46.1) million, or $0.32 per share and $(0.71) per share, respectively. The increase in net assets from operations for the nine months ended June 30, 2024 was primarily due to a decrease in the net realized and unrealized depreciation in the portfolio primarily driven by changes in market conditions.

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LIQUIDITY AND CAPITAL RESOURCES

Our liquidity and capital resources are derived primarily from cash flows from operations, including investment sales and repayments, and income earned, proceeds of securities offerings and debt financings. Our primary use of funds from operations includes investments in portfolio companies and payments of interest expense, fees and other operating expenses we incur. We have used, and expect to continue to use, our debt capital, proceeds from the rotation of our portfolio and proceeds from public and private offerings of securities to finance our investment objectives and operations. As of June 30, 2024, in accordance with the 1940 Act, with certain limited exceptions, we are only allowed to borrow amounts such that we are in compliance with a 150% asset coverage ratio requirement after such borrowing, excluding SBA debentures pursuant to exemptive relief from the SEC received in June 2011. This “Liquidity and Capital Resources” section should be read in conjunction with the "Forward-Looking Statements" section above.

On February 5, 2019, our stockholders approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act, as amended by the Consolidated Appropriations Act of 2018 (which includes the SBCAA) as approved by our board of directors on November 13, 2018. As a result, the asset coverage requirement applicable to us for senior securities was reduced from 200% (i.e., $1 of debt outstanding for each $1 of equity) to 150% (i.e., $2 of debt outstanding for each $1 of equity), subject to compliance with certain disclosure requirements.

As of June 30, 2024 and September 30, 2023, our asset coverage ratio, as computed in accordance with the 1940 Act was 164%% and 195%, respectively.

For the nine months ended June 30, 2024 and 2023, the annualized weighted average cost of debt inclusive of the fee on the undrawn commitment and amendment costs on the Truist Credit Facility, and amortized upfront fees on SBA debentures, 2026 Notes and 2026 Notes-2, was 6.5% and 6.0%, respectively.

As of June 30, 2024, we had the multi-currency Truist Credit Facility for up to $475.0 million (decreased from $500.0 million in September 2023), which may be further increased up to $750.0 million in borrowings with certain lenders and Truist Bank, acting as administrative agent, Regions Bank, acting as an additional multicurrency lender, and JPMorgan Chase Bank, N.A., acting as syndication agent for the lenders. As of June 30, 2024 and September 30, 2023, we had $450.5 million and $212.4 million, respectively, in outstanding borrowings under the Truist Credit Facility. The Truist Credit Facility had a weighted average interest rate of 7.7% and 7.7%, respectively, exclusive of the fee on undrawn commitment, as of June 30, 2024 and September 30, 2023. The Truist Credit Facility is a revolving facility with a stated maturity date of July 29, 2027 and pricing set at 235 basis points over SOFR (or an alternative risk-free floating interest rate index). As of June 30, 2024 and September 30, 2023, we had $24.5 million and $262.6 million of unused borrowing capacity under the Truist Credit Facility, respectively, subject to leverage and borrowing base restrictions. The Truist Credit Facility is secured by substantially all of our assets. As of June 30, 2024, we were in compliance with the terms of the Truist Credit Facility.

As of June 30, 2024, we had $150 million in aggregate principal amount of 2026 Notes outstanding. Interest on the 2026 Notes is paid semi-annually on May 1 and November 1, at a rate of 4.50% per year, commencing November 1, 2021. The 2026 Notes mature on May 1, 2026, and may be redeemed in whole or in part at our option subject to a make-whole premium if redeemed more than three months prior to maturity. The 2026 Notes are direct unsecured obligations and rank pari passu in right of payment with future unsecured unsubordinated indebtedness. The 2026 Notes are structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries, financing vehicles, or similar facilities.

As of June 30, 2024, we had $165 million in aggregate principal amount of 2026 Notes-2 outstanding. Interest on the 2026 Notes-2 is paid semi-annually on May 1 and November 1, at a rate of 4.0% per year, commencing May 1, 2022. The 2026 Notes-2 mature on November 1, 2026, and may be redeemed in whole or in part at our option subject to a make-whole premium if redeemed more than three months prior to maturity. The 2026 Notes-2 are direct unsecured obligations and rank pari passu in right of payment with future unsecured unsubordinated indebtedness. The 2026 Notes-2 are structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries, financing vehicles, or similar facilities.

On June 4, 2024, we entered into equity distribution agreements with Truist Securities, Inc. and Keefe, Bruyette & Woods, Inc. (together, the "Equity Distribution Agreements"), as sales agents (each a "Sales Agent" and together, the "Sales Agents") in connection with the sale of shares of our common stock, with an aggregate offering price of up to $100 million under an at-the-market offering ("ATM Program"). We may offer and sell shares of our common stock from time to time through a sales agent in amounts and at times to be determined by us. Actual sales will depend on a variety of factors to be determined by us from time to time, including, market conditions and the trading price of our common stock. The Investment Adviser may, from time to time, in its sole discretion, pay some or all of the commissions payable under the equity distribution agreements or make additional supplemental payments to ensure that the sales price per share of our common stock in connection with all of the offerings made hereunder will not be less than our current NAV per share. Any such payments made by the Investment Adviser will not be subject to reimbursement by us.

During the three and nine months ended June 30, 2024, we issued 71,594 and 71,594 shares of common stock through the ATM Program at an average price of $7.72 and $7.72 per share, raising $0.6 million and $0.6 million of net proceeds after commissions to the sales agents and inclusive of proceeds from the Investment Adviser to ensure that all shares were sold at or above NAV, respectively. In connection with the share issuance, we expensed $0.3 million of deferred offering costs incurred related to establishing the ATM Program to additional paid in capital.

We may raise additional equity or debt capital through both registered offerings off our shelf registration statement and private offerings of securities, by securitizing a portion of our investments, among other sources. Any future additional debt capital we incur, to the extent it is available, may be issued at a higher cost and on less favorable terms and conditions than the Truist Credit Facility, 2026 Notes, and 2026 Notes-2. Furthermore, the Truist Credit Facility availability depends on various covenants and restrictions. The primary use of existing funds and any funds raised in the future is expected to be for repayment of indebtedness, investments in portfolio companies, cash distributions to our stockholders or for other general corporate or strategic purposes such as a stock repurchase program.

We have entered into certain contracts under which we have material future commitments. Under our Investment Management Agreement, which was reapproved by our board of directors (including a majority of our directors who are not interested persons of us or the Investment Adviser) in May 2024 PennantPark Investment Advisers serves as our investment adviser. Payments under our Investment Management Agreement in each reporting period are equal to (1) a management fee equal to a percentage of the value of our average adjusted gross assets and (2) an incentive fee based on our performance.

Under our Administration Agreement, which was most recently reapproved by our board of directors, including a majority of our directors who are not interested persons of us, in May 2024 the Administrator furnishes us with office facilities and administrative services necessary to conduct our day-to-day operations. The Administration Agreement was amended on July 1, 2022. If requested to provide significant managerial assistance to our portfolio companies, we or the Administrator will be paid an additional amount based on the services provided. Payment under our Administration Agreement is based upon our allocable portion of the Administrator’s overhead in performing its obligations under our Administration Agreement, including rent and our allocable portion of the costs of our Chief Compliance Officer, Chief Financial Officer, Corporate Counsel and their respective staffs.

If any of our contractual obligations discussed above are terminated, our costs under new agreements that we enter into may increase. In addition, we will likely incur significant time and expense in locating alternative parties to provide the services we expect to receive under our Investment Management Agreement and our Administration Agreement. Any new investment management agreement would also be subject to approval by our stockholders.

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In accordance with the 1940 Act, with certain limited exceptions, PennantPark Investment is only allowed to borrow amounts such that our required 150% asset coverage ratio is met after such borrowing. As of June 30, 2024 and September 30, 2023, we excluded the principal amounts of our SBA debentures from our asset coverage ratio pursuant to SEC exemptive relief. In 2011, we received exemptive relief from the SEC allowing us to modify the asset coverage ratio requirement to exclude the SBA debentures from the calculation. Accordingly, our ratio of total assets on a consolidated basis to outstanding indebtedness may be less than 150% which, while providing increased investment flexibility, also increases our exposure to risks associated with leverage.

As of June 30, 2024 and September 30, 2023, we had cash and cash equivalents of $59.2 million and $38.8 million, respectively, available for investing and general corporate purposes. We believe our liquidity and capital resources are sufficient to allows us to effectively operate our business.

For the nine months ended June 30, 2024, our operating activities used cash of $167.7 million and our financing activities provided cash of $188.1 million. Our operating activities provided cash primarily due to our investment activities and our financing activities used cash primarily from borrowings under the Truist Credit Facility.

For the nine months ended June 30, 2023, our operating activities provided cash of $115.7 million and our financing activities used cash of $124.1 million. Our operating activities provided cash primarily due to our investment activities and our financing activities used cash primarily due to repayments under the Truist Credit Facility.

 

PennantPark Senior Loan Fund, LLC

In July 2020, we and Pantheon formed PSLF, an unconsolidated joint venture. PSLF invests primarily in middle-market and other corporate debt securities consistent with its strategy. PSLF was formed as a Delaware limited liability company. As of June 30, 2024 and September 30, 2023, PSLF had total assets of $977.0 million and $872.8 million, respectively and its investment portfolio consisted of debt investments in 101 and 90 portfolio companies, respectively. As of the same dates, we and Pantheon had remaining commitments to fund subordinated debt of zero and $22.4 million, respectively, and equity interest of zero and $14.5 million, respectively, in PSLF. As of June 30, 2024, at fair value, the largest investment in a single portfolio company in PSLF was $21.5 million and the five largest investments totaled $100.1 million. As of September 30, 2023, at fair value, the largest investment in a single portfolio company in PSLF was $19.7 million and the five largest investments totaled $97.5 million. PSLF invests in portfolio companies in the same industries in which we may directly invest.

We provide capital to PSLF in the form of subordinated notes and equity interests. As of June 30, 2024 and September 30, 2023, we and Pantheon owned 60.5% and 39.5%, respectively, of each of the outstanding subordinated notes and equity interests of PSLF. As of June 30, 2024 and September 30, 2023, our investment in PSLF consisted of subordinated notes of $115.9 million and $102.3 million, respectively, and equity interests of $67.4 million and $58.6 million, respectively.

We and Pantheon each appointed two members to PSLF’s four-person Member Designees’ Committee, or the Member Designees’ Committee. All material decisions with respect to PSLF, including those involving its investment portfolio, require unanimous approval of a quorum of the Member Designees’ Committee. Quorum is defined as (i) the presence of two members of the Member Designees’ Committee; provided that at least one individual is present that was elected, designated or appointed by each of us and Pantheon; (ii) the presence of three members of the Member Designees’ Committee, provided that the individual that was elected, designated or appointed by each of us or Pantheon, as the case may be, with only one individual present shall be entitled to cast two votes on each matter; and (iii) the presence of four members of the Member Designees’ Committee shall constitute a quorum, provided that two individuals are present that were elected, designated or appointed by each of us and Pantheon.

Additionally, PSLF, through its wholly-owned subsidiary, has entered into a $325.0 million (increased from $225.0 million on September 2, 2022) senior secured revolving credit facility, with BNP Paribas, which bears interest at SOFR (or an alternative risk-free interest rate index) plus 260 basis points during the investment period and is subject to leverage and borrowing base restrictions.

In March 2022, PSLF completed a $304.0 million debt securitization in the form of a collateralized loan obligation, or the “2034 Asset-Backed Debt”. The 2034 Asset-Backed Debt is secured by a diversified portfolio of PennantPark CLO IV, LLC., a wholly-owned and consolidated subsidiary of PSLF, consisting primarily of middle market loans and participation interests in middle market loans. The 2034 Asset-Backed Debt is scheduled to mature in April 2034. On the closing date of the transaction, in consideration of PSLF’s transfer to PennantPark CLO IV, LLC of the initial closing date loan portfolio, which included loans distributed to PSLF by certain of its wholly owned subsidiaries and us, PennantPark CLO IV, LLC transferred to PSLF 100% of the Preferred Shares of PennantPark CLO IV, LLC and 100% of the Subordinated Notes issued by PennantPark CLO IV, LLC. As of June 30, 2024 and September 30, 2023, there was $246.0 million of external 2034 Asset-Back Debt.

On July 26, 2023, CLO VII , LLC ("CLO VII") completed a $300 million debt securitization in the form of a collateralized loan obligation (the "2035 Debt Securitization" or "2035 Asset-Backed Debt"). The 2035 Asset-Backed Debt is secured by a diversified portfolio consisting primarily of middle market loans. The 2035 Debt Securitization was executed through a private placement of: (i) $151.0 million Class A-1a Notes maturing 2035, which bear interest at the three-month SOFR plus 2.7%, (ii) $20.0 million Class A-1b Loans 2035, which bear interest at 6.5%, (iii) $12.0 million Class A-2 Senior Secured Floating Rate Notes due 2035, which bear interest at the three-month SOFR plus 3.2%, (iv) $21.0 million Class B Senior Secured Floating Rate Notes due 2035, which bear interest at the three-month SOFR plus 4.1%, (v) $24.0 million Class C Secured Deferrable Floating Rate Notes due 2035, which bear interest at the three-month SOFR plus 4.7%, (vi) $18.0 million Class D Secured Deferrable Floating Rate Notes due 2035, which bear interest at the three-month SOFR plus 7.0%. As of June 30, 2024 and September 30, 2023, there was $246.0 million of external 2035 Asset-Backed Debt.

Below is a summary of PSLF’s portfolio at fair value:

($ in thousands)	June 30, 2024 (Unaudited)			September 30, 2023
Total investments	$	926,103		$	804,187
Weighted average cost yield on income producing investments		11.8	%		12.1	%
Number of portfolio companies in PSLF		101			90
Largest portfolio company investment at fair value	$	21,520		$	19,737
Total of five largest portfolio company investments at fair value	$	100,056		$	97,526

52

Below is a listing of PSLF’s individual investments as of June 30, 2024 ($ in thousands):

Issuer Name	Maturity	Industry	Current  Coupon			Basis Point Spread Above Index 1	Par		Cost		Fair Value 2
First Lien Secured Debt - 803.6%
A1 Garage Merger Sub, LLC	12/22/28	Personal, Food and Miscellaneous Services		10.83	%	SOFR+ 550		14,775	$	14,533	$	14,775
ACP Avenu Buyer, LLC	10/02/29	Business Services		10.55	%	SOFR+ 525		6,468		6,359		6,273
ACP Falcon Buyer, Inc.	08/01/29	Business Services		10.80	%	SOFR+ 550		15,389		15,096		15,512
AFC - Dell Holding Corp.	04/09/27	Distribution		11.75	%	SOFR+ 640		2,282		2,256		2,260
Ad.net Acquisition, LLC	05/07/26	Media		11.60	%	SOFR+ 600		4,850		4,850		4,850
Aeronix, Inc. - Term Loan	12/18/28	Aerospace and Defense		10.83	%	SOFR+ 550		14,925		14,728		14,925
Alpine Acquisition Corp II	11/30/26	Containers, Packaging and Glass		11.43	%	SOFR+ 610		14,725		14,475		14,136
Amsive Holding Corporation (f/k/a Vision Purchaser Corporation)	06/10/25	Media		11.73	%	SOFR+ 640		13,849		13,793		13,642
Anteriad Holdings Inc (fka MeritDirect)	06/30/26	Media		11.23	%	SOFR+ 575		13,744		13,673		13,744
Applied Technical Services, LLC	12/29/26	Environmental Services		11.25	%	SOFR+ 590		13,750		13,623		13,544
Arcfield Acquisition Corp.	08/03/29	Aerospace and Defense		11.58	%	SOFR+ 625		21,628		21,323		21,520
Beta Plus Technologies, Inc.	07/01/29	Business Services		11.08	%	SOFR+ 575		14,775		14,554		14,480
Big Top Holdings, LLC	02/28/30	Manufacturing / Basic Industries		11.58	%	SOFR+ 625		6,983		6,867		6,930
Bioderm, Inc.	01/31/28	Healthcare, Education and Childcare		11.83	%	SOFR+ 650		8,910		8,815		8,799
Blackhawk Industrial Distribution, Inc.	09/17/26	Distribution		11.66	%	SOFR+ 640		19,645		19,388		19,517
BlueHalo Global Holdings, LLC	10/31/25	Aerospace and Defense		10.09	%	SOFR+ 475		12,228		12,158		12,045
Broder Bros., Co.	12/04/25	Personal and Non-Durable Consumer Products		11.60	%	SOFR+ 626		9,438		9,438		9,438
Burgess Point Purchaser Corporation	09/26/29	Auto Sector		10.69	%	SOFR+ 535		887		834		857
Carisk Buyer, Inc.	11/30/29	Healthcare, Education and Childcare		11.08	%	SOFR+ 575		5,486		5,412		5,459
Carnegie Dartlet, LLC	02/07/30	Education		10.84	%	SOFR+ 550		9,975		9,835		9,825
Cartessa Aesthetics, LLC	06/14/28	Distribution		11.08	%	SOFR+ 575		17,150		16,910		17,150
CF512, Inc.	08/20/26	Media		11.54	%	SOFR+ 619		2,899		2,883		2,855
Connatix Buyer, Inc.	07/13/27	Media		11.11	%	SOFR+ 576		8,739		8,726		8,564
Crane 1 Services, Inc.	08/16/27	Personal, Food and Miscellaneous Services		10.35	%	SOFR+ 501		2,555		2,535		2,549
Dr. Squatch, LLC	08/31/27	Personal and Non-Durable Consumer Products		11.18	%	SOFR+ 575		10,615		10,578		10,615
DRI Holding Inc.	12/21/28	Media		10.69	%	SOFR+ 535		5,845		5,420		5,604
DRS Holdings III, Inc.	11/03/25	Consumer Products		11.73	%	SOFR+ 640		14,049		14,025		13,993
EDS Buyer, LLC	01/10/29	Aerospace and Defense		11.08	%	SOFR+ 575		6,172		6,110		6,079
ETE Intermediate II, LLC	05/29/29	Personal, Food and Miscellaneous Services		11.85	%	SOFR+ 650		12,280		12,074		12,402
Exigo Intermediate II, LLC	03/15/27	Business Services		11.69	%	SOFR+ 625		9,676		9,574		9,603
Fairbanks Morse Defense	06/17/28	Aerospace and Defense		10.35	%	SOFR+ 475		3,491		3,413		3,494
Five Star Buyer, Inc.	02/23/28	Hotels, Motels, Inns and Gaming		12.47	%	SOFR+ 700		4,274		4,204		4,242
Global Holdings InterCo LLC	03/16/26	Banking, Finance, Insurance & Real Estate		11.48	%	SOFR+ 610		6,971		6,958		6,622
Graffiti Buyer, Inc.	08/10/27	Distribution		10.93	%	SOFR+ 560		3,126		3,087		3,095
Hancock Roofing and Construction L.L.C.	12/31/26	Insurance		10.93	%	SOFR+ 550		6,146		6,146		5,777
Hills Distribution, Inc	11/08/29	Distribution		11.33	%	SOFR+ 600		14,328		14,139		14,185
HV Watterson Holdings, LLC	12/17/26	Business Services		11.73	%	SOFR+ 615		14,987		14,851		14,313
HW Holdco, LLC	05/10/26	Media		11.70	%	SOFR+ 640		18,451		18,380		18,451
IG Investments Holdings, LLC	09/22/28	Business Services		11.43	%	SOFR+ 600		4,394		4,330		4,317
Imagine Acquisitionco, LLC	11/15/27	Business Services		10.43	%	SOFR+ 510		5,523		5,451		5,495
Infinity Home Services Holdco, Inc.	12/28/28	Personal, Food and Miscellaneous Services		12.18	%	SOFR+ 685		10,969		10,807		10,969
Infolinks Media Buyco, LLC	11/01/26	Media		10.83	%	SOFR+ 550		10,902		10,838		10,793
Integrity Marketing Acquisition, LLC	08/27/26	Insurance		11.50	%	SOFR+ 605		19,571		19,527		19,473
Inventus Power, Inc.	06/30/25	Consumer Products		12.96	%	SOFR+ 761		13,117		12,961		12,855
Kinetic Purchaser, LLC	11/10/27	Consumer Products		11.48	%	SOFR+ 615		13,701		13,510		13,701
LAV Gear Holdings, Inc.	10/31/25	Leisure, Amusement, Motion Pictures, Entertainment		11.72	%	SOFR+ 640		4,625		4,615		4,569
Lash OpCo, LLC	02/18/27	Consumer Products		8.06	%	SOFR+ 275		20,184		20,069		19,982
Lightspeed Buyer Inc.	02/03/26	Healthcare, Education and Childcare		10.69	%	SOFR+ 535		12,123		12,011		12,123
LJ Avalon Holdings, LLC	01/31/30	Environmental Services		11.74	%	SOFR+ 625		6,271		6,165		6,271
MAG DS Corp.	04/01/27	Aerospace and Defense		10.93	%	SOFR+ 550		7,539		7,173		7,275
Magenta Buyer, LLC	07/31/28	Software		10.59	%	SOFR+ 526		3,756		3,552		2,072
Mars Acquisition Holdings Corp.	05/14/26	Media		10.98	%	SOFR+ 565		10,802		10,746		10,802
MBS Holdings, Inc.	04/16/27	Telecommunications		11.27	%	SOFR+ 585		8,352		8,274		8,360
Meadowlark Acquirer, LLC	12/10/27	Business Services		11.23	%	SOFR+ 575		2,930		2,889		2,857
Medina Health, LLC	10/20/28	Healthcare, Education and Childcare		11.58	%	SOFR+ 625		9,950		9,796		9,950
Megawatt Acquisitionco, Inc.	03/01/30	Business Services		10.58	%	SOFR+ 525		8,000		7,887		8,000
MOREgroup Holdings, LLC	01/16/30	Business Services		11.08	%	SOFR+ 575		7,481		7,379		7,406
Municipal Emergency Services, Inc.	10/01/27	Distribution		10.49	%	SOFR+ 515		5,928		5,833		5,928
NBH Group LLC	08/19/26	Healthcare, Education and Childcare		11.18	%	SOFR+ 575		7,372		7,327		7,004
NORA Acquisition, LLC	08/31/29	Healthcare, Education and Childcare		11.68	%	SOFR+ 635		14,888		14,625		14,888
Omnia Exterior Solutions, LLC	12/29/29	Diversified Conglomerate Service		10.83	%	SOFR+ 550		3,491		3,443		3,439
One Stop Mailing, LLC	05/07/27	Transportation		11.71	%	SOFR+ 636		8,403		8,271		8,403
Owl Acquisition, LLC	02/04/28	Education		10.69	%	SOFR+ 535		3,893		3,807		3,834
Ox Two, LLC (New Issue)	05/18/26	Distribution		11.85	%	SOFR+ 651		4,340		4,304		4,340
PCS Midco, Inc.	03/01/30	Financial Services		11.10	%	SOFR+ 575		5,826		5,745		5,768
PL Acquisitionco, LLC	11/09/27	Retail		12.44	%	SOFR+ 710		8,143		8,047		6,514
Pacific Purchaser, LLC	10/02/28	Business Services		11.26	%	SOFR+ 600		12,935		12,705		13,013
PlayPower, Inc.	05/08/26	Consumer Products		10.96	%	SOFR+ 565		2,529		2,477		2,491
Quantic Electronics, LLC	11/19/26	Aerospace and Defense		11.68	%	SOFR+ 635		3,288		3,251		3,255
Radius Aerospace, Inc.	03/31/25	Aerospace and Defense		11.38	%	SOFR+ 575		12,599		12,567		12,347
Rancho Health MSO, Inc.	12/18/25	Healthcare, Education and Childcare		10.92	%	SOFR+ 550		5,560		5,560		5,560
Reception Purchaser, LLC	04/28/28	Transportation		11.48	%	SOFR+ 615		4,962		4,910		3,970
Recteq, LLC	01/29/26	Consumer Products		12.49	%	SOFR+ 715		9,675		9,609		9,530
Research Now Group, LLC and Dynata, LLC 3	12/20/24	Business Services		0.00	%	SOFR+ 576		14,351		14,318		12,198
Research Now Group, LLC and Dynata, LLC-DIP	08/06/24	Business Services		14.21	%	SOFR+ 886		617		570		617
Riverpoint Medical, LLC	06/21/25	Healthcare, Education and Childcare		10.78	%	SOFR+ 550		3,942		3,925		3,946

53

Issuer Name	Maturity	Industry	Current  Coupon			Basis Point Spread Above Index 1	Par		Cost		Fair Value 2
Rural Sourcing Holdings, Inc. (HPA SPQ Merger Sub, Inc.)	06/16/29	Professional Services		11.02	%	SOFR+ 575		4,347	$	4,276	$	4,303
S101 Holdings Inc.	12/29/26	Electronics		11.45	%	SOFR+ 615		4,218		4,156		4,176
Sales Benchmark Index LLC	01/03/25	Business Services		11.53	%	SOFR+ 620		6,676		6,660		6,676
Sargent & Greenleaf Inc.	12/20/24	Electronics		11.92	%	SOFR+ 650		4,675		4,675		4,675
Seaway Buyer, LLC	06/13/29	Chemicals, Plastics and Rubber		11.48	%	SOFR+ 615		14,738		14,540		14,259
Sigma Defense Systems, LLC	12/18/27	Telecommunications		12.49	%	SOFR+ 715		14,687		14,518		14,540
Simplicity Financial Marketing Group Holdings, Inc	12/02/26	Banking, Finance, Insurance & Real Estate		11.71	%	SOFR+ 640		11,387		11,220		11,274
Skopima Consilio Parent, LLC	05/17/28	Business Services		9.96	%	SOFR+ 450		1,294		1,271		1,295
Smartronix, LLC	11/23/28	Aerospace and Defense		11.33	%	SOFR+ 600		19,564		19,274		19,564
Solutionreach, Inc.	07/17/25	Communications		12.48	%	SOFR+ 700		9,239		9,208		9,239
SpendMend Holdings, LLC	03/01/28	Business Services		10.98	%	SOFR+ 565		9,534		9,314		9,534
Summit Behavioral Healthcare, LLC	11/24/28	Healthcare, Education and Childcare		9.60	%	SOFR+ 425		3,554		3,391		3,566
System Planning and Analysis, Inc. (f/k/a Management Consulting & Research, LLC)	08/16/27	Aerospace and Defense		11.16	%	SOFR+ 575		15,844		15,624		15,844
TCG 3.0 Jogger Acquisitionco, Inc.	01/23/29	Media		11.84	%	SOFR+ 650		9,975		9,819		9,875
Team Services Group, LLC	11/24/28	Healthcare, Education and Childcare		10.50	%	SOFR+ 515		2,668		2,581		2,659
Teneo Holdings LLC	03/13/31	Business Services		10.09	%	SOFR+ 475		2,993		2,963		2,996
The Bluebird Group LLC	07/27/26	Business Services		11.98	%	SOFR+ 665		11,933		11,889		11,933
The Vertex Companies, LLC	08/31/27	Business Services		11.48	%	SOFR+ 610		7,631		7,552		7,641
TPC US Parent, LLC	11/24/25	Food		10.95	%	SOFR+ 550		5,437		5,369		5,437
Transgo, LLC	12/29/28	Auto Sector		11.34	%	SOFR+ 600		14,952		14,742		14,952
TWS Acquisition Corporation	06/06/25	Education		11.74	%	SOFR+ 625		3,628		3,624		3,628
Tyto Athene, LLC	04/03/28	Aerospace and Defense		10.95	%	SOFR+ 550		11,393		11,305		10,596
Urology Management Holdings, Inc.	06/15/26	Healthcare, Education and Childcare		11.76	%	SOFR+ 625		3,831		3,780		3,804
Watchtower Buyer, LLC	12/01/29	Consumer Products		11.33	%	SOFR+ 600		8,978		8,843		8,897
Wildcat Buyerco, Inc.	02/27/27	Electronics		11.08	%	SOFR+ 575		19,305		19,162		19,305
Zips Car Wash, LLC	12/31/24	Business Services		12.69	%	SOFR+ 725		19,736		19,645		18,998
Total First Lien Secured Debt										930,700		926,103
Total Investments - 803.6%
Cash and Cash Equivalents - 38.8%
BlackRock Federal FD Institutional 30										44,765		44,765
Total Cash and Cash Equivalents										44,765		44,765
Total Investments and Cash Equivalents - 842.5)%									$	975,465	$	970,868
Liabilities in Excess of Other Assets — (716.9)%												(855,630	)
Members' Equity—100.0%											$	115,238

(1)

Represents floating rate instruments that accrue interest at a predetermined spread relative to an index, typically the applicable Secured Overnight Financing Rate (“SOFR”) or Prime rate (“P”). The spread may change based on the type of rate used. The terms in the Schedule of Investments disclose the actual interest rate in effect as of the reporting period. SOFR loans are typically indexed to a 30-day, 60-day, 90-day or 180-day SOFR rate (1M S, 2M S, 3M S, or 6M S, respectively), at the borrower’s option. All securities are subject to a SOFR or Prime rate floor where a spread is provided, unless noted. The spread provided includes PIK interest and other fee rates, if any.

(2)

Valued based on PSLF’s accounting policy.

(3)

Non-income producing security

54

Below is a listing of PSLF’s individual investments as of September 30, 2023 ($ in thousands):

Issuer Name	Maturity	Industry	Current  Coupon			Basis Point Spread Above Index 1	Par		Cost		Fair Value 2
First Lien Secured Debt - 783.7%
A1 Garage Merger Sub, LLC	12/22/28	Personal, Food and Miscellaneous Services		11.84	%	SOFR+650		14,925	$	14,668	$	14,850
Ad.net Acquisition, LLC	05/07/26	Media		11.65	%	SOFR+600		4,888		4,888		4,863
Alpine Acquisition Corp II	11/30/26	Containers, Packaging and Glass		11.26	%	SOFR+600		14,837		14,528		14,244
Amsive Holding Corporation (f/k/a Vision Purchaser Corporation)	06/10/25	Media		11.79	%	SOFR+675		13,958		13,869		13,749
Anteriad, LLC (f/k/a MeritDirect, LLC)	05/23/24	Media		12.04	%	SOFR+650		14,354		14,319		14,103
Any Hour Services	07/21/27	Personal, Food and Miscellaneous Services		11.22	%	SOFR+575		10,882		10,847		10,665
Apex Service Partners, LLC	07/31/25	Personal, Food and Miscellaneous Services		10.52	%	SOFR+525		6,424		6,380		6,408
Apex Service Partners, LLC Term Loan B	07/31/25	Personal, Food and Miscellaneous Services		11.11	%	SOFR+550		3,316		3,299		3,308
Apex Service Partners, LLC - Term Loan C	07/31/25	Personal, Food and Miscellaneous Services		10.76	%	SOFR+525		7,531		7,531		7,512
Applied Technical Services, LLC	12/29/26	Environmental Services		11.51	%	SOFR+575		11,394		11,271		11,166
Applied Technical Services, LLC - Unfunded Term Loan 3	12/29/26	Environmental Services						513		-		(5	)
Arcfield Acquisition Corp.	08/03/29	Aerospace and Defense		11.62	%	SOFR+625		11,820		11,642		11,702
Beta Plus Technologies, Inc.	07/01/29	Business Services		11.14	%	SOFR+575		14,850		14,604		13,811
Bioderm, Inc.	01/31/28	Healthcare, Education and Childcare		11.83	%	SOFR+650		8,978		8,874		8,933
Blackhawk Industrial Distribution, Inc.	09/17/24	Distribution		11.79	%	SOFR+625		17,823		17,588		17,556
Broder Bros., Co.	12/04/25	Personal and Non-Durable Consumer Products		11.50	%	SOFR+600		9,683		9,683		9,683
Burgess Point Purchaser Corporation	09/26/29	Auto Sector		10.67	%	SOFR+525		893		836		841
Cartessa Aesthetics, LLC	06/14/28	Distribution		11.39	%	SOFR+600		17,281		17,013		17,281
CF512, Inc.	08/20/26	Media		11.60	%	SOFR+600		2,921		2,901		2,862
Connatix Buyer, Inc.	07/13/27	Media		11.16	%	SOFR+550		8,808		8,792		8,500
Crane 1 Services, Inc.	08/16/27	Personal, Food and Miscellaneous Services		10.90	%	SOFR+575		2,575		2,550		2,562
Dr. Squatch, LLC	08/31/27	Personal and Non-Durable Consumer Products		11.24	%	SOFR+575		10,882		10,834		10,882
DRI Holding Inc.	12/21/28	Media		10.67	%	SOFR+525		4,382		3,959		3,993
DRS Holdings III, Inc.	11/03/25	Consumer Products		11.77	%	SOFR+640		14,395		14,345		14,222
Duraco Specialty Tapes LLC	06/30/24	Manufacturing / Basic Industries		11.93	%	SOFR+650		8,635		8,561		8,505
EDS Buyer, LLC	01/10/29	Aerospace and Defense		11.64	%	SOFR+625		6,219		6,148		6,125
Electro Rent Corporation	01/17/24	Electronics		10.93	%	SOFR+550		3,712		3,665		3,632
ETE Intermediate II, LLC	05/29/29	Personal, Food and Miscellaneous Services		11.89	%	SOFR+650		12,404		12,171		12,193
Exigo Intermediate II, LLC	03/15/27	Business Services		11.17	%	SOFR+575		9,750		9,637		9,555
Fairbanks Morse Defense	06/17/28	Aerospace and Defense		10.40	%	SOFR+475		1,518		1,470		1,506
Five Star Buyer, Inc.	02/23/28	Hotels, Motels, Inns and Gaming		12.43	%	SOFR+700		4,373		4,291		4,307
Global Holdings InterCo LLC	03/16/26	Banking, Finance, Insurance & Real Estate		11.96	%	SOFR+650		7,027		7,008		6,676
Graffiti Buyer, Inc.	08/10/27	Distribution		10.99	%	SOFR+575		1,954		1,925		1,935
Hancock Roofing and Construction L.L.C.	12/31/26	Insurance		10.93	%	SOFR+550		6,423		6,423		6,262
Holdco Sands Intermediate, LLC	11/23/28	Aerospace and Defense		11.32	%	SOFR+600		19,717		19,388		19,717
HV Watterson Holdings, LLC	12/17/26	Business Services		11.79	%	SOFR+600		15,140		14,974		15,110
HW Holdco, LLC	12/10/24	Media		11.70	%	SOFR+625		14,250		14,171		14,036
IG Investments Holdings, LLC	09/22/28	Business Services		11.45	%	SOFR+600		4,428		4,355		4,362
Imagine Acquisitionco, LLC	11/15/27	Business Services		10.72	%	SOFR+550		5,565		5,481		5,482
Inception Fertility Ventures, LLC	12/31/24	Healthcare, Education and Childcare		12.50	%	SOFR+715		19,737		19,410		19,737
Infinity Home Services Holdco, Inc.	12/28/28	Personal, Food and Miscellaneous Services		12.24	%	SOFR+685		11,053		10,867		11,053
Infolinks Media Buyco, LLC	11/01/26	Media		11.17	%	SOFR+575		6,364		6,364		6,364
Integrity Marketing Acquisition, LLC	08/27/26	Insurance		11.57	%	SOFR+575		19,701		19,639		19,504
K2 Pure Solutions NoCal, L.P.	12/20/23	Chemicals, Plastics and Rubber		13.42	%	SOFR+800		12,061		12,040		12,061
Kinetic Purchaser, LLC	11/10/27	Consumer Products		11.54	%	SOFR+615		16,920		16,641		16,666
LAV Gear Holdings, Inc.	10/31/24	Leisure, Amusement, Motion Pictures, Entertainment		11.46	%	SOFR+565		4,658		4,631		4,603
Lash OpCo, LLC	02/18/27	Consumer Products		12.13	%	SOFR+700		19,723		19,565		19,526
Lightspeed Buyer Inc.	02/03/26	Healthcare, Education and Childcare		10.67	%	SOFR+575		12,218		12,056		12,096
LJ Avalon Holdings, LLC	01/31/30	Environmental Services		11.77	%	SOFR+665		6,318		6,206		6,192
MAG DS Corp.	04/01/27	Aerospace and Defense		10.99	%	SOFR+550		7,601		7,153		7,202
Magenta Buyer, LLC	07/31/28	Software		10.63	%	SOFR+500		3,785		3,550		2,805
Mars Acquisition Holdings Corp.	05/14/26	Media		11.04	%	SOFR+550		10,885		10,811		10,776
MBS Holdings, Inc.	04/16/27	Telecommunications		11.22	%	SOFR+575		7,859		7,780		7,749
Meadowlark Acquirer, LLC	12/10/27	Business Services		10.58	%	SOFR+550		2,958		2,911		2,884
Municipal Emergency Services, Inc.	10/01/27	Distribution		11.04	%	SOFR+550		5,975		5,860		5,843
NBH Group LLC	08/19/26	Healthcare, Education and Childcare		10.93	%	SOFR+525		7,429		7,369		7,280
Neptune Flood Incorporated	05/09/29	Financial Services		11.97	%	SOFR+660		8,020		7,910		8,020
One Stop Mailing, LLC	05/07/27	Transportation		11.68	%	SOFR+625		8,470		8,311		8,470
Owl Acquisition, LLC	02/04/28	Education		10.80	%	SOFR+575		3,893		3,794		3,834
Ox Two, LLC (New Issue)	05/18/26	Distribution		12.90	%	SOFR+725		4,378		4,343		4,301
Pequod Merger Sub, Inc.	12/02/26	Banking, Finance, Insurance & Real Estate		11.79	%	SOFR+640		11,474		11,267		11,244
PL Acquisitionco, LLC	11/09/27	Retail		12.42	%	SOFR+700		7,930		7,818		7,137
PlayPower, Inc.	05/08/26	Consumer Products		10.92	%	SOFR+565		2,551		2,481		2,436
Quantic Electronics, LLC	11/19/26	Aerospace and Defense		11.74	%	SOFR+625		3,314		3,267		3,264
Radius Aerospace, Inc.	03/31/25	Aerospace and Defense		11.29	%	SOFR+575		12,703		12,641		12,576
Rancho Health MSO, Inc.	12/18/25	Healthcare, Education and Childcare		11.22	%	SOFR+550		5,603		5,603		5,603
Reception Purchaser, LLC	4/28/2028	Transportation		11.54	%	SOFR+600		5,000		4,937		4,800
Recteq, LLC	1/29/2026	Consumer Products		12.54	%	SOFR+700		9,750		9,655		9,458
Research Now Group, LLC and Dynata, LLC	12/20/2024	Business Services		11.13	%	SOFR+550		14,389		14,332		12,591
Riverpoint Medical, LLC	6/20/2025	Healthcare, Education and Childcare		10.54	%	SOFR+575		3,176		3,162		3,131
Riverside Assessments, LLC	3/10/2025	Education		11.29	%	SOFR+625		10,895		10,834		10,786
Rural Sourcing Holdings, Inc. (HPA SPQ Merger Sub, Inc.)	6/16/2029	Professional Services		11.52	%	SOFR+625		3,749		3,678		3,692

55

Issuer Name	Maturity	Industry	Current  Coupon			Basis Point Spread Above Index 1	Par		Cost		Fair Value 2
Sales Benchmark Index LLC	1/3/2025	Business Services		11.59	%	SOFR+600		6,859	$	6,815	$	6,825
Sargent & Greenleaf Inc.	12/20/2024	Electronics		12.92	%	SOFR+750		4,872		4,872		4,823
Seaway Buyer, LLC	6/13/2029	Chemicals, Plastics and Rubber		11.54	%	SOFR+605		14,850		14,633		14,405
Signature Systems Holding Company	5/3/2024	Chemicals, Plastics and Rubber		12.04	%	SOFR+650		11,201		11,173		11,201
Skopima Consilio Parent, LLC	5/17/2028	Business Services		9.93	%	SOFR+450		1,300		1,274		1,272
Solutionreach, Inc.	7/17/2025	Communications		12.37	%	SOFR+700		9,239		9,206		9,202
SpendMend Holdings, LLC	3/1/2028	Business Services		11.04	%	SOFR+575		9,607		9,352		9,396
STV Group Incorporated	12/11/2026	Transportation		10.67	%	SOFR+525		12,099		12,045		11,857
Summit Behavioral Healthcare, LLC	11/24/2028	Healthcare, Education and Childcare		10.43	%	SOFR+475		3,572		3,389		3,559
System Planning and Analysis, Inc. (f/k/a Management Consulting & Research, LLC)	8/16/2027	Aerospace and Defense		11.49	%	SOFR+600		15,966		15,695		15,790
Team Services Group, LLC	11/24/2028	Healthcare, Education and Childcare		10.75	%	SOFR+515		2,688		2,584		2,627
Teneo Holdings LLC	7/18/2025	Financial Services		10.67	%	SOFR+525		2,936		2,927		2,931
The Aegis Technologies Group, LLC	10/31/2025	Aerospace and Defense		12.04	%	SOFR+650		11,095		11,008		10,929
The Bluebird Group LLC	7/27/2026	Business Services		12.79	%	SOFR+725		7,855		7,872		7,823
The Vertex Companies, LLC	8/31/2027	Business Services		11.70	%	SOFR+635		7,690		7,596		7,628
TPC Canada Parent, Inc. and TPC US Parent, LLC	11/24/2025	Food		10.68	%	SOFR+550		5,479		5,378		5,479
TWS Acquisition Corporation	6/6/2025	Education		11.80	%	SOFR+625		7,177		7,161		7,177
Tyto Athene, LLC	4/3/2028	Aerospace and Defense		10.90	%	SOFR+550		11,393		11,285		10,391
Urology Management Holdings, Inc.	6/15/2026	Healthcare, Education and Childcare		11.79	%	SOFR+625		3,860		3,792		3,780
Wildcat Buyerco, Inc.	2/27/2026	Electronics		10.54	%	SOFR+515		11,386		11,323		11,272
Zips Car Wash, LLC	3/1/2024	Business Services		12.67	%	SOFR+725		19,682		19,582		19,042
Total First Lien Secured Debt										810,737		804,187
Total Investments - 783.7%
Cash and Cash Equivalents - 57.6%
BlackRock Federal FD Institutional 30										59,096		59,096
Total Cash and Cash Equivalents										59,096		59,096
Total Investments and Cash Equivalents - 841.3%									$	869,833	$	863,283
Liabilities in Excess of Other Assets — (741.3)%												(760,665	)
Members' Equity—100.0%											$	102,618

(1)

Represents floating rate instruments that accrue interest at a predetermined spread relative to an index, typically the applicable Secured Overnight Financing Rate, or “SOFR” or Prime rate or
“P”. The spread may change based on the type of rate used. The terms in the Schedule of Investments disclose the actual interest rate in effect as of the reporting period. SOFR loans are typically
indexed to a 30-day, 60-day, 90-day or 180-day SOFR rate (1M S, 2M S, 3M S, or 6M S, respectively), at the borrower’s option. All securities are subject to a SOFR or Prime rate floor where a
spread is provided, unless noted. The spread provided includes PIK interest and other fee rates, if any.

(2)

Valued based on PSLF’s accounting policy.

Below are the consolidated statements of assets and liabilities for PSLF,($ in thousands):

	June 30, 2024 (Unaudited)		September 30, 2023
Assets
Investments at fair value (amortized cost—$930,700 and $810,737, respectively)	$	926,103	$	804,187
Cash and cash equivalents (cost—$44,765 and $59,096, respectively)		44,765		59,096
Interest receivable		5,648		5,248
Prepaid expenses and other assets		430		936
Due from affiliate		64		3,296
Total assets		977,010		872,763
Liabilities
2034 Asset-backed debt, net (par—$246,000)		244,575		244,284
2035 Asset-backed debt, net (par—$246,000)		244,021		243,727
Notes payable to members		191,546		169,131
Credit facility payable		152,600		88,600
Interest payable on credit facility and asset backed debt		11,413		10,421
Distribution payable to members		12,210		7,250
Interest payable on notes to members		4,397		3,895
Accounts payable and accrued expenses		885		835
Due to affiliate		125		—
Payable for investments purchased		—		2,002
Total liabilities		861,772		770,145
Commitments and contingencies 1
Members' equity		115,238		102,618
Total liabilities and members' equity	$	977,010	$	872,763

(1)

As of June 30, 2024 and September 30, 2023, PSLF had zero and $0.5 million, respectively, of unfunded commitments to fund investments.

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Below are the consolidated statements of operations for PSLF, ($ in thousands):

	Three Months Ended June 30,						Nine Months Ended June 30,
	2024			2023			2024		2023
Investment income:
Interest	$	28,866		$	22,848		$	83,812	$	62,916
Other income		222			422			696		1,270
Total investment income		29,088			23,270			84,508		64,186
Expenses:
Interest expense on credit facility and asset-backed debt		13,635			9,798			39,613		26,487
Interest expense on notes to members		6,450			5,397			18,361		15,123
Administration fees		778			513			1,948		1,733
General and administrative expenses		305			194			725		485
Total expenses		21,168			15,902			60,647		43,828
Net investment income		7,920			7,368			23,861		20,358
Realized and unrealized gain (loss) on investments:
Net realized gain (loss) on investments		—			(43	)		—		(22	)
Net change in unrealized appreciation (depreciation) on investments		(400	)		1,683			1,935		(3,934	)
Net realized and unrealized gain (loss) on investments		(400	)		1,640			1,935		(3,956	)
Net increase (decrease) in members' equity resulting from operations	$	7,520		$	9,008		$	25,796	$	16,402

(1) No management or incentive fees are payable by PSLF.

Distributions

In order to be treated as a RIC for federal income tax purposes and to not be subject to corporate-level tax on undistributed income or gains, we are required, under Subchapter M of the Code, to annually distribute dividends for U.S. federal income tax purposes to our stockholders out of the assets legally available for distribution of an amount generally at least equal to 90% of our investment company taxable income, determined without regard to any deduction for dividends paid.

Although not required for us to maintain our RIC tax status, in order to preclude the imposition of a 4% nondeductible federal excise tax imposed on RICs, we must distribute dividends for U.S. federal income tax purposes to our stockholders in respect of each calendar year of an amount at least equal to the Excise Tax Avoidance Requirement. In addition, although we may distribute realized net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually, out of the assets legally available for such distributions in the manner described above, we have retained and may continue to retain such net capital gains or investment company taxable income, contingent on our ability to be subject to tax as a RIC, in order to provide us with additional liquidity.

During the three and nine months ended June 30, 2024, we declared distributions of $0.22 and $0.64 per share, for total distributions of $14.4 million and $41.8 million. During the three and nine months ended June 30, 2023, we declared distributions of $0.20 and $0.55 per share, for total distributions of $13.0 million and $35.9 million, respectively. We monitor available net investment income to determine if a return of capital for tax purposes may occur for the fiscal year. To the extent our taxable earnings fall below the total amount of our distributions for any given fiscal year, stockholders will be notified of the portion of those distributions deemed to be a tax return of capital. Tax characteristics of all distributions will be reported to stockholders subject to information reporting on Form 1099-DIV after the end of each calendar year and in our periodic reports filed with the SEC.

Effective October 2023, we changed from a quarterly distribution to a monthly distribution. We intend to continue to make monthly distributions to our stockholders. Our monthly distributions, if any, are determined by our board of directors.

We maintain an “opt out” dividend reinvestment plan for our common stockholders. As a result, if we declare a distribution, then stockholders’ cash distributions will be automatically reinvested in additional shares of our common stock, unless they specifically “opt out” of the dividend reinvestment plan so as to receive cash distributions.

We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of these distributions from time to time. In addition, we may be limited in our ability to make distributions due to the asset coverage ratio for borrowings applicable to us as a BDC under the 1940 Act and/or due to provisions in future credit facilities. If we do not distribute at least a certain percentage of our income annually, we could suffer adverse tax consequences, including possible loss of our ability to be subject to tax as a RIC. We cannot assure stockholders that they will receive any distributions at a particular level.

Recent Accounting Pronouncements

In March 2020, the FASB issued Accounting Standards Update ("ASU, No. 2020-04"), “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The guidance provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other transactions, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued because of the reference rate reform. ASU 2020-04 is effective for all entities as of March 12, 2020 through June 30, 2023. The FASB approved an (optional) two year extension to December 31, 2024, for transitioning away from LIBOR. The Company utilized the optional expedients and exceptions provided by ASU 2020-04 during the three and nine months ended June 30, 2024, the effect of which was not material to the consolidated financial statements and the notes thereto.

In March 2022, the FASB issued ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326)”, which is intended to address issues identified during the post-implementation review of ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendment, among other things, eliminates the accounting guidance for troubled debt restructurings by creditors in Subtopic 310-40, “Receivables - Troubled Debt Restructurings by Creditors”, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The new guidance is effective for interim and annual periods beginning after December 15, 2022. The Company has adopted the new accounting standard implementing appropriate controls and procedures, the effect of which was not material to the consolidated financial statements and the notes thereto.

57

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions ("ASU 2022-03"), which changed the fair value measurement disclosure requirements of ASC Topic 820, Fair Value Measurements and Disclosures ("ASC 820"). The amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods therein. Early application is permitted. The Company is currently evaluating the impact the adoption of this new accounting standard will have on its consolidated financial statements, but the impact of the adoption is not expected to be material.

In December 2023, the FASB issued ASU 2023 - 09 "Improvements to Income Tax Disclosures" ("ASU 2023 - 09"). ASU 2023 - 09 intends to improve the transparency of income tax disclosures. 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. We are currently assessing the impact of this guidance, however, we do not expect a material impact to our financial statements.

Share Repurchase Program

On February 9, 2022, we announced a share repurchase program which allows us to repurchase up to $25 million of our outstanding common shares in the open market at prices below our net asset value as reported in our then most recently published consolidated financial statements. The program expired on March 31, 2023. During the nine months ended June 30, 2023, we did not make any repurchases of our common shares.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are subject to financial market risks, including changes in interest rates. As of June 30, 2024, our debt portfolio consisted of 96% variable-rate investments and 4% fixed rate investments. The variable-rate loans are usually based on a SOFR (or an alternative risk-free floating interest rate index) rate and typically have durations of three months after which they reset to current market interest rates. Variable-rate investments subject to a floor generally reset by reference to the current market index after one to nine months only if the index exceeds the floor. In regards to variable-rate instruments with a floor, we do not benefit from increases in interest rates until such rates exceed the floor and thereafter benefit from market rates above any such floor. In contrast, our cost of funds, to the extent it is not fixed, will fluctuate with changes in interest rates since it has no floor.

Assuming that the most recent Consolidated Statements of Assets and Liabilities was to remain constant, and no actions were taken to alter the interest rate sensitivity, the following table shows the annualized impact of hypothetical base rate changes in interest rates:

Change in Interest Rates	Change in Interest Income, Net of Interest Expense  (in thousands)			Change in Interest Income, Net of Interest Expense Per Share
Down 1%	$	(4,318	)	$	(0.07	)
Up 1%		4,318			0.07
Up 2%		8,637			0.13
Up 3%		12,955			0.20
Up 4%		17,294			0.26

Although management believes that this measure is indicative of our sensitivity to interest rate changes, it does not adjust for potential changes in the credit market, credit quality, size and composition of the assets on the Consolidated Statements of Assets and Liabilities and other business developments that could affect net increase in net assets resulting from operations, or net investment income. Accordingly, no assurances can be given that actual results would not differ materially from those shown above.

Because we borrow money to make investments, our net investment income is dependent upon the difference between the rate at which we borrow funds and the rate at which we invest these funds as well as our level of leverage. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income or net assets.

We may hedge against interest rate and foreign currency fluctuations by using standard hedging instruments such as futures, options and forward contracts or our Truist Credit Facility subject to the requirements of the 1940 Act and applicable commodities laws. While hedging activities may insulate us against adverse changes in interest rates and foreign currencies, they may also limit our ability to participate in the benefits of lower interest rates or higher exchange rates with respect to our portfolio of investments with fixed interest rates or investments denominated in foreign currencies. During the periods covered by this Report, we did not engage in interest rate hedging activities or foreign currency derivatives hedging activities.

58

Item 4. Controls and Procedures

As of the quarter ended June 30, 2024, we, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act). As disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, a material weakness was previously identified in connection with our internal control over financial reporting relating to the review of quarterly cash and investment reconciliations. Additionally, a material weakness was identified in the operation of our internal controls over financial reporting relating to our review of interest income and non-accrual classification of investments. We have taken steps to remediate these material weaknesses, which steps have included (i) enhancing existing controls to ensure the appropriate review of the quarterly cash and investment reconciliation and that it is adequately documented so as to provide evidence that the controls are operating effectively (ii) enhancing existing controls to ensure that our internal controls over financial reporting relating to our analysis of interest income and assessment of investments for classification as non-accrual investments are operating effectively and (iii) enhancing policies and procedures to demonstrate a commitment to improving our overall control environment.

Taking the above efforts into consideration, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures for the quarter ended June 30, 2024 were effective and provided reasonable assurance that information required to be disclosed in our periodic filings with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. However, in evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of such possible controls and procedures.

Other than disclosed in this Item 4, there have been no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

None of us, our Investment Adviser or our Administrator, is currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us, or against our Investment Adviser or Administrator. From time to time, we, our Investment Adviser or Administrator may be a party to certain legal proceedings, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations.

Item 1A. Risk Factors

In addition to the other information set forth in this Report, you should consider carefully the factors discussed below, as well as in Part I “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, filed on December 8, 2023, which could materially affect our business, financial condition and/or operating results. The risks as in our Annual Report on Form 10-K, are not the only risks facing PennantPark Investment Corp. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

No unregistered securities were sold in the quarter ended June 30, 2024.

Issuer Purchases of Equity Securities

Repurchases of our common stock under our share repurchase program are as follows:

Period	Total Number of Shares Purchased		Average Price per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands)
January 1, 2022 through March 31, 2022		913,454	$	7.72		913,454	$	17,944
April 1, 2022 through June 30, 2022		717,709	$	6.91		1,631,163	$	12,986
July 1, 2022 through September 30, 2022		189,442	$	6.52		1,820,605	$	11,751
October 1, 2022 through December 31, 2022		—	$	-		1,820,605	$	11,751
January 1, 2023 through March 31, 2023		—	$	-		1,820,605	$	-
Total investments		1,820,605	$	7.28

—————————

(1) The program expired on March 31, 2023 and we purchased 1.8 million shares of our common stock in open market transaction while the program was in effect for an aggregate cost (including transaction costs) of $13.2 million.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Amendment to Articles of Incorporation

On August 7, 2024, we filed an amendment to our Articles of Incorporation with the State Department of Assessments and Taxation of Maryland to increase our authorized shares of common stock, par value $0.001 per share, from 100,000,000 shares of common stock to 200,000,000 shares of common stock.

10b5-1 Disclosure

None of the officers or directors of the Company have adopted or terminated any Rule 10b5-1 trading arrangements applicable to them (if any) or the Company.

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Item 6. Exhibits

Unless specifically indicated otherwise, the following exhibits are incorporated by reference to exhibits previously filed with the SEC:

3.1	Articles of Incorporation (Incorporated by reference to Exhibit 99(a) to the Registrant’s Pre-Effective Amendment No. 3 to the Registration Statement on Form N-2/A (File No. 333-140092), filed on April 5, 2007).
3.2*	Articles of Amendment to Articles of Incorporation of the Registrant
3.3	Second Amended and Restated Bylaws of the Registrant (Incorporated by reference to Exhibit 3.2 to the Registrant's Quarterly Report on Form 10-Q (File No. 814-00736), filed on May 11, 2020).
4.1	Form of Share Certificate (Incorporated by reference to Exhibit 99(d)(1) to the Registrant’s Registration Statement on Form N-2 (File No. 333-150033), filed on April 2, 2008).
10.1*	Fourth Amended and Restated Investment Advisory Management Agreement, dated as of May 20, 2024, between the Registrant and PennantPark Investment Advisers, LLC.
10.2*	Amended and Restated Administration Agreement, dated as of May 20, 2024, between the Registrant and PennantPark Investment Administration, LLC.
10.3	Equity Distribution Agreement, dated as of June 4, 2024, by and among PennantPark Investment Corporation, PennantPark Investment Advisers, LLC, PennantPark Investment Administration, LLC and Truist Securities, Inc., as the sales agent (Incorporated by reference to Ex. 1.1 to the Registrant’s Current Report on Form 8-K (File No. 814-00736), filed on June 4, 2024).
10.4	Equity Distribution Agreement, dated as of June 4, 2024 by and among PennantPark Investment Corporation, PennantPark Investment Advisers, LLC, PennantPark Investment Administration, LLC and Keefe, Bruyette & Woods, Inc., as the sales agent (Incorporated by reference to Ex. 1.2 to the Registrant’s Current Report on Form 8-K (File No. 814-00736), filed on June 4, 2024).
10.5*	Sixth Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement, dated as of June 25, 2024, by and among PennantPark Investment Corporation and Truist Bank, as administrative agent.
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.
32.1*	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1	Privacy Policy of the Registrant (Incorporated by reference to Exhibit 99.1 to the Registrant’s Annual Report on Form 10-K (File No. 814-00736), filed on November 16, 2011).
101.INS*	Inline XBRL Instance Document-the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document
101.SCH*	Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page formatted as Inline XBRL and contained in Exhibit 101

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

	PENNANTPARK INVESTMENT CORPORATION
Date: August 7, 2024	By:	/s/ Arthur H. Penn
		Arthur H. Penn
		Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)
Date: August 7, 2024	By:	/s/ Richard T. Allorto, Jr.
		Richard T. Allorto, Jr.
		Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

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