Fair value is determined by or under the direction of our Board of Directors. Unless otherwise indicated by endnote 47 below, all of our investments are valued using significant unobservable inputs. In accordance with ASC 820, such investments are classified as Level 3 within the fair value hierarchy. See Notes 2 and 3 within the accompanying notes to consolidated financial statements for further discussion.

[2]

The following shows the composition of our investment portfolio at cost by control designation, investment type and by industry as of September 30, 2022:


Industry	1st Lien Term Loan		2nd Lien Term Loan		Subordinated Structured Notes		Unsecured Debt		Equity (B)		Cost Total
Control Investments
Aerospace & Defense	$	54,797	$	—	$	—	$	—	$	55,581	$	110,378
Commercial Services & Supplies	124,680		—		—		7,200		27,349		159,229
Construction & Engineering	56,753		—		—		—		11,550		68,303
Consumer Finance	452,388		—		—		—		81,303		533,691
Diversified Consumer Services	—		—		—		—		2,378		2,378
Energy Equipment & Services	81,566		—		—		—		221,150		302,716
Equity Real Estate Investment Trusts (REITs)	651,586		—		—		—		15,430		667,016
Health Care Providers & Services	278,429		—		—		—		45,118		323,547
Machinery	33,622		—		—		—		6,866		40,488
Media	29,723		—		—		—		—		29,723
Online Lending	25,080		—		—		—		—		25,080
Personal Products	73,104		—		—		—		189,295		262,399
Trading Companies & Distributors	32,708		—		—		—		32,500		65,208
Structured Finance (A)	196,200		—		—		—		—		196,200
Total Control Investments	$	2,090,636	$	—	$	—	$	7,200	$	688,520	$	2,786,356
Affiliate Investments
Commercial Services & Supplies	$	—	$	—	$	—	$	—	$	9,523	$	9,523
Diversified Consumer Services	70,639		153,931		—		—		—		224,570
Textiles, Apparel & Luxury Goods	—		—		—		—		2,805		2,805
Total Affiliate Investments	$	70,639	$	153,931	$	—	$	—	$	12,328	$	236,898
Non-Control/Non-Affiliate Investments
Air Freight & Logistics	$	92,620	$	95,000	$	—	$	—	$	—	$	187,620
Auto Components	22,348		112,179		—		—		—		134,527
Building Products	—		35,000		—		—		—		35,000
Capital Markets	—		42,500		—		—		—		42,500

Commercial Services & Supplies	68,786		185,304		—		—		1,500		255,590
Communications Equipment	9,214		50,585		—		—		—		59,799
Consumer Finance	47,028		—		—		—		—		47,028
Distributors	168,207		103,730		—		—		—		271,937
Diversified Consumer Services	—		22,713		—		—		—		22,713
Diversified Financial Services	36,816		—		—		—		—		36,816
Diversified Telecommunication Services	44,266		121,799		—		—		—		166,065



Food & Staples Retailing	27,437		—		—		—		—		27,437
Food Products	—		131,036		—		—		—		131,036
Health Care Equipment & Supplies	—		7,484		—		—		—		7,484
Health Care Providers & Services	181,414		159,664		—		—		1,546		342,624
Health Care Technology	128,973		—		—		—		—		128,973
Hotels, Restaurants & Leisure	23,127		—		—		—		—		23,127
Household Durables	96,475		29,777		—		—		2,001		128,253
Household Products	20,874		—		—		—		—		20,874

Interactive Media & Services	226,054		—		—		—		—		226,054
Internet & Direct Marketing Retail	20,217		—		—		—		—		20,217
IT Services	211,406		147,925		—		—		—		359,331
Leisure Products	67,879		—		—		—		1		67,880
Machinery	57,749		9,983		—		—		—		67,732
Media	51,098		—		—		—		26,991		78,089


Pharmaceuticals	25,536		—		—		—		—		25,536
Professional Services	66,785		123,606		—		—		—		190,391


Industry	1st Lien Term Loan		2nd Lien Term Loan		Subordinated Structured Notes		Unsecured Debt		Equity (B)		Cost Total
Software	—		52,309		—		—		—		52,309


Textiles, Apparel & Luxury Goods	165,628		8,939		—		—		—		174,567


Structured Finance (A)	—		—		990,723		—		—		990,723
Total Non-Control/Non-Affiliate	$	1,859,937	$	1,439,533	$	990,723	$	—	$	32,039	$	4,322,232
Total Portfolio Investment Cost	$	4,021,212	$	1,593,464	$	990,723	$	7,200	$	732,887	$	7,345,486

The following table shows the composition of our investment portfolio at fair value by control designation, investment type and by industry as of September 30, 2022:


Industry	1st Lien Term Loan			2nd Lien Term Loan			Subordinated Structured Notes			Unsecured Debt			Equity (B)			Fair Value Total			Fair Value % of Net Assets Applicable to Common Stock
Control Investments
Aerospace & Defense	$	54,797		$	—		$	—		$	—		$	7,225		$	62,022		1.6	%
Commercial Services & Supplies	76,017			—			—			7,200			280			83,497			2.1	%
Construction & Engineering	56,753			—			—			—			84,926			141,679			3.6	%
Consumer Finance	454,041			—			—			—			268,049			722,090			18.2	%
Diversified Consumer Services	—			—			—			—			3,833			3,833			0.1	%
Energy Equipment & Services	81,566			—			—			—			37,697			119,263			3.0	%
Equity Real Estate Investment Trusts (REITs)	651,586			—			—			—			761,144			1,412,730			35.7	%
Health Care Providers & Services	278,429			—			—			—			129,105			407,534			10.3	%
Machinery	33,622			—			—			—			22,496			56,118			1.4	%
Media	29,723			—			—			—			84,971			114,694			2.9	%
Online Lending	25,058			—			—			—			—			25,058			0.6	%
Personal Products	65,336			—			—			—			—			65,336			1.6	%
Trading Companies & Distributors	32,708			—			—			—			3,406			36,114			0.9	%
Structured Finance (A)	194,510			—			—			—			—			194,510			4.9	%
Total Control Investments	$	2,034,146		$	—		$	—		$	7,200		$	1,403,132		$	3,444,478		86.9	%
Fair Value % of Net Assets	51.3		%	—		%	—		%	0.2		%	35.4		%	86.9		%
Affiliate Investments
Commercial Services & Supplies	$	—		$	—		$	—		$	—		$	9,755		$	9,755		0.2	%
Diversified Consumer Services	69,029			151,818			—			—			66,904			287,751			7.3	%
Textiles, Apparel & Luxury Goods	—			—			—			—			19,769			19,769			0.5	%
Total Affiliate Investments	$	69,029		$	151,818		$	—		$	—		$	96,428		$	317,275		8.0	%
Fair Value % of Net Assets	1.7		%	3.8		%	—		%	—		%	2.5		%	8.0		%
Non-Control/Non-Affiliate Investments
Air Freight & Logistics	$	92,978		$	95,000		$	—		$	—		$	—		$	187,978		4.7	%
Auto Components	22,251			100,510			—			—			—			122,761			3.1	%
Building Products	—			34,669			—			—			—			34,669			0.9	%
Capital Markets	—			41,640			—			—			—			41,640			1.1	%

Commercial Services & Supplies	69,021			181,895			—			—			10,145			261,061			6.6	%
Communications Equipment	8,743			47,864			—			—			—			56,607			1.4	%
Consumer Finance	26,681			—			—			—			—			26,681			0.7	%
Distributors	160,832			6,076			—			—			2,012			168,920			4.2	%
Diversified Consumer Services	—			19,717			—			—			—			19,717			0.5	%
Diversified Financial Services	36,816			—			—			—			—			36,816			0.9	%
Diversified Telecommunication Services	43,854			119,457			—			—			—			163,311			4.1	%



Food & Staples Retailing	27,146			—			—			—			—			27,146			0.7	%
Food Products	—			125,700			—			—			—			125,700			3.2	%
Health Care Equipment & Supplies	—			6,894			—			—			—			6,894			0.2	%
Health Care Providers & Services	179,381			157,370			—			—			1,542			338,293			8.4	%
Health Care Technology	128,927			—			—			—			—			128,927			3.3	%
Hotels, Restaurants & Leisure	22,234			—			—			—			—			22,234			0.6	%


Industry	1st Lien Term Loan			2nd Lien Term Loan			Subordinated Structured Notes			Unsecured Debt			Equity (B)			Fair Value Total			Fair Value % of Net Assets Applicable to Common Stock
Household Durables	96,485			26,364			—			—			—			122,849			3.1	%
Household Products	20,874			—			—			—			—			20,874			0.5	%

Interactive Media & Services	226,054			—			—			—			—			226,054			5.7	%
Internet & Direct Marketing Retail	16,946			—			—			—			—			16,946			0.4	%
IT Services	210,459			138,251			—			—			—			348,710			8.8	%
Leisure Products	67,534			—			—			—			—			67,534			1.7	%
Machinery	56,713			9,749			—			—			—			66,462			1.7	%
Media	50,874			—			—			—			87			50,961			1.3	%


Pharmaceuticals	25,829			—			—			—			—			25,829			0.7	%
Professional Services	66,108			119,563			—			—			—			185,671			4.7	%

Software	—			50,013			—			—			—			50,013			1.3	%


Textiles, Apparel & Luxury Goods	165,628			8,734			—			—			—			174,362			4.4	%


Structured Finance (A)	—			—			695,292			—			—			695,292			17.5	%
Total Non-Control/Non-Affiliate	$	1,822,368		$	1,289,466		$	695,292		$	—		$	13,786		$	3,820,912		96.4	%
Fair Value % of Net Assets	46.0		%	32.6		%	17.5		%	—		%	0.3		%	96.4		%
Total Portfolio	$	3,925,543		$	1,441,284		$	695,292		$	7,200		$	1,513,346		$	7,582,665		191.3	%
Fair Value % of Net Assets	99.0		%	36.4		%	17.5		%	0.2		%	38.2		%	191.3		%

(A) Our SSN investments do not have industry concentrations and as such have been separated in the tables above.

(B) Equity, unless specifically stated otherwise, includes our investments in preferred stock, common stock, membership interests, net profits interests, net operating income interests, net revenue interests, overriding royalty interests, escrows receivable, and warrants.

[3]

The terms “Prospect,” “the Company,” “we,” “us” and “our” mean Prospect Capital Corporation and its subsidiaries unless the context specifically requires otherwise. The securities in which Prospect has invested were acquired in transactions that were exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). These securities may be resold only in transactions that are exempt from registration under the Securities Act.

[4]

CP Holdings of Delaware LLC (“CP Holdings”), a consolidated entity in which we own 100% of the membership interests, owns 99.8% of CP Energy Services Inc. (“CP Energy”) as of September 30, 2022 and June 30, 2022. CP Energy owns directly or indirectly 100% of each of CP Well Testing, LLC; Wright Foster Disposals, LLC; Foster Testing Co., Inc.; ProHaul Transports, LLC; and Wright Trucking, Inc. We report CP Energy as a separate controlled company. In June 2019, CP Energy purchased a controlling interest in the common equity of Spartan Energy Holdings, Inc. (“Spartan Holdings”), which owns 100% of Spartan Energy Services, LLC (“Spartan”), a portfolio company of Prospect with $27,347 in first lien term loans (the “Spartan Term Loans”) due to us as of September 30, 2022. As a result of CP Energy’s purchase, and given Prospect’s controlling interest in CP Energy, our Spartan Term Loans are presented as control investments under CP Energy. Spartan remains the direct borrower and guarantor to Prospect for the Spartan Term Loans. In September 2020, we made a new $26,193 Series A preferred stock investment in Spartan Energy Holdings, Inc., which equates to 100% of the Series A non-voting non-convertible preferred stock outstanding. In September 2020, Spartan Energy Services, LLC fully repaid the $26,193 Senior Secured Term Loan B receivable to us at par. We recorded a realized gain of $2,832 in our Consolidated Statement of Operations for the quarter ended September 30, 2020 as a result of this transaction.

[5]

As defined in the 1940 Act, we are deemed to “Control” these portfolio companies because we own more than 25% of the portfolio company’s outstanding voting securities. Transactions during the three months ended September 30, 2022 with these controlled investments were as follows:


Controlled Companies	Fair Value at June 30, 2022		Gross Additions (Cost)(A)		Gross Reductions (Cost)(B)		Net unrealized gains (losses)		Fair Value at September 30, 2022		Interest income		Dividend income		Other income		Net realized gains (losses)
CP Energy Services Inc.	$	64,260	$	1,521	$	—	$	(608)	$	65,173	$	1,521	$	—	$	—	$	—
CP Energy - Spartan Energy Services, Inc.	48,441		699		—		(8,362)		40,778		700		—		—		—
Credit Central Loan Company, LLC	76,935		1,882		—		(11,360)		67,457		1,859		—		—		—
Echelon Transportation, LLC	65,766		1,588		—		(5,332)		62,022		869		—		—		—
First Tower Finance Company LLC	607,283		9,577		—		(11,578)		605,282		20,235		—		—		—
Freedom Marine Solutions, LLC	13,899		—		—		(587)		13,312		—		—		—		—
InterDent, Inc.	406,194		4,981		—		(3,641)		407,534		7,508		—		—		—
Kickapoo Ranch Pet Resort	3,833		—		—		—		3,833		—		50		—		—
MITY, Inc.	59,999		—		(573)		(1,598)		57,828		1,897		—		—		—
National Property REIT Corp.	1,615,737		77,600		(52,500)		(8,539)		1,632,298		20,272		—		20,665		—
Nationwide Loan Company LLC	50,400		522		—		(1,571)		49,351		1,045		—		—		—
NMMB, Inc.	109,943		—		—		4,751		114,694		818		1,093		—		(1,093)
Pacific World Corporation	59,179		2,003		—		4,154		65,336		1,508		—		—		—
R-V Industries, Inc.	56,923		—		—		(805)		56,118		985		—		—		—
Universal Turbine Parts, LLC	31,147		—		(8)		4,975		36,114		688		—		—		—
USES Corp.	22,395		6,114		—		(2,840)		25,669		173		—		—		—
Valley Electric Company, Inc.	145,983		—		44		(4,348)		141,679		2,185		44		—		—
Total	$	3,438,317	$	106,487	$	(53,037)	$	(47,289)	$	3,444,478	$	62,263	$	1,187	$	20,665	$	(1,093)

(A) Gross additions include increases in the cost basis of the investments resulting from new portfolio investments, OID accretion and PIK interest, and any transfer of investments.

(B) Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investments repayments or sales, impairments, and any transfer of investments.

[6]

Certain variable rate securities in our portfolio bear interest at a rate determined by a publicly disclosed base rate plus a basis point spread. The 1-Month LIBOR, or “1ML”, was 3.14% as of September 30, 2022 and 1.79% as of June 30, 2022. The 3-Month LIBOR, or “3ML”, was 3.75% as of September 30, 2022 and 2.29% as of June 30, 2022. The 6-Month LIBOR, or “6ML”, was 4.23% as of September 30, 2022 and 2.94% as of June 30, 2022. The 1-Month Secured Overnight Financing Rate or “1M SOFR”, was 3.04% as of September 30, 2022 and 1.69% as of June 30, 2022. The 3-Month Secured Overnight Financing Rate or “3M SOFR”, was 3.59% as of September 30, 2022 and 2.12% as of June 30, 2022. The 6-Month Secured Overnight Financing Rate or “6M SOFR” was 3.99% as of September 30, 2022.

[7]

The interest rate on these investments, excluding those on non-accrual, contains a paid in kind (“PIK”) provision, whereby the issuer has either the option or the obligation to make interest payments with the issuance of additional securities. The interest rate in the schedule represents the current interest rate in effect for these investments.

The following table provides additional details on these PIK investments, including the maximum annual PIK interest rate allowed under the existing credit agreements, as of and for three months ended September 30, 2022:


Security Name	PIK Rate - Capitalized		PIK Rate - Paid as cash		Maximum Current PIK Rate
CP Energy Services Inc. - First Lien Term Loan	12.67	%	—	%	12.67	%	(A)
CP Energy Services Inc. - First Lien Term Loan	12.67	%	—	%	12.67	%	(A)
CP Energy Services Inc. - First Lien Term Loan A to Spartan Energy Services, LLC	11.12	%	—	%	11.12	%	(B)
Credit Central Loan Company, LLC - First Lien Term Loan	5.00	%	—	%	5.00	%	(C)
Echelon Transportation, LLC - First Lien Term Loan	6.00	%	—	%	6.00	%	(D)
First Tower Finance Company LLC - First Lien Term Loan	9.37	%	2.63	%	12.00	%
InterDent, Inc. - First Lien Term Loan B	12.00	%	—	%	12.00	%
MITY, Inc. - First Lien Term Loan B	—	%	10.00	%	10.00	%
National Property REIT Corp. - First Lien Term Loan A	—	%	3.53	%	3.53	%
National Property REIT Corp. - First Lien Term Loan B	—	%	5.50	%	5.50	%
National Property REIT Corp. - First Lien Term Loan C	—	%	2.25	%	2.25	%
National Property REIT Corp. - First Lien Term Loan D	—	%	2.50	%	2.50	%
Nationwide Loan Company LLC - First Lien Term Loan	10.00	%	—	%	10.00	%
Pacific World Corporation - Revolving Line of Credit	10.37	%	—	%	10.37	%	(E)
Pacific World Corporation - First Lien Term Loan A	8.37	%	—	%	8.37	%

Town & Country Holdings, Inc. - First Lien Term Loan	4.875	%	—	%	4.875	%	(F)
TPS, LLC - First Lien Term Loan	1.50	%	—	%	1.50	%
USES Corp. - First Lien Equipment Term Loan	12.12	%	—	%	12.12	%
Valley Electric Co. of Mt. Vernon, Inc. - First Lien Term Loan	—	%	2.50	%	2.50	%
Valley Electric Company, Inc. - First Lien Term Loan	—	%	10.00	%	10.00	%
Valley Electric Company, Inc. - First Lien Term Loan B	—	%	4.50	%	4.50	%

(A) Effective September 20, 2022, the CP Energy Fifteenth Amendment to Loan Agreement was amended to allow 100% of the September 30, 2022 interest accruing in cash to be payable in kind resulting in a current PIK rate capitalized of 12.67%.

(B) On August 22, 2022, the Spartan Energy Services, LLC Twenty-Fifth Amendment to Amended and Restated Senior Secured Loan Agreement was amended to allow interest accruing in cash to be payable in kind resulting in a maximum current PIK rate of 11.12%.

(C) On September 30, 2022, the Credit Central Senior Subordinated Loan Agreement was amended to allow interest accruing in cash to be payable in kind resulting in a maximum current PIK rate of 10.00%.

(D) On January 31, 2022, the Echelon Fifth Amendment and Restated Credit Agreement was amended to remove the PIK rate and to allow the interest accruing in cash to be payable in kind resulting in a maximum current PIK rate of 6.00%.

(E) Effective as of December 29, 2021, the Pacific World Corporation Amendment No. 8 was amended to allow the Revolving Line of Credit interest accruing in cash to be payable in kind resulting in a maximum current rate of 10.37%.

(F) On August 31, 2022, the Town & Country Holdings, Inc. Seventh Amendment to Loan Agreement was amended to allow the First Lien Term loan interest accruing in cash to be payable in kind resulting in a maximum current PIK rate of 4.875%.


Security Name	PIK Rate - Capitalized	PIK Rate - Paid as cash	Maximum Current PIK Rate
CP Energy Services Inc. - First Lien Term Loan	13.25%	—%	13.25%	(A)
CP Energy Services Inc. - First Lien Term Loan A to Spartan Energy Services, LLC	9.67%	—%	9.67%	(B)
Credit Central Loan Company, LLC - First Lien Term Loan	12.92%	7.08%	10.00%	(C)
First Tower Finance Company LLC - First Lien Term Loan	8.72%	3.28%	12.00%
InterDent, Inc. - First Lien Term Loan B	12.00%	—%	12.00%
MITY, Inc. - First Lien Term Loan A	3.30%	6.70%	—%	(D)
MITY, Inc. - First Lien Term Loan B	6.59%	13.41%	10.00%	(D)
National Property REIT Corp. - First Lien Term Loan A	—%	3.53%	3.53%
National Property REIT Corp. - First Lien Term Loan B	—%	5.50%	5.50%
National Property REIT Corp. - First Lien Term Loan C	—%	2.25%	2.25%
National Property REIT Corp. - First Lien Term Loan D	—%	2.50%	2.50%
Nationwide Loan Company LLC - First Lien Term Loan	—%	10.00%	10.00%
Pacific World Corporation - Revolving Line of Credit	8.92%	—%	8.92%	(E)
Pacific World Corporation - First Lien Term Loan A	6.92%	—%	6.92%
Town & Country Holdings, Inc. - First Lien Term Loan	N/A	N/A	N/A	(F)
TPS, LLC - First Lien Term Loan	1.50%	—%	1.50%
Valley Electric Co. of Mt. Vernon, Inc. - First Lien Term Loan	—%	2.50%	2.50%
Valley Electric Company, Inc. - First Lien Term Loan	—%	10.00%	10.00%
Valley Electric Company, Inc. - First Lien Term Loan B	—%	4.50%	4.50%	(G)
Venio LLC - First Lien Term Loan	1.00%	—%	1.00%

(A) Effective March 31, 2022, the CP Energy Fourteenth Amendment to Loan Agreement was amended to allow 100% of the June 30, 2022 interest accruing in cash to be payable in kind resulting in a current PIK rate capitalized of 13.25%.

(B) On October 28, 2021, the Spartan Energy Services, LLC Twenty-Second Amendment to Amended and Restated Senior Secured Loan Agreement was amended to allow interest accruing in cash to be payable in kind resulting in maximum current PIK rate of 9.67%.

(C) On December 17, 2018, the Credit Central Senior Subordinated Loan Agreement was amended to allow interest accruing in cash to be payable in kind resulting in a maximum current PIK rate of 20.00%.

(D) On March 23, 2021, the Mity Amendment No. 1 and Waiver to Note Purchase Agreement was amended to allow Senior Secured Note A and Senior Secured Note B interest accruing in cash to be payable in kind resulting in a maximum current TLA PIK rate of 10% and TLB PIK rate of 20.00%.

(F) On December 31, 2021, the Town & Country Holdings, Inc. Seventh Amendment to Loan Agreement was amended to allow the First Lien Term Loan interest accruing in cash to be payable in kind resulting in a maximum current PIK rate of 8.125%. As of June 30, 2022 there is no longer interest accruing as payable in kind.

(G) On March 28, 2022, the Valley Electric Company, Inc. Loan Agreement was amended to allow interest accruing at a maximum current PIK rate of 4.50%.

[8]

As defined in the 1940 Act, we are deemed to “Control” these portfolio companies because we own more than 25% of the portfolio company’s outstanding voting securities. Transactions during the year ended June 30, 2022 with these controlled investments were as follows:


Portfolio Company	Fair Value at June 30, 2021		Gross Additions (Cost)(A)		Gross Reductions (Cost)(B)		Net unrealized gains (losses)		Fair Value at June 30, 2022		Interest income		Dividend income		Other income		Net realized gains (losses)
CP Energy Services Inc.	$	44,621	$	11,277	$	—	$	8,362	$	64,260	$	5,424	$	—	$	—	$	—
CP Energy - Spartan Energy Services, LLC	26,866		10,992		—		10,583		48,441		1,884		—		6		—
Credit Central Loan Company, LLC	78,023		9,599		(1,295)		(9,392)		76,935		15,106		—		—		—
Echelon Transportation LLC	84,240		10,646		—		(29,120)		65,766		7,695		—		—		—
First Tower Finance Company LLC	592,356		42,669		(11,153)		(16,589)		607,283		74,501		—		7,898		—
Freedom Marine Solutions, LLC	11,717		1,000		—		1,182		13,899		—		—		—		—
InterDent, Inc.	412,339		36,123		(246)		(42,022)		406,194		26,517		—		200		—
Kickapoo Ranch Pet Resort	3,833		—		—		—		3,833		—		25		—		—
MITY, Inc.	49,680		4,956		—		5,363		59,999		7,317		—		—		12
National Property REIT Corp.	1,189,755		410,867		(301,382)		316,497		1,615,737		63,818		—		69,772		—
Nationwide Loan Company LLC	47,993		—		—		2,407		50,400		4,108		2,650		405		—
NMMB, Inc.	46,888		25,000		(13,021)		51,076		109,943		1,206		8,383		450		3,946
Pacific World Corporation	71,097		11,151		—		(23,069)		59,179		4,779		—		—		—
R-V Industries, Inc.	49,693		5,000		—		2,230		56,923		3,051		441		125		—
Universal Turbine Parts, LLC	27,106		—		(33)		4,074		31,147		2,354		—		—		—
USES Corp.	33,815		—		—		(11,420)		22,395		203		—		—		—
Valley Electric Company, Inc.	149,695		13,022		(14,698)		(2,036)		145,983		7,531		3,150		926		—
Total	$	2,919,717	$	592,302	$	(341,828)	$	268,126	$	3,438,317	$	225,494	$	14,649	$	79,782	$	3,958

(A) Gross additions include increases in the cost basis of the investments resulting from new portfolio investments, PIK interest, and any transfer of investments.

(B) Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investments repayments or sales, impairments, and any transfer of investments.

[9]

Syndicated investment which was originated by a financial institution and broadly distributed.

[10]

Security, or a portion thereof, is held by Prospect Capital Funding LLC (“PCF”), our wholly owned subsidiary and a bankruptcy remote special purpose entity, and is pledged as collateral for the Revolving Credit Facility and such security is not available as collateral to our general creditors (see Note 4). The fair values of the investments held by PCF at September 30, 2022 and June 30, 2022 were $2,658,423 and $2,638,042, respectively, representing 35.1% and 34.7% of our total investments, respectively.

[11]

Investment has been designated as an investment not “qualifying” under Section 55(a) of the Investment Company Act of 1940 (the “1940 Act”). Under the 1940 Act, we may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of our total assets. As of September 30, 2022 and June 30, 2022, our qualifying assets, as a percentage of total assets, stood at 81.06% and 80.64%, respectively. We monitor the status of these assets on an ongoing basis.

[12]

This investment is in the equity class of the collateralized loan obligation (“CLO”) security, which is referred to as “Subordinated Structured Note,” or “SSN”. The SSN investments are entitled to recurring distributions which are generally equal to the excess cash flow generated from the underlying investments after payment of the contractual payments to debt holders and fund expenses. The current estimated yield, calculated using amortized cost, is based on the current projections of this excess cash flow taking into account assumptions which have been made regarding expected prepayments, losses and future reinvestment rates. These assumptions are periodically reviewed and adjusted. Ultimately, the actual yield may be higher or lower than the estimated yield if actual results differ from those used for the assumptions.

[13]

Undrawn committed revolvers and delayed draw term loans to our portfolio companies incur commitment and unused fees ranging from 0.00% to 7.25%. As of September 30, 2022 and June 30, 2022, we had $43,434 and $43,934, respectively, of undrawn revolver and delayed draw term loan commitments to our portfolio companies.

[14]

This investment represents a Level 2 security in the ASC 820 table as of September 30, 2022. See Notes 2 and 3 within the accompanying notes to consolidated financial statements for further discussion.

[15]

The effective yield has been estimated to be 0% as expected future cash flows are anticipated to not be sufficient to repay the investment at cost. If the expected investment proceeds increase, there is a potential for future investment income from the investment. Distributions, once received, will be recognized as return of capital, and when called, any remaining unamortized investment costs will be written off if the actual distributions are less than the amortized investment cost. To the extent that the cost basis of the SSN is fully recovered, any future distributions will be recorded as realized gains.

[16]

Represents non-income producing security that has not paid a dividend in the year preceding the reporting date.

[17]

Credit Central Holdings of Delaware, LLC (“Credit Central Delaware”), a consolidated entity in which we own 100% of the membership interests, owns 99.8% and 99.0% of Credit Central Loan Company, LLC (f/k/a Credit Central Holdings, LLC (“Credit Central”)) as of September 30, 2022 and June 30, 2022, respectively. Credit Central owns 100% of each of Credit Central, LLC; Credit Central South, LLC; Credit Central of Texas, LLC; and Credit Central of Tennessee, LLC, the operating companies. We report Credit Central as a separate controlled company. Effective December 10, 2021, Credit Central’s term loan lenders were granted a first priority security interest on certain assets of Credit Central and our investment became classified as a First Lien Term Loan.

[18]

Investment on non-accrual status as of the reporting date (See Note 2).

[19]

Engine Group, Inc., EMX Digital, Inc. (f/k/a Clearstream.TV, Inc.), and Engine International, Inc., are joint borrowers on the first lien term loan.

[20]

First Tower Holdings of Delaware LLC (“First Tower Delaware”), a consolidated entity in which we own 100% of the membership interests, owns 78.06% and 80.03% of First Tower Finance Company LLC (“First Tower Finance”), which owns 100% of First Tower, LLC, the operating company as of September 30, 2022 and June 30, 2022. We report First Tower Finance as a separate controlled company. Effective March 17, 2021, the First Tower, LLC lenders were granted a first priority security interest in First Tower Finance’s assets and our investment became classified as a First Lien Term Loan. Effective June 30, 2021, we increased our investment in our first lien term loan in the aggregate principal amount of $50,000 and the proceeds were returned to us as a distribution on our equity investment in First Tower, LLC.

[21]

Energy Solutions Holdings Inc., a consolidated entity in which we own 100% of the equity, owns 100% of Freedom Marine Solutions, LLC (“Freedom Marine”), which owns Vessel Company, LLC, Vessel Company II, LLC and Vessel Company III, LLC. We report Freedom Marine as a separate controlled company.

[22]

MITY Holdings of Delaware Inc. (“MITY Delaware”), a consolidated entity in which we own 100% of the common stock, owns 100% of the equity of MITY, Inc. (f/k/a MITY Enterprises, Inc.) (“MITY”). MITY owns 100% of each of MITY-Lite, Inc. (“Mity-Lite”); Broda Enterprises USA, Inc.; and Broda Enterprises ULC (“Broda Canada”). We report MITY as a separate controlled company. Our subordinated unsecured note issued and outstanding to Broda Canada is denominated in Canadian Dollars (“CAD”). As of September 30, 2022 and June 30, 2022, the principal balance of this note was CAD 7,371. In accordance with ASC 830, Foreign Currency Matters (“ASC 830”), this note was remeasured into our functional currency, US Dollars (USD), and is presented on our Consolidated Schedule of Investments in USD. We formed a separate legal entity domiciled in the United States, MITY FSC, Inc., (“MITY FSC”) in which Prospect owns 100% of the equity. MITY FSC does not have material operations. This entity earns commission payments from MITY-Lite based on its sales to foreign customers, and distributes it to its shareholder.

[23]

Medusind Acquisition, Inc., Medusind Intermediate, Inc., Medusind Solutions Inc. and Medusind Inc. are joint borrowers.

[24]

NMMB Holdings, Inc. (“NMMB Holdings”), a consolidated entity in which we own 100% of the equity, owns 90.42% of the fully diluted equity of NMMB, Inc. (“NMMB”) as of September 30, 2022 and June 30, 2022. NMMB owns 100% of Refuel Agency, Inc., which owns 100% of Armed Forces Communications, Inc. We report NMMB as a separate controlled company.

[25]

NPH Property Holdings, LLC (“NPH”), a consolidated entity in which we own 100% of the membership interests, owns 100% of the common equity of National Property REIT Corp. (“NPRC”) (f/k/a National Property Holdings Corp.), a property REIT which holds investments in several real estate properties. Additionally, NPRC invests in online consumer loans and rated secured structured notes through American Consumer Lending Limited (“ACLL”) and National General Lending Limited (“NGL”), respectively, its wholly owned subsidiaries. We report NPRC as a separate controlled company. See Note 3 for further discussion of the investments held by NPRC.

[26]

Since Prospect's initial common equity investment in NPRC on December 31, 2013, we have made numerous additional follow-on investments that have been used to invest in new and existing properties as well as online consumer loans and rated secured structured notes. These follow-on acquisitions are summarized by fiscal year below (excluding effects of return of capital distributions). Details of specific transactions are included in the respective fiscal year Form 10-K filing (refer to endnote 44 for NPRC term loan follow-on investments):


Fiscal Year	Follow-On Investments (NPRC Common Stock, excluding cost of initial investment)
2014	$	4,555
2015	68,693
2016	93,857
2017	116,830
2018	137,024
2019	11,582
2020	19,800
2022	15,620
2023	3,600

[27]

As of September 30, 2022 and June 30, 2022, the residual profit interest includes both (i) 8.33% of New TLA and TLD residual profit and (ii) 100% of TLC residual profits, with both calculated quarterly in arrears.

[28]

Nationwide Acceptance Holdings LLC (“Nationwide Holdings”), a consolidated entity in which we own 100% of the membership interests, owns 94.48% of Nationwide Loan Company LLC, the operating company, as of September 30, 2022 and June 30, 2022. We report Nationwide Loan Company LLC as a separate controlled company. Prospect has a first priority security interest in the assets of Nationwide.

[29]

As defined in the 1940 Act, we are deemed to be an “Affiliated company” of these portfolio companies because we own more than 5% of the portfolio company’s outstanding voting securities. Transactions during the three months ended September 30, 2022 with these affiliated investments were as follows:


Affiliated Companies	Fair Value at June 30, 2022		Gross Additions (Cost)(A)		Gross Reductions (Cost)(B)		Net unrealized gains (losses)		Fair Value at September 30, 2022		Interest income		Dividend income		Other income		Net realized gains (losses)

Nixon, Inc.	—		—		—		—		—		—		—		—		—
PGX Holdings, Inc.	340,253		—		(743)		(51,759)		287,751		7,430		—		133		—
RGIS Services, LLC	17,004		—		(4,460)		(2,789)		9,755		31		1,374		—		—
Targus Cayman HoldCo Limited	36,007		—		—		(16,238)		19,769		—		—		—		—
Total	$	393,264	$	—	$	(5,203)	$	(70,786)	$	317,275	$	7,461	$	1,374	$	133	$	—

(A) Gross additions include increases in the cost basis of the investments resulting from new portfolio investments, PIK interest, and any transfer of investments.

(B) Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investments repayments or sales, impairments, and any transfer of investments.

[30]

As of September 30, 2022 and June 30, 2022, Prospect owns 8.57% of the equity in Encinitas Watches Holdco, LLC, the parent company of Nixon, Inc.

[31]

As defined in the 1940 Act, we are deemed to be an “Affiliated company” of these portfolio companies because we own more than 5% of the portfolio company’s outstanding voting securities. Transactions during the year ended June 30, 2022 with these affiliated investments were as follows:


Portfolio Company	Fair Value at June 30, 2021		Gross Additions (Cost)(A)		Gross Reductions (Cost)(B)		Net unrealized gains (losses)		Fair Value at June 30, 2022		Interest income		Dividend income		Other income		Net realized gains (losses)
Nixon, Inc.	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
PGX Holdings, Inc.	$	313,089	$	229,984	$	(190,825)	$	(11,995)	$	340,253	$	30,032	$	—	$	4,032	$	—
RGIS Services, LLC	$	17,440	$	—	$	—	$	(436)	$	17,004	$	317	$	256	$	—	$	—
Targus Cayman HoldCo Limited	$	26,205	$	—	$	—	$	9,802	$	36,007	$	—	$	—	$	—	$	—
	356,734		229,984		(190,825)		(2,629)		393,264		30,349		256		4,032		—

(A) Gross additions include increases in the cost basis of the investments resulting from new portfolio investments, PIK interest, and any transfer of investments.

(B) Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investments repayments or sales, impairments, and any transfer of investments.

[32]

On July 21, 2021, we funded total commitments of $202,931 for our investment in PGX Holdings, Inc. (“PGX”), comprised of a $49,000 first lien senior secured floating rate term loan and a $153,931 second lien senior secured floating rate term loan, to support the refinancing of PGX. In connection with the refinancing, our $47,773 first lien senior secured term loan, $18,164 1.5 lien senior secured term loan and $122,271 second lien senior secured term loan outstanding with PGX were fully repaid at par.

[33]

Prospect owns 100% of the preferred equity of Pacific World Corporation (“Pacific World”), which represents a 99.97% ownership interest of Pacific World as of September 30, 2022 and as of June 30, 2022. As a result, Prospect’s investment in Pacific World is classified as a control investment.

[34]

PeopleConnect Holdings, Inc. and Pubrec Holdings, Inc. are joint borrowers.

[35]

Prospect owns 38.95% of the preferred stock of Legere Pharmaceutical Holdings, Inc. (“Legere”), which represents 4.98% voting interest in Legere. Legere is the parent company of the borrower, Preventics, Inc. (d/b/a Legere Pharmaceuticals).

[36]

Redstone Holdco 2 LP is the parent borrower on the second lien term loan. Redstone Buyer, LLC, Redstone Intermediate (Archer) HoldCo LLC, Redstone Intermediate (FRI) HoldCo LLC, Redstone Intermediate (NetWitness) HoldCo, LLC, and Redstone Intermediate (SecurID) HoldCo, LLC are joint borrowers on the Second Lien Term Loan.

[37]

The overriding royalty interests held receive payments at the stated rates based upon operations of the borrower.

[38]

Prospect owns 9.19% of the equity in Targus Cayman HoldCo Limited (“Targus”), the parent company of Targus International LLC (“Targus International”), as of September 30, 2022 and June 30, 2022.

[39]

Prospect owns 99.96% of the equity of USES Corp. as of September 30, 2022 and June 30, 2022.

[40]

UTP Holdings Group, Inc. (“UTP Holdings”) owns all of the voting stock of Universal Turbine Parts, LLC (“UTP”) and has appointed a Board of Directors to UTP Holdings, consisting of three employees of the Investment Advisor. UTP Holdings owns UTP. UTP Holdings is a wholly-owned holding company controlled by Prospect and therefore Prospect’s investment in UTP is classified as a control investment.

[41]

Valley Electric Holdings I, Inc., a consolidated entity in which we own 100% of the common stock, owns 100% of Valley Electric Holdings II, Inc. (“Valley Holdings II”), another consolidated entity. Valley Holdings II owns 94.99% of Valley Electric Company, Inc. (“Valley Electric”). Valley Electric owns 100% of the equity of VE Company, Inc., which owns 100% of the equity of Valley Electric Co. of Mt. Vernon, Inc. We report Valley Electric as a separate controlled company.

[42]

The consolidated revenue interest is equal to the lesser of (i) 2.0% of consolidated revenue for the twelve-month period ending on the last day of the prior fiscal quarter (or portion thereof) and (ii) 25% of the amount of interest accrued on the Notes at the cash interest rate for such fiscal quarter (or portion thereof).

[43]

Vision Solutions, Inc. and Precisely Software Incorporate are joint borrowers on the Second Lien Term Loan.