UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarter Ended March 31, 2025

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 814-01508

REDWOOD ENHANCED INCOME CORP.

(Exact Name of Registrant as Specified in Charter)

Maryland	88-0824777
(State or Other Jurisdiction of Incorporation)	(IRS Employer Identification No.)
250 West 55th Street, 26th Floor
New York, NY	10019
(Address of Principal Executive Offices)	(Zip Code)

(212) 970‑1400

(Registrant’s telephone number, including area code)

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

None	Not applicable	Not applicable
(Title of each class)	(Trading Symbol(s) )	(Name of each exchange where registered)

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act: Yes ☐ No ☒

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 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 a 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 ☒

As of March 31, 2025, there was no established public market for the Registrant’s shares of common stock.

The number of the Registrant’s shares of common stock outstanding on May 14, 2025 was 17,009,499.

REDWOOD ENHANCED INCOME CORP.

FORM 10‑Q

TABLE OF CONTENTS

Part I.	Financial Information
Item 1.	Financial Statements
	Statements of Assets and Liabilities as of March 31, 2025 (Unaudited) and December 31, 2024	3
	Statements of Operations for the three months ended March 31, 2025 and 2024 (Unaudited)	4
	Statements of Changes in Net Assets for the three months ended March 31, 2025 and 2024 (Unaudited)	5
	Statements of Cash Flows for the three months ended March 31, 2025 and 2024 (Unaudited)	6
	Schedules of Investments as of March 31, 2025 (Unaudited) and December 31, 2024	7
	Notes to Financial Statements (Unaudited)	15
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46
Item 4.	Controls and Procedures	47
Part II.	Other Information	49
Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 3.	Defaults Upon Senior Securities	49
Item 4.	Mine Safety Disclosures	49
Item 5.	Other Information	49
Item 6.	Exhibits	50
Signatures		51

2

Redwood Enhanced Income Corp.

Statements of Assets and Liabilities

(in thousands, except shares and per share data)

	March 31, 2025			December 31, 2024
	(Unaudited)
Assets
Non-controlled/non-affiliated investments, at fair value (1)	$	381,210		$	362,607
Non-controlled/affiliated investments, at fair value (2)		25,262			25,536
Cash and cash equivalents		176			384
Restricted cash		80			—
Derivatives, at fair value		150			299
Receivables for investments sold		1,015			803
Interest and other receivables		5,474			7,530
Deferred debt issuance costs		295			613
Total assets	$	413,662		$	397,772
Liabilities
Debt	$	183,241		$	169,157
Incentive fees payable		388			1,337
Interest and other debt related payables		164			118
Distributions payable		6,432			10,915
Payable for investments purchased		10,124			286
Payable to broker		12			43
Management fees payable		675			477
Accrued expenses and other liabilities		414			450
Total liabilities	$	201,450		$	182,783
Commitments and contingencies (Note 8)
Net assets	$	212,212		$	214,989
Composition of net assets applicable to common shareholders
Common stock, $0.001 par value (1,000,000,000 shares authorized, 16,926,075 and 16,793,031 shares issued and outstanding, respectively)	$	17		$	17
Paid-in capital in excess of par		242,723			241,020
Distributable earnings (deficit)		(30,528	)		(26,048	)
Total net assets		212,212			214,989
Total liabilities and net assets	$	413,662		$	397,772
Shares outstanding		16,926,075			16,793,031
Net asset value per share	$	12.54		$	12.80

————————————

(1)Non-controlled/non-affiliated investments at amortized cost $397,045 and $374,197 as of March 31, 2025 and December 31, 2024, respectively.

(2)Non-controlled/affiliated investments at amortized cost $23,439 and $22,968 as of March 31, 2025 and December 31, 2024, respectively.

The accompanying notes are an integral part of these financial statements.

3

Redwood Enhanced Income Corp.

Statements of Operations (Unaudited)

(in thousands, except shares and per share data)

	Three Months Ended March 31, 2025			Three Months Ended March 31, 2024
Investment income:
Non-controlled/non-affiliated investments:
Interest income, excluding payment-in-kind (“PIK”)	$	10,672		$	11,983
PIK interest income		342			136
Other income		696			1,929
Total investment income from non-controlled/non-affiliated company investments		11,710			14,048
Non-controlled/affiliated investments:
Interest income, excluding payment-in-kind (“PIK”)		569			670
PIK interest income		89			106
Total investment income from non-controlled/affiliated company investments		658			776
Total investment income		12,368			14,824
Operating expenses:
Interest and other debt expenses		3,414			3,251
Management fees		811			812
Administrative expenses		53			45
Professional fees		114			93
Directors' fees		56			56
Custody and transfer agent fees		32			20
Incentive fees		388			1,582
Other operating expenses		110			65
Total operating expenses, before expense reimbursement		4,978			5,924
Expense reimbursement		(136	)		(63	)
Total operating expenses, net of expense reimbursement		4,842			5,861
Net investment income (loss)		7,526			8,963
Realized and unrealized gain (loss):
Net realized gain (loss):
Non-controlled/non-affiliated investments		334			(116	)
Non-controlled/affiliated investments		—			11
Derivative instruments		111			477
Foreign currency debt		(880	)		(250	)
Net realized gain (loss)		(435	)		122
Change in net unrealized appreciation (depreciation):
Non-controlled/non-affiliated investments		(5,055	)		3,506
Non-controlled/affiliated investments		(745	)		1,716
Derivative instruments		(149	)		144
Foreign currency investments		811			(582	)
Foreign currency debt		(1	)		(2	)
Net change in net unrealized appreciation (depreciation)		(5,139	)		4,782
Net realized and unrealized gain (loss)		(5,574	)		4,904
Net increase (decrease) in net assets from operations	$	1,952		$	13,867
Net investment income (loss) per share (basic and diluted)	$	0.44		$	0.54
Earnings (loss) per share (1)	$	0.12		$	0.84
Basic and diluted weighted average shares outstanding		16,924,597			16,505,261

————————————

(1)Computed based on the weighted average shares outstanding and capital activity during the time periods such earnings occurred.

The accompanying notes are an integral part of these financial statements.

4

Redwood Enhanced Income Corp.

Statements of Changes in Net Assets (Unaudited)

(in thousands, except shares)

								Distributable
	Common Stock					Paid-in-Capital in		Earnings			Total
	Shares		Par Amount			Excess of Par Value		(Loss)			Net Assets
Balance at December 31, 2023		16,304,772	$	16		$	234,688	$	(26,765	)	$	207,939
Issuance of common stock		—		—			—		—			—
Common stock issued from reinvestment of distributions		202,717		—	(1)		2,585		—			2,585
Distributions to shareholders		—		—			—		(6,273	)		(6,273	)
Net investment income		—		—			—		8,963			8,963
Net realized gain (loss)		—		—			—		122			122
Change in net unrealized appreciation (depreciation)		—		—			—		4,782			4,782
Balance at March 31, 2024		16,507,489	$	16		$	237,273	$	(19,171	)	$	218,118
Balance at December 31, 2024		16,793,031	$	17		$	241,020	$	(26,048	)	$	214,989
Issuance of common stock		—		—			—		—			—
Common stock issued from reinvestment of distributions		133,044		—	(1)		1,703		—			1,703
Distributions to shareholders		—		—			—		(6,432	)		(6,432	)
Net investment income		—		—			—		7,526			7,526
Net realized gain (loss)		—		—			—		(435	)		(435	)
Change in net unrealized appreciation (depreciation)		—		—			—		(5,139	)		(5,139	)
Balance at March 31, 2025		16,926,075	$	17		$	242,723	$	(30,528	)	$	212,212

————————————

(1)Par amount is zero due to rounding of shares

The accompanying notes are an integral part of these financial statements.

5

Redwood Enhanced Income Corp.

Statements of Cash Flows (Unaudited)

(in thousands)

	For the Three Months Ended March 31, 2025			For the Three Months Ended March 31, 2024
Operating activities
Net increase (decrease) in net assets resulting from operations	$	1,952		$	13,867
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Purchases of investments		(40,335	)		(62,005	)
Proceeds from disposition of investments		19,162			64,502
Net realized (gain) loss on investments		(334	)		105
Net realized (gain) loss on foreign currency debt		880			250
Change in net unrealized (appreciation)/depreciation of investments		5,800			(5,222	)
Change in net unrealized (appreciation)/depreciation of foreign currency investments		(811	)		582
Change in net unrealized (appreciation)/depreciation of foreign currency debt		1			2
Net amortization of investment discounts and premiums		(768	)		(1,213	)
Amortization of deferred debt issuance costs		318			247
PIK interest and other income capitalized		(1,044	)		(1,135	)
Changes in assets and liabilities:
Decrease (increase) in derivatives, at fair value		149			(144	)
Decrease (increase) in receivables for investments sold		(212	)		(47	)
Decrease (increase) in interest and other receivables		2,056			270
Decrease (increase) in prepaid expenses and other assets		—			50
Increase (decrease) in incentive fees payable		(949	)		501
Increase (decrease) in interest and other debt related payables		46			(695	)
Increase (decrease) in payable to broker		(31	)		75
Increase (decrease) in payable for investments purchased		9,838			—
Increase (decrease) in management fees payable		198			115
Increase (decrease) in accrued expenses and other liabilities		(36	)		(139	)
Net cash provided by (used in) operating activities		(4,120	)		9,966
Financing activities
Debt borrowings		42,779			64,132
Debt repayments		(29,575	)		(62,675	)
Distribution paid		(9,212	)		(10,785	)
Deferred debt issuance costs paid		—			(8	)
Net cash provided by (used in) financing activities		3,992			(9,336	)
Net increase (decrease) in cash and cash equivalents and restricted cash		(128	)		630
Cash and cash equivalents and restricted cash at beginning of period		384			1,002
Cash and cash equivalents and restricted cash at end of period	$	256		$	1,632
Supplemental information
Interest and other debt expenses paid	$	3,050		$	3,699
Other financing fees paid	$	—		$	75
Supplemental non-cash information
Reinvestment of shareholder distributions	$	1,703		$	2,585

The accompanying notes are an integral part of these financial statements.

6

Redwood Enhanced Income Corp.

Schedule of Investments (Unaudited)

March 31, 2025

(in thousands)

Investments	Investment Type	Ref	Floor	Interest Rate	Maturity Date	Par Amount / Shares		Cost			Fair Value			Percentage of Net Assets			Footnotes
Investments - non-controlled/non-affiliated
First Lien Secured Debt
Aerospace & Defense
BlueHalo Global Holdings, LLC	First Lien Secured Debt	3M SOFR	1.00%	S + 6.00%	10/31/2025		5,079	$	5,040		$	5,072			2.39		(A) (E)
Doncasters US Finance LLC (United Kingdom)	First Lien Secured Debt	3M SOFR	2.00%	S + 6.50%	4/23/2030		14,048	$	13,778		$	14,188			6.69		(A) (B)
Doncasters US Finance LLC (Delayed Draw Loan) (United Kingdom)	First Lien Secured Debt	3M SOFR	2.00%	S + 6.50%	4/23/2030		1,419	$	(13	)	$	14			0.01		(A) (B) (D)
								$	18,805		$	19,274			9.09
Beverage, Food & Tobacco
Wellful Inc.	First Lien Secured Debt	1M SOFR	0.75%	S + 5.00%	4/19/2030		4,156	$	3,985		$	4,018			1.89		(A)
Wellful Inc.	First Lien Secured Debt	1M SOFR	0.00%	S + 5.25% plus 1.75% PIK	10/19/2030		4,662	$	3,307		$	3,217			1.52		(A)
								$	7,292		$	7,235			3.41
Construction & Building
CP Altas Buyer, Inc.	First Lien Secured Debt	1M SOFR	0.50%	S + 5.25%	11/23/2027		9,455	$	8,415		$	8,639			4.07		(A) (E)
Lightning US Holdings, Inc.	First Lien Secured Debt	3M SOFR	2.00%	S + 6.00%	11/18/2029		14,408	$	14,120		$	14,120			6.65		(A) (E)
Lightning US Holdings, Inc. (Delayed Draw Loan)	First Lien Secured Debt	3M SOFR	2.00%	S + 6.00%	11/18/2029		3,333	$	(71	)	$	(67	)		(0.03	)	(A) (D) (E)
Lightning US Holdings, Inc.	First Lien Secured Debt - Revolver	1M SOFR	2.00%	S + 6.00%	11/18/2029		2,222	$	1,287		$	1,289			0.61		(A) (D) (E)
								$	23,751		$	23,981			11.30
Consumer Goods: Durable
Apex Tool Group (Delayed Draw Loan)	First Lien Secured Debt	1M SOFR	3.00%	S + 7.00%	2/8/2028		5,861	$	5,784		$	5,708			2.69		(A)
Augusta Sportswear, Inc.	First Lien Secured Debt	1M SOFR	1.00%	S + 6.50%	11/21/2029		12,375	$	12,166		$	12,127			5.71		(A)
Bad Boy Mowers JV Acquisition, LLC	First Lien Secured Debt	1M SOFR	1.00%	S + 6.00%	11/9/2029		11,850	$	11,610		$	11,894			5.61		(A) (E)
								$	29,560		$	29,729			14.01
Consumer Goods: Non-Durable
Farfetch US Holdings Inc. (United Kingdom)	First Lien Secured Debt	3M SOFR	0.50%	S + 6.25%	10/20/2027		7,128	$	6,875		$	6,861			3.23		(A) (B) (C)
								$	6,875		$	6,861			3.23
Environmental Industries
Ironhorse Purchaser, LLC	First Lien Secured Debt	1M SOFR	1.00%	S + 5.25%	9/30/2027		10,442	$	10,309		$	10,442			4.92		(A) (E)
Ironhorse Purchaser, LLC (Delayed Draw Loan)	First Lien Secured Debt	1M SOFR	1.00%	S + 5.25%	9/30/2027		1,043	$	—		$	—			—		(A) (D) (E)
Ironhorse Purchaser, LLC	First Lien Secured Debt - Revolver	1M SOFR	1.00%	S + 5.25%	9/30/2027		1,000	$	167		$	180			0.08		(A) (D) (E)
								$	10,476		$	10,622			5.00
FIRE: Insurance
Norvax, LLC	First Lien Secured Debt	1M SOFR	3.00%	S + 7.50%	11/4/2029		8,134	$	7,870		$	7,922			3.73		(A) (C) (E)
Norvax, LLC	First Lien Secured Debt - Revolver	1M SOFR	3.00%	S + 7.50%	11/4/2029		602	$	(19	)	$	(16	)		(0.01	)	(A) (C) (D) (E)
								$	7,851		$	7,906			3.72
Healthcare & Pharmaceuticals
Beacon Oral Specialists Management LLC (Delayed Draw Loan)	First Lien Secured Debt	3M SOFR	1.00%	S + 6.00%	12/14/2026		17,480	$	4,428		$	4,490			2.12		(A) (D) (E)
BW CDMO Holdings UK Limited (United Kingdom)	First Lien Secured Debt	3M EURIBOR	0.00%	E + 6.75%	2/19/2030		12,485	$	12,635		$	13,095			6.17		(A) (B) (E)
BW CDMO Holdings UK Limited (Delayed Draw Loan) (United Kingdom)	First Lien Secured Debt	3M EURIBOR	0.00%	E + 6.75%	2/19/2030		3,746	$	(117	)	$	(122	)		(0.06	)	(A) (B) (D) (E)
Inotiv, Inc.	First Lien Secured Debt	1M SOFR	1.00%	S + 6.5% plus 0.25% PIK	11/5/2026		11,894	$	11,835		$	9,714			4.58		(A) (C)
Sonrava Health Holdings, LLC	First Lien Secured Debt	3M SOFR	0.75%	S + 6.76%	5/18/2028		6,289	$	6,104		$	6,247			2.94		(A)
								$	34,885		$	33,424			15.75

7

Redwood Enhanced Income Corp.

Schedule of Investments (Unaudited) (Continued)

March 31, 2025

(in thousands)

Investments	Investment Type	Ref	Floor	Interest Rate	Maturity Date	Par Amount / Shares		Cost			Fair Value			Percentage of Net Assets				Footnotes
Hotel, Gaming & Leisure
K1 Speed, Inc	First Lien Secured Debt	3M SOFR	1.00%	S + 6.25%	1/2/2029		19,087	$	18,739		$	18,784			8.85			(A) (E)
K1 Speed, Inc (Delayed Draw Loan)	First Lien Secured Debt	3M SOFR	1.00%	S + 6.25%	1/2/2029		5,913	$	4,171		$	4,120			1.94			(A) (D) (E)
Xponential Fitness LLC	First Lien Secured Debt	3M SOFR	1.00%	S + 6.76%	3/16/2026		20,972	$	20,737		$	20,343			9.59			(A) (C) (E)
								$	43,647		$	43,247			20.38
Metals & Mining
Alchemy US Holdco 1, LLC	First Lien Secured Debt	3M EURIBOR	0.00%	E + 6.50%	7/31/2029		2,294	$	2,447		$	2,440			1.15			(A) (E)
Alchemy US Holdco 1, LLC	First Lien Secured Debt	3M SOFR	1.00%	S + 6.50%	7/31/2029		11,363	$	11,284		$	11,264			5.31			(A) (E)
Alchemy US Holdco 1, LLC (Delayed Draw Loan)	First Lien Secured Debt	3M SOFR	1.00%	S + 6.50%	7/31/2029		966	$	124		$	116			0.06			(A) (D) (E)
Titan Purchaser, Inc	First Lien Secured Debt	3M SOFR	1.00%	S + 6.00%	3/1/2030		2,058	$	2,041		$	2,045			0.96			(A)
								$	15,896		$	15,865			7.48
Retail
At Home Group, Inc.	First Lien Secured Debt	1M SOFR	0.50%	S + 4.36%	7/24/2028		5,624	$	4,883		$	1,891			0.89			(A)
Chinos Intermediate 2 LLC	First Lien Secured Debt	3M SOFR	0.00%	S + 6.00%	9/29/2031		987	$	971		$	980			0.46			(A)
Claire's Stores, Inc.	First Lien Secured Debt	1M SOFR	0.00%	S + 7.25% PIK	5/15/2026		4,071	$	4,071		$	4,071			1.92			(A) (E)
Claire's Stores, Inc.	First Lien Secured Debt	3M SOFR	0.00%	S + 6.60%	5/15/2026		14,095	$	13,936		$	10,994			5.18			(A)
								$	23,861		$	17,936			8.45
Services: Business
Aptim Corp.	First Lien Secured Debt	1M SOFR	0.00%	S + 7.50%	5/23/2029		14,434	$	14,401		$	14,001			6.60			(A)
Energy Acquisition LP	First Lien Secured Debt	3M SOFR	2.00%	S + 6.50%	5/9/2029		18,818	$	18,478		$	18,818			8.87			(A) (E)
Energy Acquisition LP (Delayed Draw Loan)	First Lien Secured Debt	3M SOFR	2.00%	S + 6.50%	5/9/2029		1,040	$	(17	)	$	-			-			(A) (D) (E)
S&S Holdings, LLC	First Lien Secured Debt	1M SOFR	0.50%	S + 5.10%	10/1/2031		7,214	$	6,883		$	7,147			3.37			(A)
								$	39,745		$	39,966			18.84
Services: Consumer
Houghton Mifflin Harcourt Co	First Lien Secured Debt	1M SOFR	1.00%	S + 8.10%	4/7/2028		12,281	$	12,281		$	12,373			5.83			(A)
								$	12,281		$	12,373			5.83
Software
Alvaria Holdco (Cayman) (fka Atlas Purchaser, Inc.)	First Lien Secured Debt	1M SOFR	0.75%	S + 7.00% PIK	5/5/2028		825	$	802		$	743			0.35			(A)
Alvaria Holdco (Cayman) (fka Atlas Purchaser, Inc.)	First Lien Secured Debt	1M SOFR	0.75%	S + 1.00% plus 5.00% PIK	5/5/2028		636	$	636		$	572			0.27			(A)
								$	1,438		$	1,315			0.62
Technology Enabled Services
Argano, LLC	First Lien Secured Debt	1M SOFR	1.00%	S + 5.75%	9/13/2029		11,897	$	11,653		$	11,802			5.56			(A) (E)
Argano, LLC (Delayed Draw Loan)	First Lien Secured Debt	1M SOFR	1.00%	S + 5.75%	9/13/2029		2,609	$	—		$	(21	)		(0.01	)		(A) (D) (E)
Argano, LLC	First Lien Secured Debt - Revolver	1M SOFR	1.00%	S + 5.75%	9/13/2029		435	$	—		$	(3	)		—			(A) (D) (E)
Electronics For Imaging, Inc.	First Lien Secured Debt	3M SOFR	0.00%	S + 5.10%	7/23/2026		3,967	$	3,930		$	3,237			1.53			(A)
								$	15,583		$	15,015			7.08
Transportation: Consumer
Hornblower Holdings, LP	First Lien Secured Debt	3M SOFR	1.00%	S + 5.50%	7/3/2029		17,168	$	17,001		$	17,150			8.08			(A) (E)
Hornblower Holdings, LP	First Lien Secured Debt - Revolver	3M SOFR	1.00%	S + 5.50%	7/3/2029		2,703	$	2,703		$	2,674			1.26			(A) (E)
Wamos Air, S.A. (Spain)	First Lien Secured Debt	6M EURIBOR	0.00%	E + 6.50%	12/30/2029		6,160	$	6,094		$	6,343			2.99			(A) (B) (E)
Wamos Air, S.A. (Delayed Draw Loan) (Spain)	First Lien Secured Debt	6M EURIBOR	0.00%	E + 6.50%	12/30/2029		3,920	$	(204	)	$	(202	)		(0.10	)		(A) (B) (D) (E)
								$	25,594		$	25,965			12.23
Total First Lien Secured Debt								$	317,540		$	310,714			146.42		%

8

Redwood Enhanced Income Corp.

Schedule of Investments (Unaudited) (Continued)

March 31, 2025

(in thousands)

Investments	Investment Type	Ref	Floor	Interest Rate	Maturity Date	Par Amount / Shares		Cost		Fair Value		Percentage of Net Assets			Footnotes
Second Lien Secured Debt
Consumer Goods: Durable
SVP Singer Holdings Inc.	Second Lien Secured Debt	3M SOFR	0.00%	S + 5.76%	6/30/2029		1,540	$	1,519	$	1,540		0.73		(A) (E)
SVP Singer Holdings Inc.	Second Lien Secured Debt	3M SOFR	0.00%	S + 1.76% plus 6.00% PIK	12/31/2029		5,306	$	5,067	$	5,306		2.50		(A) (E)
								$	6,586	$	6,846		3.23
Software
Alvaria Holdco (Cayman) (fka Atlas Purchaser, Inc.)	Second Lien Secured Debt	1M SOFR	0.75%	S + 1.00% plus 6.50% PIK	5/5/2028		5,189	$	4,006	$	1,661		0.78		(A)
								$	4,006	$	1,661		0.78
Total Second Lien Secured Debt								$	10,592	$	8,507		4.01	%
Corporate Bond
Environmental Industries
Bioceres Crop Solutions Corp. (Argentina)	Corporate Bond	NA	NA	5.00% plus 4.00% PIK	8/5/2026		13,868	$	13,868	$	13,694		6.45		(A) (B) (E)
								$	13,868	$	13,694		6.45
Retail
At Home Group, Inc.	Corporate Bond	NA	NA	4.88%	7/15/2028		8,418	$	7,250	$	2,979		1.40		(A)
Guitar Center, Inc.	Corporate Bond	NA	NA	8.50%	1/15/2026		10,888	$	10,564	$	8,824		4.16		(A)
								$	17,814	$	11,803		5.56
Services: Consumer
MoneyGram International Inc	Corporate Bond	NA	NA	9.00%	6/1/2030		7,721	$	6,652	$	7,055		3.33		(A)
Staples, Inc.	Corporate Bond	NA	NA	10.75%	9/1/2029		8,090	$	8,000	$	7,318		3.45		(A)
Stonemor, Inc.	Corporate Bond	NA	NA	8.50%	5/15/2029		4,645	$	4,390	$	4,227		1.99		(A) (C)
								$	19,042	$	18,600		8.77
Software
Aptos Canada, Inc.	Corporate Bond	1M SOFR	1.00%	S + 7.61%	3/2/2027		15,000	$	14,826	$	14,733		6.94		(A) (E)
								$	14,826	$	14,733		6.94
Total Corporate Bonds								$	65,550	$	58,830		27.72	%
Equity
Consumer Goods: Durable
SVP Singer Holdings Inc.	Equity - Common Stock	NA	NA	NA	NA		357	$	3,363	$	3,159		1.49		(E)
								$	3,363	$	3,159		1.49
Total Equity								$	3,363	$	3,159		1.49	%
Total Investments - non-controlled/non-affiliated								$	397,045	$	381,210		179.64	%

9

Redwood Enhanced Income Corp.

Schedule of Investments (Unaudited) (Continued)

March 31, 2025

(in thousands)

Investments	Investment Type	Ref	Floor	Interest Rate	Maturity Date	Par Amount / Shares		Cost		Fair Value		Percentage of Net Assets			Footnotes
Investments - non-controlled/affiliated
First Lien Secured Debt
FIRE: Real Estate
PREIT Associates LP	First Lien Secured Debt	1M SOFR	0.00%	S + 7.00%	4/1/2029		20,059	$	20,059	$	20,360		9.59		(A) (C)
								$	20,059	$	20,360		9.59
Total First Lien Secured Debt								$	20,059	$	20,360		9.59	%
Second Lien Secured Debt
Services: Business
Carlson Travel, Inc.	Second Lien Secured Debt	NA	0.00%	18.50% PIK	5/8/2029		311	$	311	$	560		0.26		(A) (E)
Carlson Travel, Inc.	Second Lien Secured Debt	NA	0.00%	18.50% PIK	5/8/2029		81	$	81	$	146		0.07		(A) (E)
Carlson Travel, Inc.	Second Lien Secured Debt	NA	0.00%	15.00% PIK	5/8/2029		2,160	$	2,160	$	2,352		1.11		(A) (E)
								$	2,552	$	3,058		1.44
Total Second Lien Secured Debt								$	2,552	$	3,058		1.44	%
Equity
Services: Business
Carlson Travel, Inc.	Equity - Common Stock	NA	NA	NA	NA		2,426	$	—	$	—		—		(E)
Carlson Travel, Inc.	Equity - Preferred Equity	NA	NA	NA	NA		1,703	$	828	$	1,844		0.87		(E)
								$	828	$	1,844		0.87
Total Equity								$	828	$	1,844		0.87	%
Total Investments - non-controlled/affiliated								$	23,439	$	25,262		11.90	%
Cash Equivalents
Cash Equivalents								$	170	$	170		0.08		(F)
Total Cash Equivalents								$	170	$	170		0.08	%
Total Investments and Cash Equivalents								$	420,654	$	406,642		191.62	%
Derivatives, at fair value	Company Receives	Company Pays	Counterparty		Maturity Date	Notional Amount				Fair Value
Interest Rate Swap	3M-USD-LIBOR-BBA	3.5461%	Goldman Sachs & Co. LLC		6/17/2027		7,000			$	8
Interest Rate Swap	3M-USD-LIBOR-BBA	2.8601%	Goldman Sachs & Co. LLC		7/7/2027		5,000			$	142
Total Derivatives							12,000			$	150

————————————

Notes to the Schedule of Investments:

(A)Debt investments include investments in bank debt and corporate bonds that generally are bought and sold among institutional investors in transactions not subject to registration under the Securities Act of 1933. Such transactions are generally subject to contractual restrictions, such as approval of the agent or borrower.

(B)Non-U.S. company or principal place of business outside the U.S. and as a result the investment is not a qualifying asset under Section 55(a) of the Investment Company Act of 1940 (the “1940 Act”). Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company’s total assets.

(C)Publicly traded company with a market capitalization greater than $250 million and as a result the investment is not a qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company’s total assets.

(D)Includes an unfunded commitment that was acquired and/or valued at a discount.

(E)Inputs in the valuation of this investment included certain unobservable inputs that were significant to the valuation as a whole (See Note 3).

(F)Cash equivalents balance represents amounts held in the interest-bearing money market fund – US Bank Money Market Deposit Account – and currently yields a rate of 4.1% as of March 31, 2025.

PRIME, SOFR or EURIBOR resets monthly (M), quarterly (Q) or semiannually (S).

Aggregate acquisitions and aggregate dispositions of investments, other than government securities, totaled $40.3 million and $19.2 million, respectively, for the three months ended March 31, 2025. Aggregate acquisitions do not include investment assets received as payment in kind. Aggregate dispositions include principal paydowns and maturities of debt investments. As of March 31, 2025, approximately 21.4% of the total assets of the Company were non-qualifying assets under Section 55(a) of the 1940 Act.

The accompanying notes are an integral part of these financial statements.

10

Redwood Enhanced Income Corp.

Schedule of Investments

December 31, 2024

(in thousands)

Investments	Investment Type	Ref	Floor	Interest Rate	Maturity Date	Par Amount / Shares		Cost			Fair Value			Percentage of Net Assets			Footnotes
Investments - non-controlled/non-affiliated
First Lien Secured Debt
Aerospace & Defense
BlueHalo Global Holdings, LLC	First Lien Secured Debt	3M SOFR	1.00%	S + 6.00%	10/31/2025		4,931	$	4,874		$	4,921			2.29		(A) (E)
Doncasters US Finance LLC (United Kingdom)	First Lien Secured Debt	3M SOFR	2.00%	S + 6.50%	4/23/2030		14,083	$	13,798		$	13,943			6.49		(A) (B)
Doncasters US Finance LLC (Delayed Draw Loan) (United Kingdom)	First Lien Secured Debt	3M SOFR	2.00%	S + 6.50%	4/23/2030		1,419	$	(14	)	$	(14	)		(0.01	)	(A) (B) (D)
Keel Platform, LLC	First Lien Secured Debt	3M SOFR	0.75%	S + 5.25%	1/19/2031		5,757	$	5,681		$	5,700			2.66		(A) (E)
Keel Platform, LLC (Delayed Draw Loan)	First Lien Secured Debt	3M SOFR	0.75%	S + 5.25%	1/19/2031		1,201	$	(8	)	$	(12	)		(0.01	)	(A) (D) (E)
								$	24,331		$	24,538			11.42
Beverage, Food & Tobacco
Wellful Inc.	First Lien Secured Debt	1M SOFR	0.75%	S + 5.11%	4/19/2030		2,905	$	2,779		$	2,905			1.34		(A)
Wellful Inc.	First Lien Secured Debt	1M SOFR	0.00%	S + 5.25% plus 1.75% PIK	10/19/2030		4,653	$	3,262		$	3,699			1.72		(A)
								$	6,041		$	6,604			3.06
Capital Equipment
Brock Holdings III, LLC	First Lien Secured Debt	3M SOFR	0.50%	S + 6.00%	5/2/2030		3,611	$	3,544		$	3,623			1.69		(A)
								$	3,544		$	3,623			1.69
Construction & Building
Lightning US Holdings, Inc.	First Lien Secured Debt	1M SOFR	2.00%	S + 6.00%	11/18/2029		14,444	$	14,076		$	14,119			6.58		(A) (E)
Lightning US Holdings, Inc. (Delayed Draw Loan)	First Lien Secured Debt	1M SOFR	2.00%	S + 6.00%	11/18/2029		3,333	$	(48	)	$	(75	)		(0.03	)	(A) (D) (E)
Lightning US Holdings, Inc.	First Lien Secured Debt - Revolver	1M SOFR	2.00%	S + 6.00%	11/18/2029		2,222	$	797		$	812			0.38		(A) (D) (E)
								$	14,825		$	14,856			6.93
Consumer Goods: Durable
Apex Tool Group (Delayed Draw Loan)	First Lien Secured Debt	1M SOFR	3.00%	S + 7.00%	2/8/2028		5,861	$	3,431		$	3,436			1.60		(A) (D)
Augusta Sportswear, Inc.	First Lien Secured Debt	1M SOFR	1.00%	S + 6.50%	11/21/2029		12,406	$	12,184		$	12,158			5.66		(A)
Bad Boy Mowers JV Acquisition, LLC	First Lien Secured Debt	1M SOFR	1.00%	S + 6.00%	11/9/2029		11,880	$	11,625		$	11,880			5.53		(A) (E)
								$	27,240		$	27,474			12.79
Consumer Goods: Non-Durable
Farfetch US Holdings Inc. (United Kingdom)	First Lien Secured Debt	3M SOFR	0.50%	S + 6.25%	10/20/2027		8,272	$	7,954		$	7,693			3.58		(A) (B) (C)
								$	7,954		$	7,693			3.58
Environmental Industries
Ironhorse Purchaser, LLC	First Lien Secured Debt	1M SOFR	1.00%	S + 5.25%	9/30/2027		10,468	$	10,320		$	10,468			4.87		(A) (E)
Ironhorse Purchaser, LLC (Delayed Draw Loan)	First Lien Secured Debt	1M SOFR	1.00%	S + 5.25%	9/30/2027		1,043	$	—		$	—			—		(A) (D) (E)
Ironhorse Purchaser, LLC	First Lien Secured Debt - Revolver	1M SOFR	1.00%	S + 5.25%	9/30/2027		1,000	$	341		$	352			0.16		(A) (D) (E)
								$	10,661		$	10,820			5.03
FIRE: Insurance
Norvax, LLC	First Lien Secured Debt	3M SOFR	3.00%	S + 7.50%	11/4/2029		8,175	$	7,894		$	7,889			3.67		(A) (C) (E)
Norvax, LLC	First Lien Secured Debt - Revolver	3M SOFR	3.00%	S + 7.50%	11/4/2029		602	$	(20	)	$	(21	)		(0.01	)	(A) (C) (D) (E)
								$	7,874		$	7,868			3.66
Healthcare & Pharmaceuticals
Beacon Oral Specialists Management LLC (Delayed Draw Loan)	First Lien Secured Debt	3M SOFR	1.00%	S + 6.00%	12/14/2026		17,491	$	4,187		$	4,258			1.98		(A) (D) (E)
Inotiv, Inc.	First Lien Secured Debt	3M SOFR	1.00%	S + 6.5% plus 0.25% PIK	11/5/2026		11,914	$	11,839		$	10,723			4.99		(A) (C)
Sonrava Health Holdings, LLC	First Lien Secured Debt	6M SOFR	0.75%	S + 6.93%	5/18/2028		6,272	$	6,072		$	6,264			2.91		(A)
								$	22,098		$	21,245			9.88

11

Redwood Enhanced Income Corp.

Schedule of Investments (Continued)

December 31, 2024

(in thousands)

Investments	Investment Type	Ref	Floor	Interest Rate	Maturity Date	Par Amount / Shares		Cost			Fair Value			Percentage of Net Assets				Footnotes
Hotel, Gaming & Leisure
K1 Speed, Inc	First Lien Secured Debt	3M SOFR	1.00%	S + 6.25%	1/2/2029		20,754	$	20,349		$	20,401			9.49			(A) (E)
K1 Speed, Inc (Delayed Draw Loan)	First Lien Secured Debt	3M SOFR	1.00%	S + 6.25%	1/2/2029		4,246	$	1,679		$	1,626			0.76			(A) (D) (E)
Xponential Fitness LLC	First Lien Secured Debt	3M SOFR	1.00%	S + 6.76%	3/16/2026		19,870	$	19,731		$	19,870			9.24			(A) (C) (E)
								$	41,759		$	41,897			19.49
Metals & Mining
Alchemy US Holdco 1, LLC	First Lien Secured Debt	3M EURIBOR	0.00%	E + 6.50%	7/31/2029		2,308	$	2,462		$	2,358			1.10			(A) (E)
Alchemy US Holdco 1, LLC	First Lien Secured Debt	3M SOFR	1.00%	S + 6.50%	7/31/2029		11,435	$	11,313		$	11,279			5.25			(A) (E)
Alchemy US Holdco 1, LLC (Delayed Draw Loan)	First Lien Secured Debt	3M SOFR	1.00%	S + 6.50%	7/31/2029		967	$	125		$	118			0.04			(A) (D) (E)
Titan Purchaser, Inc	First Lien Secured Debt	3M SOFR	1.00%	S + 6.00%	3/1/2030		2,086	$	2,067		$	2,104			0.98			(A)
								$	15,967		$	15,859			7.37
Retail
At Home Group, Inc.	First Lien Secured Debt	1M SOFR	0.50%	S + 4.36%	7/24/2028		5,639	$	4,849		$	2,346			1.08			(A)
Chinos Intermediate 2 LLC	First Lien Secured Debt	3M SOFR	0.00%	S + 6.00%	9/29/2031		6,074	$	5,971		$	6,141			2.86			(A)
Claire's Stores, Inc.	First Lien Secured Debt	1M SOFR	0.00%	S + 6.60%	12/18/2026		14,132	$	13,953		$	11,221			5.22			(A)
								$	24,773		$	19,708			9.16
Services: Business
Aptim Corp.	First Lien Secured Debt	1M SOFR	0.00%	S + 7.50%	5/23/2029		13,216	$	13,216		$	13,117			6.10			(A)
Energy Acquisition LP	First Lien Secured Debt	6M SOFR	2.00%	S + 6.50%	5/9/2029		18,865	$	18,502		$	18,569			8.64			(A) (E)
Energy Acquisition LP (Delayed Draw Loan)	First Lien Secured Debt	6M SOFR	2.00%	S + 6.50%	5/9/2029		1,040	$	(18	)	$	(16	)		(0.01	)		(A) (D) (E)
S&S Holdings, LLC	First Lien Secured Debt	1M SOFR	0.50%	S + 5.10%	10/1/2031		7,233	$	6,883		$	7,211			3.35			(A)
								$	38,583		$	38,881			18.08
Services: Consumer
Houghton Mifflin Harcourt Co	First Lien Secured Debt	1M SOFR	1.00%	S + 8.10%	4/7/2028		12,313	$	12,313		$	12,666			5.89			(A)
Staples, Inc.	First Lien Secured Debt	3M SOFR	0.50%	S + 5.75%	9/1/2029		1,845	$	1,778		$	1,760			0.82			(A)
								$	14,091		$	14,426			6.71
Software
Alvaria Holdco (Cayman) (fka Atlas Purchaser, Inc.)	First Lien Secured Debt	1M SOFR	0.75%	S + 7.00% PIK	5/5/2028		803	$	778		$	738			0.34			(A)
Alvaria Holdco (Cayman) (fka Atlas Purchaser, Inc.)	First Lien Secured Debt	1M SOFR	0.75%	S + 1.00% plus 5.00% PIK	5/5/2028		628	$	628		$	578			0.27			(A)
								$	1,406		$	1,316			0.61
Technology Enabled Services
Argano, LLC	First Lien Secured Debt	1M SOFR	1.00%	S + 5.75%	9/13/2029		11,927	$	11,667		$	11,703			5.44			(A) (E)
Argano, LLC (Delayed Draw Loan)	First Lien Secured Debt	1M SOFR	1.00%	S + 5.75%	9/13/2029		2,609	$	—		$	(24	)		(0.01	)		(A) (D) (E)
Argano, LLC	First Lien Secured Debt - Revolver	1M SOFR	1.00%	S + 5.75%	9/13/2029		435	$	—		$	(8	)		—			(A) (D) (E)
Electronics For Imaging, Inc.	First Lien Secured Debt	3M SOFR	0.00%	S + 5.10%	7/23/2026		3,967	$	3,922		$	3,204			1.49			(A)
								$	15,589		$	14,875			6.92
Transportation: Consumer
Hornblower Holdings, LP	First Lien Secured Debt	3M SOFR	1.00%	S + 5.50%	7/3/2029		17,211	$	17,030		$	17,056			7.93			(A) (E)
Hornblower Holdings, LP	First Lien Secured Debt - Revolver	3M SOFR	1.00%	S + 5.50%	7/3/2029		2,703	$	1,350		$	1,321			0.61			(A) (D) (E)
								$	18,380		$	18,377			8.54
Total First Lien Secured Debt								$	295,116		$	290,060			134.92		%
Second Lien Secured Debt
Consumer Goods: Durable
SVP Singer Holdings Inc.	Second Lien Secured Debt	3M SOFR	0.00%	S + 5.76%	6/30/2029		1,317	$	1,317		$	1,316			0.61			(A) (E)
SVP Singer Holdings Inc.	Second Lien Secured Debt	3M SOFR	0.00%	S + 7.01% plus 0.75% PIK	12/31/2029		4,435	$	4,375		$	4,435			2.06			(A) (E)
								$	5,692		$	5,751			2.67

12

Redwood Enhanced Income Corp.

Schedule of Investments (Continued)

December 31, 2024

(in thousands)

Investments	Investment Type	Ref	Floor	Interest Rate	Maturity Date	Par Amount / Shares		Cost		Fair Value		Percentage of Net Assets			Footnotes
Software
Alvaria Holdco (Cayman) (fka Atlas Purchaser, Inc.)	Second Lien Secured Debt	1M SOFR	0.75%	S + 1.00% plus 6.50% PIK	5/5/2028		5,108	$	3,908	$	2,022		0.94		(A)
								$	3,908	$	2,022		0.94
Total Second Lien Secured Debt								$	9,600	$	7,773		3.61	%
Corporate Bond
Environmental Industries
Bioceres Crop Solutions Corp. (Argentina)	Corporate Bond	NA	NA	5.00% plus 4.00% PIK	8/5/2026		13,732	$	13,732	$	13,485		6.27		(A) (B) (E)
								$	13,732	$	13,485		6.27
Retail
At Home Group, Inc.	Corporate Bond	NA	NA	4.88%	7/15/2028		8,418	$	7,175	$	3,418		1.59		(A)
Guitar Center, Inc.	Corporate Bond	NA	NA	8.50%	1/15/2026		10,888	$	10,467	$	9,280		4.32		(A)
								$	17,642	$	12,698		5.91
Services: Consumer
MoneyGram International Inc	Corporate Bond	NA	NA	9.00%	6/1/2030		7,721	$	6,615	$	7,480		3.48		(A)
Staples, Inc.	Corporate Bond	NA	NA	10.75%	9/1/2029		9,056	$	8,951	$	8,891		4.14		(A)
Stonemor, Inc.	Corporate Bond	NA	NA	8.50%	5/15/2029		4,645	$	4,377	$	4,157		1.93		(A) (C)
								$	19,943	$	20,528		9.55
Software
Aptos Canada, Inc.	Corporate Bond	1M SOFR	1.00%	S + 7.61%	3/2/2027		15,000	$	14,801	$	14,700		6.84		(A) (E)
								$	14,801	$	14,700		6.84
Total Corporate Bonds								$	66,118	$	61,411		28.57	%
Equity
Consumer Goods: Durable
SVP Singer Holdings Inc.	Equity - Common Stock	NA	NA	NA	NA		357	$	3,363	$	3,363		1.56		(E)
								$	3,363	$	3,363		1.56
Total Equity								$	3,363	$	3,363		1.56	%
Total Investments - non-controlled/non-affiliated								$	374,197	$	362,607		168.66	%
Investments - non-controlled/affiliated
First Lien Secured Debt
FIRE: Real Estate
PREIT Associates LP	First Lien Secured Debt	1M SOFR	0.00%	S + 7.00%	4/1/2029		20,059	$	20,059	$	20,135		9.37		(A) (C)
								$	20,059	$	20,135		9.37
Total First Lien Secured Debt								$	20,059	$	20,135		9.37	%
Second Lien Secured Debt
Services: Business
Carlson Travel, Inc.	Second Lien Secured Debt	NA	0.00%	15.00% PIK	5/8/2029		2,081	$	2,081	$	2,393		1.11		(A) (E)
								$	2,081	$	2,393		1.11
Total Second Lien Secured Debt								$	2,081	$	2,393		1.11	%

13

Redwood Enhanced Income Corp.

Schedule of Investments (Continued)

December 31, 2024

(in thousands)

Investments	Investment Type	Ref		Floor	Interest Rate	Maturity Date	Par Amount / Shares		Cost		Fair Value		Percentage of Net Assets			Footnotes
Equity
Services: Business
Carlson Travel, Inc.	Equity - Common Stock	NA		NA	NA	NA		2,426	$	—	$	617		0.29		(E)
Carlson Travel, Inc.	Equity - Preferred Equity	NA		NA	NA	NA		1,703	$	828	$	2,391		1.11		(E)
									$	828	$	3,008		1.40
Total Equity									$	828	$	3,008		1.40	%
Total Investments - non-controlled/affiliated									$	22,968	$	25,536		11.88	%
Cash Equivalents
Cash Equivalents									$	356	$	356		0.17		(F)
Total Cash Equivalents									$	356	$	356		0.17	%
Total Investments and Cash Equivalents									$	397,521	$	388,499		180.71	%
Derivatives, at fair value	Company Receives	Company Pays		Counterparty	Maturity Date		Notional Amount				Fair Value
Interest Rate Swap	3M-USD-LIBOR-BBA		3.5461	Goldman Sachs & Co. LLC	6/17/2027			7,000			$	133
Interest Rate Swap	3M-USD-LIBOR-BBA		2.8601	Goldman Sachs & Co. LLC	7/7/2027			5,000			$	166
Total Derivatives								12,000			$	299

————————————

Notes to the Schedule of Investments:

(A)Debt investments include investments in bank debt and corporate bonds that generally are bought and sold among institutional investors in transactions not subject to registration under the Securities Act of 1933. Such transactions are generally subject to contractual restrictions, such as approval of the agent or borrower.

(B)Non-U.S. company or principal place of business outside the U.S. and as a result the investment is not a qualifying asset under Section 55(a) of the Investment Company Act of 1940 (the “1940 Act”). Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company’s total assets.

(C)Publicly traded company with a market capitalization greater than $250 million and as a result the investment is not a qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company’s total assets.

(D)Includes an unfunded commitment that was acquired and/or valued at a discount.

(E)Inputs in the valuation of this investment included certain unobservable inputs that were significant to the valuation as a whole (See Note 3).

(F)Cash equivalents balance represents amounts held in the interest-bearing money market fund – US Bank Money Market Deposit Account – and currently yields a rate of 4.1% as of December 31, 2024.

PRIME, SOFR or EURIBOR resets monthly (M), quarterly (Q) or semiannually (S).

Aggregate acquisitions and aggregate dispositions of investments, other than government securities, totaled $280.1 million and $258.2 million, respectively, for the year ended December 31, 2024. Aggregate acquisitions do not include investment assets received as payment in kind. Aggregate dispositions include principal paydowns and maturities of debt investments. As of December 31, 2024, approximately 17.8% of the total assets of the Company were non-qualifying assets under Section 55(a) of the 1940 Act.

The accompanying notes are an integral part of these financial statements.

14

REDWOOD ENHANCED INCOME CORP.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(in thousands, except share and per share data)

1. Organization and Nature of Operations

Redwood Enhanced Income Corp. (the “Company,” “we” or “our”), a Maryland corporation incorporated on June 21, 2021, is an externally managed, non-diversified closed-end investment company that has elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company has elected to be treated for federal income tax purposes, and intends to qualify annually thereafter, as a regulated investment company (“RIC”) as defined under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). As a RIC, the Company generally does not pay corporate-level federal income taxes on its income to the extent that it distributes such income each year and satisfies other applicable income tax requirements.

Redwood Capital Management, LLC (the “Adviser”) is our investment adviser, effective March 31, 2022, pursuant to an investment advisory agreement entered into between the Company and the Adviser. On September 30, 2022, the Company and the Adviser entered into an Amended and Restated Investment Advisory Agreement (the “Investment Advisory Agreement”). The Adviser, subject to the overall supervision of our Board of Directors (the “Board of Directors”), manages the day-to-day operations of the Company and provides investment advisory services to the Company.

Redwood Capital Management, LLC, as our administrator (the “Administrator”), provides, among other things, administrative services and facilities to the Company pursuant to an administration agreement (the “Administration Agreement”) entered into between the Company and the Administrator. Furthermore, the Administrator offers to provide, on our behalf, managerial assistance to those portfolio companies, or an affiliate thereof to which we are required to provide such assistance.

Our investment objective is to seek current income as well as capital appreciation, while emphasizing the preservation of capital. The Company’s focus is fixed income investments, primarily in the senior layers of the capital structure of leveraged companies. These investments primarily consist of loans and bonds, sourced either through direct investments, the syndicated market or through trading in the secondary market. In connection with the Company’s debt investments, the Company may also receive equity interests such as options, warrants or other instruments as additional consideration.

The Company generally expects to invest in middle market companies, which the Adviser considers to be companies with annual earnings before interest, taxes, depreciation and amortization (“EBITDA”) of between $50.0 million and $300.0 million. The Company may also invest in smaller or larger companies if an attractive opportunity presents itself, particularly during periods of market dislocation.

The companies in which the Company intends to invest typically are highly leveraged, and, in most cases, not rated by national rating agencies. If such companies were rated, the Adviser believes that they would typically receive a rating below investment grade (between BB and CCC under the Standard & Poor’s system) from the national securities rating organizations. Securities rated below investment grade are often referred to as “leveraged loans” or “high yield” securities or “junk bonds” and are often higher risk and have speculative characteristics as compared to investment grade debt instruments.

2. Summary of Significant Accounting Policies

The following is a summary of the significant accounting and reporting policies used in preparing the unaudited interim financial statements.

Basis of Presentation

The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) as contained within the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. The Company is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies in the FASB ASC Topic 946, Financial Services – Investment Companies. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. These unaudited interim financial statements should be read in conjunction with the audited financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP as contained in the ASC have been omitted from the unaudited interim financial statements according to the SEC rules and regulations. Certain prior period amounts have been reclassified to conform to the current period presentation.

15

Segment Reporting

In accordance with ASC Topic 280, Segment Reporting (“ASC 280”), the Company has determined that it has a single operating and reporting segment. As a result, the Company’s segment accounting policies are the same as described herein and the Company does not have any intra-segment sales and transfers of assets.

Use of Estimates

The preparation of the unaudited interim financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim financial statements, as well as the reported amounts of revenues and expenses during the reporting period presented. Although management believes these estimates and assumptions to be reasonable, actual results could differ from those estimates and such differences could be material.

Cash and Cash Equivalents

The Company defines cash equivalents as securities that are readily convertible into known amounts of cash and near maturity that present insignificant risk of changes in value because of changes in interest rates. Generally, only securities with a maturity of three months or less from the date of purchase would qualify, with limited exceptions. The Company deems that certain money market funds, U.S. Treasury bills, repurchase agreements and other high-quality, short-term debt securities would qualify as cash equivalents.

The Company maintains its cash in a bank account, which, at times, may exceed federally insured limits. As of March 31, 2025, our cash balance exceeded federally insured limits. The Adviser continuously monitors the performance of the bank where the account is held in order to manage any risk associated with such account. Cash and cash equivalents are carried at cost, which approximates fair value. Cash and cash equivalents held as of March 31, 2025 and December 31, 2024 were $0.2 million and $0.4 million, respectively.

Restricted Cash

Restricted cash represents cash held by our counterparty as collateral against our derivative instruments until such contracts mature or are settled upon per agreement of buyer and seller of the contract. In accordance with ASC 230, Statement of Cash Flows, the Statements of Cash Flows outline the changes in cash, including both restricted and unrestricted cash, cash equivalents and foreign currencies. As of March 31, 2025 and December 31, 2024, restricted cash included $0.1 million and zero, respectively, held with Goldman Sachs & Co. LLC, as collateral for interest rate swaps. Restricted cash is carried at cost, which approximates fair value.

Investment Transactions

Investments are recognized when the Company assumes an obligation to acquire a financial instrument and assume the risks for gains and losses related to that instrument. Investments are derecognized when the Company assumes an obligation to sell a financial instrument and forego the risks for gains or losses related to that instrument. Specifically, the Company records all security transactions on a trade date basis. Amounts for investments recognized or derecognized but not yet settled are reported as a payable for investments purchased and a receivable for investments sold, respectively, in the Statements of Assets and Liabilities.

Unsettled Purchases and Sales of Investments

Investment transactions are recorded based on the trade date of the transaction. As a result, unsettled purchases and sales are recorded as payables and receivables from unsettled transactions, respectively. While purchases and sales of the Company’s syndicated senior secured loans generally settle on a T+7 basis, the settlement period will sometimes extend past the scheduled settlement. In such cases, the Company generally is contractually owed and recognizes interest income equal to the applicable margin (“spread”) beginning on the T+7 date. Such income is accrued as interest receivable and is collected upon settlement of the investment transaction.

Investment Classification

In accordance with the provisions of the 1940 Act, the Company classifies investments by level of control. As defined in the 1940 Act, “Control Investments” are investments in those companies that the Company is deemed to “Control.” “Affiliate Investments” are investments in those companies that are “Affiliated Persons” of the Company, as defined in the 1940 Act, other than Control Investments. “Non-Control / Non-Affiliate Investments” are those that are neither Control Investments nor Affiliate Investments. Generally, under the 1940 Act, the Company is deemed to control a company in which it has invested if the Company owns more than 25.0% of the voting securities (i.e., securities with the right to elect directors) and/or has the power to exercise control over the management or policies of such portfolio company. Generally, under the 1940 Act, Affiliate Investments that are not

16

otherwise Control Investments are defined as investments in which the Company owns at least 5.0%, up to 25.0% (inclusive), of the voting securities and does not have the power to exercise control over the management or policies of such portfolio company.

Fair Value Measurements

The Company follows guidance in ASC 820, Fair Value Measurement (“ASC 820”), where fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are determined within a framework that establishes a three-tier hierarchy which maximizes the use of observable market data and minimizes the use of unobservable inputs to establish a classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, such as the risk inherent in a particular valuation technique used to measure fair value using a pricing model and/or the risk inherent in the inputs for the valuation technique. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company and the Adviser. Unobservable inputs reflect the Adviser’s own assumptions about the assumptions market participants would use in pricing the asset or liability based on the information available. The inputs or methodology used for valuing assets or liabilities may not be an indication of the risks associated with investing in those assets or liabilities.

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

•Level 1: Quoted prices in active markets for identical assets or liabilities, accessible by us at the measurement date.

•Level 2: Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or other observable inputs other than quoted prices.

•Level 3: Unobservable inputs for the asset or liability.

In all cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level of input that is significant to the fair value measurement. The Adviser’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each investment. The level assigned to the investment valuations may not be indicative of the risk or liquidity associated with investing in such investments. Because of the inherent uncertainties of valuation, the values reflected in the unaudited interim financial statements may differ materially from the values that would be received upon an actual disposition of such investments.

Investment Valuation Process

The Adviser, as the Company’s valuation designee (the “Valuation Designee”), undertakes a multi-step valuation process under the supervision of the Board of Directors. In calculating the value of the Company’s total assets, the Adviser values investments for which market quotations are readily available at such market quotations if they are deemed to represent fair value. Debt and equity securities that are not publicly traded, whose market price is not readily available or whose market quotations are not deemed to represent fair value are valued at fair value as determined in good faith by the Valuation Designee, under the direction of our Board of Directors. Market quotations may be deemed not to represent fair value in certain circumstances where the Adviser reasonably believes that facts and circumstances applicable to an issuer, a seller or purchaser or the market for a particular security causes current market quotes not to reflect the fair value of the security. Examples of these events could include cases in which material events are announced after the close of the market on which a security is primarily traded, when a security trades infrequently causing a quoted purchase or sale price to become stale or in the event of a “fire sale” by a distressed seller.

When market quotations are not readily available, the Valuation Designee seeks to obtain fair values from independent pricing services or at bid prices obtained from at least two brokers or dealers, if available, or otherwise from a principal market maker or a primary market dealer.

If the Valuation Designee has a bona fide reason to believe that any such market quotes or values from independent pricing services or broker/dealers does not reflect the fair value of an investment, a fair value may be determined for such investments by the Valuation Designee in accordance with the Company’s valuation procedures. At least once annually, the Adviser will utilize an independent third-party valuation firm to assist in determining fair value of each such investment.

Derivative Instruments

The Company recognizes all derivative instruments as assets or liabilities at fair value in its unaudited interim financial statements. Derivative contracts entered into by the Company are not designated as hedging instruments, and as a result the Company presents changes in fair value and realized gains or losses through current period earnings.

17

Derivative instruments are measured in terms of the notional contract amount and derive their value based upon one or more underlying instruments. Derivative instruments are subject to various risks similar to non-derivative instruments including market, credit, liquidity, and operational risks. The Company manages these risks on an aggregate basis as part of its risk management process. The derivatives may require the Company to pay or receive an upfront fee or premium. These upfront fees or premiums are carried forward as cost or proceeds to the derivatives.

Exchange-traded derivatives which include put and call options are valued based on the last reported sales price on the date of valuation. Over-the-counter (“OTC”) derivatives, including credit default swaps, are valued by the Adviser using quotations from counterparties. In instances where models are used, the value of the OTC derivative is derived from the contractual terms of, and specific risks inherent in, the instrument as well as the availability and reliability of observable inputs, such as credit spreads.

Offsetting Assets and Liabilities

The Company has elected not to offset cash collateral against the fair value of derivative contracts. The fair values of these derivatives are presented on a gross basis, even when derivatives are subject to master netting agreements.

Valuation of Other Financial Assets and Financial Liabilities

ASC 825, Financial Instruments, permits an entity to choose, at specified election dates, to measure certain assets and liabilities at fair value (the “Fair Value Option”). We have not elected the Fair Value Option to report selected financial assets and financial liabilities. Debt issued by the Company is reported at amortized cost (see Note 7 to the unaudited interim financial statements). The carrying value of all other financial assets and liabilities approximates fair value due to their short maturities or their close proximity of the originations to the measurement date.

Realized Gains or Losses

Security transactions are accounted for on a trade date basis. Realized gains or losses on investments are calculated by using the specific identification method. Securities that have been called by the issuer are recorded at the call price on the call effective date.

Investment Income Recognition

The Company records interest and dividend income, adjusted for amortization of premium and accretion of discount, on an accrual basis. Some of our loans and other investments, including certain preferred equity investments, may have contractual payment-in-kind (“PIK”) interest or dividends. PIK income computed at the contractual rate is accrued into income and reflected as receivable up to the capitalization date. PIK investments offer issuers the option at each payment date of making payments in cash or in additional securities. When additional securities are received, they typically have the same terms, including maturity dates and interest rates as the original securities issued. On these payment dates, the Company capitalizes the accrued interest or dividends receivable (reflecting such amounts as the basis in the additional securities received). PIK generally becomes due at maturity of the investment or upon the investment being called by the issuer. At that point, the Company believes PIK is not fully expected to be realized, the PIK investment will be placed on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued, uncapitalized interest or dividends are reversed from the related receivable through interest or dividend income, respectively. The Company does not reverse previously capitalized PIK interest or dividends. Upon capitalization, PIK is subject to the fair value estimates associated with their related investments. PIK investments on non-accrual status are restored to accrual status if the Company believes that PIK is expected to be realized.

Investments that are expected to pay regularly scheduled interest and/or dividends in cash are generally placed on non-accrual status when principal or interest/dividend cash payments are past due 30 days or more and/or when it is no longer probable that principal or interest/dividend cash payments will be collected. Such non-accrual investments are restored to accrual status if past due principal and interest or dividends are paid in cash, and in management’s judgment, are likely to continue timely payment of their remaining interest or dividend obligations. Interest or dividend cash payments received on non-accrual designated investments may be recognized as income or applied to principal depending upon management’s judgment.

Loan origination fees, original issue discount (“OID”), and market discounts are capitalized and accreted into interest income over the respective terms of the applicable loans using the effective interest method or straight-line, as applicable. Upon the prepayment of a loan, prepayment premiums, any unamortized loan origination fees, OID, or market discounts are recorded as interest income. Other income generally includes amendment fees, bridge fees, and structuring fees which are recorded when earned.

Foreign Currency Investments

The Company may invest in instruments traded in foreign countries and denominated in foreign currencies. Such positions are converted at the respective closing foreign exchange rates in effect at March 31, 2025 and December 31, 2024, respectively, and reported in U.S. dollars. Purchases and sales of investments and revenue and expense items denominated in foreign currencies, when

18

they occur, are translated into U.S. dollars based on the foreign exchange rates in effect on the respective dates of such transactions. The portion of gains and losses on foreign investments resulting from fluctuations in foreign currencies is included in realized and unrealized gain (loss) on foreign currency investments, in the Statements of Operations.

Investments in foreign companies and securities of foreign governments may involve special risks and considerations not typically associated with investments in U.S. companies and securities of the U.S. Government. These risks include, among other things, revaluation of currencies, less reliable information about issuers, different transaction clearance and settlement practices, and potential future adverse political and economic developments. Moreover, investments in foreign companies, securities of foreign governments and their markets may be less liquid and their prices more volatile than those of comparable U.S. companies and the U.S. Government.

Expenses

Expenses include management fees, performance-based incentive fees, interest expense, insurance expense, administrative service fees, legal fees, directors’ fees, audit and tax service expenses, third-party valuation fees and other general and administrative expenses. Expenses are recognized on an accrual basis. As noted in Note 6, certain expenses of the Company are subject to a cap as agreed with the Adviser.

Deferred Financing Costs and Debt Issuance Costs

Deferred financing and debt issuance costs represent fees and other direct incremental costs incurred in connection with the Company’s borrowings. These expenses are deferred and amortized into interest expense over the life of the related debt instrument using the straight-line method. Deferred financing costs related to revolving credit facilities are presented separately as an asset on the Company’s Statements of Assets and Liabilities. Debt issuance costs related to any issuance of installment debt or notes are presented net against the outstanding debt balance of the related security.

Distributions

Distributions to common shareholders are recorded on the record date. The amount to be paid out as a distribution is determined by the Board of Directors and depends on the Company’s earnings, financial condition, maintenance of our tax treatment as a RIC, compliance with applicable BDC regulations and such factors as the Board of Directors may deem relevant from time to time.

Distributions from net investment income and net realized capital gains are determined in accordance with U.S. federal income tax regulations, which may differ from those amounts determined in accordance with U.S. GAAP. The Company may pay distributions in excess of its taxable net investment income. This excess would be a tax-free return of capital in the period and reduce the shareholder’s tax basis in its shares. These book/tax differences are either temporary or permanent in nature. Temporary and permanent differences are primarily attributable to differences in the tax treatment of certain loans and the tax characterization of income and non-deductible expenses. These differences are generally determined in conjunction with the preparation of the Company’s annual RIC tax return. To the extent these differences are permanent, they are charged or credited to paid-in capital in excess of par or distributable earnings, as appropriate, in the period that the differences arise.

The Company intends to timely distribute to its shareholders substantially all of its annual taxable income for each year, except that the Company may retain certain net capital gains for reinvestment and may carry forward taxable income for distribution in the following year and pay any applicable tax. The specific tax characteristics of the Company’s distributions will be reported to shareholders after the end of the calendar year. All distributions will be subject to available funds, and no assurance can be given that the Company will be able to declare such distributions in future periods.

The Company has a dividend reinvestment plan that provides for reinvestment of all cash distributions declared by the Board of Directors unless a shareholder elects to “opt out” of the plan. As a result, if the Board of Directors declares a cash distribution, then the shareholders who have not “opted out” of the dividend reinvestment plan will have their cash distributions automatically reinvested in additional shares of common stock, rather than receiving the cash distribution. Shareholders who receive distributions in the form of shares of common stock will generally be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions and, for this purpose, shareholders receiving distributions in the form of stock will generally be treated as receiving distributions equal to the fair market value of the stock received through the plan; however, since their cash distributions will be reinvested, those shareholders will not receive cash with which to pay any applicable taxes.

Federal and State Income Taxes

We have elected to be treated as a RIC, and we intend to qualify as a RIC under the Code and operate in a manner so as to qualify for the tax treatment applicable to RICs. To qualify as a RIC, the Company must (among other requirements) meet certain source-of-income and asset diversification requirements and timely distribute to its shareholders at least 90% of its investment company taxable income, as defined by the Code, for each year. The Company (among other requirements) intends to make the

19

requisite distributions to its shareholders, which will generally relieve the Company from corporate-level income taxes. For income tax purposes, distributions made to shareholders are reported as ordinary income, capital gains, non-taxable return of capital, or a combination thereof. The tax character of distributions, if any, paid to shareholders may include return of capital, however, the exact amount cannot be determined at this point. The final determination of the tax character of distributions will not be made until we file Form 1099s for the tax year ending December 31, 2025. The character of income and gains that we will distribute is determined in accordance with income tax regulations that may differ from U.S. GAAP. Book and tax basis differences relating to shareholder dividend and distributions and other permanent book and tax differences are reclassified to paid-in capital.

If we do not distribute (or are not deemed to have distributed) at least 98.0% of our annual ordinary income and 98.2% of our capital gain net income for the one-year period ending on October 31 of such calendar year, we will generally be required to pay excise tax equal to 4% of the amount by which 98% of our annual ordinary income and 98.2% of our capital gains exceed the distributions from such taxable income for the year. To the extent that we determine that our estimated current year annual taxable income will be in excess of estimated current year dividend distributions from such taxable income, we accrue excise taxes, if any, on estimated undistributed taxable income.

If we fail to satisfy the annual distribution requirement or otherwise fail to qualify as a RIC in any taxable year, we would be subject to tax on all of our taxable income at regular corporate rates. Distribution would generally be taxable to our individual and other non-corporate taxable shareholders as ordinary dividend income eligible for the reduced maximum rate applicable to qualified dividend income to the extent of our current and accumulated earnings and profits provided certain holding period and other requirements are met. Subject to certain limitation under the Code, corporate distributions would be eligible for the dividend-received deduction. To qualify again to be taxed as a RIC in a subsequent year, we would be required to distribute to our shareholders our accumulated earnings and profits attributable to non-RIC years. In addition, if we failed to qualify as a RIC for a period greater than two taxable years, then, in order to qualify as a RIC in a subsequent year, we would be required to elect to recognize and pay tax on any net built-in gain (the excess of aggregate gain, including items of income, over aggregate loss that would have been realized if we had been liquidated) or, alternatively, be subject to taxation on such built-in gain recognized for a period of five years.

We follow ASC 740, Income Taxes (“ASC 740”). ASC 740 provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the unaudited interim financial statements. ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing our tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. Penalties or interest, if applicable, that may be assessed relating to income taxes would be classified as other operating expenses in the unaudited interim financial statements. Management’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 we file both federal and state income tax returns, our major tax jurisdiction is federal.

Recent Accounting Pronouncements

The Company considers the applicability and impact of all accounting standard updates (“ASU”) issued by the FASB. The Company has assessed currently issued ASUs and has determined that they are not applicable or expected to have minimal impact on its unaudited interim financial statements.

In March 2020, the FASB issued Accounting Standards Update, 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The amendments in ASU 2020-04 provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. In December 2022, the FASB issued Accounting Standards Update 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which deferred the sunset day of this guidance to December 31, 2024.

The objective of the guidance in Topic 848 is to provide temporary relief during the transition period. The FASB included a sunset provision within Topic 848 based on expectations of when the London Interbank Offered Rate (“LIBOR”) would cease being published. At the time that Update 2020-04 (“Update”) was issued, the UK Financial Conduct Authority (“FCA”) had established its intent that it would no longer be necessary to persuade, or compel, banks to submit to LIBOR after December 31, 2021. As a result, the sunset provision was set for December 31, 2022 - 12 months after the expected cessation date of all currencies and tenors of LIBOR. In March 2021, the FCA announced that the intended cessation date of the overnight 1-, 3-, 6-, and 12-month tenors of USD LIBOR will be June 30, 2023, which is beyond the current sunset date of Topic 848. Because the current relief in Topic 848 may not cover a period of time during which a significant number of modifications may take place, the amendments in this Update defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024 (“FASB Sunset Date”), after which entities will no longer be permitted to apply the relief in Topic 848.

20

Management had evaluated the impact of Topic 848 on the Company’s investments, derivatives, debt and other contracts that will undergo reference rate-related modifications as a result of the Reference Rate Reform. Management has no concerns in adopting Topic 848 by the FASB Sunset Date. Management will continue to work with other financial institutions and counterparties to modify contracts as required by applicable regulation and within the regulatory deadlines. As of March 31, 2025, management believes these accounting standards have no impact on the Company and does not have any concerns of adopting the regulations by FASB Sunset Date.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which enhances disclosure requirements about significant segment expenses that are regularly provided to the chief operating decision maker (the “CODM”). ASU 2023-07, among other things, (i) requires a single segment public entity to provide all of the disclosures as required by ASC 280, (ii) requires a public entity to disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources and (iii) provides the ability for a public entity to elect more than one performance measure. ASU 2023-07 is effective for the fiscal years beginning after December 15, 2023, and interim periods beginning with the first quarter ended March 31, 2025. Early adoption is permitted and retrospective adoption is required for all prior periods presented. The Company has adopted ASU 2023-07 effective December 31, 2024 and concluded that the application of this guidance did not have any material impact on its unaudited interim financial statements. See Note 12 for more information on the effects of the adoption of ASU 2023-07.

SEC Disclosure Update and Simplification

In December 2020, the SEC adopted Rule 2a-5. The rule establishes a consistent, principles-based framework for boards of directors to use in creating their own specific processes in order to determine fair values in good faith.

3. Investments

Investments may be categorized based on the types of inputs used in valuing such investments. The level in the U.S. GAAP valuation hierarchy in which an investment falls is based on the lowest level input that is significant to the valuation of the investment in its entirety. Per ASC 820, leveling for each investment is conducted at each quarter end. Transfers between levels are made in accordance with the Company’s accounting policy. Transfers between levels are recognized as of the beginning of the reporting period.

At March 31, 2025, the Company’s investments were categorized as follows:

	Fair Value Measurements
March 31, 2025	Level 1		Level 2 (1)		Level 3		Total
Investments:
First Lien Secured Debt (2)	$	—	$	136,437	$	190,513	$	326,950
Second Lien Secured Debt		—		1,661		9,904		11,565
Corporate Bond		—		30,403		28,427		58,830
Revolver		—		—		4,124		4,124
Equity - Preferred Equity		—		—		1,844		1,844
Equity - Common Stock		—		—		3,159		3,159
Total investments	$	—	$	168,501	$	237,971	$	406,472
Derivatives	$	—	$	150	$	—	$	150
Cash equivalents	$	170	$	—	$	—	$	170

21

At December 31, 2024, the Company’s investments were categorized as follows:

	Fair Value Measurements
December 31, 2024	Level 1		Level 2 (1)		Level 3		Total
Investments:
First Lien Secured Debt (2)	$	—	$	145,651	$	162,088	$	307,739
Second Lien Secured Debt		—		2,022		8,144		10,166
Corporate Bond		—		33,226		28,185		61,411
Revolver		—		—		2,456		2,456
Equity - Preferred Equity		—		—		2,391		2,391
Equity - Common Stock		—		—		3,980		3,980
Total investments	$	—	$	180,899	$	207,244	$	388,143
Derivatives	$	—	$	299	$	—	$	299
Cash equivalents	$	356	$	—	$	—	$	356

————————————

(1)Fair value based upon quoted prices in inactive markets or quotes for comparable investments.

(2)Includes senior secured loans.

Unobservable inputs used in the fair value measurement of Level 3 investments as of March 31, 2025 included the following:

	March 31, 2025
					Range
	Fair Value		Valuation Technique	Unobservable Input	Low			High			Weighted Average
Corporate Bond	$	14,733	Yield analysis	Market yield		12.27	%		13.27	%		12.77	%
Corporate Bond	$	13,694	Yield analysis	Market yield		5.25	%		5.25	%		5.25	%
			Black Scholes Option Pricing Model	Volatility		10.00	%		41.50	%		25.75	%
			Black Scholes Option Pricing Model	Term	1.35 years			1.35 years			1.35 years
			Black Scholes Option Pricing Model	Risk free rate		3.55	%		3.55	%