Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information in management's discussion and analysis of financial conditions and results of operations relates to John Hancock Comvest Private Income Fund (collectively, "we", "us", "our", or the "Fund").

Forward-Looking Statements

The information contained in this section should be read in conjunction with the financial data and consolidated financial statements and notes thereto appearing elsewhere in this quarterly report on Form 10-Q (the "Report"). Some of the statements in this Report (including in the following discussion) constitute forward-looking statements, which relate to future events, future performance, or our financial condition. The forward-looking statements contained in this section involve a number of risks and uncertainties, including:

Forward-looking statements are identified by their use of such terms and phrases such as "anticipate", "believe", "continue", "could", "estimate", "expect", "intend", "may", "plan", "potential", "project", "seek", "should", "target", "will", "would" or similar expressions. Actual results could differ materially from those projected in the forward-looking statements for any reason, including the factors set forth in Part I-Item 1A.-Risk Factors contained in our annual report on Form 10-K for the year ended December 31, 2024, and in this Report.

We have based the forward-looking statements included in this Report on information available to us on the date of this Report. We assume no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Although we undertake no obligation to revise or update any forward-looking statements, you are advised to consult any additional disclosures we may make directly to you or through reports filed or to be filed with the U.S. Securities and Exchange Commission (the "SEC"), including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Overview

The Fund is an externally managed, diversified, closed-end management investment company that has elected to be regulated as a business development company (a "BDC") under the Investment Company Act of 1940, as amended (the "1940 Act") and has elected to be treated for U.S. federal income tax purposes, and intends to qualify annually thereafter, as a regulated investment company ("RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). The Fund was formed as Comvest Credit Partners BDC Fund, L.P. on June 28, 2023 as a limited partnership under the laws of the state of Delaware. The Fund changed its name to AMG Comvest Senior Lending Fund on October 23, 2023 and converted to a Delaware statutory trust by operation of law on October 24, 2023. The Fund commenced operations on September 29, 2023 ("Inception Date") and commenced investment operations on October 18, 2023. On November 6, 2025, the Fund changed its name to John Hancock Comvest Private Income Fund.

The Fund previously offered its common shares pursuant to the terms set forth in the Fund's Confidential Private Placement Memorandum and subscription agreements that it entered into with investors in connection with its private offering of common shares (the "Private Offering") (each, a "Subscription Agreement"). The common shares in the Private Offering were sold under the exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), only to investors that are "accredited

investors" in accordance with Rule 506 of Regulation D promulgated under the Securities Act, and other exemptions of similar import in the laws of the states and jurisdictions where the Private Offering was made. The Fund's final Closing under the Private Offering occurred on December 13, 2024. All common shares issued under the Private Offering are now classified as Class I shares (the "Shares").

On December 13, 2024, the Fund received a notice of effectiveness from the SEC related to the Fund's N-2 Registration Statement (the "Registration Statement"). Pursuant to the Registration Statement, the Fund intends to publicly offer on a continuous basis up to $2.0 billion of the Shares (the "Public Offering").

On March 14, 2025, the SEC issued the Fund an exemptive order ("Multi-Class Order") that permits the Fund to offer multiple classes of its Shares. Under the Multi-Class Order, the Fund may issue Class S, Class D, Class F and Class I shares.

The Fund is managed by the Investment Adviser, a Delaware limited liability company and an affiliate of Comvest Capital Advisors LLC and Comvest Credit Advisors LLC (collectively, "Comvest Partners"). The Investment Adviser is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940, as amended. The Investment Adviser oversees the management of the Fund's activities and is responsible for making investment decisions with respect to the Fund's portfolio.

Our investment objective is to generate current income and capital appreciation. Our primary focus is to provide risk-adjusted returns and current income to investors by investing primarily in middle-market companies with earnings before interest, taxes, depreciation and amortization ("EBITDA") generally between $10 million and $100 million within a wide range of industries, although the Fund intends to focus on industries in which the Investment Adviser and its affiliates have investing experience and access to operating resources, including but not limited to healthcare, financial services, business & technology services, industrials, consumer products, and franchisors/retail.

On March 11, 2024, the Fund established AMG Comvest Senior Lending Blocker MF SPV, LLC ("Subsidiary I"), a wholly-owned subsidiary and Delaware limited liability company to hold equity securities of portfolio companies organized as a pass-through entity while continuing to satisfy the requirements of a RIC under the Code. Subsidiary I has filed an election to be treated as a corporation for tax purposes. On November 6, 2025, Subsidiary I changed its name to Comvest Senior Lending Blocker MF SPV, LLC.

On April 15, 2024, the Fund established AMG Comvest Senior Lending Fund LLI SPV, LLC ("Subsidiary II"), a wholly-owned financing subsidiary and Delaware limited liability company, for the purpose of holding pledged investments as collateral under a Secured Loan Facility (as defined below). Subsidiary II is a disregarded entity for tax purposes. On November 6, 2025, Subsidiary II changed its name to Comvest Senior Lending Fund LLI SPV, LLC.

On May 30, 2024, the Fund established AMG Comvest SLF California, LLC ("Subsidiary III", collectively with Subsidiary I and Subsidiary II, the "Subsidiaries"), a wholly-owned subsidiary and Delaware limited liability company, which has been established to acquire investments in the state of California, as required by California law. Subsidiary III is a disregarded entity for tax purposes. November 6, 2025, Subsidiary III changed its name to Comvest SLF California, LLC.

Portfolio and Investment Activity

During the nine months ended September 30, 2025, we made $479,363 of investments in new or existing portfolio companies and had $66,041 in aggregate amount of sales and repayments, resulting in net investments of $413,322 for the period. The total portfolio of debt investments at fair value consisted of 100% bearing variable interest rates and 0% bearing fixed interest rates.

During the nine months ended September 30, 2024, we made $108,813 of investments in new or existing portfolio companies and had $1,000 in aggregate amount of sales and repayments, resulting in net investments of $107,813 for the period. The total portfolio of debt investments at fair value consisted of 100% bearing variable interest rates and 0% bearing fixed interest rates.

Our portfolio composition, based on fair value at September 30, 2025 was as follows.

Our portfolio composition, based on fair value at December 31, 2024 was as follows.

Portfolio Asset Quality

Our Investment Adviser employs an investment rating system to categorize our investments. In addition to various risk management and monitoring tools, our Investment Adviser grades the credit risk of all debt investments on a scale of 1 to 6 no less frequently than quarterly. This system is intended primarily to reflect the underlying risk of a portfolio debt investment relative to the inherent risk at the time the original debt investment was made (i.e., at the time of acquisition), although it may also take into account under certain circumstances the performance of the portfolio company's business, the collateral coverage of the investment and other relevant factors.

The Investment Adviser focuses on downside protection by leveraging existing rights available under the credit documents; however, for investments that are significantly underperforming, which may need to be restructured, the Investment Adviser's workout team partners with the investment team and all material amendments, waivers and restructurings require the approval of a majority of the Investment Committee.

The weighted average risk rating of our investments based on fair value was 2.0 as of September 30, 2025. As of September 30, 2025, the Fund had one portfolio investment on non-accrual status. Refer to Note 2-Summary of Significant Accounting Policies for additional details regarding the Fund's non-accrual policy.

The following table shows the distribution of our investments on the 1 to 6 investment rating scale at fair value as of September 30, 2025.

The weighted average risk rating of our investments based on fair value was 2.0 as of December 31, 2024. As of December 31, 2024, the Fund had one portfolio company on non-accrual status. Refer to Note 2-Summary of Significant Accounting Policies for additional details regarding the Fund's non-accrual policy.

The following table shows the distribution of our investments on the 1 to 6 investment rating scale at fair value as of December 31, 2024.

The following table shows the amortized cost and fair value of our performing and non-accrual investments as of the following periods.

The following table shows the weighted average rate, spread over the reference rate of floating rate and fees of investments originated during the three months ended September 30, 2025 and 2024.

RESULTS OF OPERATIONS

Our operating results for the three and nine months ended September 30, 2025, was as follows (dollars in thousands).

Our operating results for the three and nine months ended September 30, 2024, was as follows (dollars in thousands).

Investment Income

Investment income for the three and nine months ended September 30, 2025, was driven by deployment of capital and interest income from our investments. The composition of our investment income was as follows (dollars in thousands).

Investment income for the three and nine months ended September 30, 2024, was driven by deployment of capital and interest income from our investments. The composition of our investment income was as follows (dollars in thousands).

Operating Expenses

The composition of our operating expenses for the three and nine months ended September 30, 2025, was as follows (dollars in thousands).

The composition of our operating expenses for the three and nine months ended September 30, 2024, was as follows (dollars in thousands).

Net Realized Gains (Losses) and Net Change in Unrealized Gains (Losses) on Investments

Net realized gains (losses) and net change in unrealized gains (losses) on investments for the three and nine months ended September 30, 2025, were as follows (dollars in thousands).

Net realized gains (losses) and net change in unrealized gains (losses) on investments for the three and nine months ended September 30, 2024, were as follows (dollars in thousands).

Recent Developments

A summary of recent developments is described under "Item 1. Financial Statements - Notes to Consolidated Financial Statements -Note 11. Subsequent Events".

Liquidity and Capital Resources

We generate cash from (1) net proceeds of our continuous offering of Common Shares, (2) cash flows from investments and operations and (3) borrowings from banks or other lenders. Our primary uses of cash are to (1) originate investments in portfolio companies and other investments to comply with certain portfolio diversification requirements, (2) fund the cost of operations (including expenses, the Management Fee and, to the extent permitted under the 1940 Act, any indemnification obligations), (3) pay debt service of any borrowings and (4) pay cash distributions to our shareholders.

As of September 30, 2025 and December 31, 2024, our debt consisted of an asset-based leverage facility, and short-term borrowings related to repurchase obligations. We have entered into, and expect to continue to enter into, additional credit facilities, increase the size of our existing facilities, or issue additional debt securities, including securitizations, unsecured debt, or other forms of debt. Any such incurrence would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions, and other factors. In accordance with the 1940 Act, with certain limited exceptions, we are only allowed to incur borrowings, issue debt securities, or issue preferred stock, if immediately after the borrowing or issuance, the ratio of total assets (less total liabilities other than indebtedness) to total indebtedness plus preferred stock, is at least 150%. See "Borrowings" for more information.

Cash and cash equivalents on hand as of September 30, 2025, taken together with our available debt capacity and any capital commitments, is expected to be sufficient for our investing activities and to conduct our operations in the near future.

Our long-term cash needs will include principal payments on outstanding indebtedness and funding of additional portfolio investments. Funding for long-term cash needs will come from any cash or liquid assets, in addition to unused net proceeds from financing activities. We cannot, however, be certain that these sources of funds will be available at a time and upon terms acceptable to us in sufficient amounts in the future.

Although we have historically been able to obtain sufficient borrowing capacity, a deterioration in economic conditions or other adverse developments could restrict our access to financing in the future. We may be unable to secure new financing for investments or liquidity needs or may only do so on less favorable terms. These limitations could reduce our ability to make new investments and negatively affect our operating results.

As of September 30, 2025, we had $24,371 in cash and cash equivalents. During the nine months ended September 30, 2025, we used $391,894 in cash for operating activities, primarily as a result of funding portfolio investments of $479,363 and partially offset by cash outflows from other operating activities of $87,469. Cash provided by financing activities was $404,359 during the period, primarily the result of proceeds from the issuance of common shares and debt borrowings of $250,214 and $174,719, respectively. Additionally, we distributed $20,574 in cash distributions during the period.

Taxation as a RIC

We have elected to be treated as a RIC under Subchapter M of the Code. As a RIC, we generally will not be subject to corporate-level U.S. federal income taxes on any income that we distribute as dividends for U.S. federal income tax purposes to our shareholders. To maintain our qualification as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements. In addition, in order to maintain RIC tax treatment, we must distribute to our shareholders, for each tax year, an amount equal to at least

90% of our "investment company taxable income," which is generally our net ordinary income plus the excess, if any, of realized net short-term capital gain over realized net long-term capital loss and determined without regard to any deduction for dividends paid. We will be subject to U.S. federal income tax at the regular corporate rates on any income or capital gains not distributed (or deemed distributed) to our shareholders. If we fail to qualify as a RIC, we will be subject to U.S. federal income tax at the regular corporate rates on our income and capital gains.

Additionally, in order to avoid the imposition of a U.S. federal excise tax, we are required to distribute, in respect of each calendar year, dividends to our shareholders of an amount at least equal to the sum of 98% of our calendar year net ordinary income (taking into account certain deferrals and elections); 98.2% of our capital gain net income (adjusted for certain ordinary losses) for the one year period ending on October 31 of such calendar year; and any net ordinary income and capital gain net income for preceding calendar years that were not distributed during such calendar years and on which we previously did not incur any U.S. federal income tax. If we fail to qualify as a RIC for any reason and become subject to corporate tax, the resulting corporate taxes could substantially reduce our net assets, the amount of income available for distribution and the amount of our distributions during the period.

Related Party Transactions and Agreements

Investment Management Agreement

We entered into an investment management agreement (the "Investment Management Agreement"), under which the Investment Adviser, subject to the overall supervision of our Board manages the day-to-day operations of, and provides investment advisory services to us. Affiliates of the Investment Adviser also provide investment advisory services to other funds that have investment mandates that are similar, in whole and in part, with ours. The Investment Adviser has adopted policies designed to manage and mitigate the conflicts of interest associated with the allocation of investment opportunities among multiple funds. In addition, any affiliated fund currently formed or formed in the future and managed by the Investment Adviser or its affiliates may have overlapping investment objectives with our own and, accordingly, may invest in asset classes similar to those targeted by us. However, in certain instances due to regulatory, tax, investment, or other restrictions, certain investment opportunities may not be appropriate for either us or other funds managed by the Investment Adviser or its affiliates.

Administration Agreement

We entered into an administration agreement (the "Administration Agreement") with AMG Funds LLC, a Delaware limited liability company and wholly-owned subsidiary of AMG (the "Administrator"). Under the terms of the Administration Agreement, the Administrator provides, or oversees the performance of, administrative and compliance services necessary for the operation of the Fund, including, but not limited to, maintaining financial records, overseeing the calculation of NAV, compliance monitoring (including diligence and oversight of the Fund's other service providers), preparing reports to shareholders and reports filed with the SEC and other regulators, preparing materials and coordinating meetings of the Fund's Board, managing the payment of expenses, the payment and receipt of funds for investments and the performance of administrative and professional services rendered by others and providing office space, equipment and office services. The Administrator may also provide on our behalf managerial assistance to our portfolio companies.

The Administrator has retained a sub-administrator (the "Sub-Administrator") to perform some of its obligations under the Administration Agreement. The Sub-Administrator receives compensation for its sub-administrative services under the sub-administration agreement. In addition, we have entered into an agreement, pursuant to which the Sub-Administrator provides us with accounting services (the "Fund Accounting Services Agreement"). We will reimburse the Sub-Administrator for all reasonable costs and expenses incurred by the Sub-Administrator in providing these services under the Fund Accounting Servicing Agreement.

Managing Dealer Agreement

We entered into a Managing Dealer Agreement (the "Managing Dealer Agreement") with John Hancock Investment Management Distributors LLC (the "Managing Dealer"), pursuant to which the Managing Dealer agreed to, among other things, manage our relationships with third-party brokers engaged by the Managing Dealer to participate in the distribution of shares, which we refer to as "participating brokers," and financial advisors. The Managing Dealer also coordinates our marketing and distribution efforts with participating brokers and their registered representatives with respect to communications related to the terms of the offering, our investment strategies, material aspects of our operations and subscription procedures.

Expense Limitation and Reimbursement Agreement

We entered into a second amended and restated expense limitation and reimbursement agreement with the Investment Adviser and the Administrator on October 25, 2024, which will terminate on May 1, 2026, unless renewed by mutual agreement of the Investment Adviser, the Administrator, and the Fund, or unless otherwise terminated by the Fund's Board upon at least thirty (30) days written notice to the Investment Adviser and the Administrator (the "Expense Limitation and Reimbursement Agreement"). Pursuant to the Expense Limitation and Reimbursement Agreement, the Investment Adviser and the Administrator are obligated to pay, absorb or

reimburse all of our operating costs and expenses incurred, including, but not limited to organization and offering costs and legal, administration, accounting, printing, mailing, subscription processing and filing fees and expenses, as determined in accordance with generally accepted accounting principles for investment companies ("Operating Expenses") (x) above 1.25% of the value of the Fund's quarterly net assets as of the beginning of the first calendar day of the applicable quarter adjusted for any share issuances or repurchases during the applicable quarter during the period of time that the Fund operates as a privately offered, non-traded BDC and (y) above 1.25% of the value of the Fund's monthly net assets as of the beginning of the first calendar day of the applicable month adjusted for any share issuances or repurchases during the applicable month during the period of time that the Fund operates as a publicly-offered, non-traded BDC (each such payment, absorption or reimbursement, a "Required Expense Payment"). Any Required Expense Payment must be paid by the Investment Adviser and the Administrator in any combination of cash or other immediately available funds and/or offset against amounts due from us to the Investment Adviser, the Administrator, or their affiliates.

Distributions and Dividends

Distributions declared for the three and nine months ended September 30, 2025, totaled $9,979 and $23,980, respectively.

The following table reflects cash distributions, including dividends and returns of capital, if any, per share that have been declared by our Board as of the nine months ended September 30, 2025:

Distributions declared for the three and nine months ended September 30, 2024, totaled $2,001 and $3,623, respectively.

The following table reflects cash distributions, including dividends and returns of capital, if any, per share that have been declared by our Board as of the nine months ended September 30, 2024:

Beginning in January 2025, we commenced paying monthly distributions to our shareholders in amounts sufficient to qualify as and maintain our status as a RIC. We intend to distribute approximately all of our net investment income no less frequently than monthly and substantially all of our taxable income on an annual basis, except that we may retain certain net capital gains for reinvestment.

Borrowings

We are only allowed to borrow money such that our asset coverage, which, as defined in the 1940 Act, measures the ratio of total assets less total liabilities not represented by senior securities to total borrowings, must equal at least 150% after such borrowing, with certain limited exceptions. We may in the future determine to utilize a greater amount of leverage, including for investment purposes. As of September 30, 2025 and December 31, 2024, we had $399,820 and $222,615, respectively, par value of outstanding borrowings. As of September 30, 2025 and December 31, 2024, our asset coverage ratio was 212.15% and 190.7%, respectively. We seek to carefully consider our unfunded commitments for the purpose of planning our ongoing financial leverage. Further, we maintain sufficient borrowing capacity within the 150% asset coverage limitation to cover any outstanding unfunded commitments we are required to fund.

Secured Loan Facility

On July 16, 2024 and as most recently amended on October 15, 2025, Subsidiary II has entered into a Loan and Servicing Agreement (as amended, the "Secured Loan Facility"), with Sumitomo Mitsui Banking Corporation, as collateral agent, administrative agent and a lender, Webster Bank, N.A., as a lender, and Western Alliance Trust Company, N.A., as account bank, collateral custodian and collateral administrator. The Secured Loan Facility provides for borrowings in U.S. dollars up to a maximum principal amount of $445,000 thousand for a six-month period beginning on October 15, 2025 (the "Upsize Period") and $400,000 after the Upsize Period. Proceeds from the borrowings under the Secured Loan Facility will be used primarily to finance the purchase or origination of loans. Unless

otherwise terminated, the Secured Loan Facility will mature on July 16, 2029. The interest rate on outstanding loans will be calculated by the 1-month SOFR rate plus a spread of 2.20%. Please refer to Note 6-Borrowings in the notes to our consolidated financial statements for further details on the Secured Loan Facility.

Contractual Obligations

We entered into the Investment Management Agreement with the Investment Adviser pursuant to the 1940 Act to provide us with investment advisory services and the Administration Agreement with the Administrator to provide us with administrative services. Payments for investment advisory services under the Investment Management Agreement are described under Item 1. Financial Statements - Notes to Consolidated Financial Statements - Note 4. Related Party Transactions. Payments for administration services under the Administration Agreement are described under Item 1. Financial Statements - Notes to Consolidated Financial Statements - Note 4. Related Party Transactions. Payments for marketing and distribution services under the Managing Dealer Agreement are described under Item 1. Financial Statements - Notes to Consolidated Financial Statements - Note 4. Related Party Transactions.

Off-Balance Sheet Arrangements

As of September 30, 2025, we have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.

Commitments

In the ordinary course of business, we may enter into future funding commitments. As of September 30, 2025, we had unfunded commitments on revolving credit lines and delayed draw term loans of $131,041. We maintain sufficient financial resources to satisfy unfunded commitments, including cash on hand. Please refer to Note 5-Commitments and Contingencies in the notes to our consolidated financial statements for further detail on these unfunded commitments.

Significant Accounting Estimates and Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP"). The preparation of consolidated financial statements in conformity with 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, we will evaluate our estimates, including those related to the matters described below. Actual results could differ from those estimates.

While our significant accounting policies are also described in Note 2-Summary of Significant Accounting Policies of the notes to our consolidated financial statements appearing elsewhere in this report, we believe the following accounting policy, Valuation of Portfolio Investments, requires the most significant judgment in the preparation of our consolidated financial statements because it involves judgments and assumptions about highly complex and inherently uncertain matters. In addition, the impact of reasonably different estimates and assumptions could have a greater impact on our consolidated financial statements.

Valuation of Portfolio Investments

The Investment Adviser applies fair value accounting in accordance with GAAP and valuation policies and procedures adopted by the Board (the "Valuation Policy"). Fair value is the amount 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. Investments are reflected on the Fund's Consolidated Statements of Assets and Liabilities at fair value, with changes in unrealized gains and losses resulting from changes in fair value reflected in the Fund's Consolidated Statements of Operations as "Net change in unrealized gains (losses) of investments".

The Investment Adviser values the Fund's portfolio investments in accordance with the Valuation Policy and the 1940 Act. For purposes of the 1940 Act, the Board has designated the Investment Adviser as the Fund's Valuation Designee (the "Valuation Designee"). The Board provides oversight of the Investment Adviser's monthly good faith fair value determinations of the Fund's portfolio investments, including investments that are not publicly traded and those whose market prices are not readily available.

One or more independent valuation firms (each a "Valuation Agent") are engaged to independently value the Fund's investments, in consultation with the Investment Adviser. The Fund's valuation procedures, which are the procedures that are followed by such Valuation Agent, are described under Item 1. Financial Statements - Notes to Consolidated Financial Statements - Note 2. Summary of Significant Accounting Policies.

For investments in revolving credit facilities and delayed draw commitments, the cost basis of the funded investments purchased is offset by any costs/netbacks received for any unfunded portion on the total balance committed. The fair value is also adjusted for the

price appreciation or depreciation on the unfunded portion. As a result, the purchase of commitments not completely funded may result in a negative fair value until it is called and funded.

The values assigned to investments are based upon available information and do not necessarily represent amounts which might ultimately be realized, since such amounts depend on future circumstances and cannot be reasonably determined until the individual positions are liquidated. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Fund's investments may fluctuate from period to period and the fluctuations could be material.

Revenue Recognition

Interest Income

Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis. Discount and premium on investments purchased are accreted/amortized over the expected life of the respective investment using the effective interest method. Loan origination fees, original issue discount and market discounts or premiums are capitalized and amortized into interest income using the effective interest method. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts are recorded as interest income. The Fund may have loans in its portfolio that contain a payment-in-kind ("PIK") interest provision. PIK interest is accrued and recorded as income at the contractual rates, if deemed collectible. The PIK interest is added to the principal balance on the capitalization date and is generally due at maturity or when deemed by the issuer.

Fee Income

Fee income, such as structuring fees, loan monitoring, amendment, syndication, commitment, termination, and other loan fees are recognized as income when earned, either upon receipt or amortized into fee income. Upon the re-payment of a loan or debt security, any prepayment penalties and unamortized loan fees are recorded as fee income.

Non-accrual

Investments may be placed on non-accrual status when principal or interest payments are past due and/or when there is reasonable doubt that principal or interest will be collected. Accrued interest is generally reversed when an investment is placed on non-accrual status. Interest payments received on non-accrual investments may be recognized as income or applied to principal depending upon management's judgment of the ultimate outcome. Non-accrual investments are restored to accrual status when past due principal and interest is paid and, in management's judgment, are likely to remain current.

Net Realized Gain or Loss and Net Change in Unrealized Gain or Loss

Investment transactions are accounted for on the trade date. Gain or loss on the sale of investments is calculated using the specific identification method. Net change in unrealized gain or loss will reflect the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized gain or loss, when a gain or loss is realized.