WTI Fund X, Inc. Annual Report Summary: A Deep Dive for Investors

Unlock the insights into WTI Fund X, Inc.'s financial health and strategic direction. This summary translates complex information from the latest 10-K filing into clear, understandable insights for retail investors, highlighting key performance indicators, investment strategies, and potential considerations.

Business Overview

WTI Fund X, Inc. provides Senior Secured loans to a diverse range of middle-market companies. As a lender, the fund prioritizes capital preservation and consistent income generation. Senior Secured loans are generally lower-risk investments because specific borrower assets back them, giving WTI Fund X a priority claim in the event of financial distress. This structure typically offers a more stable return profile compared to equity investments.

The fund's core strategy focuses on:

• Preserving Capital: Safeguarding invested capital through secured lending.
• Generating Income: Delivering a steady stream of interest income from its loan portfolio.
• Diversifying Investments: Spreading investments across various industries to mitigate sector-specific risks.
• Actively Managing: Continuously monitoring portfolio companies and market conditions to optimize returns and manage risk.

Financial Performance

WTI Fund X delivered strong financial performance in 2025, growing its asset base and consistently distributing to shareholders.

• Total Assets: Grew to $1.25 billion at year-end 2025, up from $1.10 billion in 2024, reflecting successful capital deployment.
• Net Investment Income (NII): Increased to $78 million in 2025, compared to $70 million in 2024, driven by a larger portfolio and a favorable interest rate environment.
• Net Asset Value (NAV) per Share: Reached $15.65 as of December 31, 2025, a modest increase from $15.30 at the end of 2024, indicating stable underlying asset values.
• Distributable Income: Totaled $85 million for 2025, providing strong coverage for shareholder distributions.
• Distributions to Shareholders: The fund maintained a consistent distribution payout of $1.25 per share for 2025, demonstrating its commitment to returning value to investors.
• Common Stock & Additional Paid-In Capital: Totaled $820 million, showcasing a robust equity base that supports its lending activities.
• Cumulative Return of Capital Distributions: WTI Fund X has returned a cumulative $150 million to shareholders through distributions over its operational history, underscoring its long-term income generation capability.

Management Discussion and Analysis (MD&A) Highlights

Strategic portfolio growth and effective capital deployment drove the fund's financial performance in 2025. An expanded investment portfolio and a generally favorable interest rate environment, which provided attractive yields on new and existing loans, directly contributed to the increase in Net Investment Income (NII). The modest rise in Net Asset Value (NAV) per share reflects the stable valuation of the underlying loan portfolio and effective investment management.

Portfolio Composition and Shifts: As of December 31, 2025, WTI Fund X's investment portfolio diversified across 10 key industries, with a strong emphasis on technology and healthcare sectors. The loan portfolio's total fair value stood at approximately $1.15 billion.

Industry Allocation (by Fair Value, End of 2025):

• Software: 25% ($287.5M)
• Other Technology: 18% ($207.0M)
• Biotechnology: 12% ($138.0M)
• Internet: 10% ($115.0M)
• Other Healthcare: 9% ($103.5M)
• Computers & Storage: 8% ($92.0M)
• Technology Services: 7% ($80.5M)
• Semiconductors & Equipment: 6% ($69.0M)
• Medical Devices: 3% ($34.5M)
• Wireless: 2% ($23.0M)

Key Portfolio Shifts (2024 vs. 2025): The fund strategically adjusted its portfolio, demonstrating a dynamic approach to market opportunities and risk management.

• Reduced Exposure in "Other Technology": The number of companies in this sector decreased from 55 to 40, and its percentage of the total portfolio fair value declined from 22% to 18%.
• Slight Reduction in Software: While still the largest segment, the number of software companies decreased from 33 to 29, with its portfolio allocation slightly adjusting from 27% to 25%.
• Increased Focus on Medical Devices: The fund added one company in this sector, increasing its holdings from 2 to 3 companies, and its allocation grew from 2% to 3%.
• Exit from "Security" Sector: A small "Security" sector, comprising one company and less than 1% of the portfolio in 2024, was fully exited in 2025.
• Stability in Other Sectors: Biotechnology, Computers & Storage, Other Healthcare, Semiconductors & Equipment, Technology Services, and Wireless sectors maintained relatively stable numbers of companies and portfolio allocations.

These adjustments highlight WTI Fund X's active portfolio management, optimizing for risk-adjusted returns by refining its exposure within the technology and healthcare landscapes. The weighted average interest rate on its loan portfolio remained attractive at approximately 9.5% at year-end 2025.

Risk Factors

Investing in WTI Fund X, Inc. involves various risks, including:

• Credit Risk: Borrowers may default on their obligations, leading to a loss of principal and interest. While senior secured loans are collateralized, the collateral's value may not fully cover the loan amount in a default.
• Interest Rate Risk: Fluctuations in interest rates can impact the fund's net investment income and the value of its debt investments, despite the use of interest rate collars. A significant rise in interest rates could increase borrowing costs or reduce demand for its loans.
• Liquidity Risk: The fund's investments in middle-market companies are often illiquid, making quick sales at desired prices difficult. This could limit the fund's ability to react to market changes or meet redemption requests.
• Valuation Risk: Many of the fund's investments lack readily ascertainable market values. The Board of Directors determines their fair value, which involves subjective judgments and estimates and may not reflect actual selling prices.
• Economic and Market Conditions: General economic downturns, industry-specific challenges, or adverse market conditions could negatively impact portfolio companies' financial health, increasing default rates and reducing investment opportunities.
• Competition: The highly competitive market for lending to middle-market companies could lead to lower yields on new investments or a decrease in the quality of available opportunities.
• Regulatory Risk: Changes in laws, regulations, or governmental policies, particularly those affecting business development companies (BDCs) or financial institutions, could adversely affect the fund's operations, financial condition, or ability to make distributions.
• Dependence on Key Personnel: The fund's success relies significantly on its management team's expertise and continued service. The loss of key personnel could adversely affect the fund's ability to achieve its investment objectives.

Financial Health and Liquidity

WTI Fund X maintains a robust financial position to support its lending activities and meet its obligations.

• Capital Structure: With $820 million in Common Stock & Additional Paid-In Capital, the fund possesses a strong equity base. This substantial equity provides a solid foundation for its investment portfolio and supports its ability to leverage judiciously.
• Debt and Leverage: The fund uses credit facilities and other forms of debt to finance a portion of its investment activities. Its strategy optimizes its capital structure, prudently managing its leverage ratio in compliance with regulatory requirements and internal policies. The fund regularly assesses its debt covenants and maintains flexibility in its financing arrangements.
• Cash and Equivalents: The fund maintains adequate cash reserves to manage day-to-day operations, fund new investment commitments, and cover distributions.
• Liquidity Management: The fund's liquidity strategy focuses on maintaining sufficient cash and access to committed credit facilities. This ensures it can capitalize on new investment opportunities, meet operational needs, and manage potential portfolio fluctuations. The use of interest rate collars also contributes to predictable cash flows by stabilizing net interest income.

Competitive Position

WTI Fund X operates in a highly competitive market, providing financing to middle-market companies. This market includes diverse participants such as:

• Commercial banks and other financial institutions: These traditional lenders often have lower capital costs and established relationships.
• Other business development companies (BDCs): Many BDCs pursue similar investment strategies, directly competing for attractive loan opportunities.
• Private debt funds and institutional investors: These entities also actively deploy capital in the middle-market lending space.

WTI Fund X's competitive advantages stem from:

• Specialized Expertise: A deep understanding of the technology and healthcare sectors, enabling more informed underwriting and portfolio management.
• Flexible Financing Solutions: The ability to structure tailored loan agreements that meet middle-market companies' specific needs, which traditional banks may be less willing or able to provide.
• Established Relationships: Long-standing relationships with private equity sponsors, management teams, and intermediaries, providing a consistent pipeline of investment opportunities.
• Disciplined Underwriting: A rigorous credit analysis and due diligence process that identifies high-quality borrowers and mitigates risk.
• Active Portfolio Management: Continuous monitoring of portfolio companies and market conditions to optimize returns and proactively manage potential issues.

These factors enable WTI Fund X to differentiate itself and compete effectively for attractive investment opportunities within its target market.

Future Outlook

WTI Fund X aims to continue delivering attractive risk-adjusted returns to shareholders through its disciplined approach to senior secured lending. Key priorities for the upcoming year include:

• Selective Portfolio Growth: Identifying and investing in high-quality middle-market companies, particularly within its core technology and healthcare sectors, while maintaining strict underwriting standards.
• Optimizing Capital Structure: Prudently managing its debt and equity to support growth and enhance shareholder value.
• Consistent Shareholder Distributions: Delivering stable and predictable distributions, supported by strong net investment income.
• Proactive Risk Management: Continuously monitoring its portfolio and market conditions to adapt strategies and mitigate emerging risks.

WTI Fund X remains committed to its role as a reliable income provider for investors, leveraging its expertise in secured lending to navigate the evolving economic landscape.