As
of and during the period ended June 30, 2026, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes
interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the
period ended June 30, 2026, the fund did not incur any interest or penalties.
Each tax year
in the three-year period ended December 31, 2025 remains subject to examination by the Internal Revenue Service and state
taxing authorities.
The tax character
of distributions paid to shareholders during the fiscal year ended December 31, 2025 were as follows: ordinary income $3,958,131
and long-term capital gains $281,938,659. The tax character of current year distributions will be determined at the end of the
current fiscal year.
(h) Operating
segment reporting: In
accordance with FASB Accounting Standards Update 2023-07, Segment Reporting (Topic 280) -
Improvements to Reportable Segment Disclosures (“ASU 2023-07”), the fund has operated and been managed as a single reportable
segment, generating returns through
dividends, interest, and/or gains from investments aligned with its single stated investment objective
as outlined in the fund’s prospectus. The fund’s accounting policies are consistent with those described in these Notes to
Financial Statements. The chief
operating decision maker (“CODM”) is represented by BNY Investments and is comprised of Senior Management
and Directors of BNY Investments. The CODM considers the net increase in net assets resulting from operations when deciding
whether to purchase additional investments or make distributions to shareholders. Detailed financial information for the fund is
presented in these financial statements, including total assets and liabilities in the Statement of Assets and Liabilities, investments
held in the Schedule of Investments,
results of operations and significant segment expenses in the Statement of Operations, and additional performance
information—such as total return, portfolio turnover, and ratios—in the Financial Highlights.
NOTE
2—
Bank
Lines of Credit:
The fund participates with
other long-term open-end funds managed by the Adviser in a $738 million unsecured credit facility led by Citibank,
N.A. (the “Citibank Credit Facility”) and a $300 million unsecured credit facility provided by BNY (the “BNY Credit
Facility”), each to be utilized
primarily for temporary or emergency purposes, including the financing of redemptions (each, a “Facility”).
The Citibank Credit Facility is available in two tranches: (i) Tranche A is in an amount equal to $618 million and is available to all
long-term open-ended funds, including
the fund, and (ii) Tranche B is an amount equal to $120 million and is available only to BNY Mellon
Floating Rate Income Fund, a series of BNY Mellon Investment Funds IV, Inc. In connection therewith, the fund has agreed to pay
its pro rata portion of commitment fees for Tranche A of the Citibank Credit Facility and the BNY Credit Facility. Interest is charged
to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period
ended June 30, 2026, the fund did not borrow under either Facility.
NOTE
3—
Management
Fee, Sub-Advisory Fee
and Other Transactions with Affiliates:
(a) Pursuant
to a management agreement with the Adviser, the management fee is payable monthly, based on the following annual percentages
of the value of the fund’s average daily net assets: .65% of the first $1.5 billion; .625% of the next $500 million; .60% of the
next $500 million; and .55% over $2.5 billion. The
effective management fee rate during the period ended June 30, 2026 was .64%.
Pursuant to
a sub-investment advisory agreement between the Adviser and the Sub-Adviser, the Adviser pays the Sub-Adviser a monthly fee
at an annual rate of .312% of the value of the fund’s average daily net assets.
(b) The
fund has an arrangement with BNY Mellon Transfer, Inc., (the “Transfer Agent”), a subsidiary of BNY and an affiliate
of the Adviser, whereby the fund
may receive earnings credits when positive cash balances are maintained, which are used to offset Transfer Agent
fees. For financial reporting purposes, the fund includes transfer agent net earnings credits, if any, as an expense offset in the Statement
of Operations.
The fund has
an arrangement with The Bank of New York Mellon (the “Custodian”), a subsidiary of BNY and an affiliate of the Adviser, whereby
the fund will receive interest income or be charged overdraft fees when cash balances are maintained. For financial reporting purposes,
the fund includes this interest income and overdraft fees, if any, as interest income in the Statement of Operations.
The fund compensates
the Transfer Agent, under a transfer agency agreement, for providing transfer agency and cash management services
for the fund. The majority of Transfer Agent fees are comprised of amounts paid on a per account basis, while cash management fees
are related to fund subscriptions and redemptions. During the period ended June 30, 2026, the fund was charged $86,079 for transfer
agency services. These fees are included in Shareholder servicing costs in the Statement of Operations.
