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Item 8. Financial Statements and Supplementary Data

2021-05-11 compared with 2020-05-12 · 940 added, 1021 removed, 1312 unchanged (60% of the section changed)

36 unchanged sentences

Opinion on the Financial Statements

audited the accompanying consolidated statements of assets and liabilities, including the consolidated schedules of investments, of Gladstone Investment Corporation and its subsidiaries (the Company) as of March 31, 2020 and 2019,

and the related consolidated statements of operations, changes in net assets and cash flows for each of the three years in the period ended March 31, 2020, including the related notes and financial statement schedules listed in the accompanying

index (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2020

and 2019, and the results of its operations, changes in its net assets and its cash flows for each of the three years in the period ended March 31, 2020 in conformity with accounting principles generally accepted in the United States of

2021 and 2020, and the related consolidated statements of operations, changes in net assets and cash flows for each of the three years in the period ended March 31, 2021, including the related notes and financial statement

schedule listed in the index appearing under Item 15(a)(2) as of March 31, 2021 and 2020 (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements

present fairly, in all material respects, the financial position of the Company as of March 31, 2021 and 2020, and the results of its operations, changes in its net assets and its cash flows for each of the three years in the period ended

March 31, 2021 in conformity with accounting principles generally accepted in the United States of America.

We have also previously audited, in

accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statements of assets and liabilities, including the consolidated schedules of investments, of the Company as of March 31, 2019,

2018, 2017, 2016, 2015, 2014, 2013, and 2012, and the related consolidated statements of operations, changes in net assets and cash flows for the years ended March 31, 2018, 2017, 2016, 2015, 2014, 2013, and 2012 (none of which are

presented herein), and we expressed unqualified opinions on those consolidated financial statements.

In our opinion, the information set forth in the Senior Securities table of the Company for each of the ten years in the period ended

March 31, 2021, appearing on pages 56-59 under Item 5 of this Form 10-K, is fairly stated, in all material respects, in relation to the consolidated financial statements from which it has been

Basis for Opinion

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Our responsibility is to express an opinion on the Companys consolidated financial statements based on our audits.

We are a public accounting firm

registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the

Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of

We are a public accounting

firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of

the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to

have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an

opinion on the effectiveness of the Companys internal control over financial reporting.

The Company is not

required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of

expressing an opinion on the effectiveness of the Companys internal control over financial reporting.

Accordingly, we express no such opinion.

included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test

basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall

presentation of the consolidated financial statements.

Our procedures included confirmation of securities owned as of March 31, 2020 and March 31, 2019 by correspondence with the custodian and portfolio company investees.

We believe that

our audits provide a reasonable basis for our opinion.

audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included

examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as

evaluating the overall presentation of the consolidated financial statements.

Our procedures included confirmation of securities owned as of March 31, 2021 and 2020 by correspondence with the custodians, agent banks and portfolio company

when replies were not received, we performed other auditing procedures.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated

or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate

opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of Level 3 Investments

As described in Notes 2 and 3 to the consolidated financial statements, the Company held $633.7 million of total level 3 investments at fair value as of

March 31, 2021.

Management uses significant unobservable inputs in estimating the fair value of its level 3 investments, including (i) with respect to investments valued using a total enterprise value, portfolio company earnings before

interest, taxes, depreciation and amortization (EBITDA) and EBITDA multiples, revenue and revenue multiples, or a discounted cash flow analysis using estimated risk-adjusted discount rates;

(ii) with respect to investments valued

using a yield analysis, a modified discount rate;

and (iii) with respect to investments valued using market quotations for which a limited market exists, the lower indicative bid price in the bid-to-ask price range.

The principal considerations for our determination that performing procedures relating

to the valuation of level 3 investments is a critical audit matter are (i) the significant judgment by management to determine the fair value of these level 3 investments using a total enterprise value or yield analysis due to the use of

significant unobservable inputs, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to the EBITDA and EBITDA multiples and revenue and revenue multiples used

in a total enterprise value and the modified discount rate used in a yield analysis, and (ii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated

financial statements.

These procedures included, among others, either (i) testing managements process for determining the fair value estimate, including testing the completeness and accuracy of data provided by management, evaluating the

appropriateness of managements valuation methods, and evaluating the reasonableness of the EBITDA and EBITDA multiples and revenue and revenue multiples used in a total enterprise value and the modified discount rate used in a yield analysis

by considering current and past performance of the investment, consistency of the unobservable inputs with external market data and evidence obtained in other areas of the audit, and managements historical forecasting accuracy, or

(ii) the involvement of professionals with specialized skill and knowledge to assist in developing an independent fair value estimate for certain level 3 investments and comparison of managements estimate to the independently developed

Developing an independent fair value estimate involved testing the completeness and accuracy of data provided by management and independently developing significant unobservable inputs related to the EBITDA and EBITDA multiples or revenue

and revenue multiples for those investments valued using a total enterprise value.

/s/ PricewaterhouseCoopers LLP

Arlington, Virginia

We have served as the Companys auditor since 2005.

14 unchanged sentences

Line of credit at fair value (Cost of $22,400 and $49,200, respectively)

Notes payable, net

Secured borrowing

2 unchanged sentences

preference per share;

6,500,000 shares authorized;

5,290,000 shares issued and outstanding, net

5,990,000 and 6,500,000 shares authorized;

3,774,853 and 5,290,000 shares issued and outstanding, respectively, net

Accounts payable and accrued expenses

Interest payable

Fees due to Adviser (A)

7 unchanged sentences

Capital in excess of par value

Cumulative net unrealized (depreciation) appreciation of investments

Underdistributed (overdistributed) net investment income

Cumulative net unrealized depreciation of investments

Underdistributed net investment income

Accumulated net realized gain in excess of distributions

6 unchanged sentences

Financial Statements for additional information.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE

CONSOLIDATED FINANCIAL STATEMENTS.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

34 unchanged sentences

NET INVESTMENT INCOME

Refer to Note 4 Related Party Transactions in the

accompanying Notes to Consolidated Financial Statements for additional information.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)

(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

Year Ended March 31,

REALIZED AND UNREALIZED GAIN (LOSS)

2 unchanged sentences

Affiliate investments

Control investments

Total net realized gain

4 unchanged sentences

Control investments

Total net unrealized (depreciation) appreciation

Net realized and unrealized (loss) gain, net of taxes on deemed distribution of long-term capital

NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

Refer to Note 4 Related Party Transactions in the accompanying Notes to Consolidated

Financial Statements for additional information.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE

CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)

(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

Total net unrealized appreciation (depreciation)

Net realized and unrealized gain (loss), net of taxes on deemed distribution of long-term capital

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

BASIC AND DILUTED PER COMMON SHARE:

Net investment income

Net (decrease) increase in net assets resulting from operations

Net increase (decrease) in net assets resulting from operations

WEIGHTED-AVERAGE SHARES OF COMMON STOCK OUTSTANDING:

Basic and diluted

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

G LADSTONE INVESTMENT CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

6 unchanged sentences

Net realized loss on other

Net unrealized (depreciation) appreciation of investments

Net unrealized depreciation (appreciation) of other

Net (decrease) increase in net assets from operations

Net unrealized appreciation (depreciation) of investments

Net unrealized depreciation of other

Net increase (decrease) in net assets from operations

DISTRIBUTIONS (A)

8 unchanged sentences

Net increase in net assets from capital activity

TOTAL (DECREASE) INCREASE IN NET ASSETS

TOTAL INCREASE (DECREASE) IN NET ASSETS

NET ASSETS, END OF YEAR (A)

1 unchanged sentence

Financial Statements for additional information.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE

CONSOLIDATED FINANCIAL STATEMENTS.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

3 unchanged sentences

CASH FLOWS FROM OPERATING ACTIVITIES

Net (decrease) increase in net assets resulting from operations

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided

by (used in) operating activities:

Net increase (decrease) in net assets resulting from operations

Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net

cash (used in) provided by operating activities:

Purchase of investments

3 unchanged sentences

Net realized loss on other

Net unrealized depreciation (appreciation) of investments

Net unrealized (depreciation) appreciation of other

Net unrealized (appreciation) depreciation of investments

Net unrealized depreciation of other

Amortization of premiums, discounts, and acquisition costs, net

2 unchanged sentences

Changes in assets and liabilities:

Increase in interest receivable

Decrease (increase) in due from administrative agent

(Increase) decrease in other assets, net

Increase (decrease) in accounts payable and accrued expenses

(Decrease) increase in fees due to

Increase in fee due to

Decrease (increase) in interest receivable

(Increase) decrease in due from administrative agent

Increase in other assets, net

(Decrease) increase in accounts payable and accrued expenses

Increase (decrease) in interest payable

Increase (decrease) in fees due to

(Decrease) increase in fee due to

Administrator (A)

(Decrease) increase in other liabilities

Net cash provided by (used in) by operating activities

Net cash (used in) provided by operating activities

CASH FLOWS FROM FINANCING ACTIVITIES

3 unchanged sentences

Repayments on line of credit

Proceeds from issuance of notes payable

Proceeds from issuance of mandatorily redeemable preferred stock

2 unchanged sentences

Distributions paid to common stockholders

Net cash (used in) provided by financing activities

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH

Net cash provided by (used in) financing activities

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH

CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF

10 unchanged sentences

basis of $21.7 million into a new $11.7 million second lien term loan, which resulted in a realized loss of $10.0 million.

Significant non-cash operating activities

consisted principally of the following transactions:

In November 2017, one of our portfolio companies, GI Plastek, Inc.

Plastek) merged with another one of our portfolio companies, Precision Southeast, Inc.

(Precision), into a new company, PSI Molded Plastics, Inc.

(PSI Molded).

As a result of this transaction, our debt investments in GI

Plastek and Precision, which totaled $15.0 million and $9.6 million, respectively, at principal and cost, were assumed by PSI Molded and combined into a new secured second lien term loan totaling $24.6 million.

Our preferred equity

investment in GI Plastek, with a cost basis of $5.2 million, and our preferred and common equity investments in Precision, with a combined cost basis of $3.8 million, were converted into a preferred equity investment in PSI Molded with the

same cost basis.

In June 2017, one of our portfolio companies, Mathey Investments, Inc.

(Mathey) merged with and into another

one of our portfolio companies, SBS Industries, LLC (SBS).

As a result of this transaction, our debt investments in Mathey, which totaled $8.6 million at principal and cost, were assumed by SBS and combined with our existing debt

investment in SBS, which totaled $11.4 million at principal and cost, into a new secured first lien term loan totaling $20.0 million.

Our common equity investment in Mathey, with a cost basis of $0.8 million, was converted into a

preferred equity investment in SBS with the same cost basis.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED

FINANCIAL STATEMENTS.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

7 unchanged sentences

Secured First Lien Debt48.9%

Containers, Packaging, and Glass 2.6%

Frontier Packaging, Inc.

Term Debt (L+10.0%, 12.0% Cash, Due 3/2021) (L)

Diversified/Conglomerate Manufacturing1.1%

Phoenix Door Systems, Inc Line of Credit, $380 available (L+7.0%, 9.0% Cash (0.3% Unused

Fee), Due 3/2021) (L)

Phoenix Door Systems, Inc.

Term Debt (L+11.0%, 13.0% Cash, Due 9/2024) (L)

Phoenix Door Systems, Inc.Line of Credit, $0 available (L+7.0%, 9.0% Cash (0.3% Unused Fee),

Due 3/2022) (L)

Phoenix Door Systems, Inc.Term Debt (L+11.0%, 13.0% Cash, Due 9/2024) (L)

Diversified/Conglomerate Services30.6%

Bassett Creek Services, Inc.

Term Debt (L+10.0%, 12.0% Cash, Due 4/2023) (L)

Counsel Press, Inc.

Term Debt (L+11.8%, 12.8% Cash, Due 3/2023) (L)

Counsel Press, Inc.

Term Debt (L+13.0%, 14.0% Cash, Due 3/2023) (L)

Horizon Facilities Services, LLC.

Term Debt (L+9.5%, 12.0% Cash, Due 6/2024) (L)

Bassett Creek Services, Inc.Term Debt (L+10.0%, 12.0% Cash, Due 4/2023) (K)

Counsel Press, Inc.Term Debt (L+11.8%, 12.8% Cash, Due 3/2023) (L)

Counsel Press, Inc.Term Debt (L+13.0%, 14.0% Cash, Due 3/2023) (L)

Horizon Facilities Services, Inc.Term Debt (L+9.5%, 12.0% Cash, Due 6/2024) (G)(L)

Mason West, LLCLine of Credit, $3,000 available (L+8.0%, 10.0% Cash, Due 7/2021) (L)

Mason West, LLCTerm Debt (L+10.0%, 12.5% Cash, Due 7/2025) (L)

Healthcare, Education, and Childcare5.2%

Educators Resource, Inc.

Term Debt (L+10.5%, 13.0% Cash, Due 11/2023) (L)

Educators Resource, Inc.Term Debt (L+10.5%, 13.0% Cash, Due 11/2023) (L)

Home and Office Furnishings, Housewares, and Durable Consumer Products6.4%

Brunswick Bowling Products, Inc.

Term Debt (L+10.0%, 12.0% Cash, Due 1/2023) (L)

Brunswick Bowling Products, Inc.Term Debt (L+10.0%, 12.0% Cash, Due 1/2023) (L)

Leisure, Amusement, Motion Pictures, and Entertainment 5.6%

Schylling, Inc.

Term Debt (L+11.0%, 13.0% Cash, Due 8/2024) (L)

Schylling, Inc.

Term Debt (L+11.0%, 13.0% Cash, Due 8/2024) (L)

Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) 3.1%

SBS Industries Holdings, Inc.

Term Debt (L+12.0%, 14.0% Cash, Due 11/2024) (L)

Schylling, Inc.Term Debt (L+11.0%, 13.0% Cash, Due 8/2024) (L)

Total Secured First Lien Debt

Secured Second Lien Debt 13.1%

Automobile 1.0%

Country Club Enterprises, LLC Term Debt (L+8.0%, 10.0% Cash, Due 2/2022) (K)

Country Club Enterprises, LLC Guaranty ($1,000) (U)

Cargo Transport 3.4%

Diligent Delivery Systems Term Debt (L+9.0%, 11.0% Cash, Due 11/2022) (K)

Home and Office Furnishings, Housewares, and Durable Consumer Products 5.5%

Brunswick Bowling Products, Inc.

Term Debt (L+10.0%, 12.0% Cash, Due 1/2023) (L)

Ginsey Home Solutions, Inc.

Term Debt (L+10.0%, 13.5% Cash, Due 1/2021) (H)(L)

Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) 3.2%

SBS Industries Holdings, Inc.

Term Debt (L+12.0%, 14.0% Cash, Due 11/2024) (L)

Total Secured Second Lien Debt

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

5 unchanged sentences

Principal/Shares/

Secured Second Lien Debt11.0%

Automobile1.0%

Country Club Enterprises, LLCTerm Debt (L+8.0%, 10.0% Cash, Due 2/2022) (K)

Country Club Enterprises, LLCGuaranty

Cargo Transport3.4%

Diligent Delivery SystemsTerm Debt (L+9.0%, 11.0% Cash, Due 11/2022) (Q)

Home and Office Furnishings, Housewares, and Durable Consumer Products3.5%

Ginsey Home Solutions, Inc.Term Debt (L+10.0%, 13.5% Cash, Due 1/2025) (H)(L)

Machinery (Non-Agriculture, Non-Construction, and Non-Electronic)3.1%

SBS Industries Holdings, Inc.Term Debt (L+7.0%, 9.0% Cash, Due 11/2024) (L)

Total Secured Second Lien Debt

Preferred Equity17.3%

Containers, Packaging, and Glass 0.4%

Frontier Packaging, Inc.

Diversified/Conglomerate Services9.2%

Bassett Creek Services, Inc.

Counsel Press, Inc.

Horizon Facilities Services, LLC Preferred Stock (C)(L)

Bassett Creek Services, Inc.Preferred

Counsel Press, Inc.Preferred

Horizon Facilities Services, Inc.Preferred Stock (C)(L)

Mason West, LLCPreferred

Healthcare, Education, and Childcare2.9%

Educators Resource, Inc.

Educators Resource, Inc.Preferred

Home and Office Furnishings, Housewares, and Durable Consumer Products2.5%

Brunswick Bowling Products, Inc.

Preferred Stock (C)(L)

Ginsey Home Solutions, Inc.

Brunswick Bowling Products, Inc.Preferred

Ginsey Home Solutions, Inc.Preferred

Leisure, Amusement, Motion Pictures, and Entertainment 2.1%

Schylling, Inc.

Schylling, Inc.Preferred

Machinery (Non-Agriculture, Non-Construction, and Non-Electronic)0.6%

SBS Industries Holdings, Inc.

Preferred Stock (C)(L)

SBS Industries Holdings, Inc.Preferred

Total Preferred Equity

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

MARCH 31, 2021

(DOLLAR AMOUNTS IN THOUSANDS)

Investment (A)(B)(D)(E)

Principal/Shares/

Common Equity/Equivalents0.7%

Cargo Transport0.6%

Diligent Delivery Systems Common Stock Warrants (C)(L)

Containers, Packaging, and Glass 2.6%

Frontier Packaging, Inc.

Diligent Delivery SystemsCommon Stock Warrants (C)(Q)

Diversified/Conglomerate Manufacturing0.1%

Phoenix Door Systems, Inc.

Phoenix Door Systems, Inc.Common

Home and Office Furnishings, Housewares, and Durable Consumer Products0.0%

Ginsey Home Solutions, Inc.

Ginsey Home Solutions, Inc.Common

Machinery (Non-Agriculture, Non-Construction, and Non-Electronic)0.0%

SBS Industries Holdings, Inc.

SBS Industries Holdings, Inc.Common

Personal and Non-Durable Consumer Products

(Manufacturing Only)0.0%

Funko Acquisition Holdings, LLC (M)

Common Units (C)(S)

Funko Acquisition Holdings,

LLC (M) Common Units (C)(S)

Total Common Equity/Equivalents

Non-Control/Non-Affiliate Investments

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

MARCH 31, 2020

(DOLLAR AMOUNTS IN THOUSANDS)

Investment (A)(B)(D)(E)

Principal/Shares/

AFFILIATE INVESTMENTS (O)

INVESTMENTS (O) 80.9%

Secured First Lien Debt47.6%

Beverage, Food, and Tobacco2.4%

Head Country, Inc.

Term Debt (L+10.5%, 12.5% Cash, Due 2/2021) (L)

Head Country, Inc.Term Debt (L+10.5%, 12.5% Cash, Due 2/2023) (L)

Chemicals, Plastics, and Rubber6.0%

PSI Molded Plastics, Inc.Term Debt (L+5.5%, 7.0% Cash, Due 1/2024) (L)

Diversified/Conglomerate Manufacturing5.4%

D.P.M.S., Inc.

Line of Credit, $250 available (L+6.5%, 9.0% Cash (0.5% Unused Fee), Due

D.P.M.S., Inc.

Term Debt (10.0% Cash, Due 10/2021) (I)(L)

D.P.M.S., Inc.Line of Credit, $0 available (L+6.5%, 9.0% Cash (0.5% Unused Fee), Due

D.P.M.S., Inc.Term Debt (10.0% Cash, Due 10/2023) (I)(L)

Edge Adhesives Holdings, Inc.

of Credit, $600 available (L+8.0%, 10.0% Cash, Due 5/2020) (K)

Credit, $0 available (L+8.0%, 10.0% Cash, Due 9/2021) (K)

Edge Adhesives Holdings, Inc.

3 unchanged sentences

Diversified/Conglomerate Services13.3%

ImageWorks Display and Marketing Group, Inc.

Term Debt (L+11.0%, 13.0% Cash,Due 11/2022) (L)

The Maids International, LLC Line of Credit, $0 available (L+7.5%, 9.5% Cash (0.3% Unused

Fee), Due 3/2021) (L)

ImageWorks Display and Marketing Group, Inc.Term Debt (L+11.0%, 13.0% Cash,

Due 11/2022) (L)

The Maids International, LLCTerm Debt (L+10.5%, 12.0% Cash, Due 3/2025) (L)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

MARCH 31, 2021

(DOLLAR AMOUNTS IN THOUSANDS)

Investment (A)(B)(D)(E)

Principal/Shares/

Home and Office Furnishings, Housewares, and Durable Consumer Products7.1%

Old World Christmas, Inc.Secured First Lien Term Loan (L+9.5%, 11.0% Cash, Due 12/2025) (L)

Leisure, Amusement, Motion Pictures, and Entertainment2.3%

SOG Specialty Knives & Tools, LLCTerm Debt (Due 12/2023) (L)(R)

SOG Specialty Knives & Tools, LLC Term Debt (L+4.0%, 6.0% Cash, Due 8/2022) (G)(L)

SOG Specialty Knives & Tools, LLCTerm Debt (L+4.0%, 6.0% Cash, Due 12/2023) (L)

Personal and Non-Durable Consumer Products

(Manufacturing Only)7.0%

The Mountain Corporation Line of Credit, $0 available (L+5.0%, 9.0%

Due 4/2021) (L)

Pioneer Square Brands, Inc.

Term Debt (L+12.0%, 13.0% Cash, Due 8/2022) (L)

The Mountain CorporationLine of Credit, $0 available (L+5.0%, 9.0% Cash, Due 4/2021) (G)(L)

Pioneer Square Brands, Inc.Term Debt (L+12.0%, 13.0% Cash, Due 8/2022) (Q)

Telecommunications4.1%

B+T Group Acquisition, Inc.

(M) Line of

Credit, $0 available (L+11.0%, 13.0% Cash, Due 12/2021) (G)(K)

B+T Group Acquisition, Inc.

Debt (L+11.0%, 13.0% Cash, Due 12/2021) (G)(K)

(M) Term Debt

(L+11.0%, 13.0% Cash, Due 12/2021) (G)(K)

Total Secured First Lien Debt

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

MARCH 31, 2020

(DOLLAR AMOUNTS IN THOUSANDS)

Investment (A)(B)(D)(E)

Principal/Shares/

Secured Second Lien Debt12.6%

Chemicals, Plastics, and Rubber 4.5%

PSI Molded Plastics, Inc.

Term Debt (L+12.0%, 13.5% Cash, Due 1/2024) (G)(L)

Diversified/Conglomerate Services12.0%

J.R.Hobbs Co.

Atlanta, LLC Line of Credit, $0 available (L+6.0%, 8.0% Cash, Due

Atlanta, LLC Term Debt (L+10.3%, 11.8% Cash, Due 10/2024) (L)

Hobbs Co.Atlanta, LLCLine of Credit, $0 available (L+6.0%, 8.0% Cash, Due

Hobbs Co.Atlanta, LLCTerm Debt (L+10.3%, 11.8% Cash, Due 10/2024) (K)

Personal and Non-Durable Consumer Products

1 unchanged sentence

The Mountain CorporationTerm Debt (L+4.0%, 7.0% Cash, Due 4/2024) (G)(L)

The Mountain CorporationDelayed Draw Term Debt, $0 available (L+4.0%, 7.0% Cash, Due 4/2024) (G)(L)

Total Secured Second Lien Debt

1 unchanged sentence

Beverage, Food, and Tobacco1.7%

Head Country, Inc.

Head Country, Inc.Preferred

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

MARCH 31, 2021

(DOLLAR AMOUNTS IN THOUSANDS)

Investment (A)(B)(D)(E)

Principal/Shares/

Chemicals, Plastics, and Rubber0.0%

PSI Molded Plastics, Inc.

PSI Molded Plastics, Inc.Preferred

Diversified/Conglomerate Manufacturing 0.0%

Channel Technologies Group, LLC Preferred Stock (C)(L)

Edge Adhesives Holdings, Inc.

Preferred Stock (C)(L)

Channel Technologies Group, LLCPreferred

Edge Adhesives Holdings,

(M) Preferred Stock (C)(L)

Diversified/Conglomerate Services3.5%

ImageWorks Display and Marketing Group, Inc.

Preferred Stock (C)(L)

Atlanta, LLC Preferred Stock (C)(L)

ImageWorks Display and Marketing Group, Inc.Preferred Stock (C)(L)

Hobbs Co.Atlanta, LLCPreferred

The Maids International, LLCPreferred

Home and Office Furnishings, Housewares, and Durable Consumer Products5.3%

Old World Christmas, Inc.

Old World Christmas, Inc.Preferred

Leisure, Amusement, Motion Pictures, and Entertainment1.8%

3 unchanged sentences

The Mountain CorporationPreferred

Pioneer Square Brands, Inc.

Pioneer Square Brands, Inc.Preferred

Telecommunications0.0%

B+T Group Acquisition, Inc.

Preferred Stock (C)(L)

B+T Group Acquisition,

(M) Preferred Stock (C)(L)

Total Preferred Equity

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

MARCH 31, 2020

(DOLLAR AMOUNTS IN THOUSANDS)

Investment (A)(B)(D)(E)

Principal/Shares/

Common Equity/Equivalents0.0%

1 unchanged sentence

Channel Technologies Group, LLCCommon

D.P.M.S., Inc.

D.P.M.S., Inc.Common

Diversified/Conglomerate Services0.0%

Nth Degree Investment Group, LLC Common Stock (C)(L)

Nth Degree Investment Group, LLCCommon

Personal and Non-Durable Consumer Products

3 unchanged sentences

B+T Group Acquisition, Inc.

Stock Warrants (C)(L)

Stock Warrant (C)(L)

Total Common Equity/Equivalents

Total Affiliate Investments

CONTROL INVESTMENTS (P)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

MARCH 31, 2021

(DOLLAR AMOUNTS IN THOUSANDS)

Investment (A)(B)(D)(E)

Principal/Shares/

INVESTMENTS (P) 7.2%:

Secured Second Lien Debt3.4%

Aerospace and Defense3.4%

Galaxy Tool Holding Corporation Line of Credit, $0 available (L+4.5%, 6.5% Cash (1.0%

Unused Fee), Due 8/2021) (L)

Galaxy Tool Holding Corporation Term Debt (L+6.0%, 10.0% Cash, Due 8/2021) (L)

Galaxy Technologies, Inc.Line of Credit, $0 available (L+4.5%, 6.5% Cash (0.5% Unused Fee),

Due 8/2023) (L)

Galaxy Technologies, Inc.Term Debt (L+6.0%, 10.0% Cash, Due 8/2023) (L)

Preferred Equity3.8%

Aerospace and Defense3.8%

Galaxy Tool Holding Corporation Preferred Stock (C)(L)

Galaxy Technologies, Inc.Preferred

Common Equity0.0%

Aerospace and Defense0.0%

Galaxy Tool Holding Corporation Common Stock (C)(L)

Galaxy Technologies, Inc.Common

Total Control Investments

TOTAL INVESTMENTS166.0%

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

MARCH 31, 2020

(DOLLAR AMOUNTS IN THOUSANDS)

Certain of the securities listed are issued by affiliate(s) of the indicated portfolio company.

3 unchanged sentences

acquisition is made, qualifying assets represent at least 70% of our total assets.

As of March 31, 2019, our investment in Funko Acquisition Holdings, LLC (Funko) is considered a

non-qualifying asset under Section 55 of the 1940 Act and represents less than 0.1% of total investments, at fair value.

As of March 31, 2021, our investment in Funko Acquisition Holdings, LLC (Funko) was considered a

non-qualifying asset under Section 55 of the 1940 Act and represented less than 0.1% of total investments, at fair value.

Unless indicated otherwise, all cash interest rates are indexed to

15 unchanged sentences

within such class (some series of which may or may not be voting shares) or aggregates all warrants to purchase shares of a class of stock owned without regard to specific series of such class of stock such warrants allow us to purchase.

THE ACCOMPANYING NOTES ARE AN INTEGRAL

PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

MARCH 31, 2021

(DOLLAR AMOUNTS IN THOUSANDS)

Debt security is on non-accrual status.

20 unchanged sentences

influence over the management or policies of the portfolio company, which may include owning, with the power to vote, more than 25.0% of the issued and outstanding voting securities.

Fair value was based on the expected exit or payoff amount, where such event has occurred or is expected to

occur imminently.

Debt security does not have a stated current interest rate.

5 unchanged sentences

marketability.

is traded on the Nasdaq Stock Market under the trading symbol FNKO. Refer to Note 3 Investments in the accompanying Notes to Consolidated Financial Statements for additional

Refer to Note 11 Commitments and Contingencies in the accompanying Notes to Consolidated

Financial Statements for additional information regarding this guaranty.

is traded on the Nasdaq Global Select Market under the trading symbol FNKO. Refer to Note 3 Investments in the accompanying Notes to Consolidated Financial Statements for additional

Refer to Note 11 Commitments and Contingencies in the accompanying Notes to

Consolidated Financial Statements for additional information regarding this guaranty.

Cumulative gross unrealized depreciation for federal income tax purposes is $109.0 million;

1 unchanged sentence

Cumulative net unrealized depreciation is $30.5 million, based on a tax cost of $664.3 million.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED

FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

8 unchanged sentences

Containers, Packaging, and Glass2.6%

Frontier Packaging, Inc.

Term Debt (L+10.0%, 12.5% Cash, Due 3/2021) (L)

Frontier Packaging, Inc.Term Debt (L+10.0%, 12.0% Cash, Due 3/2021) (L)

Diversified/Conglomerate Manufacturing1.0%

Phoenix Door Systems, IncLine of Credit, $380 available (L+7.0%, 9.0% Cash (0.3% Unused

Fee), Due 3/2021) (L)

Phoenix Door Systems, Inc.Term Debt (L+11.0%, 13.0% Cash, Due 9/2024) (L)

Diversified/Conglomerate Services 24.1%

Bassett Creek Restoration, Inc.

Term Debt (L+10.0%, 12.5% Cash, Due 4/2023) (L)

Counsel Press, Inc.

Term Debt (L+11.8%, 14.2% Cash, Due 3/2020) (L)

Counsel Press, Inc.

Term Debt (L+13.0%, 15.5% Cash, Due 3/2020) (L)

Nth Degree, Inc.

Term Debt (L+11.5%, 14.0% Cash, Due 3/2023) (L)

Farming and Agriculture 2.7%

Jackrabbit, Inc.

Term Debt (L+10.0%, 13.5% Cash, Due 12/2020) (Q)(T)

Bassett Creek Services, Inc. Term Debt (L+10.0%, 12.0% Cash, Due 4/2023) (L)

Counsel Press, Inc.Term Debt (L+11.8%, 12.8% Cash, Due 3/2023) (L)

Counsel Press, Inc.Term Debt (L+13.0%, 14.0% Cash, Due 3/2023) (L)

Horizon Facilities Services, Inc.Term Debt (L+9.5%, 12.0% Cash, Due 6/2024) (L)

Healthcare, Education, and Childcare5.4%

Educators Resource, Inc.

Term Debt (L+10.5%, 13.0% Cash, Due 11/2023) (L)

Educators Resource, Inc.Term Debt (L+10.5%, 13.0% Cash, Due 11/2023) (L)

Home and Office Furnishings, Housewares, and Durable Consumer Products4.8%

Brunswick Bowling Products, Inc.Term Debt (L+10.0%, 12.0% Cash, Due 1/2023) (L)

Leisure, Amusement, Motion Pictures, and Entertainment5.8%

Schylling, Inc.

Term Debt (L+11.0%, 13.5% Cash, Due 8/2019) (L)

Schylling, Inc.

Term Debt (L+11.0%, 13.5% Cash, Due 8/2019) (L)

Schylling, Inc.

Term Debt (L+11.0%, 13.5% Cash, Due 8/2019) (L)

Schylling, Inc.Term Debt (L+11.0%, 13.0% Cash, Due 8/2024) (L)

Machinery (Non-Agriculture, Non-Construction, and Non-Electronic)3.1%

SBS Industries, LLC Term Debt (L+12.0%, 14.5% Cash, Due 6/2020) (L)

Oil and Gas 0.8%

Tread Corporation Line of Credit, $634 available (L+10.0%, 12.5% Cash, Due 3/2021) (Q)(T)

Personal, Food, and Miscellaneous Services 0.0%

B-Dry, LLC Line of Credit, $50 available (L+0.3%,

2.7% Cash (0.8% Unused Fee), Due 12/2019) (G)(L)

B-Dry, LLC Term Debt (L+0.3%, 2.7% Cash, Due

12/2019) (G)(L)

B-Dry, LLC Term Debt (L+0.3%, 2.7% Cash, Due

12/2019) (G)(L)

SBS Industries Holdings, Inc.Term Debt (L+12.0%, 14.0% Cash, Due 11/2024) (L)

Total Secured First Lien Debt

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

MARCH 31, 2020

(DOLLAR AMOUNTS IN THOUSANDS)

Investment (A)(B)(D)(E)

Principal/Shares/

Secured Second Lien Debt13.1%

5 unchanged sentences

Home and Office Furnishings, Housewares, and Durable Consumer Products5.5%

Ginsey Home Solutions, Inc.

Term Debt (L+10.0%, 13.5% Cash, Due 1/2021) (H)(L)

Brunswick Bowling Products, Inc.Term Debt (L+10.0%, 12.0% Cash, Due 1/2023) (L)

Ginsey Home Solutions, Inc.Term Debt (L+10.0%, 13.5% Cash, Due 1/2021) (H)(L)

Machinery (Non-Agriculture, Non-Construction, and Non-Electronic)3.2%

SBS Industries Holdings, Inc.Term Debt (L+12.0%, 14.0% Cash, Due 11/2024) (L)

Total Secured Second Lien Debt

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

MARCH 31, 2019

(DOLLAR AMOUNTS IN THOUSANDS)

Investment (A)(B)(D)(E)

Principal/Shares/

Preferred Equity16.5%

Containers, Packaging, and Glass0.4%

Frontier Packaging, Inc.

Frontier Packaging, Inc.Preferred

Diversified/Conglomerate Services6.3%

Bassett Creek Restoration, Inc.

Preferred Stock (C)(L)

Counsel Press, Inc.

Nth Degree, Inc.

Farming and Agriculture 1.4%

Jackrabbit, Inc.

Bassett Creek Services, Inc.Preferred

Counsel Press, Inc.Preferred

Horizon Facilities Services, Inc.Preferred Stock (C)(L)

Healthcare, Education, and Childcare1.5%

Educators Resource, Inc.

Educators Resource, Inc.Preferred

Home and Office Furnishings, Housewares, and Durable Consumer Products7.1%

Ginsey Home Solutions, Inc.

Brunswick Bowling Products, Inc.Preferred

Ginsey Home Solutions, Inc.Preferred

Leisure, Amusement, Motion Pictures, and Entertainment1.2%

Schylling, Inc.

Schylling, Inc.Preferred

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

MARCH 31, 2020

(DOLLAR AMOUNTS IN THOUSANDS)

Investment (A)(B)(D)(E)

Machinery (Non-Agriculture, Non-Construction, and Non-Electronic)0.0%

SBS Industries, LLC Preferred

Oil and Gas 0.3%

Tread Corporation Preferred

Stock (C)(Q)(T)

Personal, Food, and Miscellaneous Services 0.0%

B-Dry, LLC Preferred Stock (C)(L)

SBS Industries Holdings, Inc.Preferred

Total Preferred Equity

3 unchanged sentences

Containers, Packaging, and Glass2.6%

Frontier Packaging, Inc.

Farming and Agriculture 0.6%

Jackrabbit, Inc.

Stock (C)(Q)(T)

Frontier Packaging, Inc.Common

Diversified/Conglomerate Manufacturing 0.2%

Phoenix Door Systems, Inc.Common

Home and Office Furnishings, Housewares, and Durable Consumer Products0.0%

Ginsey Home Solutions, Inc.

Ginsey Home Solutions, Inc.Common

Machinery (Non-Agriculture, Non-Construction, and Non-Electronic)0.0%

SBS Industries, LLC Common

Oil and Gas 0.0%

Tread Corporation Common

Stock (C)(Q)(T)

SBS Industries Holdings, Inc.Common

Personal and Non-Durable Consumer Products

(Manufacturing Only) 0.0%

Funko Acquisition Holdings, LLC (M)

Common Units (C)(S)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

MARCH 31, 2019

(DOLLAR AMOUNTS IN THOUSANDS)

Investment (A)(B)(D)(E)

Principal/Shares/

Personal, Food, and Miscellaneous Services 0.0%

B-Dry, LLC Common Stock (C)(L)

Total Common Equity

Funko Acquisition Holdings,

LLC (M) Common Units (C)(S)

Total Common Equity/Equivalents

Non-Control/Non-Affiliate Investments

AFFILIATE INVESTMENTS (O)

INVESTMENTS (O) 67.0%

Secured First Lien Debt36.8%

Automobile 1.4%

Meridian Rack & Pinion, Inc.

Term Debt (L+11.5%, 14.0% Cash, Due 6/2019) (G)(K)

Beverage, Food, and Tobacco2.5%

Head Country, Inc.

Term Debt (L+10.5%, 13.0% Cash, Due 2/2021) (L)

Head Country, Inc.Term Debt (L+10.5%, 12.5% Cash, Due 2/2021) (L)

Diversified/Conglomerate Manufacturing6.4%

D.P.M.S., Inc.

Term Debt (10.0% Cash, Due 10/2021) (I)(L)

D.P.M.S., Inc.Line of Credit, $250 available (L+6.5%, 9.0% Cash (0.5% Unused Fee), Due

D.P.M.S., Inc.Term Debt (10.0% Cash, Due 10/2021) (I)(L)

Edge Adhesives Holdings, Inc.

Credit, $600 available (L+8.0%, 10.0% Cash, Due 5/2020) (K)

Edge Adhesives Holdings, Inc.

Debt (L+10.5%, 12.5% Cash, Due 2/2022) (K)

2 unchanged sentences

Diversified/Conglomerate Services14.0%

ImageWorks Display and Marketing Group, Inc.

Term Debt (L+11.0%, 13.5% Cash,Due 11/2022) (L)

Atlanta, LLC Term Debt (L+10.3%, 12.7% Cash, Due 10/2023) (L)

Home and Office Furnishings, Housewares, and Durable Consumer Products 8.2%

Brunswick Bowling Products, Inc.

Term Debt (L+10.0%, 12.5% Cash, Due 1/2023) (L)

Old World Christmas, Inc.

Term Debt (L+11.3%, 13.7% Cash, Due 10/2019) (L)

Leisure, Amusement, Motion Pictures, and Entertainment 2.2%

SOG Specialty Knives & Tools, LLC Term Debt (L+4.0%, 6.5% Cash, Due 8/2022) (G)(L)

ImageWorks Display and Marketing Group, Inc.Term Debt (L+11.0%, 13.0% Cash, Due 11/2022) (L)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

MARCH 31, 2020

(DOLLAR AMOUNTS IN THOUSANDS)

Investment (A)(B)(D)(E)

Principal/Shares/

The Maids International, LLCLine of Credit, $0 available (L+7.5%, 9.5% Cash (0.3% Unused

Fee), Due 3/2021) (L)

The Maids International, LLCTerm Debt (L+10.5%, 12.0% Cash, Due 3/2025) (L)

Leisure, Amusement, Motion Pictures, and

Entertainment 2.4%

SOG Specialty Knives & Tools, LLCTerm Debt (Due 8/2020) (L)(R)

SOG Specialty Knives & Tools, LLCTerm Debt (L+4.0%, 6.0% Cash, Due 8/2022) (G)(L)

Personal and Non-Durable Consumer Products

1 unchanged sentence

The Mountain CorporationLine of Credit, $0 available (L+5.0%, 9.0% Cash, Due 4/2021) (L)

Pioneer Square Brands, Inc.

Term Debt (L+12.0%, 14.5% Cash, Due 8/2022) (L)

Pioneer Square Brands, Inc.Term Debt (L+12.0%, 13.0% Cash, Due 8/2022) (L)

Telecommunications4.3%

1 unchanged sentence

(M) Line of

Credit, $175 available (L+11.0%, 13.5% Cash, Due 12/2021) (L)

Credit, $0 available (L+11.0%, 13.0% Cash, Due 12/2021) (G)(K)

B+T Group Acquisition, Inc.

Debt (L+11.0%, 13.5% Cash, Due 12/2021) (L)

(M) Term Debt

(L+11.0%, 13.0% Cash, Due 12/2021) (G)(K)

Total Secured First Lien Debt

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

MARCH 31, 2019

(DOLLAR AMOUNTS IN THOUSANDS)

Investment (A)(B)(D)(E)

Principal/Shares/

Secured Second Lien Debt17.7%

Chemicals, Plastics, and Rubber4.5%

PSI Molded Plastics, Inc.

Term Debt (L+12.0%, 14.5% Cash, Due 1/2024) (G)(L)

Diversified/Conglomerate Manufacturing 3.2%

Alloy Die Casting Co.

(M) Term Debt

(L+4.0%, 6.5% Cash, Due 4/2021) (K)

Alloy Die Casting Co.

(M) Term Debt

(L+4.0%, 6.5% Cash, Due 4/2021) (K)

Alloy Die Casting Co.

(M) Term Debt

(L+4.0%, 6.5% Cash, Due 4/2021) (K)

PSI Molded Plastics, Inc.Term Debt (L+12.0%, 13.5% Cash, Due 1/2024) (G)(L)

Diversified/Conglomerate Services12.5%

Atlanta, LLCLine of Credit, $0 available (L+6.0%, 8.0% Cash, Due

Atlanta, LLCTerm Debt (L+10.3%, 11.8% Cash, Due 10/2024) (L)

Personal and Non-Durable Consumer Products

2 unchanged sentences

Total Secured Second Lien Debt

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

MARCH 31, 2020

(DOLLAR AMOUNTS IN THOUSANDS)

Investment (A)(B)(D)(E)

Preferred Equity11.5%

Automobile 0.0%

Meridian Rack & Pinion, Inc.

Preferred Stock (C)(L)

Beverage, Food, and Tobacco0.9%

Head Country, Inc.

Head Country, Inc.Preferred

Chemicals, Plastics, and Rubber0.0%

PSI Molded Plastics, Inc.

PSI Molded Plastics, Inc.Preferred

Diversified/Conglomerate Manufacturing0.0%

Alloy Die Casting Co.

(M) Preferred

Channel Technologies Group, LLC Preferred Stock (C)(L)

Edge Adhesives Holdings, Inc.

Preferred Stock (C)(L)

Channel Technologies Group, LLCPreferred

Edge Adhesives Holdings,

(M) Preferred Stock (C)(L)

Diversified/Conglomerate Services3.6%

ImageWorks Display and Marketing Group, Inc.

Preferred Stock (C)(L)

Atlanta, LLC Preferred Stock (C)(L)

ImageWorks Display and Marketing Group, Inc. Preferred Stock (C)(L)

Hobbs Co.Atlanta, LLCPreferred

The Maids International, LLCPreferred

Home and Office Furnishings, Housewares, and Durable Consumer Products5.3%

Brunswick Bowling Products, Inc.

Preferred Stock (C)(L)

Old World Christmas, Inc.

Leisure, Amusement, Motion Pictures, and Entertainment 0.0%

Old World Christmas, Inc.Preferred

Leisure, Amusement, Motion Pictures, and

Entertainment 0.1%

SOG Specialty Knives & Tools, LLCPreferred Stock (C)(L)

2 unchanged sentences

The Mountain CorporationPreferred

Pioneer Square Brands, Inc.

Pioneer Square Brands, Inc.Preferred

Telecommunications0.0%

B+T Group Acquisition, Inc.

Preferred Stock (C)(L)

B+T Group Acquisition,

(M) Preferred Stock (C)(L)

Total Preferred Equity

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

MARCH 31, 2019

AMOUNTS IN THOUSANDS)

Investment (A)(B)(D)(E)

Principal/Shares/

Common Equity 0.4%

Common Equity/Equivalents1.0%

Diversified/Conglomerate Manufacturing0.0%

Alloy Die Casting Co.

(M) Common Stock (C)(L)

Channel Technologies Group, LLCCommon

D.P.M.S., Inc.

D.P.M.S., Inc.Common

Diversified/Conglomerate Services1.0%

Nth Degree Investment Group, LLCCommon

Personal and Non-Durable Consumer Products

1 unchanged sentence

The Mountain CorporationCommon

Total Common Equity

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

MARCH 31, 2020

(DOLLAR AMOUNTS IN THOUSANDS)

Investment (A)(B)(D)(E)

Telecommunications 0.0%

B+T Group Acquisition, Inc.

Stock Warrants (C)(L)

Total Common Equity/Equivalents

Total Affiliate Investments

CONTROL INVESTMENTS (P)

INVESTMENTS (P) 7.2%:

Secured Second Lien Debt2.8%

Aerospace and Defense2.8%

Galaxy Tool Holding Corporation Line of Credit, $0 available (L+4.5%, 7.0% Cash (1.0%

Unused Fee), Due 8/2019) (L)

Galaxy Tool Holding CorporationLine of Credit, $0 available (L+4.5%, 6.5% Cash (1.0% Unused

Fee), Due 8/2021) (L)

Galaxy Tool Holding CorporationTerm Debt (L+6.0%, 10.0% Cash, Due 8/2021) (L)

6 unchanged sentences

Total Control Investments

TOTAL INVESTMENTS

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

MARCH 31, 2019

AMOUNTS IN THOUSANDS)

INVESTMENTS153.6% (V)

Certain of the securities listed are issued by affiliate(s) of the indicated portfolio company.

3 unchanged sentences

70% of our total assets.

As of March 31, 2019, our investment in Funko is considered a non-qualifying asset under Section 55 of the 1940 Act and represents less than 0.1% of total investments, at

As of March 31, 2020, our investment in Funko was considered a non-qualifying asset under Section 55 of the 1940 Act and represented less than 0.1% of total investments, at

Unless indicated otherwise, all cash interest rates are indexed to

11 unchanged sentences

Refer to Note 3 Investments in the accompanying Notes to Consolidated Financial Statements for additional information.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED

FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

MARCH 31, 2020

(DOLLAR AMOUNTS IN THOUSANDS)

Where applicable, aggregates all shares of a class of stock owned without regard to specific series owned

22 unchanged sentences

influence over the management or policies of the portfolio company, which may include owning, with the power to vote, more than 25.0% of the issued and outstanding voting securities.

Fair value was based on the expected exit or payoff amount, where such event has occurred or is expected to

occur imminently.

Debt security does not have a stated current interest rate.

Our investment in Funko was valued using Level 2 inputs within the ASC 820 fair value hierarchy.

common units in Funko are convertible to class A common stock in Funko, Inc.

common units in Funko are convertible into class A common stock in Funko, Inc.

upon meeting certain requirements.

2 unchanged sentences

marketability.

is traded on the Nasdaq Stock Market under the trading symbol FNKO. Refer to Note 3 Investments in the accompanying Notes to Consolidated Financial Statements for additional

Security was sold subsequent to March 31, 2019.

Refer to Note 3 Investments in the

accompanying Notes to Consolidated Financial Statements for additional information.

is traded on the Nasdaq Global Select Market under the trading symbol FNKO. Refer to Note 3 Investments in the accompanying Notes to Consolidated Financial Statements for additional

Refer to Note 11 Commitments and Contingencies in the accompanying Notes to Consolidated

2 unchanged sentences

gross unrealized appreciation for federal income tax purposes is $60.7 million.

Cumulative net unrealized appreciation is $34.4 million, based on a tax cost of $589.8 million.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

Cumulative net unrealized depreciation is $44.6 million, based on a tax cost of $610.5 million.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED

FINANCIAL STATEMENTS.

GLADSTONE INVESTMENT CORPORATION

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The financial statements of Business Investment are consolidated with those of Gladstone Investment.

We also have significant subsidiaries (as defined under Rule 1-02(w) of the U.S.

Securities and Exchange Commissions (SEC) Regulation S-X) whose financial statements are not consolidated with ours.

Refer to Note 13 Unconsolidated Significant

Subsidiaries for additional information regarding our unconsolidated significant subsidiaries.

We are externally managed by Gladstone Management

Corporation (the Adviser), an affiliate of ours and an SEC-registered investment adviser, pursuant to an investment advisory and management agreement (the Advisory Agreement).

Administrative services are provided by Gladstone Administration, LLC (the Administrator), an affiliate of ours and the Adviser, pursuant to an administration agreement (the Administration Agreement).

Refer to Note 4

Unconsolidated Significant Subsidiaries for additional information regarding our unconsolidated significant subsidiaries.

We are externally

managed by Gladstone Management Corporation (the Adviser), an affiliate of ours and an SEC registered investment adviser, pursuant to an investment advisory and management agreement (the Advisory Agreement).

Administrative

services are provided by Gladstone Administration, LLC (the Administrator), an affiliate of ours and the Adviser, pursuant to an administration agreement (the Administration Agreement).

Refer to Note 4 Related Party

Transactions for more information regarding these arrangements.

Related Party Transactions for more information regarding these arrangements.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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(GAAP) and conform to the applicable requirements of Regulation S-X.

Management believes it has made all necessary adjustments so that our accompanying Consolidated Financial Statements are presented fairly and that all such adjustments are of a normal recurring nature.

Our accompanying Consolidated

Financial Statements include our accounts and the accounts of our wholly-owned subsidiaries.

All significant intercompany balances and transactions have been eliminated.

Management believes it has made all necessary adjustments so that our accompanying Consolidated Financial Statements are presented fairly and that all such adjustments are of a normal recurring

Our accompanying Consolidated Financial Statements include our accounts and the accounts of our wholly-owned subsidiaries.

All significant intercompany balances and transactions

have been eliminated.

Consolidation

In accordance with Article 6 of Regulation

S-X, we do not consolidate portfolio company investments.

Under the investment company rules and regulations pursuant to the American Institute of Certified Public Accountants (AICPA) Audit and

Accounting Guide for Investment Companies, codified in ASC 946, we are precluded from consolidating any entity other than another investment company, except that ASC 946 provides for the consolidation of a controlled operating company that provides

substantially all of its services to the investment company or its consolidated subsidiaries.

In accordance

with Article 6 of Regulation S-X, we do not consolidate portfolio company investments.

Under the investment company rules and regulations pursuant to the American Institute of Certified Public Accountants

(AICPA) Audit and Accounting Guide for Investment Companies, codified in ASC 946, we are precluded from consolidating any entity other than another investment company, except that ASC 946 provides for the consolidation of a controlled

operating company that provides substantially all of its services to the investment company or its consolidated subsidiaries.

Use of Estimates

Preparing financial statements requires management to make estimates and assumptions that affect the amounts reported in our accompanying Consolidated

Financial Statements and these Notes to Consolidated Financial Statements .

Preparing financial statements requires management to make estimates and assumptions that affect the amounts reported in our accompanying

Consolidated Financial Statements and these Notes to Consolidated Financial Statements .

Actual results may differ from those estimates.

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reclassified to conform to the current period presentation in the Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements .

Reclassifications did not impact net increase in net assets resulting

from operations, total assets, total liabilities or total net assets, or Consolidated Statements of Changes in Net Assets and Consolidated Statements of Cash Flows classifications.

Reclassifications did not impact net increase (decrease) in net assets

resulting from operations, total assets, total liabilities or total net assets, or Consolidated Statements of Changes in Net Assets and Consolidated Statements of Cash Flows classifications.

Classification of Investments

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investment fair values, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.

Responsibility

In accordance with the 1940 Act, our board of directors (Board of Directors) has the ultimate responsibility for reviewing

and determining, in good faith, the fair value of our investments for which market quotations are not readily available based on our investment valuation policy (which has been approved by our Board of Directors) (the Policy).

review occurs in three phases.

First, prior to its quarterly meetings, the Board of Directors receives written valuation recommendations and supporting materials provided by professionals of the Adviser and Administrator with oversight and direction

from the chief valuation officer (the Valuation Team).

Second, the Valuation Committee of our Board of Directors (comprised entirely of independent directors) meets to review the valuation recommendations and supporting materials,

presented by the chief valuation officer.

Third, after the Valuation Committee concludes its meeting, it and the chief valuation officer present the Valuation Committees findings to the entire Board of Directors so that the full Board of

Directors may review and determine in good faith the fair value of such investments in accordance with the Policy.

There is no single standard for

determining fair value (especially for privately-held businesses), as fair value depends upon the specific facts and circumstances of each individual investment.

In determining the fair value of our investments, the Valuation Team, led by the chief

valuation officer, uses the Policy, and each quarter the Valuation Committee and Board of Directors review the Policy to determine if changes thereto are advisable and whether the Valuation Team has applied the Policy consistently.

Board Responsibility

In accordance with the 1940 Act, our board of directors (Board of Directors) has the ultimate responsibility for reviewing and determining, in good

faith, the fair value of our investments for which market quotations are not readily available based on our investment valuation policy (which has been approved by our Board of Directors) (the Policy).

Such review occurs in three phases.

officer (the Valuation Team).

Second, the Valuation Committee of our Board of Directors (comprised entirely of independent directors) meets to review the valuation recommendations and supporting materials, discusses the information

provided by the Valuation Team, determines whether the Valuation Team has followed the Policy, determines whether the Valuation Teams recommended fair value is reasonable in light of the Policy, and reviews other facts and circumstances.

Third, after the Valuation Committee concludes its meeting, it and the chief valuation officer present the Valuation Committees findings to the entire Board of Directors so that the full Board of Directors may review and determine in good

faith the fair value of such investments in accordance with the Policy.

There is no single standard for determining fair value (especially for

privately-held businesses), as fair value depends upon the specific facts and circumstances of each individual investment.

In determining the fair value of our investments, the Valuation Team, led by the chief valuation officer, uses the Policy, and

each quarter the Valuation Committee and Board of Directors review the Policy to determine if changes thereto are advisable and whether the Valuation Team has applied the Policy consistently.

Use of Third-Party Valuation Firms

The Valuation Team engages third party valuation firms to provide independent assessments of fair value of certain of our investments.

ICE Data Pricing and Reference Data, LLC (ICE), a valuation specialist, generally provides estimates of fair value on our debt investments.

Valuation Team generally assigns ICEs estimates of fair value to our debt investments where we do not have the ability to effectuate a sale of the applicable portfolio company.

The Valuation Team corroborates ICEs estimates of fair value

using one or more of the valuation techniques discussed below.

The Valuation Teams estimate of value on a specific debt investment may significantly differ from ICEs.

When this occurs, our Valuation Committee and Board of Directors

review whether the Valuation Team has followed the Policy and whether the Valuation Teams recommended fair value is reasonable in light of the Policy and other facts and circumstances before determining fair value.

We may engage other independent valuation firms to provide earnings multiple ranges, as well as other information, and evaluate such information for

incorporation into the total enterprise value (TEV) of certain of our investments.

Generally, at least once per year, we engage an independent valuation firm to value or review the valuation of each of our significant equity investments,

which includes providing the information noted above.

The Valuation Team evaluates such information for incorporation into our TEV, including review of all inputs provided by the independent valuation firm.

The Valuation Team then makes a

recommendation to our Valuation Committee and Board of Directors as to the fair value.

Our Board of Directors reviews the recommended fair value and whether it is reasonable in light of the Policy and other relevant facts and circumstances

before determining fair value.

Valuation Techniques

The Valuation Team

engages third party valuation firms to provide independent assessments of fair value of certain of our investments.

ICE Data Pricing and Reference Data,

LLC (ICE), a valuation specialist, generally provides estimates of fair value on our debt investments.

The Valuation Team generally assigns ICEs estimates of fair value to our debt investments where we do not have the ability to

effectuate a sale of the applicable portfolio company.

The Valuation Team corroborates ICEs estimates of fair value using one or more of the valuation techniques discussed below.

The Valuation Teams estimate of value on a specific debt

investment may significantly differ from ICEs.

When this occurs, our Valuation Committee and Board of Directors review whether the Valuation Team has followed the Policy and whether the Valuation Teams recommended fair value is

reasonable in light of the Policy and other facts and circumstances before determining fair value.

We may engage other independent valuation firms to

provide earnings multiple ranges, as well as other information, and evaluate such information for incorporation into the total enterprise value (TEV) of certain of our investments.

Generally, at least once per year, we engage an

independent valuation firm to value or review the valuation of each of our significant equity investments, which includes providing the information noted above.

The Valuation Team evaluates such information for incorporation into our TEV, including

review of all inputs provided by the independent valuation firm.

The Valuation Team then makes a recommendation to our Valuation Committee and Board of Directors as to the fair value.

Our Board of Directors reviews the recommended fair

value and whether it is reasonable in light of the Policy and other relevant facts and circumstances before determining fair value.

In accordance with ASC 820, the Valuation Team uses the following techniques when valuing our investment portfolio:

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calculates the TEV of the portfolio company by incorporating some or all of the following factors:

the portfolio companys ability to make payments and other specific portfolio company attributes;

the earnings of the portfolio company (the

trailing or projected twelve month revenue or earnings before interest, taxes, depreciation and amortization (EBITDA));

EBITDA obtained from our indexing methodology whereby the original transaction EBITDA at the time of our closing is

indexed to a general subset of comparable disclosed transactions and EBITDA from recent sales to third parties of similar securities in similar industries;

portfolio companys ability to make payments and other specific portfolio company attributes;

the earnings of the portfolio company (the trailing or projected twelve month revenue or

earnings before interest, taxes, depreciation and amortization (EBITDA));

EBITDA multiples obtained from our indexing methodology whereby the original transaction EBITDA multiple at the time of our closing is indexed to a general subset

of comparable disclosed transactions and EBITDA multiples from recent sales to third parties of similar securities in similar industries;

a comparison to publicly traded securities in similar industries;

and other pertinent

The Valuation Team generally reviews industry statistics and may use outside experts when gathering this information.

Once the TEV is determined for a portfolio company, the Valuation Team generally allocates the TEV to the portfolio

companys securities based on the facts and circumstances of the securities, which typically results in the allocation of fair value to securities based on the order of their relative priority in the capital structure.

Generally, the Valuation

Team uses TEV to value our equity investments and, in the circumstances where we have the ability to effectuate a sale of a portfolio company, our debt investments.

TEV is primarily calculated using EBITDA;

however, TEV may also be calculated using revenue multiples or a discounted cash flow

(DCF) analysis whereby future expected cash flows of the portfolio company are discounted to determine a net present value using estimated risk-adjusted discount rates, which incorporate adjustments for nonperformance and liquidity

Generally, the Valuation Team uses a DCF analysis to calculate TEV to corroborate estimates of value for our equity investments where we do not have the ability to effectuate a sale of a portfolio company or for debt of credit-impaired

portfolio companies.

and other pertinent factors.

The Valuation

Team generally reviews industry statistics and may use outside experts when gathering this information.

Once the TEV is determined for a portfolio company, the Valuation Team generally allocates the TEV to the portfolio companys securities

based on the facts and circumstances of the securities, which typically results in the allocation of fair value to securities based on the order of their relative priority in the capital structure.

Generally, the Valuation Team uses TEV to value our

equity investments and, in the circumstances where we have the ability to effectuate a sale of a portfolio company, our debt investments.

TEV is primarily calculated using EBITDA and EBITDA multiples;

however, TEV may also be calculated using revenue and revenue multiples or a

discounted cash flow (DCF) analysis whereby future expected cash flows of the portfolio company are discounted to determine a net present value using estimated risk-adjusted discount rates, which incorporate adjustments for

nonperformance and liquidity risks.

debt of credit-impaired portfolio companies.

Yield Analysis The Valuation Team generally determines the fair value of our debt investments for

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Market Quotes For our investments for which a limited market exists, we generally base fair value

on readily available and reliable market quotations, which are corroborated by the Valuation Team (generally by using the yield analysis explained above).

on readily available and reliable market quotations, which are corroborated by the Valuation Team (generally by using the yield analysis described above).

In addition, the Valuation Team assesses trading activity for similar investments and

evaluates variances in quotations and other market insights to determine if any available quoted prices are reliable.

Typically, the Valuation Team uses the lower indicative bid price (IBP) in the bid-to-ask price range obtained from the respective originating syndication agents trading desk on or near the valuation date.

The Valuation Team may take further steps to consider additional information to validate that price in accordance with the Policy.

For securities that are publicly traded, we generally base fair

value on the closing market price of the securities we hold as of the reporting date.

For restricted securities that are publicly traded, we generally base fair value on the closing market price of the securities we hold as of the reporting date

less a discount for the restriction, which includes consideration of the nature and term to expiration of the restriction.

Typically, the Valuation Team uses the lower indicative bid price in the bid-to-ask price range obtained from the respective originating syndication agents trading desk on or near the valuation date.

The Valuation Team may take further steps to consider additional

information to validate that price in accordance with the Policy.

For securities that are publicly traded, we generally base fair value on the closing market price of the securities we hold as of the reporting date.

For restricted securities that

are publicly traded, we generally base fair value on the closing market price of the securities we hold as of the reporting date less a discount for the restriction, which includes consideration of the nature and term to expiration of the

Investments in Funds For equity investments in other funds for which we cannot effectuate a sale of

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In addition to the valuation techniques listed above, the Valuation Team may also consider other factors when determining the fair value of our investments,

the nature and realizable value of the collateral, including external parties guaranties, any relevant offers or letters of intent to acquire the portfolio company, timing of expected loan repayments, and the markets in which the

portfolio company operates.

Fair value measurements of our investments may involve subjective judgments and estimates and, due to the uncertainty

inherent in valuing these securities, the determinations of fair value may fluctuate from period to period and may differ materially from the values that could be obtained if a ready market for these securities existed.

Our NAV could be materially

affected if the determinations regarding the fair value of our investments are materially different from the values that we ultimately realize upon our disposal of such securities.

Additionally, changes in the market environment and other events

that may occur over the life of the investment may cause the gains or losses ultimately realized on these investments to be different than the valuations currently assigned.

Further, such investments are generally subject to legal and other

restrictions on resale or otherwise are less liquid than publicly traded securities.

the nature and realizable value of the collateral,

including external parties guaranties, any relevant offers or letters of intent to acquire the portfolio company, timing of expected loan repayments, and the markets in which the portfolio

company operates.

Fair value measurements of our investments may involve subjective judgments and estimates and, due to the uncertainty inherent in

valuing these securities, the determinations of fair value may fluctuate from period to period and may differ materially from the values that could be obtained if a ready market for these securities existed.

Our NAV could be materially affected if

the determinations regarding the fair value of our investments are materially different from the values that we ultimately realize upon our disposal of such securities.

Additionally, changes in the market environment and other events that may occur

over the life of the investment may cause the gains or losses ultimately realized on these investments to be different than the valuations currently assigned.

Further, such investments are generally subject to legal and other restrictions on resale

or otherwise are less liquid than publicly traded securities.

If we were required to liquidate a portfolio investment in a forced or liquidation sale, we could realize significantly less than the value at which it is recorded.

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We determine the fair value of each individual investment each reporting period and record changes in fair value as unrealized appreciation or depreciation in

our Consolidated Statement of Operations .

our accompanying Consolidated Statement of Operations .

Revenue Recognition

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principal and interest are paid, and, in managements judgment, are likely to remain current, or, due to a restructuring, the interest income is deemed to be collectible.

As of March 31, 2020, certain of our loans to B+T Group Acquisition,

(B+T), The Mountain Corporation (The Mountain), PSI Molded Plastics, Inc.

(PSI Molded), and SOG Specialty Knives & Tools, LLC (SOG) were on

non-accrual status, with an aggregate debt cost basis of $63.5 million, or 14.0% of the cost basis of all debt investments in our portfolio, and an aggregate fair value of $43.5 million, or 10.1% of

the fair value of all debt investments in our portfolio.

As of March 31, 2019, certain of our loans to B-Dry, LLC (B-Dry), Meridian Rack &

(Meridian), The Mountain, PSI Molded, and SOG were on non-accrual status, with an aggregate debt cost basis of $68.3 million, or 15.4% of the cost basis of all debt investments in

our portfolio, and an aggregate fair value of $21.9 million, or 5.4% of the fair value of all debt investments in our portfolio.

(PIK) interest, computed at the contractual rate specified in the loan agreement, is added to the principal balance of the loan and recorded as interest income.

As of March 31, 2020 and 2019, we did not have any loans with a PIK

interest component.

As of March 31, 2021, our loans to B+T Group Acquisition, Inc.

(B+T), Horizon Facilities Services, Inc., and The Mountain Corporation (The Mountain) were on non-accrual status, with an aggregate debt cost basis of $61.1 million, or 12.4% of

the cost basis of all debt investments in our portfolio, and an aggregate fair value of $48.8 million, or 10.3% of the fair value of all debt investments in our portfolio.

As of March 31, 2020, certain of our loans to B+T, The Mountain,

PSI Molded Plastics, Inc.

(PSI Molded), and SOG Specialty Knives & Tools, LLC were on non-accrual status, with an aggregate debt cost basis of $63.5 million, or 14.0% of the cost

basis of all debt investments in our portfolio, and an aggregate fair value of $43.5 million, or 10.1% of the fair value of all debt investments in our portfolio.

Paid-in-kind (PIK) interest, computed at the contractual rate

specified in the loan agreement, is added to the principal balance of the loan and recorded as interest income.

As of March 31, 2021 and 2020, we did not have any loans with a PIK interest component.

Success Fee Income Recognition

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During the year ended March 31, 2019, we re-characterized $0.5 million of dividend income from our investment in Logo

Sportswear, Inc.

(Logo), which was originally recorded during our fiscal year ended March 31, 2018, as a return of capital.

Cash Equivalents

We consider all short-term, highly-liquid investments that are both readily convertible to cash and have a maturity of three months

or less at the time of purchase to be cash equivalents.

Sportswear, Inc., which was originally recorded during our fiscal year ended March 31, 2018, as a return of capital.

Cash and Cash Equivalents

We consider all short-term, highly-liquid investments that are both readily convertible to cash and have a maturity of three months or less at the

time of purchase to be cash equivalents.

Cash and cash equivalents are carried at cost, which approximates fair value.

We place our cash with financial institutions, and at times, cash held in checking accounts may exceed the Federal

Deposit Insurance Corporation insured limit.

We place our cash with financial institutions, and at times, cash held in checking accounts may exceed the Federal Deposit

Insurance Corporation insured limit.

We seek to mitigate this concentration of credit risk by depositing funds with major financial institutions.

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Deferred financing

and offering costs consist of costs incurred to obtain financing, including lender fees and legal fees.

Certain costs associated with our revolving line of credit are deferred and amortized using the straight-line method, which approximates the

effective interest method, over the term of the revolving line of credit.

Costs associated with the issuance of our mandatorily redeemable preferred stock are presented as discounts to the liquidation value of the mandatorily redeemable preferred

stock and are amortized using the straight-line method, which approximates the effective interest method, over the term of the respective series of preferred stock.

Refer to Note 5 Borrowings and Note 6 Mandatorily

Redeemable Preferred Stock for further discussion.

and offering costs consist of costs incurred to obtain financing, including lender fees, underwriting discounts and commissions, and legal fees.

Certain costs associated with our revolving line of credit are deferred and amortized using the

straight-line method, which approximates the effective interest method, over the term of the revolving line of credit.

Costs associated with the issuance of our notes payable and mandatorily redeemable preferred stock are presented as discounts to

the liquidation value of the notes payable and mandatorily redeemable preferred stock and are amortized using the straight-line method, which approximates the effective interest method, over the term of the notes payable and respective series of

preferred stock.

Refer to Note 5 Borrowings and Note 6 Mandatorily Redeemable Preferred Stock for further discussion.

Related Party Fees

We are party to the Advisory Agreement with the Adviser, which is owned and controlled by our chairman and chief executive officer.

In accordance with the

Advisory Agreement, we pay the Adviser fees as compensation for its services, consisting of a base management fee and an incentive fee.

Additionally, we pay the Adviser a loan servicing fee as compensation for its services as servicer under the

terms of the Fifth Amended and Restated Credit Agreement dated April 30, 2013, as amended (the Credit Facility).

We are also party to

the Administration Agreement with the Administrator, which is owned and controlled by our chairman and chief executive officer, whereby we pay separately for administrative services.

Refer to Note 4 Related Party Transactions for additional information regarding these related party fees and agreements.

We are party to the Advisory

Agreement with the Adviser, which is owned and controlled by our chairman and chief executive officer.

In accordance with the Advisory Agreement, we pay the Adviser fees as compensation for its services, consisting of a base management fee and an

incentive fee.

Additionally, we pay the Adviser a loan servicing fee as compensation for its services as servicer under the terms of the Fifth Amended and Restated Credit Agreement dated April 30, 2013, as amended (the Credit

We are also party to the Administration Agreement with the Administrator, which is owned and controlled by our chairman and chief

executive officer, whereby we pay separately for administrative services.

Refer to Note 4 Related Party Transactions for additional

information regarding these related party fees and agreements.

Federal Income Taxes

We intend to continue to maintain

our qualification as a RIC under subchapter M of the Code for federal income tax purposes.

As a RIC, we generally are not subject to federal income tax on the portion of our taxable income and gains distributed to our stockholders.

To maintain our

qualification as a RIC, we must maintain our status as a BDC and meet certain source-of-income and asset diversification requirements.

In addition, in order to qualify

to be taxed as a RIC, we must distribute to stockholders at least 90% of our taxable ordinary income plus the excess of our net short-term capital gains over net long-term capital losses (Investment Company Taxable Income).

generally is to make distributions to our stockholders in an amount up to 100% of our Investment Company Taxable Income.

We intend to continue to make sufficient distributions to qualify as a RIC and to generally limit taxable income, although we

may retain some or all of our net long-term capital gains and pay income taxes on such gains.

Refer to Note 10 Federal and State Income Taxes for additional information regarding our RIC requirements.

FASB ASC 740, Income Taxes (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 authorities.

Tax positions

not deemed to satisfy the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current fiscal year.

We have evaluated the implications of ASC 740 for all open tax

years and in all major tax jurisdictions and determined that there is no material impact on our accompanying Consolidated Financial Statements .

Our federal income tax returns for fiscal years 2019, 2018, and 2017 remain subject to examination

by the Internal Revenue Service (IRS).

We intend to continue to maintain our qualification as a RIC under subchapter M of the Code for federal income tax purposes.

As a RIC, we generally are not

subject to federal income tax on the portion of our taxable income and gains distributed to our stockholders.

To maintain our qualification as a RIC, we must maintain our status as a BDC and meet certain source-of-income and asset diversification requirements.

In addition, to qualify to be taxed as a RIC, we must generally distribute to stockholders, for each taxable year, at least 90% of our taxable ordinary

income plus the excess of our net short-term capital gains over net long-term capital losses (Investment Company Taxable Income).

Our policy generally is to make distributions to our stockholders in an amount up to 100% of our Investment

Company Taxable Income.

We intend to continue to make sufficient distributions to qualify as a RIC and to generally limit taxable income, although we may retain some or all of our net long-term capital gains and pay income taxes on such gains.

to Note 10 Federal and State Income Taxes for additional information regarding our RIC requirements.

FASB ASC 740, Income Taxes

(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 authorities.

Tax positions not deemed to satisfy the more-likely-than-not threshold

would be recorded as a tax benefit or expense in the current fiscal year.

We have evaluated the implications of ASC 740 for all open tax years and in all major tax jurisdictions and determined that there is no material impact on our accompanying

Consolidated Financial Statements .

Our federal income tax returns for fiscal years 2020, 2019, and 2018 remain subject to examination by the Internal Revenue Service (IRS).

Distributions

Distributions to stockholders are recorded on the ex-dividend date.

We are required to distribute at least 90% of our

Investment Company Taxable Income for each taxable year as a distribution to our stockholders in order to maintain our ability to be taxed as a RIC under Subchapter M of the Code.

It is our policy to generally pay out as a distribution up to 100% of

those amounts.

The amount to be paid is determined by our Board of Directors and is based upon managements estimate of Investment Company Taxable Income, net long-term capital gains, as well as amounts to be distributed in accordance with

Section 855(a) of the Code.

Based on that estimate, our Board of Directors declares monthly distributions, and supplemental distributions, as applicable, each quarter.

At fiscal year-end, we may elect to

treat a portion of the first distributions paid after year-end as having been paid in the prior year in accordance with Section 855(a) of the Code.

We may retain some or all of our net long-term capital

gains, if any, and designate them as deemed distributions, or distribute these capital gains to stockholders in cash.

If we elect to retain net long-term capital gains and deem them distributed, each U.S.

common stockholder will be treated as if

they received a distribution of their pro-rata share of the retained net long-term capital gain and the U.S.

Distributions to stockholders are recorded

on the ex-dividend date.

We are required to distribute at least 90% of our Investment Company Taxable Income for each taxable year as a distribution to our stockholders to maintain our ability to be taxed as a

RIC under Subchapter M of the Code.

It is our policy to generally pay out as a distribution up to 100% of those amounts.

The amount to be paid is determined by our Board of Directors and is based upon managements estimate of Investment Company

Taxable Income, net long-term capital gains, as well as amounts to be distributed in accordance with Section 855(a) of the Code.

Based on that estimate, our Board of Directors declares monthly distributions, and supplemental distributions, as

applicable, each quarter.

At fiscal year-end, we may elect to treat a portion of the first distributions paid after year-end as having been paid in the prior year in

accordance with Section 855(a) of the Code.

We may retain some or all of our net long-term capital gains, if any, and designate them as deemed distributions, or distribute these capital gains to stockholders in cash.

If we elect to retain net

long-term capital gains and deem them distributed, each U.S.

common stockholder will be treated as if they received a distribution of their pro-rata share of the retained net long-term capital gain and the

federal income tax paid.

As a result, each common stockholder will (i) be required to report

their pro-rata share of the retained gain on their tax return as long-term capital gain, (ii) receive a refundable tax credit for their pro-rata share of federal

income tax paid by us on the retained gain, and (iii) increase the tax basis of their shares of common stock by an amount equal to the deemed distribution less the tax credit.

Refer to Note 9 Distributions to Common Stockholders

for further information.

Our common stockholders who hold their shares through our transfer agent, Computershare, Inc.

(Computershare), have

the option to participate in a dividend reinvestment plan offered by Computershare, as the plan agent.

This is an opt in dividend reinvestment plan, meaning that common stockholders may elect to have their cash distributions

automatically reinvested in additional shares of our common stock.

As a result, each common stockholder will (i) be required to report their pro-rata share of the retained gain on their tax return as long-term capital gain, (ii) receive

a refundable tax credit for their pro-rata share of federal income tax paid by us on the retained gain, and (iii) increase the tax basis of their shares of common stock by an amount equal to the deemed

distribution less the tax credit.

Refer to Note 9 Distributions to Common Stockholders for further information.

Our common stockholders who

hold their shares through our transfer agent, Computershare, Inc.

(Computershare), have the option to participate in a dividend reinvestment plan offered by Computershare, as the plan agent.

This is an opt in dividend

reinvestment plan, meaning that common stockholders may elect to have their cash distributions automatically reinvested in additional shares of our common stock.

Common stockholders who do not so elect will receive their distributions in cash.

Any distributions reinvested under the plan will be taxable to a common stockholder to the same

extent, and with the same character, as if the common stockholder had received the distribution in cash.

The common stockholder will have an adjusted basis in the additional common shares purchased through the plan equal to the dollar amount that

would have been received if the U.S.

distributions reinvested under the plan will be taxable to a common stockholder to the same extent, and with the same character, as if the common stockholder had received the distribution in cash.

The common stockholder will have an adjusted basis

in the additional common shares purchased through the plan equal to the dollar amount that would have been received if the U.S.

stockholder had received the dividend or distribution in cash.

The additional common shares will have a new holding period commencing on the day following the date on which the shares are credited to the common

The additional common shares will have a new holding

period commencing on the day following the date on which the shares are credited to the common

stockholders account.

Computershare purchases shares in the open market in connection with the obligations under the plan.

The dividend reinvestment plan is not open to holders of our preferred stock.

The dividend reinvestment plan is not open to holders of our

preferred stock.

Recent Accounting Pronouncements

In March 2020, the FASB

issued Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04).

ASU 2020-04 provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other

transactions affected by reference rate reform if certain criteria are met.

ASU 2020-04 was effective immediately.

The adoption of ASU 2020-04 did not have a material

impact on our financial position, results of operations or cash flows.

In July 2019, the FASB issued Accounting Standards Update 2019-07, Codification Updates to SEC Sections Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases

33-10532, Disclosure Update and Simplification, and Nos.

33-10231 and 33-10442, Investment Company

Reporting Modernization and Miscellaneous Updates (SEC Update) (ASU 2019-07).

ASU 2019-07 aligns the guidance in various SEC sections of the

Codification with the requirements of certain SEC final rules.

ASU 2019-07 was effective immediately.

The adoption of ASU 2019-07 did not have a material impact on our

financial position, results of operations or cash flows.

In August 2018, the FASB issued Accounting Standards Update

2018-13, Fair Value Measurement (Topic 820):

Disclosure FrameworkChanges to the Disclosure Requirements for Fair Value (ASU

2018-13), which modifies the disclosure requirements in ASC 820.

We are currently assessing the impact of ASU 2018-13 and do not anticipate a material impact

on our disclosures.

ASU 2018-13 is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted.

In accordance with ASC 820, we determine the

fair value of our investments to be the price that would be received for an investment in a current sale, which assumes an orderly transaction between willing market participants on the measurement date.

This fair value definition focuses on exit

price in the principal, or most advantageous, market and prioritizes, within a measurement of fair value, the use of market-based inputs over entity-specific inputs.

ASC 820 also establishes the following three-level hierarchy for fair value

measurements based upon the transparency of inputs to the valuation of a financial instrument as of the measurement date.

In August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820):

Disclosure FrameworkChanges to the Disclosure Requirements for Fair Value (ASU 2018-13), which modifies the disclosure requirements in ASC 820.

ASU 2018-13 was effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted, and we adopted ASU 2018-13 effective April 1, 2020.

The adoption of ASU 2018-13 did not have a material impact on our financial position, results of operations or cash flows.

In May 2020, the Securities and Exchange Commission (SEC) adopted the final rule under SEC release

33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses , amending certain disclosure requirements applicable to acquisitions and dispositions of businesses,

including real estate operations and investment companies.

The final rule became effective on January 1, 2021, with early adoption is permitted, and we adopted the final rule on January 1, 2021.

In accordance with ASC 820, we determine the fair value of our investments to be the price that would be received for an investment in a current sale, which

assumes an orderly transaction between willing market participants on the measurement date.

This fair value definition focuses on exit price in the principal, or most advantageous, market and prioritizes, within a measurement of fair value, the use

of market-based inputs over entity-specific inputs.

ASC 820 also establishes the following three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of a financial instrument as of the measurement date.

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for

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financial instruments in active or inactive markets, and inputs that are observable for the financial instrument, either directly or indirectly, for substantially the full term of the financial instrument.

Level 2 inputs are in those markets

Level 2 inputs are those in markets

for which there are few transactions, the prices are not current, little public information exists, or instances where prices vary substantially over time or among brokered market makers;

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hierarchy, except for our investment in Funko Acquisition Holdings, LLC (Funko), which was valued using Level 2 inputs.

investments in and out of Level 1, 2 and 3 of the valuation hierarchy as of the beginning balance sheet date, based on changes in the use of observable and unobservable inputs utilized to perform the valuation for the period.

There were no

transfers in or out of Level 1, 2 and 3 during the years ended March 31, 2020 and 2019, respectively.

As of March 31, 2020 and 2019, our

investments, by security type, at fair value were categorized as follows within the ASC 820 fair value hierarchy:

We transfer investments in and out of Level 1, 2 and 3 of the valuation hierarchy as of the beginning

balance sheet date, based on changes in the use of observable and unobservable inputs utilized to perform the valuation for the period.

There were no transfers in or out of Level 1, 2 and 3 during the years ended March 31, 2021 and 2020,

respectively.

As of March 31, 2021 and 2020, our investments, by security type, at fair value were categorized as follows within the ASC 820 fair

value hierarchy:

Fair Value Measurements

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converted into common shares of Funko, Inc.) at the reporting date less a discount for lack of marketability, as our investment was subject to certain restrictions.

The following table presents our investments, valued using Level 3 inputs within the ASC 820 fair value hierarchy, and carried at fair value as of

March 31, 2020 and 2019, by caption on our accompanying Consolidated Statements of Assets and Liabilities, and by security type:

Total Recurring Fair Value Measurements

Reported in Consolidated Statements

Assets and Liabilities

Valued Using Level 3 Inputs

The following table presents our investments, valued using Level 3 inputs within the ASC 820 fair value

hierarchy, and carried at fair value as of March 31, 2021 and 2020, by caption on our accompanying Consolidated Statements of Assets and Liabilities, and by security type:

Total Recurring Fair Value

Measurements Reported in

Consolidated Statements

of Assets and

Valued Using Level 3

Inputs March 31,

Non-Control/Non-Affiliate

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Total investments at fair value using Level 3 inputs

Excludes our investment in Funko with a fair value of $33 and $0.4 million as of March 31, 2020 and

Excludes our investment in Funko with a fair value of $95 and $33 as of March 31, 2021 and 2020,

respectively, which was valued using Level 2 inputs.

In accordance with ASC 820, the following table provides quantitative information about our investments

valued using Level 3 fair value measurements as of March 31, 2020 and 2019.

The table below is not intended to be all-inclusive, but rather provides information on the significant Level 3 inputs

as they relate to our fair value measurements.

The weighted-average calculations in the table below are based on the principal balances for all debt-related calculations and on the cost basis for all equity-related calculations for the particular

In accordance with ASC 820, the following table provides quantitative

information about our investments valued using Level 3 fair value measurements as of March 31, 2021 and 2020.

The table below is not intended to be all-inclusive, but rather provides information on

the significant Level 3 inputs as they relate to our fair value

measurements.

The weighted-average calculations in the table below are based on the principal balances for all debt-related calculations and on the cost basis for all equity-related calculations

for the particular input.

Quantitative Information about Level 3 Fair Value Measurements

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0.6x 0.7x / 0.6x

0.62x 1.0x /

0.3x 0.7x / 0.5x

$14,474 $30,537

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12.6% 16.4% /

Preferred equity (C)

5.1x 8.1x / 6.1x

Preferred equity

5.6x 8.0 / 6.6 x

5.1x 8.1x / 6.1x

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$15,267 $24,060

Common equity/equivalents (D)

Common equity/equivalents (E)

4.6x 7.1x / 5.7x

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$15,267 $15,267

Fair value as of March 31, 2019 includes two proprietary debt investments for a combined

$14.2 million, which were valued at the expected payoff amount as the unobservable input.

Fair value as of March 31, 2019 includes two proprietary equity investments for a combined

$6.8 million, which were valued at the expected payoff amount as the unobservable input.

Fair value as of March 31, 2019 includes two proprietary equity investments for a combined

$2.6 million, which were valued at the expected payoff amount as the unobservable input.

Fair value as of March 31, 2021 includes one proprietary debt investment with a fair value of

$23.2 million, which was valued at the expected payoff amount as the unobservable input.

Fair value as of March 31, 2021 includes one proprietary debt investment with a fair value of

$13.0 million, which was valued at the expected payoff amount as the unobservable input.

Fair value as of March 31, 2021 includes one proprietary equity investment with a fair value of

$32.1 million, which was valued at the expected exit amount as the unobservable input.

Fair value as of March 31, 2021 includes one proprietary equity investment with a fair value of

$2.2 million, which was valued at the expected exit amount as the unobservable input.

Fair value as of both March 31, 2021 and 2020 excludes our investment in Funko with a fair value of $95

and $0.4 million, respectively, which was valued using Level 2 inputs.

Fair value measurements can be sensitive to changes in

one or more of the valuation inputs.

and $33, respectively, which was valued using Level 2 inputs.

Fair value measurements can be sensitive to changes in one or more

of the valuation inputs.

Changes in discount rates, EBITDA, or EBITDA multiples (or revenue or revenue multiples), each in isolation, may change the fair value of certain of our investments.

Generally, an increase/(decrease) in discount

rates or a (decrease)/increase in EBITDA or EBITDA multiples (or revenue or revenue multiples) may result in a (decrease)/increase in the fair value of certain of our investments.

Generally, an increase/(decrease) in discount rates or a

(decrease)/increase in EBITDA or EBITDA multiples (or revenue or revenue multiples) may result in a (decrease)/increase in the fair value of certain of our investments.

Changes in Level 3 Fair Value Measurements of Investments

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acquisition costs, and other cost-basis adjustments.

Transfers represent (1) secured first lien debt of B-Dry

with a cost basis of $11.9 million and a fair value of $0, which was converted into equity during the three months ended June 30, 2019, (2) secured first lien debt of J.R.

Atlanta, LLC, with a total cost basis and fair

value of $41.0 million, that was converted into secured second lien debt during the three months ended September 30, 2019, (3) secured first lien debt of SBS Investment Holdings, Inc., with a total cost basis and fair value of

$8.6 million, that was converted to secured second lien debt during the three months ended December 31, 2019, and (4) preferred equity of Nth Degree, Inc.

with a cost basis of $1.2 million and fair value of $12.4 million,

that was converted to common equity in Nth Degree Investment Group, LLC during the three months ended December 31, 2019.

Transfers represent $5.0 million of secured first lien debt of Galaxy Tool Holding Corporation, which was converted into secured

second lien debt during the three months ended December 31, 2018.

Transfers represent (1) secured second lien debt of Brunswick Bowling Products, Inc.

cost basis and fair value of $6.9 million, which was converted into secured first lien debt during the three months ended June 30, 2020 and (2) secured second lien debt of PSI Molded, with a total cost basis and fair value of

$26.6 million and $17.1 million, respectively, which was converted into secured first lien debt during the three months ended September 30, 2020.

Transfers represent (1) secured first lien debt of B-Dry, LLC with a cost basis of

$11.9 million and a fair value of $0, which was converted into equity during the three months ended June 30, 2019, (2) secured first lien debt of J.R.

Atlanta, LLC, with a total cost basis and fair value of

$41.0 million, that was converted into secured second lien debt during the three months ended September 30, 2019, (3) secured first lien debt of SBS Investment Holdings, Inc., with a total cost basis and fair value of $8.6 million,

which was converted to secured second lien debt during the three months ended December 31, 2019, and (4) preferred equity of Nth Degree, Inc.

with a cost basis of $1.2 million and fair value of $12.4 million, that was converted

to common equity in Nth Degree Investment Group, LLC during the three months ended December 31, 2019.

Investment Activity

During the fiscal year ended March 31, 2021, the following significant transactions occurred:

In April 2019, we sold our investment in Tread Corporation, which resulted in a realized loss of

$2.7 million.

In connection with the sale, we received net cash proceeds of $4.9 million, including the repayment of our debt investment of $3.2 million at par.

In April 2019, we sold our investment in Jackrabbit Inc., which resulted in dividend income of $2.1 million

and a realized gain of $3.2 million.

In connection with the sale, we received net cash proceeds of $19.8 million, including the repayment of our debt investment of $11.0 million at par.

In April and May 2019, we extended a line of credit to J.R.

Atlanta, LLC (J.R.

Hobbs) with a total commitment amount of $10.0 million, which matures in October 2024.

In May 2019, our $15.8 million debt investment in Old World Christmas, Inc.

was repaid at par.

In connection

with the repayment, we received success fee income of $0.2 million.

In June 2019, we invested $38.8 million in Horizon Facilities Services, Inc.

(Horizon) through a

combination of secured first lien debt and preferred equity.

Horizon, headquartered in Allentown, Pennsylvania, is a leading provider of outsourced services to the rental car industry.

In August 2019, we sold our investment in Alloy Die Casting Co., which resulted in success fee income of

$1.9 million and a realized gain of $20.4 million.

In connection with the sale, we received net cash proceeds of $38.8 million, including the repayment of our debt investment of $13.3 million at par.

In September 2019, we invested $4.4 million in Phoenix Door Systems, Inc.

(Phoenix) through a

combination of secured first lien debt and common equity.

Phoenix, headquartered in Mason, Ohio, manufactures high impact traffic doors for the commercial and industrial market and architectural doors for the municipal market.

In September 2019, we invested an additional $8.5 million in Bassett Creek Services, Inc.

Creek) in the form of first lien debt.

In October 2019, we exited our investment in B-Dry and recorded a

realized loss of $14.5 million.

In November 2019, we invested an additional $16.9 million in Brunswick Bowling Products, Inc.

(Brunswick) in the form of second lien debt, of which $10.0 million was repaid in December 2019.

In December 2019, we exited our investment in Nth Degree, Inc., which resulted in dividend income of

In July 2020, we invested $46.9 million in Mason West, LLC (Mason West) through a combination of

secured first lien debt and preferred equity.

Mason West, headquartered in Placentia, California, is a provider of engineered seismic restraint and vibration isolation solutions.

In September 2020, Mason West repaid $7.0 million of secured

first lien debt and redeemed $3.1 million of preferred equity.

In September 2020, we invested an additional $8.0 million in PSI Molded in the form of preferred equity and

also amended certain terms of our existing debt.

In December 2020, we recapitalized our investment in Old World Christmas, Inc.

(Old World) and

invested an additional $27.0 million in the form of secured first lien debt.

In connection with this investment, Old World paid dividend income of $3.2 million and additional equity proceeds of $10.8 million, resulting in a

$7.5 million return of preferred equity cost basis and a realized gain of $3.3 million.

In December 2020, we invested an additional $3.0 million in Galaxy Technologies, Inc.

in the form of secured second lien debt.

In connection with this investment, Galaxy purchased SBS Industries, LLC (a subsidiary of SBS Industries Holdings, Inc., one of our other portfolio companies).

SBS Industries Holdings, Inc.

used proceeds from

the sale to partially repay our $11.4 million first lien debt, resulting in a realized loss of $8.5 million.

In December 2020, we sold our investment in Frontier Packaging, Inc., which resulted in dividend income of

$0.9 million, success fee income of $0.2 million, and a realized gain of $14.0 million.

In connection with the sale, we received net cash proceeds of $26.0 million, including the repayment of our debt investment of

$13.3 million at par, and retained an equity investment in common stock in Nth Degree Investment Group, LLC.

In January 2020, we exited our investment in Meridian and recorded a realized loss of $13.0 million.

In January 2020, we invested an additional $4.4 million into Edge Adhesives Holdings, Inc.

in the form of

preferred equity.

In February 2020, we invested an additional $5.0 million into J.R.

Hobbs in the form of preferred equity.

In March 2020, we invested $35.9 million in The Maids International, LLC (The Maids), through a

combination of secured first lien debt and preferred equity.

The Maids, headquartered in Omaha, Nebraska, is a franchisor of residential cleaning services.

$9.5 million at par.

Investment Concentrations

As of March 31, 2020, our

investment portfolio consisted of investments in 28 portfolio companies located in 17 states across 14 different industries with an aggregate fair value of $565.9 million.

Our investments in J.R.

Hobbs, Brunswick, Counsel Press, Inc., Bassett

Creek, and The Maids represent our five largest portfolio investments at fair value, and collectively comprised $206.9 million, or 36.5%, of our total investment portfolio at fair value as of March 31, 2020.

The following table summarizes our investments by security type as of March 31, 2020 and 2019:

As of March 31, 2021, our investment portfolio consisted of investments in 28 portfolio companies located in 17 states across 13 different industries with

an aggregate fair value of $633.8 million.

Our investments in Pioneer Square Brands Inc., Counsel Press, Inc., Old World, J.R.

Atlanta, LLC, and Bassett Creek Services, Inc., represent our five largest portfolio investments at

fair value, and collectively comprised $233.9 million, or 36.9%, of our total investment portfolio at fair value as of March 31, 2021.

following table summarizes our investments by security type as of March 31, 2021 and 2020:

March 31, 2021

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Home and Office Furnishings, Housewares, and Durable Consumer Products

Leisure, Amusement, Motion Pictures, Entertainment

Personal and Non-Durable Consumer Products

(Manufacturing Only)

Diversified/Conglomerate Manufacturing

Aerospace and Defense

Leisure, Amusement, Motion Pictures, Entertainment

Healthcare, Education, and Childcare

Machinery (Non-agriculture, Non-construction, and Non-electronic)

Containers, Packaging, and Glass

Aerospace and Defense

Diversified/Conglomerate Manufacturing

Chemicals, Plastics, and Rubber

Telecommunications

Cargo Transport

Beverage, Food, and Tobacco

Farming and Agriculture

Cargo Transport

Machinery (Non-agriculture, Non-construction, and Non-electronic)

Containers, Packaging, and Glass

Total investments

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$1.5 million and $1.4 million, respectively.

As of March 31, 2020 and 2019, the allowance for uncollectible receivables was $0.9 million and $0.8 million, respectively.

As of both March 31, 2021 and 2020, the allowance for uncollectible receivables was $0.9 million.

RELATED PARTY TRANSACTIONS

with the Adviser

We pay the Adviser certain fees as compensation for its services, such fees consisting of a base management fee and an incentive fee,

as described in the Advisory Agreement, and a loan servicing fee for the Advisers role as servicer pursuant to the Credit Facility, each as described below.

On July 9, 2019, our Board of Directors, including a majority of the directors

who are not parties to the Advisory Agreement or interested persons of either party, approved the annual renewal of the Advisory Agreement through August 31, 2020.

Two of our executive officers, David Gladstone (our chairman and chief executive officer) and Terry Lee Brubaker (our vice chairman and chief operating

officer) serve as directors and executive officers of the Adviser, which is 100% indirectly owned and controlled by Mr.

David Dullum (our president) is also an executive managing director of the Adviser.

We pay the Adviser certain fees as compensation for its services under the Advisory Agreement, consisting of a base management fee

and an incentive fee, and a loan servicing fee for the Advisers role as servicer pursuant to the Credit Facility, all as described below.

On July 14, 2020, our Board of Directors, including a majority of the directors who are not parties

to the Advisory Agreement or interested persons of either party, approved the annual renewal of the Advisory Agreement through August 31, 2021.

of our executive officers, David Gladstone (our chairman and chief executive officer) and Terry Lee Brubaker (our vice chairman and chief operating officer) serve as directors and executive officers of the Adviser, which is 100% indirectly owned and

controlled by Mr.

David Dullum (our president) is also the executive vice president of private equity (buyouts) of the Adviser.

Michael LiCalsi, our general counsel and secretary (who also serves as the Administrators

president, general counsel and secretary), is also the executive vice president of administration of our Adviser.

The following table summarizes the base management fees, loan servicing fees, incentive fees, and associated

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Base management fee (B)

Credits to fees from Adviser -

Credits to fees from

Adviserother (B)

Net base management fee

Loan servicing fee (B)

Credits to base management fee - loan servicing

Credits to base management feeloan servicing fee (B)

Net loan servicing fee

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Total incentive fee (B)

Credits to fees from Adviser -

Credits to fees from

Adviser-other (B)

Net total incentive fee

Average total assets subject to the base management fee is defined in the Advisory Agreement as total assets,

including investments made with proceeds of borrowings, less any uninvested cash or cash equivalents resulting from borrowings, valued at the end of the applicable quarters within the respective periods and adjusted appropriately for any share

issuances or repurchases during the periods.

Average total assets subject to the base management fee is defined in the Advisory Agreement as total

assets, including investments made with proceeds of borrowings, less any uninvested cash or cash equivalents resulting from borrowings, valued at the end of the applicable quarters within the respective periods and adjusted appropriately for any

share issuances or repurchases during the periods.

Reflected as a line item on our accompanying Consolidated Statement of Operations .

The capital gains-based incentive fees are recorded in accordance with GAAP and do not necessarily reflect

amounts contractually due under the terms of the Advisory Agreement.

The capital gains-based incentive fees are recorded in accordance with GAAP and do not necessarily

reflect amounts contractually due under the terms of the Advisory Agreement.

Base Management Fee

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and (iv) taking a primary role in interviewing, vetting, and negotiating employment contracts with candidates in connection with adding and

retaining key portfolio company management team members.

The Adviser non-contractually, unconditionally, and irrevocably credits 100% of any fees received for such services against the base management fee that

we would otherwise be required to pay to the Adviser;

however, pursuant to the terms of the Advisory Agreement, a small percentage of certain of such fees, totaling $0.2 million for each of the years ended March 31, 2020, 2019, and 2018,

was retained by the Adviser in the form of reimbursement, at cost, for tasks completed by personnel of the Adviser, primarily related to the valuation of portfolio companies.

retaining key portfolio

company management team members.

The Adviser non-contractually, unconditionally, and irrevocably credits 100% of any fees received for such services

against the base management fee that we would otherwise be required to pay to the Adviser;

however, pursuant to the terms of the Advisory Agreement, a small percentage of certain of such fees, totaling $0.2 million for each of the years ended

March 31, 2021, 2020, and 2019, was retained by the Adviser in the form of reimbursement, at cost, for tasks completed by personnel of the Adviser, primarily related to the valuation of portfolio companies.

Loan Servicing Fee

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Incentive Fee

The incentive fee payable to the Adviser under our Advisory Agreement consists of two parts:

an income-based incentive fee and a capital gains-based incentive

The income-based incentive fee rewards the Adviser if our quarterly net investment income (before giving effect to any incentive fee) exceeds 1.75%

of our net assets, which we define as total assets less indebtedness and before taking into account any incentive fees payable or contractually due but not payable during the period, at the end of the immediately preceding calendar quarter, adjusted

appropriately for any share issuances or repurchases during the period (the Hurdle Rate).

The income-based incentive fee with respect to our pre-incentive fee net investment income is payable

quarterly to the Adviser and is computed as follows:

The incentive fee payable to the Adviser

under our Advisory Agreement consists of two parts:

an income-based incentive fee and a capital gains-based incentive fee.

The income-based incentive fee

rewards the Adviser if our quarterly net investment income (before giving effect to any incentive fee) exceeds 1.75% of our net assets, which we define as total assets less indebtedness and before taking into account any incentive fees payable or

contractually due but not payable during the period, at the end of the immediately preceding calendar quarter, adjusted appropriately for any share issuances or repurchases during the period (the Hurdle Rate).

The income-based incentive

fee with respect to our pre-incentive fee net investment income is payable quarterly to the Adviser and is computed as follows:

No incentive fee in any calendar quarter in which our pre-incentive fee

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For calculation purposes, cumulative aggregate realized capital gains, if any, equals the sum of

the excess between the net sales price of each investment, when sold, and the original cost of such investment since our inception.

Cumulative aggregate realized capital losses equals the sum of the deficit between the net sales price of each

investment, when sold, and the original cost of such investment since our inception.

The entire portfolios aggregate unrealized capital depreciation, if any, equals the sum of the deficit between the fair value of each investment security as

of the applicable calculation date and the original cost of such investment security.

During the year ended March 31, 2020, capital gains-based incentive fees of $8.1 million were contractually due and paid to the Adviser, which was the

first payment of a capital gains-based incentive fee since our inception.

In accordance with GAAP, accrual of the capital gains-based incentive fee is

determined as if our investments had been liquidated at their fair values as of the end of the reporting period.

Therefore, GAAP requires that the capital gains-based incentive fee accrual consider the aggregate unrealized capital appreciation in

the calculation, as a capital gains-based incentive fee would be payable if such unrealized capital appreciation were realized.

the excess between

the net sales price of each investment, when sold, and the original cost of such investment since our inception.

Cumulative aggregate realized capital losses equals the sum of the deficit between

the net sales price of each investment, when sold, and the original cost of such investment since our inception.

The entire portfolios aggregate unrealized capital depreciation, if any, equals the sum of the deficit between the fair value of

each investment security as of the applicable calculation date and the original cost of such investment security.

As of and for the year ended March 31, 2021, no capital gains-based incentive fees were contractually due and paid to the Adviser.

During the year ended March 31, 2020, capital gains-based incentive fees of $8.1 million were contractually due and paid to the Adviser, which was the first payment of a capital gains-based incentive fee since our inception.

In accordance with GAAP, accrual of the capital gains-based incentive fee is determined as if our investments had been liquidated at their fair values as of

the end of the reporting period.

Therefore, GAAP requires that the capital gains-based incentive fee accrual consider the aggregate unrealized capital appreciation in the calculation, as a capital gains-based incentive fee would be payable if such

unrealized capital appreciation were realized.

There can be no assurance that any such unrealized capital appreciation will be realized in the future.

Accordingly, a

GAAP accrual is calculated at the end of the reporting period based on (i) cumulative aggregate realized capital gains since our inception, plus (ii) the entire portfolios aggregate unrealized capital appreciation, if any, less

(iii) cumulative aggregate realized capital losses since our inception, less (iv) the entire portfolios aggregate unrealized capital depreciation, if any.

If such amount is positive at the end of a reporting period, a capital

gains-based incentive fee equal to 20.0% of such amount, less the aggregate amount of capital gains-based incentive fees accrued in all prior years, is recorded, regardless of whether such amount is contractually due under the terms of the Advisory

If such amount is negative, then there is no accrual for such period and prior period accruals are reversed, as appropriate.

During the year ended March 31, 2020, we recorded a reversal of capital gains-based incentive fees of

$6.7 million.

During the years ended March 31, 2019 and 2018, we recorded capital gains-based incentive fees of $17.8 million and $4.4 million, respectively.

Accordingly, a GAAP accrual is calculated at the end of the reporting period based on

(i) cumulative aggregate realized capital gains since our inception, plus (ii) the entire portfolios aggregate unrealized capital appreciation, if any, less (iii) cumulative aggregate realized capital losses since our inception,

less (iv) the entire portfolios aggregate unrealized capital depreciation, if any.

If such amount is positive at the end of a reporting period, a capital gains-based incentive fee equal to 20.0% of such amount, less the aggregate amount

of capital gains-based incentive fees accrued in all prior years, is recorded, regardless of whether such amount is contractually due under the terms of the Advisory Agreement.

If such amount is negative, then there is no accrual for such period and

prior period accruals are reversed, as appropriate.

During the year ended March 31, 2021, we recorded capital gains-based incentive fees of $5.0 million.

During the year ended March 31, 2020, we recorded a reversal of capital

gains-based incentive fees of $6.7 million.

During the year ended March 31, 2019, we recorded capital gains-based incentive fees of $17.8 million.

Transactions with the Administrator

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Administrator pursuant to the Administration Agreement for our allocable portion of the Administrators expenses incurred while performing services to us, which are primarily rent and salaries and benefits expenses of the Administrators

employees, including, our chief financial officer and treasurer, chief valuation officer, chief compliance officer, and general counsel and secretary (who also serves as the Administrators president, general counsel and secretary), and their

respective staffs.

Two of our executive officers, David Gladstone (our chairman and chief executive officer) and Terry Lee Brubaker (our vice chairman and chief operating officer) serve as members of the board of managers and executive officers of

the Administrator, which is 100% indirectly owned and controlled by Mr.

Our allocable portion of the Administrators expenses is generally derived by multiplying the

Administrators total expenses by the approximate percentage of time during the current quarter the Administrators employees performed services for us in relation to their time spent performing services for all companies serviced by the

Administrator.

On July 9, 2019, our Board of Directors, including a majority of the directors who are not parties to the Administration Agreement or interested persons of either party, approved the renewal of the Administration Agreement

through August 31, 2020.

employees, including, our chief financial officer and treasurer, chief valuation officer, chief compliance officer, and general counsel and secretary, and their respective staffs.

Two of our executive officers, David Gladstone (our chairman and

chief executive officer) and Terry Lee Brubaker (our vice chairman and chief operating officer) serve as members of the board of managers and executive officers of the Administrator, which is 100% indirectly owned and controlled by

Another of our officers, Mr.

LiCalsi (our general counsel & secretary), serves as the Administrators president as well as the executive vice president of administration for the Adviser.

Our allocable portion of the Administrators expenses is generally derived by multiplying the Administrators total expenses by the approximate

percentage of time during the current quarter the Administrators employees performed services for us in relation to their time spent performing services for all companies serviced by the Administrator.

On July 14, 2020, our Board of

Directors, including a majority of the directors who are not parties to the Administration Agreement or interested persons of either party, approved the annual renewal of the Administration Agreement through August 31, 2021.

Transactions with Gladstone Securities, LLC

Securities, LLC (Gladstone Securities) is a privately held broker dealer registered with the Financial Industry Regulatory Authority and insured by the Securities Investor Protection Corporation.

Gladstone Securities is an affiliate of

ours, as its parent company is 100% owned and controlled by David Gladstone, our chairman and chief executive officer.

Gladstone also serves on the board of managers of Gladstone Securities.

Dealer Manager Agreement

On May 22, 2020, the Company, entered into a dealer manager agreement (the Dealer Manager Agreement), with Gladstone Securities whereby

Gladstone Securities would serve as the Companys exclusive dealer manager in connection with the Companys offering (the Offering) of up to $350.0 million aggregate principal amount of the Companys 6.00% Notes due

2040 (the Notes) on a reasonable best efforts basis.

From inception of the Offering through February 23, 2021, no Notes had been sold and the Company terminated the Dealer Manager Agreement and the Offering as of such

Other Transactions

Gladstone Securities, LLC (Gladstone Securities), which is 100% indirectly owned and controlled by Mr.

Gladstone, our chairman and chief

executive officer, is a privately-held broker-dealer registered with the Financial Industry Regulatory Authority and insured by the Securities Investor Protection Corporation.

From time to time, Gladstone Securities provides other services, such as

investment banking and due diligence services, to certain of our portfolio companies, for which it receives a fee.

Any such fees paid by portfolio companies to Gladstone Securities do not impact the fees we pay to the Adviser or the non-contractual, unconditional, and irrevocable credits against the base management fee.

The fees received by Gladstone Securities from our portfolio companies totaled $0.8 million, $0.7 million, and

$0.6 million during the years ended March 31, 2020, 2019, and 2018, respectively.

Related Party Fees Due

From time to time,

Gladstone Securities provides other services, such as investment banking and due diligence services, to certain of our portfolio companies, for which it receives a fee.

Any such fees paid by portfolio companies to Gladstone Securities do not impact

the fees we pay to the Adviser or the non-contractual, unconditional, and irrevocable credits against the base management fee.

During the years ended March 31, 2021, 2020, and 2019, the fees received by

Gladstone Securities from portfolio companies totaled $0.6 million, $0.8 million, and $0.7 million, respectively.

Related Party Fees

Amounts due to related parties on our accompanying Consolidated Statements of Assets and Liabilities were as follows:

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Includes a capital gains-based incentive fee of $12.4 million and $7.4 million as of March 31,

2020 and 2019, respectively, recorded in accordance with GAAP requirements and which is not contractually due under the terms of the Advisory Agreement.

2021 and 2020, respectively, recorded in accordance with GAAP requirements and which was not contractually due under the terms of the Advisory Agreement.

Refer to Note 4 Related Party Transactions Transactions with the

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2020, respectively.

These amounts are generally settled in the quarter after being incurred and have been included in Other assets, net on the accompanying Consolidated Statements of Assets and Liabilities as of March 31, 2020 and 2019,

respectively.

Line of Credit

On August 22, 2018, we, through our wholly-owned subsidiary, Business Investment, entered into Amendment No.

4 to the Fifth

Amended and Restated Credit Agreement, originally entered into on April 30, 2013 and as previously amended, with KeyBank National Association (KeyBank) as administrative agent, lead arranger, managing agent and lender, the Adviser,

as servicer, and certain other lenders party thereto.

The revolving period was extended to August 22, 2021, and if not renewed or extended by such date, all principal and interest will be due and payable on August 22, 2023 (two years after

the revolving period end date).

As of March 31, 2020, the Credit Facility provided a one-year extension option that may be exercised on or before August 22, 2020 amendment date, subject to approval

by all lenders.

Additionally, the Credit Facility commitment amount was increased from $165.0 million to $200.0 million and, subject to certain terms and conditions, can be expanded to a total facility amount of $300.0 million through

additional commitments from existing or new lenders.

The amendment also reduced the Companys minimum asset coverage with respect to senior

securities representing indebtedness from 200% to 150% (or such percentage as may be set forth in Section 18 of the 1940 Act, as modified by Section 61 of the 1940 Act).

Advances under the Credit Facility generally bear interest at 30-day

London Interbank Offered Rate (LIBOR) plus 2.85% per annum until August 21, 2021, with the margin then increasing to 3.10% for the period from August 22, 2021 to August 21, 2022, and increasing further to 3.35% thereafter.

The Credit Facility has an unused commitment fee on the daily unused commitment amount of 0.50% per annum if the average unused commitment amount for the period is less than or equal to 50% of the total commitment amount, 0.75% per annum if the

average unused commitment amount for the period is greater than 50% but less than or equal to 65% of the total commitment amount, and 1.00% per annum if the average unused commitment amount for the period is greater than 65% of the total commitment

These amounts are generally settled in the quarter subsequent to being incurred and have been included in Other assets, net on the accompanying Consolidated Statements of Assets and Liabilities as of March 31, 2021

and 2020, respectively.

Revolving Line of Credit

On March 8, 2021, we,

through our wholly-owned subsidiary, Business Investment, entered into Amendment No.

6 to the Fifth Amended and Restated Credit Agreement, originally entered into on April 30, 2013 and as previously amended, with KeyBank National

Association (KeyBank) as administrative agent, lead arranger, managing agent and lender, the Adviser, as servicer, and certain other lenders party thereto.

The revolving period

was extended to February 29, 2024, and if not renewed or extended by such date, all principal and interest will be due and payable on February 28, 2026 (two years after the revolving

period end date).

As of March 31, 2021, the Credit Facility provided two one-year extension options that may be exercised on or before the first and second anniversary of March 8, 2021, subject to

approval by all lenders.

Additionally, the COVID-19 Relief Period (described below) was extended to September 30, 2021.

On August 10, 2020, we, through Business Investment, entered into Amendment No.

5 to the Credit Facility.

Among other things, Amendment No.

amended the Credit Facility to (i) add London Interbank Offered Rate (LIBOR) replacement language;

(ii) implement a 0.5% LIBOR floor;

(iii) reduce the facility size from $200.0 million to $180.0 million, which

may be expanded to $300.0 million through additional commitments;

and (iv) provide certain other changes to existing terms and covenants.

In addition, Amendment No.

5 provided for certain temporary changes during the COVID-19 Relief Period (August 10, 2020 until March 31, 2021, which may be extended, subject to certain conditions) including:

(i) amending the definition of Effective Advance Rate, provided

that during such period the overall effective advance rate does not exceed 55%;

and (ii) removing or changing certain Excess Concentration Limits (as defined in the Credit Facility).

Advances under the Credit Facility generally bear interest at 30-day LIBOR, subject to a floor of 0.5%, plus 2.85% per

annum until February 29, 2024, with the margin then increasing to 3.10% for the period from February 29, 2024 to February 28, 2025, and increasing further to 3.35% thereafter.

The Credit Facility has an unused commitment fee on the

daily unused commitment amount of 0.50% per annum if the average unused commitment amount for the period is less than or equal to 50% of the total commitment amount, 0.75% per annum if the average unused commitment amount for the period is greater

than 50% but less than or equal to 65% of the total commitment amount, and 1.00% per annum if the average unused commitment amount for the period is greater than 65% of the total commitment amount.

The following tables summarize noteworthy information related to the Credit Facility:

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Amounts collected in the lockbox account with KeyBank are presented as Due from administrative agent on the

Consolidated Statements of Assets and Liabilities.

Among other things, the Credit Facility contains a performance guaranty that requires us to

maintain (i) a minimum net worth (defined in the Credit Facility to include our mandatory redeemable term preferred stock) of the greater of $210.0 million or $210.0 million plus 50% of all equity and subordinated debt raised minus

50% of any equity or subordinated debt redeemed or retired after November 16, 2016, which equated to $220.3 million as of March 31, 2020, (ii) asset coverage with respect to senior securities representing indebtedness of at least 150%

(or such percentage as may be set forth in Section 18 of the 1940 Act, as modified by Section 61 of the 1940 Act);

accompanying Consolidated Statements of Assets and Liabilities.

Among other things, the Credit Facility contains a performance guaranty that

requires us to maintain (i) a minimum net worth (defined in the Credit Facility to include our mandatory redeemable term preferred stock) of

the greater of $210.0 million or $210.0 million plus 50% of all equity and subordinated debt raised minus 50% of any equity or subordinated debt redeemed or retired after

November 16, 2016, which equated to $266.2 million as of March 31, 2021, (ii) asset coverage with respect to senior securities representing indebtedness of at least 150% (or such percentage as may be set forth in Section 18 of

the 1940 Act, as modified by Section 61 of the 1940 Act);

and (iii) our status as a BDC under the 1940 Act and as a RIC under the Code.

As of March 31, 2020, and as defined

in the performance guaranty of the Credit Facility, we had a net worth of $497.2 million, asset coverage on our senior securities representing indebtedness of 993.5%, calculated in compliance with the requirements of Sections 18 and 61 of the

1940 Act, and an active status as a BDC and RIC.

As of March 31, 2020, we were in compliance with all covenants under the Credit Facility.

Secured Borrowing

In August 2012, we entered into a

participation agreement with a third-party related to $5.0 million of our secured second lien term debt investment in Ginsey Home Solutions, Inc.

In May 2014, we amended the agreement with the third-party to include an

additional $0.1 million.

ASC Topic 860, Transfers and Servicing requires us to treat the participation as a financing-type transaction.

Specifically, the third-party has a senior claim to our remaining investment in the event

of default by Ginsey which, in part, resulted in the loan participation bearing a rate of interest lower than the contractual rate established at origination.

Therefore, our accompanying Consolidated Statements of Assets and Liabilities

reflect the entire secured second lien term debt investment in Ginsey and a corresponding $5.1 million secured borrowing liability.

The secured borrowing has a stated fixed interest rate of 7.0% and a maturity date of January 3, 2021.

We elected to apply the fair value option of

ASC Topic 825, Financial Instruments , to the Credit Facility, which was consistent with our application of ASC 820 to our investments.

Generally, the fair value of the Credit Facility is determined using a yield analysis, which

includes a DCF calculation and also takes into account the assumptions the Valuation Team believes market participants would use, including the estimated remaining life, counterparty credit risk, current market yield and interest rate spreads of

similar securities as of the measurement date.

At March 31, 2020 and 2019, the discount rate used to determine the fair value of the Credit Facility was 30-day LIBOR, plus 2.85% per annum, plus

an unused commitment fee of 1.0%.

Generally, an increase or decrease in the discount rate used in the DCF calculation may result in a corresponding decrease or increase, respectively, in the fair value of the Credit Facility.

each of March 31, 2020 and 2019, the Credit Facility was valued using Level 3 inputs and any changes in its fair value are recorded in Net unrealized depreciation of other on our accompanying Consolidated Statements of

The following tables provide relevant information and disclosures about the Credit Facility as of and for the years ended March 31,

2020 and 2019, as required by ASC 820:

As of March 31, 2021, and as defined in the performance guaranty of the Credit Facility, we had a

net worth of $597.1 million, asset coverage on our senior securities representing indebtedness of 398.0%, calculated in compliance with the requirements of Sections 18 and 61 of the 1940 Act, and an active status as a BDC and RIC.

March 31, 2021, we were in compliance with all covenants under the Credit Facility.

We elected to apply the fair value option of ASC Topic 825, Financial Instruments , to the Credit Facility, which was consistent with our

application of ASC 820 to our investments.

Generally, the fair value of the Credit Facility is determined using a yield analysis, which includes a DCF calculation and also takes into account the assumptions the Valuation Team believes market

participants would use, including the estimated remaining life, counterparty credit risk, current market yield and interest rate spreads of similar securities as of the measurement date.

At March 31, 2021, the discount rate used to determine

the fair value of the Credit Facility was 30-day LIBOR, with a 0.5% floor, plus 2.85% per annum, plus an unused commitment fee of 1.0%.

At March 31, 2020, the discount rate used to determine the

fair value of the Credit Facility was 30-day LIBOR, plus 2.85% per annum, plus an unused commitment fee of 1.0%.

Generally, an increase or decrease in the discount rate used in the DCF calculation

may result in a corresponding decrease or increase, respectively, in the fair value of the Credit Facility.

At each of March 31, 2021 and 2020, the Credit Facility was valued using Level 3 inputs and any changes in its fair value are

recorded in Net unrealized depreciation of other on our accompanying Consolidated Statements of Operations .

The following tables provide

relevant information and disclosures about the Credit Facility as of and for the years ended March 31, 2021 and 2020, as required by ASC 820:

Level 3 Borrowings

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Fair value at March 31, 2019

Unrealized appreciation

Fair value at March 31, 2020

The fair value of the collateral under the Credit Facility was $496.4 million and $536.3 million as of

March 31, 2020 and 2019, respectively.

The fair value of the collateral under the Credit Facility was $524.0 million and $496.4 million

as of March 31, 2021 and 2020, respectively.

Notes Payable

In March 2021, we completed a public offering of 5.00% Notes due 2026 with an aggregate principal amount of $127.9 million (the 2026 Notes),

which resulted in net proceeds of approximately $123.8 million after deducting underwriting discounts, commissions and offering costs borne by us.

The 2026 Notes are traded under the ticker symbol GAINN on the Nasdaq Global Select

Market (Nasdaq).

The 2026 Notes will mature on May 1, 2026 and may be redeemed in whole or in part at any time or from time to time at the Companys option on or after May 1, 2023.

The 2026 Notes bear interest at a rate of

5.00% per year, which is payable quarterly in arrears.

The indenture relating to the 2026 Notes contains certain covenants, including (i) an

inability to incur additional debt or issue additional debt or preferred securities unless the Companys asset coverage meets the threshold specified in the 1940 Act after such borrowing, (ii) an inability to declare any dividend or

distribution (except a dividend payable in our stock) on a class of our capital stock or to purchase shares of our capital stock unless the Companys asset coverage meets the threshold specified in the 1940 Act at the time of (and giving effect

to) such declaration or purchase, and (iii) if, at any time, we are not subject to the reporting requirements of the Exchange Act, we will provide the holders of the 2026 Notes, as applicable, and the trustee with audited annual consolidated

financial statements and unaudited interim consolidated financial statements.

The 2026 Notes are recorded at the aggregate principal amount, less

underwriting discounts, commissions, and offering costs, on our accompanying Consolidated Statements of Assets and Liabilities .

Total underwriting discounts, commissions, and offering costs related to this offering were

$4.1 million, which have been recorded as discounts to the aggregate principal amount on our accompanying Consolidated Statements of Assets and Liabilities and are being amortized over the period ending May 1, 2026, the

maturity date.

The following table summarizes our 2026 Notes as of March 31, 2021:

March 2, 2021

Notes payable,

The 2026 Notes can be redeemed at our option at any time on or after May 1, 2023.

As of March 31, 2021 and 2020, asset coverage on our senior securities representing indebtedness,

calculated pursuant to Sections 18 and 61 of the 1940 Act, was 398.0% and 993.5%, respectively.

Reflected as a line item on our accompanying Consolidated Statement of Assets and Liabilities pursuant to the

adoption of Accounting Standard Update 2015-03, Simplifying the Presentation of Debt Issuance Costs.

The fair value, based on the last reported closing price, of the 2026 Notes as of March 31, 2021 was $132.3 million.

We consider the closing price

of the 2026 Notes to be a Level 1 input within the ASC 820 hierarchy.

Secured Borrowing

In August 2012, we entered into a participation agreement with a third-party related to $5.0 million of our secured second lien term debt investment in

Ginsey Home Solutions, Inc.

In May 2014, we amended

the agreement with the third-party to include an additional $0.1 million.

ASC Topic 860, Transfers and Servicing requires us to treat the participation as a financing-type

Specifically, the third-party has a senior claim to our remaining investment in the event of default by Ginsey which, in part, resulted in the loan participation bearing a rate of interest lower than the contractual rate established at

Therefore, our accompanying Consolidated Statements of Assets and Liabilities reflect the entire secured second lien term debt investment in Ginsey and a corresponding $5.1 million secured borrowing liability.

borrowing has a stated fixed interest rate of 7.0% and a maturity date of January 3, 2025.

MANDATORILY REDEEMABLE PREFERRED STOCK

In August 2018, we completed a public offering of 2,990,000 shares of 6.375% Series E Cumulative Term Preferred Stock (our Series E Term Preferred

Stock or Series E) at a public offering price of $25.00 per share.

Gross proceeds totaled $74.8 million and net proceeds, after deducting underwriting discounts and offering costs borne by us, were $72.1 million.

underwriting discounts and offering costs related to this offering were $2.7 million, which have been recorded as discounts to the liquidation value on our accompanying Consolidated Statements of Assets and Liabilities and are

being amortized over the period ending August 31, 2025, the mandatory redemption date.

The shares of Series E Term Preferred Stock are traded under

the ticker symbol GAINL on the Nasdaq Global Select Market (Nasdaq).

Our Series E Term Preferred Stock is not convertible into our common stock or any other security and provides for a fixed dividend equal to 6.375% per year,

payable monthly.

We are required to redeem all shares of our outstanding Series E Term Preferred Stock on August 31, 2025, for cash at a redemption price equal to $25.00 per share, plus an amount equal to accumulated but unpaid dividends, if

any, to, but excluding, the date of redemption.

In addition, two other potential mandatory redemption triggers are as follows:

(1) upon the occurrence of certain events that would constitute a change in control of us, we would be required to

redeem all of our outstanding Series E Term Preferred Stock, and (2) if we fail to maintain asset coverage as required by Sections 18 and 61 of the 1940 Act (which is currently 150%) and are unable to correct such failure within a specific

amount of time, we are required to redeem a portion of our outstanding Series E Term Preferred Stock or otherwise cure the asset coverage redemption trigger (we may also redeem additional securities to cause asset coverage to be up to 200%).

also voluntarily redeem all or a portion of our Series E Term Preferred Stock at our sole option at the redemption price at any time on or after August 31, 2020.

In August 2018, we used the proceeds from the issuance of our Series E Term Preferred Stock, along with

borrowings under the Credit Facility, to voluntarily redeem all outstanding shares of our 6.750% Series B Cumulative Term Preferred Stock (our Series B Term Preferred Stock) and 6.500% Series C Cumulative Term Preferred Stock (our

Series C Term Preferred Stock), each of which had a liquidation preference of $25.00 per share.

In connection with the voluntary redemption of our Series B Term Preferred Stock and Series C Term Preferred Stock, we incurred a loss on

extinguishment of debt of $1.7 million, which was recorded in Realized loss on other in our accompanying Consolidated Statements of Operations and which was primarily comprised of unamortized deferred issuance costs at the time

of redemption.

In September 2016, we completed a public offering of 2,300,000 shares of 6.25% Series D Cumulative Term Preferred Stock (our Series

D Term Preferred Stock or Series D) at a public offering price of $25.00 per share.

In August 2018, we completed a public offering of 2,990,000 shares of 6.375% Series E Cumulative Term Preferred Stock (our Series E Term

Preferred Stock or Series E) at a public offering price of $25.00 per share.

Gross proceeds totaled $74.8 million and net proceeds, after deducting underwriting discounts and offering costs borne by us, were

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Total underwriting discounts and offering costs related to this offering were $2.7 million, which have been recorded as discounts to the liquidation value on our accompanying Consolidated Statements of Assets and

Liabilities and are being amortized over the period ending September 30, 2023, the mandatory redemption date.

The shares of Series D Term

Preferred Stock are traded under the ticker symbol GAINM on the Nasdaq.

Our Series D Term Preferred Stock is not convertible into our common stock or any other security and provides for a fixed dividend equal to 6.25% per year, payable

We are required to redeem all shares of our outstanding Series D Term Preferred Stock on September 30, 2023, for cash at a redemption price equal to $25.00 per share, plus an amount equal to accumulated but unpaid dividends, if any,

to, but excluding, the date of redemption.

Liabilities and are being amortized over the period ending August 31, 2025, the mandatory redemption date.

The shares of Series E Term

Preferred Stock are traded under the ticker symbol GAINL on the Nasdaq Global Select Market (Nasdaq).

Our Series E Term Preferred Stock is not convertible into our common stock or any other security and provides for a fixed

dividend equal to 6.375% per year, payable monthly.

We are required to redeem all shares of our outstanding Series E Term Preferred Stock on August 31, 2025, for cash at a redemption price equal to $25.00 per share, plus an amount equal to

accumulated but unpaid dividends, if any, to, but excluding, the date of redemption.

In addition, two other potential mandatory redemption triggers are as follows:

(1) upon the occurrence of certain events that would constitute a change in control of us, we would be required to redeem

all of our outstanding Series D Term Preferred Stock, and (2) if we fail to maintain an asset coverage ratio of at least 200% and are unable to correct such failure within a specific amount of time, we are required to redeem a portion of our

outstanding Series D Term Preferred Stock or otherwise cure the ratio redemption trigger (and we may also redeem additional securities to cause the asset coverage ratio to be 240%).

We may also voluntarily redeem all or a portion of our Series D

Term Preferred Stock at our sole option at the redemption price at any time.

The following tables summarize our Series D Term Preferred Stock and our

Series E Term Preferred Stock outstanding as of March 31, 2020 and 2019:

(1) upon the occurrence of certain events that would constitute a change in

control of us, we would be required to redeem all of our outstanding Series E Term Preferred Stock, and (2) if we fail to maintain asset coverage as required by Sections 18 and 61 of the 1940 Act (which is currently 150%) and are unable to

correct such failure within a specific amount of time, we are required to redeem a portion of our outstanding Series E Term Preferred Stock or otherwise cure the asset coverage redemption trigger (we may also redeem additional securities to cause

asset coverage to be up to 200%).

We may also voluntarily redeem all or a portion of our Series E Term Preferred Stock at any time.

In August 2018, we

used the proceeds from the issuance of our Series E Term Preferred Stock, along with borrowings under the Credit Facility, to voluntarily redeem all outstanding shares of our 6.750% Series B Cumulative Term Preferred Stock (our Series B Term

Preferred Stock) and 6.500% Series C Cumulative Term Preferred Stock (our Series C Term Preferred Stock), each of which had a liquidation preference of $25.00 per share.

In connection with the voluntary redemption of our Series B

Term Preferred Stock and Series C Term Preferred Stock, we incurred a loss on extinguishment of debt of $1.7 million, which was recorded in Realized loss on other in our accompanying Consolidated Statements of Operations and

which was primarily comprised of unamortized deferred issuance costs at the time of redemption.

In March 2021, we used a portion of the proceeds from the

issuance of our 2026 Notes to voluntarily redeem all outstanding shares of our 6.25% Series D Cumulative Term Preferred Stock (or Series D Term Preferred Stock or Series D), which had a liquidation preference of $25.00 per

In connection with the voluntary redemption of our Series D Term Preferred Stock, we incurred a loss on extinguishment of debt of $0.8 million, which was recorded in Realized loss on other in our accompanying Consolidated Statements

of Operations and which was primarily comprised of unamortized deferred issuance costs at the time of redemption.

The following tables summarize our Series D Term Preferred Stock and our Series E Term Preferred Stock

outstanding as of March 31, 2021 and 2020:

As of March 31, 2021 :

September 26, 2016

September 30, 2023

Initial Issuance

Mandatory Redemption

August 22,2018

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As of March 31, 2020 :

Initial Issuance

Mandatory Redemption

September 26, 2016

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Term preferred stock,

Our Series D Term Preferred Stock is currently redeemable at our option and our Series E Term Preferred Stock

is redeemable at our option any time after August 31, 2020.

We voluntarily redeemed all outstanding shares of our Series D Term Preferred Stock on March 3, 2021.

Our Series E Term Preferred Stock is currently redeemable at our option.

As of March 31, 2021 and 2020, asset coverage on our senior securities that are stock, calculated pursuant

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July 24, 2020

July 31, 2020

July 14, 2020

August 24, 2020

August 31, 2020

July 14, 2020

September 23, 2020

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Declaration Date

Series B Term

Series C Term

Series D Term

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July 31, 2019

July 31, 2018

July 10, 2018

August 20, 2019

August 30, 2019

July 10, 2018

September 17, 2019

September 30, 2019

September 6, 2018

September 19, 2018

September 28, 2018

October 8, 2019

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Declaration Date

Series B Term

Series C Term

Series D Term

Series E Term

April 10, 2018

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September 28, 2018

September 6, 2018

September 19, 2018

September 28, 2018

October 9, 2018

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March 29, 2019

We voluntarily redeemed all outstanding shares of our Series D Term Preferred Stock on March 3, 2021.

We issued our Series E Term Preferred Stock on August 22, 2018.

Represents accrued and unpaid dividends up to, but excluding, the redemption date of March 3, 2021.

We voluntarily redeemed all outstanding shares of our Series B Term Preferred Stock and Series C Term Preferred

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The federal income tax characteristics of dividends paid

to our preferred stockholders generally constitute ordinary income or capital gains to the extent of our current and accumulated earnings and profits and is reported after the end of the calendar year based on tax information for the full fiscal

Estimates of tax characterization made on a quarterly basis may not be representative of the actual tax characterization of dividends for the full year.

to our preferred stockholders generally constitute ordinary income or capital gains to the extent of our current and accumulated earnings and profits and are

reported after the end of the calendar year based on tax information for the full fiscal year.

Estimates of tax characterization made on a quarterly basis may not be representative of the actual

tax characterization of dividends for the full year.

Estimates made on a quarterly basis are updated as of each interim reporting date.

characterization of dividends paid to our preferred stockholders during the calendar year ended December 31, 2019 was 27.3% from ordinary income and 72.7% from capital gains.

The tax characterization of dividends paid to our preferred

stockholders during the calendar year ended December 31, 2018 was 81.2% from ordinary income and 18.8% from capital gains.

In accordance with ASC

Topic 480, Distinguishing Liabilities from Equity , mandatorily redeemable financial instruments should be classified as liabilities on the balance sheet.

Our mandatorily redeemable preferred stock is recorded at the liquidation

preference, less discounts, on our accompanying Consolidated Statements of Assets and Liabilities as of March 31, 2020 and 2019.

The related dividend payments to preferred stockholders are treated as dividend expense on our

accompanying Consolidated Statements of Operations on the ex-dividend date.

The following table summarizes the fair value of each of our series of mandatorily redeemable preferred

stock based on the last reported closing sale price as of March 31, 2020 and 2019, each of which we consider to be a Level 1 input within the fair value hierarchy:

The tax characterization of dividends paid to our preferred stockholders during the calendar year ended

December 31, 2020 was 42.1% from ordinary income and 57.9% from capital gains.

The tax characterization of dividends paid to our preferred stockholders during the calendar year ended December 31, 2019 was 27.3% from ordinary income and

72.7% from capital gains.

In accordance with ASC Topic 480, Distinguishing Liabilities from Equity , mandatorily redeemable financial

instruments should be classified as liabilities on the balance sheet.

Our mandatorily redeemable preferred stock is recorded at the liquidation preference, less discounts, on our accompanying Consolidated Statements of Assets and Liabilities

as of March 31, 2021 and 2020.

The related dividend payments to preferred stockholders are treated as dividend expense on our accompanying Consolidated Statements of Operations on the ex-dividend

The following table summarizes the fair value of each of our series of mandatorily redeemable preferred stock based on the last reported closing

sale price as of March 31, 2021 and 2020, each of which we consider to be a Level 1 input within the fair value hierarchy:

Fair Value as of March 31,

Series D Term Preferred Stock

Series D Term Preferred Stock (A)

Series E Term Preferred Stock

We voluntarily redeemed all outstanding shares of our Series D Term Preferred Stock on March 3, 2021.

REGISTRATION STATEMENT AND COMMON EQUITY OFFERINGS

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In December 2019, we entered

into equity distribution agreements with Wedbush Securities, Inc.

(Wedbush), Cantor Fitzgerald & Co., and Ladenburg Thalmann & Co., Inc.

(each a Sales Agent), under which we have the ability to issue and

sell shares of our common stock, from time to time, through the Sales Agents, up to an aggregate offering price of $35.0 million in what is commonly referred to as an

at-the-market program (ATM Program).

This ATM Program replaced the February 2018 ATM Program discussed below.

As of March 31, 2020, we had

remaining capacity to sell up to $31.9 million of common stock under the December 2019 ATM Program.

During the year ended March 31, 2020, we

sold 227,004 shares of our common stock under the December 2019 ATM Program with Wedbush at a weighted-average gross price of $13.80 per share and raised approximately $3.1 million of gross proceeds.

The weighted-average net price per share,

after deducting commissions and offering costs borne by us, was $13.55 and resulted in total net proceeds of approximately $3.1 million.

into equity distribution agreements with Wedbush Securities, Inc., Cantor Fitzgerald & Co., and Ladenburg Thalmann & Co., Inc.

(each a Common Stock ATM Sales Agent), under which we have the ability to issue and sell

shares of our common stock, from time to time, through the Common Stock ATM Sales Agents, up to an aggregate offering price of $35.0 million in an at-the-market

program (the Common Stock ATM Program).

As of March 31, 2021, we had remaining capacity to sell up to $30.1 million of common stock under the Common Stock ATM Program.

During the year ended March 31, 2021, we sold 155,560 shares of our common stock under the Common Stock ATM Program at a weighted-average gross price of

$11.39 per share and raised approximately $1.8 million of gross proceeds.

The weighted-average net price per share, after deducting commissions and offering costs borne by us, was $11.17 and resulted in total net proceeds of approximately

$1.7 million.

These sales were above our then current estimated NAV per share.

In February 2018, we entered into equity distribution agreements with Cantor Fitzgerald & Co.

(Cantor), Ladenburg Thalmann &

Co., Inc., and Wedbush Securities, Inc., under which we had the ability to issue and sell shares of our common stock, from time to time, through the Sales Agents, up to an aggregate offering price of $35.0 million in an ATM program.

February 2018 ATM Program was replaced by the December 2019 ATM Program.

During the year ended March 31, 2019, we sold 168,824 shares of our common

stock under the February 2018 ATM Program with Cantor at a weighted-average gross price of $11.09 per share and raised approximately $1.9 million of gross proceeds.

The weighted-average net price per share, after deducting commissions and

offering costs borne by us, was $10.87 and resulted in total net proceeds of approximately $1.8 million.

Certain of these sales were below our then-current estimated NAV per share during the sales period, with a discount of $0.002 per share,

when comparing the sales price per share, after deducting commissions, to the then-current estimated NAV per share;

however, the net dilutive effect (after commissions and offering costs borne by us) of these sales was $0.00 per common share as a

result of the small number of shares sold at a slight discount to NAV per share and resulting rounding.

In aggregate, the sales during the year ended March 31, 2019 were above our then-current estimated NAV per share.

During the year ended March 31, 2018, we sold 127,412 shares of our common stock under the February 2018 ATM Program with Cantor at a weighted-average

gross price of $10.45 per share and raised approximately $1.3 million of gross proceeds.

The weighted-average net price per share, after deducting commissions and offering costs borne by us, was $10.24 and resulted in total net proceeds of

approximately $1.3 million.

These sales were below our then current estimated NAV per share during the sales period, with such discounts ranging from $0.01 per share to $0.07 per share, when comparing the sales price per share, after deducting

commissions, to the then current estimated NAV per share;

however, the net dilutive effect (after commissions and offering costs borne by us) of these sales was $0.00 per common share as a result of the small number of shares sold at a slight

discount to NAV per share and resulting rounding.

In May 2017, we completed a public offering of 2.1 million shares of our common stock at a public

offering price of $9.38 per share, which was below our then current NAV of $9.95 per share.

Gross proceeds totaled $19.7 million and net proceeds, after deducting underwriting discounts and commissions and offering costs borne by us, were

$18.7 million, which were used to repay borrowings under the Credit Facility and for other general corporate purposes.

In June 2017, the underwriters partially exercised their over-allotment option and purchased an additional 155,265 shares at

the public offering price of $9.38 per share and on the same terms and conditions solely to cover over-allotments, which resulted in gross proceeds of $1.5 million and net proceeds, after deducting underwriting discounts and commissions and

offering costs borne by us, of $1.4 million.

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS PER WEIGHTED-AVERAGE

The following table sets forth the computation of basic and diluted Net (decrease) increase in net assets resulting from operations per

weighted-average common share for the years ended March 31, 2020, 2019, and 2018:

During the year ended March 31, 2020, we sold 227,004 shares of our common stock under the Common Stock

ATM Program at a weighted-average gross price of $13.80 per share and raised approximately $3.1 million of gross proceeds.

The weighted-average net price per share, after deducting commissions and offering costs borne by us, was $13.55 and

resulted in total net proceeds of approximately $3.1 million.

These sales were above our then current estimated NAV per share.

During the year ended

March 31, 2019, we sold 168,824 shares of our common stock under a previous Common Stock ATM Program at a weighted-average gross price of $11.09 per share and raised approximately $1.9 million of gross proceeds.

The weighted-average net

price per share, after deducting commissions and offering costs borne by us, was $10.87 and resulted in total net proceeds of approximately $1.8 million.

Certain of these sales were below our then-current estimated NAV per share during the

sales period, with a discount of $0.002 per share, when comparing the sales price per share, after deducting commissions, to the then-current estimated NAV per share;

however, the net dilutive effect (after commissions and offering costs borne by

us) of these sales was $0.00 per common share as a result of the small number of shares sold at a slight discount to NAV per share and resulting rounding.

In aggregate, the sales during the year ended March 31, 2019 were above our then-current

estimated NAV per share.

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS PER WEIGHTED-AVERAGE COMMON SHARE

The following table sets forth the computation of basic and diluted Net increase (decrease) in net assets resulting from operations per weighted-average common

share for the years ended March 31, 2021, 2020, and 2019:

Year Ended March 31,

net (decrease) increase in net assets resulting from operations

net increase (decrease) in net assets resulting from operations

basic and diluted weighted-average common shares

Basic and diluted net (decrease) increase in net assets resulting from operations per

Basic and diluted net increase (decrease) in net assets resulting from operations per

weighted-average common share

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calendar year ended December 31, 2020 was 93.9% from ordinary income and 6.1% from capital gains.

The tax characterization of cash distributions paid to our common stockholders during the calendar year ended December 31, 2018 was 81.2%

from ordinary income and 18.8% from capital gains.

We paid the following monthly distributions to our common stockholders for the years ended March 31,

2020, 2019 and 2018:

The tax characterization of

cash distributions paid to our common stockholders during the calendar year ended December 31, 2019 was 67.8% from ordinary income and 32.2% from capital gains.

We paid the following monthly distributions to our common stockholders for the years ended March 31, 2021, 2020 and 2019:

Declaration Date

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July 24, 2020

July 31, 2020

July 14, 2020

August 24, 2020

August 31, 2020

September 4, 2019

September 13, 2019

July 14, 2020

September 23, 2020

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December 31, 2020

October 8, 2019

December 19, 2019

December 31, 2019

January 12, 2021

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March 31, 2021

Year ended March 31, 2020:

Year end March 31, 2021:

Declaration Date

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July 31, 2019

July 31, 2018

July 10, 2018

August 20, 2019

August 30, 2019

July 10, 2018

September 4, 2019

September 13, 2019

September 17, 2019

September 30, 2019

October 8, 2019

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Represents a supplemental distribution to common stockholders.

Aggregate cash distributions to our common stockholders declared and paid for the years ended March 31,

2020, 2019 and 2018 were $33.9 million, $30.5 million, and $28.9 million, respectively.

For each of the fiscal years ended March 31, 2020, 2019, and 2018, Investment Company Taxable Income exceeded distributions declared and

paid, and, in accordance with Section 855(a) of the Code, we elected to treat $17.9 million, $16.0 million, and $8.4 million, respectively, of the first distributions paid subsequent to fiscal

year-end as having been paid in the prior year.

In addition, for each of the fiscal years ended March 31, 2020, 2019, and 2018, net capital gains exceeded distributions declared and paid, and, in

Aggregate cash distributions to our common stockholders declared and paid for the years ended March 31, 2021, 2020 and 2019 were $30.9 million,

$33.9 million, and $30.5 million, respectively.

For the fiscal years ended March 31, 2021, 2020, and 2019, Investment Company Taxable

Income exceeded distributions declared and paid, and, in accordance with Section 855(a) of the Code, we elected to treat $16.1 million, $17.9 million, and $16.0 million, respectively, of the first distributions paid subsequent to

fiscal year-end, as having been paid in the prior year.

In addition, for the fiscal years ended March 31, 2021, 2020, and 2019, net capital gains exceeded distributions declared and paid, and, in

accordance with Section 855(a) of the Code, we elected to treat $8.5 million, $5.3 million, and $13.2 million, respectively, of the first distributions paid subsequent to fiscal year-end as

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pro-rata share of federal income tax paid by us on the retained gain, and (iii) increase the tax basis of their shares of common stock by an amount equal to the deemed distribution less the tax credit.

order to use the deemed distribution approach, we must provide written notice to our common stockholders prior to the expiration of 60 days after the close of the relevant taxable year.

For the years ended March 31, 2020 and 2019, we elected to

retain $38.0 million, or $1.15 per common share, and $50.0 million, or $1.52 per common share, respectively, of long-term capital gains and to treat them as deemed distributions to common stockholders.

For the years ended March 31,

2020 and 2019, we incurred $8.0 million, or $0.24 per common share, and $10.5 million, or $0.32 per common share, respectively, of federal income taxes on behalf of common stockholders, which were included in Taxes on deemed distribution

of long-term capital gains on our accompanying Consolidated Statements of Operations and in Other liabilities on our accompanying Consolidated Statements of Assets and Liabilities as of March 31, 2020 and 2019, respectively.

In addition, we obtained clarification of the treatment of deemed distributions with respect to Virginia state taxes from the Virginia Department of Revenue,

which ruled that Virginia state taxes are imposed.

Related to this matter, we previously recorded a $3.0 million reserve for uncertain tax positions, which was included in Taxes on deemed distribution of long-term capital gains on our

accompanying Consolidated Statements of Operations and in Other Liabilities on our accompanying Consolidated Statements of Assets and Liabilities as of and for the year ended March 31, 2019.

We will report and pay this amount with

an amended Virginia tax return expected to be filed in the near future.

As a result of the ruling, we also incurred $2.3 million of Virginia state taxes related to the deemed distribution for the year ended March 31, 2020, which was

included in Taxes on deemed distribution of long-term capital gains on our accompanying Consolidated Statements of Operations and in Other Liabilities on our accompanying Consolidated Statements of Assets and Liabilities as of and for

the year ended March 31, 2020.

We had no deemed distributions during the year ended March 31, 2018.

use the deemed distribution approach, we must provide written notice to our common stockholders prior to the expiration of 60 days after the close of the relevant taxable year.

For the year ended March 31, 2021, we did not elect to retain

long-term capital gains and to treat them as deemed distributions to common stockholders.

For the years ended March 31, 2020 and 2019, we elected to retain $38.0 million, or $1.15 per common share, and $50.0 million, or $1.52 per

common share, respectively, of long-term capital gains and to treat them as deemed distributions to common stockholders.

For the years ended March 31, 2020 and 2019, we incurred $8.0 million, or $0.24 per common share, and

$10.5 million, or $0.32 per common share, respectively, of federal income taxes on behalf of common stockholders, which were included in Taxes on deemed distribution of long-term capital gains on our accompanying Consolidated Statements of

Operations and in Other liabilities on our Consolidated Statements of Assets and Liabilities as of March 31, 2020 and 2019, respectively, which were paid subsequent to each fiscal year end.

In addition, we obtained clarification of the treatment of deemed distributions with respect to Virginia

state taxes from the Virginia Department of Revenue, which ruled that Virginia state taxes are imposed.

As a result of this ruling, we incurred $2.3 million and $3.0 million of Virginia state taxes related to the deemed distributions for

the years ended March 31, 2020 and 2019, respectively, which were included in Taxes on deemed distribution of long-term capital gains on our accompanying Consolidated Statements of Operations and in Other Liabilities on our

Consolidated Statements of Assets and Liabilities as of March 31, 2020 and 2019, respectively, and which were paid subsequent to March 31, 2020.

The components of our net assets on a tax basis were as follows:

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source-of-income and asset diversification requirements.

In addition, in order to qualify to be taxed as a RIC, we must distribute to stockholders at least 90% of our

Investment Company Taxable Income.

In addition, to qualify to be taxed as a RIC, we must distribute to stockholders at least 90% of our Investment

Company Taxable Income.

Our policy generally is to make distributions to our stockholders in an amount up to 100% of our Investment Company Taxable Income.

We may retain some or all of our net long-term capital gains, if any, and

designate them as deemed distributions, or distribute such gains to stockholders in cash.

Because we have distributed or intend to distribute 100% of our Investment Company Taxable Income and net long-term capital gains, no income tax provisions

have been recorded for the years ended March 31, 2020, 2019, and 2018.

In an effort to limit federal excise taxes, we have to distribute to

stockholders, during each calendar year, an amount close to the sum of (1) 98% of our ordinary income for the calendar year, (2) 98.2% of our net capital gains (both long-term and short-term), if any, for the

one-year period ending on October 31 of the calendar year and (3) any income realized, but not distributed, in the preceding period (to the extent that income tax was not imposed on such amounts),

less certain reductions, as applicable.

We incurred an excise tax of $0.8 million, $0.3 million, and $0.2 million for the calendar years ended December 31, 2019, 2018 and 2017, respectively.

Under the RIC Modernization Act, we are permitted to carryforward any capital losses that we may incur for an unlimited period, and such capital loss

carryforwards will retain their character as either short-term or long-term capital losses.

We may retain some or all of our net long-term capital gains, if any, and designate them as

deemed distributions, or distribute such gains to stockholders in cash.

Because we have distributed or intend to distribute 100% of our Investment Company Taxable Income and net long-term capital gains, no income tax provisions have been recorded

for the years ended March 31, 2021, 2020, and 2019.

In an effort to limit federal excise taxes, we have to distribute to stockholders, during each

calendar year, an amount close to the sum of (1) 98% of our ordinary income for the calendar year, (2) 98.2% of our net capital gains (both long-term and short-term), if any, for the one-year period ending on

October 31 of the calendar year and (3) any income realized, but not distributed, in the preceding period (to the extent that income tax was not imposed on such amounts), less certain reductions, as applicable.

We incurred an excise tax of

$0.5 million, $0.8 million, and $0.3 million for the calendar years ended December 31, 2020, 2019 and 2018, respectively.

Under the RIC Modernization Act, we are permitted to carryforward any capital losses that we may incur for

an unlimited period, and such capital loss carryforwards will retain their character as either short-term or long-term capital losses.

Our capital loss carryforward balance was $0 as of both March 31, 2021 and 2020.

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Commitments and Obligations

We may have line of credit commitments to certain of our portfolio companies that have not been fully drawn.

line of credit commitments have expiration dates and we expect many will never be fully drawn, the total line of credit commitment amounts do not necessarily represent future cash requirements.

We estimate the fair value of the combined unused line

of credit commitments as of March 31, 2020 and 2019 to be immaterial.

We may have line of credit and delayed draw term loan commitments to certain of our portfolio companies that have not been

Since these line of credit and delayed draw term loan commitments have expiration dates and we expect many will never be fully drawn, the total line of credit and delayed draw term loan commitment amounts do not necessarily represent

future cash requirements.

We estimate the fair value of the combined unused line of credit and delayed draw term loan commitments as of March 31, 2021 and 2020 to be immaterial.

We have also extended a guaranty on behalf of one of our portfolio companies.

As of March 31, 2020 and 2019, we have not been required to make any payments on this guaranty, or any guaranties that existed in previous periods, and we consider the credit risk to be remote and the fair value of the guaranty as of

March 31, 2020 and 2019 to be immaterial.

As of March 31, 2021 and 2020, we have not been required to make any

payments on this guaranty, or any guaranties that existed in previous periods, and we consider the credit risk to be remote and the fair value of the guaranty as of March 31, 2021 and 2020 to be immaterial.

As of March 31, 2021, the following guaranty was outstanding:

A $1.0 million continuing guaranty of a wholesale financing facility agreement (the Floor Plan

Facility) between DLL Finance LLC (f/k/a Agricredit Acceptance, LLC) and CCE.

The Floor Plan Facility provides CCE with financing to bridge the time and cash flow gap between the order and delivery of golf carts to customers.

The following table summarizes the principal balances of unused line of credit commitments and guaranties as of March 31, 2020 and

2019, which are not reflected as liabilities in the accompanying Consolidated Statements of Assets and Liabilities :

Facility) between DLL Finance LLC (f/k/a Agricredit Acceptance, LLC) and Country Club Enterprises, LLC.

The Floor Plan Facility provides Country Club Enterprises, LLC with financing to bridge the time and cash flow gap between the order and

delivery of golf carts to customers.

The following table summarizes the principal balances of unused line of credit and delayed draw term loan

commitments and guaranties as of March 31, 2021 and 2020, which are not reflected as liabilities in the accompanying Consolidated Statements of Assets and Liabilities :

As of March 31,

Unused line of credit commitments

Unused line of credit and delayed draw term loan commitments

FINANCIAL HIGHLIGHTS

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Taxes on deemed distributions of long-term capital gains

Net unrealized (depreciation) appreciation of investments and other

Net unrealized appreciation (depreciation) of investments and other

Total from investment operations

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price above the then current NAV per share.

During the years ended March 31, 2018 and 2016, the net dilutive effect is the result of issuing common shares at a price below the then current NAV per share.

During the year ended March 31, 2018, the net dilutive effect is the result of issuing common shares at a price below the then current NAV per share.

Represents the impact of the different share amounts (weighted-average basic common shares outstanding for the

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Calculated using the average balance of net assets at the end of each month of the reporting year.

Represents the total liquidation preference of our mandatorily redeemable preferred stock.

Represents the aggregate liquidation preference of our mandatorily redeemable preferred stock.

Ratio of net expenses to average net assets is computed using total expenses, net of any non-contractual, unconditional, and irrevocable credits of fees from the Adviser.

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the Adviser, the ratio of expenses to average net assets would have been 13.33%, 9.12%, 16.45%, 14.11%, and 13.46%, for the fiscal years ended March 31, 2021, 2020, 2019, 2018, and 2017, respectively.

Had we included Virginia state taxes

incurred on the deemed distributions of retained capital gains for the fiscal year ended March 31, 2020 and 2019, the ratio of net expenses to average net assets would have been 6.89% and 14.07%, respectively.

Had we included Virginia state taxes incurred on the deemed distributions of retained capital gains for the fiscal year ended March 31,

2020 and 2019, the ratio of net expenses to average net assets would have been 6.89% and 14.07%, respectively.

Had we not received any non-contractual, unconditional, and irrevocable

credits of fees from the Adviser, the ratio of net investment income (loss) to average net assets would have been 2.16%,6.20%, (1.22)%, 3.66%, and 4.19%, for the fiscal years ended March 31, 2021, 2020, 2019, 2018, and 2017, respectively.

SELECTED QUARTERLY DATA (UNAUDITED)

Year ended March 31, 2020

Quarter Ended

June 30, 2019

September 30, 2019

December 31, 2019

March 31, 2020

Total investment income

Net investment income

Net increase (decrease) in net assets resulting from operations

Net increase (decrease) in net assets resulting from operations per weighted-average common share

basic & diluted

Year ended March 31, 2019

Quarter Ended

June 30, 2018

September 30, 2018

December 31, 2018

March 31, 2019

Total investment income

Net investment income (loss)

Net increase in net assets resulting from operations

Net increase in net assets resulting from operations per weighted-average common share

basic & diluted

UNCONSOLIDATED SIGNIFICANT SUBSIDIARIES

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the investment company or its consolidated subsidiaries.

We had one unconsolidated subsidiary, Galaxy Tool Holding Corporation (Galaxy),

which met at least one of the significance conditions under Rule 1-02(w) of the SECs Regulation S-X as of or during at least one of the years ended March 31,

2020, 2019 and 2018.

Accordingly, pursuant to Rule 3-09 of Regulation S-X, audited and unaudited financial statements, as applicable, for Galaxy have been included as

exhibits to this Form 10-K.

We did not have any unconsolidated subsidiaries that met any of the significance conditions

under Rule 1-02(w)(2) of the SECs Regulation S-X as of or during at least one of the years ended March 31, 2021, 2020 and 2019.

SUBSEQUENT EVENTS

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In April 2021, our Board of

Directors declared the following monthly and supplemental cash distributions to common stockholders and monthly dividends to holders of our Series D Term Preferred Stock and Series E Term Preferred Stock:

Directors declared the following monthly and supplemental cash distributions to common stockholders and monthly dividends to holders of our Series E Term Preferred Stock:

Distribution per

Series D Term

Preferred Stock

Series E Term

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Represents a supplemental distribution to common stockholders.

COVID-19 Impact

We continue to closely monitor and work with our portfolio companies to navigate the significant challenges created by the

COVID-19 pandemic and are focused on ensuring the safety of the Advisers and Administrators personnel and of the employees of our portfolio companies, while also managing our ongoing business

While we are closely monitoring all of our portfolio companies, our portfolio continues to be diverse from

a geographic and industry perspective.

Through proactive measures and continued diligence, the management teams of our portfolio companies continue to demonstrate their ability to respond

effectively and efficiently to the challenges posed by COVID-19 and related orders imposed by state and local governments.

We believe we have sufficient levels of liquidity to support our existing

portfolio companies, as necessary, and selectively deploy capital in new investment opportunities.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data