What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-05-10 compared with 2022-05-11 · 437 added, 526 removed, 1496 unchanged (39% of the section changed)

2 unchanged sentences

Management’s Annual Report on Internal Controls Over Financial Reporting

Report of Independent Registered Public Accounting Firm

Consolidated Statements of Assets and Liabilities as of March 31, 2022 and March 31, 2021

Report of Independent Registered Public Accounting Firm (PCAOB ID 238 )

Consolidated Statements of Assets and Liabilities as of March 31, 2023 and 2022

Consolidated Statements of Operations for the years ended March 31, 2023 , 2022 and 2021

1 unchanged sentence

Consolidated Statements of Cash Flows for the years ended March 31, 2023 , 2022 and 2021

Consolidated Schedules of Investments as of March 31, 2022 and March 31, 2021

Consolidated Schedules of Investments as of March 31, 2023 and 2022

Notes to Consolidated Financial Statements

Table of Content s

Management’s Annual Report on Internal Control over Financial Reporting

9 unchanged sentences

Based on its assessment, management has concluded that our internal control over financial reporting was effective as of March 31, 2023.

Table of Content s

Report of Independent Registered Public Accounting Firm

1 unchanged sentence

Opinion on the Financial Statements

We have 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, 2022 and 2021, and the related consolidated statements of operations, of changes in net assets and of cash flows for each of the three years in the period ended March 31, 2022, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) as of March 31, 2022 and 2021 (collectively referred to as the “consolidated financial statements”).

We have 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, 2023 and 2022, and the related consolidated statements of operations, of changes in net assets and of cash flows for each of the three years in the period ended March 31, 2023, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (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, 2023 and 2022, 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, 2023 in conformity with accounting principles generally accepted in the United States of America.

20 unchanged sentences

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.

Table of Content s

Valuation of Level 3 Investments

8 unchanged sentences

/s/ PricewaterhouseCoopers LLP

Washington, D.C.

Washington, DC

We have served as the Company’s auditor since 2005.

Table of Content s

GLADSTONE INVESTMENT CORPORATION

17 unchanged sentences

Total borrowings

Mandatorily redeemable preferred stock, $0.001 par value per share, $25.00 liquidation preference per share;

0 and 5,990,000 shares authorized;

0 and 3,774,853 shares issued and outstanding, respectively, net

Accounts payable and accrued expenses

10 unchanged sentences

Capital in excess of par value

Cumulative net unrealized appreciation (depreciation) of investments 45,148

(Overdistributed) underdistributed net investment income

Cumulative net unrealized appreciation of investments 32,913

Cumulative net unrealized depreciation of other 29 —

Overdistributed net investment income

Accumulated net realized gain in excess of distributions

53 unchanged sentences

Affiliate investments 3,469 14,186 4,973

Control investments ( 277 ) — —

Other — ( 1,998 ) ( 782 )

Total net realized gain 10,753 12,444 10,592

Taxes on deemed distribution of long-term capital gains

Net unrealized appreciation (depreciation):

3 unchanged sentences

Total net unrealized appreciation (depreciation) ( 12,206 ) 74,882 13,924

Net realized and unrealized gain (loss), net of taxes on deemed distribution of long-term capital gains 87,326 24,516 (43,596)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

Net realized and unrealized gain (loss) ( 1,453 ) 87,326 24,516

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

$ 35,547 $ 102,316 $ 42,454

2 unchanged sentences

$ 1.11 $ 0.45 $ 0.54

Net increase (decrease) in net assets resulting from operations

Net increase in net assets resulting from operations

$ 1.07 $ 3.08 $ 1.28

12 unchanged sentences

Net realized gain on investments 10,753 14,442 11,374

Taxes on deemed distributions of long-term capital gains — — (10,260)

Net realized loss on other — ( 1,998 ) ( 782 )

Net unrealized appreciation (depreciation) of investments ( 12,235 ) 74,882 13,924

Net increase (decrease) in net assets from operations

Net unrealized depreciation of other 29 — —

Net increase in net assets from operations

35,547 102,316 42,454

2 unchanged sentences

( 30,833 ) ( 30,244 ) ( 27,407 )

Distributions to common stockholders from realized gains ( $0.26 , $0.10, and $0.28 per share, respectively)

Distributions to common stockholders from cumulative realized gains ( $ 0.49 , $ 0.26 , and $ 0.10 per share, respectively)

( 16,217 ) ( 8,606 ) ( 3,451 )

5 unchanged sentences

Discounts, commissions, and offering costs for issuance of common stock

( 77 ) — ( 35 )

Net increase in net assets from capital activity

12 unchanged sentences

CASH FLOWS FROM OPERATING ACTIVITIES

Net increase (decrease) in net assets resulting from operations

Net increase in net assets resulting from operations

$ 35,547 $ 102,316 $ 42,454

Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash (used in) provided by operating activities:

Adjustments to reconcile net increase in net assets resulting from operations to net cash (used in) provided by operating activities:

Purchase of investments

7 unchanged sentences

Net realized loss on other

Net unrealized (appreciation) depreciation of investments

Net unrealized depreciation (appreciation) of investments

12,235 ( 74,882 ) ( 13,924 )

Net unrealized depreciation of other ( 29 ) — —

Amortization of premiums, discounts, and acquisition costs, net

4 unchanged sentences

Changes in assets and liabilities:

(Increase) decrease in interest receivable

Decrease (increase) in interest receivable

Decrease (increase) in due from administrative agent

2,507 ( 5,242 ) ( 393 )

(Increase) decrease in due from administrative agent

(Increase) decrease in other assets, net

( 446 ) 209 ( 19 )

Decrease (increase) in other assets, net

Increase (decrease) in accounts payable and accrued expenses

(Decrease) increase in accounts payable and accrued expenses

( 13 ) 236 ( 521 )

1 unchanged sentence

119 1,599 453

Increase (decrease) in fees due to Adviser (A)

(Decrease) increase in fees due to Adviser (A)

( 435 ) 13,588 8,442

2 unchanged sentences

442 45 ( 13,972 )

Net cash provided by (used in) by operating activities 36,599 (29,732) 35,309

Net cash (used in) provided by operating activities ( 4,504 ) 36,599 ( 29,732 )

CASH FLOWS FROM FINANCING ACTIVITIES

2 unchanged sentences

Discounts, commissions, and offering costs for issuance of common stock

( 77 ) — ( 31 )

Proceeds from line of credit

22 unchanged sentences

(A) 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.

Supplemental disclosures of non-cash operating activities:

• In March 2022, we restructured our existing first lien term loan to J.R.

Hobbs with a total cost basis of $36.0 million into a new $26.0 million first lien term loan, which resulted in a realized loss of $10.0 million.

For the year ended March 31, 2023:

• In August 2022, in conjunction with a refinancing at Ginsey Home Solutions, Inc.

("Ginsey"), there was a $ 5.1 million payment made by Ginsey to extinguish our secured borrowing liability.

Refer to Note 3 - Investments and Note 5 - Borrowings for further discussion.

• In December 2022, we replaced our previously outstanding secured second lien term loan and second lien delayed draw term loan to The Mountain with a total aggregate cost basis of $ 13.2 million with a new $ 3.2 million secured second lien term loan, which resulted in a realized loss of $ 10.0 million.

For the year ended March 31, 2022:

• In March 2022, we replaced our previously outstanding first lien term loan to J.R.

Hobbs with a total cost basis of $ 36.0 million with a new $ 26.0 million first lien term loan, which resulted in a realized loss of $ 10.0 million.

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

4 unchanged sentences

Company and Investment (A)(B)(D)(E)

Principal/Shares/

Principal/Shares/ Units (F)(H)

Cost Fair Value

NON-CONTROL/NON-AFFILIATE INVESTMENTS (M) – 99.2%

NON-CONTROL/NON-AFFILIATE INVESTMENTS (L) – 113.0 %

Secured First Lien Debt – 63.6 %

Buildings and Real Estate Total – 8.7 %

Dema/Mai Holdings, Inc.

– Term Debt (L+ 11.0 %, 15.9 % Cash, Due 7/2027) (J)

$ 38,250 $ 38,250 $ 38,250

Diversified/Conglomerate Manufacturing – 1.2 %

Phoenix Door Systems, Inc – Line of Credit, $150 available (L+7.0%, 9.0% Cash (0.3% Unused Fee), Due 3/2024) (J)

Phoenix Door Systems, Inc.

– Line of Credit, $ 0 available (L+ 7.0 %, 11.9 % Cash ( 0.3 % Unused Fee), Due 3/2024) (I)

2,550 2,550 2,391

Phoenix Door Systems, Inc.

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

– Term Debt (L+ 11.0 %, 15.9 %% Cash, Due 9/2024) (I)

3,200 3,200 3,000

Diversified/Conglomerate Services – 25.1 %

Bassett Creek Services, Inc.

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

48,000 48,000 48,000

Counsel Press, Inc.

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

– Term Debt (L+ 11.8 %, 16.6 % Cash, Due 3/2024) (J)

21,100 21,100 21,100

Counsel Press, Inc.

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

– Term Debt (L+ 13.0 %, 17.9 % Cash, Due 3/2024) (J)

6,400 6,400 6,400

Horizon Facilities Services, Inc.

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

– Term Debt (L+ 7.5 %, 12.4 % Cash, Due 6/2026) (J)

57,700 57,700 57,700

Mason West, LLC – Term Debt (L+10.0%, 12.5% Cash, Due 7/2025) (K)

Mason West, LLC – Term Debt (L+ 10.0 %, 14.9 % Cash, Due 7/2025) (J)

25,250 25,250 25,250

2 unchanged sentences

Educators Resource, Inc.

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

– Term Debt (L+ 10.5 %, 15.4 % Cash, Due 11/2023) (J)

20,000 20,000 20,000

1 unchanged sentence

Brunswick Bowling Products, Inc.

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

– Term Debt (L+ 10.0 %, 14.9 % Cash, Due 1/2026) (J)

17,700 17,700 17,700

Brunswick Bowling Products, Inc.

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

– Term Debt (L+ 10.0 %, 14.9 % Cash, Due 1/2026) (J)

6,850 6,850 6,850

Ginsey Home Solutions, Inc.

– Term Debt (L+ 10.0 %, 14.9 %% Cash, Due 11/2025) (J)

12,200 12,200 10,676

36,750 35,226

Hotels, Motels, Inns, and Gaming Total – 9.7 %

Nocturne Villa Rentals, Inc.

– Line of Credit, $2,000 available (L+8.0%, 10.0% Cash, Due 6/2023) (K)

Nocturne Villa Rentals, Inc.

– Term Debt (L+10.5%, 12.5% Cash, Due 6/2026) (K)

Nocturne Luxury Villas, Inc.

– Line of Credit, $ 2,000 available (L+ 8.0 %, 12.9 % Cash, Due 6/2024) (J)

Nocturne Luxury Villas, Inc.

– Term Debt (L+ 10.5 %, 15.4 % Cash, Due 6/2026) (J)

42,450 42,450 42,450

2 unchanged sentences

Schylling, Inc.

– Term Debt (L+11.0%, 13.0% Cash, Due 5/2025) (K)

– Term Debt (L+ 11.0 %, 15.9 % Cash, Due 5/2025) (J)

27,981 27,981 27,981

3 unchanged sentences

Galaxy Technologies Holdings, Inc.

– Term Debt (L+4.1%, 7.1% Cash, Due 10/2026) (K)

– Term Debt (L+ 4.1 %, 9.0 % Cash, Due 10/2026) (J)

$ 6,900 $ 6,900 $ 5,965

Galaxy Technologies Holdings, Inc.

– Term Debt (L+7.0%, 10.0% Cash, Due 10/2026) (K)

18,796 18,796 18,796

– Term Debt (L+ 7.0 %, 11.9 % Cash, Due10/2026) (J)

18,796 18,796 16,250

Automobile – 0.3%

Country Club Enterprises, LLC – Term Debt (L+8.0%, 10.0% Cash, Due 7/2027) (J)

25,696 22,215

Country Club Enterprises, LLC - Guaranty ($1,000) (Q)

Cargo Transport – 3.0 %

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

13,000 12,987 13,000

Home and Office Furnishings, Housewares, and Durable Consumer Products – 3.0%

Ginsey Home Solutions, Inc.

– Term Debt (L+10.0%, 13.5% Cash, Due 1/2025) (H)(K)

Diligent Delivery Systems – Term Debt (L+ 9.0 %, 13.9 % Cash, Due 5/2024) (I)

13,000 13,000 12,983

1 unchanged sentence

SFEG Holdings, Inc.

– Term Debt (L+7.0%, 9.0% Cash, Due 11/2024) (G)(J)

– Term Debt (L+ 7.0 %, 11.9 %% Cash, Due 11/2024) (J)

3,128 3,128 3,128

SFEG Holdings, Inc.

– Term Debt (L+7.0%, 9.0% Cash, Due 11/2024) (G)(J)

– Term Debt (L+ 7.0 %, 11.9 % Cash, Due 11/2024) (J)

12,516 12,516 12,516

3 unchanged sentences

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

CONSOLIDATED SCHEDULE OF INVESTMENTS

MARCH 31, 2023

1 unchanged sentence

Company and Investment (A)(B)(D)(E)

Principal/Shares/

Principal/Shares/ Units (F)(H)

Cost Fair Value

Preferred Equity – 37.4 %

Diversified/Conglomerate Services – 15.2%

Bassett Creek Services, Inc.

– Preferred Stock (C)(K)

Buildings and Real Estate – 5.1 %

Dema/Mai Holdings, Inc.

- Preferred Equity (C)(J)

21,000 $ 21,000 $ 22,321

Diversified/Conglomerate Services – 11.6 %

Counsel Press, Inc.

– Preferred Stock (C)(K)

– Preferred Stock (C)(J)

6,995 6,995 27,885

Horizon Facilities Services, Inc.

– Preferred Stock (C)(K)

– Preferred Stock (C)(J)

10,080 — 12,345

Mason West, LLC – Preferred Stock (C)(K)

Mason West, LLC – Preferred Stock (C)(J)

11,206 11,206 10,940

2 unchanged sentences

Educators Resource, Inc.

– Preferred Stock (C)(K)

– Preferred Stock (C)(J)

8,560 8,560 17,445

1 unchanged sentence

Brunswick Bowling Products, Inc.

– Preferred Stock (C)(K)

– Preferred Stock (C)(J)

6,653 6,653 33,969

Ginsey Home Solutions, Inc.

– Preferred Stock (C)(K)

– Preferred Stock (C)(J)

19,280 9,583 —

16,236 33,969

Hotels, Motels, Inns, and Gaming Total – 2.3%

Nocturne Villa Rentals, Inc.

– Preferred Stock (C)(K)

Hotels, Motels, Inns, and Gaming – 3.7 %

Nocturne Luxury Villas, Inc.

– Preferred Stock (C)(J)

6,600 6,600 16,263

1 unchanged sentence

Schylling, Inc.

– Preferred Stock (C)(K)

– Preferred Stock (C)(J)

4,000 4,000 18,922

1 unchanged sentence

SFEG Holdings, Inc.

– Preferred Stock (C)(K)

– Preferred Stock (C)(J)

29,577 4,643 4,444

4 unchanged sentences

Galaxy Technologies Holdings, Inc.

– Common Stock (C)(K)

– Common Stock (C)(J)

16,957 $ 11,513 $ —

Cargo Transport – 0.4 %

Diligent Delivery Systems – Common Stock Warrants (C)(K)

8 % 500 1,533

Diligent Delivery Systems – Common Stock Warrants (C)(J)

Diversified/Conglomerate Manufacturing – 0.0 %

Phoenix Door Systems, Inc.

– Common Stock (C)(K)

– Common Stock (C)(J)

4,221 1,830 —

1 unchanged sentence

Ginsey Home Solutions, Inc.

– Common Stock (C)(K)

– Common Stock (C)(J)

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

SFEG Holdings, Inc.

– Common Stock (C)(K)

– Common Stock (C)(J)

221,500 222 —

Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0 %

Funko Acquisition Holdings, LLC (L) – Common Units (C)(P)

Funko Acquisition Holdings, LLC (K) – Common Units (C)(O)

Total Common Equity/Equivalents $ 14,094 $ 1,751

Total Non-Control/Non-Affiliate Investments $ 429,305 $ 496,875

AFFILIATE INVESTMENTS (N) – 60.8%

Secured First Lien Debt – 42.9%

Chemicals, Plastics, and Rubber – 6.0%

PSI Molded Plastics, Inc.

– Term Debt (L+5.5%, 7.0% Cash, Due 1/2024) (K)

$ 26,618 $ 26,618 $ 26,618

Diversified/Conglomerate Manufacturing – 2.0%

Edge Adhesives Holdings, Inc.

(L) – Term Debt (L+5.5%, 7.5% Cash, Due 8/2024) (J)

9,210 9,210 9,072

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

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

CONSOLIDATED SCHEDULE OF INVESTMENTS

MARCH 31, 2023

1 unchanged sentence

Company and Investment (A)(B)(D)(E)

Principal/Shares/

Principal/Shares/ Units (F)(H)

Cost Fair Value

AFFILIATE INVESTMENTS (M) – 58.2 %

Secured First Lien Debt – 35.8 %

Diversified/Conglomerate Manufacturing – 1.0 %

Edge Adhesives Holdings, Inc.

(K) – Term Debt (L+ 5.5 %, 10.4 % Cash, Due 8/2024) (G)(J)

$ 9,210 $ 9,210 $ 4,255

Diversified/Conglomerate Services – 17.7 %

ImageWorks Display and Marketing Group, Inc.

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

– Term Debt (L+ 11.0 %, 15.9 % Cash, Due 11/2025) (J)

22,000 22,000 22,000

- Atlanta, LLC - Term Debt (L+6.0%, 8.0% Cash, Due 10/2024) (G)(K)

- Atlanta, LLC – Line of Credit, $ 0 available (L+ 6.0 %, 10.9 %, Cash, Due 6/2025) (G)(J)

5,000 5,000 2,744

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

- Atlanta, LLC - Term Debt (L+ 6.0 %, 10.9 % Cash, Due 6/2025) (G)(J)

16,500 16,500 9,054

- Atlanta, LLC – Term Debt (L+6.0%, 8.0% Cash, Due 3/2023) (G)(K)

- Atlanta, LLC – Term Debt (L+ 10.3 %, 15.1 % Cash, Due 6/2025) (G)(J)

26,000 26,000 14,268

- Atlanta, LLC - Guaranty ($9,250) (Q)

The Maids International, LLC – Term Debt (L+10.5%, 12.0% Cash, Due 3/2025) (K)

- Atlanta, LLC – Term Debt (L+ 6.0 %, 10.9 % Cash, Due 6/2025) (G)(J)

2,438 2,438 1,338

The Maids International, LLC – Term Debt (L+ 10.5 %, 15.4 % Cash, Due 3/2025) (J)

28,560 28,560 28,560

100,498 77,964

Home and Office Furnishings, Housewares, and Durable Consumer Products – 9.2 %

Old World Christmas, Inc.

– Secured First Lien Term Loan (L+9.5%, 11.0% Cash, Due 12/2025) (K)

– Term Debt (L+ 9.5 %, 14.4 % Cash, Due 12/2025) (J)

40,500 40,500 40,500

Mining, Steel, Iron and Non-Precious Metals Total – 4.1 %

Utah Pacific Bridge & Steel, Ltd., $2,000 available (L+8.5%, 10.0% Cash, Due 7/2022) (K)

Utah Pacific Bridge & Steel, Ltd.

(L+10.0%, 11.5% Cash, Due 7/2026) (K)

18,250 18,250 18,250

18,250 18,250

Personal and Non-Durable Consumer Products (Manufacturing Only) – 1.0%

The Mountain Corporation – Line of Credit, $0 available (L+5.0%, 9.0% Cash, Due 5/2022) (G)(K)

– Term Debt (L+ 10.0 %, 14.9 % Cash, Due 7/2026) (J)

18,250 18,250 18,250

The Mountain Corporation – Line of Credit, $100 available (L+5.0%, 9.0% Cash, Due 5/2023) (G)(K)

Telecommunications – 3.8 %

B+T Group Acquisition, Inc.

(L) – Line of Credit, $0 available (L+11.0%, 13.0% Cash, Due 12/2024) (K)

(K) – Line of Credit, $ 0 available (L+ 11.0 %, 15.9 % Cash, Due 12/2024) (J)

2,800 2,800 2,800

B+T Group Acquisition, Inc.

(L) – Term Debt (L+11.0%, 13.0% Cash, Due 12/2024) (K)

(K) – Term Debt (L+11.0%, 15.9 % Cash, Due 12/2024) (J)

14,000 14,000 14,000

2 unchanged sentences

Secured Second Lien Debt – 5.7 %

Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.2%

The Mountain Corporation – Term Debt (L+4.0%, 7.0% Cash, Due 4/2024) (G)(K)

$ 11,700 $ 11,700 $ 923

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

1,500 1,500 118

Chemicals, Plastics, and Rubber – 5.7 %

PSI Molded Plastics, Inc.

– Term Debt (L+ 5.5 %, 10.4 % Cash, Due 1/2024) (J)

$ 26,618 $ 26,618 $ 24,892

4 unchanged sentences

PSI Molded Plastics, Inc.

– Preferred Stock (C)(K)

– Preferred Stock (C)(J)

158,598 $ 19,730 $ —

1 unchanged sentence

Edge Adhesives Holdings, Inc.

(L) – Preferred Stock (C)(K)

(K) – Preferred Stock (C)(J)

8,199 8,199 —

1 unchanged sentence

ImageWorks Display and Marketing Group, Inc.

– Preferred Stock (C)(K)

– Preferred Stock (C)(J)

67,490 6,749 10,926

– Atlanta, LLC – Preferred Stock (C)(K)

– Atlanta, LLC – Preferred Stock (C)(J)

10,920 10,920 —

The Maids International, LLC – Preferred Stock (C)(K)

The Maids International, LLC – Preferred Stock (C)(J)

6,640 6,640 3,200

2 unchanged sentences

Old World Christmas, Inc.

– Preferred Stock (C)(K)

– Preferred Stock (C)(J)

6,180 — 33,990

1 unchanged sentence

Utah Pacific Bridge & Steel, Ltd.

- Preferred Stock (C)(K)

– Preferred Stock (C)(J)

6,000 6,000 7,748

1 unchanged sentence

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

CONSOLIDATED SCHEDULE OF INVESTMENTS

MARCH 31, 2023

1 unchanged sentence

Company and Investment (A)(B)(D)(E)

Principal/Shares/

Principal/Shares/ Units (F)(H)

Cost Fair Value

Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0%

The Mountain Corporation – Preferred Stock (C)(K)

6,899 6,899 —

Telecommunications – 0.5 %

B+T Group Acquisition, Inc.

(L) – Preferred Stock (C)(K)

(K) – Preferred Stock (C)(J)

14,304 4,722 2,187

2 unchanged sentences

Diversified/Conglomerate Services – 3.5 %

Nth Degree Investment Group, LLC – Common Stock (C)(K)

Nth Degree Investment Group, LLC – Common Stock (C)(J)

14,360,000 $ 1,219 $ 15,243

Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0%

The Mountain Corporation – Common Stock (C)(K)

Telecommunications – 0.0 %

B+T Group Acquisition, Inc.

(L) – Common Stock Warrants (C)(K)

(K) – Common Stock Warrants (C)(J)

Total Common Equity/Equivalents $ 1,219 $ 15,243

Total Affiliate Investments $ 276,055 $ 255,955

CONTROL INVESTMENTS (O) – 0.2%:

CONTROL INVESTMENTS (N) – 0.2 %

Secured First Lien Debt – 0.0 %

Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0 %

The Mountain Corporation – Line of Credit, $ 150 available (L+ 5.0 %, 9.9 % Cash, Due 5/2023) (G)(J)

4,550 $ 4,550 $ —

Total Secured First Lien Debt 4,550 —

Secured Second Lien Debt – 0.0 %

Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0 %

The Mountain Corporation – Term Debt (L+ 4.0 %, 8.9 % Cash, Due 4/2024) (G)(J)

3,200 $ 3,200 $ —

Total Secured Second Lien Debt 3,200 —

Preferred Equity – 0.0 %

Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0 %

The Mountain Corporation – Preferred Stock (C)(J)

6,899 $ 6,899 $ —

Total Preferred Equity 6,899 —

Common Equity/Equivalents – 0.2 %

1 unchanged sentence

Gladstone SOG Investments, Inc.

- Common Stock (C)(K)

- Common Stock (C)(J)

100 $ 620 $ 713

Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0 %

The Mountain Corporation – Common Stock (C)(J)

Total Common Equity/Equivalents $ 621 $ 713

Total Control Investments $ 15,270 $ 713

TOTAL INVESTMENTS – 160.2% (R)

TOTAL INVESTMENTS – 171.4 % (P)

$ 720,630 $ 753,543

3 unchanged sentences

As of March 31, 2023, 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.

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

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

MARCH 31, 2023

(DOLLAR AMOUNTS IN THOUSANDS)

(B) Unless indicated otherwise, all cash interest rates are indexed to 30-day London Interbank Offered Rate ("LIBOR" or "L"), which was 4.9 % as of March 31, 2023.

9 unchanged sentences

(G) Debt security is on non-accrual status.

(H) $5.1 million of the debt security was participated to a third-party, but is accounted for as collateral for a secured borrowing under accounting principles generally accepted in the U.S.

and presented as Secured borrowing on our accompanying Consolidated Statements of Assets and Liabilities as of March 31, 2022.

(I) Represents the principal balance for debt investments and the number of shares/units held for equity investments.

(H) Represents the principal balance, presented in thousands, for debt investments and the number of shares/units held for equity investments.

Warrants are represented as a percentage of ownership, as applicable.

(J) Fair value was based on internal yield analysis or on estimates of value submitted by ICE Data Pricing and Reference Data, LLC.

(I) Fair value was based on internal yield analysis or on estimates of value submitted by ICE Data Pricing and Reference Data, LLC.

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

(K) Fair value was based on the total enterprise value of the portfolio company, which is generally allocated to the portfolio company’s securities in order of their relative priority in the capital structure.

(J) Fair value was based on the total enterprise value of the portfolio company, which is generally allocated to the portfolio company’s securities in order of their relative priority in the capital structure.

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, 2022

(DOLLAR AMOUNTS IN THOUSANDS)

(L) One of our affiliated funds, Gladstone Capital Corporation, co-invested with us in this portfolio company pursuant to an exemptive order granted by the U.S.

(K) One of our affiliated funds, Gladstone Capital Corporation, co-invested with us in this portfolio company pursuant to an exemptive order granted by the U.S.

Securities and Exchange Commission.

(M) Non-Control/Non-Affiliate investments, as defined by the 1940 Act, are those that are neither Control nor Affiliate investments and in which we own less than 5.0% of the issued and outstanding voting securities.

(N) Affiliate investments, as defined by the 1940 Act, are those that are not Control investments and in which we own, with the power to vote, between and inclusive of 5.0% and 25.0% of the issued and outstanding voting securities.

(O) Control investments, as defined by the 1940 Act, are those where we have the power to exercise a controlling 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.

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

(L) Non-Control/Non-Affiliate investments, as defined by the 1940 Act, are those that are neither Control nor Affiliate investments and in which we own less than 5.0% of the issued and outstanding voting securities.

(M) Affiliate investments, as defined by the 1940 Act, are those that are not Control investments and in which we own, with the power to vote, between and inclusive of 5.0% and 25.0% of the issued and outstanding voting securities.

(N) Control investments, as defined by the 1940 Act, are those where we have the power to exercise a controlling 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.

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

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

3 unchanged sentences

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 information.

(Q) Refer to Note 11— Commitments and Contingencies in the accompanying Notes to Consolidated Financial Statements for additional information regarding this guaranty.

(R) Cumulative gross unrealized appreciation for federal income tax purposes is $140.8 million;

(P) Cumulative gross unrealized appreciation for federal income tax purposes is $ 150.4 million;

cumulative gross unrealized depreciation for federal income tax purposes is $ 119.3 million.

8 unchanged sentences

Cost Fair Value

NON-CONTROL/NON-AFFILIATE INVESTMENTS (N) – 77.9%

NON-CONTROL/NON-AFFILIATE INVESTMENTS (M) – 99.2 %

Secured First Lien Debt – 52.4 %

Diversified/Conglomerate Manufacturing – 1.1 %

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 – Line of Credit, $ 150 available (L+ 7.0 %, 9.0 % Cash ( 0.3 % Unused Fee), Due 3/2024) (J)

$ 2,000 $ 2,000 $ 1,920

Phoenix Door Systems, Inc.

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

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

3,200 3,200 3,072

4 unchanged sentences

Counsel Press, Inc.

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

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

21,100 21,100 21,100

Counsel Press, Inc.

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

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

6,400 6,400 6,400

Horizon Facilities Services, Inc.

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

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

27,700 27,700 27,700

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

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

Mason West, LLC – Term Debt (L+ 10.0 %, 12.5 % Cash, Due 7/2025) (K)

25,250 25,250 25,250

2 unchanged sentences

Educators Resource, Inc.

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

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

20,000 20,000 20,000

1 unchanged sentence

Brunswick Bowling Products, Inc.

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

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

17,700 17,700 17,700

Brunswick Bowling Products, Inc.

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

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

6,850 6,850 6,850

24,550 24,550

Hotels, Motels, Inns, and Gaming Total – 6.2 %

Nocturne Luxury Villas, Inc.

– Line of Credit, $ 2,000 available (L+ 8.0 %, 10.0 % Cash, Due 6/2023) (K)

Nocturne Luxury Villas, Inc.

– Term Debt (L+ 10.5 %, 12.5 % Cash, Due 6/2026) (K)

27,700 27,700 27,700

27,700 27,700

Leisure, Amusement, Motion Pictures, and Entertainment – 6.3 %

Schylling, Inc.

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

– Term Debt (L+ 11.0 %, 13.0 % Cash, Due 5/2025) (K)

27,981 27,981 27,981

Schylling, Inc.

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

Total Secured First Lien Debt $ 233,881 $ 233,673

Secured Second Lien Debt – 15.0 %

Aerospace and Defense – 5.7 %

Galaxy Technologies Holdings, Inc.

– Term Debt (L+ 4.1 %, 7.1 % Cash, Due 10/2026) (K)

$ 6,500 $ 6,500 $ 6,500

Galaxy Technologies Holdings, Inc.

– Term Debt (L+ 7.0 %, 10.0 % Cash, Due 10/2026) (K)

18,796 18,796 18,796

Total Secured First Lien Debt

25,296 25,296

Secured Second Lien Debt – 11.0%

Automobile – 0.3 %

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

Country Club Enterprises, LLC – Term Debt (L+ 8.0 %, 10.0 % Cash, Due 7/2027) (J)

1,500 1,500 1,498

Country Club Enterprises, LLC – Guaranty ($1,000) (T)

Country Club Enterprises, LLC - Guaranty ($ 1,000 ) (Q)

Cargo Transport – 2.9 %

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

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

13,000 12,987 13,000

1 unchanged sentence

Ginsey Home Solutions, Inc.

– Term Debt (L+10.0%, 13.5% Cash, Due 1/2025) (H)(L)

– Term Debt (L+ 10.0 %, 13.5 % Cash, Due 1/2025) (H)(K)

13,300 13,300 13,300

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)

SFEG Holdings, Inc.

– Term Debt (L+ 7.0 %, 9.0 % Cash, Due 11/2024) (G)(J)

3,128 3,128 2,909

Total Secured Second Lien Debt

SFEG Holdings, Inc.

– Term Debt (L+ 7.0 %, 9.0 % Cash, Due 11/2024) (G)(J)

11,736 11,736 10,914

14,864 13,823

Total Secured Second Lien Debt $ 67,947 $ 66,917

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

9 unchanged sentences

Bassett Creek Services, Inc.

– Preferred Stock (C)(L)

– Preferred Stock (C)(K)

4,900 $ 4,900 $ 17,150

Counsel Press, Inc.

– Preferred Stock (C)(L)

– Preferred Stock (C)(K)

6,995 6,995 25,374

Horizon Facilities Services, Inc.

– Preferred Stock (C)(L)

– Preferred Stock (C)(K)

10,080 10,080 17,807

Mason West, LLC – Preferred Stock (C)(L)

Mason West, LLC – Preferred Stock (C)(K)

11,206 11,206 7,553

2 unchanged sentences

Educators Resource, Inc.

– Preferred Stock (C)(L)

– Preferred Stock (C)(K)

8,560 8,560 19,252

1 unchanged sentence

Brunswick Bowling Products, Inc.

– Preferred Stock (C)(L)

– Preferred Stock (C)(K)

6,653 6,653 21,485

Ginsey Home Solutions, Inc.

– Preferred Stock (C)(L)

– Preferred Stock (C)(K)

19,280 9,583 3,263

16,236 24,748

Hotels, Motels, Inns, and Gaming Total – 2.3 %

Nocturne Luxury Villas, Inc.

– Preferred Stock (C)(K)

6,600 6,600 10,223

Leisure, Amusement, Motion Pictures, and Entertainment – 4.0 %

Schylling, Inc.

– Preferred Stock (C)(L)

– Preferred Stock (C)(K)

4,000 4,000 17,820

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

SBS Industries Holdings, Inc.

– Preferred Stock (C)(L)

SFEG Holdings, Inc.

– Preferred Stock (C)(K)

29,577 4,643 —

2 unchanged sentences

Common Equity/Equivalents – 0.4 %

Cargo Transport – 0.6%

Diligent Delivery Systems – Common Stock Warrants (C)(Q)

Aerospace and Defense – 0.0 %

Galaxy Technologies Holdings, Inc.

– Common Stock (C)(K)

16,957 $ 11,513 $ —

Cargo Transport – 0.4 %

Diligent Delivery Systems – Common Stock Warrants (C)(K)

Diversified/Conglomerate Manufacturing– 0.0 %

Phoenix Door Systems, Inc.

– Common Stock (C)(L)

– Common Stock (C)(K)

3,195 1,452 —

1 unchanged sentence

Ginsey Home Solutions, Inc.

– Common Stock (C)(L)

– Common Stock (C)(K)

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

SBS Industries Holdings, Inc.

– Common Stock (C)(L)

SFEG Holdings, Inc.

– Common Stock (C)(K)

221,500 222 —

Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0 %

Funko Acquisition Holdings, LLC (M) – Common Units (C)(S)

Funko Acquisition Holdings, LLC (L) – Common Units (C)(P)

Total Common Equity/Equivalents $ 13,725 $ 1,607

$ 2,215 $ 2,766

Total Non-Control/Non-Affiliate Investments $ 388,773 $ 442,124

AFFILIATE INVESTMENTS (O) – 80.9%

AFFILIATE INVESTMENTS (N) – 60.8 %

Secured First Lien Debt – 42.9 %

Beverage, Food, and Tobacco – 2.4%

Head Country, Inc.

– Term Debt (L+10.5%, 12.5% Cash, Due 2/2023) (L)

$ 9,050 $ 9,050 $ 9,050

Chemicals, Plastics, and Rubber – 6.0 %

PSI Molded Plastics, Inc.

– Term Debt (L+5.5%, 7.0% Cash, Due 1/2024) (L)

– Term Debt (L+ 5.5 %, 7.0 % Cash, Due 1/2024) (K)

$ 26,618 $ 26,618 $ 26,618

8 unchanged sentences

Diversified/Conglomerate Manufacturing – 2.0 %

D.P.M.S., Inc.

– Line of Credit, $0 available (L+6.5%, 9.0% Cash (0.5% Unused Fee), Due 10/2023) (L)

1,500 1,500 1,500

D.P.M.S., Inc.

– Term Debt (10.0% Cash, Due 10/2023) (I)(L)

10,796 10,796 5,751

Edge Adhesives Holdings, Inc.

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

(L) – Term Debt (L+ 5.5 %, 7.5 % Cash, Due 8/2024) (J)

$ 9,210 9,210 9,072

Edge Adhesives Holdings, Inc.

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

Diversified/Conglomerate Services – 20.5 %

ImageWorks Display and Marketing Group, Inc.

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

22,000 22,000 22,000

Edge Adhesives Holdings, Inc.

(M) – Term Debt (L+11.8%, 13.8% Cash, Due 2/2022) (K)

- Atlanta, LLC - Term Debt (L+ 6.0 %, 8.0 % Cash, Due 10/2024) (G)(K)

16,500 16,500 15,023

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

26,000 26,000 23,672

Diversified/Conglomerate Services – 13.3%

ImageWorks Display and Marketing Group, Inc.

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

- Atlanta, LLC – Term Debt (L+ 6.0 %, 8.0 % Cash, Due 3/2023) (G)(K)

2,438 2,438 2,219

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

- Atlanta, LLC - Guaranty ($ 9,250 ) (Q)

The Maids International, LLC – Term Debt (L+ 10.5 %, 12.0 % Cash, Due 3/2025) (K)

28,560 28,560 28,560

2 unchanged sentences

Old World Christmas, Inc.

– Secured First Lien Term Loan (L+9.5%, 11.0% Cash, Due 12/2025) (L)

27,000 27,000 27,000

Leisure, Amusement, Motion Pictures, and Entertainment – 2.3%

SOG Specialty Knives & Tools, LLC – Term Debt (Due 12/2023) (L)(R)

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

– Secured First Lien Term Loan (L+ 9.5 %, 11.0 % Cash, Due 12/2025) (K)

25,000 25,000 25,000

Personal and Non-Durable Consumer Products (Manufacturing Only) – 7.0%

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

Mining, Steel, Iron and Non-Precious Metals Total – 4.1 %

Utah Pacific Bridge & Steel, Ltd., $ 2,000 available (L+ 8.5 %, 10.0 % Cash, Due 7/2022) (K)

Utah Pacific Bridge & Steel, Ltd.

(L+ 10.0 %, 11.5 % Cash, Due 7/2026) (K)

18,250 18,250 18,250

Pioneer Square Brands, Inc.

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

18,250 18,250

Personal and Non-Durable Consumer Products (Manufacturing Only) – 1.0 %

The Mountain Corporation – Line of Credit, $ 0 available (L+ 5.0 %, 9.0 % Cash, Due 5/2022) (G)(K)

3,400 3,400 3,400

The Mountain Corporation – Line of Credit, $ 100 available (L+ 5.0 %, 9.0 % Cash, Due 5/2023) (G)(K)

Telecommunications – 3.7 %

B+T Group Acquisition, Inc.

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

(L) – Line of Credit, $ 0 available (L+ 11.0 %, 13.0 % Cash, Due 12/2024) (K)

2,800 2,800 2,800

B+T Group Acquisition, Inc.

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

(L) – Term Debt (L+ 11.0 %, 13.0 % Cash, Due 12/2024) (K)

14,000 14,000 14,000

2 unchanged sentences

Secured Second Lien Debt – 0.2 %

Diversified/Conglomerate Services – 12.0%

– Atlanta, LLC – Line of Credit, $0 available (L+6.0%, 8.0% Cash, Due 10/2024) (K)

$ 10,000 $ 10,000 $ 9,975

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

36,000 36,000 35,910

46,000 45,885

Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.2 %

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

The Mountain Corporation – Term Debt (L+ 4.0 %, 7.0 % Cash, Due 4/2024) (G)(K)

$ 11,700 $ 11,700 $ 923

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

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

1,500 1,500 118

2 unchanged sentences

Preferred Equity – 17.4 %

Beverage, Food, and Tobacco – 1.7%

Head Country, Inc.

– Preferred Stock (C)(L)

4,000 $ 4,000 $ 6,469

Chemicals, Plastics, and Rubber – 0.0 %

PSI Molded Plastics, Inc.

– Preferred Stock (C)(L)

– Preferred Stock (C)(K)

158,598 $ 19,730 $ —

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)

Company and Investment (A)(B)(D)(E)

Principal/Shares/

Cost Fair Value

Diversified/Conglomerate Manufacturing – 0.0 %

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

2,279 1,841 —

Edge Adhesives Holdings, Inc.

(M) – Preferred Stock (C)(L)

(L) – Preferred Stock (C)(K)

8,199 8,199 —

1 unchanged sentence

ImageWorks Display and Marketing Group, Inc.

– Preferred Stock (C)(L)

– Preferred Stock (C)(K)

67,490 6,749 16,405

– Atlanta, LLC – Preferred Stock (C)(L)

– Atlanta, LLC – Preferred Stock (C)(K)

10,920 10,920 —

The Maids International, LLC – Preferred Stock (C)(L)

The Maids International, LLC – Preferred Stock (C)(K)

6,640 6,640 2,679

24,309 19,084

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

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

MARCH 31, 2022

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment (A)(B)(D)(E)

Principal/Shares/

Cost Fair Value

Home and Office Furnishings, Housewares, and Durable Consumer Products – 8.5 %

Old World Christmas, Inc.

– Preferred Stock (C)(L)

– Preferred Stock (C)(K)

6,180 — 37,842

Leisure, Amusement, Motion Pictures, and Entertainment – 1.8%

SOG Specialty Knives & Tools, LLC – Preferred Stock (C)(L)

Mining, Steel, Iron and Non-Precious Metals – 1.3 %

Utah Pacific Bridge & Steel, Ltd.

- Preferred Stock (C)(K)

6,000 6,000 6,000

Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0 %

The Mountain Corporation – Preferred Stock (C)(L)

6,899 6,899 —

Pioneer Square Brands, Inc.

– Preferred Stock (C)(Q)

5,502 5,500 32,055

The Mountain Corporation – Preferred Stock (C)(K)

6,899 6,899 —

1 unchanged sentence

B+T Group Acquisition, Inc.

(M) – Preferred Stock (C)(L)

(L) – Preferred Stock (C)(K)

14,304 4,722 14,746

Total Preferred Equity $ 69,859 $ 77,672

$ 90,149 $ 78,905

Common Equity/Equivalents – 0.3 %

Diversified/Conglomerate Manufacturing – 0.0%

Channel Technologies Group, LLC – Common Stock (C)(L)

2,319,184 $ — $ —

D.P.M.S., Inc.

– Common Stock (C)(L)

Diversified/Conglomerate Services – 0.1 %

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

Nth Degree Investment Group, LLC – Common Stock (C)(K)

14,360,000 $ 1,219 $ 511

Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0 %

The Mountain Corporation – Common Stock (C)(L)

The Mountain Corporation – Common Stock (C)(K)

Telecommunications – 0.2 %

B+T Group Acquisition, Inc.

(M) – Common Stock Warrant (C)(L)

(L) – Common Stock Warrants (C)(K)

Total Common Equity/Equivalents 1,220 1,432

Total Affiliate Investments $ 279,855 $ 271,559

CONTROL INVESTMENTS (P) – 7.2%:

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)

Company and Investment (A)(B)(D)(E)

Principal/Shares/

Cost Fair Value

Secured Second Lien Debt – 3.4%

Aerospace and Defense – 3.4%

Galaxy Technologies, Inc.

– Line of Credit, $0 available (L+4.5%, 6.5% Cash (0.5% Unused Fee), Due 8/2023) (L)

$ 5,000 $ 5,000 $ 5,000

Galaxy Technologies, Inc.

– Term Debt (L+6.0%, 10.0% Cash, Due 8/2023) (L)

8,000 8,000 8,000

$ 13,000 $ 13,000

Preferred Equity – 3.8%

Aerospace and Defense – 3.8%

Galaxy Technologies, Inc.

– Preferred Stock (C)(L)

5,517,444 $ 11,464 $ 14,630

Common Equity – 0.0%

Aerospace and Defense – 0.0%

Galaxy Technologies, Inc.

– Common Stock (C)(L)

88,843 $ 48 $ —

CONTROL INVESTMENTS (O) – 0.2 %:

Common Equity/Equivalents – 0.2 %

Leisure, Amusement, Motion Pictures, and Entertainment – 0.2 %

Gladstone SOG Investments, Inc.

- Common Stock (C)(K)

Total Common Equity/Equivalents $ 620 $ 713

Total Control Investments $ 620 $ 713

TOTAL INVESTMENTS – 166.0%

TOTAL INVESTMENTS – 160.2 % (R)

$ 669,248 $ 714,396

1 unchanged sentence

The majority of the securities listed, totaling $ 537.5 million at fair value, are pledged as collateral to our revolving line of credit, as described further in Note 5— Borrowings in the accompanying Notes to Consolidated Financial Statements .

Additionally, under Section 55 the 1940 Act, we may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of our total assets.

Additionally, under Section 55 of the 1940 Act, we may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70 % of our total assets.

As of March 31, 2022, 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 fair value.

12 unchanged sentences

and presented as Secured borrowing on our accompanying Consolidated Statements of Assets and Liabilities as of March 31, 2022.

(I) Debt security has a fixed interest rate.

(J) Represents the principal balance for debt investments and the number of shares/units held for equity investments.

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

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

MARCH 31, 2022

(DOLLAR AMOUNTS IN THOUSANDS)

(I) Represents the principal balance for debt investments and the number of shares/units held for equity investments.

Warrants are represented as a percentage of ownership, as applicable.

(K) Fair value was based on internal yield analysis or on estimates of value submitted by ICE Data Pricing and Reference Data, LLC.

(J) Fair value was based on internal yield analysis or on estimates of value submitted by ICE Data Pricing and Reference Data, LLC.

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

(L) Fair value was based on the total enterprise value of the portfolio company, which is generally allocated to the portfolio company’s securities in order of their relative priority in the capital structure.

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

(M) One of our affiliated funds, Gladstone Capital Corporation, co-invested with us in this portfolio company pursuant to an exemptive order granted by the U.S.

(L) One of our affiliated funds, Gladstone Capital Corporation, co-invested with us in this portfolio company pursuant to an exemptive order granted by the U.S.

Securities and Exchange Commission.

(N) Non-Control/Non-Affiliate investments, as defined by the 1940 Act, are those that are neither Control nor Affiliate investments and in which we own less than 5.0% of the issued and outstanding voting securities.

(O) Affiliate investments, as defined by the 1940 Act, are those that are not Control investments and in which we own, with the power to vote, between and inclusive of 5.0% and 25.0% of the issued and outstanding voting securities.

(P) Control investments, as defined by the 1940 Act, are those where we have the power to exercise a controlling 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.

(Q) Fair value was based on the expected exit or payoff amount, where such event has occurred or is expected to occur imminently.

(R) Debt security does not have a stated current interest rate.

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

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

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

3 unchanged sentences

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)

(T) Refer to Note 11 — Commitments and Contingencies in the accompanying Notes to Consolidated Financial Statements for additional information regarding this guaranty.

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

cumulative gross unrealized appreciation for federal income tax purposes is $78.5 million.

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

(Q) Refer to Note 11— Commitments and Contingencies in the accompanying Notes to Consolidated Financial Statements for additional information regarding this guaranty.

(R) Cumulative gross unrealized appreciation for federal income tax purposes is $ 140.8 million;

cumulative gross unrealized depreciation for federal income tax purposes is $ 97.1 million.

Cumulative net unrealized appreciation is $ 43.8 million, based on a tax cost of $ 670.6 million.

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

15 unchanged sentences

We intend that our investment portfolio over time will consist of approximately 75.0 % in debt investments and 25.0 % in equity investments, at cost.

As of March 31, 2022, our investment portfolio was comprised of 76.3% in debt securities and 23.7% in equity securities, at cost.

As of March 31, 2023, our investment portfolio was comprised of 77.1 % in debt investments and 22.9 % in equity investments, at cost.

Gladstone Business Investment, LLC (“Business Investment”), a wholly-owned subsidiary of ours, was established on August 11, 2006 for the sole purpose of holding certain investments pledged as collateral under our line of credit.

29 unchanged sentences

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.

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, discusses the information provided by the Valuation Team, determines whether the Valuation Team has followed the Policy, determines whether the Valuation Team’s 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 Committee’s 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.

Our board of directors (the “Board of Directors”) has approved investment valuation policies and procedures pursuant to Rule 2a-5 (the “Policy”) and, in July 2022, designated the Adviser to serve as the Board of Directors’ valuation designee (“Valuation Designee”) under the 1940 Act.

In accordance with the 1940 Act, our Board of Directors has the ultimate responsibility for reviewing the good faith fair value determination of our investments for which market quotations are not readily available based on our Policy and for overseeing the Valuation Designee.

Such review and oversight includes receiving written fair value determinations and supporting materials provided by the Valuation Designee, in coordination with the Administrator and with the oversight by the Company's chief valuation officer (collectively, the “Valuation Team”).

The Valuation Committee of our Board of Directors (comprised entirely of independent directors) meets to review the valuation determinations and supporting materials, discusses the information provided by the Valuation Team, determines whether the Valuation Team has followed the Policy, and reviews other facts and circumstances, including current valuation risks, conflicts of interest, material valuation matters, appropriateness of valuation methodologies, back-testing results, price challenges/overrides, and ongoing monitoring and oversight of pricing services.

After the Valuation Committee concludes its meeting, it and the chief valuation officer, representing the Valuation Designee, present the Valuation Committee’s findings on the Valuation Designee's determinations to the entire Board of Directors so that the full Board of Directors may review the Valuation Designee's determined fair values 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.

6 unchanged sentences

The Valuation Team’s estimate of value on a specific debt investment may significantly differ from ICE’s.

When this occurs, our Valuation Committee and Board of Directors review whether the Valuation Team has followed the Policy and whether the Valuation Team’s recommended fair value is reasonable in light of the Policy and other facts and circumstances before determining fair value.

When this occurs, our Valuation Committee and Board of Directors review whether the Valuation Team has followed the Policy and the Valuation Committee reviews whether the Valuation Team’s determined fair value is reasonable in light of the Policy and other relevant facts and circumstances.

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.

1 unchanged sentence

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.

The Valuation Team then makes a determination to our Valuation Committee as to the fair value.

Our Valuation Committee reviews the determined fair value and whether it is reasonable in light of the Policy and other relevant facts and circumstances.

Valuation Techniques

11 unchanged sentences

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.

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.

• Yield Analysis — The Valuation Team generally determines the fair value of our debt investments for which we do not have the ability to effectuate a sale of the applicable portfolio company using the yield analysis, which includes a DCF calculation and assumptions that the Valuation Team believes market participants would use, including:

estimated remaining life, current market yield, current leverage, and interest rate spreads.

This technique develops a modified discount rate that incorporates risk premiums including, among other things, increased probability of default, increased loss upon default, and increased liquidity risk.

This technique develops a modified discount rate that incorporates risk premiums including, among other things,

increased probability of default, increased loss upon default, and increased liquidity risk.

Generally, the Valuation Team uses the yield analysis to corroborate both estimates of value provided by ICE and market quotes.

26 unchanged sentences

However, we remain contractually entitled to this interest.

Interest payments received on non-accrual loans may be recognized as income or applied to the cost basis, depending upon management’s judgment.

Interest payments received on non-accrual loans may be recognized as income or

applied to the cost basis, depending upon management’s judgment.

Generally, non-accrual loans are restored to accrual status when past-due principal and interest are paid, and, in management’s judgment, are likely to remain current, or, due to a restructuring, the interest income is deemed to be collectible.

As of March 31, 2022, our loans to J.R.

As of March 31, 2023, our loans to Edge Adhesives Holdings, Inc., J.R.

– Atlanta, LLC (“J.R.

Hobbs”), The Mountain Corporation (“The Mountain”), and SFEG Holdings, Inc.

Hobbs”) and The Mountain Corporation (“The Mountain”) were on non-accrual status, with an aggregate debt cost basis of $ 66.9 million, or 12.0 % of the cost basis of all debt investments in our portfolio, and an aggregate fair value of $ 31.7 million, or 6.2 % of the fair value of all debt investments in our portfolio.

As of March 31, 2022, our loans to J.R.

Hobbs, The Mountain, and SFEG Holdings, Inc.

were on non-accrual status, with an aggregate debt cost basis of $ 77.2 million, or 15.1 % of the cost basis of all debt investments in our portfolio, and an aggregate fair value of $ 60.0 million, or 12.2 % of the fair value of all debt investments in our portfolio.

As of March 31, 2021, certain of our loans to B+T Group Acquisition, Inc., Horizon Facilities Services, Inc., and 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.

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.

22 unchanged sentences

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.

35 unchanged sentences

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

The dividend reinvestment plan was not open to holders of our preferred stock during periods in which we had preferred stock outstanding.

Recent Accounting Pronouncements

In June 2022, the FASB issued Accounting Standards Update 2022-03, “Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions” (“ASU 2022-03”), which clarifies the measurement and presentation of fair value for equity securities subject to contractual restrictions that prohibit the sale of the equity security.

ASU 2022-03 is effective for annual reporting periods beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted.

Our early adoption of ASU 2022-03 did not have a material impact on our financial position, results of operations or cash flows.

In August 2021, the FASB issued Accounting Standards Update 2021-06, “Presentation of Financial Statements (Topic 205):

78 unchanged sentences

$ 753,516 $ 714,322

(A) Excludes our investment in Funko with a fair value of $74 and $95 as of March 31, 2022 and 2021, respectively, which was valued using Level 2 inputs.

(A) Excludes our investment in Funko with a fair value of $ 27 thousand and $ 74 thousand as of March 31, 2023 and 2022, 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, 2023 and 2022.

5 unchanged sentences

March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022

Secured first lien debt $ 411,023 $ 303,330 (A)

TEV EBITDA multiple 3.4x – 9.3x /

Secured first lien debt $ 432,126 $ 411,023 TEV EBITDA multiple 4.4 x – 7.7 x /

3.4 x – 9.3 x /

7 unchanged sentences

11.3 % – 15.2 % /

Secured second lien debt 39,637 53,122 (B)

TEV EBITDA multiple 5.6x – 6.8x /

Secured second lien debt 62,750 39,637 TEV EBITDA multiple 5.4 x – 6.6 x /

5.6 x – 6.8 x /

1 unchanged sentence

$ 3,953 – $ 5,488 /

Revenue multiple 0.7x – 0.7x/

0.7x – 0.7x /

Revenue $14,072 – $14,072 /

$14,474 – $14,474 /

Revenue multiple N/A 0.7 x – 0.7 x /

Revenue N/A $ 14,072 – $ 14,072 /

12,984 28,321 Yield Analysis Discount Rate 14.0 % – 14.0 % /

10.0 % – 12.2 % /

Preferred equity 217,599 159,478 (C)

TEV EBITDA multiple 3.4x – 9.3x /

Preferred equity 222,585 217,599 TEV EBITDA multiple 4.4 x – 7.7 x /

3.4 x – 9.3 x /

5 unchanged sentences

$ 14,072 – $ 14,072 /

Common equity/equivalents (E)

3,678 2,671 (D)

Common equity/equivalents (A)

17,680 3,678 TEV EBITDA multiple 4.7 x – 7.2 x /

2 unchanged sentences

$ 829 – $ 13,707 /

Revenue multiple 0.7x – 0.7x /

0.7x – 0.7x /

Revenue $14,072 – $14,072 /

$14,474 – $14,474 /

Revenue multiple N/A 0.7 x – 0.7 x /

Revenue N/A $ 14,072 – $ 14,072 /

Total $ 753,516 $ 714,322

(A) 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.

(B) 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.

(C) 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.

(D) 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.

(E) Fair value as of both March 31, 2022 and 2021 excludes our investment in Funko with a fair value of $74 and $95, respectively, which was valued using Level 2 inputs.

(A) Fair value as of both March 31, 2023 and 2022 excludes our investment in Funko with a fair value of $ 27 thousand and $ 74 thousand, respectively, which was valued using Level 2 inputs.

Fair value measurements can be sensitive to changes in one or more of the valuation inputs.

23 unchanged sentences

— — ( 35,758 ) — ( 35,758 )

Transfers (D)

Transfers (E)

( 14,418 ) 14,418 — — —

20 unchanged sentences

— — ( 49,394 ) — ( 49,394 )

Transfers (D)

Transfers (E)

45,043 ( 45,043 ) ( 16,034 ) 16,034 —

3 unchanged sentences

(B) Included in net unrealized appreciation (depreciation) of investments on our accompanying Consolidated Statements of Operations for the respective years ended March 31, 2023 and 2022.

(C) Includes increases in the cost basis of investments resulting from new portfolio investments, the amortization of discounts, PIK, and other non-cash disbursements to portfolio companies, as well as decreases in the cost basis of investments resulting from principal repayments or sales, the amortization of premiums and acquisition costs, and other cost-basis adjustments.

(C) Includes increases in the cost basis of investments resulting from new portfolio investments, the amortization of discounts, and other non-cash disbursements to portfolio companies, as well as decreases in the cost basis of investments resulting from principal repayments or sales, the amortization of premiums and acquisition costs, and other cost-basis adjustments.

(D) Includes $ 13.4 million of proceeds from the recapitalization of Old World Christmas, Inc.

("Old World") and $ 12.3 million of proceeds from the recapitalization of Horizon Facilities Services, Inc ("Horizon").

Transfers include (1) secured second lien debt of Ginsey with a total cost basis and fair value of $ 12.2 million, which was converted into secured first lien debt in August 2022 and (2) secured first lien debt of PSI Molded Plastics, Inc.

with a total cost basis and fair value of $ 26.6 million, which was converted into secured second lien debt in September 2022.

Transfers represent (1) secured second lien debt of J.R.

Hobbs with a total cost basis and fair value of $52.5 million and $52.4 million, respectively, which was converted into secured first lien debt during the three months ended June 30, 2021, (2) secured first lien debt of D.P.M.S., Inc.

Hobbs with a total cost basis and fair value of $ 52.5 million and $$ 52.4 million, respectively, which was converted into secured first lien debt in June 2021, (2) secured first lien debt of D.P.M.S., Inc.

("Danco") with a total cost basis and fair value of $ 12.3 million and $ 7.3 million, respectively, which was converted into secured second lien debt of Galaxy Technologies Holdings, Inc.

(“Galaxy Technologies Holdings”) during the three months ended September 30, 2021, (3) preferred equity of Galaxy Technologies, Inc.

("Galaxy") with a total cost basis and fair value of $11.5 million and $16.0 million, respectively, which was converted into common equity of Galaxy Technologies Holdings during the three months ended September 30, 2021 and (4) preferred equity of SOG Specialty Knives & Tools, LLC with a total cost and fair value of $0.6 million and $0.0 million, respectively, which was converted into common equity of Gladstone SOG Investments, Inc.

during the three months ended December 31, 2021.

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

with a total 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.

(“Galaxy Technologies Holdings”) in September 2021, (3) preferred equity of Galaxy Technologies, Inc.

("Galaxy") with a total cost basis and fair value of $ 11.5 million and $ 16.0 million, respectively, which was converted into common equity of Galaxy Technologies Holdings in September 2021 and (4) preferred equity of SOG Specialty Knives & Tools, LLC with a total cost and fair value of $ 0.6 million and $ 0.0 million , respectively, which was converted into common equity of Gladstone SOG Investments, Inc.

in December 2021.

Investment Activity

During the fiscal year ended March 31, 2023, the following significant transactions occurred:

• In May 2021, we dissolved our investment in Channel Technologies Group, LLC and recorded a realized loss of $1.8 million.

• In June 2021, we invested $10.0 million in a new portfolio company, Nocturne Villa Rentals, Inc.

(“Nocturne”), through a combination of secured first lien debt and preferred equity.

Nocturne, headquartered in Telluride, Colorado, is a luxury vacation rental manager.

• In June 2021, we invested an additional $6.5 million in J.R.

Hobbs in the form of secured second lien debt.

In connection with the investment, our secured second lien debt was converted to secured first lien debt.

• In June 2021, we sold our investment in Head Country, Inc.

(“Head Country”), which resulted in success fee income of $2.0 million and a realized gain of $3.6 million.

In connection with the sale, we received net cash proceeds of $16.7 million, including the repayment of our debt investment of $9.1 million at par.

• In July 2021, we invested an additional $5.9 million in the form of secured first lien debt in Nocturne to fund an add-on acquisition.

• In July 2021, we invested $24.3 million in a new portfolio company, Utah Pacific Bridge & Steel, Ltd.

(“Utah Pacific”), through a combination of secured first lien debt and preferred equity.

Utah Pacific, headquartered in Lindon, Utah, is a manufacturer of large steel components used in bridge replacement, rehabilitation, and construction.

• In September 2021, one of our portfolio companies, Danco, merged with another of our portfolio companies, Galaxy, into a newly formed portfolio company, Galaxy Technologies Holdings.

Our debt investments in Danco, which totaled $12.3 million at principal and cost, and Galaxy, which totaled $13.0 million at principal and cost, were converted into two second lien term loans with an aggregate cost and principal of $25.3 million to Galaxy Technologies Holdings.

Our common equity investment in Danco, with a cost basis of $0.0 million, and our preferred and common equity investments in Galaxy, with an aggregate cost basis of $11.5 million, were converted into a common equity investment in Galaxy Technologies Holdings with a combined cost basis of $11.5 million.

• In October 2021, we invested an additional $10.5 million in Bassett Creek Services, Inc.

("Bassett Creek"), in the form of secured first lien debt to fund an add-on acquisition.

• In December 2021, we invested an additional $19.0 million in the form of secured first lien debt in Nocturne to fund an add-on acquisition.

• In December 2021, we invested an additional $6.4 million in the form of secured first lien debt in Schylling, Inc.

("Schylling") to fund an add-on acquisition.

• In December 2021, we sold our investment in Pioneer Square Brands, Inc., which resulted in success fee income of $0.5 million and a realized gain of $21.9 million.

• In May 2022, we invested an additional $ 6.4 million in the form of secured first lien debt in Nocturne Luxury Villas, Inc.

("Nocturne") to fund an add-on acquisition.

• In June 2022, we exited our investment in Bassett Creek Services, Inc.

("Bassett Creek"), which resulted in success fee income of $ 3.0 million and a realized gain on preferred equity of $ 4.7 million.

In connection with the sale, we received net cash proceeds of $ 57.6 million, including the repayment of our debt investment of $ 48.0 million at par.

• In December 2021, we sold our investment in SOG Specialty Knives & Tools, LLC, which resulted in success fee income of $2.9 million.

In connection with the sale, we received net cash proceeds of $23.3 million, including the repayment of our debt investment of $8.9 million at par, and retained a common stock investment in the intermediary entity, Gladstone SOG Investments, Inc., which maintains a cost basis of $0.6 million.

• In January 2022, we invested $5.0 million SBS Industries Holdings, Inc.

("SBS"), through a combination of secured second lien debt and preferred equity to fund an add-on acquisition.

As part of the additional investment, SBS was renamed SFEG Holdings, Inc ("SFEG").

• In March 2022, we entered into a new $26.0 million secured first lien term loan with J.R.

Hobbs, replacing our previously outstanding first lien term loan with a total cost basis of $36.0 million, which resulted in a realized loss of $10.0 million.

The new term loan has a stated interest rate of LIBOR + 10.3% and matures October 1, 2024.

• In March 2022, we invested an additional $2.4 million in the form of secured first lien debt in J.R.

• In June 2022, we invested $ 21.0 million in a new portfolio company, Dema/Mai Holdings, Inc.

(“Dema/Mai”), in the form of preferred equity to acquire Mai Mechanical, LLC, a leading provider of plumbing and mechanical services focused on multi-family residential construction headquartered in Denver, Colorado, from J.R.

Hobbs, an existing portfolio company.

In July 2022, we invested an additional $ 39.1 million in the form of secured first lien debt in Dema/Mai to fund the acquisition of Dema Plumbing, a plumbing and mechanical systems installation and service provider to single-family residential homebuilders.

• In July 2022, we recapitalized our investment in Horizon and invested an additional $ 30.0 million in the form of secured first lien debt.

In connection with this investment, we received equity proceeds of $ 12.3 million, which were recognized as a $ 10.1 million return of preferred equity cost basis and a realized gain of $ 2.2 million, as well as dividend income of $ 3.1 million and success fee income of $ 1.7 million.

• In August 2022, in conjunction with a refinancing at Ginsey, our $ 13.3 million secured second lien debt investment was reduced to $ 12.2 million and converted to secured first lien debt.

The reduction in our cost basis was the result of a $ 5.1 million payment made by Ginsey to extinguish our secured borrowing liability, which was partially offset by an additional investment in Ginsey of $ 4.0 million.

Refer to Note 5 - Borrowing s for discussion of the secured borrowing liability.

• In October 2022, we invested an additional $ 8.4 million in the form of secured first lien debt in Nocturne to fund an add-on acquisition.

• In November 2022, our $ 1.5 million secured second lien debt investment in Country Club Enterprises, LLC ("CCE") was repaid at par.

In connection with the repayment, we received success fee income of $ 1.1 million and our $ 1.0 million guaranty was released.

Refer to Note 11 - Commitments and Contingencies for discussion of the guaranty.

• In December 2022, we recapitalized our investment in Old World and invested an additional $ 15.5 million in the form of secured first lien debt.

In connection with this investment, we received proceeds of $ 17.9 million, of which $ 13.4 million was recognized as a realized gain and $ 4.5 million was recognized as dividend income.

• In December 2022, we replaced our previously outstanding secured second lien term loan and secured second lien delayed draw term loan to The Mountain with a total aggregate cost basis of $ 13.2 million with a new $ 3.2 million secured second lien term loan, which resulted in a realized loss of $ 10.0 million.

• In February 2023, we replaced our two previously outstanding secured first lien revolving lines of credit to The Mountain with an aggregate cost basis of $ 4.3 million with a new secured first lien revolving line of credit with a $ 4.7 million commitment.

Investment Conc entrations

As of March 31, 2023, our investment portfolio consisted of investments in 25 portfolio companies located in 19 states across 14 different industries with an aggregate fair value of $ 753.5 million.

Our investments in Bassett Creek Services, Inc., Old World, Counsel Press, Inc., Brunswick Bowling Products, Inc., and Schylling, Inc., represent our five largest portfolio investments at fair value, and collectively comprised $272.7 million, or 38.1%, of our total investment portfolio at fair value as of March 31, 2022.

Our investments in Old World, Horizon, Dema/Mai, Nocturne, and Brunswick Bowling Products, Inc., represent our five largest portfolio investments at fair value, and collectively comprised $ 322.3 million, or 42.8 %, of our total investment portfolio at fair value as of March 31, 2023.

The following table summarizes our investments by security type as of March 31, 2023 and 2022:

17 unchanged sentences

Home and Office Furnishings, Housewares, and Durable Consumer Products 143,685 19.1 % 125,440 17.6 %

Buildings and Real Estate 60,571 8.0 % — — %

Hotels, Motels, Inns, and Gaming 58,713 7.8 % 37,923 5.3 %

Leisure, Amusement, Motion Pictures, and Entertainment 47,616 6.3 % 46,514 6.5 %

Healthcare, Education, and Childcare 37,445 5.0 % 39,252 5.5 %

Hotels, Motels, Inns, and Gaming 37,923 5.3 % — — %

Telecommunications 32,467 4.6 % 15,582 2.5 %

Mining, Steel, Iron and Non-Precious Metals 25,998 3.5 % 24,250 3.4 %

Chemicals, Plastics, and Rubber 24,891 3.3 % 26,618 3.7 %

Aerospace and Defense 22,215 2.8 % 25,296 3.5 %

Mining, Steel, Iron and Non-Precious Metals 24,250 3.4 % — — %

Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) 20,088 2.7 % 13,823 1.9 %

Telecommunications 18,987 2.5 % 32,467 4.6 %

Cargo Transport 14,707 2.0 % 14,533 2.0 %

Diversified/Conglomerate Manufacturing 9,646 1.3 % 14,064 2.0 %

Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) 13,823 1.9 % 14,199 2.2 %

Personal and Non-Durable Consumer Products (Manufacturing Only) 5,315 0.8 % 60,852 9.6 %

Beverage, Food, and Tobacco — — % 15,519 2.4 %

Other < 2.0% 27 0.0 % 6,813 1.0 %

9 unchanged sentences

Northeast $ 266,612 35.4 % $ 194,100 27.2 %

West 197,989 26.3 % 158,607 22.2 %

South 171,056 22.7 % 188,978 26.4 %

Midwest 117,886 15.6 % 172,711 24.2 %

West 158,607 22.2 % 160,581 25.3 %

Total investments

6 unchanged sentences

2024 $ 81,218

Thereafter 1,500

Total contractual repayments $ 555,597

Adjustments to cost basis of debt investments (12)

Investments in equity securities 165,033

11 unchanged sentences

On July 12, 2022, 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, 2023.

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.

Two of our executive officers, David Gladstone (our chairman and chief executive officer) and Terry Lee Brubaker (our 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 Administrator’s president, general counsel and secretary), is also the executive vice president of administration of our Adviser.

Michael LiCalsi, our general counsel and secretary (who also serves as the Administrator’s president,

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

The following table summarizes the base management fees, loan servicing fees, incentive fees, and associated non-contractual, unconditional, and irrevocable credits reflected in our accompanying Consolidated Statements of Operations :

37 unchanged sentences

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 $0.3 million for year ended March 31, 2022, and $0.2 million for each of the years ended March 31, 2021, and 2020, 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.

however, pursuant to the terms of the Advisory Agreement, a small percentage of certain of such fees, totaling $ 0.2 million, $ 0.3 million, and $ 0.2 million for the years ended March 31, 2023, 2022, and 2021, respectively, 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

The Adviser also services the loans held by our wholly-owned subsidiary, Business Investment (the borrower under the Credit Facility), in return for which the Adviser receives a 2.0 % annual fee based on the monthly aggregate outstanding balance of loans pledged under the Credit Facility.

Since Business Investment is a consolidated subsidiary of ours, coupled with the fact that the total base management fee paid to the Adviser pursuant to the Advisory Agreement cannot exceed

2.0% of total assets (less any uninvested cash or cash equivalents resulting from borrowings) during any given calendar year, we treat payment of the loan servicing fee pursuant to the Credit Facility as a pre-payment of the base management fee under the Advisory Agreement.

Since Business Investment is a consolidated subsidiary of ours, coupled with the fact that the total base management fee paid to the Adviser pursuant to the Advisory Agreement cannot exceed 2.0 % of total assets (less any uninvested cash or cash equivalents resulting from borrowings) during any given calendar year, we treat payment of the loan servicing fee pursuant to the Credit Facility as a pre-payment of the base management fee under the Advisory Agreement.

Accordingly, these loan servicing fees are 100 % non-contractually, unconditionally, and irrevocably credited back to us by the Adviser.

13 unchanged sentences

The entire portfolio’s 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, 2022, capital gains-based incentive fees of $5.3 million were contractually due and paid to the Adviser.

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

As of and for the years ended March 31, 2023 and 2021, no capital gains-based incentive fees were contractually due and paid to the Adviser.

As of and for the year ended March 31, 2022, $ 5.3 million capital gains-based incentive fees were contractually due and paid to the Adviser.

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.

2 unchanged sentences

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 portfolio’s aggregate unrealized capital appreciation, if any, less (iii) cumulative aggregate realized capital losses since our inception, less (iv) the entire portfolio’s 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 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 years ended March 31, 2022 and 2021, we recorded capital gains-based incentive fees of $18.3 million and $5.0 million, respectively.

During the year ended March 31, 2023, we recorded a reversal of capital gains-based incentive fees of $ 0.3 million.

During the years ended March 31, 2022 and 2021, we recorded capital gains-based incentive fees of $ 18.3 million and $ 5.0 million, respectively.

Transactions with the Administrator

We reimburse the Administrator pursuant to the Administration Agreement for our allocable portion of the Administrator’s expenses incurred while performing services to us, which are primarily rent and salaries and benefits expenses of the Administrator’s 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 Mr.

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

Another of our officers, Mr.

LiCalsi (our general counsel & secretary), serves as the Administrator’s president as well as the executive vice president of administration for the Adviser.

LiCalsi (our general counsel and secretary), serves as the Administrator’s president as well as the executive vice president of administration, general counsel, and secretary for the Adviser.

Our allocable portion of the Administrator’s expenses is generally derived by multiplying the Administrator’s total expenses by the approximate percentage of time during the current quarter the Administrator’s employees performed services for us in relation to their time spent performing services for all companies serviced by the Administrator.

On July 12, 2022, 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, 2023.

Administration fees for the years ended March 31, 2023, 2022, and 2021 were $ 1.8 million, $ 1.8 million, and $ 1.6 million, respectively.

Transactions with Gladstone Securities, LLC

27 unchanged sentences

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, 2022, the Credit Facility provided one one-year extension option that may be exercised on or before the 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 unchanged sentences

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 (initially August 10, 2020 until March 31, 2021) 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 0.50 %, 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.

Refer to Note 14 — Subsequent Events for information on Amendment No.

7 to the Credit Facility.

The following tables summarize noteworthy information related to the Credit Facility:

24 unchanged sentences

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, 2022 and 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, 2023, the discount rate used to determine the fair value of the Credit Facility was 30-day LIBOR, with a 0.50 % floor, plus 2.94 % per annum, plus an unused commitment fee of 1.0 %.

At March 31, 2022, the discount rate used to determine the fair value of the Credit Facility was 30-day LIBOR, with a 0.50 % floor, 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, 2022 and 2021, 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 .

At each of March 31, 2023 and 2022, the Credit Facility was valued using Level 3 inputs and any changes in its fair value are recorded in Net unrealized appreciation (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, 2023 and 2022, as required by ASC 820:

10 unchanged sentences

Fair value at March 31, 2022

Unrealized depreciation ( 29 )

Fair value at March 31, 2023

7 unchanged sentences

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 our option on or after May 1, 2023.

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 Company's 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 Company’s 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 Company’s 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 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 Company’s 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 Company’s 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 Securities Exchange Act of 1934, as amended (the "Exchange Act"), we will provide the holders of the 2026 Notes, 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 .

2 unchanged sentences

In August 2021, we completed a public offering of 4.875 % Notes due 2028 with an aggregate principal amount of $ 134.6 million (the “2028 Notes”), which resulted in net proceeds of approximately $ 131.3 million after deducting underwriting discounts, commissions and offering costs borne by us.

The 2028 Notes are traded under the ticker symbol “GAINZ” on the Nasdaq.

The 2028 Notes will mature on November 1, 2028 and may be redeemed in whole or in part at any time or from time to time at our option on or after November 1, 2023.

The 2028 Notes are traded under the ticker symbol “GAINZ” on Nasdaq.

The 2028 Notes will mature on November 1, 2028 and may be redeemed in whole or in part at any time or from time to time at the Company's option on or after November 1, 2023.

The 2028 Notes bear interest at a rate of 4.875 % per year, which is payable quarterly in arrears.

The indenture relating to the 2028 Notes contains certain covenants, including (i) an inability to incur additional debt or issue additional debt or preferred securities unless the Company’s 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 Company’s 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 2028 Notes, as applicable, and the trustee with audited annual consolidated financial statements and unaudited interim consolidated financial statements.

The indenture relating to the 2028 Notes contains certain covenants, including (i) an inability to incur additional debt or issue additional debt or preferred securities unless the Company’s 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 Company’s 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 2028 Notes, and the trustee with audited annual consolidated financial statements and unaudited interim consolidated financial statements.

The 2028 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 $ 3.3 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 November 1, 2028, the maturity date.

The following table summarizes our 2026 Notes and 2028 Notes as of March 31, 2022 and 2021:

The following tables summarizes our 2026 Notes and 2028 Notes as of March 31, 2023 and 2022:

As of March 31, 2023:

8 unchanged sentences

10,499,500 262,488

Discounts (6,236)

Unamortized Discounts ( 5,052 )

Notes payable, net (C)

6 unchanged sentences

2026 Notes GAINN March 2, 2021 May 1, 2026 5.00 % 5,117,500 $ 25.00 $ 127,938

2028 Notes GAINZ August 18, 2021 November 1, 2028 4.875 % 5,382,000 $ 25.00 134,550

Notes payable, gross (B)

Discounts (4,055)

10,499,500 262,488

Unamortized Discounts ( 6,236 )

Notes payable, net (C)

2 unchanged sentences

(B) As of March 31, 2023 and 2022, asset coverage on our senior securities representing indebtedness, calculated pursuant to Sections 18 and 61 of the 1940 Act, was 244.7 % and 252.9 %, respectively.

(C) 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 prices of the 2026 Notes and the 2028 Notes as of March 31, 2022 was $128.3 million and $134.3 million, respectively.

The fair value based on the last reported closing prices of the 2026 Notes as of March 31, 2021 was $132.3 million.

We consider the closing price of the 2026 Notes and 2028 Notes to be a Level 1 input within the ASC 820 hierarchy.

The fair value based on the last reported closing prices of the 2026 Notes and 2028 Notes as of March 31, 2023 was $ 121.5 million and $ 127.4 million, respectively.

The fair value based on the last reported closing prices of the 2026 Notes and 2028 Notes as of March 31, 2022 was $ 128.3 million and $ 134.3 million, respectively.

We consider the closing prices of the 2026 Notes and 2028 Notes to be a Level 1 inputs 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 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, 2025.

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 and in May 2014, we amended the agreement with the third-party to include an additional $ 0.1 million.

ASC Topic 860, “ Transfers and Servicing ” required us to treat the participation as a financing-type transaction.

Specifically, the third-party had 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 as of March 31, 2022 reflect the entire secured second lien term debt investment in Ginsey and a corresponding $ 5.1 million secured borrowing liability.

In conjunction with the August 2022 refinancing at Ginsey, the $ 5.1 million secured borrowing liability was extinguished.

MANDATORILY REDEEMABLE PREFERRED STOCK

3 unchanged sentences

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 E Term Preferred Stock outstanding as of March 31, 2021:

As of March 31, 2021 :

Class of Term Preferred Stock

Symbol Initial

Issuance Mandatory

Outstanding Liquidation

per Share Aggregate

Series E GAINL August 22, 2018 August 31, 2025 6.375% 3,774,853 $ 25.00 $ 94,371

Term preferred stock, gross (A)

3,774,853 $ 25.00 $ 94,371

Discounts (2,162)

Term preferred stock, net (B)

(A) As of March 31, 2021, asset coverage on our senior securities that are stock, calculated pursuant to Sections 18 and 61 of the 1940 Act, was 248.6%.

(B) Reflected as a line item on our accompanying Consolidated Statement of Assets and Liabilities .

The following tables summarize dividends declared by our Board of Directors and paid by us on each of our series of mandatorily redeemable preferred stock during the years ended March 31, 2022, 2021, and 2020:

The following tables summarize dividends declared by our Board of Directors and paid by us on each of our Series D Term Preferred Stock and Series E Term Preferred Stock during the years ended March 31, 2022 and 2021:

For the Year Ended March 31, 2022 :

30 unchanged sentences

Total $ 1.44097219 $ 1.59375000

For the Year Ended March 31, 2020 :

Declaration Date Record Date Payment Date

Dividend per Share of

Series D Term

Preferred Stock (C)

Dividend per Share of

Series E Term

Preferred Stock (A)

April 9, 2019 April 22, 2019 April 30, 2019 $ 0.13020833 $ 0.13281250

April 9, 2019 May 22, 2019 May 31, 2019 0.13020833 0.13281250

April 9, 2019 June 19, 2019 June 28, 2019 0.13020833 0.13281250

July 9, 2019 July 22, 2019 July 31, 2019 0.13020833 0.13281250

July 9, 2019 August 20, 2019 August 30, 2019 0.13020833 0.13281250

July 9, 2019 September 17, 2019 September 30, 2019 0.13020833 0.13281250

October 8, 2019 October 22, 2019 October 31, 2019 0.13020833 0.13281250

October 8, 2019 November 19, 2019 November 29, 2019 0.13020833 0.13281250

October 8, 2019 December 19, 2019 December 31, 2019 0.13020833 0.13281250

January 14, 2020 January 24, 2020 January 31, 2020 0.13020833 0.13281250

January 14, 2020 February 19, 2020 February 28, 2020 0.13020833 0.13281250

January 14, 2020 March 20, 2020 March 31, 2020 0.13020833 0.13281250

$ 1.56249996 $ 1.59375000

(A) We voluntarily redeemed all outstanding shares of our Series E Term Preferred Stock on August 19, 2021

3 unchanged sentences

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 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.

The tax characterization of dividends paid to our preferred stockholders during the calendar year ended December 31, 2021 was 71.3 % from ordinary income and 28.7 % from capital gains.

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.

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, 2022 and 2021.

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 fair value of our Series E Term Preferred Stock, based on the last reported closing sale price as of March 31, 2021, which we consider to be a Level 1 input within the fair value hierarchy, was $96.1 million.

REGISTRATION STATEMENT AND COMMON EQUITY OFFERINGS

5 unchanged sentences

Common Equity Offerings

In December 2019, we entered 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 had 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”).

On August 11, 2021, we terminated the equity distribution agreements with each of the Common Stock ATM Sales Agents.

We did not sell any shares of our common stock under the Common Stock ATM Program during the year ended March 31, 2022.

In August 2022, we entered into equity distribution agreements with Oppenheimer & Co.

and Virtu Americas LLC (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 $ 50.0 million in what is commonly referred to as an “at-the-market” program (“Common Stock ATM Program”).

During the year ended March 31, 2023, we sold 386,482 shares of our common stock under the Common Stock ATM Program at a weighted-average gross price of $ 14.21 per share and raised approximately $ 5.5 million of gross proceeds.

The weighted-average net price per share, after deducting commissions and offering costs borne by us, was $ 14.01 and resulted in total net proceeds of approximately $ 5.4 million.

These sales were above our then current estimated NAV per share.

These sales were above our then current NAV per share.

In December 2019, we entered into equity distribution agreements with Wedbush Securities, Inc., Cantor Fitzgerald & Co., and Ladenburg Thalmann & Co., Inc.

(each a “2019 Sales Agent”), under which we had the ability to issue and sell shares of our common stock, from time to time, through the 2019 Sales Agents, up to an aggregate offering price of $ 35.0 million in an at-the-market program (the “2019 Common Stock ATM Program”).

On August 11, 2021, we terminated the equity distribution agreements with each of the 2019 Sales Agents.

We did not sell any shares of our common stock under the 2019 Common Stock ATM Program during the year ended March 31, 2022.

During the year ended March 31, 2021, we sold 155,560 shares of our common stock under the 2019 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.

These sales were above our then current 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, 2022, 2021, and 2020:

The following table sets forth the computation of basic and diluted Net increase in net assets resulting from operations per weighted-average common share for the years ended March 31, 2023, 2022, and 2021:

Year Ended March 31,

15 unchanged sentences

The tax characterization of cash distributions paid to our common stockholders during the calendar year ended December 31, 2021 was 71.3 % from ordinary income and 28.7 % from capital gains .

The following tables detail the monthly distributions to our common stockholders for the years ended March 31, 2022, 2021 and 2020.

We paid the following cash distributions to our common stockholders for the years ended March 31, 2023, 2022 and 2021.

For the Year Ended March 31, 2023 :

8 unchanged sentences

July 12, 2022 August 23, 2022 August 31, 2022 0.075

July 13, 2021 September 3, 2021 September 15, 2021 0.030 (A)

July 12, 2022 September 22, 2022 September 30, 2022 0.075

4 unchanged sentences

January 10, 2023 January 20, 2023 January 31, 2023 0.080

January 11, 2022 February 4, 2022 February 14, 2022 0.120 (A)

January 10, 2023 February 17, 2023 February 28, 2023 0.080

January 10, 2023 March 3, 2023 March 15, 2023 0.240 (A)

January 10, 2023 March 17, 2023 March 31, 2023 0.080

10 unchanged sentences

July 13, 2021 August 23, 2021 August 31, 2021 0.070

July 13, 2021 September 3, 2021 September 15, 2021 0.030 (A)

July 13, 2021 September 22, 2021 September 30, 2021 0.070

1 unchanged sentence

October 12, 2021 November 19, 2021 November 30, 2021 0.075

October 12, 2021 December 7, 2021 December 15, 2021 0.090 (A)

October 12, 2021 December 23, 2021 December 31, 2021 0.075

January 11, 2022 January 21, 2022 January 31, 2022 0.075

January 11, 2022 February 4, 2022 February 14, 2022 0.120 (A)

January 11, 2022 February 18, 2022 February 28, 2022 0.075

11 unchanged sentences

July 14, 2020 August 24, 2020 August 31, 2020 0.070

July 9, 2019 September 4, 2019 September 13, 2019 0.030 (A)

July 14, 2020 September 23, 2020 September 30, 2020 0.070

1 unchanged sentence

October 13, 2020 November 20, 2020 November 30, 2020 0.070

October 8, 2019 December 3, 2019 December 13, 2019 0.090 (A)

October 13, 2020 December 23, 2020 December 31, 2020 0.070

15 unchanged sentences

For the years ended March 31, 2023, 2022, and 2021 we did not elect to retain long-term capital gains and to treat them as deemed distributions to common stockholders.

For the year ended March 31, 2020, we elected to retain $38.0 million, or $1.15 per common share, of long-term capital gains and to treat them as a deemed distribution to common stockholders.

For the year ended March 31, 2020, we incurred $8.0 million, or $0.24 per common share, 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, which were paid subsequent to March 31, 2020.

We incurred $2.3 million of Virginia state taxes related to the deemed distributions for the year ended March 31, 2020, 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 which were paid subsequent to March 31, 2020.

The components of our net assets on a tax basis were as follows:

2 unchanged sentences

401,798 397,948

Cumulative unrealized (depreciation) appreciation of investments

Cumulative unrealized appreciation of investments

31,129 43,760

Cumulative unrealized depreciation of other

Undistributed ordinary income 21,380 13,862

Undistributed capital gain

10,552 15,731

Other temporary differences

4 unchanged sentences

Tax Year Ended March 31,

(Overdistributed) underdistributed net investment income

Underdistributed (overdistributed) net investment income

$ 1,301 $ ( 333 )

Accumulated net realized gain (loss) in excess of distributions

Accumulated net realized gain in excess of distributions

$ 263 $ 3,181

10 unchanged sentences

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 $0.7 million, $0.5 million, and $0.8 million for the calendar years ended December 31, 2021, 2020 and 2019, respectively.

We incurred an excise tax of $ 1.3 million, $ 0.7 million, and $ 0.5 million for the calendar years ended December 31, 2022, 2021 and 2020, respectively, which are included in Other general and administrative expenses on the accompanying Consolidated Statement of Operations .

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.

13 unchanged sentences

Financial Commitments and Obligations

We may have line of credit and delayed draw term loan commitments to certain of our portfolio companies that have not been fully drawn.

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, 2022 and 2021 to be immaterial.

We have also extended guaranties on behalf of two of our portfolio companies.

As of March 31, 2022, the following guaranties were 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 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.

We may have line of credit and delayed draw term debt commitments to certain of our portfolio companies that have not been fully drawn.

Since these line of credit and delayed draw term debt commitments have expiration dates, and we expect many will never be fully drawn, the total line of credit and delayed draw term debt 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, 2023 and 2022 to be insignificant.

We may also extend guaranties on behalf of our portfolio companies.

As of March 31, 2023, there were no guaranties outstanding.

As of March 31, 2022, the following guaranties were outstanding on behalf of two of our portfolio companies:

• 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 provided CCE with financing to bridge the time and cash flow gap between the order and delivery of golf carts to customers.

In conjunction with the term loan repayment by CCE in November 2022, the guaranty was released and terminated.

• A $ 9.3 million guaranty that we extended in February 2022, on behalf of J.R.

Hobbs, whereby we have guaranteed 50% of their obligations with another lender, with a maximum amount of $9.3 million.

As of March 31, 2022 and 2021, we have not been required to make any payments on these guaranties, 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, 2022 and 2021 to be immaterial.

The following table summarizes the principal balances of unused line of credit and delayed draw term loan commitments and guaranties as of March 31, 2022 and 2021, which are not reflected as liabilities in the accompanying Consolidated Statements of Assets and Liabilities :

Hobbs, whereby we had guaranteed 50 % of their obligations with another lender, with a maximum amount of $ 9.3 million.

In June 2022, the guaranty was released and terminated.

As of March 31, 2023 and 2022, we have not been required to make any payments on these guaranties, 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, 2023 and 2022 to be not significant.

The following table summarizes the principal balances of unused line of credit and delayed draw term debt commitments and guaranties as of March 31, 2023 and 2022, which are not reflected as liabilities in the accompanying Consolidated Statements of Assets and Liabilities :

As of March 31,

Unused line of credit and delayed draw term loan commitments

Unused line of credit and delayed draw term debt commitments

$ 2,150 $ 4,250

85 unchanged sentences

(A) Represents a supplemental distribution to common stockholders.

Revolving Line of Credit

On April 10, 2023, we, through Business Investment, entered into Amendment No.

7 to the Credit Facility to update the reference rate from LIBOR to Term SOFR plus an 11 basis point credit spread adjustment.

Director Activity

Terry Lee Brubaker resigned from our Board of Directors, effective April 14, 2023.

Brubaker's resignation was not a result of any disagreement with the Company on any matters relating to the Company's operations, policies, or practices.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

1 unchanged sentence

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