What changed in this filing

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Item 1. Business

2026-05-12 compared with 2025-05-13 · 53 added, 46 removed, 524 unchanged (16% of the section changed)

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federal income tax purposes and obtain favorable RIC tax treatment, we must meet certain requirements, including certain minimum distribution requirements.

As of March 31, 2025, shares of our common stock, our 5.00% Notes due 2026 (“5.00% 2026 Notes”), our 4.875% Notes due 2028 (“4.875% 2028 Notes”), our 8.00% Notes due 2028 ("8.00% 2028 Notes") and our 7.875% Notes due 2030 ("7.875% 2030 Notes") are traded on the Nasdaq Global Select Market (“Nasdaq”) under the trading symbols “GAIN,” “GAINN,” “GAINZ,” "GAINL," and "GAINI" respectively.

As of March 31, 2026, shares of our common stock, our 5.00% Notes due 2026 (“5.00% 2026 Notes”), our 4.875% Notes due 2028 (“4.875% 2028 Notes”), our 7.875% Notes due 2030 ("7.875% 2030 Notes") and our 7.125% Notes due 2031 ("7.125% 2031 Notes") are traded on the Nasdaq Global Select Market (“Nasdaq”) under the trading symbols “GAIN,” “GAINN,” “GAINZ,” "GAINI," and "GAING," respectively.

Our 6.875% Notes due 2028 ("6.875% 2028 Notes") are not listed.

Investment Adviser and Administrator

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We have also entered into an administration agreement (the “Administration Agreement”) with Gladstone Administration, LLC (the “Administrator”), an affiliate of ours and the Adviser.

Each of the Adviser and the Administrator are privately-held companies that are indirectly owned by David Gladstone, our chairman and chief executive officer.

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

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

Each of the Adviser and the Administrator are privately-held companies that are indirectly owned by David Gladstone, our chairman.

David Dullum, our chief executive officer and president, also serves as the executive vice president of private equity of the Adviser.

Erika Highland and Christopher Lee, both of whom are executive vice presidents, also serve as senior managing directors of the Adviser.

Michael LiCalsi, our chief administrative officer, co-general counsel and co-secretary, also serves as the Administrator’s president, co-general counsel, and co-secretary, as well as the executive vice president of administration of the Adviser.

Erich Hellmold, our co-general counsel and co-secretary, also serves in the same roles for the Administrator and Adviser.

John Sateri, our chief investment officer, also serves in the same role for the Adviser.

Gladstone also serves on the board of directors of the Adviser, the board of managers of the Administrator, and as an executive officer of the Adviser and the Administrator.

The Administrator employs, among others, our chief financial officer and treasurer, chief valuation officer, chief compliance officer, general counsel and secretary (who also serves as the president of the Administrator) and their respective staffs.

The Administrator employs, among others, our chief financial officer and treasurer, chief valuation officer, chief compliance officer, chief administrative officer, co-general counsels and co-secretaries (one of whom also serves as the president of the Administrator) and their respective staffs.

The Adviser and Administrator have extensive experience in our lines of business and also provide investment advisory and administrative services, respectively, to our affiliates, including:

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Our investment objectives are to:

(i) achieve and grow current income by investing in debt securities of established businesses that we believe will provide stable earnings and cash flow to pay expenses, make principal and interest payments on our outstanding indebtedness and make distributions to stockholders that grow over

and (ii) provide our stockholders with long-term capital appreciation in the value of our assets by investing in equity securities of established businesses, generally in combination with the aforementioned debt securities, that we believe can grow over time to permit us to sell our equity investments for capital gains.

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We invest in portfolio companies that seek funds for management buyouts and/or growth capital to finance acquisitions, recapitalize or, to a lesser extent, refinance their existing debt facilities.

We seek to avoid investing in high-risk, early-stage enterprises.

Our targeted portfolio companies are generally considered too small for the larger capital marketplace.

We invest by ourselves or jointly with other funds and/or management of the portfolio company, depending on the opportunity.

In July 2012, the SEC granted us an exemptive order (the “Co-Investment Order”) that expanded our ability to co-invest, under certain circumstances, with certain of our affiliates, including Gladstone Capital and Gladstone Alternative and any future BDC or registered closed-end management investment company that is advised (or sub-advised if it controls the fund) by the Adviser, or any combination of the foregoing, subject to the conditions in the Co-Investment Order.

In September 2025, the SEC granted us our current Co-Investment Order that contains a more flexible requirement that allocations be “fair and equitable” to us and that the Adviser consider the interests of us in allocations and which minimizes certain board approval requirements from the prior Co-Investment Order.

We believe the Co-Investment Order has enhanced and will continue to enhance our ability to further our investment objectives and strategies.

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In general, our investments in debt securities have a term of five years, accrue interest at variable rates based on the 30 day Secured Overnight Financing Rate ("SOFR") and, to a lesser extent, at fixed rates.

As of March 31, 2025, our loan portfolio consisted of 100.0% variable rate loans with floors, based on the total principal balance of all outstanding debt investments.

As of March 31, 2026, our loan portfolio consisted of 100.0% variable rate loans with floors.

We seek debt instruments that pay interest monthly or, at a minimum, quarterly, and which may include a yield enhancement such as a success fee or, to a lesser extent, deferred interest provision and are primarily interest only, with all principal and any accrued but unpaid interest due at maturity.

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Often, these equity investments occur in connection with our original investment, buyouts and recapitalizations of a business, or refinancing existing debt.

From our initial public offering in 2005 through March 31, 2025, we invested in 62 companies, excluding investments in syndicated loans.

From our initial public offering in 2005 through March 31, 2026, we have invested in 66 companies, excluding investments in syndicated loans.

We expect that our investment portfolio will continue to primarily include the following three categories of investments in private companies in the U.S.:

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Investment Concentrations

As of March 31, 2025, our investment portfolio consisted of investments in 25 portfolio companies located in 19 states or countries across 16 different industries with an aggregate fair value of $979.3 million.

As of March 31, 2026, our investment portfolio consisted of investments in 29 portfolio companies located in 20 states and Canada across 16 different industries with an aggregate fair value of $1.3 billion.

Our investments in SFEG Holdings, Inc.

("SFEG"), Ricardo Defense, Inc.

("Ricardo"), Brunswick Bowling Products, Inc.

("Brunswick"), Nielsen-Kellerman Acquisition Corp.

("Nielsen-Kellerman") and The E3 Company, LLC ("E3") represented our five largest portfolio investments at fair value and collectively comprised $401.7 million, or 41.0%, of our total investment portfolio at fair value as of March 31, 2025.

("SFEG"), The E3 Company, LLC ("E3"), Schylling, Inc.

("Schylling"), Brunswick Bowling Products, Inc.

("Brunswick"), and Detroit Defense, Inc.

("Detroit Defense") represented our five largest portfolio investments at fair value and collectively comprised $582.6 million, or 44.5%, of our total investment portfolio at fair value as of March 31, 2026.

The following table summarizes our investments by security type as of March 31, 2026 and 2025:

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Total Investments

Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) $ 258,692 19.8 % $ 105,432 10.8 %

Diversified/Conglomerate Services 189,148 14.4 % 170,360 17.4 %

Home and Office Furnishings, Housewares, and Durable Consumer Products 159,236 16.3 % 160,038 17.3 %

Aerospace and Defense 174,542 13.4 % 107,869 10.9 %

Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) 105,432 10.8 % 92,781 10.1 %

Leisure, Amusement, Motion Pictures, and Entertainment 78,460 8.0 % 39,350 4.3 %

Electronics 71,573 7.2 % — — %

Home and Office Furnishings, Housewares, and Durable Consumer Products 166,553 12.7 % 159,236 16.3 %

Oil and Gas 125,605 9.6 % 69,589 7.1 %

Leisure, Amusement, Motion Pictures, and Entertainment 105,339 8.0 % 78,460 8.0 %

Buildings and Real Estate 68,987 5.3 % 69,320 7.1 %

Electronics 62,723 4.8 % 71,573 7.2 %

Chemicals, Plastics, and Rubber 49,715 3.8 % 11,612 1.2 %

Healthcare, Education, and Childcare 41,630 3.2 % 51,501 5.3 %

Mining, Steel, Iron and Non-Precious Metals 37,713 2.9 % 41,010 4.2 %

Cargo Transport 12,624 1.3 % 13,500 1.5 %

Printing and Publishing 8,379 0.6 % 11,681 1.2 %

Chemicals, Plastics, and Rubber 11,612 1.2 % 20,363 2.2 %

Hotels, Motels, Inns, and Gaming — — % 77,366 8.4 %

Telecommunications 7,942 0.6 % 7,585 0.8 %

Diversified/Conglomerate Manufacturing 6,763 0.5 % 6,493 0.7 %

Other < 2.0% 5,517 0.4 % 17,599 1.8 %

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$ 1,309,248 100.0 % $ 979,320 100.0 %

Our investments at fair value were included in the following geographic regions of the U.S and Canada as of March 31, 2025 and 2024:

Our investments at fair value were included in the following geographic regions of the U.S.

and Canada as of March 31, 2026 and 2025:

March 31, 2026 March 31, 2025

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South $ 649,436 49.6 % $ 317,294 32.4 %

Midwest 227,415 23.2 % 141,925 15.4 %

West 227,294 17.3 % 222,062 22.7 %

Midwest 216,726 16.6 % 227,415 23.2 %

Northeast 193,837 14.8 % 182,669 18.7 %

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The Adviser’s investment professionals review information received from these and other sources in search of potential financing opportunities.

If a potential opportunity matches our investment objectives, the investment professionals will seek an initial screening of the opportunity with our president, David Dullum, to authorize the submission of an indication of interest (“IOI”) to the prospective portfolio company.

If a potential opportunity matches our investment objectives, the investment professionals will seek an initial screening of the opportunity with our chief executive officer and president, David Dullum, to authorize the submission of an indication of interest (“IOI”) to the prospective portfolio company.

If the prospective portfolio company passes this initial screening and the IOI is accepted by the prospective company, the investment professionals will seek approval to issue a letter of intent (“LOI”) from the Adviser’s investment committee, which currently is composed of Messrs.

Gladstone and Dullum, as well as John Sateri and Laura Gladstone.

Gladstone, Dullum and John Sateri, as well as Laura Gladstone.

If this LOI is issued, then the Adviser and Gladstone Securities, LLC (“Gladstone Securities”) (collectively, the “Due Diligence Team”) will conduct a due diligence investigation and create a detailed profile summarizing the prospective portfolio company’s historical financial statements, industry, competitive position and management team and analyzing its conformity to our general investment criteria.

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Extensive Due Diligence

The Due Diligence Team conducts what we believe are extensive due diligence investigations of our prospective portfolio companies and investment opportunities.

The Due Diligence Team conducts what we believe are extensive evaluation and due diligence investigations of our prospective portfolio companies and investment opportunities.

The due diligence investigation typically begins with a review of publicly available information followed by in-depth business analysis, including some or all of the following:

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Once the Adviser has determined that an investment meets our standards and investment criteria, the Adviser works with the management of that company and other capital providers to structure the transaction in a way that we believe will provide us with the greatest opportunity to maximize our return on the investment, while providing appropriate incentives to management of the company.

As discussed above, the capital classes through which we typically structure a deal include first lien secured debt, second lien secured debt, and preferred and common equity or equivalents.

As discussed above, the capital classes through which we typically structure a deal include secured first lien debt, secured second lien debt, and preferred and common equity or equivalents.

Through its risk management process, the Adviser seeks to limit the downside risk of our investments by:

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• seeking collateral or superior positions in the portfolio company’s capital structure where possible;

• incorporating put and call protection rights into the investment structure where possible;

• incorporating put and call protection rights into the investment where possible;

• negotiating covenants in connection with our investments that afford our portfolio companies as much flexibility as possible in managing their businesses, while also preserving our capital;

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Each of Messrs.

Gladstone, Dullum and Sateri (also a managing director of the Adviser) have over 30 years of experience in investing in middle market companies and with operating in the BDC marketplace in general.

Gladstone, Dullum and Sateri have over 30 years of experience in investing in middle market companies and with operating in the BDC marketplace in general.

Gladstone also has principal management responsibility for the Adviser as an executive officer, and has worked at the Gladstone companies for more than 20 years.

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Investment Advisory and Management Agreement

Pursuant to our Advisory Agreement, we pay the Adviser certain fees as compensation for its services, consisting of a base management fee and an incentive fee, each as described below.

Our Board of Directors, including a majority of the directors who are not parties to the Advisory Agreement or interested persons of either party, unanimously approved the Advisory Agreement.

Pursuant to our Advisory Agreement, which was most recently amended and restated in January 2025, we pay the Adviser certain fees as compensation for its services, consisting of a base management fee and an incentive fee, each as described below.

On July 10, 2025, our Board of Directors, including a majority of the directors who are not parties to the Advisory Agreement or interested persons of either party, unanimously approved the renewal of the Advisory Agreement through August 31, 2026.

Our Board of Directors considered the following factors as the basis for its decision to approve the Advisory Agreement:

(1) the nature, extent and quality of services provided by the Adviser to our stockholders, (2) the investment performance of the Company and the Adviser, (3) the costs of the services to be provided and profits to be realized by the Adviser and its affiliates from the relationship with the Company, (4) the extent to which economies of scale will be realized as the Company and the Affiliated Public Funds grow and whether the fee level under the Advisory Agreement reflects the economies of scale for the Company’s investors, (5) the fee structure of the advisory and administrative agreements of comparable funds, (6) indirect profits to the Adviser created through the Company and (7) in light of the foregoing considerations, the overall fairness of the advisory fees paid under the Advisory Agreement.

On January 24, 2025, the Company entered into the Advisory Agreement, which was approved by the Company's stockholders at a stockholders' meeting on January 4, 2024, as a result of a change of control of the Adviser pursuant to a previously disclosed voting trust agreement.

There are no changes to the terms, including the fee structure and services to be provided, of the prior Advisory Agreement other than the date and term of the Advisory Agreement.

Based on the information reviewed and the considerations detailed above, our Board of Directors, including all of the directors who are not “interested persons” as that term is defined in the 1940 Act, concluded that the investment advisory fee rates and terms are fair and reasonable in relation to the services provided and approved the Advisory Agreement, as being in the best interests of our stockholders.

Base Management Fee

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(ii) negotiating important contractual financial relationships;

(iii) consulting services regarding restructuring of the portfolio company and financial modeling as it relates to raising additional debt and equity capital from unaffiliated third parties;

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

connection with adding and retaining key portfolio company management team members.

(iii) consulting services regarding restructuring of the portfolio company and financial modeling as it relates to raising additional debt and equity capital from unaffiliated third

and (iv) a primary role in interviewing, vetting and negotiating employment contracts with candidates in connection with adding and retaining key portfolio company management team members.

The Adviser non-contractually, unconditionally, and irrevocably credits 100% of any fees received for such services against the base management fee that we would otherwise be required to pay to the Adviser;

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For this purpose, pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence, consulting fees that we receive from portfolio companies, but excluding fees for providing managerial assistance) accrued by us during the calendar quarter, minus our operating expenses for the quarter.

Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with payment-in-kind interest and zero coupon securities), accrued income that we not yet received in cash.

Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

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The capital gains-based incentive fee payable to the Adviser is calculated based on (i) cumulative aggregate realized capital gains since our inception, less (ii) cumulative aggregate realized capital losses since our inception, less (iii) the entire portfolio’s aggregate unrealized capital depreciation, if any, as of the date of the calculation.

If this number is positive at the applicable calculation date, then the capital gains-based incentive fee for such year equals 20.0% of such amount, less the aggregate amount of any capital gains-based incentive fees paid in respect of our portfolio in all prior years.

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

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

in all prior years.

For calculation purposes, cumulative aggregate realized capital gains, if any, equals the sum of the excess between the net sales price of each investment, when sold, and the original cost of such investment since our inception.

Cumulative aggregate realized capital losses equals the sum of the deficit between the net sales price of each investment, when sold, and the original cost of such investment since our inception.

The entire 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.

For the years ended March 31, 2025 and 2024, capital gains-based incentive fees of $4.9 million and $1.1 million, respectively, were contractually due and paid to the Adviser.

For the year ended March 31, 2026, no capital gains-based incentive fees were contractually due and paid to the Adviser.

For the years ended March 31, 2025 and 2024, capital gains-based incentive fees of $4.9 million and $1.1 million, respectively, 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.

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

For the years ended March 31, 2025, 2024 and 2023, we recorded/(reversed) capital gains-based incentive fees of $7.4 million, $12.7 million and $(0.3) million, respectively.

For the years ended March 31, 2026, 2025 and 2024, we recorded capital gains-based incentive fees of $38.0 million, $7.4 million and $12.7 million, respectively.

Loan Servicing Fee Pursuant to Credit Facility

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Administration Agreement

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, general counsel and secretary (who also serves as the Administrator’s president, general counsel, and secretary), and their respective staffs.

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, chief administrative officer, co-general counsels and co-secretaries (who also serves as the Administrator’s co-general counsels and co-secretaries, and one of whom serves as the Administrator's president), and their respective staffs.

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 that the Administrator’s employees performed services for us in relation to their time spent performing services for all companies serviced by the Administrator.

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For the calendar years ended December 31, 2025, 2024 and 2023, we incurred $0.3 million, $1.2 million and $1.2 million, respectively, in excise taxes.

As of March 31, 2025, there was no capital loss carryforward.

As of March 31, 2026, there was a capital loss carryforward of $17.3 million.

Taxation of Our U.S.

The following summary generally describes certain U.S federal income tax consequences of an investment in our shares beneficially owned by U.S.

The following summary generally describes certain U.S.

federal income tax consequences of an investment in our shares beneficially owned by U.S.

stockholders.

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For the fiscal year ended March 31, 2026, Investment Company Taxable Income exceeded distributions declared and paid, and, in accordance with Section 855(a) of the Code, we elected to treat $21.3 million of the first distributions paid to common stockholders in the fiscal year ending March 31, 2027 as having been paid in the fiscal year ended March 31, 2026.

In addition, for the fiscal year ended March 31, 2025, net capital gains exceeded distributions declared and paid, and, in accordance with Section 855(a) of the Code, we elected to treat $18.7 million of the first distributions paid to common stockholders in the fiscal year ending March 31, 2026 as having been paid in the fiscal year ended March 31, 2025.

In addition, for the fiscal year ended March 31, 2026, the net capital loss carryforward balance was $17.3 million and no distributions paid in the fiscal year ending March 31, 2027 will be treated as having been paid in the fiscal year ended March 31, 2026.

If a common stockholder participates in our “opt in” dividend reinvestment plan, then the common stockholder will have their cash dividends and distributions automatically reinvested in additional shares of our common stock, rather than receiving cash dividends and distributions.

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Code of Ethics

We, and all of the Gladstone family of companies, have adopted a code of ethics and business conduct applicable to all of the officers, directors and personnel of such companies that complies with the guidelines set forth in Item 406 of Regulation S-K of the Securities Act, and Rule 17j-1 of the 1940 Act.

As required by the 1940 Act, this code establishes procedures for personal investments, restricts certain transactions by such personnel and requires the reporting of certain transactions and holdings by such personnel.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business