GLADSTONE INVESTMENT CORPORATIONDE 10-Q

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. The prices of securities held by us may decline in response to certain events, including those directly involving the companies whose securities are owned by us; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and interest rate fluctuations. The primary risk we believe we are exposed to is interest rate risk. Because we borrow money to make investments, our net investment income is dependent upon the difference between the rates at which we borrow funds, such as under our Credit Facility (which is variable) and our unsecured notes (which are fixed), and the rates at which we invest those funds. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income. We use a combination of debt and equity capital to finance our investing activities. We may use interest rate risk management techniques to limit our exposure to interest rate fluctuations. Such techniques may include various interest rate hedging activities to the extent permitted by the 1940 Act. We target to have approximately 90% of the loans in our portfolio at variable rates or variable rates with a floor mechanism, and approximately up to 10% at fixed rates. As of June 30, 2026 and March 31, 2026, all of our variable-rate loans had rates associated with the current 30-day SOFR rate, and our total debt investment portfolio consisted of the following breakdown based on the principal balance: Rates: June 30, 2026 March 31, 2026 Variable rates with a floor 100.0 % 100.0 % Fixed rates — % — % Total 100.0 % 100.0 % There have been no material changes in the quantitative and qualitative market risk disclosures during the three months ended June 30, 2026 from those included in our Annual Report. To illustrate the potential impact of changes in interest rates, we have performed the following hypothetical analysis, which assumes that our balance sheet and interest rates remain constant as of June 30, 2026 and no further actions are taken to alter our existing interest rate sensitivity. Basis Point Change Increase (Decrease) in Interest Income Increase (Decrease) in Interest Expense Net Increase (Decrease) in Net Assets Resulting from Operations Up 150 basis points $ 6,161 $ 2,398 $ 3,763 Up 100 basis points $ 3,578 $ 1,599 $ 1,979 Up 50 basis points $ 1,543 $ 799 $ 744 Down 50 basis points $ (1,370) $ (799) $ (571) Down 100 basis points $ (2,631) $ (1,599) $ (1,032) Down 150 basis points $ (3,657) $ (2,398) $ (1,259) Although management believes that this analysis is indicative of our existing interest rate sensitivity, it does not adjust for potential changes in credit quality, size and composition of our loan portfolio on the balance sheet and other business developments, including portfolio company defaults, that could affect net increase (decrease) in net assets resulting from operations. Accordingly, actual results could differ significantly from those in the hypothetical analysis in the table above. We may also experience risk associated with investing in securities of companies with foreign operations. Some of our portfolio companies have operations located outside the U.S. These risks include, but are not limited to, fluctuations in foreign currency exchange rates, potential tariffs, imposition of foreign taxes, changes in exportation regulations and political and social instability. 62 Table of Contents