GLADSTONE CAPITAL CORP 10-Q

Item 1. Financial Statements (Unaudited) GLADSTONE CAPITAL CORPORATION CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED) June 30, 2023 September 30, 2022 ASSETS Investments, at fair value: Non-Control/Non-Affiliate investments (Cost of $ 650,784 and $ 571,736 , respectively) $ 642,847 $ 574,811 Affiliate investments (Cost of $ 50,327 and $ 49,412 , respectively) 42,023 39,091 Control investments (Cost of $ 34,071 and $ 34,905 , respectively) 30,454 35,713 Cash and cash equivalents 1,681 2,011 Restricted cash and cash equivalents 105 96 Interest receivable, net 4,237 2,737 Due from administrative agent 4,299 3,199 Deferred financing costs, net 1,509 836 Other assets, net 2,907 2,474 TOTAL ASSETS $ 730,062 $ 660,968 LIABILITIES Line of credit at fair value (Cost of $ 163,800 and $ 141,800 , respectively) $ 163,800 $ 141,800 Notes payable, net of unamortized deferred financing costs of $ 2,114 and $ 2,393 , respectively 197,886 197,607 Accounts payable and accrued expenses 1,069 500 Interest payable 4,307 2,517 Fees due to Adviser (A) 2,513 2,104 Fee due to Administrator (A) 696 423 Other liabilities 1,845 530 TOTAL LIABILITIES $ 372,116 $ 345,481 Commitments and contingencies (B) NET ASSETS Common stock, $ 0.001 par value per share, 44,000,000 and 44,560,000 shares authorized, respectively, and 38,600,686 and 34,734,796 shares issued and outstanding, respectively $ 39 $ 35 Capital in excess of par value 433,165 395,542 Cumulative net unrealized appreciation (depreciation) of investments ( 19,858 ) ( 6,438 ) Under (over) distributed net investment income 4,868 ( 500 ) Accumulated net realized losses ( 60,268 ) ( 73,152 ) Total distributable loss ( 75,258 ) ( 80,090 ) TOTAL NET ASSETS $ 357,946 $ 315,487 NET ASSET VALUE PER COMMON SHARE $ 9.27 $ 9.08 (A) Refer to Note 4— Related Party Transactions in the accompanying Notes to Consolidated Financial Statements for additional information. (B) Refer to Note 10— Commitments and Contingencies in the accompanying Notes to Consolidated Financial Statements for additional information. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 2 Table of Contents GLADSTONE CAPITAL CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED) Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 INVESTMENT INCOME Interest income Non-Control/Non-Affiliate investments $ 19,183 $ 10,550 $ 52,051 $ 31,318 Affiliate investments 1,023 806 2,865 2,612 Control investments 736 591 2,134 1,794 Cash and cash equivalents 29 1 93 1 Total interest income (excluding PIK interest income) 20,971 11,948 57,143 35,725 PIK interest income Non-Control/Non-Affiliate investments 629 568 1,980 2,619 Affiliate investments 139 77 415 77 Control investments 77 — 223 — Total PIK interest income 845 645 2,618 2,696 Total interest income 21,816 12,593 59,761 38,421 Success fee income Non-Control/Non-Affiliate investments 335 — 935 3,231 Affiliate Investments — — — 1,563 Total success fee income 335 — 935 4,794 Dividend income Non-Control/Non-Affiliate investments 42 493 830 2,002 Control investments 362 656 691 1,245 Total dividend income 404 1,149 1,521 3,247 Other income 268 42 461 749 Total investment income 22,823 13,784 62,678 47,211 EXPENSES Base management fee (A) 3,106 2,501 8,833 7,500 Loan servicing fee (A) 2,069 1,614 5,866 4,596 Incentive fee (A) 2,919 1,579 7,508 5,641 Administration fee (A) 417 407 1,237 1,187 Interest expense 5,553 3,150 15,091 9,177 Amortization of deferred financing costs 405 286 1,164 849 Professional fees 271 139 784 610 Other general and administrative expenses 402 346 1,110 1,045 Expenses, before credits from Adviser 15,142 10,022 41,593 30,605 Credit to base management fee - loan servicing fee (A) ( 2,069 ) ( 1,614 ) ( 5,866 ) ( 4,596 ) Credits to fees from Adviser - other (A) ( 1,926 ) ( 1,571 ) ( 3,082 ) ( 3,600 ) Total expenses, net of credits 11,147 6,837 32,645 22,409 NET INVESTMENT INCOME 11,676 6,947 30,033 24,802 NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss): Non-Control/Non-Affiliate investments ( 789 ) — 9,949 472 Affiliate investments — — — 13,408 Control investments 3,700 ( 8,496 ) 2,684 ( 8,496 ) Other 44 347 322 ( 120 ) Total net realized gain (loss) 2,955 ( 8,149 ) 12,955 5,264 Net unrealized appreciation (depreciation): Non-Control/Non-Affiliate investments 2,394 ( 5,596 ) ( 11,012 ) ( 2,027 ) Affiliate investments ( 228 ) ( 1,272 ) 2,017 ( 19,094 ) Control investments ( 4,752 ) 2,471 ( 4,425 ) 5,862 Other ( 161 ) — — — Total net unrealized appreciation (depreciation) ( 2,747 ) ( 4,397 ) ( 13,420 ) ( 15,259 ) Net realized and unrealized gain (loss) 208 ( 12,546 ) ( 465 ) ( 9,995 ) NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 11,884 $ ( 5,599 ) $ 29,568 $ 14,807 BASIC AND DILUTED PER COMMON SHARE: Net investment income $ 0.31 $ 0.20 $ 0.82 $ 0.72 Net increase (decrease) in net assets resulting from operations $ 0.32 $ ( 0.16 ) $ 0.81 $ 0.43 WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING: Basic and Diluted 37,680,465 34,304,371 36,492,168 34,304,371 (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. 3 Table of Contents GLADSTONE CAPITAL CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (DOLLAR AMOUNTS IN THOUSANDS) (UNAUDITED) 2023 2022 NET ASSETS, SEPTEMBER 30 $ 315,487 $ 318,439 OPERATIONS Net investment income 8,725 9,160 Net realized gain (loss) on investments 9,319 13,880 Net realized gain (loss) on other 253 ( 700 ) Net unrealized appreciation (depreciation) of investments ( 12,599 ) ( 10,237 ) Net increase (decrease) in net assets resulting from operations 5,698 12,103 DISTRIBUTIONS Distributions to common stockholders from net investment income ($ 0.21 per share and $ 0.20 per share, respectively) (A) ( 7,398 ) ( 6,689 ) Net decrease in net assets from distributions ( 7,398 ) ( 6,689 ) CAPITAL TRANSACTIONS Issuance of common stock 10,721 — Discounts, commissions and offering costs for issuance of common stock ( 182 ) — Net increase (decrease) in net assets resulting from capital transactions 10,539 — NET INCREASE (DECREASE) IN NET ASSETS 8,839 5,414 NET ASSETS, DECEMBER 31 $ 324,326 $ 323,853 OPERATIONS Net investment income 9,632 8,695 Net realized gain (loss) on investments 403 — Net realized gain (loss) on other 25 233 Net unrealized appreciation (depreciation) of investments 1,765 ( 625 ) Net unrealized depreciation of other 161 — Net increase (decrease) in net assets resulting from operations 11,986 8,303 DISTRIBUTIONS Distributions to common stockholders from net investment income ($ 0.23 per share and $ 0.20 per share, respectively) (A) ( 8,257 ) ( 6,689 ) Net decrease in net assets from distributions ( 8,257 ) ( 6,689 ) CAPITAL TRANSACTIONS Issuance of common stock 13,993 — Discounts, commissions and offering costs for issuance of common stock ( 237 ) — Net increase (decrease) in net assets resulting from capital transactions 13,756 — NET INCREASE (DECREASE) IN NET ASSETS 17,485 1,614 NET ASSETS, MARCH 31 $ 341,811 $ 325,467 OPERATIONS Net investment income 11,676 6,947 Net realized gain (loss) on investments 2,911 ( 8,496 ) Net realized gain (loss) on other 44 347 Net unrealized appreciation (depreciation) of investments ( 2,586 ) ( 4,397 ) Net unrealized appreciation of other ( 161 ) — Net increase (decrease) in net assets resulting from operations 11,884 ( 5,599 ) DISTRIBUTIONS Distributions to common stockholders from net investment income ($ 0.24 per share and $ 0.15 per share, respectively) (A) ( 9,082 ) ( 5,173 ) Distributions to common stockholders from return of capital ($ 0.00 per share and $ 0.05 per share, respectively) (A) — ( 1,774 ) Net decrease in net assets from distributions ( 9,082 ) ( 6,947 ) CAPITAL TRANSACTIONS Issuance of common stock 13,565 — Discounts, commissions and offering costs for issuance of common stock ( 232 ) — Net increase (decrease) in net assets resulting from capital transactions 13,333 — NET INCREASE (DECREASE) IN NET ASSETS 16,135 ( 12,546 ) NET ASSETS, JUNE 30 $ 357,946 $ 312,921 (A) Refer to Note 9 – Distributions to Common Stockholders in the accompanying Notes to Consolidated Financial Statements for additional information. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 4 Table of Contents GLADSTONE CAPITAL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLAR AMOUNTS IN THOUSANDS) (UNAUDITED) Nine Months Ended June 30, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net increase (decrease) in net assets resulting from operations $ 29,568 $ 14,807 Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities: Purchase of investments ( 148,084 ) ( 188,851 ) Principal repayments on investments 66,200 138,231 Net proceeds from sale of investments 18,296 15,929 Increase in investments due to PIK interest ( 2,779 ) ( 3,218 ) Net change in premiums, discounts and amortization 193 ( 605 ) Net realized loss (gain) on investments ( 12,633 ) ( 5,384 ) Net realized loss (gain) on other ( 322 ) 120 Net unrealized depreciation (appreciation) of investments 13,420 15,259 Net unrealized depreciation of other — — Changes in assets and liabilities: Amortization of deferred financing costs 1,164 849 Decrease (increase) in interest receivable, net ( 1,500 ) ( 1,068 ) Decrease (increase) in funds due from administrative agent ( 1,100 ) ( 372 ) Decrease (increase) in other assets, net ( 509 ) ( 685 ) Increase (decrease) in accounts payable and accrued expenses 569 ( 130 ) Increase (decrease) in interest payable 1,790 1,947 Increase (decrease) in fees due to Adviser (A) 409 ( 960 ) Increase (decrease) in fee due to Administrator (A) 273 294 Increase (decrease) in other liabilities 1,315 ( 4,766 ) Net cash provided by (used in) operating activities ( 33,730 ) ( 18,603 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from line of credit 123,000 235,500 Repayments on line of credit ( 101,000 ) ( 206,000 ) Proceeds from issuance of notes payable — 50,000 Redemption of notes payable — ( 38,813 ) Financing costs ( 1,559 ) ( 1,662 ) Proceeds from issuance of common stock 38,279 — Discounts, commissions and offering costs for issuance of common stock ( 574 ) — Distributions paid to common stockholders ( 24,737 ) ( 20,325 ) Net cash provided by (used in) financing activities 33,409 18,700 NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS ( 321 ) 97 CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF PERIOD 2,107 846 CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD $ 1,786 $ 943 CASH PAID FOR INTEREST $ 13,301 $ 7,230 NON-CASH ACTIVITIES (B) $ 2,416 $ 7,489 (A) Refer to Note 4— Related Party Transactions in the accompanying Notes to Consolidated Financial Statements for additional information. (B) Non-cash activities relate to the October 2022 exit of our investment in Targus Cayman HoldCo Ltd., which was sold for net proceeds of approximately $ 8.0 million, resulting in a realized gain of approximately $ 5.9 million. As part of the proceeds, we received an interest in B. Riley Financial, Inc. 6.75 % senior notes in the amount of $ 2.4 million. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 5 Table of Contents GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS JUNE 30, 2023 (UNAUDITED) (DOLLAR AMOUNTS IN THOUSANDS) Company and Investment (A)(B)(K)(Q) Principal/ Shares/ Units (I)(J) Cost Fair Value NON-CONTROL/NON-AFFILIATE INVESTMENTS (M) – 179.6 % Secured First Lien Debt – 134.6 % Aerospace and Defense – 20.0 % Antenna Research Associates, Inc. – Term Debt (S + 10.0 %, 15.1 % Cash, 4.0 % PIK, Due 11/2026) (E) $ 22,041 $ 22,041 $ 22,041 Ohio Armor Holdings, LLC – Term Debt (S + 8.0 %, 13.1 % Cash, Due 2/2026) (C) 18,031 18,013 17,670 SpaceCo Holdings, LLC – Line of Credit, $ 100 available (S + 7.2 %, 12.4 % Cash, Due 12/2025) (C)(U) 1,900 1,900 1,869 SpaceCo Holdings, LLC – Term Debt (S + 7.2 %, 12.4 % Cash, Due 12/2025) (C)(U) 30,491 30,136 29,995 72,090 71,575 Beverage, Food, and Tobacco – 19.3 % Cafe Zupas – Line of Credit, $ 1,500 available (S + 6.8 %, 11.9 % Cash, Due 12/2024) (C) — — — Café Zupas – Delayed Draw Term Loan, $ 6,070 available (S + 6.8 %, 11.9 % Cash, Due 12/2024) (C) 3,970 3,970 3,891 Café Zupas – Term Debt (S + 6.8 %, 11.9 % Cash, Due 12/2024) (C) 23,460 23,460 22,991 Eegee’s LLC – Line of Credit, $ 1,000 available (S + 7.8 %, 12.9 % Cash, Due 6/2026) (C) — — — Eegee’s LLC – Delayed Draw Term Loan, $ 4,500 available (S + 7.8 %, 12.9 % Cash, Due 6/2026) (C) 3,000 3,000 2,873 Eegee’s LLC – Term Debt (S + 7.8 %, 12.9 % Cash, Due 6/2026) (C) 17,000 17,000 16,278 Salt & Straw, LLC – Line of Credit, $ 60 available (S + 9.1 %, 14.2 % Cash, Due 9/2027) (C) 1,940 1,940 1,853 Salt & Straw, LLC – Delayed Draw Term Loan, $ 3,000 available (S + 9.1 %, 14.2 % Cash, Due 9/2027) (C) 8,500 8,430 8,118 Sokol & Company Holdings, LLC – Term Debt (S + 7.0 %, 12.1 % Cash, Due 8/2027) (C) 13,500 13,500 13,179 71,300 69,183 Buildings and Real Estate – 0.6 % GFRC 360, LLC – Line of Credit, $ 50 available (S + 8.0 %, 13.1 % Cash, Due 9/2023) (C) 1,150 1,150 1,076 GFRC 360, LLC – Term Debt (S + 8.0 %, 13.1 % Cash, Due 9/2023) (C) 1,000 1,000 936 2,150 2,012 Diversified/Conglomerate Manufacturing – 32.2 % Engineering Manufacturing Technologies, LLC – Line of Credit, $ 3,000 available (S + 8.3 %, 13.4 % Cash, Due 10/2026) (C) — — — Engineering Manufacturing Technologies, LLC – Term Debt (S + 8.3 %, 13.4 % Cash, Due 10/2026) (C) 21,500 21,500 20,317 NeoGraf Solutions LLC – Line of Credit, $ 4,500 available (S + 7.0 %, 11.0 % Cash, 1.1 % PIK, Due 1/2028) (C) — — — NeoGraf Solutions LLC – Term Debt (S + 7.0 %, 11.0 % Cash, 1.1 % PIK, Due 1/2028) (C) 27,070 27,070 26,258 OCI, LLC – Term Debt (S + 7.5 %, 12.6 % Cash, Due 5/2028) (C) 20,000 20,000 20,000 Salvo Technologies, Inc. – Term Debt (S + 9.5 %, 14.6 % Cash, Due 4/2027) (C) 11,797 11,797 10,971 Unirac Holdings, Inc. – Line of Credit, $ 1,022 available (S + 6.5 %, 11.6 % Cash, Due 9/2027) (C) 1,200 1,200 1,201 Unirac Holdings, Inc. – Delayed Draw Term Loan, $ 1,669 available (S + 6.5 %, 11.6 % Cash, Due 9/2027) (C) 1,108 1,108 1,110 Unirac Holdings, Inc. – Term Debt (S + 6.5 %, 11.6 % Cash, Due 9/2027) (C) 14,888 14,561 14,906 Viva Railings, LLC – Line of Credit, $ 4,000 available (S + 7.1 %, 12.2 % Cash, Due 5/2027) (C) — — — Viva Railings, LLC – Term Debt (S + 7.1 %, 12.2 % Cash, Due 5/2027) (C) 20,747 20,747 20,488 117,983 115,251 Diversified/Conglomerate Service – 29.6 % Axios Industrial Group, LLC – Term Debt (S + 9.1 %, 14.2 % Cash, Due 10/2027) (C) 9,000 8,967 8,843 Axios Industrial Group, LLC – Delayed Draw Term Loan, $ 5,000 available (S + 9.1 %, 14.2 % Cash, Due 10/2027) (C) 3,000 3,000 2,948 DKI Ventures, LLC – Term Debt (S + 8.0 %, 13.1 % Cash, Due 12/2023) (C) 5,915 5,915 3,549 ENET Holdings, LLC – Term Debt (S + 7.3 %, 12.4 % Cash, Due 4/2025) (C) 22,289 22,289 21,453 Fix-It Group, LLC – Line of Credit, $ 2,000 available (S + 8.1 %, 13.2 % Cash, Due 12/2026) (C) 1,000 1,000 1,000 Fix-It Group, LLC – Term Debt (S + 8.1 %, 13.2 % Cash, Due 12/2026) (C) 12,200 12,200 12,200 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 6 Table of Contents GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS JUNE 30, 2023 (UNAUDITED) (DOLLAR AMOUNTS IN THOUSANDS) Company and Investment (A)(B)(K)(Q) Principal/ Shares/ Units (I)(J) Cost Fair Value Fix-It Group, LLC – Delayed Draw Term Loan, $ 0 available (S + 8.1 %, 13.2 % Cash, Due 12/2026) (C) 6,911 6,911 6,911 Leadpoint Business Services, LLC – Term Debt (S + 8.5 %, 13.6 % Cash, Due 2/2028) (C) 13,500 13,500 13,365 MCG Energy Solutions, LLC – Term Debt (S + 7.6 %, 12.7 % Cash, 3.5 % PIK, Due 3/2026) (C) 20,111 20,068 18,226 Trowbridge Chicago, LLC – Line of Credit, $ 2,000 available (S + 7.0 %, 12.1 % Cash, Due 6/2029) (C) — — — Trowbridge Chicago, LLC – Term Debt (S + 7.0 %, 12.1 % Cash, Due 6/2029) (C) 5,750 5,750 5,750 Trowbridge Chicago, LLC – Delayed Draw Term Loan, $ 5,250 available (S + 7.0 %, 12.1 % Cash, Due 6/2029) (C) — — — WorkforceQA, LLC – Line of Credit, $ 2,000 available (S + 6.5 %, 11.6 % Cash, Due 12/2026) (C) — — — WorkforceQA, LLC – Term Debt (S + 8.4 %, 13.5 % Cash, Due 12/2026) (C)(H) 10,000 9,969 9,975 WorkforceQA, LLC – Term Debt (S + 9.5 %, 14.6 % Cash, Due 12/2026) (C)(H) 1,600 1,595 1,596 111,164 105,816 Healthcare, Education, and Childcare – 29.7 % ALS Education, LLC – Line of Credit, $ 3,000 available (S + 7.0 %, 12.1 % Cash, Due 5/2025) (C) — — — ALS Education, LLC – Term Debt (S + 7.0 %, 12.1 % Cash, Due 5/2025) (C) 19,030 19,030 18,982 HH-Inspire Acquisition, Inc. – Line of Credit, $ 1,212 available (S + 8.0 %, 13.3 % Cash, Due 4/2028) (C)(U) 624 624 624 HH-Inspire Acquisition, Inc. – Term Debt (S + 8.0 %, 13.3 % Cash, Due 4/2028) (C)(U) 16,013 16,013 16,013 HH-Inspire Acquisition, Inc. – Term Debt (S + 8.0 %, 13.3 % Cash, Due 4/2028) (C)(U) 3,225 3,225 3,225 Pansophic Learning, Ltd. – Term Debt (S + 7.5 %, 12.8 % Cash, Due 3/2027) (C)(U) 28,000 27,966 28,000 Pansophic Learning, Ltd. – Term Debt (S + 7.5 %, 12.8 % Cash, Due 3/2027) (C)(U) 5,000 4,994 5,000 Technical Resource Management, LLC – Line of Credit, $ 3,000 available (S + 8.0 %, 13.1 % Cash, Due 4/2028) (C) — — — Technical Resource Management, LLC – Term Debt (S + 8.0 %, 13.1 % Cash, Due 4/2028) (C) 23,000 23,000 23,000 Technical Resource Management, LLC – Delayed Draw Term Loan, $ 2,500 available (S + 8.0 %, 13.1 % Cash, Due 4/2028) (C) — — — Turn Key Health Clinics, LLC – Line of Credit, $ 1,500 available (S + 7.3 %, 12.4 % Cash, Due 6/2026) (C) 500 500 500 Turn Key Health Clinics, LLC – Term Debt (S + 7.3 %, 12.4 % Cash, Due 6/2026) (C) 11,000 11,000 11,000 106,352 106,344 Machinery – 1.5 % Arc Drilling Holdings LLC – Line of Credit, $ 1,000 available (S + 11.5 %, 10.5 % Cash, 6.1 % PIK, Due 2/2024) (C) — — — Arc Drilling Holdings LLC – Term Debt (S + 11.5 %, 10.5 % Cash, 6.1 % PIK, Due 2/2024) (C) 5,835 5,835 5,522 5,835 5,522 Telecommunications – 1.7 % B+T Group Acquisition, Inc. (S) – Line of Credit, $ 0 available (S + 11.0 %, 16.1 % Cash, Due 12/2024) (C) 1,200 1,200 996 B+T Group Acquisition, Inc. (S) – Term Debt (S + 11.0 %, 16.1 % Cash, Due 12/2024) (C) 6,000 6,000 4,980 7,200 5,976 Total Secured First Lien Debt $ 494,074 $ 481,679 Secured Second Lien Debt – 31.5 % Automobile – 3.3 % Sea Link International IRB, Inc. – Term Debt ( 11.3 % Cash, 2.0 % PIK, Due 12/2025) (C)(F) $ 12,021 $ 11,989 $ 11,630 Beverage, Food, and Tobacco – 0.7 % 8th Avenue Food & Provisions, Inc. – Term Debt (S + 7.9 %, 13.0 % Cash, Due 10/2026) (D) 3,683 3,683 2,431 Diversified/Conglomerate Manufacturing – 10.1 % OCI, LLC – Term Debt ( 7.0 % Cash, 7.0 % PIK, Due 11/2028) (C)(F) 2,000 2,000 2,000 Springfield, Inc. – Term Debt (S + 10.1 %, 15.2 % Cash, Due 12/2026) (C) 30,000 30,000 29,888 Tailwind Smith Cooper Intermediate Corporation – Term Debt (S + 9.0 %, 14.3 % Cash, Due 5/2027) (D)(U) 5,000 4,849 4,300 36,849 36,188 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 7 Table of Contents GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS JUNE 30, 2023 (UNAUDITED) (DOLLAR AMOUNTS IN THOUSANDS) Company and Investment (A)(B)(K)(Q) Principal/ Shares/ Units (I)(J) Cost Fair Value Diversified/Conglomerate Service – 3.2 % CHA Holdings, Inc. – Term Debt (S + 9.0 %, 14.3 % Cash, Due 4/2026) (D)(U) 3,000 2,973 2,760 Gray Matter Systems, LLC – Term Debt ( 11.3 % Cash, Due 12/2026) (C)(F) 8,600 8,553 8,589 11,526 11,349 Healthcare, Education, and Childcare – 8.0 % Giving Home Health Care, LLC – Term Debt ( 12.5 % Cash, Due 2/2028) (C)(F) 28,800 28,800 28,728 Machinery – 0.2 % CPM Holdings, Inc. – Term Debt (L + 8.3 %, 13.5 % Cash, Due 11/2026) (D)(V) 798 798 792 Oil and Gas – 6.0 % Imperative Holdings Corporation – Term Debt (S + 9.8 %, 14.9 % Cash, Due 8/2028) (C) 21,765 21,611 21,493 Total Secured Second Lien Debt $ 115,256 $ 112,611 Unsecured Debt – 0.0 % Diversified/Conglomerate Service – 0.0 % Frontier Financial Group Inc. – Convertible Debt ( 6.0 %, Due 6/2022) (E)(F) $ 198 $ 198 $ 32 Total Unsecured Debt $ 198 $ 32 Preferred Equity – 6.1 % Automobile – 0.0 % Sea Link International IRB, Inc. – Preferred Stock (E)(G) 98,039 98 175 Beverage, Food, and Tobacco – 0.0 % Triple H Food Processors, LLC – Preferred Stock (E)(G) 75 75 135 Buildings and Real Estate – 0.1 % GFRC 360, LLC – Preferred Stock (E)(G) 1,000 1,025 263 Diversified/Conglomerate Manufacturing – 0.6 % Salvo Technologies, Inc. – Preferred Stock (E)(G) 2,500 2,500 2,011 Diversified/Conglomerate Service – 2.7 % Frontier Financial Group Inc. – Preferred Stock (E)(G) 766 500 — Frontier Financial Group Inc. – Preferred Stock Warrant (E)(G) 168 — — MCG Energy Solutions, LLC – Preferred Stock (E) 7,000,000 7,000 8,904 Trowbridge Chicago, LLC – Preferred Stock (E)(G) 242,105 750 750 8,250 9,654 Healthcare, Education, and Childcare – 1.2 % HH-Inspire Acquisition, Inc. – Preferred Stock (E)(G) 1,329,054 2,251 4,213 Oil and Gas – 1.5 % FES Resources Holdings LLC – Preferred Equity Units (E)(G) 6,350 6,350 3,619 Imperative Holdings Corporation – Preferred Equity Units (E)(G) 972,569 488 1,656 6,838 5,275 Telecommunications – 0.0 % B+T Group Acquisition, Inc. (S) – Preferred Stock (E)(G) 6,130 2,024 — Total Preferred Equity $ 23,061 $ 21,726 Common Equity – 7.4 % Aerospace and Defense – 4.6 % Antenna Research Associates, Inc. – Common Equity Units (E)(G) 4,283 $ 4,283 $ 15,814 Ohio Armor Holdings, LLC – Common Equity (E)(G) 100 1,000 543 5,283 16,357 Automobile– 0.1 % Sea Link International IRB, Inc.– Common Equity Units (E)(G) 823,333 823 322 Beverage, Food, and Tobacco – 0.8 % Salt & Straw, LLC – Common Warrant (E)(G) 0.4 % — — Sokol & Company Holdings, LLC – Common Stock (E)(G) 1,500,000 1,500 1,581 Triple H Food Processors, LLC – Common Stock (E)(G) 250,000 250 1,311 1,750 2,892 Buildings and Real Estate – 0.0 % GFRC 360, LLC – Common Stock Warrants (E)(G) 45 % — — Diversified/Conglomerate Manufacturing – 0.2 % Engineering Manufacturing Technologies, LLC – Common Stock (E)(G) 6,000 3,000 — THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 8 Table of Contents GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS JUNE 30, 2023 (UNAUDITED) (DOLLAR AMOUNTS IN THOUSANDS) Company and Investment (A)(B)(K)(Q) Principal/ Shares/ Units (I)(J) Cost Fair Value OCI, LLC – Common Units (E)(G) 306 — — NeoGraf Solutions LLC – Common Stock (E)(G) 2,000,000 2,000 855 5,000 855 Diversified/Conglomerate Service – 0.1 % WorkforceQA, LLC – Common Stock (E)(G) 532 532 391 Healthcare, Education, and Childcare – 1.6 % Giving Home Health Care, LLC – Warrant (E)(G) 10,667 19 2,415 GSM MidCo LLC – Common Stock (E)(G) 767 767 1,118 Leeds Novamark Capital I, L.P. – Limited Partnership Interest ($ 843 uncalled capital commitment) (G)(L)(R) 3.5 % — 193 Technical Resource Management, LLC – Common Stock (E)(G) 2,000,000 2,000 2,000 2,786 5,726 Machinery – 0.0 % Arc Drilling Holdings LLC – Common Stock (E)(G) 15,000 1,500 106 Oil and Gas – 0.0 % FES Resources Holdings LLC – Common Equity Units (E)(G) 6,233 — — Total Safety Holdings, LLC – Common Equity (E)(G) 435 499 119 499 119 Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0 % Funko Acquisition Holdings, LLC (S) – Common Units (G)(T) 4,239 22 31 Telecommunications – 0.0 % B+T Group Acquisition, Inc. (S) – Common Stock Warrant (E)(G) 1.5 % — — Total Common Equity $ 18,195 $ 26,799 Total Non-Control/Non-Affiliate Investments $ 650,784 $ 642,847 AFFILIATE INVESTMENTS (N) – 11.7 % Secured First Lien Debt – 9.9 % Diversified/Conglomerate Manufacturing – 0.8 % Edge Adhesives Holdings, Inc. (S) – Term Debt (S + 5.5 %, 10.6 % Cash, Due 8/2024) (E)(P) $ 6,140 $ 6,140 $ 2,752 Diversified/Conglomerate Service – 9.1 % Encore Dredging Holdings, LLC – Line of Credit, $ 3,000 available (S + 8.3 %, 13.4 % Cash, Due 12/2025) (C) — — — Encore Dredging Holdings, LLC – Term Debt (S + 7.0 %, 12.1 % Cash, 1.5 % PIK, Due 12/2025) (C) 23,881 23,881 23,284 Encore Dredging Holdings, LLC – Term Debt (S + 7.0 %, 12.1 % Cash, 2.5 % PIK, Due 12/2025) (C) 4,619 4,619 4,503 Encore Dredging Holdings, LLC – Delayed Draw Term Loan, $ 0 available (S + 7.0 %, 12.1 % Cash, 1.5 % PIK, Due 12/2025) (C) 5,081 5,081 4,954 33,581 32,741 Total Secured First Lien Debt $ 39,721 $ 35,493 Preferred Equity – 1.4 % Diversified/Conglomerate Manufacturing – 0.0 % Edge Adhesives Holdings, Inc. (S) – Preferred Stock (E)(G) 5,466 $ 5,466 $ — Diversified/Conglomerate Service– 1.2 % Encore Dredging Holdings, LLC – Preferred Stock (E)(G) 3,840,000 3,840 $ 4,278 Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.2 % Canopy Safety Brands, LLC – Preferred Stock (E)(G) 500,000 500 846 Total Preferred Equity $ 9,806 $ 5,124 Common Equity – 0.4 % Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.4 % Canopy Safety Brands, LLC – Common Stock (E)(G) 1,170,370 800 1,406 Total Common Equity $ 800 $ 1,406 Total Affiliate Investments $ 50,327 $ 42,023 CONTROL INVESTMENTS (O) – 8.5 % Secured First Lien Debt – 4.5 % Diversified/Conglomerate Manufacturing – 1.1 % THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 9 Table of Contents GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS JUNE 30, 2023 (UNAUDITED) (DOLLAR AMOUNTS IN THOUSANDS) Company and Investment (A)(B)(K)(Q) Principal/ Shares/ Units (I)(J) Cost Fair Value Lonestar EMS, LLC – Term Debt ( 8.0 % PIK, Due 6/2027) (E)(F) $ 3,847 $ 3,847 $ 3,847 Personal and Non-Durable Consumer Products (Manufacturing Only) – 3.2 % WB Xcel Holdings, LLC – Line of Credit, $ 32 available (S + 10.5 %, 15.6 % Cash, Due 11/2026) (E) 1,468 1,468 1,468 WB Xcel Holdings, LLC – Term Debt (S + 10.5 %, 15.6 % Cash, Due 11/2026) (E) 9,850 9,850 9,850 11,318 11,318 Printing and Publishing – 0.2 % TNCP Intermediate HoldCo, LLC – Line of Credit, $ 1,100 available ( 8.0 % Cash, Due 10/2024) (E)(F) 900 900 900 Total Secured First Lien Debt $ 16,065 $ 16,065 Secured Second Lien Debt – 2.1 % Automobile– 2.1 % Defiance Integrated Technologies, Inc. – Term Debt (S + 9.6 %, 14.7 % Cash, Due 5/2026) (E) $ 7,425 $ 7,425 $ 7,425 Preferred Equity – 0.3 % Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.3 % WB Xcel Holdings, LLC – Preferred Stock (E)(G) 333 2,750 1,141 Common Equity – 1.6 % Automobile– 0.7 % Defiance Integrated Technologies, Inc. – Common Stock (E)(G) 33,321 $ 580 $ 2,639 Diversified/Conglomerate Manufacturing – 0.0 % Lonestar EMS, LLC – Common Units (E)(G) 100 % 6,750 — Machinery – 0.1 % PIC 360, LLC – Common Equity Units (E)(G) 750 1 256 Printing and Publishing – 0.8 % TNCP Intermediate HoldCo, LLC – Common Equity Units (E)(G) 790,000 500 2,928 Total Common Equity $ 7,831 $ 5,823 Total Control Investments $ 34,071 $ 30,454 TOTAL INVESTMENTS – 199.8 % $ 735,182 $ 715,324 (A) Certain of the securities listed in this schedule are issued by affiliate(s) of the indicated portfolio company. The majority of the securities listed, totaling $ 649.2 million at fair value, are pledged as collateral under our revolving line of credit, as described further in Note 5— Borrowings in the accompanying Notes to Consolidated Financial Statements. Under the Investment Company Act of 1940, as amended (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 June 30, 2023, our investments in Leeds Novamark Capital I, L.P. (“Leeds”) and Funko Acquisition Holdings, LLC (“Funko”) are considered non-qualifying assets under Section 55 of the 1940 Act. Such non-qualifying assets represent less than 0.1 % of total investments, at fair value, as of June 30, 2023. (B) Unless indicated otherwise, all cash interest rates are indexed to one-month Secured Overnight Financing Rate (“SOFR” or “S”), which was 5.14 % as of June 30, 2023. If applicable, paid-in-kind (“PIK”) interest rates are noted separately from the cash interest rate. Certain securities are subject to an interest rate floor. The cash interest rate is the greater of the floor or the reference rate plus a spread. Due dates represent the contractual maturity date. (C) Fair value was based on an internal yield analysis or on estimates of value submitted by ICE Data Pricing and Reference Data, LLC (“ICE”). (D) Fair value was based on the indicative bid price on or near June 30, 2023, offered by the respective syndication agent’s trading desk. (E) Fair value was based on the total enterprise value of the portfolio company, which was then allocated to the portfolio company’s securities in order of their relative priority in the capital structure. (F) Debt security has a fixed interest rate. (G) Security is non-income producing. (H) The Company has entered into an agreement that entitles it to the "last out" tranche of the first lien secured loans, whereby the "first out" tranche will receive priority as to the "last out" tranche with respect to payments of principal, interest, and any other amounts due thereunder. (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. (J) Where applicable, aggregates all shares of a class of stock owned without regard to specific series owned within such class (some series of which may or may not be voting shares) or aggregates all warrants to purchase shares of a class of stock owned without regard to specific series of such class of stock such warrants allow us to purchase. (K) Category percentages represent the fair value of each category and subcategory as a percentage of net assets as of June 30, 2023. (L) There are certain limitations on our ability to withdraw our partnership interest prior to dissolution of the entity, which must occur no later than May 9, 2024 or two years after all outstanding leverage has matured. (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. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 10 Table of Contents (N) Affiliate investments, as defined by the 1940 Act, are those 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) Debt security is on non-accrual status. (Q) Unless indicated otherwise, all of our investments are valued using Level 3 inputs within the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”) fair value hierarchy. Refer to Note 3— Investments in the accompanying Notes to Consolidated Financial Statements for additional information. (R) Fair value was based on net asset value provided by the fund as a practical expedient. (S) One of our affiliated funds, Gladstone Investment Corporation, co-invested with us in this portfolio company pursuant to an exemptive order granted by the U.S. Securities and Exchange Commission. (T) Our investment in Funko was valued using Level 2 inputs within ASC 820 of the fair value hierarchy. Our common units in Funko are convertible to class A common stock in Funko, Inc. upon meeting certain requirements. Fair value was based on the closing market price of shares of Funko, Inc. as of the reporting date, less a discount for lack of marketability. Funko, Inc. 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. (U) The cash interest rate on this investment was indexed to 90-day SOFR, which was 5.27 % as of June 30, 2023. (V) The cash interest rate on this investment was indexed to 30-day LIBOR, which was 5.22 % as of June 30, 2023 and transitioned to one month SOFR on July 3, 2023. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 11 Table of Contents GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2022 (DOLLAR AMOUNTS IN THOUSANDS) Company and Investment (A)(B)(W)(K) Principal/ Shares/ Units (J)(I) Cost Fair Value NON-CONTROL/NON-AFFILIATE INVESTMENTS (M) – 182.2 % Secured First Lien Debt – 131.2 % Aerospace and Defense – 23.4 % Antenna Research Associates, Inc. – Term Debt (SOFR + 10.0 %, 13.0 % Cash, 4.0 % PIK, Due 11/2026) (E) $ 21,973 $ 21,973 $ 21,973 Ohio Armor Holdings, LLC – Term Debt (L + 8.0 %, 11.1 % Cash, Due 2/2026) (C) $ 18,913 18,913 18,558 SpaceCo Holdings, LLC – Line of Credit, $ 100 available (L + 7.0 %, 10.8 % Cash, Due 12/2025) (C)(U) $ 1,900 1,900 1,886 SpaceCo Holdings, LLC – Term Debt (L + 7.0 %, 10.8 % Cash, Due 12/2025) (C)(U) $ 31,719 31,326 31,481 74,112 73,898 Beverage, Food, and Tobacco – 18.7 % Café Zupas – Line of Credit, $ 4,000 available (L + 7.4 %, 10.5 % Cash, Due 12/2024) (C) $ — — — Café Zupas – Delayed Draw Term Loan, $ 0 available (L + 7.4 %, 10.5 % Cash, Due 12/2024) (C) $ 1,970 1,970 1,958 Café Zupas – Term Debt (L + 7.4 %, 10.5 % Cash, Due 12/2024) (C) $ 23,460 23,460 23,313 Eegee’s LLC – Line of Credit, $ 1,000 available (L + 8.3 %, 11.4 % Cash, Due 6/2026) (C) $ — — — Eegee’s LLC – Delayed Draw Term Loan, $ 4,500 available (L + 8.3 %, 11.4 % Cash, Due 6/2026) (C) $ 3,000 3,000 2,910 Eegee’s LLC – Term Debt (L + 8.3 %, 11.4 % Cash, Due 6/2026) (C) $ 17,000 17,000 16,490 Salt & Straw, LLC – Line of Credit, $ 1,200 available (L + 8.0 %, 11.1 % Cash, Due 9/2027) (C) $ 800 800 800 Salt & Straw, LLC – Delayed Draw Term Loan, $ 11,500 available (L + 8.0 %, 11.1 % Cash, Due 9/2027) (C) $ — — — Sokol & Company Holdings, LLC – Term Debt (SOFR + 7.0 %, 10.0 % Cash, Due 8/2027) (C)(AA) $ 13,500 13,500 13,500 59,730 58,971 Buildings and Real Estate – 0.5 % GFRC 360, LLC – Line of Credit, $ 500 available (L + 8.0 %, 11.1 % Cash, Due 9/2023) (C) $ 700 700 681 GFRC 360, LLC – Term Debt (L + 8.0 %, 11.1 % Cash, Due 9/2023) (C) $ 1,000 1,000 973 1,700 1,654 Diversified/Conglomerate Manufacturing – 22.3 % Engineering Manufacturing Technologies, LLC – Line of Credit, $ 3,000 available (L + 8.3 %, 11.4 % Cash, Due 10/2026) (C) $ — — — Engineering Manufacturing Technologies, LLC – Term Debt (L + 8.3 %, 11.4 % Cash, Due 10/2026) (C) $ 22,500 22,500 22,134 Salvo Technologies, Inc. – Term Debt (SOFR + 9.5 %, 12.5 % Cash, Due 4/2027) (C)(AA) $ 11,887 11,887 11,619 Viva Railings, LLC – Line of Credit, $ 4,000 available (L + 7.0 %, 10.1 % Cash, Due 5/2027) (C) $ — — — Viva Railings, LLC – Term Debt (L + 7.0 %, 10.1 % Cash, Due 5/2027) (C) $ 21,800 21,800 21,364 Unirac Holdings, Inc. – Line of Credit, $ 2,222 available (SOFR + 6.5 %, 9.5 % Cash, Due 9/2027) (C)(AA) $ — — — Unirac Holdings, Inc. – Delayed Draw Term Loan, $ 2,778 available (SOFR + 6.5 %, 9.5 % Cash, Due 9/2027) (C)(AA) $ — — — Unirac Holdings, Inc. – Term Debt (SOFR + 6.5 %, 9.5 % Cash, Due 9/2027) (C)(AA) $ 15,000 14,628 15,000 70,815 70,117 Diversified/Conglomerate Service – 31.1 % Axios Industrial Group, LLC – Term Debt (SOFR + 9.5 %, 12.6 % Cash, Due 10/2027) (C)(AA) $ 9,000 9,000 8,741 Axios Industrial Group, LLC– Delayed Draw Term Loan, $ 5,000 available (SOFR + 9.5 %, 12.6 % Cash, Due 10/2027) (C)(AA) $ 3,000 3,000 2,914 DKI Ventures, LLC – Term Debt (SOFR + 8.0 %, 11.0 % Cash, Due 12/2023) (C) $ 5,915 5,915 4,554 ENET Holdings, LLC – Term Debt (L + 7.3 %, 10.4 % Cash, Due 4/2025) (C) $ 24,360 24,360 23,142 Fix-It Group, LLC – Line of Credit, $ 3,000 available (L + 7.0 %, 10.1 % Cash, Due 12/2026) (C)(U) $ — — — Fix-It Group, LLC – Term Debt (L + 7.0 %, 10.1 % Cash, Due 12/2026) (C)(U) 10,000 10,000 9,950 Fix-It Group, LLC– Delayed Draw Term Loan, $ 10,000 available (L + 7.0 %, 10.1 % Cash, Due 12/2026) (C)(U) — — — THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 12 Table of Contents GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2022 (DOLLAR AMOUNTS IN THOUSANDS) Company and Investment (A)(B)(W)(K) Principal/ Shares/ Units (J)(I) Cost Fair Value MCG Energy Solutions, LLC – Line of Credit, $ 3,000 available (L + 7.5 %, 10.6 % Cash, Due 3/2026) (C) — — — MCG Energy Solutions, LLC – Term Debt (L + 7.5 %, 10.6 % Cash, 3.5 % PIK, Due 3/2026) (C) 20,820 20,820 19,779 R2i Holdings, LLC – Line of Credit, $ 1,171 available ( 8.0 % PIK, Due 12/2023) (F)(Y) 829 829 829 R2i Holdings, LLC – Term Debt ( 8.0 % PIK, Due 12/2023) (F)(Y) 18,000 18,000 18,000 WorkforceQA, LLC– Line of Credit, $ 2,000 available (L + 6.5 %, 9.6 % Cash, Due 12/2026) (C)(U) — — — WorkforceQA, LLC – Term Debt (L + 8.5 %, 11.6 % Cash, Due 12/2026) (C)(H)(U) 10,000 10,000 9,975 101,924 97,884 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 13 Table of Contents GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2022 (DOLLAR AMOUNTS IN THOUSANDS) Company and Investment (A)(B)(W)(K) Principal/ Shares/ Units (J)(I) Cost Fair Value Healthcare, Education, and Childcare - 31.3 % ALS Education, LLC – Line of Credit, $ 3,000 available (L + 7.0 %, 10.1 % Cash, Due 5/2025) (C) — — — ALS Education, LLC – Term Debt (L + 7.0 %, 10.1 % Cash, Due 5/2025) (C) 19,690 19,690 19,468 HH-Inspire Acquisition, Inc. – Line of Credit, $ 1,500 available (L + 6.8 %, 9.9 % Cash, Due 12/2026) (C)(U) 1,500 1,500 1,489 HH-Inspire Acquisition, Inc. – Term Debt (L + 6.8 %, 9.9 % Cash, Due 12/2026) (C)(U) 16,000 16,000 15,880 HH-Inspire Acquisition, Inc. – Term Debt (L + 6.8 %, 9.9 % Cash, Due 12/2026) (C)(U) 8,000 8,000 7,940 HH-Inspire – Delayed Draw Term Loan, $ 0 available (L + 6.8 %, 9.9 % Cash, Due 12/2026) (C)(U) 10,000 10,000 9,925 Pansophic Learning Ltd. – Term Debt (L + 7.3 %, 10.4 % Cash, Due 3/2027) (C) 28,000 27,961 27,825 Pansophic Learning Ltd. – Term Debt (L + 7.3 %, 10.4 % Cash, Due 3/2027) (C) 5,000 4,993 4,969 Turn Key Health Clinics, LLC – Line of Credit, $ 1,500 available (L + 7.3 %, 10.4 % Cash, Due 6/2026) (C) 500 500 495 Turn Key Health Clinics, LLC – Term Debt (L + 7.3 %, 10.4 % Cash, Due 6/2026) (C) 11,000 11,000 10,890 99,644 98,881 Machinery - 1.7 % Arc Drilling Holdings LLC – Line of Credit, $ 1,000 available (L + 8.0 %, 11.1 % Cash, Due 11/2022) (C) — — — Arc Drilling Holdings LLC – Term Debt (L + 9.5 %, 12.6 % Cash, 3.0 % PIK, Due 11/2022) (C) 5,625 5,625 5,350 5,625 5,350 Printing and Publishing – 0.0 % Chinese Yellow Pages Company – Line of Credit, $ 0 available (PRIME + 4.0 %, 10.3 % Cash, Due 2/2015) (E)(V)(Q) 107 107 — Telecommunications – 2.2 % B+T Group Acquisition, Inc.(S) – Line of Credit, $ 0 available (L + 11.0 %, 14.1 % Cash, Due 12/2024) (C) 1,200 1,200 1,146 B+T Group Acquisition, Inc.(S) – Term Debt (L + 11.0 %, 14.1 % Cash, Due 12/2024) (C) 6,000 6,000 5,730 7,200 6,876 Total Secured First Lien Debt $ 420,857 $ 413,631 Secured Second Lien Debt – 34.3 % Automobile – 3.5 % Sea Link International IRB, Inc. – Term Debt ( 14.5 % PIK, Due 12/2025) (C)(F) $ 11,719 $ 11,679 $ 11,074 Beverage, Food, and Tobacco – 1.0 % 8 th Avenue Food & Provisions, Inc. – Term Debt (L + 7.8 %, 10.9 % Cash, Due 10/2026) (D) $ 3,682 3,698 3,020 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 14 Table of Contents GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2022 (DOLLAR AMOUNTS IN THOUSANDS) Company and Investment (A)(B)(W)(K) Principal/ Shares/ Units (J)(I) Cost Fair Value Diversified/Conglomerate Manufacturing – 10.8 % Springfield, Inc. – Term Debt (L + 10.0 %, 13.1 % Cash, Due 12/2026) (C) 30,000 30,000 29,738 Tailwind Smith Cooper Intermediate Corporation – Term Debt (L + 9.0 %, 12.1 % Cash, Due 5/2027) (D) 5,000 4,829 4,313 34,829 34,051 Diversified/Conglomerate Service – 2.3 % CHA Holdings, Inc. – Term Debt (L + 8.8 %, 12.5 % Cash, Due 4/2026) (D)(U) 3,000 2,967 2,700 Gray Matter Systems, LLC – Term Debt ( 11.3 % Cash, Due 12/2026) (C)(F) 2,100 2,069 2,084 Gray Matter Systems, LLC – Delayed Draw Term Loan, $ 4,000 available ( 11.3 % Cash, Due 12/2026) (C)(F) 2,500 2,476 2,481 7,512 7,265 Healthcare, Education, and Childcare – 9.1 % Giving Home Health Care, LLC – Term Debt ( 12.5 % Cash, Due 2/2028) (C)(F) 28,800 28,800 28,800 Machinery – 0.2 % CPM Holdings, Inc. – Term Debt (L + 8.3 %, 11.4 % Cash, Due 11/2026) (D) 798 798 758 Oil and Gas – 7.4 % Imperative Holdings Corporation – Term Debt (L + 10.3 %, 13.4 % Cash, Due 9/2024) (C) 24,016 23,968 23,295 Total Secured Second Lien Debt $ 111,284 $ 108,263 Unsecured Debt – 0.0 % Diversified/Conglomerate Service – 0.0 % Frontier Financial Group Inc. – Convertible Debt ( 6.0 %, Due 6/2022) (E)(F) $ 198 $ 198 $ 55 Preferred Equity – 5.6 % Automobile – 0.0 % Sea Link International IRB, Inc. – Preferred Stock (E)(G) 98,039 98 153 Beverage, Food, and Tobacco – 0.0 % Triple H Food Processors, LLC – Preferred Stock (E)(G) 75 75 120 Buildings and Real Estate – 0.2 % GFRC 360, LLC – Preferred Stock (E)(G) 1,000 1,025 551 Diversified/Conglomerate Manufacturing – 0.8 % Salvo Technologies, Inc. – Preferred Stock (E)(G) 2,500 2,500 2,584 Diversified/Conglomerate Service – 2.6 % Frontier Financial Group Inc. – Preferred Stock (E)(G) 766 500 — Frontier Financial Group Inc. – Preferred Stock Warrant (E)(G) 168 — — MCG Energy Solutions, LLC – Preferred Stock (E) 7,000,000 7,000 8,151 7,500 8,151 Healthcare, Education, and Childcare – 0.3 % HH-Inspire Acquisition, Inc. – Preferred Stock (E)(G) 854,848 956 945 Oil and Gas – 0.6 % FES Resources Holdings LLC – Preferred Equity Units (E)(G) 6,350 6,350 — Imperative Holdings Corporation – Preferred Equity Units (E)(G) 1,474,225 632 2,028 6,982 2,028 Telecommunications – 1.1 % B+T Group Acquisition, Inc. (S) – Preferred Stock (E)(G) 6,130 2,024 2,718 NetFortris Holdings LLC – Preferred Stock (E)(G) 7,890,860 789 469 2,813 3,187 Total Preferred Equity $ 21,949 $ 17,719 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 15 Table of Contents GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2022 (DOLLAR AMOUNTS IN THOUSANDS) Company and Investment (A)(B)(W)(K) Principal/ Shares/ Units (J)(I) Cost Fair Value Common Equity – 11.1 % Aerospace and Defense – 4.7 % Antenna Research Associates, Inc. – Common Equity Units (E)(G) 4,283 $ 4,283 $ 13,734 Ohio Armor Holdings, LLC – Common Equity (E)(G) 100 1,000 1,017 5,283 14,751 Automobile – 0.0 % Sea Link International IRB, Inc.– Common Equity Units (E)(G) 823,333 823 105 Beverage, Food, and Tobacco – 0.7 % Sokol & Company Holdings, LLC - Common Stock (E)(G) 1,500,000 1,500 1,500 Triple H Food Processors, LLC – Common Stock (E)(G) 250,000 250 672 1,750 2,172 Buildings and Real Estate – 0.0 % GFRC 360, LLC – Common Stock Warrants (E)(G) 45.0 % — — Diversified/Conglomerate Manufacturing – 0.6 % Engineering Manufacturing Technologies, LLC – Common Stock (E)(G) 6,000 3,000 1,773 Diversified/Conglomerate Service – 0.1 % WorkforceQA, LLC – Common Stock (E)(G) 500 500 456 Healthcare, Education, and Childcare – 2.5 % Giving Home Health Care, LLC - Warrant (E)(G) 10,667 19 19 GSM MidCo LLC – Common Stock (E)(G) 767 767 1,359 Leeds Novamark Capital I, L.P. – Limited Partnership Interest ($ 843 uncalled capital commitment) (G)(L)(R) 3.5 % 1,223 6,397 2,009 7,775 Machinery – 0.0 % Arc Drilling Holdings LLC – Common Stock (E)(G) 15,000 1,500 — Oil and Gas – 0.0 % FES Resources Holdings LLC – Common Equity Units (E)(G) 6,233 — — Total Safety Holdings, LLC – Common Equity (E)(G) 435 499 50 499 50 Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0 % Funko Acquisition Holdings, LLC (S) – Common Units (G)(T) 4,239 22 58 Telecommunications – 0.0 % B+T Group Acquisition, Inc. (S) – Common Stock Warrant (E)(G) 1.5 % — 25 Textiles and Leather – 2.5 % Targus Cayman HoldCo, Ltd. – Common Stock (G)(Y)(Z) 3,076,414 2,062 7,978 Total Common Equity $ 17,448 $ 35,143 Total Non-Control/Non-Affiliate Investments $ 571,736 $ 574,811 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 16 Table of Contents GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2022 (DOLLAR AMOUNTS IN THOUSANDS) Company and Investment (A)(B)(W)(K) Principal/ Shares/ Units (J)(I) Cost Fair Value AFFILIATE INVESTMENTS (N) - 12.4 % Secured First Lien Debt – 11.0 % Diversified/Conglomerate Manufacturing – 0.8 % Edge Adhesives Holdings, Inc. (S) – Term Debt (L + 5.5 %, 8.6 % Cash, Due 8/2024) (E) $ 6,140 $ 6,140 $ 2,550 Diversified/Conglomerate Service – 10.2 % Encore Dredging Holdings, LLC – Line of Credit, $ 3,000 available (L + 8.3 %, 11.4 % Cash, Due 12/2025) (C) $ — — — Encore Dredging Holdings, LLC – Term Debt (L + 7.0 %, 10.1 % Cash, 1.5 % PIK, Due 12/2025) (C) $ 23,611 23,611 22,962 Encore Dredging Holdings, LLC – Term Debt (L + 7.0 %, 10.1 % Cash, 2.5 % PIK, Due 12/2025) (C) $ 4,532 4,532 4,407 Encore Dredging Holdings, LLC – Delayed Draw Term Loan, $ 0 available (L + 7.0 %, 10.1 % Cash, 1.5 % PIK, Due 12/2025) (C) $ 5,023 5,023 4,885 33,166 32,254 Total Secured First Lien Debt $ 39,306 $ 34,804 Preferred Equity – 1.2 % Diversified/Conglomerate Manufacturing – 0.0 % Edge Adhesives Holdings, Inc. (S) – Preferred Stock (E)(G) 5,466 $ 5,466 $ — Diversified/Conglomerate Service – 0.9 % Encore Dredging Holdings, LLC (S) – Preferred Stock (E)(G) 3,840,000 3,840 2,842 Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.3 % Canopy Safety Brands, LLC – Preferred Stock (E)(G) 500,000 500 798 Total Preferred Equity $ 9,806 $ 3,640 Common Equity – 0.2 % Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.2 % Canopy Safety Brands, LLC – Common Stock (E)(G) 800,000 300 647 Total Common Equity $ 300 $ 647 Total Affiliate Investments $ 49,412 $ 39,091 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 17 Table of Contents GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2022 (DOLLAR AMOUNTS IN THOUSANDS) Company and Investment (A)(B)(W)(K) Principal/ Shares/ Units (J)(I) Cost Fair Value CONTROL INVESTMENTS (O) – 11.3 % Secured First Lien Debt – 4.9 % Diversified/Conglomerate Manufacturing – 1.0 % Lonestar EMS, LLC – Term Debt ( 8.0 % Cash, Due 6/2027) (E)(F) $ 3,250 $ 3,250 $ 3,030 Personal and Non-Durable Consumer Products (Manufacturing Only) – 3.6 % WB Xcel Holdings, LLC - Line of Credit, $ 32 available (L + 10.5 %, 13.6 % Cash, Due 11/2026) (E) $ 1,468 1,468 1,468 WB Xcel Holdings, LLC - Term Loan (L + 10.5 %, 13.6 % Cash, Due 11/2026) (E) $ 9,925 9,925 9,925 11,393 11,393 Printing and Publishing – 0.3 % TNCP Intermediate HoldCo, LLC – Line of Credit, $ 1,000 available ( 8.0 % Cash, Due 10/2024) (E)(F) $ 1,000 1,000 1,000 Total Secured First Lien Debt $ 15,643 $ 15,423 Secured Second Lien Debt – 2.4 % Automobile– 2.4 % Defiance Integrated Technologies, Inc. – Term Debt (L + 9.5 %, 12.6 % Cash, Due 5/2026) (E) $ 7,665 $ 7,665 $ 7,665 Unsecured Debt – 0.0 % Diversified/Conglomerate Manufacturing – 0.0 % LWO Acquisitions Company LLC – Term Debt (Due 6/2023) (E)(P) $ 95 $ 95 $ — Preferred Equity – 1.8 % Personal and Non-Durable Consumer Products (Manufacturing Only) – 1.8 % WB Xcel Holdings, LLC - Preferred Stock (E)(G) 333 $ 2,750 $ 5,687 Common Equity – 2.2 % Automobile– 0.4 % Defiance Integrated Technologies, Inc. – Common Stock (E)(G) 33,321 $ 580 $ 1,147 Diversified/Conglomerate Manufacturing – 0.0 % Circuitronics EMS Holdings LLC – Common Units (E)(G) 921,000 921 — Lonestar EMS, LLC – Common Units (E)(G) 100 % 6,750 — 7,671 — Machinery – 1.1 % PIC 360, LLC – Common Equity Units (E)(G) 750 1 3,454 Printing and Publishing – 0.7 % TNCP Intermediate HoldCo, LLC – Common Equity Units (E)(G) 790,000 500 2,337 Total Common Equity $ 8,752 $ 6,938 Total Control Investments $ 34,905 $ 35,713 TOTAL INVESTMENTS – 205.9 % $ 656,053 $ 649,615 (A) Certain of the securities listed in this schedule are issued by affiliate(s) of the indicated portfolio company. The majority of the securities listed, totaling $ 577.6 million at fair value, are pledged as collateral under our revolving line of credit, as described further in Note 5— Borrowings in the accompanying Notes to Consolidated Financial Statements. Under the Investment Company Act of 1940, as amended (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 September 30, 2022, our investments in Leeds Novamark Capital I, L.P. (“Leeds”) and Funko Acquisition Holdings, LLC (“Funko”) are considered non-qualifying assets under Section 55 of the 1940 Act. Such non-qualifying assets represent 1.0 % of total investments, at fair value, as of September 30, 2022. (B) Unless indicated otherwise, all cash interest rates are indexed to 30-day London Interbank Offered Rate (“LIBOR” or “L”), which was 3.14 % as of September 30, 2022. If applicable, paid-in-kind (“PIK”) interest rates are noted separately from the cash interest rate. Certain securities are subject to an interest rate floor. The cash interest rate is the greater of the floor or LIBOR plus a spread. Due dates represent the contractual maturity date. (C) Fair value was based on an internal yield analysis or on estimates of value submitted by ICE Data Pricing and Reference Data, LLC (“ICE”). (D) Fair value was based on the indicative bid price on or near September 30, 2022, offered by the respective syndication agent’s trading desk. (E) Fair value was based on the total enterprise value of the portfolio company, which was then allocated to the portfolio company’s securities in order of their relative priority in the capital structure. (F) Debt security has a fixed interest rate. (G) Security is non-income producing. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 18 Table of Contents (H) The Company has entered into an agreement that entitles it to the "last out" tranche of the first lien secured loan, whereby the "first out" tranche will receive priority as to the "last out" tranche with respect to payments of principal, interest, and any other amounts due thereunder. Therefore, the Company receives a higher interest rate than the contractual stated interest rate of LIBOR plus 6.50 % (Floor 1.0 %) per the credit agreement and the Consolidated Schedule of Investments above reflects such higher rate. (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. (J) Where applicable, aggregates all shares of a class of stock owned without regard to specific series owned within such class (some series of which may or may not be voting shares) or aggregates all warrants to purchase shares of a class of stock owned without regard to specific series of such class of stock such warrants allow us to purchase. (K) Category percentages represent the fair value of each category and subcategory as a percentage of net assets as of September 30, 2022. (L) There are certain limitations on our ability to withdraw our partnership interest prior to dissolution of the entity, which must occur no later than May 9, 2024 or two years after all outstanding leverage has matured. (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 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) Debt security does not have a stated interest rate that is payable thereon. (Q) Investment maturity date has passed. Investment continues to make applicable interest payments. (R) Fair value was based on net asset value provided by the fund as a practical expedient. (S) One of our affiliated funds, Gladstone Investment Corporation, co-invested with us in this portfolio company pursuant to an exemptive order granted by the U.S. Securities and Exchange Commission. (T) Our investment in Funko was valued using Level 2 inputs within the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 820, “Fair Value Measurements and Disclosures" (“ASC 820”) fair value hierarchy. Our common units in Funko are convertible to class A common stock in Funko, Inc. upon meeting certain requirements. Fair value was based on the closing market price of shares of Funko, Inc. as of the reporting date, less a discount for lack of marketability. Funko, Inc. 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. (U) The cash interest rate on this investment was indexed to 90-day LIBOR, which was 3.75 % as of September 30, 2022. (V) The cash interest rate on this investment was indexed to the U.S. Prime Rate (“PRIME”), which was 6.25 % as of September 30, 2022. (W) Unless indicated otherwise, all of our investments are valued using Level 3 inputs within the ASC 820 fair value hierarchy. Refer to Note 3 — Investments in the accompanying Notes to Consolidated Financial Statements for additional information. (X) Cumulative gross unrealized depreciation for federal income tax purposes is $ 52.3 million; cumulative gross unrealized appreciation for federal income tax purposes is $ 35.2 million. Cumulative net unrealized depreciation is $ 17.1 million, based on a tax cost of $ 666.7 million. (Y) Fair value was based on the expected exit or payoff amount, where such event has occurred or is expected to occur imminently. (Z) Investment was exited subsequent to September 30, 2022. (AA) The cash interest rate on this investment was indexed to the 30-day SOFR, which was 3.04 % as of September 30, 2022. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 19 Table of Contents GLADSTONE CAPITAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) JUNE 30, 2023 (DOLLAR AMOUNTS IN TABLES IN THOUSANDS, EXCEPT PER SHARE DATA AND AS OTHERWISE INDICATED) NOTE 1. ORGANIZATION Gladstone Capital Corporation was incorporated under the Maryland General Corporation Law on May 30, 2001 and completed an initial public offering on August 24, 2001. The terms “the Company,” “we,” “our” and “us” all refer to Gladstone Capital Corporation and its consolidated subsidiaries. We are an externally managed, closed-end, non-diversified management investment company that has elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), and are applying the guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946 “Financial Services-Investment Companies” (“ASC 946”). In addition, we have elected to be treated for U.S. federal income tax purposes as a regulated investment company (“RIC”) under the Internal Revenue Code of 1986, as amended (the “Code”). We were established for the purpose of investing in debt and equity securities of established private businesses operating in the United States (“U.S.”). Our investment objectives are to: (1) achieve and grow current income by investing in debt securities of established lower middle market companies (which we generally define as companies with annual earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $ 3 million to $ 15 million) in the U.S. 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 time; and (2) provide our stockholders with long-term capital appreciation in the value of our assets by investing in equity securities of established businesses that we believe can grow over time to permit us to sell our equity investments for capital gains. Gladstone Business Loan, LLC (“Business Loan”), a wholly-owned subsidiary of ours, was established on February 3, 2003, for the sole purpose of holding certain investments pledged as collateral to our line of credit. The financial statements of Business Loan are consolidated with those of Gladstone Capital Corporation. We may also have significant subsidiaries (as defined under Rule 1-02(w)(2) of the U.S. Securities and Exchange Commission’s (“SEC”) Regulation S-X) whose financial statements are not consolidated with ours. We did not have any unconsolidated subsidiaries that met any of the significance conditions under Rule 1-02(w)(2) of the SEC’s Regulation S-X as of or during the nine month periods ended June 30, 2023 and June 30, 2022. We are externally managed by Gladstone Management Corporation (the “Adviser”), an affiliate of ours and an SEC registered investment adviser, pursuant to an investment advisory and management agreement (as amended and/or restated from time to time, the “Advisory Agreement”). Administrative services are provided by Gladstone Administration, LLC (the “Administrator”), an affiliate of ours and the Adviser, pursuant to an administration agreement (the “Administration Agreement”). Refer to Note 4— Related Party Transactions for additional information regarding these arrangements. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Unaudited Interim Financial Statements and Basis of Presentation We prepare our interim financial statements in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6, 10 and 12 of Regulation S-X. Accordingly, we have not included in this quarterly report all of the information and notes required by GAAP for annual financial statements. The accompanying Consolidated Financial Statements include our accounts and those of our wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. In accordance with Article 6 of Regulation S-X, we do not consolidate portfolio company investments. Under the investment company rules and regulations pursuant to the American Institute of Certified Public Accountants Audit and Accounting Guide for Investment Companies, codified in ASC 946, we are precluded from consolidating any entity other than another investment company, except that ASC 946 provides for the consolidation of a controlled operating company that provides substantially all of its services to the investment company or its consolidated subsidiaries. In our opinion, all adjustments, consisting solely of normal recurring accruals, necessary for the fair statement of financial statements for the interim periods have been included. The results of operations for the three and nine months ended June 30, 2023 are not necessarily indicative of results that ultimately may be achieved for the fiscal year ending 20 Table of Contents September 30, 2023 or any future interim periods. The interim financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022, as filed with the SEC on November 14, 2022. Use of Estimates Preparing financial statements requires management to make estimates and assumptions that affect the amounts reported in our accompanying Consolidated Financial Statements and these Notes to Consolidated Financial Statements . Actual results may differ from those estimates. Investment Valuation Policy Accounting Recognition We record our investments at fair value in accordance with the FASB ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”) and the 1940 Act. Investment transactions are recorded on the trade date. Realized gains or losses are generally measured by the difference between the net proceeds from the repayment or sale and the cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized, and include investments charged off during the period, net of recoveries. Unrealized appreciation or depreciation primarily reflects the change in investment fair values, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized. Board Responsibility 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. In determining the fair value of our investments, the Valuation Team, led by the chief valuation officer, uses the Policy, and each quarter the Valuation Committee and Board of Directors review the Policy to determine if changes thereto are advisable and whether the Valuation Team has applied the Policy consistently. Use of Third Party Valuation Firms The Valuation Team engages third party valuation firms to provide independent assessments of fair value of certain of our investments. ICE Data Pricing and Reference Data, LLC (“ICE”), a valuation specialist, generally provides estimates of fair value on our proprietary debt investments. The Valuation Team generally assigns ICE’s estimates of fair value to our debt investments where we do not have the ability to effectuate a sale of the applicable portfolio company. The Valuation Team corroborates ICE’s estimates of fair value using one or more of the valuation techniques discussed below. 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 the 21 Table of Contents Valuation Committee reviews whether the Valuation Designee’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. Generally, at least once per year, we engage an independent valuation firm to value or review the valuation of each of our significant equity investments, which includes providing the information noted above. The Valuation Team evaluates such information for incorporation into our TEV, including review of all inputs provided by the independent valuation firm. The Valuation Team then makes a recommendation to our Valuation Committee as to the fair value. Our Valuation Committee reviews the recommended fair value, and whether it is reasonable in light of the Policy, and other relevant facts and circumstances, as necessary. Valuation Techniques In accordance with ASC 820, the Valuation Team uses the following techniques when valuing our investment portfolio: • Total Enterprise Value — In determining the fair value using a TEV, the Valuation Team first calculates the TEV of the portfolio company by incorporating some or all of the following factors: the portfolio company’s ability to make payments and other specific portfolio company attributes; the earnings of the portfolio company (the trailing or projected twelve month revenue or EBITDA); EBITDA multiples obtained from our indexing methodology whereby the original transaction EBITDA multiple at the time of our closing is indexed to a general subset of comparable disclosed transactions and EBITDA multiples from recent sales to third parties of similar securities in similar industries; a comparison to publicly traded securities in similar industries; and other pertinent factors. The Valuation Team generally reviews industry statistics and may use outside experts when gathering this information. Once the TEV is determined for a portfolio company, the Valuation Team generally allocates the TEV to the portfolio company’s securities based on the facts and circumstances of the securities, which typically results in the allocation of fair value to securities based on the order of their relative priority in the capital structure. Generally, the Valuation Team uses TEV to value our equity investments and, in the circumstances where we have the ability to effectuate a sale of a portfolio company, our debt investments. TEV is primarily calculated using EBITDA and EBITDA multiples; however, TEV may also be calculated using revenue and revenue multiples or a discounted cash flow (“DCF”) analysis whereby future expected cash flows of the portfolio company are discounted to determine a net present value using estimated risk-adjusted discount rates, which incorporate adjustments for nonperformance and liquidity risks. 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 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. • Market Quotes — For our investments for which a limited market exists, we generally base fair value on readily available and reliable market quotations which are corroborated by the Valuation Team (generally by using the yield analysis described above). In addition, the Valuation Team assesses trading activity for similar investments and evaluates variances in quotations and other market insights to determine if any available quoted prices are reliable. Typically, the Valuation Team uses the lower indicative bid price (“IBP”) in the bid-to-ask price range obtained from the respective originating syndication agent’s trading desk on or near the valuation date. The Valuation Team may take further steps to consider additional information to validate that price in accordance with the Policy. For securities that are publicly traded, we generally base fair value on the closing market price of the securities we hold as of the reporting date. For restricted securities that are publicly traded, we generally base fair value on the closing market price of the securities we hold as of the reporting date less a discount for the restriction, which includes consideration of the nature and term to expiration of the restriction. 22 Table of Contents • Investments in Funds — For equity investments in other funds for which we cannot effectuate a sale of the fund, the Valuation Team generally determines the fair value of our invested capital at the net asset value (“NAV”) provided by the fund. Any invested capital that is not yet reflected in the NAV provided by the fund is valued at par value. The Valuation Team may also determine fair value of our investments in other investment funds based on the capital accounts of the underlying entity. In addition to the valuation techniques listed above, the Valuation Team may also consider other factors when determining the fair value of our investments, including: the nature and realizable value of the collateral, including external parties’ guaranties, any relevant offers or letters of intent to acquire the portfolio company, timing of expected loan repayments, and the markets in which the portfolio company operates. Fair value measurements of our investments may involve subjective judgments and estimates and due to the uncertainty inherent in valuing these securities, the determinations of fair value may fluctuate from period to period and may differ materially from the values that could be obtained if a ready market for these securities existed. Our NAV could be materially affected if the determinations regarding the fair value of our investments are materially different from the values that we ultimately realize upon our disposal of such securities. Additionally, changes in the market environment and other events that may occur over the life of the investment may cause the gains or losses ultimately realized on these investments to be different than the valuations currently assigned. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we could realize significantly less than the value at which it is recorded. Refer to Note 3— Investments for additional information regarding fair value measurements and our application of ASC 820. Revenue Recognition Interest Income Recognition Interest income, including the amortization of premiums, acquisition costs and amendment fees, the accretion of original issue discounts (“OID”), and paid-in-kind (“PIK”) interest, is recorded on the accrual basis to the extent that such amounts are expected to be collected. Generally, when a loan becomes 90 days or more past due or if our qualitative assessment indicates that the debtor is unable to service its debt or other obligations, we will place the loan on non-accrual status and cease recognizing interest income on that loan for financial reporting purposes until the borrower has demonstrated the ability and intent to pay contractual amounts due. 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. 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 such that the interest income is deemed to be collectible. As of June 30, 2023, our loan to Edge Adhesives Holdings, Inc. was on non-accrual status with a debt cost basis of $ 6.1 million, or 0.9 % of the cost basis of all debt investments in our portfolio, and a fair value of $ 2.8 million, or 0.4 % of the fair value of all debt investments in our portfolio. There were no loans on non-accrual status as of September 30, 2022. We currently hold, and we expect to hold in the future, some loans in our portfolio that contain OID or PIK provisions. We recognize OID for loans originally issued at discounts and recognize the income over the life of the obligation based on an effective yield calculation. PIK interest, computed at the contractual rate specified in a loan agreement, is added to the principal balance of a loan and recorded as income over the life of the obligation. Thus, the actual collection of PIK income may be deferred until the time of debt principal repayment. To maintain our ability to be taxed as a RIC, we may need to pay out both OID and PIK non-cash income amounts in the form of distributions, even though we have not yet collected the cash on either. As of each of June 30, 2023 and September 30, 2022, we held four OID loans. We recorded OID income of $ 49 thousand and $ 0.2 million during the three and nine months ended June 30, 2023, respectively, and $ 46 thousand and $ 0.2 million during the three and nine months ended June 30, 2022, respectively. The unamortized balance of OID investments as of June 30, 2023 and September 30, 2022 totaled $ 0.8 million and $ 0.9 million, respectively. As of June 30, 2023 and September 30, 2022, we had eight and six investments which had a PIK interest component, respectively. We recorded PIK interest income of $ 0.8 million and $ 2.6 million during the three and nine months ended June 30, 2023, respectively, and $ 0.6 million and $ 2.7 million during the three and nine months ended June 30, 2022, respectively. We collected $ 0 and 23 Table of Contents $ 0.4 million in PIK interest in cash during the three and nine months ended June 30, 2023, respectively, and $ 0 and $ 2.4 million during the three and nine months ended June 30, 2022, respectively. Success Fee Income Recognition We record success fees as income when earned, which often occurs upon receipt of cash. Success fees are generally contractually due upon a change of control in a portfolio company, typically resulting from an exit or sale, and are non-recurring. Dividend Income Recognition We accrue dividend income on preferred and common equity securities to the extent that such amounts are expected to be collected and if we have the option to collect such amounts in cash or other consideration. Related Party Fees We are party to the Advisory Agreement with the Adviser, which is owned and controlled by our chairman and chief executive officer. In accordance with the Advisory Agreement, we pay the Adviser fees as compensation for its services, consisting of a base management fee and an incentive fee. Additionally, we pay the Adviser a loan servicing fee as compensation for its services as servicer under the terms of our revolving credit facility with KeyBank National Association (“KeyBank”), as administrative agent, lead arranger and lender (as amended and/or restated from time to time, our “Credit Facility”). These fees are accrued at the end of the quarter when the services are performed and generally paid the following quarter. We are also party to the Administration Agreement with the Administrator, which is owned and controlled by our chairman and chief executive officer, whereby we pay separately for administrative services. Refer to Note 4 — Related Party Transactions for additional information regarding these related party fees and agreements. NOTE 3. INVESTMENTS Fair Value In accordance with ASC 820, the fair value of each investment is determined to be the price that would be received for an investment in a current sale, which assumes an orderly transaction between willing market participants on the measurement date. This fair value definition focuses on exit price in the principal, or most advantageous, market and prioritizes, within a measurement of fair value, the use of market-based inputs over entity-specific inputs. ASC 820 also establishes the following three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of a financial instrument as of the measurement date. • Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical financial instruments in active markets; • Level 2 — inputs to the valuation methodology include quoted prices for similar financial instruments in active or inactive markets, and inputs that are observable for the financial instrument, either directly or indirectly, for substantially the full term of the financial instrument. Level 2 inputs are in those markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers; and • Level 3 — inputs to the valuation methodology are unobservable and significant to the fair value measurement. Unobservable inputs are those inputs that reflect assumptions that market participants would use when pricing the financial instrument and can include the Valuation Team’s assumptions based upon the best available information. When a determination is made to classify our investments within Level 3 of the valuation hierarchy, such determination is based upon the significance of the unobservable factors to the overall fair value measurement. However, Level 3 financial instruments typically include, in addition to the unobservable, or Level 3, inputs, observable inputs (or components that are actively quoted and can be validated to external sources). The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. Investments in funds measured using NAV as a practical expedient are not categorized within the fair value hierarchy. 24 Table of Contents As of June 30, 2023, all of our investments were valued using Level 3 inputs within the ASC 820 fair value hierarchy, except for our investment in Funko Acquisition Holdings, LLC (“Funko”), which was valued using Level 2 inputs, and our investment in Leeds Novamark Capital I, L.P. (“Leeds”), which was valued using NAV as a practical expedient. As of September 30, 2022, all of our investments were valued using Level 3 inputs within the ASC 820 fair value hierarchy, except for our investment in Funko, which was valued using Level 2 inputs, and our investment in Leeds, which was valued using NAV as a practical expedient. We transfer investments in and out of Level 1, 2, and 3 of the valuation hierarchy as of the beginning balance sheet date, based on changes in the use of observable and unobservable inputs utilized to perform the valuation for the period. During the nine months ended June 30, 2023 and 2022, there were no investments transferred into or out of Levels 1, 2 or 3 of the valuation hierarchy. As of June 30, 2023 and September 30, 2022, our investments, by security type, at fair value were categorized as follows within the ASC 820 fair value hierarchy: Fair Value Measurements Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of June 30, 2023: Secured first lien debt $ 533,237 $ — $ — $ 533,237 Secured second lien debt 120,036 — — 120,036 Unsecured debt 32 — — 32 Preferred equity 27,991 — — 27,991 Common equity/equivalents 33,835 (A) — 31 (B) 33,804 Total Investments as of June 30, 2023 $ 715,131 $ — $ 31 $ 715,100 Fair Value Measurements Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of September 30, 2022: Secured first lien debt $ 463,858 $ — $ — $ 463,858 Secured second lien debt 115,928 — — 115,928 Unsecured debt 55 — — 55 Preferred equity 27,046 — — 27,046 Common equity/equivalents 36,331 (A) — 58 (B) 36,273 Total Investments as of September 30, 2022 $ 643,218 $ — $ 58 $ 643,160 (A) Excludes our investment in Leeds with fair values of $ 0.2 million and $ 6.4 million as of June 30, 2023 and September 30, 2022, respectively. Leeds was valued using NAV as a practical expedient. (B) Fair value was determined based on the closing market price of shares of Funko, Inc. (our units in Funko can be converted into common shares of Funko, Inc.) at the reporting date less a discount for lack of marketability as our investment was subject to certain restrictions. 25 Table of Contents The following table presents our portfolio investments, valued using Level 3 inputs within the ASC 820 fair value hierarchy and carried at fair value as of June 30, 2023 and September 30, 2022, by caption on our accompanying Consolidated Statements of Assets and Liabilities and by security type: Total Recurring Fair Value Measurements Reported in Consolidated Statements of Assets and Liabilities Using Significant Unobservable Inputs (Level 3) June 30, 2023 September 30, 2022 Non-Control/Non-Affiliate Investments Secured first lien debt $ 481,679 $ 413,631 Secured second lien debt 112,611 108,263 Unsecured debt 32 55 Preferred equity 21,726 17,719 Common equity/equivalents 26,575 (A) 28,688 (B) Total Non-Control/Non-Affiliate Investments $ 642,623 $ 568,356 Affiliate Investments Secured first lien debt $ 35,493 $ 34,804 Preferred equity 5,124 3,640 Common equity/equivalents 1,406 647 Total Affiliate Investments $ 42,023 $ 39,091 Control Investments Secured first lien debt $ 16,065 $ 15,423 Secured second lien debt 7,425 7,665 Preferred equity 1,141 5,687 Common equity/equivalents 5,823 6,938 Total Control Investments $ 30,454 $ 35,713 Total Investments at Fair Value Using Level 3 Inputs $ 715,100 $ 643,160 (A) Excludes our investments in Leeds and Funko with fair values of $ 0.2 million and $ 31 thousand, respectively, as of June 30, 2023. Leeds was valued using NAV as a practical expedient, and Funko was valued using Level 2 inputs. (B) Excludes our investments in Leeds and Funko with fair values of $ 6.4 million and $ 58 thousand, respectively, as of September 30, 2022. Leeds was valued using NAV as a practical expedient, and Funko was valued using Level 2 inputs. In accordance with ASC 820, the following table provides quantitative information about our Level 3 fair value measurements of our investments as of June 30, 2023 and September 30, 2022. The table below is not intended to be all-inclusive, but rather provides information on the significant Level 3 inputs as they relate to our fair value measurements. 26 Table of Contents The weighted average calculations in the table below are based on the principal balances for all debt related calculations and on the cost basis for all equity related calculations for the particular input. Quantitative Information about Level 3 Fair Value Measurements Range / Weighted Average as of June 30, 2023 September 30, 2022 Valuation Techniques/ Methodologies Unobservable Input June 30, 2023 September 30, 2022 Secured first lien debt $ 492,379 $ 423,912 Yield Analysis Discount Rate 11.7 % - 37.0 % / 14.3 % 8.0 % - 29.5 % / 11.8 % 40,858 39,946 TEV EBITDA multiple 4.7 x – 5.9 x / 5.8 x 4.8 x – 6.7 x / 6.2 x EBITDA $ 960 - $ 14,121 / $ 13,605 $ 800 - $ 10,257 / $ 7,605 Revenue multiple 0.3 x – 0.8 x / 0.6 x 0.3 x – 0.6 x / 0.5 x Revenue $ 15,375 - $ 16,322 / $ 15,922 $ 11,514 - $ 16,320 / $ 14,656 Secured second lien debt 102,328 97,472 Yield Analysis Discount Rate 11.7 % - 15.5 % / 14.2 % 11.5 % - 15.4 % / 13.8 % 10,283 10,791 Market Quote IBP 66.0 % - 99.3 % / 82.4 % 82.0 % - 95.0 % / 86.5 % 7,425 7,665 TEV EBITDA multiple 5.5 x – 5.5 x / 5.5 x 5.6 x – 5.6 x / 5.6 x EBITDA $ 3,441 - $ 3,441 / $ 3,441 $ 3,299 - $ 3,299 / $ 3,299 Unsecured debt 32 55 TEV Revenue multiple 1.3 x – 1.3 x / 1.3 x 0.3 x – 1.3 x / 1.0 x Revenue $ 5,270 - $ 5,270 / $ 5,270 $ 764 - $ 11,514 / $ 4,249 Preferred and common equity / equivalents (A) 61,795 63,319 TEV EBITDA multiple 4.3 x – 12.9 x / 6.7 x 4.1 x – 11.0 x / 6.5 x EBITDA $ 960 -$ 108,146 / $ 10,410 $ 800 -$ 74,512 / $ 11,742 Revenue multiple 0.3 x – 3.0 x / 1.2 x 0.3 x– 4.4 x / 1.4 x Revenue $ 3,447 -$ 16,322 / $ 14,798 $ 764 -$ 42,926 / $ 19,963 Total Level 3 Investments, at Fair Value $ 715,100 $ 643,160 (A) Fair value as of June 30, 2023 excludes our investments in Leeds and Funko with fair values of $ 0.2 million and $ 31 thousand, respectively. Fair value as of September 30, 2022 excludes our investments in Leeds and Funko with fair values of $ 6.4 million and $ 58 thousand, respectively. Leeds was valued using NAV as a practical expedient and Funko was valued using Level 2 inputs as of both June 30, 2023 and September 30, 2022. Fair value measurements can be sensitive to changes in one or more of the valuation inputs. Changes in discount rates, EBITDA or EBITDA multiples (or revenue or revenue multiples), each in isolation, may change the fair value of certain of our investments. Generally, an increase/(decrease) in market yields or, discount rates, or a (decrease)/increase in EBITDA or EBITDA multiples (or revenue or revenue multiples) may result in a (decrease)/increase, respectively, in the fair value of certain of our investments. Changes in Level 3 Fair Value Measurements of Investments The following tables provide the changes in fair value, broken out by security type, during the three and nine months ended June 30, 2023 and 2022 for all investments for which we determine fair value using unobservable (Level 3) inputs. 27 Table of Contents Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Three months ended June 30, 2023 Secured First Lien Debt Secured Second Lien Debt Unsecured Debt Preferred Equity Common Equity/ Equivalents Total Fair Value as of March 31, 2023 $ 498,947 $ 117,438 $ 36 $ 28,298 $ 31,444 $ 676,163 Total gains (losses): Net realized gain (loss) (A) — — — ( 789 ) 3,700 2,911 Net unrealized appreciation (depreciation) (B) ( 2,195 ) 601 ( 4 ) ( 1,718 ) 4,622 1,306 Reversal of prior period net depreciation (appreciation) on realization (B) ( 200 ) — — 526 ( 4,262 ) ( 3,936 ) New investments, repayments and settlements: (C) Issuances/originations 65,707 2,061 — 1,674 2,000 71,442 Settlements/repayments ( 29,022 ) ( 64 ) — — — ( 29,086 ) Net proceeds from sales — — — — ( 3,700 ) ( 3,700 ) Transfers — — — — — — Fair Value as of June 30, 2023 $ 533,237 $ 120,036 $ 32 $ 27,991 $ 33,804 $ 715,100 Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Nine months ended June 30, 2023 Secured First Lien Debt Secured Second Lien Debt Unsecured Debt Preferred Equity Common Equity/ Equivalents Total Fair Value as of September 30, 2022 $ 463,858 $ 115,928 $ 55 $ 27,046 $ 36,273 $ 643,160 Total gains (losses): Net realized gain (loss) (A) ( 107 ) — ( 95 ) ( 279 ) 8,695 8,214 Net unrealized appreciation (depreciation) (B) ( 4,685 ) 376 ( 23 ) ( 693 ) 5,239 214 Reversal of prior period net depreciation (appreciation) on realization (B) 10 — 95 526 ( 9,257 ) ( 8,626 ) New investments, repayments and settlements: (C) Issuances/originations 135,567 6,303 — 2,045 4,532 148,447 Settlements/repayments ( 61,406 ) ( 2,571 ) — — — ( 63,977 ) Net proceeds from sales — — — ( 654 ) ( 11,678 ) ( 12,332 ) Transfers — — — — — — Fair Value as of June 30, 2023 $ 533,237 $ 120,036 $ 32 $ 27,991 $ 33,804 $ 715,100 28 Table of Contents Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Three months ended June 30, 2022 Secured First Lien Debt Secured Second Lien Debt Unsecured Debt Preferred Equity Common Equity/ Equivalents Total Fair Value as of March 31, 2022 $ 377,902 $ 85,498 $ 64 $ 27,935 $ 41,264 $ 532,663 Total gains (losses): Net realized gain (loss) (A) ( 8,471 ) — ( 25 ) — — ( 8,496 ) Net unrealized appreciation (depreciation) (B) ( 3,182 ) ( 1,006 ) ( 5 ) ( 5,482 ) ( 9,440 ) ( 19,115 ) Reversal of prior period net depreciation (appreciation) on realization (B) 14,199 — 25 ( 28 ) — 14,196 New investments, repayments and settlements: (C) Issuances/originations 64,578 167 — 3,140 — 67,885 Settlements/repayments ( 6,509 ) ( 813 ) — ( 250 ) — ( 7,572 ) Net proceeds from sales 1,339 — — — — 1,339 Transfers ( 6,750 ) — — — 6,750 — Fair Value as of June 30, 2022 $ 433,106 $ 83,846 $ 59 $ 25,315 $ 38,574 $ 580,900 Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Nine months ended June 30, 2022 Secured First Lien Debt Secured Second Lien Debt Unsecured Debt Preferred Equity Common Equity/ Equivalents Total Fair Value as of September 30, 2021 $ 337,394 $ 135,956 $ 10 $ 29,246 $ 48,441 $ 551,047 Total gains (losses): Net realized gain (loss) (A) ( 8,471 ) — ( 25 ) — 13,876 5,380 Net unrealized appreciation (depreciation) (B) 1,230 ( 627 ) 24 ( 4,691 ) ( 9,148 ) ( 13,212 ) Reversal of prior period net depreciation (appreciation) on realization (B) 13,819 ( 1,601 ) 25 ( 4,309 ) ( 9,113 ) ( 1,179 ) New investments, repayments and settlements: (C) Issuances/originations 151,401 30,503 25 6,640 3,500 192,069 Settlements/repayments ( 56,856 ) ( 80,385 ) — ( 250 ) — ( 137,491 ) Net proceeds from sales 1,339 — — ( 1,321 ) ( 15,732 ) ( 15,714 ) Transfers ( 6,750 ) — — — 6,750 — Fair Value as of June 30, 2022 $ 433,106 $ 83,846 $ 59 $ 25,315 $ 38,574 $ 580,900 (A) Included in net realized gain (loss) on investments on our accompanying Consolidated Statements of Operations for the corresponding period. (B) Included in net unrealized appreciation (depreciation) on investments on our accompanying Consolidated Statements of Operation s for the corresponding period. (C) Includes increases in the cost basis of investments resulting from new portfolio investments, accretion 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. Investment Activity Proprietary Investments As of June 30, 2023 and September 30, 2022, we held 47 and 46 proprietary investments, respectively, with an aggregate fair value of $ 704.9 million and $ 630.8 million, or 98.5 % and 97.1 % of the total investment portfolio at fair value, 29 Table of Contents respectively. The following significant proprietary investment transactions occurred during the nine months ended June 30, 2023: • In October and November 2022, we received distributions totaling $ 6.0 million from our investment in Leeds related primarily to the sale of underlying assets in the fund, which resulted in a realized gain of approximately $ 4.4 million. We retain an equity investment in Leeds with no remaining cost basis and fair value of $ 0.2 million as of June 30, 2023. • In December 2022, our investment in R2i Holdings, LLC paid off at par for net cash proceeds of $ 19.2 million. • In January 2023, we invested $ 29.0 million in NeoGraf Solutions LLC (“NeoGraf”) through secured first lien debt and common equity. We also extended NeoGraf a $ 4.5 million line of credit commitment, which was unfunded at close. • In January and March 2023, we invested a total of $ 6.3 million in Salt & Straw, LLC, an existing portfolio company, through funding on our existing delayed draw term loan commitment. • In March 2023, we invested $ 13.5 million in Leadpoint Business Services, LLC through secured first lien debt. We also extended Leadpoint Business Services, LLC a $ 5.5 million line of credit commitment which was fully funded as of March 31, 2023. In May 2023, the line of credit was paid off at par for net cash proceeds of $ 5.5 million and terminated. • In April 2023, we invested $ 25.0 million in Technical Resource Management, LLC (“Technical”) through secured first lien debt and equity. We also extended Technical a $ 3.0 million line of credit commitment and a $ 2.5 million delayed draw term loan commitment, each of which were unfunded at close. • In April 2023, our debt investment in HH-Inspire Acquisition, Inc. (“Inspire”) was refinanced. Our original debt investment totaling $ 35.5 million was redeemed at par plus a $ 0.2 million prepayment fee, and we invested a total of $ 16.8 million in Inspire through new secured first lien debt and equity, which was net funded through the redemption of our original debt investment. We also extended Inspire a $ 1.8 million line of credit commitment, which was unfunded at close. In June 2023, we invested an additional $ 3.4 million in Inspire through secured first lien debt and equity. • In May 2023, we invested $ 22.0 million in OCI, LLC through secured first lien debt, secured second lien debt, and common equity. • In June 2023, the majority of our investment in PIC 360, LLC was sold resulting in a net realized gain of $ 3.7 million. We continue to retain a small investment in PIC 360 with a fair value of approximately $ 0.3 million. • In June 2023, we invested $ 6.5 million in Trowbridge Chicago, LLC (“Trowbridge”) through secured first lien debt and preferred equity. We also extended Trowbridge a $ 2.0 million line of credit commitment and a $ 5.3 million delayed draw term loan commitment, each of which were unfunded at close. Syndicated Investments As of June 30, 2023 and September 30, 2022, we held five and six syndicated investments with an aggregate fair value of $ 10.4 million and $ 18.8 million, or 1.5 % and 2.9 % of the total investment portfolio at fair value, respectively. The following significant syndicated investment transaction occurred during the nine months ended June 30, 2023: • In October 2022, our investment in Targus Cayman HoldCo Ltd. was sold for net proceeds of approximately $ 8.0 million, which resulted in a realized gain of approximately $ 5.9 million. As part of the proceeds, we received an interest in B. Riley Financial, Inc. 6.75 % senior notes in the amount of $ 2.4 million which are traded on the Nasdaq Global Select Market under the trading symbol RILYO. In June 2023, we redeemed our investment in B. Riley Financial, Inc. 6.75 % senior notes at par for proceeds of $ 2.4 million. 30 Table of Contents Investment Concentrations As of June 30, 2023, our investment portfolio consisted of investments in 52 portfolio companies located in 24 states in 12 different industries, with an aggregate fair value of $ 715.3 million. The five largest investments at fair value as of June 30, 2023 totaled $ 172.0 million, or 24.0 % of our total investment portfolio, as compared to the five largest investments at fair value as of September 30, 2022 totaling $ 174.5 million, or 26.9 % of our total investment portfolio. As of June 30, 2023 and September 30, 2022, our average investment by obligor was $ 14.1 million and $ 12.6 million at cost, respectively. The following table outlines our investments by security type as of June 30, 2023 and September 30, 2022: June 30, 2023 September 30, 2022 Cost Fair Value Cost Fair Value Secured first lien debt $ 549,860 74.8 % $ 533,237 74.5 % $ 475,806 72.5 % $ 463,858 71.4 % Secured second lien debt 122,681 16.7 120,036 16.8 118,949 18.2 115,928 17.8 Unsecured debt 198 0.0 32 0.0 293 0.0 55 0.0 Total debt investments 672,739 91.5 653,305 91.3 595,048 90.7 579,841 89.2 Preferred equity 35,617 4.8 27,991 3.9 34,505 5.3 27,046 4.2 Common equity/equivalents 26,826 3.7 34,028 4.8 26,500 4.0 42,728 6.6 Total equity investments 62,443 8.5 62,019 8.7 61,005 9.3 69,774 10.8 Total Investments $ 735,182 100.0 % $ 715,324 100.0 % $ 656,053 100.0 % $ 649,615 100.0 % Our investments at fair value consisted of the following industry classifications as of June 30, 2023 and September 30, 2022: June 30, 2023 September 30, 2022 Industry Classification Fair Value Percentage of Total Investments Fair Value Percentage of Total Investments Diversified/Conglomerate Service $ 164,261 23.0 % $ 148,907 22.9 % Diversified/Conglomerate Manufacturing 160,904 22.5 114,105 17.6 Healthcare, Education, and Childcare 145,011 20.3 136,401 21.0 Aerospace and Defense 87,932 12.3 88,649 13.6 Beverage, Food, and Tobacco 74,641 10.4 64,283 9.9 Oil and Gas 26,887 3.8 25,373 3.9 Automobile 22,191 3.1 20,144 3.1 Personal and Non-Durable Consumer Products 14,742 2.1 18,583 2.9 Machinery 6,676 0.9 9,562 1.5 Telecommunications 5,976 0.8 10,088 1.6 Textiles and Leather — — 7,978 1.2 Other, < 2.0% 6,103 0.8 5,542 0.8 Total Investments $ 715,324 100.0 % $ 649,615 100.0 % Our investments at fair value were included in the following U.S. geographic regions as of June 30, 2023 and September 30, 2022: June 30, 2023 September 30, 2022 Location Fair Value Percentage of Total Investments Fair Value Percentage of Total Investments South $ 290,432 40.6 % $ 326,524 50.3 % West 220,602 30.8 169,415 26.1 Midwest 146,324 20.5 118,191 18.2 Northeast 57,966 8.1 35,485 5.4 Total Investments $ 715,324 100.0 % $ 649,615 100.0 % 31 Table of Contents The geographic composition indicates the location of the headquarters for our portfolio companies. A portfolio company may have additional locations in other geographic regions. Investment Principal Repayments The following table summarizes the contractual principal repayment and maturity of our investment portfolio by fiscal year, assuming no voluntary prepayments, as of June 30, 2023: Amount For the remaining three months ending September 30: 2023 (A) $ 4,806 For the fiscal years ending September 30: 2024 28,818 2025 86,790 2026 160,943 2027 241,385 Thereafter 151,330 Total contractual repayments $ 674,072 Adjustments to cost basis of debt investments ( 1,333 ) Investments in equity securities 62,443 Investments held as of June 30, 2023 at cost: $ 735,182 (A) Includes debt investments with contractual principal amounts totaling $ 0.2 million for which the maturity date has passed as of June 30, 2023. Receivables from Portfolio Companies Receivables from portfolio companies represent non-recurring costs incurred on behalf of such portfolio companies and are included in other assets on our accompanying Consolidated Statements of Assets and Liabilities. We generally maintain an allowance for uncollectible receivables from portfolio companies when the receivable balance becomes 90 days or more past due or if it is determined, based upon management’s judgment, that the portfolio company is unable to pay its obligations. We write off accounts receivable when we have exhausted collection efforts and have deemed the receivables uncollectible. As of June 30, 2023 and September 30, 2022, we had gross receivables from portfolio companies of $ 0.9 million and $ 0.5 million, respectively. The allowance for uncollectible receivables was $ 0 as of each of June 30, 2023 and September 30, 2022. NOTE 4. RELATED PARTY TRANSACTIONS Transactions with the Adviser We have been externally managed by the Adviser pursuant to the Advisory Agreement since October 1, 2004 pursuant to which we pay the Adviser a base management fee and an incentive fee for its services. On July 11, 2023, our Board of Directors, including a majority of the directors who are not parties to the Advisory Agreement or interested persons of us or the Adviser, unanimously approved the renewal of the Advisory Agreement through August 31, 2024. We also pay the Adviser a loan servicing fee for its role of servicer pursuant to our Credit Facility. The entire loan servicing fee paid to the Adviser by Business Loan is non-contractually, unconditionally and irrevocably credited against the base management fee otherwise payable to the Adviser, since Business Loan is a consolidated subsidiary of ours, and overall, the base management fee (including any loan servicing fee) cannot exceed 1.75 % of total assets (including investments made with proceeds of borrowings, less any uninvested cash or cash equivalents resulting from borrowings) during any given fiscal year pursuant to the Advisory Agreement. 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. Gladstone. Robert Marcotte (our president) also serves as executive vice president of private equity (debt) 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. 32 Table of Contents The following table summarizes the base management fee, incentive fee, and loan servicing fee and associated non-contractual, unconditional and irrevocable credits reflected in our accompanying Consolidated Statements of Operations : Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Average total assets subject to base management fee (A) $ 709,943 $ 571,657 $ 672,990 $ 571,429 Multiplied by prorated annual base management fee of 1.75 % 0.4375 % 0.4375 % 1.3125 % 1.3125 % Base management fee (B) $ 3,106 $ 2,501 $ 8,833 $ 7,500 Portfolio company fee credit ( 1,894 ) ( 1,099 ) ( 2,987 ) ( 3,027 ) Syndicated loan fee credit ( 32 ) ( 35 ) ( 95 ) ( 136 ) Net Base Management Fee $ 1,180 $ 1,367 $ 5,751 $ 4,337 Loan servicing fee (B) 2,069 1,614 5,866 4,596 Credit to base management fee - loan servicing fee (B) ( 2,069 ) ( 1,614 ) ( 5,866 ) ( 4,596 ) Net Loan Servicing Fee $ — $ — $ — $ — Incentive fee (B) 2,919 1,579 7,508 5,641 Incentive fee credit — ( 437 ) — ( 437 ) Net Incentive Fee $ 2,919 $ 1,142 $ 7,508 $ 5,204 Portfolio company fee credit ( 1,894 ) ( 1,099 ) ( 2,987 ) ( 3,027 ) Syndicated loan fee credit ( 32 ) ( 35 ) ( 95 ) ( 136 ) Incentive fee credit — ( 437 ) — ( 437 ) Credits to Fees From Adviser - other (B) $ ( 1,926 ) $ ( 1,571 ) $ ( 3,082 ) $ ( 3,600 ) (A) Average total assets subject to the base management fee is defined in the Advisory Agreement as total assets, including investments made with proceeds of borrowings, less any uninvested cash or cash equivalents resulting from borrowings, valued at the end of the two most recently completed quarters within the respective years and adjusted appropriately for any share issuances or repurchases during the period. (B) Reflected as a line item on our accompanying Consolidated Statements of Operations . Base Management Fee The base management fee is payable quarterly to the Adviser pursuant to our Advisory Agreement and is assessed at an annual rate of 1.75 %, computed on the basis of the value of our average total assets at the end of the two most recently-completed quarters (inclusive of the current quarter), which are total assets, including investments made with proceeds of borrowings, less any uninvested cash or cash equivalents resulting from borrowings and adjusted appropriately for any share issuances or repurchases during the period. Additionally, pursuant to the requirements of the 1940 Act, the Adviser makes available significant managerial assistance to our portfolio companies. The Adviser may also provide other services to our portfolio companies under certain agreements and may receive fees for services other than managerial assistance. Such services may include: (i) assistance obtaining, sourcing or structuring credit facilities, long-term loans or additional equity from unaffiliated third parties; (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) taking a primary role in interviewing, vetting and negotiating employment contracts with candidates in connection with adding and retaining key portfolio company management team members. The Adviser non-contractually, unconditionally, and irrevocably credits 100 % of any fees for such services against the base management fee that we would otherwise be required to pay to the Adviser. Our Board of Directors accepted a non-contractual, unconditional, and irrevocable credit from the Adviser to reduce the annual base management fee on syndicated loan participations to 0.5 %, to the extent that proceeds resulting from borrowings were used to purchase such syndicated loan participations, for each of the three and nine months ended June 30, 2023 and 2022. Loan Servicing Fee The Adviser also services the loans held by Business Loan (the borrower under the Credit Facility), in return for which the Adviser receives a 1.5 % annual fee payable monthly based on the aggregate outstanding balance of loans pledged under our Credit Facility. As discussed in the notes to the table above, we treat payment of the loan servicing fee pursuant to the 33 Table of Contents 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. Incentive Fee The incentive fee consists of two parts: an income-based incentive fee and a capital gains-based incentive fee. The income-based incentive fee rewards the Adviser if our quarterly net investment income (before giving effect to any incentive fee) exceeds 1.75 % ( 2.0 % during the period from April 1, 2020 through March 31, 2023) of our net assets, which we define as total assets less indebtedness and before taking into account any incentive fees payable or contractually due but not payable during the period, at the end of the immediately preceding calendar quarter, adjusted appropriately for any share issuances or repurchases during the period (the “hurdle rate”). The income-based incentive fee with respect to our pre-incentive fee net investment income is generally payable quarterly to the Adviser and is computed as follows: • no incentive fee in any calendar quarter in which our pre-incentive fee net investment income does not exceed the hurdle rate; • 100.0 % of our pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 2.1875 % ( 2.4375 % during the period from April 1, 2020 through March 31, 2022 and 2.50 % from April 1, 2022 through March 31, 2023) of our net assets, adjusted appropriately for any share issuances or repurchases during the period, in any calendar quarter; and • 20.0 % of the amount of our pre-incentive fee net investment income, if any, that exceeds 2.1875 % ( 2.4375 % during the period from April 1, 2020 through March 31, 2022 and 2.50 % from April 1, 2022 through March 31, 2023) of our net assets, adjusted appropriately for any share issuances or repurchases during the period, in any calendar quarter. On April 12, 2022, our Board of Directors approved an amendment of the Advisory Agreement which extended the temporary revision to the hurdle rate through March 31, 2023 and increased the excess incentive fee hurdle rate from 2.1875 % per quarter ( 8.75 % annualized) to 2.50 % per quarter ( 10.0 % annualized), up from the 2.4375 % per quarter ( 9.75 % annualized) in effect since April 1, 2020. The second part of the incentive fee is a capital gains-based incentive fee that is determined and payable in arrears as of the end of each fiscal year (or upon termination of the Advisory Agreement, as of the termination date) and equals 20.0 % of our “net realized capital gains” (as defined herein) as of the end of the fiscal year. In determining the capital gains-based incentive fee payable to the Adviser, we calculate “net realized capital gains” at the end of each applicable year by subtracting the sum of our cumulative aggregate realized capital losses and our entire portfolio’s aggregate unrealized capital depreciation from our cumulative aggregate realized capital gains. For this purpose, cumulative aggregate realized capital gains, if any, equals the sum of the differences between the net sales price of each investment, when sold, and the original cost of such investment since inception. Cumulative aggregate realized capital losses equals the sum of the amounts by which the net sales price of each investment, when sold, is less than the original cost of such investment since inception. The entire portfolio’s aggregate unrealized capital depreciation, if any, equals the sum of the difference between the valuation of each investment as of the applicable calculation date and the original cost of such investment. At the end of the applicable fiscal year, the amount of capital gains that serves as the basis for our calculation of the capital gains-based incentive fee equals the cumulative aggregate realized capital gains less cumulative aggregate realized capital losses, less the entire portfolio’s aggregate unrealized capital depreciation, if any. If this number is positive at the end of such fiscal year, 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. No capital gains-based incentive fee has been recorded or paid since our inception through June 30, 2023, as cumulative unrealized capital depreciation has exceeded cumulative realized capital gains net of cumulative realized capital losses. In accordance with GAAP, a capital gains-based incentive fee accrual is calculated using the aggregate cumulative realized capital gains and losses and aggregate cumulative unrealized capital appreciation and depreciation. If such amount is positive at the end of a period, then GAAP requires us to record a capital gains-based incentive fee equal to 20.0% of such amount, less the aggregate amount of actual capital gains-based incentive fees paid in all prior years. If such amount is negative, then there is no accrual for such period. GAAP requires that the capital gains-based incentive fee accrual consider the cumulative aggregate unrealized capital appreciation in the calculation, as a capital gains-based incentive fee would be payable if such unrealized capital appreciation were realized. There can be no assurance that such unrealized capital 34 Table of Contents appreciation will be realized in the future. No GAAP accrual for a capital gains-based incentive fee has been recorded from our inception through June 30, 2023. Transactions with the Administrator We have entered into the Administration Agreement with the Administrator to provide administrative services. We reimburse the Administrator pursuant to the Administration Agreement for the portion of expenses the Administrator incurs while performing services for us. The Administrator’s expenses are primarily rent and the salaries, benefits and expenses of the Administrator’s employees, including: our chief financial officer and treasurer, chief compliance officer, chief valuation officer, and general counsel and secretary (who also serves as the Administrator’s president, general counsel and secretary) and their respective staffs. Two of our executive officers, David Gladstone (our chairman and chief executive officer) and Terry Lee Brubaker (our chief operating officer) serve as members of the board of managers and executive officers of the Administrator, which, as of June 30, 2023, is 100 % indirectly owned and controlled by Mr. Gladstone. Another of our officers, Michael LiCalsi (our general counsel and secretary), serves as the Administrator’s president as well as the executive vice president of administration 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 11, 2023, our Board of Directors, including a majority of the directors who are not parties to the Administration Agreement or interested persons of either party, approved the renewal of the Administration Agreement through August 31, 2024. Other Transactions Gladstone Securities, LLC (“Gladstone Securities”), a privately-held broker-dealer registered with the Financial Industry Regulatory Authority and insured by the Securities Investor Protection Corporation, which is 100 % indirectly owned and controlled by Mr. Gladstone, our chairman and chief executive officer, has provided other services, such as investment banking and due diligence services, to certain of our portfolio companies, for which Gladstone Securities receives a fee. Any such fees paid by portfolio companies to Gladstone Securities do not impact the fees we pay to the Adviser or the non-contractual, unconditional and irrevocable credits against the base management fee or incentive fee. Gladstone Securities received fees from portfolio companies totaling $ 0.5 million and $ 0.8 million during the three and nine months ended June 30, 2023, respectively, and $ 0.2 million and $ 0.8 million during the three and nine months ended June 30, 2022, respectively. Gladstone Securities also serves as the Company’s exclusive dealer manager in connection with the Company’s offering of up to 6,000,000 shares of 6.25 % Series A Cumulative Redeemable Preferred Stock. Refer to Note 6 — Cumulative Redeemable Preferred Stock Offering for further information. Related Party Fees Due Amounts due to related parties on our accompanying Consolidated Statements of Assets and Liabilities were as follows: June 30, 2023 September 30, 2022 Base management fee due to Adviser $ ( 890 ) $ ( 189 ) Loan servicing fee due to Adviser 484 423 Incentive fee due to Adviser 2,919 1,870 Total fees due to Adviser 2,513 2,104 Fee due to Administrator 696 423 Total Related Party Fees Due $ 3,209 $ 2,527 In addition to the above fees, other operating expenses due to the Adviser as of June 30, 2023 and September 30, 2022, totaled $ 63 thousand and $ 44 thousand, respectively. In addition, net expenses payable to Gladstone Investment Corporation (for reimbursement purposes), which includes certain co-investment expenses, totaled $ 0 and $ 13 thousand as of June 30, 2023 and September 30, 2022, respectively. These amounts are generally settled in the quarter subsequent to 35 Table of Contents being incurred and are included in other liabilities on the accompanying Consolidated Statements of Assets and Liabilities as of June 30, 2023 and September 30, 2022. NOTE 5. BORROWINGS Revolving Credit Facility On May 13, 2021, we, through Business Loan, amended and restated the Credit Facility to, among other things, (i) decrease the commitment amount from $ 205.0 million to $ 175.0 million, (ii) extend the revolving period end date to October 31, 2023, (iii) extend the maturity date to October 31, 2025 (at which time all principal and interest will be due and payable if the Credit Facility is not extended by the revolving period end date), (iv) reduce the interest rate margin to 2.70 % during the revolving period and 3.25 % thereafter, with a LIBOR floor of 0.35 %, (v) revise the unused fee to include an additional fee tier of 0.35 % per annum on the daily undrawn amounts if the average unused amount is equal to or less than 35 % during the applicable period, (vi) provide for certain excess concentration limits, including a reduced second lien limit and a new broadly syndicated loan limit and (vii) add customary LIBOR replacement language. We incurred fees of approximately $ 1.1 million in connection with this amendment and restatement, which are being amortized through our Credit Facility’s revolving period end date of October 31, 2023. On September 12, 2022, we, through Business Loan, entered into Amendment No. 1 to the Credit Facility to update the reference rate from LIBOR to SOFR plus an 11 basis point credit spread adjustment. On September 20, 2022, we, through Business Loan, entered into Amendment No. 2 to the Credit Facility to increase the size of the Credit Facility by $ 50.0 million from $ 175.0 million to $ 225.0 million, as permitted under the terms of the Credit Facility. On October 31, 2022, we, through Business Loan, entered into Amendment No. 3 to the Credit Facility to increase the size of the Credit Facility by $ 20.0 million from $ 225.0 million to $ 245.0 million, as permitted under the terms of the Credit Facility. On June 16, 2023, we, through Business Loan, entered into Amendment No. 4 to the Credit Facility to, among other things, (i) decrease the commitment amount from $ 245.0 million to $ 223.7 million, (ii) extend the revolving period end date to October 31, 2025, (iii) extend the maturity date to October 31, 2027 (at which time all principal and interest will be due and payable if the Credit Facility is not extended by the revolving period end date), (iv) increase the interest rate margin to 3.00 % during the revolving period and 3.50 % thereafter, (v) update the SOFR credit spread adjustment to 10 basis points, and (vi) provide for certain excess concentration limits. We incurred fees of approximately $ 1.2 million in connection with this amendment, which are being amortized through our Credit Facility’s revolving period end date of October 31, 2025. The following tables summarize noteworthy information related to our Credit Facility: June 30, 2023 September 30, 2022 Commitment amount $ 223,659 $ 225,000 Line of credit outstanding, at cost 163,800 141,800 Availability (A) 53,535 60,068 For the Three Months Ended June 30, For the Nine Months Ended June 30, 2023 2022 2023 2022 Weighted average borrowings outstanding, at cost $ 154,265 $ 49,053 $ 136,373 $ 41,469 Weighted average interest rate (B) 8.2 % 6.2 % 7.7 % 6.4 % Commitment (unused) fees incurred $ 105 $ 299 $ 446 $ 978 (A) Available borrowings are subject to various constraints imposed under our Credit Facility, based on the aggregate loan balance pledged by Business Loan, which varies as loans are added and repaid, regardless of whether such repayments are prepayments or made as contractually required. (B) Includes unused commitment fees and excludes the impact of deferred financing costs. Our Credit Facility also requires that any interest or principal payments on pledged loans be remitted directly by the borrower into a lockbox account with KeyBank. KeyBank is also the trustee of the account and generally remits the collected funds to us once each month. Amounts collected in the lockbox account with KeyBank are presented as Due from 36 Table of Contents administrative agent on the accompanying Consolidated Statement of Assets and Liabilities as of June 30, 2023 and September 30, 2022. Our Credit Facility contains covenants that require Business Loan to maintain its status as a separate legal entity, prohibit certain significant corporate transactions (such as mergers, consolidations, liquidations or dissolutions), and restrict material changes to our credit and collection policies without the lenders’ consent. Our Credit Facility also generally limits distributions to our stockholders on a fiscal year basis to the sum of our net investment income, net capital gains and amounts elected to have been paid during the prior year in accordance with Section 855(a) of the Code. Business Loan is also subject to certain limitations on the type of loan investments it can apply as collateral towards the borrowing base to receive additional borrowing availability under our Credit Facility, including restrictions on geographic concentrations, sector concentrations, loan size, payment frequency and status, average life and lien property. Our Credit Facility further requires Business Loan to comply with other financial and operational covenants, which obligate Business Loan to, among other things, maintain certain financial ratios, including asset and interest coverage and a minimum number of 25 obligors required in the borrowing base. Additionally, we are required to maintain (i) a minimum net worth (defined in our Credit Facility to include any outstanding mandatorily redeemable preferred stock) of $ 325.0 million plus 50.0 % of all equity and subordinated debt raised after May 13, 2021 less 50 % of any equity and subordinated debt retired or redeemed after May 13, 2021, which equates to $ 355.8 million as of June 30, 2023, (ii) asset coverage with respect to “senior securities representing indebtedness” of at least 150% (or such percentage as may be set forth in Section 18 of the 1940 Act, as modified by Section 61 of the 1940 Act), and (iii) our status as a BDC under the 1940 Act and as a RIC under the Code. As of June 30, 2023, and as defined in our Credit Facility, we had a net worth of $ 554.3 million, asset coverage on our “senior securities representing indebtedness” of 195.8 %, calculated in accordance with the requirements of Section 18 and 61 of the 1940 Act, and an active status as a BDC and RIC. In addition, we had 37 obligors in our Credit Facility’s borrowing base as of June 30, 2023. As of June 30, 2023, we were in compliance with all of our Credit Facility covenants. Fair Value We elected to apply the fair value option of ASC 825, “ Financial Instruments ,” specifically for the Credit Facility, which was consistent with our application of ASC 820 to our investments. Generally, the fair value of our Credit Facility is determined using a yield analysis which includes a DCF calculation and the assumptions that 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. As of June 30, 2023, the discount rate used to determine the fair value of our Credit Facility was one-month Term SOFR, plus 3.10 % per annum, plus a 0.35 % unused commitment fee. As of September 30, 2022, the discount rate used to determine the fair value of our Credit Facility was one-month Term SOFR, plus 2.81 % per annum, plus a 0.50 % unused commitment fee. 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 our Credit Facility. As of June 30, 2023 and September 30, 2022, our Credit Facility was valued using Level 3 inputs and any changes in its fair value are recorded in net unrealized depreciation (appreciation) of other on our accompanying Consolidated Statements of Operations . The following tables present our Credit Facility carried at fair value as of June 30, 2023 and September 30, 2022, on our accompanying Consolidated Statements of Assets and Liabilities for Level 3 of the hierarchy established by ASC 820 and the changes in fair value of our Credit Facility during the three and nine months ended June 30, 2023 and 2022: Total Recurring Fair Value Measurement Reported in Consolidated Statements of Assets and Liabilities Using Significant Unobservable Inputs (Level 3) June 30, 2023 September 30, 2022 Credit Facility $ 163,800 $ 141,800 37 Table of Contents Fair Value Measurements Using Significant Unobservable Data Inputs (Level 3) Three Months Ended June 30, 2023 2022 Fair value as of March 31, 2023 and 2022, respectively $ 152,439 $ 17,400 Borrowings 22,600 74,000 Repayments ( 11,400 ) ( 11,400 ) Net unrealized appreciation (A) 161 — Fair Value as of June 30, 2023 and 2022, respectively $ 163,800 $ 80,000 (A) Included in net unrealized appreciation (depreciation) of other on our accompanying Consolidated Statements of Operations for the three months ended June 30, 2023. Fair Value Measurements Using Significant Unobservable Data Inputs (Level 3) Nine Months Ended June 30, 2023 2022 Fair value as of September 30, 2022 and 2021, respectively $ 141,800 $ 50,500 Borrowings 123,000 235,500 Repayments ( 101,000 ) ( 206,000 ) Net unrealized depreciation — — Fair Value as of June 30, 2023 and 2022, respectively $ 163,800 $ 80,000 The fair value of the collateral under our Credit Facility totaled approximately $ 649.2 million and $ 577.6 million as of June 30, 2023 and September 30, 2022, respectively. Notes Payable In November 2021, we completed a private placement of $ 50.0 million aggregate principal amount of 3.75 % Notes due 2027 (the “2027 Notes”) for net proceeds of approximately $ 48.5 million after deducting initial purchasers’ costs, commissions and offering expenses borne by us. The 2027 Notes will mature on May 1, 2027 and may be redeemed in whole or in part at any time or from time to time at the Company’s option prior to maturity at par plus a “make-whole” premium, if applicable. The 2027 Notes bear interest at a rate of 3.75 % per year. Interest is payable semi-annually on May 1 and November 1 of each year (which equates to approximately $ 1.9 million per year). In April 2022, pursuant to the registration rights agreement we entered into in connection with the 2027 Notes, we conducted an exchange offer through which we offered to exchange all of our then outstanding 2027 Notes (the “Restricted Notes”) that were issued on November 4, 2021, for an equal aggregate principal amount of our new 3.75 % Notes due 2027 (the “Exchange Notes”) that had been registered with the SEC under the Securities Act of 1933, as amended. The terms of the Exchange Notes are identical to those of the outstanding Restricted Notes, except that the transfer restrictions and registration rights relating to the Restricted Notes do not apply to the Exchange Notes, and the Exchange Notes do not provide for the payment of additional interest in the event of a registration default. In December 2020, we completed an offering of $ 100.0 million aggregate principal amount of 5.125 % Notes due 2026 (the “2026 Notes”) for net proceeds of approximately $ 97.7 million after deducting underwriting discounts, commissions and offering expenses borne by us. In March 2021, we completed an offering of an additional $ 50.0 million aggregate principal amount of the 2026 Notes for net proceeds of approximately $ 50.6 million after adding premiums and deducting underwriting costs, commissions and offering expenses borne by us. The 2026 Notes will mature on January 31, 2026 and may be redeemed in whole or in part at any time or from time to time at the Company’s option prior to maturity at par plus a “make-whole” premium, if applicable. The 2026 Notes bear interest at a rate of 5.125 % per year. Interest is payable semiannually on January 31 and July 31 of each year (which equates to approximately $ 7.7 million per year). In October 2019, we completed an offering of $ 38.8 million aggregate principal amount of 5.375 % Notes due 2024 (the “2024 Notes”), inclusive of the overallotment option exercised by the underwriters, for net proceeds of approximately $ 37.5 million after deducting underwriting discounts, commissions and offering expenses borne by us. On November 1, 2021, we voluntarily redeemed the 2024 Notes with an aggregate principal amount outstanding of $ 38.8 million. The 2024 Notes would have otherwise matured on November 1, 2024. 38 Table of Contents The indenture relating to the 2027 Notes and 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 2027 Notes and the 2026 Notes, as applicable, and the trustee with audited annual consolidated financial statements and unaudited interim consolidated financial statements. The 2027 Notes and 2026 Notes are recorded at the principal amount, plus applicable premiums, less discounts and offering costs, on our Consolidated Statements of Assets and Liabilities. The fair value, based on a DCF analysis, of the 2027 Notes as of June 30, 2023 was $ 44.9 million. The fair value, based on a DCF analysis, of the 2026 Notes as of June 30, 2023 was $ 144.0 million. We consider the 2027 Notes and 2026 Notes to be Level 3 within the ASC 820 fair value hierarchy. NOTE 6. CUMULATIVE REDEEMABLE PREFERRED STOCK OFFERING In May 2023, we entered into a Dealer Manager Agreement pursuant to which we may sell a maximum of 6,000,000 shares of 6.25 % Series A Cumulative Redeemable Preferred Stock (the “Series A Preferred Stock”), par value $ 0.001 per share, on a “reasonable best efforts” basis through our affiliated dealer manager, Gladstone Securities, at a public offering price of $ 25.00 per share (the “Series A Offering”). As of June 30, 2023, no shares of Series A Preferred Stock have been sold. Under the Dealer Manager Agreement, Gladstone Securities will provide certain sales, promotional and marketing services to us in connection with the Series A Offering, and we will pay Gladstone Securities (i) selling commissions of up to 7.0 % of the gross proceeds from sales of Series A Preferred Stock in the Series A Offering, and (ii) a dealer manager fee of up to 3.0 % of the gross proceeds from sales of Series A Preferred Stock in the Series A Offering. Gladstone Securities may, in its sole discretion, reallow a portion of the dealer manager fee to participating broker-dealers in support of the Series A Offering. Pursuant to the Dealer Manager Agreement, the offering of the Series A Preferred Stock will terminate on the date that is the earlier of (1) December 31, 2026 (unless earlier terminated or extended by our Board of Directors) and (2) the date on which all 6,000,000 shares of Series A Preferred Stock offered are sold. NOTE 7. REGISTRATION STATEMENT AND COMMON EQUITY OFFERINGS Our shelf registration statement permits us to issue, through one or more transactions, up to an aggregate of $ 300.0 million in securities, consisting of common stock, preferred stock, subscription rights, debt securities and warrants to purchase common stock or preferred stock. As of June 30, 2023, we had the ability to issue up to an additional $ 257.2 million in securities under the registration statement. Common Stock At-the-Market Offerings In May 2021, we entered into an equity distribution agreement with Jefferies LLC, as amended in August 2022 (the “Jefferies Sales Agreement”), under which we have the ability to issue and sell, from time to time, shares of our common stock with an aggregate offering price of up to $ 60.0 million. During the nine months ended June 30, 2023, we sold 3,865,890 shares of our common stock under the Jefferies Sales Agreement, at a weighted-average price of $ 9.90 per share and raised approximately $ 38.3 million of gross proceeds. Net proceeds, after deducting commissions and offering costs borne by us, were approximately $ 37.6 million. All sales were above our then current estimated NAV per share. As of June 30, 2023, we had a remaining capacity to sell up to an additional $ 9.5 million of our common stock under the Jefferies Sales Agreement. 39 Table of Contents NOTE 8. NET INCREASE 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 three and nine months ended June 30, 2023 and 2022 : Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Numerator: basic and diluted net increase (decrease) in net assets resulting from operations per common share $ 11,884 $ ( 5,599 ) $ 29,568 $ 14,807 Denominator: basic and diluted weighted average common share 37,680,465 34,304,371 36,492,168 34,304,371 Basic and diluted net increase (decrease) in net assets resulting from operations per common share $ 0.32 $ ( 0.16 ) $ 0.81 $ 0.43 NOTE 9. DISTRIBUTIONS TO COMMON STOCKHOLDERS To qualify to be taxed as a RIC under Subchapter M of the Code, we must generally distribute to our stockholders, for each taxable year, at least 90% of our taxable ordinary income plus the excess of our net short-term capital gains over net long-term capital losses (“Investment Company Taxable Income”). The amount to be paid out as distributions to our stockholders is determined by our Board of Directors quarterly and is based on management’s estimate of Investment Company Taxable Income. Based on that estimate, our Board of Directors declares three monthly distributions to common stockholders each quarter. The federal income tax characteristics of all distributions will be reported to stockholders on the IRS Form 1099 after the end of each calendar year. Estimates of tax characterization made on a quarterly basis may not be representative of the actual tax characterization of cash distributions for the full year. Estimates made on a quarterly basis are updated as of each interim reporting date. For the calendar year ended December 31, 2022, 93.2 % of distributions to common stockholders were deemed to be paid from ordinary income and 6.8 % of distributions were deemed to be return of capital for 1099 stockholder reporting purposes. For the calendar year ended December 31, 2021, 100.0 % of distributions to common stockholders were deemed to be paid from ordinary income for 1099 stockholder reporting purposes. We paid the following monthly distributions to common stockholders for the nine months ended June 30, 2023 and 2022 : Fiscal Year Declaration Date Record Date Payment Date Distribution per Common Share 2023 October 11, 2022 October 21, 2022 October 31, 2022 $ 0.07 October 11, 2022 November 18, 2022 November 30, 2022 0.07 October 11, 2022 December 20, 2022 December 30, 2022 0.07 January 10, 2023 January 20, 2023 January 31, 2023 0.075 January 10, 2023 February 17, 2023 February 28, 2023 0.075 January 10, 2023 March 17, 2023 March 31, 2023 0.075 April 11, 2023 April 21, 2023 April 28, 2023 0.08 April 11, 2023 May 23, 2023 May 31, 2023 0.08 April 11, 2023 June 21, 2023 June 30, 2023 0.08 Nine Months Ended June 30, 2023: $ 0.675 40 Table of Contents Fiscal Year Declaration Date Record Date Payment Date Distribution per Common Share 2022 October 12, 2021 October 22, 2021 October 29, 2021 $ 0.065 October 12, 2021 November 19, 2021 November 30, 2021 0.065 October 12, 2021 December 23, 2021 December 31, 2021 0.065 January 11, 2022 January 21, 2022 January 31, 2022 0.065 January 11, 2022 February 18, 2022 February 28, 2022 0.065 January 11, 2022 March 23, 2022 March 31, 2022 0.065 April 12, 2022 April 22, 2022 April 29, 2022 0.0675 April 12, 2022 May 20, 2022 May 31, 2022 0.0675 April 12, 2022 June 22, 2022 June 30, 2022 0.0675 Nine Months Ended June 30, 2022: $ 0.5925 Aggregate distributions declared and paid to our common stockholders were approximately $ 24.7 million and $ 20.3 million for the nine months ended June 30, 2023 and 2022 , respectively, and were declared based on estimates of Investment Company Taxable Income for the respective fiscal years. For the fiscal year ended September 30, 2022, distributions declared and paid exceeded taxable income available for common distributions resulting in a partial return of capital of approximately $ 1.4 million. For the nine months ended June 30, 2023 and the fiscal year ended September 30, 2022, we recorded the following adjustments for book-tax differences to reflect tax character. Results of operations, total net assets, and cash flows were not affected by these adjustments. Nine Months Ended June 30, 2023 Year Ended September 30, 2022 Undistributed net investment income $ 71 $ ( 5,606 ) Accumulated net realized losses ( 71 ) 7,013 Capital in excess of par value — ( 1,407 ) NOTE 10. COMMITMENTS AND CONTINGENCIES Legal Proceedings We are party to certain legal proceedings incidental to the normal course of our business. We are required to establish reserves for litigation matters where those matters present loss contingencies that are both probable and estimable. When loss contingencies are not both probable and estimable, we do not establish reserves. Based on current knowledge, we do not believe that loss contingencies, if any, arising from pending investigations, litigation or regulatory matters will have a material adverse effect on our financial condition, results of operations or cash flows. Additionally, based on our current knowledge, we do not believe such loss contingencies are both probable and estimable and therefore, as of June 30, 2023 and September 30, 2022, we had no established reserves for such loss contingencies. Escrow Holdbacks From time to time, we enter into arrangements relating to exits of certain investments whereby specific amounts of the proceeds are held in escrow to be used to satisfy potential obligations, as stipulated in the sales agreements. We record escrow amounts in Restricted cash and cash equivalents, if received in cash but subject to potential obligations or other contractual restrictions, or as escrow receivables in Other assets, net, if not yet received in cash, on our accompanying Consolidated Statements of Assets and Liabilities . We establish reserves and holdbacks against escrow amounts if we 41 Table of Contents determine that it is probable and estimable that a portion of the escrow amounts will not ultimately be released or received at the end of the escrow period. Reserves and holdbacks against escrow amounts were $ 0.6 million and $ 0.2 million as of June 30, 2023 and September 30, 2022, respectively. Financial Commitments and Obligations We have lines of credit, delayed draw term loans, and an uncalled capital commitment with certain of our portfolio companies that have not been fully drawn. Since these commitments have expiration dates and we expect many will never be fully drawn, the total commitment amounts do not necessarily represent future cash requirements. We estimate the fair value of the combined unused lines of credit, the unused delayed draw term loans and the uncalled capital commitment as of June 30, 2023 and September 30, 2022 to be immaterial. The following table summarizes the amounts of our unused lines of credit, delayed draw term loans and uncalled capital commitment, at cost, as of June 30, 2023 and September 30, 2022, which are not reflected as liabilities in the accompanying Consolidated Statements of Assets and Liabilities : June 30, 2023 September 30, 2022 Unused line of credit commitments (A) $ 35,076 $ 36,225 Delayed draw term loans (A) 27,989 37,778 Uncalled capital commitment 843 843 Total $ 63,908 $ 74,846 (A) There may be specific covenant requirements that temporarily limit a portfolio company’s availability to draw on an unused line of credit commitment or a delayed draw term loan. 42 Table of Contents NOTE 11. FINANCIAL HIGHLIGHTS Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Per Common Share Data: Net asset value at beginning of period (A) $ 9.19 $ 9.49 $ 9.08 $ 9.28 Income from operations (B) Net investment income 0.31 0.20 0.82 0.72 Net realized and unrealized gain (loss) on investments 0.01 ( 0.37 ) ( 0.03 ) ( 0.29 ) Net realized and unrealized gain (loss) on other — 0.01 0.02 — Total from operations 0.32 ( 0.16 ) 0.81 0.43 Distributions to common stockholders from (B)(C) Net investment income ( 0.24 ) ( 0.15 ) ( 0.68 ) ( 0.55 ) Return of capital — ( 0.05 ) — ( 0.05 ) Total distributions ( 0.24 ) ( 0.20 ) ( 0.68 ) ( 0.60 ) Capital share transactions (B) Anti-dilutive effect of common stock issuance (D) 0.01 — 0.08 — Total capital share transactions 0.01 — 0.08 — Other, net ( 0.01 ) ( 0.01 ) ( 0.02 ) 0.01 Net asset value at end of period (A) $ 9.27 $ 9.12 $ 9.27 $ 9.12 Per common share market value at beginning of period $ 9.40 $ 11.79 $ 8.49 $ 11.30 Per common share market value at end of period 9.76 10.09 9.76 10.09 Total return (E) 6.45 % ( 12.84 ) % 23.16 % ( 5.91 ) % Common stock outstanding at end of period (A) 38,600,686 34,304,371 38,600,686 34,304,371 Statement of Assets and Liabilities Data: Net assets at end of period $ 357,946 $ 312,921 $ 357,946 $ 312,921 Average net assets (F) 351,454 322,048 338,703 322,610 Senior Securities Data: Borrowings under line of credit, at cost 163,800 80,000 163,800 80,000 Notes payable 200,000 200,000 200,000 200,000 Ratios/Supplemental Data: Ratio of net expenses to average net assets – annualized (G)(H) 12.69 % 8.49 % 12.85 % 9.26 % Ratio of net investment income to average net assets – annualized (I) 13.29 % 8.63 % 11.82 % 10.25 % (A) Based on actual shares outstanding at the end of the corresponding period. (B) Based on weighted average basic per share data. (C) The tax character of distributions is determined based on taxable income calculated in accordance with income tax regulations, which may differ from amounts determined under GAAP. (D) During the three and nine months ended June 30, 2023, the anti-dilution was a result of issuing common shares during the period at a price above the then current NAV per share. (E) Total return equals the change in the ending market value of our common stock from the beginning of the fiscal year, taking into account distributions reinvested in accordance with the terms of our dividend reinvestment plan. Total return does not take into account distributions that may be characterized as a return of capital. For further information on the estimated character of our distributions to common stockholders, refer to Note 9— Distributions to Common Stockholders . (F) Computed using the average of the balance of net assets at the end of each month of the reporting period. (G) Ratio of net expenses to average net assets is computed using total expenses, net of credits from the Adviser, to the base management, loan servicing and incentive fees. (H) Had we not received any non-contractual, unconditional and irrevocable credits of fees from the Adviser, the ratio of net expenses to average net assets would have been 17.30 % and 16.42 % for the three and nine months ended June 30, 2023, respectively, and 12.49 % and 12.68 % for the three and nine months ended June 30, 2022, respectively. (I) Had we not received any non-contractual, unconditional and irrevocable credits of fees from the Adviser, the ratio of net investment income to average net assets would have been 8.77 % and 8.32 % for the three and nine months ended June 30, 2023, respectively, and 4.69 % and 6.88 % for the three and nine months ended June 30, 2022, respectively. 43 NOTE 12. SUBSEQUENT EVENTS Portfolio Activity In July 2023, we invested an additional $ 5.0 million in Gray Matter Systems, LLC, an existing portfolio company, through secured second lien debt. Distributions and Dividends On July 11, 2023, our Board of Directors declared the following distributions to common and preferred stockholders: Record Date Payment Date Distribution per Common Share July 21, 2023 July 31, 2023 $ 0.0825 August 23, 2023 August 31, 2023 0.0825 September 7, 2023 September 15, 2023 (A) 0.0200 September 21, 2023 September 29, 2023 0.0825 Total for the Quarter: $ 0.2675 Record Date Payment Date Distribution per Series A Preferred Stock (B) July 27, 2023 August 4, 2023 $ 0.130208 August 28, 2023 September 6, 2023 0.130208 September 27, 2023 October 5, 2023 0.130208 Total for the Quarter: $ 0.390624 (A) Represents a supplemental distribution to common stockholders. (B) As of the date of this filing, there are no shares of Series A Preferred Stock outstanding. 44 Table of Contents