What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-11-13 compared with 2022-11-14 · 464 added, 461 removed, 1530 unchanged (38% of the section changed)

24 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of assets and liabilities, including the consolidated schedules of investments, of Gladstone Capital Corporation and its subsidiaries (the “Company”) as of September 30, 2022 and 2021, and the related consolidated statements of operations, changes in net assets and cash flows for each of the three years in the period ended September 30, 2022, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated statements of assets and liabilities, including the consolidated schedules of investments, of Gladstone Capital Corporation and its subsidiaries (the “Company”) as of September 30, 2023 and 2022, and the related consolidated statements of operations, of changes in net assets and of cash flows for each of the three years in the period ended September 30, 2023, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2023 and 2022, and the results of its operations, changes in its net assets and its cash flows for each of the three years in the period ended September 30, 2023 in conformity with accounting principles generally accepted in the United States of America.

30 unchanged sentences

/s/ PricewaterhouseCoopers LLP

Washington, DC

Washington, District of Colombia

November 13, 2023

36 unchanged sentences

Under (over) distributed net investment income (C)

4,741 ( 500 )

Accumulated net realized losses ( 60,116 ) ( 73,152 )

29 unchanged sentences

Affiliate investments

Control investments 303 — —

Total PIK interest income

48 unchanged sentences

Affiliate investments

13,408 — (63)

Control investments

2,684 ( 8,496 ) —

319 ( 243 ) ( 999 )

Total net realized gain (loss)

12,664 5,173 3,180

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

Net unrealized appreciation (depreciation):

30 unchanged sentences

12,345 5,416 4,179

Net realized loss on other

Net realized gain (loss) on other

319 ( 243 ) ( 999 )

1 unchanged sentence

( 11,016 ) ( 17,538 ) 55,347

Net unrealized appreciation (depreciation) of other

Net unrealized appreciation of other

Net increase (decrease) in net assets from operations

38 unchanged sentences

114 ( 445 ) 876

Net realized loss (gain) on investments

Net realized gain on investments

( 12,345 ) ( 5,416 ) ( 4,179 )

27 unchanged sentences

( 243,000 ) ( 237,600 ) ( 316,300 )

Redemption of mandatorily redeemable preferred stock

Proceeds from issuance of notes payable

24 unchanged sentences

(B) Non-cash activities relate to estimated tax liabilities and escrows associated with portfolio company exits and the following transactions:

• In October 2022, our investment in Targus Cayman HoldCo Ltd.

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.

• In June 2022, our investment in LWO Acquisitions Company LLC was restructured, resulting in non-cash activity of $ 6.8 million and new investments in Lonestar EMS, LLC, which are listed on the accompanying Consolidated Schedule of Investments as of September 30, 2022.

8 unchanged sentences

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment (A)(B)(W)(K)

Company and Investment (A)(B)(K)(Q)

Cost Fair Value

NON-CONTROL/NON-AFFILIATE INVESTMENTS (M) – 162.4 %

2 unchanged sentences

Antenna Research Associates, Inc.

– Term Debt (SOFR + 10.0%, 13.0% Cash, 4.0% PIK, Due 11/2026) (E)

– Term Debt (S + 10.0 %, 15.3 % Cash, 4.0 % PIK, Due 11/2026) (E)

$ 30,048 $ 30,048 $ 30,048

Ohio Armor Holdings, LLC – Term Debt (L + 8.0%, 11.1% Cash, Due 2/2026) (C)

Ohio Armor Holdings, LLC – Term Debt (S + 8.0 %, 13.3 % Cash, Due 2/2026) (C)

17,738 17,738 17,294

SpaceCo Holdings, LLC – Line of Credit, $100 available (L + 7.0%, 10.8% Cash, Due 12/2025) (C)(U)

SpaceCo Holdings, LLC – Line of Credit, $ 550 available (S + 7.2 %, 12.5 % Cash, Due 12/2025) (C)(U)

1,450 1,450 1,434

SpaceCo Holdings, LLC – Term Debt (L + 7.0%, 10.8% Cash, Due 12/2025) (C)(U)

SpaceCo Holdings, LLC – Term Debt (S + 7.2 %, 12.5 % Cash, Due 12/2025) (C)(U)

30,284 29,961 29,944

1 unchanged sentence

Beverage, Food, and Tobacco – 17.8 %

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)

Café Zupas – Line of Credit, $ 1,500 available (S + 6.8 %, 12.1 % Cash, Due 12/2024) (C)

Café Zupas – Delayed Draw Term Loan, $ 2,070 available (S + 6.8 %, 12.1 % Cash, Due 12/2024) (C)

7,970 7,970 7,850

Café Zupas – Term Debt (L + 7.4%, 10.5% Cash, Due 12/2024) (C)

Café Zupas – Term Debt (S + 6.8 %, 12.1 % Cash, Due 12/2024) (C)

23,460 23,460 23,108

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)

Eegee’s LLC – Line of Credit, $ 1,000 available (S + 7.8 %, 13.1 % Cash, Due 6/2026) (C)

Eegee’s LLC – Delayed Draw Term Loan, $ 4,500 available (S + 7.8 %, 13.1 % Cash, Due 6/2026) (C)

3,000 3,000 2,865

Eegee’s LLC – Term Debt (L + 8.3%, 11.4% Cash, Due 6/2026) (C)

Eegee’s LLC – Term Debt (S + 7.8 %, 13.1 % Cash, Due 6/2026) (C)

17,000 17,000 16,235

Salt & Straw, LLC – Line of Credit, $1,200 available (L + 8.0%, 11.1% Cash, Due 9/2027) (C)

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)

Salt & Straw, LLC – Line of Credit, $ 2,000 available (S + 9.1 %, 14.4 % Cash, Due 9/2027) (C)

Salt & Straw, LLC – Delayed Draw Term Loan, $ 1,300 available (S + 9.1 %, 14.4 % Cash, Due 9/2027) (C)

10,200 10,133 9,715

Sokol & Company Holdings, LLC – Term Debt (S + 7.0 %, 12.3 % Cash, Due 8/2027) (C)

13,500 13,500 13,095

75,063 72,868

Buildings and Real Estate – 0.5 %

GFRC 360, LLC – Line of Credit, $500 available (L + 8.0%, 11.1% Cash, Due 9/2023) (C)

GFRC 360, LLC – Term Debt (L + 8.0%, 11.1% Cash, Due 9/2023) (C)

GFRC 360, LLC – Line of Credit, $ 175 available (S + 8.0 %, 13.3 % Cash, Due 9/2024) (C)

1,275 1,275 1,205

GFRC 360, LLC – Term Debt (S + 8.0 %, 13.3 % Cash, Due 9/2024) (C)

1,000 1,000 945

Diversified/Conglomerate Manufacturing – 27.9 %

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)

Engineering Manufacturing Technologies, LLC – Line of Credit, $ 3,000 available (S + 8.3 %, 13.6 % Cash, Due 10/2026) (C)

Engineering Manufacturing Technologies, LLC – Term Debt (S + 8.3 %, 13.6 % Cash, Due 10/2026) (C)

21,500 21,500 19,726

Salvo Technologies, Inc.

– Term Debt (SOFR + 9.5%, 12.5% Cash, Due 4/2027) (C)(AA)

NeoGraf Solutions LLC – Line of Credit, $ 4,500 available (S + 7.0 %, 11.0 % Cash, 1.3 % PIK, Due 1/2028) (C)

NeoGraf Solutions LLC – Term Debt (S + 7.0 %, 11.0 % Cash, 1.3 % PIK, Due 1/2028) (C)

27,154 27,154 26,000

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)

OCI, LLC – Term Debt (S + 7.5 %, 12.8 % Cash, Due 5/2028) (C)

20,000 20,000 19,800

Salvo Technologies, Inc.

– Term Debt (S + 9.5 %, 14.8 % Cash, Due 4/2027) (C)

11,768 11,768 10,900

Unirac Holdings, Inc.

– Line of Credit, $2,222 available (SOFR + 6.5%, 9.5% Cash, Due 9/2027) (C)(AA)

– Line of Credit, $ 1,244 available (S + 6.5 %, 11.8 % Cash, Due 9/2027) (C)

Unirac Holdings, Inc.

– Delayed Draw Term Loan, $2,778 available (SOFR + 6.5%, 9.5% Cash, Due 9/2027) (C)(AA)

– Delayed Draw Term Loan, $ 1,669 available (S + 6.5 %, 11.8 % Cash, Due 9/2027) (C)

1,108 1,108 1,111

Unirac Holdings, Inc.

– Term Debt (SOFR + 6.5%, 9.5% Cash, Due 9/2027) (C)(AA)

– Term Debt (S + 6.5 %, 11.8 % Cash, Due 9/2027) (C)

14,888 14,577 14,925

Viva Railings, LLC – Line of Credit, $ 4,000 available (S + 7.1 %, 12.4 % Cash, Due 5/2027) (C)

Viva Railings, LLC – Term Debt (S + 7.1 %, 12.4 % Cash, Due 5/2027) (C)

20,747 20,747 20,436

Diversified/Conglomerate Service – 31.1%

Axios Industrial Group, LLC – Term Debt (SOFR + 9.5%, 12.6% Cash, Due 10/2027) (C)(AA)

117,832 113,878

Axios Industrial Group, LLC– Delayed Draw Term Loan, $5,000 available (SOFR + 9.5%, 12.6% Cash, Due 10/2027) (C)(AA)

Diversified/Conglomerate Service – 25.5 %

Axios Industrial Group, LLC – Term Debt (S + 8.6 %, 13.9 % Cash, Due 10/2027) (C)

11,550 11,519 11,291

DKI Ventures, LLC – Term Debt (SOFR + 8.0%, 11.0% Cash, Due 12/2023) (C)

DKI Ventures, LLC – Line of Credit, $ 170 available ( 9.0 % Cash, Due 12/2025) (C)(F)

DKI Ventures, LLC – Term Debt ( 9.0 % Cash, Due 12/2025) (C)(F)

5,915 5,915 3,253

ENET Holdings, LLC – Term Debt (L + 7.3%, 10.4% Cash, Due 4/2025) (C)

ENET Holdings, LLC – Term Debt (S + 8.3 %, 13.6 % Cash, Due 4/2025) (C)

22,289 22,289 21,397

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)

Fix-It Group, LLC – Line of Credit, $ 2,500 available (S + 8.1 %, 13.4 % Cash, Due 12/2026) (C)

Fix-It Group, LLC – Term Debt (S + 8.1 %, 13.4 % Cash, Due 12/2026) (C)

12,200 12,200 12,170

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.

GLADSTONE CAPITAL CORPORATION

2 unchanged sentences

(DOLLAR AMOUNTS IN THOUSANDS)

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)

Company and Investment (A)(B)(K)(Q)

Cost Fair Value

Fix-It Group, LLC – Delayed Draw Term Loan, $ 0 available (S + 8.1 %, 13.4 % Cash, Due 12/2026) (C)

6,911 6,911 6,894

R2i Holdings, LLC – Line of Credit, $1,171 available (8.0% PIK, Due 12/2023) (F)(Y)

R2i Holdings, LLC – Term Debt (8.0% PIK, Due 12/2023) (F)(Y)

Leadpoint Business Services, LLC – Term Debt (S + 8.5 %, 13.8 % Cash, Due 2/2028) (C)

13,500 13,500 13,399

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)

MCG Energy Solutions, LLC – Term Debt (S + 7.6 %, 12.9 % Cash, 3.5 % PIK, Due 3/2026) (C)

20,146 20,107 17,628

Trowbridge Chicago, LLC – Line of Credit, $ 2,000 available (S + 7.0 %, 12.3 % Cash, Due 6/2029) (C)

Trowbridge Chicago, LLC – Term Debt (S + 7.0 %, 12.3 % Cash, Due 6/2029) (C)

5,750 5,750 5,664

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

GLADSTONE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2022

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment (A)(B)(W)(K)

WorkforceQA, LLC – Line of Credit, $ 1,600 available (S + 6.5 %, 11.8 % Cash, Due 12/2026) (C)

WorkforceQA, LLC – Term Debt (S + 8.4 %, 13.7 % Cash, Due 12/2026) (C)(H)

10,000 9,971 9,987

WorkforceQA, LLC – Term Debt (S + 9.3 %, 14.6 % Cash, Due 12/2026) (C)(H)

1,600 1,595 1,598

110,862 104,293

Healthcare, Education, and Childcare – 26.5 %

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)

ALS Education, LLC – Line of Credit, $ 3,000 available (S + 7.0 %, 12.3 % Cash, Due 5/2025) (C)

ALS Education, LLC – Term Debt (S + 7.0 %, 12.3 % Cash, Due 5/2025) (C)

18,700 18,700 18,700

HH-Inspire Acquisition, Inc.

– Line of Credit, $1,500 available (L + 6.8%, 9.9% Cash, Due 12/2026) (C)(U)

– Line of Credit, $ 478 available (S + 8.0 %, 13.4 % Cash, Due 4/2028) (C)(U)

1,359 1,359 1,347

HH-Inspire Acquisition, Inc.

– Term Debt (L + 6.8%, 9.9% Cash, Due 12/2026) (C)(U)

– Term Debt (S + 8.0 %, 13.4 % Cash, Due 4/2028) (C)(U)

16,013 16,013 15,872

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)

– Term Debt (S + 8.0 %, 13.4 % Cash, Due 4/2028) (C)(U)

3,225 3,225 3,197

Pansophic Learning, Ltd.

– Term Debt (L + 7.3%, 10.4% Cash, Due 3/2027) (C)

– Term Debt (S + 7.5 %, 12.9 % Cash, Due 3/2027) (C)(U)

28,000 27,968 27,965

Pansophic Learning, Ltd.

– Term Debt (L + 7.3%, 10.4% Cash, Due 3/2027) (C)

– Term Debt (S + 7.5 %, 12.9 % Cash, Due 3/2027) (C)(U)

5,000 4,994 4,994

Turn Key Health Clinics, LLC – Line of Credit, $1,500 available (L + 7.3%, 10.4% Cash, Due 6/2026) (C)

Turn Key Health Clinics, LLC – Term Debt (L + 7.3%, 10.4% Cash, Due 6/2026) (C)

Technical Resource Management, LLC – Line of Credit, $ 1,000 available (S + 8.0 %, 13.3 % Cash, Due 4/2028) (C)

2,000 2,000 1,970

Technical Resource Management, LLC – Term Debt (S + 8.0 %, 13.3 % Cash, Due 4/2028) (C)

23,000 23,000 22,655

Technical Resource Management, LLC – Delayed Draw Term Loan, $ 2,500 available (S + 8.0 %, 13.3 % Cash, Due 4/2028) (C)

Turn Key Health Clinics, LLC – Line of Credit, $ 1,500 available (S + 7.3 %, 12.6 % Cash, Due 6/2026) (C)

Turn Key Health Clinics, LLC – Term Debt (S + 7.3 %, 12.6 % Cash, Due 6/2026) (C)

11,000 11,000 10,986

108,759 108,185

Machinery – 1.4 %

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)

Arc Drilling Holdings LLC – Line of Credit, $ 1,000 available (S + 11.5 %, 10.5 % Cash, 6.3 % PIK, Due 2/2024) (C)

Arc Drilling Holdings LLC – Term Debt (S + 11.5 %, 10.5 % Cash, 6.3 % PIK, Due 2/2024) (C)

5,928 5,928 5,724

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)

Telecommunications – 1.4 %

B+T Group Acquisition, Inc.(S) – Line of Credit, $0 available (L + 11.0%, 14.1% Cash, Due 12/2024) (C)

B+T Group Acquisition, Inc.

(S) – Line of Credit, $ 0 available (S + 2.0 %, 7.3 % Cash, Due 12/2024) (C)

1,200 1,200 978

B+T Group Acquisition, Inc.(S) – Term Debt (L + 11.0%, 14.1% Cash, Due 12/2024) (C)

B+T Group Acquisition, Inc.

(S) – Term Debt (S + 2.0 %, 7.3 % Cash, Due 12/2024) (C)

6,000 6,000 4,890

3 unchanged sentences

Sea Link International IRB, Inc.

– Term Debt (14.5% PIK, Due 12/2025) (C)(F)

– Term Debt ( 11.3 % Cash, 2.0 % PIK, Due 12/2025) (C)(F)

12,083 12,053 11,675

Sea Link International IRB, Inc.

– Term Debt ( 12.0 % Cash, 2.0 % PIK, Due 12/2025) (C)(F)

4,000 4,000 4,000

16,053 15,675

Beverage, Food, and Tobacco – 0.6 %

8th Avenue Food & Provisions, Inc.

– Term Debt (L + 7.8%, 10.9% Cash, Due 10/2026) (D)

– Term Debt (S + 7.9 %, 13.2 % Cash, Due 10/2026) (D)

3,683 3,683 2,495

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

GLADSTONE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2022

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment (A)(B)(W)(K)

Diversified/Conglomerate Manufacturing – 8.9 %

OCI, LLC – Term Debt ( 7.0 % Cash, 7.0 % PIK, Due 11/2028) (C)(F)

2,012 2,012 1,992

Springfield, Inc.

– Term Debt (L + 10.0%, 13.1% Cash, Due 12/2026) (C)

– Term Debt (S + 10.1 %, 15.4 % Cash, Due 12/2026) (C)

30,000 30,000 29,850

Tailwind Smith Cooper Intermediate Corporation – Term Debt (L + 9.0%, 12.1% Cash, Due 5/2027) (D)

Tailwind Smith Cooper Intermediate Corporation – Term Debt (S + 9.0 %, 14.4 % Cash, Due 5/2027) (D)(U)

5,000 4,856 4,294

36,868 36,136

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

GLADSTONE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2023

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment (A)(B)(K)(Q)

Cost Fair Value

Diversified/Conglomerate Service – 4.0 %

CHA Holdings, Inc.

– Term Debt (L + 8.8%, 12.5% Cash, Due 4/2026) (D)(U)

– Term Debt (S + 9.0 %, 14.4 % Cash, Due 4/2026) (D)(U)

3,000 2,974 2,820

Gray Matter Systems, LLC – Term Debt (11.3% Cash, Due 12/2026) (C)(F)

Gray Matter Systems, LLC – Term Debt ( 12.0 % Cash, 2.0 % PIK, Due 12/2026) (C)(F)

13,645 13,578 13,645

Gray Matter Systems, LLC – Delayed Draw Term Loan, $4,000 available (11.3% Cash, Due 12/2026) (C)(F)

16,552 16,465

2 unchanged sentences

28,800 28,800 28,800

Machinery – 0.2%

CPM Holdings, Inc.

– Term Debt (L + 8.3%, 11.4% Cash, Due 11/2026) (D)

Oil and Gas – 5.1 %

Imperative Holdings Corporation – Term Debt (L + 10.3%, 13.4% Cash, Due 9/2024) (C)

Imperative Holdings Corporation – Term Debt (S + 9.8 %, 15.1 % Cash, Due 8/2028) (C)

21,015 20,871 20,858

3 unchanged sentences

Frontier Financial Group Inc.

– Convertible Debt (6.0%, Due 6/2022) (E)(F)

$ 198 $ 198 $ 55

– Convertible Debt ( 6.0 % Cash, Due 6/2022) (E)(F)

Preferred Equity – 5.3 %

17 unchanged sentences

– Preferred Stock Warrant (E)(G)

MCG Energy Solutions, LLC – Preferred Stock (E)

MCG Energy Solutions, LLC – Preferred Stock (E)(G)

7,000,000 7,000 8,904

Trowbridge Chicago, LLC – Preferred Stock (E)(G)

242,105 750 750

Healthcare, Education, and Childcare – 0.8 %

11 unchanged sentences

6,130 2,024 —

NetFortris Holdings LLC – Preferred Stock (E)(G)

7,890,860 789 469

Total Preferred Equity $ 23,061 $ 21,733

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

GLADSTONE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2022

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment (A)(B)(W)(K)

Common Equity – 7.3 %

9 unchanged sentences

Beverage, Food, and Tobacco – 0.8 %

Salt & Straw, LLC – Common Warrant (E)(G)

Sokol & Company Holdings, LLC – Common Stock (E)(G)

7 unchanged sentences

6,000 3,000 —

OCI, LLC – Common Units (E)(G)

NeoGraf Solutions LLC – Common Stock (E)(G)

2,000,000 2,000 —

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

GLADSTONE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2023

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment (A)(B)(K)(Q)

Cost Fair Value

Diversified/Conglomerate Service – 0.1 %

2 unchanged sentences

Giving Home Health Care, LLC – Warrant (E)(G)

10,667 19 2,794

GSM MidCo LLC – Common Stock (E)(G)

2 unchanged sentences

– Limited Partnership Interest ($ 843 uncalled capital commitment) (G)(L)(R)

Technical Resource Management, LLC – Common Stock (E)(G)

2,000,000 2,000 1,415

10 unchanged sentences

(S) – Common Stock Warrant (E)(G)

Textiles and Leather – 2.5%

Targus Cayman HoldCo, Ltd.

– Common Stock (G)(Y)(Z)

3,076,414 2,062 7,978

Total Common Equity $ 18,195 $ 29,672

Total Non-Control/Non-Affiliate Investments $ 671,397 $ 663,544

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

GLADSTONE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2022

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment (A)(B)(W)(K)

AFFILIATE INVESTMENTS (N) – 2.6 %

2 unchanged sentences

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

(S) – Term Debt (S + 5.5 %, 10.8 % Cash, Due 8/2024) (E)(P)

6,140 6,140 2,895

Total Secured First Lien Debt $ 39,306 $ 34,804

Preferred Equity – 1.3 %

4 unchanged sentences

Diversified/Conglomerate Service– 1.1 %

Encore Dredging Holdings, LLC (S) – Preferred Stock (E)(G)

Encore Dredging Holdings, LLC – Preferred Stock (E)(G)

3,840,000 3,840 4,265

7 unchanged sentences

1,170,370 800 2,404

Total Common Equity $ 300 $ 647

Total Affiliate Investments $ 16,746 $ 10,421

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

GLADSTONE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2022

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment (A)(B)(W)(K)

CONTROL INVESTMENTS (O) – 7.5 %

1 unchanged sentence

Diversified/Conglomerate Manufacturing – 0.9 %

Lonestar EMS, LLC – Term Debt (8.0% Cash, Due 6/2027) (E)(F)

Lonestar EMS, LLC – Term Debt ( 8.0 % PIK, Due 6/2027) (E)(F)

3,927 3,927 3,927

Personal and Non-Durable Consumer Products (Manufacturing Only) – 2.8 %

WB Xcel Holdings, LLC - Line of Credit, $32 available (L + 10.5%, 13.6% Cash, Due 11/2026) (E)

WB Xcel Holdings, LLC – Line of Credit, $ 32 available (S + 10.5 %, 15.8 % 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)

WB Xcel Holdings, LLC – Term Debt (S + 10.5 %, 15.8 % Cash, Due 11/2026) (E)

9,825 9,825 9,825

2 unchanged sentences

TNCP Intermediate HoldCo, LLC – Line of Credit, $ 1,100 available ( 8.0 % Cash, Due 10/2024) (E)(F)

1,000 1,000 1,000

Total Secured First Lien Debt $ 16,120 $ 16,120

2 unchanged sentences

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)

– Term Debt (S + 9.6 %, 14.9 % Cash, Due 5/2026) (E)

7,425 7,425 7,425

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

GLADSTONE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2023

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment (A)(B)(K)(Q)

Cost Fair Value

Preferred Equity – 0.0 %

8 unchanged sentences

Diversified/Conglomerate Manufacturing – 0.0 %

Circuitronics EMS Holdings LLC – Common Units (E)(G)

921,000 921 —

Lonestar EMS, LLC – Common Units (E)(G)

7 unchanged sentences

Total Control Investments $ 34,126 $ 30,850

TOTAL INVESTMENTS – 205.9%

TOTAL INVESTMENTS (V) – 172.5 %

$ 722,269 $ 704,815

4 unchanged sentences

(“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.

Such non-qualifying assets represent less than 0.1 % of total investments, at fair value, as of September 30, 2023.

(B) Unless indicated otherwise, all cash interest rates are indexed to one-month Secured Overnight Financing Rate (“SOFR” or “S”), which was 5.32 % as of September 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 LIBOR plus a spread.

The cash interest rate is the greater of the floor or SOFR 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”).

(C) Fair value was based on an internal yield analysis or on estimates of value submitted by a third party valuation firm.

(D) Fair value was based on the indicative bid price on or near September 30, 2023, offered by the respective syndication agent’s trading desk.

1 unchanged sentence

(F) Debt security has a fixed interest rate.

GLADSTONE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2022

(DOLLAR AMOUNTS IN THOUSANDS)

(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 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.

(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.

6 unchanged sentences

(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.

(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.

1 unchanged sentence

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.

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

(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.

3 unchanged sentences

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

(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;

(U) The cash interest rate on this investment was indexed to 90-day SOFR, which was 5.40 % as of September 30, 2023.

(V) Cumulative gross unrealized depreciation for federal income tax purposes is $ 56.9 million;

cumulative gross unrealized appreciation for federal income tax purposes is $ 33.7 million.

Cumulative net unrealized depreciation is $ 23.2 million, based on a tax cost of $ 728.0 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.

Refer to Note 15 – Subsequent Events in the accompanying Notes to the Consolidated Financial Statements for additional information.

(AA) The cash interest rate on this investment was indexed to the 30-day Secured Overnight Financing Rate (“SOFR”), which was 3.04% as of September 30, 2022.

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

4 unchanged sentences

Company and Investment (A)(B)(W)(K)

Cost Fair Value

NON-CONTROL/NON-AFFILIATE INVESTMENTS (M) – 182.2 %

2 unchanged sentences

Antenna Research Associates, Inc.

– Term Debt (L + 10.0%, 12.0% Cash, 4.0% PIK, Due 11/2023) (E)

– Term Debt (SOFR + 10.0 %, 13.0 % Cash, 4.0 % PIK, Due 11/2026) (E)

$ 21,973 $ 21,973 $ 21,973

1 unchanged sentence

$ 18,913 18,913 18,558

SpaceCo Holdings, LLC – Line of Credit, $1,300 available (L + 6.8%, 7.8% Cash, Due 12/2025) (C)

SpaceCo Holdings, LLC – Term Debt (L + 6.8%, 7.8% Cash, Due 12/2025) (C)

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 Debt, $3,030 available (L + 7.4%, 8.9% 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

2 unchanged sentences

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 Debt, $7,500 available (L + 7.3%, 8.3% 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 unchanged sentence

Diversified/Conglomerate Manufacturing – 22.3 %

– Line of Credit, $1,003 available (L + 7.0%, 8.0% Cash, Due 6/2026) (C)(U)

– Delayed Draw Term Debt, $1,254 available (L + 7.0%, 8.0% Cash, Due 6/2026) (C)(U)

– Term Debt (L + 7.0%, 8.0% Cash, Due 6/2026) (C)(U)

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 %

DKI Ventures, LLC – Line of Credit, $2,500 available (L + 8.3%, 9.3% Cash, 2.0% PIK, Due 12/2021) (C)

DKI Ventures, LLC – Term Debt (L + 8.3%, 9.3% Cash, 2.0% PIK, Due 12/2023) (C)

Axios Industrial Group, LLC – Term Debt (SOFR + 9.5 %, 12.6 % Cash, Due 10/2027) (C)(AA)

$ 9,000 9,000 8,741

ENET Holdings, LLC – Term Debt (L + 8.8%, 10.2% Cash, Due 12/2022) (C)

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

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

GLADSTONE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2022

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment (A)(B)(W)(K)

Fix-It Group, LLC– Delayed Draw Term Loan, $ 10,000 available (L + 7.0 %, 10.1 % Cash, Due 12/2026) (C)(U)

MCG Energy Solutions, LLC – Line of Credit, $ 3,000 available (L + 7.5 %, 10.6 % Cash, Due 3/2026) (C)

1 unchanged sentence

20,820 20,820 19,779

MCG Energy Solutions, LLC – Delayed Draw Term Debt, $3,000 available (L + 7.5%, 8.5% Cash, 1.5% PIK, Due 3/2026) (C)

R2i Holdings, LLC – Line of Credit, $1,171 available (8.0% Cash, Due 12/2021) (C)(F)

R2i Holdings, LLC – Term Debt (8.0% Cash, Due 12/2021) (C)(F)

R2i Holdings, LLC – Line of Credit, $ 1,171 available ( 8.0 % PIK, Due 12/2023) (F)(Y)

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.

GLADSTONE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2022

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment (A)(B)(W)(K)

Healthcare, Education, and Childcare - 31.3 %

2 unchanged sentences

19,690 19,690 19,468

Effective School Solutions LLC – Line of Credit, $2,000 available (L + 7.3%, 8.3% Cash, Due 12/2025) (C)

Effective School Solutions LLC – Term Debt (L + 7.3%, 8.3% Cash, Due 12/2025) (C)

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

Effective School Solutions LLC – Delayed Draw Term Debt, $3,200 available (L + 7.3%, 8.3% Cash, Due 12/2025) (C)

EL Academies, Inc.

– Delayed Draw Term Debt, $0 available (L + 8.0%, 9.0% Cash, Due 8/2022) (C)

HH-Inspire Acquisition, Inc.

– Term Debt (L + 6.8 %, 9.9 % Cash, Due 12/2026) (C)(U)

16,000 16,000 15,880

EL Academies, Inc.

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)

2 unchanged sentences

99,644 98,881

GLADSTONE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2021

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment (A)(B)(W)(K)

Cost Fair Value

Machinery - 1.7 %

5 unchanged sentences

Telecommunications – 2.2 %

B+T Group Acquisition, Inc.

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

1,200 1,200 1,158

B+T Group Acquisition, Inc.

(S) – Term Debt (L + 11.0%, 13.0% Cash, Due 12/2021) (C)

6,000 6,000 5,790

NetFortris Corp.

– Term Debt (L + 11.0%, 4.0% Cash, 7.5% PIK, Due 5/2021) (C)(Q)

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

3 unchanged sentences

Sea Link International IRB, Inc.

– Term Debt (11.3% Cash, 2.0% PIK, Due 3/2023) (C)(F)

– Term Debt ( 14.5 % PIK, Due 12/2025) (C)(F)

$ 11,719 $ 11,679 $ 11,074

3 unchanged sentences

$ 3,682 3,698 3,020

Chemicals, Plastics, and Rubber – 3.2%

Phoenix Aromas & Essential Oils, LLC – Term Debt (L + 9.3%, 10.3% Cash, Due 5/2024) (C)

10,012 9,986 10,062

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

GLADSTONE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2022

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment (A)(B)(W)(K)

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 %

4 unchanged sentences

2,100 2,069 2,084

Keystone Acquisition Corp.

– Term Debt (L + 9.3%, 10.3% Cash, Due 5/2025) (D)(U)

4,000 3,954 3,790

Prophet Brand Strategy – Delayed Draw Term Debt, $5,000 available (L + 8.5%, 10.5% Cash, Due 2/2025) (Y)(Z)

Prophet Brand Strategy – Term Debt (L + 8.5%, 10.5% Cash, Due 2/2025) (Y)(Z)

13,000 13,000 13,130

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

Healthcare, Education, and Childcare – 9.1 %

Medical Solutions Holdings, Inc.

– Term Debt (L + 8.4%, 9.4% Cash, Due 6/2025) (C)

3,000 2,974 2,940

Medical Solutions Holdings, Inc.

– Term Debt (L + 8.8%, 9.8% Cash, Due 6/2025) (C)

3,000 2,957 2,940

Home and Office Furnishings, Housewares and Durable Consumer Products – 3.2%

Belnick, Inc.

– Term Debt (11.0% Cash, Due 8/2023) (C)(F)

Giving Home Health Care, LLC – Term Debt ( 12.5 % Cash, Due 2/2028) (C)(F)

28,800 28,800 28,800

3 unchanged sentences

Oil and Gas – 7.4 %

Imperative Holdings Corporation – Term Debt (L + 10.3%, 12.3% Cash, 1.8% PIK, Due 9/2022) (C)

Imperative Holdings Corporation – Term Debt (L + 10.3 %, 13.4 % Cash, Due 9/2024) (C)

24,016 23,968 23,295

15 unchanged sentences

1,000 1,025 551

GLADSTONE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2021

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment (A)(B)(W)(K)

Cost Fair Value

Diversified/Conglomerate Manufacturing – 0.8 %

Salvo Technologies, Inc.

– Preferred Stock (E)(G)

2,500 2,500 2,584

Diversified/Conglomerate Service – 2.6 %

5 unchanged sentences

7,000,000 7,000 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 %

7 unchanged sentences

6,130 2,024 2,718

NetFortris Corp.

– Preferred Stock (E)(G)

NetFortris Holdings LLC – Preferred Stock (E)(G)

7,890,860 789 469

Total Preferred Equity $ 21,949 $ 17,719

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

GLADSTONE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2022

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment (A)(B)(W)(K)

Common Equity – 11.1 %

9 unchanged sentences

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)

2 unchanged sentences

GFRC 360, LLC – Common Stock Warrants (E)(G)

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)

Healthcare, Education, and Childcare – 2.5 %

Giving Home Health Care, LLC - Warrant (E)(G)

GSM MidCo LLC – Common Stock (E)(G)

767 767 1,359

Leeds Novamark Capital I, L.P.

12 unchanged sentences

(S) – Common Stock Warrant (E)(G)

NetFortris Corp.

– Common Stock Warrant (E)(G)

Textiles and Leather – 2.5 %

Targus Cayman HoldCo, Ltd.

– Common Stock (E)(G)

– Common Stock (G)(Y)(Z)

3,076,414 2,062 7,978

1 unchanged sentence

Total Non-Control/Non-Affiliate Investments $ 571,736 $ 574,811

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

GLADSTONE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2022

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment (A)(B)(W)(K)

AFFILIATE INVESTMENTS (N) - 12.4 %

2 unchanged sentences

Edge Adhesives Holdings, Inc.

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

(S) – Term Debt (L + 5.5 %, 8.6 % Cash, Due 8/2024) (E)

$ 6,140 $ 6,140 $ 2,550

1 unchanged sentence

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 + 8.0%, 9.0% Cash, Due 12/2025) (C)

23,500 23,500 23,618

GLADSTONE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2021

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment (A)(B)(W)(K)

Cost Fair Value

Encore Dredging Holdings, LLC – Delayed Draw Term Debt, $5,000 available (L + 8.0%, 9.0% Cash, Due 12/2025) (C)

23,500 23,618

Total Secured First Lien Debt $ 29,040 $ 29,158

Secured Second Lien Debt – 9.6%

Diversified Natural Resources, Precious Metals and Minerals – 9.6%

Lignetics, Inc.

– Term Debt (L + 9.8%, 11.8% Cash, Due 6/2026) (Y)(Z)

$ 6,000 $ 6,000 $ 6,540

Lignetics, Inc.

– Term Debt (L + 9.8%, 11.8% Cash, Due 6/2026) (Y)(Z)

8,000 8,000 8,633

Lignetics, Inc.

– Term Debt (L + 9.8%, 11.8% Cash, Due 6/2026) (Y)(Z)

3,300 3,300 3,491

Lignetics, Inc.

– Term Debt (L + 9.8%, 11.8% Cash, Due 6/2026) (Y)(Z)

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

Lignetics, Inc.

– Term Debt (L + 9.8%, 11.8% Cash, Due 6/2026) (Y)(Z)

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

Lignetics, Inc.

– Term Debt (L + 9.8%, 11.8% Cash, Due 6/2026) (Y)(Z)

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 Second Lien Debt $ 29,000 $ 30,563

Total Secured First Lien Debt $ 39,306 $ 34,804

Preferred Equity – 1.2 %

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Diversified/Conglomerate Service – 0.9 %

Encore Dredging Holdings, LLC – Preferred Stock (E)(G)

3,200,000 3,200 4,525

Diversified Natural Resources, Precious Metals and Minerals – 1.8%

Lignetics, Inc.

– Preferred Stock (G)(Y)(Z)

Encore Dredging Holdings, LLC (S) – Preferred Stock (E)(G)

3,840,000 3,840 2,842

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Common Equity – 0.2 %

Diversified Natural Resources, Precious Metals and Minerals – 3.5%

Lignetics, Inc.

– Common Stock (G)(Y)(Z)

152,603 $ 1,855 $ 10,969

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

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Total Affiliate Investments $ 49,412 $ 39,091

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

GLADSTONE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2022

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment (A)(B)(W)(K)

CONTROL INVESTMENTS (O) – 11.3 %

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Diversified/Conglomerate Manufacturing – 1.0 %

LWO Acquisitions Company LLC – Term Debt (L + 7.5%, 10.0% Cash, Due 6/2021) (E)(Q)

Lonestar EMS, LLC – Term Debt ( 8.0 % Cash, Due 6/2027) (E)(F)

$ 3,250 $ 3,250 $ 3,030

LWO Acquisitions Company LLC – Term Debt (Due 6/2021) (E)(P)(Q)

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 %

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Preferred Equity – 1.8 %

Automobile– 0.1%

Defiance Integrated Technologies, Inc.

– Preferred Stock (E)(G)

Personal and Non-Durable Consumer Products (Manufacturing Only) – 1.8 %

WB Xcel Holdings, LLC - Preferred Stock (E)(G)

333 $ 2,750 $ 5,687

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Diversified/Conglomerate Manufacturing – 0.0 %

LWO Acquisitions Company LLC – Common Units (E)(G)

Circuitronics EMS Holdings LLC – Common Units (E)(G)

921,000 921 —

GLADSTONE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2021

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment (A)(B)(W)(K)

Cost Fair Value

Lonestar EMS, LLC – Common Units (E)(G)

100 % 6,750 —

Machinery – 1.1 %

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Total Control Investments $ 34,905 $ 35,713

TOTAL INVESTMENTS – 175.1% $ 546,512 $ 557,612

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

TOTAL INVESTMENTS (X) – 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, 2021, 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.

Under 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 and 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.

(2) Unless indicated otherwise, all cash interest rates are indexed to 30-day London Interbank Offered Rate (“LIBOR” or “L”), which was 0.08% as of September 30, 2021.

If applicable, paid-in-kind (“PIK”) interest rates are noted separately from the cash interest rate.

(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, PIK interest rates are noted separately from the cash interest rate.

Certain securities are subject to an interest rate floor.

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Due dates represent the contractual maturity date.

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

(4) Fair value was based on the indicative bid price on or near September 30, 2021, offered by the respective syndication agent’s trading desk.

(5) 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.

(6) Debt security has a fixed interest rate.

(7) Security is non-income producing.

(8) Reserved.

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

(C) Fair value was based on an internal yield analysis or on estimates of value submitted by a third party valuation firm.

(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.

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.

(10) 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.

(11) Category percentages represent the fair value of each category and subcategory as a percentage of net assets as of September 30, 2021.

(12) 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.

(13) 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.

(14) 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.

(15) 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.

(16) Debt security does not have a stated interest rate that is payable thereon.

(17) Investment maturity date has passed.

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

(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.

(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.

(18) Fair value was based on net asset value provided by the fund as a practical expedient.

(19) 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.

(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.

(20) 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.

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

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

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(21) The cash interest rate on this investment was indexed to 90-day LIBOR, which was 0.13% as of September 30, 2021.

(22) The cash interest rate on this investment was indexed to the U.S.

(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.

(23) Unless indicated otherwise, all of our investments are valued using Level 3 inputs within the ASC 820 fair value hierarchy.

(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.

(24) Cumulative gross unrealized depreciation for federal income tax purposes is $59.4 million;

(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.

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

(26) Investment was exited subsequent to September 30, 2021.

(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.

GLADSTONE CAPITAL CORPORATION

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Board Responsibility

In December 2020, the SEC adopted Rule 2a-5 under the 1940 Act, which permits a BDC’s board of directors to designate its investment adviser as a valuation designee to perform fair value determinations for its investment portfolio, subject to the active oversight of such board.

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.

In accordance with the 1940 Act and SEC Rule 2a-5, our Board of Directors has the ultimate responsibility for reviewing and determining, in good faith, the fair value of our investments for which market quotations are not readily available based on our 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 to the entire Board of Directors so that the full Board of Directors may review and approve in good faith the Valuation Designee’s determined fair values of such investments in accordance with the Policy.

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 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.

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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 whether the Valuation Team’s recommended fair value is reasonable in light of the Policy and other facts and circumstances before determining fair value.

A third party valuation firm generally provides estimates of fair value on our proprietary debt investments.

The Valuation Team generally assigns the third party valuation firm’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 the third party valuation firm’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 the third party valuation firm’s.

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

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

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

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

The Valuation Team then makes a 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.

Valuation Techniques

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

the earnings of the portfolio company (the trailing or projected 12 month revenue or EBITDA);

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.

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.

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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.

• 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.

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.

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.

Generally, the Valuation Team uses the yield analysis to corroborate both estimates of value provided by our third party valuation firm 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).

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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.

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

For restricted securities that are publicly traded, the Valuation Team generally bases 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 and the lack of marketability of the security.

• 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.

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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 September 30, 2022 and 2021, there were no loans on non-accrual status.

As of September 30, 2023, our loan to Edge Adhesives Holdings, Inc.

was on non-accrual status with a 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 $ 2.9 million, or 0.5 % 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.

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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 September 30, 2022 and 2021, we held four and six OID loans, respectively, primarily from syndicated loans as well as some participation interests in our portfolio.

As of each of September 30, 2023 and 2022, we held four OID loans.

We recorded OID income of $ 0.2 million, $ 0.5 million, and $ 0.3 million during the years ended September 30, 2023, 2022, and 2021, respectively.

The unamortized balance of OID investments as of September 30, 2023 and 2022 totaled $ 0.7 million and $ 0.9 million, respectively.

As of September 30, 2022 and 2021, we had six and seven investments which had a PIK interest component, respectively.

As of September 30, 2023 and 2022, we had eight and six investments which had a PIK interest component, respectively.

We recorded PIK interest income of $ 3.6 million, $ 4.2 million, and $ 2.5 million during the years ended September 30, 2023, 2022, and 2021, respectively.

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Costs associated with the issuance of our notes payable are presented as discounts to the principal amount of the notes payable and are amortized using the straight-line method, which approximates the effective interest method, over the term of the notes.

Costs associated with the issuance of our mandatorily redeemable preferred stock are presented as discounts to the liquidation value of the mandatorily redeemable preferred stock and are amortized using the straight-line method, which approximates the effective interest method, over the term of the respective series of preferred stock.

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

Refer to Note 5 — Borrowings for further discussion.

Related Party Fees

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

We are party to the Advisory Agreement with the Adviser, which is indirectly 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.

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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.

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

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

We intend to continue to qualify for treatment as a RIC under subchapter M of the Code, which generally allows us to avoid paying corporate income taxes on any income or gains that we distribute to our stockholders.

We intend to continue

to distribute sufficient dividends to eliminate taxable income.

We intend to continue to distribute sufficient dividends to eliminate taxable income.

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

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

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

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

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

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

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

Financial Services – Depository and Lending (Topic 942), and Financial Services – Investment Companies (Topic 946)” (“ASU 2021-06”), which codifies SEC final rules.

ASU 2021-06 is effective immediately.

Our adoption of ASU 2021-06 did not have a material impact on our financial position, results of operations or cash flows.

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

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.

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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).

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.

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Secured first lien debt $ 2,895 $ 34,804

Secured second lien debt — 30,563

Preferred equity 5,122 3,640

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$ 3,299 –$ 3,299 / $ 3,299

Unsecured debt 55 10 TEV Revenue multiple 0.3x–1.3x / l.0x

0.3x–1.4x / l.0x

Unsecured debt 24 55 TEV Revenue multiple 1.0 x– 1.0 x / 1.0 x

0.3 x– 1.3 x / 1.0 x

Revenue $ 5,044 –$ 5,044 / $ 5,044

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(A) Fair value as of September 30, 2022 includes one proprietary debt investment totaling $ 18.8 million, which was valued using the expected payoff amount as the unobservable input.

Fair value as of September 30, 2021 includes two proprietary debt investments totaling $43.7 million, which were valued using the expected payoff amount as the unobservable input.

(B) Fair value as of September 30, 2022 includes one syndicated equity investment totaling $8.0 million, which was valued using the expected payoff amount as the unobservable input.

Fair value as of September 30, 2021 includes one proprietary equity investment totaling $16.6 million, which was valued using the expected payoff amount as the unobservable input.

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, as of September 30, 2022.

Fair value as of September 30, 2021 excludes our investments in Leeds and Funko with fair values of $6.5 million and $78 thousand, respectively, as of September 30, 2021.

(B) Fair value as of September 30, 2023 excludes our investments in Leeds and Funko with fair values of $ 0.2 million and $ 22 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 September 30, 2023 and 2022.

Fair value as of September 30, 2022 includes one syndicated equity investment totaling $ 8.0 million, which was valued using the expected payoff amount as the unobservable input.

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

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The following significant proprietary investment transactions occurred during the year ended September 30, 2023:

• In October 2021, we invested $26.3 million in Engineering Manufacturing Technologies, LLC through secured first lien debt and equity.

• In November 2021, our investment in Lignetics, Inc.

was sold, which resulted in the recognition of success fee income of $1.6 million and a realized gain of $13.4 million.

In connection with the sale, we received net cash proceeds of approximately $47.2 million, including the repayment of our debt investment of $29.0 million at par.

• In November 2021, our investment in Prophet Brand Strategy paid off at par for net cash proceeds of $13.1 million.

In conjunction with the payoff, we received a prepayment fee of $0.1 million.

• In November 2021, our investment in Effective School Solutions LLC paid off at par for net cash proceeds of $19.5 million.

In conjunction with the payoff, we received a prepayment fee of $0.5 million.

• In November 2021, we invested $13.4 million in WB Xcel Holdings, LLC through secured first lien debt and equity.

• In December 2021, our investment in Phoenix Aromas & Essential Oils, LLC paid off at par for net cash proceeds of $10.0 million.

• In December 2021, we invested $10.0 million in Fix-it Group, Inc.

through secured first lien debt.

• In December 2021, we invested $10.5 million in Workforce QA LLC through secured first lien debt and equity.

• In December 2021, we invested $30.0 million in Springfield, Inc.

through secured second lien debt.

• In December 2021, we invested $16.8 million in HH-Inspire Acquisition, Inc.

(“HH-Inspire”) through secured first lien debt and preferred equity.

In June 2022, we invested an additional $11.5 million in HH-Inspire through secured first lien debt.

In August 2022, we invested an additional $0.2 million in HH-Inspire through additional preferred equity.

In September 2022, we invested an additional $8.0 million in HH-Inspire through secured first lien debt.

• In January 2022, our investment in Belnick, Inc.

paid off at par for net cash proceeds of $10.0 million.

• In March 2022, we invested $5.0 million in Pansophic Learning Ltd., an existing portfolio company, through secured first lien debt.

• In March 2022, our investment in NetFortris Corp.

was sold, which resulted in the recognition of success fee income of $3.2 million.

In connection with the sale, we received net cash proceeds of $29.0 million, including the repayment of our debt investment of $28.8 million at par.

We continue to retain an equity investment in NetFortris Holdings LLC with a cost basis of $0.8 million and fair value of $0.5 million as of September 30, 2022.

• In April 2022, we invested $12.0 million in Axios Industrial Group, LLC through secured first lien debt.

• In April 2022, we invested $14.4 million in Salvo Technologies, Inc.

through secured first lien debt and membership units.

• In May 2022, we invested $21.8 million in Viva Railings, LLC through secured first lien debt.

• In June 2022, our investment in LWO Acquisitions Company LLC (“LWO”) was restructured upon emergence from Chapter 11 bankruptcy protection.

As part of the restructuring, our existing $16.8 million debt investment in LWO was converted to $3.3 million of first lien debt and $6.8 million of common equity in Lonestar EMS, LLC.

In conjunction with the restructuring, we recorded a net realized loss of approximately $8.5 million, including the write off of approximately $1.8 million in other receivables.

• In August 2022, we invested $28.8 million in Giving Home Health Care LLC through secured second lien debt and common equity warrants.

• In August 2022, we invested $15.0 million in Sokol & Company Holdings, LLC through secured first lien debt and common equity.

• In August 2022, we invested an additional $2.5 million in Gray Matter Systems, LLC, an existing investment, through secured second lien debt.

• In September 2022, we invested an additional $10.5 million in Antenna Research Associates, Inc., an existing investment, through secured first lien debt.

• In September 2022, we extended Salt and Straw, LLC a $2.0 million line of credit commitment and an $11.5 million delayed draw term loan commitment.

We funded $0.8 million on the line of credit at close.

• In September 2022, Unirac, Inc.

In conjunction with the sale, we received net cash proceeds of $11.8 million, including the repayment of our debt investment at par and a $0.1 million prepayment penalty.

• In September 2022, we invested $15.0 million in Unirac Holdings, Inc.

through secured first lien debt.

We also extended Unirac Holdings, Inc.

a $2.2 million line of credit commitment and a $2.8 million delayed draw term loan commitment, both of which were both unfunded at close.

• 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 a fair value of $ 0.2 million as of September 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 the company 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 equity 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.

In September 2023, the delayed draw term loan commitment expired.

• In July 2023, we invested an additional $ 5.0 million in Gray Matter Systems, LLC, an existing portfolio company, through secured second lien debt.

• In September 2023, we invested an additional $ 4.0 million in Sea Link International IRB, Inc., an existing portfolio company, through secured second lien debt.

• In September 2023, we invested an additional $ 8.1 million in Antenna Research Associates, Inc., an existing portfolio company, through secured first lien debt.

• In September 2023, our debt investment in Encore Dredging Holdings, LLC (“Encore”) was repaid at par plus $ 0.4 million in prepayment and early termination fees.

We retain an equity investment in Encore with cost basis of $ 3.8 million and fair value of $ 4.3 million as of September 30, 2023.

Syndicated Investments

As of September 30, 2022 and 2021, we held six and eight syndicated investments with an aggregate fair value of $18.8 million and $31.7 million, or 2.9% and 5.7% of the total portfolio at fair value, respectively.

As of September 30, 2023 and 2022, we held four and six syndicated investments with an aggregate fair value of $ 9.7 million and $ 18.8 million, or 1.4 % and 2.9 % of the total portfolio at fair value, respectively.

The following significant syndicated investment transactions occurred during the year ended September 30, 2023:

• In November 2021, our investment in Medical Solutions Holdings, Inc.

paid off at par for net cash proceeds of $6.0 million.

• In January 2022, our investment in Keystone Acquisition Corp.

• 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 Nasdaq 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.

• In September 2023, our investment in CPM Holdings, Inc.

paid off at par for net cash proceeds of $ 0.8 million.

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Investments Fair Value Percentage of

Diversified/Conglomerate Service $ 148,907 22.9 % $ 132,458 23.8 %

Healthcare, Education, and Childcare 136,401 21.0 92,680 16.6

Diversified/Conglomerate Manufacturing $ 158,061 22.4 % $ 114,105 17.6 %

Healthcare, Education, and Childcare 146,438 20.8 136,401 21.0

Diversified/Conglomerate Service 135,060 19.2 148,907 22.9

Aerospace and Defense 97,836 13.9 88,649 13.6

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Personal and Non-Durable Consumer Products 14,576 2.1 18,583 2.9

Telecommunications 10,088 1.6 36,720 6.6

Machinery 6,411 0.9 9,562 1.5

Telecommunications 5,868 0.8 10,088 1.6

Textiles and Leather — — 7,978 1.2

Diversified Natural Resources, Precious Metals, and Minerals — — 47,134 8.4

Chemicals, Plastics, and Rubber — — 10,062 1.8

Home and Office Furnishings, Housewares, and Durable Consumer Products — — 10,025 1.8

Other, < 2.0% 6,376 0.9 5,542 0.8

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As of September 30, 2023 and 2022, we had gross receivables from portfolio companies of $ 0.8 million and $ 0.5 million, respectively.

The allowance for uncollectible receivables was $0 as of each of September 30, 2022 and 2021.

The allowance for uncollectible receivables was $ 9 thousand and $ 0 as of September 30, 2023 and 2022, respectively.

RELATED PARTY TRANSACTIONS

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

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

Robert Marcotte (our president) also serves as executive vice president of private equity (debt) of the Adviser.

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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;

however, pursuant to the terms of the Advisory Agreement, a small percentage of certain of such fees, totaling $8 thousand, $0.1 million, and $0.1 million for the years ended September 30, 2022, 2021, and 2020, respectively, was retained by the Adviser in the form of reimbursement, at cost, for tasks completed by personnel of the Adviser primarily for the valuation of portfolio companies.

however, pursuant to the terms of the Advisory Agreement, a small percentage of certain of such fees, totaling $ 0 , $ 8 thousand, and $ 0.1 million for the years ended September 30, 2023, 2022, and 2021, respectively, was retained by the Adviser in the form of reimbursement, at cost, for tasks completed by personnel of the Adviser primarily for the valuation of portfolio companies.

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 years ended September 30, 2023 and 2022.

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• 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.

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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.

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 appreciation will be realized in the future.

No GAAP accrual for a capital gains-based incentive fee has been recorded from our inception through September 30, 2023.

Our Board of Directors accepted non-contractual, unconditional and irrevocable credits from the Adviser to reduce the income-based incentive fee to the extent net investment income did not 100.0% cover distributions to common stockholders for the years ended September 30, 2022, 2021, and 2020.

Our Board of Directors accepted non-contractual, unconditional and irrevocable credits from the Adviser to reduce the income-based incentive fee to the extent net investment income did not 100.0 % cover distributions to common stockholders for the years ended September 30, 2022 and 2021, which credits totaled $ 0.4 million and $ 0.5 million, respectively.

There were no such credits during the year ended September 30, 2023.

Transactions with the Administrator

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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 vice chairman and chief operating officer) serve as members of the board of managers and executive officers of the Administrator, which is 100% indirectly owned and controlled by Mr.

Two of our executive officers, David Gladstone (our chairman and chief executive officer) and Terry Lee Brubaker (our chief operating officer) serve as members of the board of managers and executive officers of the Administrator, which is 100 % indirectly owned and controlled by Mr.

Another of our officers, 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.

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Gladstone Securities received fees from portfolio companies totaling $ 0.8 million, $ 1.1 million, and $ 0.8 million during the years ended September 30, 2023, 2022, and 2021, respectively.

See Note 6 — Cumulative Redeemable Preferred Stock Offering for a description of the dealer manager agreement between us and Gladstone Securities.

Related Party Fees Due

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In addition to the above fees, other operating expenses due to the Adviser as of September 30, 2023 and 2022 totaled $ 65 thousand and $ 44 thousand, respectively.

In addition, net expenses payable to Gladstone Investment Corporation (for reimbursement purposes), which includes certain co-investment expenses, totaled $13 thousand and $38 thousand as of September 30, 2022 and 2021, respectively.

In addition, net expenses payable to Gladstone Investment Corporation (for reimbursement purposes), which includes certain co-investment expenses, totaled $ 19 thousand and $ 13 thousand as of

September 30, 2023 and 2022, respectively.

These amounts are generally settled in the quarter subsequent to being incurred and are included in other liabilities on the accompanying Consolidated Statements of Assets and Liabilities as of September 30, 2023 and 2022.

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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:

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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 administrative agent on the accompanying Consolidated Statement of Assets and Liabilities as of September 30, 2022 and 2021.

Amounts collected in the lockbox account with KeyBank are presented as Due from

administrative agent on the accompanying Consolidated Statement of Assets and Liabilities as of September 30, 2023 and 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.

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.

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As of September 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 1.00 % unused commitment fee.

As of September 30, 2021, the discount rate used to determine the fair value of our Credit Facility was 30-day LIBOR, plus 2.97% per annum, plus a 1.00% 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.

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Notes Payable

In August 2023, we completed an offering of $ 57.0 million aggregate principal amount of 7.75 % Notes due 2028 (the “2028 Notes”) for net proceeds of approximately $ 55.1 million after deducting underwriting discounts, commissions and offering expenses borne by us.

The 2028 Notes are traded under the ticker symbol “GLADZ” on the Nasdaq Global Select Market.

The 2028 Notes will mature on September 1, 2028 and may be redeemed in whole or in part at any time or from time to time at our option on or after September 1, 2025.

The 2028 Notes bear interest at a rate of 7.75 % per year.

Interest is payable quarterly on March 1, June 1, September 1, and December 1 of each year beginning December 1, 2023 (which equates to approximately $ 4.4 million per year).

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.

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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.

The terms of the Exchange Notes are identical to those of the 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.

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The 2024 Notes would have otherwise matured on November 1, 2024.

In November 2018, we completed an offering of $57.5 million aggregate principal amount of 6.125% Notes due 2023 (the “2023 Notes”), inclusive of the overallotment option exercised by the underwriters, for net proceeds of $55.4 million after deducting underwriting discounts, commissions and offering expenses borne by us.

On January 7, 2021, we voluntarily redeemed the 2023 Notes with an aggregate principal amount outstanding of $57.5 million.

The redemption amount was $58.1 million inclusive of accrued interest through the date of redemption.

In connection with the voluntary redemption of the 2023 Notes, we incurred a loss on extinguishment of debt of $1.2 million, which is primarily comprised of the unamortized deferred issuance costs at the time of redemption.

The 2023 Notes would have otherwise matured on November 1, 2024.

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 indenture relating to the 2028 Notes, 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 2028 Notes, 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 2028 Notes, 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 the last quoted closing price, of the 2028 Notes as of September 30, 2023 was $ 57.1 million.

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

The fair value, based on a DCF analysis, of the 2027 Notes as of September 30, 2023 was $ 44.5 million.

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We consider the 2027 Notes and 2026 Notes to be Level 3 within the ASC 820 fair value hierarchy.

MANDATORILY REDEEMABLE PREFERRED STOCK

In September 2017, we completed a public offering of approximately 2.1 million shares of our Series 2024 Term Preferred Stock at a public offering price of $25.00 per share.

The shares of our Series 2024 Term Preferred Stock were traded under the ticker symbol “GLADN” on Nasdaq as of September 30, 2019.

On October 2, 2019, we voluntarily redeemed all 2,070,000 outstanding shares of our Series 2024 Term Preferred Stock at a redemption price of $25.00 per share, which represents the liquidation preference per share, plus accrued and unpaid dividends through October 1, 2019 in the amount of $0.004166 per share, for a total payment per share of $25.004166 and an aggregate redemption price of approximately $51.8 million.

In connection with the voluntary redemption of our Series 2024 Term Preferred Stock, we incurred a loss on extinguishment of debt of $1.4 million, which has been reflected in Realized loss on other in our accompanying Consolidated Statement of Operations and which is primarily comprised of the unamortized deferred issuance costs at the time of redemption.

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 September 30, 2023, no shares of Series A Preferred Stock have been issued.

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.

REGISTRATION STATEMENT AND COMMON EQUITY OFFERINGS

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Common Stock 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 year ended September 30, 2022, we sold 430,425 shares of our common stock under the Jefferies Sales Agreement, at a weighted-average price of $10.53 per share and raised $4.5 million of gross proceeds.

In May 2021, we entered into an equity distribution agreement with Jefferies LLC, as amended in August 2022 (the “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 $ 100.0 million in an “at the market offering” (the “ATM Program”).

In July 2023, we amended and restated the Sales Agreement to add Huntington Securities, Inc.

as a sales agent under the ATM Program in addition to Jefferies LLC.

During the year ended September 30, 2023, we sold 8,774,101 shares of our common stock under the Sales Agreement, at a weighted-average price of $ 9.96 per share and raised $ 87.4 million of gross proceeds.

Net proceeds, after deducting commissions and offering costs borne by us, were approximately $ 85.9 million.

As of September 30, 2022, we had a remaining capacity to sell up to an additional $47.8 million of our common stock under the Jefferies Sales Agreement.

As of September 30, 2023, we had a remaining capacity to sell up to an additional $ 0.4 million of our common stock under the Sales Agreement.

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS PER COMMON SHARE

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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.

For the calendar year ended December 31, 2020, 97.3% of distributions to common stockholders were deemed to be paid from ordinary income and 2.7% of distributions to common stockholders were deemed to be a return of capital for 1099 stockholder reporting purposes.

We paid the following monthly distributions to common stockholders for the years ended September 30, 2023 and 2022:

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July 11, 2023 August 23, 2023 August 31, 2023 0.0825

July 11, 2023 September 7, 2023 September 15, 2023(A) 0.02

July 11, 2023 September 21, 2023 September 29, 2023 0.0825

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Year Ended September 30, 2022:

(A) Represents a supplemental distribution to common stockholders.

Aggregate distributions declared and paid to our common stockholders were approximately $ 35.4 million and $ 27.3 million for the years ended September 30, 2023 and 2022, respectively, and were declared based on estimates of Investment Company Taxable Income.

For the fiscal years ended September 30, 2022, 2021, and 2020, distributions declared and paid exceeded taxable income available for common distributions resulting in a partial return of capital of approximately $1.4 million, $1.0 million, and $0.4 million, respectively.

For the fiscal year ended September 30, 2023, our current and accumulated earnings and profits exceeded common stock distributions declared and paid, and, in accordance with Section 855(a) of the Code, we elected to treat $ 5.0 million of the first common distributions paid to common stockholders in the subsequent fiscal year as having been paid in the prior year.

For the fiscal years ended September 30, 2022 and 2021, distributions declared and paid exceeded taxable income available for common distributions resulting in a partial return of capital of approximately $ 1.4 million and $ 1.0 million, respectively.

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

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Cumulative net unrealized appreciation (depreciation) of investments ( 17,454 ) ( 6,438 )

Cumulative net unrealized appreciation of other — —

Undistributed ordinary income 4,978 —

Capital loss carryforward ( 54,425 ) ( 62,910 )

Post-October tax loss deferral — —

Other temporary differences ( 5,928 ) ( 10,742 )

22 unchanged sentences

We are required to establish reserves for litigation matters where those matters present loss contingencies that are both probable and estimable.

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.

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 September 30, 2023 and 2022, we had no established reserves for such loss contingencies.

21 unchanged sentences

Per Common Share Data:

Net asset value at beginning of period / year (A)

Net asset value at beginning of year (A)

$ 9.08 $ 9.28 $ 7.40 $ 8.22 $ 8.32 $ 8.40 $ 8.62 $ 9.06 $ 9.51 $ 9.81

23 unchanged sentences

— — — — — — — 0.02 — —

Repayment of principal on employee notes

— — — — — — — — — 0.14

Net anti-dilutive (dilutive) effect of equity offering (D)

43 unchanged sentences

SUBSEQUENT EVENTS

Credit Facility

In October 2022, we entered into Amendment No.

3 to the Credit Facility to increase the commitment amount by $20.0 million from $225.0 million to $245.0 million, as permitted under the terms of the Credit Facility.

Portfolio Activity

In October 2022, our investment in Targus Cayman HoldCo Ltd.

was sold for net proceeds of approximately $8.0 million including certain receivables.

In October and November 2022, we received distributions totaling $6.0 million from our investment in Leeds Novamark Capital I, L.P.

related primarily to the sale of underlying assets in the fund.

Election of Director

Effective October 11, 2022, Paula Novara was elected to our Board of Directors.

Novara also serves as head of human resources, facilities and office management and IT of the Adviser and certain of its affiliates.

In November 2023, we invested $ 11.0 million in Quality Environmental Midco, Inc.

(“Quality”) through secured first lien debt and preferred equity.

We also extended Quality a $ 2.0 million line of credit commitment, which was unfunded at close.

Distributions

In October 2022, our Board of Directors declared the following monthly cash distributions to common stockholders:

Record Date Payment Date Distribution

On October 10, 2023, our Board of Directors declared the following distributions to common and preferred stockholders:

Record Date Payment Date Distribution per Common Share

October 20, 2023 October 31, 2023 $ 0.0825

2 unchanged sentences

Total for the Quarter $ 0.2475

Record Date Payment Date Distribution per Series A Preferred Stock(A)

October 25, 2023 November 3, 2023 $ 0.130208

November 28, 2023 December 5, 2023 0.130208

December 27, 2023 January 5, 2024 0.130208

Total for the Quarter $ 0.390624

(A) As of November 13, 2023, there are no shares of Series A Preferred Stock outstanding.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data