UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒
x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, ~~2021~~

2022

☐
o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 814-00704

GLADSTONE INVESTMENT CORPORATION

(Exact name of registrant as specified in its charter)


Delaware			83-0423116
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

~~DELAWARE~~		~~83-0423116~~
~~(State or other jurisdiction of~~ ~~incorporation or organization)~~	~~(I.R.S. Employer~~ ~~Identification No.)~~


1521 WESTBRANCH DRIVE, SUITE 100 ~~MCLEAN, VIRGINIA~~	22102
MCLEAN, VA		(Zip Code)
(Address of principal executive offices)		~~(Zip Code)~~

(703) 287-5800

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year,

if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading

Symbol(s)

Name of Each Exchange

on Which Registered

Common Stock, $0.001 par value per share

GAIN

The Nasdaq Stock Market LLC

5.00% Notes due 2026

GAINN

The Nasdaq Stock Market LLC

4.875% Notes due 2028

GAINZ

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒x No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐o No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐o No ☒

The number of shares of the issuer’s Common Stock, $0.001 par value per share, outstanding as of ~~November 1, 2021~~October 31, 2022 was ~~33,205,023.~~

33,234,663.

Table of Contents

GLADSTONE INVESTMENT CORPORATION

TABLE OF CONTENTS


PART I.	FINANCIAL INFORMATION:

Item 1.	Financial Statements (Unaudited)

	Consolidated Statements of Assets and Liabilities as of September 30, ~~2021~~2022 and March 31, ~~2021~~ 2022		2
	Consolidated Statements of Operations for the three and six months ended September 30, ~~2021~~2022 and ~~2020~~ 2021		3
	Consolidated Statements of Changes in Net Assets for the three and six months ended September 30, ~~2021~~2022 and ~~2020~~ 2021		4
	Consolidated Statements of Cash Flows for the six months ended September 30, ~~2021~~2022 and ~~2020~~ 2021		5
	Consolidated Schedules of Investments as of September 30, ~~2021~~2022 and March 31, ~~2021~~ 2022		6
	Notes to Consolidated Financial Statements		18	16

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

	Overview		43
	Results of Operations		48	47
	Liquidity and Capital Resources		56	57

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		63	65

Item 4.	Controls and Procedures		63	65

PART II.	OTHER INFORMATION:

Item 1.	Legal Proceedings		64	66

Item 1A.	Risk Factors		64	66

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		64	66

Item 3.	Defaults Upon Senior Securities		64	66

Item 4.	Mine Safety Disclosures		64	66

Item 5.	Other Information		64	66

Item 6.	Exhibits		65	66

SIGNATURES		66	68

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(UNAUDITED)

   September 30,
2021 March 31,
2021
ASSETS

Investments at fair value

Non-Control/Non-Affiliate investments (Cost of $350,516 and $297,400, respectively)
   $ 383,339 $ 298,222
Affiliate investments (Cost of $340,703 and $341,651, respectively)
   353,164 307,977
Control investments (Cost of $0 and $24,512, respectively)
   —   27,630
Cash and cash equivalents
   2,184 2,062
Restricted cash and cash equivalents
   238 336
Interest receivable
   2,651 3,369
Due from administrative agent
   1,820 1,164
Deferred financing costs, net
   1,164 1,359
Other assets, net
   1,372 1,612


TOTAL ASSETS
   $ 745,932 $ 643,731


LIABILITIES

Borrowings:

Line of credit at fair value (Cost of $8,900 and $22,400, respectively)
   $ 8,900 $ 22,400
Notes payable, net
   255,626 123,883
Secured borrowing
   5,096 5,096


Total borrowings
   269,622 151,379
Mandatorily redeemable preferred stock, $0.001 par value per share, $25.00 liquidation preference per share; 5,990,000 shares authorized; 0 and 3,774,853 shares issued and outstanding, respectively, net
   —   92,209
Accounts payable and accrued expenses
   1,475 563
Interest payable
   1,901 591
Fees due to Adviser^(A)
   31,399 15,664
Fee due to Administrator^(A)
   571 577
Other liabilities
   263 384


TOTAL LIABILITIES
   $ 305,231 $ 261,367


Commitments and contingencies^(B)

NET ASSETS
   $ 440,701 $ 382,364


ANALYSIS OF NET ASSETS

Common stock, $0.001 par value per share, 100,000,000 shares authorized, 33,205,023 shares issued and outstanding
   $ 33 $ 33
Capital in excess of par value
   398,083 400,796
Cumulative net unrealized appreciation (depreciation) of investments
   45,284 (29,734 )
(Overdistributed) underdistributed net investment income
   (10,098 ) 2,592
Accumulated net realized gain in excess of distributions
   7,399 8,677


Total distributable earnings
   42,585 (18,465 )


TOTAL NET ASSETS
   $ 440,701 $ 382,364


NET ASSET VALUE PER SHARE
   $ 13.27 $ 11.52

^(A)

~~Refer to Note 4 —~~ ~~Related Party Transactions~~ ~~in the accompanying~~ ~~Notes to Consolidated Financial Statements~~ ~~for additional information.~~

^(B)

~~Refer to Note 10 —~~ ~~Commitments and Contingencies~~ ~~in the accompanying~~ ~~Notes to Consolidated Financial Statements~~ ~~for additional information.~~

September 30,
2022 March 31,
2022
ASSETS
Investments at fair value
Non-Control/Non-Affiliate investments (Cost of $421,643 and $388,773, respectively)
$ 488,999 $ 442,124
Affiliate investments (Cost of $280,955 and $279,855, respectively)
248,223 271,559
Control investments (Cost of $620 and $620, respectively)
713 713
Cash and cash equivalents 2,557 14,190
Restricted cash and cash equivalents 346 305
Interest receivable 3,000 3,042
Due from administrative agent 2,242 6,406
Deferred financing costs, net 701 895
Other assets, net 1,847 1,178
TOTAL ASSETS $ 748,628 $ 740,412
LIABILITIES
Borrowings:
Line of credit at fair value (Cost of $16,600 and $0, respectively)
$ 16,600 $ —
Notes payable, net 256,802 256,252
Secured borrowing — 5,096
Total borrowings 273,402 261,348
Accounts payable and accrued expenses 1,798 799
Interest payable 2,206 2,190
Fees due to Adviser(A)
27,791 29,288
Fee due to Administrator(A)
615 627
Other liabilities 346 330
TOTAL LIABILITIES $ 306,158 $ 294,582
Commitments and contingencies(B)
NET ASSETS $ 442,470 $ 445,830
ANALYSIS OF NET ASSETS
Common stock, $0.001 par value per share, 100,000,000 shares authorized, 33,234,663 and 33,205,023 shares issued and outstanding, respectively
$ 33 $ 33
Capital in excess of par value 397,131 397,948
Cumulative net unrealized appreciation (depreciation) of investments 34,717 45,148
Overdistributed net investment income (1,073) (12,995)
Accumulated net realized gain in excess of distributions 11,662 15,696
Total distributable earnings 45,306 47,849
TOTAL NET ASSETS $ 442,470 $ 445,830
NET ASSET VALUE PER SHARE $ 13.31 $ 13.43

(A)Refer to Note 4 — Related Party Transactions in the accompanying Notes to Consolidated Financial Statements for additional information.

(B)Refer to Note 10 — Commitments and Contingencies in the accompanying Notes to Consolidated Financial Statements for additional information.

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

Table of Contents

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(UNAUDITED)

   Three Months Ended September 30, Six Months Ended September 30,
   2021 2020 2021 2020
INVESTMENT INCOME

Interest income

Non-Control/Non-Affiliate investments
   $ 7,407 $ 7,014 $ 14,284 $ 12,978
Affiliate investments
   6,678 4,616 15,509 8,964
Control investments
   213 210 497 419
Cash and cash equivalents
   —   —   —   4


Total interest income
   14,298 11,840 30,290 22,365
Dividend income

Non-Control/Non-Affiliate investments
   1 —   3 —
Affiliate investments
   1,589 —   1,589 —


Total dividend income
   1,590 —   1,592 —
Success fee income

Non-Control/Non-Affiliate investments
   1,650 —   1,650 182
Affiliate investments
   1,000 —   3,032 —


Total success fee income
   2,650 —   4,682 182


Total investment income
   18,538 11,840 36,564 22,547


EXPENSES

Base management fee^(A)
   3,577 2,989 6,897 5,845
Loan servicing fee^(A)
   1,794 1,747 3,662 3,456
Incentive fee^(A)
   7,351 452 19,599 (302 )
Administration fee^(A)
   571 390 970 836
Interest expense on borrowings
   3,082 1,055 5,382 1,972
Dividends on mandatorily redeemable preferred stock
   802 2,158 2,306 4,260
Amortization of deferred financing costs and discounts
   452 466 908 840
Professional fees
   343 254 649 825
Other general and administrative expenses
   1,125 778 2,173 1,535


Expenses before credits from Adviser
   19,097 10,289 42,546 19,267


Credits to base management fee – loan servicing fee^(A)
   (1,794 ) (1,747 ) (3,662 ) (3,456 )
Credits to fees from Adviser—other^(A)
   (930 ) (1,070 ) (2,181 ) (1,805 )


Total expenses, net of credits to fees
   16,373 7,472 36,703 14,006


NET INVESTMENT INCOME (LOSS)
   2,165 4,368 (139 ) 8,541


REALIZED AND UNREALIZED GAIN (LOSS)

Net realized gain (loss):

Non-Control/Non-Affiliate investments
   —   47 143 60
Affiliate investments
   464 574 2,250 1,314
Other
   (1,998 ) —   (1,998 ) —


Total net realized (loss) gain
   (1,534 ) 621 395 1,374
Net unrealized appreciation (depreciation):

Non-Control/Non-Affiliate investments
   15,101 (4,076 ) 32,003 (13,014 )
Affiliate investments
   16,926 6,612 46,134 7,970
Control investments
   (4,523 ) (895 ) (3,119 ) 1,798


Total net unrealized appreciation (depreciation)
   27,504 1,641 75,018 (3,246 )


Net realized and unrealized gain (loss)
   25,970 2,262 75,413 (1,872 )


NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
   $ 28,135 $ 6,630 $ 75,274 $ 6,669


BASIC AND DILUTED PER COMMON SHARE:

Net investment income (loss)
   $ 0.07 $ 0.13 $ —   $ 0.26


Net increase in net assets resulting from operations
   $ 0.85 $ 0.20 $ 2.27 $ 0.20


WEIGHTED-AVERAGE SHARES OF COMMON STOCK OUTSTANDING:

Basic and diluted
   33,205,023 33,205,023 33,205,023 33,148,652

^(A)

~~Refer to Note 4 —~~ ~~Related Party Transactions~~ ~~in the accompanying~~ ~~Notes to Consolidated Financial Statements~~ ~~for additional information.~~

Three Months Ended September 30, Six Months Ended September 30,

2022 2021 2022 2021
INVESTMENT INCOME
Interest income
Non-Control/Non-Affiliate investments $ 9,922 $ 7,407 $ 18,650 $ 14,284
Affiliate investments 4,286 6,678 8,296 15,509
Control investments — 213 — 497
Cash and cash equivalents 29 — 32 —
Total interest income 14,237 14,298 26,978 30,290
Dividend income
Non-Control/Non-Affiliate investments 4,825 1 4,829 3
Affiliate investments — 1,589 1,552 1,589
Total dividend income 4,825 1,590 6,381 1,592
Success fee income
Non-Control/Non-Affiliate investments 1,733 1,650 6,733 1,650
Affiliate investments — 1,000 — 3,032
Total success fee income 1,733 2,650 6,733 4,682
Total investment income $ 20,795 $ 18,538 $ 40,092 36,564
EXPENSES
Base management fee(A)
$ 3,613 $ 3,577 $ 7,176 6,897
Loan servicing fee(A)
1,916 1,794 3,674 3,662
Incentive fee(A)
768 7,351 3,777 19,599
Administration fee(A)
562 571 942 970
Interest expense on borrowings 3,857 3,082 7,641 5,382
Dividends on mandatorily redeemable preferred stock — 802 — 2,306
Amortization of deferred financing costs and discounts 450 452 898 908
Professional fees 938 343 1,233 649
Other general and administrative expenses 816 1,125 2,013 2,173
Expenses before credits from Adviser 12,920 19,097 27,354 42,546
Credits to base management fee – loan servicing fee(A)
(1,916) (1,794) (3,674) (3,662)
Credits to fees from Adviser - other(A)
(1,625) (930) (2,375) (2,181)
Total expenses, net of credits to fees 9,379 16,373 21,305 36,703
NET INVESTMENT INCOME (LOSS) $ 11,416 $ 2,165 $ 18,787 (139)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss):
Non-Control/Non-Affiliate investments $ 2,302 $ — $ 7,031 143
Affiliate investments — 464 — 2,250
Control investments — — (277) —
Other — (1,998) — (1,998)
Total net realized gain 2,302 (1,534) 6,754 395
Net unrealized appreciation (depreciation):
Non-Control/Non-Affiliate investments (985) 15,101 14,004 32,003
Affiliate investments (9,658) 16,926 (24,435) 46,134
Control investments — (4,523) — (3,119)
Total net unrealized (depreciation) appreciation (10,643) 27,504 (10,431) 75,018
Net realized and unrealized gain (loss) (8,341) 25,970 (3,677) 75,413
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,075 $ 28,135 $ 15,110 $ 75,274
BASIC AND DILUTED PER COMMON SHARE:
Net investment income $ 0.34 $ 0.07 $ 0.57 $ —
Net increase in net assets resulting from operations $ 0.09 $ 0.85 $ 0.45 $ 2.27
WEIGHTED-AVERAGE SHARES OF COMMON STOCK OUTSTANDING:
Basic and diluted 33,218,901 33,205,023 33,212,000 33,205,023

(A)Refer to Note 4 — Related Party Transactions in the accompanying Notes to Consolidated Financial Statements for additional information.

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

Table of Contents

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(IN THOUSANDS)

(UNAUDITED)

   2021 2020
NET ASSETS, MARCH 31
   $ 382,364 $ 369,031
OPERATIONS

Net investment (loss) income
   (2,304 ) 4,173
Net realized gain on investments
   1,929 753
Net unrealized appreciation (depreciation) of investments
   47,514 (4,887 )


Net increase in net assets from operations
   47,139 39


DISTRIBUTIONS^(A)

Distributions to common stockholders from net investment income ($0.20 and $0.28 per share, respectively)
   (6,593 ) (9,272 )
Distributions to common stockholders from net realized gains ($0.07 and $0.02 per share, respectively)
   (2,372 ) (666 )


Net decrease in net assets from distributions
   (8,965 ) (9,938 )


CAPITAL ACTIVITY

Issuance of common stock
   —   1,772
Discounts, commissions, and offering costs for issuance of common stock
   —   (35 )


Net increase in net assets from capital activity
   —   1,737


NET INCREASE (DECREASE) IN NET ASSETS
   38,174 (8,162 )


NET ASSETS, JUNE 30
   $ 420,538 $ 360,869


OPERATIONS

Net investment income
   2,165 4,368
Net realized gain on investments
   464 621
Net realized loss on other
   (1,998 ) —
Net unrealized appreciation of investments
   27,504 1,641


Net increase in net assets from operations
   28,135 6,630


DISTRIBUTIONS^(A)

Distributions to common stockholders from net investment income ($0.16 and $0.20 per share, respectively)
   (5,490 ) (6,553 )
Distributions to common stockholders from net realized gains ($0.08 and $0.01 per share, respectively)
   (2,482 ) (420 )


Net decrease in net assets from distributions
   (7,972 ) (6,973 )


NET INCREASE (DECREASE) IN NET ASSETS
   20,163 (343 )


NET ASSETS, SEPTEMBER 30
   $ 440,701 $ 360,526

^(A)	~~Refer to Note 9 —~~ ~~Distributions to Common Stockholders~~ ~~in the accompanying~~ ~~Notes to Consolidated Financial Statements~~ ~~for additional information.~~

2022 2021
NET ASSETS, MARCH 31 $ 445,830 $ 382,364
OPERATIONS
Net investment income (loss) 7,371 (2,304)
Net realized gain on investments 4,452 1,929
Net unrealized appreciation (depreciation) of investments 212 47,514
Net increase in net assets from operations 12,035 47,139
DISTRIBUTIONS(A)
Distributions to common stockholders from net investment income ($0.10 and $0.20 per share, respectively)
(3,188) (6,593)
Distributions to common stockholders from net realized gains ($0.25 and $0.07 per share, respectively)
(8,268) (2,372)
Net decrease in net assets from distributions (11,456) (8,965)
CAPITAL ACTIVITY
Issuance of common stock — —
Discounts, commissions, and offering costs for issuance of common stock — —
Net increase in net assets from capital activity — —
NET INCREASE (DECREASE) IN NET ASSETS 579 38,174
NET ASSETS, JUNE 30 $ 446,409 $ 420,538
OPERATIONS
Net investment income $ 11,416 $ 2,165
Net realized gain on investments 2,302 464
Net realized loss on other — (1,998)
Net unrealized (depreciation) appreciation of investments (10,643) 27,504
Net increase in net assets from operations 3,075 28,135
DISTRIBUTIONS(A)
Distributions to common stockholders from net investment income ($0.14 and $0.16 per share, respectively)
(4,678) (5,490)
Distributions to common stockholders from net realized gains ($0.08 and $0.08 per share, respectively)
(2,797) (2,482)
Net decrease in net assets from distributions (7,475) (7,972)
CAPITAL ACTIVITY
Issuance of common stock 467 —
Discounts, commissions, and offering costs for issuance of common stock (6) —
Net increase in net assets from capital activity 461 —
NET INCREASE (DECREASE) IN NET ASSETS (3,939) 20,163
NET ASSETS, SEPTEMBER 30 $ 442,470 $ 440,701

(A)Refer to Note 9 — Distributions to Common Stockholders in the accompanying Notes to Consolidated Financial Statements for additional information.

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

Table of Contents

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

(UNAUDITED)

   Six Months Ended September 30,
   2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES

Net increase in net assets resulting from operations
   $ 75,274 $ 6,669
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:

Purchase of investments
   (47,550 ) (57,382 )
Principal repayments of investments
   14,060 1,000
Net proceeds from the sale of investments
   8,137 1,104
Net realized gain on investments
   (2,393 ) (1,374 )
Net realized loss on other
   1,998 —
Net unrealized (appreciation) depreciation of investments
   (75,018 ) 3,246
Amortization of premiums, discounts, and acquisition costs, net
   (9 ) (9 )
Amortization of deferred financing costs and discounts
   908 840
Bad debt expense, net of recoveries
   568 60
Changes in assets and liabilities:

Decrease in interest receivable
   259 1,232
Increase in due from administrative agent
   (656 ) (1,342 )
Decrease (increase) in other assets, net
   242 (100 )
Increase (decrease) in accounts payable and accrued expenses
   913 (324 )
Increase in interest payable
   1,311 108
Increase in fees due to Adviser^(A)
   15,698 525
Decrease in fee due to Administrator^(A)
   (6 ) (224 )
Decrease in other liabilities
   (22 ) (13,412 )


Net cash used in operating activities
   (6,286 ) (59,383 )


CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issuance of common stock
   —   1,772
Discounts, commissions, and offering costs for issuance of common stock
   —   (31 )
Proceeds from line of credit
   62,700 81,500
Repayments on line of credit
   (76,200 ) (14,100 )
Proceeds from issuance of notes payable
   134,550 —
Proceeds from issuance of mandatorily redeemable preferred stock
   —   6,283
Redemption of mandatorily redeemable preferred stock
   (94,371 ) —
Deferred financing and offering costs
   (3,432 ) (634 )
Distributions paid to common stockholders
   (16,937 ) (16,911 )


Net cash provided by financing activities
   6,310 57,879


NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS
   24 (1,504 )


CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF PERIOD
   2,398 4,060


CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD
   $ 2,422 $ 2,556


CASH PAID FOR INTEREST
   $ 3,286 $ 1,374

^(A)

~~Refer to Note 4 —~~ ~~Related Party Transactions~~ ~~in the accompanying~~ ~~Notes to Consolidated Financial Statements~~ ~~for additional information.~~

Six Months Ended September 30,

2022 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in net assets resulting from operations $ 15,110 $ 75,274
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities:
Purchase of investments (102,046) (47,550)
Principal repayments of investments 48,000 14,060
Net proceeds from the sale and recapitalization of investments 21,690 8,137
Net realized gain on investments (6,754) (2,393)
Net realized loss on other — 1,998
Net unrealized depreciation (appreciation) of investments 10,431 (75,018)
Amortization of premiums, discounts, and acquisition costs, net (9) (9)
Amortization of deferred financing costs and discounts 898 908
Bad debt expense, net of recoveries 153 568
Changes in assets and liabilities:
Decrease in interest receivable 42 259
Decrease (increase) in due from administrative agent 4,164 (656)
(Increase) decrease in other assets, net (617) 242
Increase in accounts payable and accrued expenses 999 913
Increase in interest payable 16 1,311
(Decrease) increase in fees due to Adviser(A)
(1,578) 15,698
Decrease in fee due to Administrator(A)
(12) (6)
Increase (decrease) in other liabilities 68 (22)
Net cash used in operating activities (9,445) (6,286)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 467 —
Discounts, commissions, and offering costs for issuance of common stock (6) —
Proceeds from line of credit 41,500 62,700
Repayments on line of credit (24,900) (76,200)
Proceeds from issuance of notes payable — 134,550
Redemption of mandatorily redeemable preferred stock — (94,371)
Deferred financing and offering costs (277) (3,432)
Distributions paid to common stockholders (18,931) (16,937)
Net cash (used in) provided by financing activities (2,147) 6,310

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS (11,592) 24

CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF PERIOD 14,495 2,398

CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD $ 2,903 $ 2,422

CASH PAID FOR INTEREST $ 6,739 $ 3,286

(A)Refer to Note 4 — Related Party Transactions in the accompanying Notes to Consolidated Financial Statements for additional information.

Supplemental disclosures of non-cash operating activities:

•In August 2022, in conjunction with a refinancing at Ginsey Home Solutions, Inc. ("Ginsey"), there was a $5.1 million payment made by Ginsey to extinguish our secured borrowing liability. Refer to Note 3 - Investments and Note 5 - Borrowings for further discussion.

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

Table of Contents

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, ~~2021~~

2022

(DOLLAR AMOUNTS IN THOUSANDS)

(UNAUDITED)

Company and Investment^(A)(B)(D)(E)
   Principal/Shares/
Units^(F)(J)    Cost    Fair Value
NON-CONTROL/NON-AFFILIATE INVESTMENTS^(N) – 87.1%

Secured First Lien Debt – 45.0%

Diversified/Conglomerate Manufacturing – 1.0%

Phoenix Door Systems, Inc. – Line of Credit, $100 available (L+7.0%, 9.0% Cash (0.3% Unused Fee), Due 3/2022)^(K)
   $ 1,350    $ 1,350    $ 1,330
Phoenix Door Systems, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 9/2024)^(K)
   3,200    3,200    3,152




      4,550    4,482
Diversified/Conglomerate Services – 26.8%

Bassett Creek Services, Inc. – Term Debt (L+10.0%, 12.0% Cash, Due 4/2023)^(L)
   37,500    37,500    37,500
Counsel Press, Inc. – Term Debt (L+11.8%, 12.8% Cash, Due 3/2023)^(L)
   21,100    21,100    21,100
Counsel Press, Inc. – Term Debt (L+13.0%, 14.0% Cash, Due 3/2023)^(L)
   6,400    6,400    6,400
Horizon Facilities Services, Inc. – Term Debt (L+9.5%, 12.0% Cash, Due 6/2024)^(L)
   27,700    27,700    27,700
Mason West, LLC – Term Debt (L+10.0%, 12.5% Cash, Due 7/2025)^(L)
   25,250    25,250    25,250




      117,950    117,950
Healthcare, Education, and Childcare – 4.5%

Educators Resource, Inc. – Term Debt (L+10.5%, 13.0% Cash, Due 11/2023)^(L)
   20,000    20,000    20,000
Home and Office Furnishings, Housewares, and Durable Consumer Products – 5.6%

Brunswick Bowling Products, Inc. – Term Debt (L+10.0%, 12.0% Cash, Due 1/2023)^(L)
   17,700    17,700    17,700
Brunswick Bowling Products, Inc. – Term Debt (L+10.0%, 12.0% Cash, Due 1/2023)^(L)
   6,850    6,850    6,850




      24,550    24,550
Hotels, Motels, Inns, and Gaming Total – 2.2%

Nocturne Villa Rentals, Inc. – Line of Credit, $2,200 available (L+8.0%, 10.0% Cash, Due 6/2022)^(L)
   800    800    800
Nocturne Villa Rentals, Inc. – Term Debt (L+10.5%, 12.5% Cash, Due 6/2026)^(L)
   8,700    8,700    8,700




      9,500    9,500
Leisure, Amusement, Motion Pictures, and Entertainment – 4.9%

Schylling, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 8/2024)^(L)
   13,081    13,081    13,081
Schylling, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 8/2024)^(L)
   8,500    8,500    8,500




      21,581    21,581




Total Secured First Lien Debt
      $ 198,131    $ 198,063




Secured Second Lien Debt – 15.2%

Aerospace and Defense – 5.8%

Galaxy Technologies Holdings, Inc. – Term Debt (L+4.1%, 7.1% Cash, Due 10/2026)^(L)
   $ 6,500    $ 6,500    $ 6,500
Galaxy Technologies Holdings, Inc. – Term Debt (L+7.0%, 10.0% Cash, Due 10/2026)^(L)
   18,796    18,796    18,796




      25,296    25,296
Automobile – 0.9%

Country Club Enterprises, LLC – Term Debt (L+8.0%, 10.0% Cash, Due 2/2022)^(K)
   4,000    4,000    3,960
Country Club Enterprises, LLC – Guaranty ($1,000)^(T)
   —      —      —




      4,000    3,960
Cargo Transport – 3.0%

Diligent Delivery Systems – Term Debt (L+9.0%, 11.0% Cash, Due 11/2022)^(K)
   13,000    12,979    13,015
Home and Office Furnishings, Housewares, and Durable Consumer Products – 3.0%

Ginsey Home Solutions, Inc. – Term Debt (L+10.0%, 13.5% Cash, Due 1/2025)^(H)(L)
   13,300    13,300    13,300
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) – 2.5%

SBS Industries Holdings, Inc. – Term Debt (L+7.0%, 9.0% Cash, Due 11/2024)^(G)(K)
   11,736    11,736    11,032




Total Secured Second Lien Debt
      $ 67,311    $ 66,603

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


Company and Investment(A)(B)(D)(E)	Principal/Shares/ Units(F)(I)		Cost		Fair Value
NON-CONTROL/NON-AFFILIATE INVESTMENTS(M) – 110.5%
Secured First Lien Debt – 61.9%
Buildings and Real Estate Total – 8.9%
Dema/Mai Holdings, Inc. – Line of Credit, $2,200 available (L+8.0%, 11.1% Cash, Due 7/2023)(K)	$	800	$	800	$	800
Dema/Mai Holdings, Inc. – Term Debt (L+11.0%, 14.1% Cash, Due 7/2027)(K)	38,250		38,250		38,250
			39,050		39,050
Diversified/Conglomerate Manufacturing – 1.2%
Phoenix Door Systems, Inc – Line of Credit, $0 available (L+7.0%, 10.1% Cash (0.3% Unused Fee), Due 3/2024)(J)	2,550		2,550		2,410
Phoenix Door Systems, Inc. – Term Debt (L+11.0%, 14.1% Cash, Due 9/2024)(J)	3,200		3,200		3,024
			5,750		5,434
Diversified/Conglomerate Services – 25.0%
Counsel Press, Inc. – Term Debt (L+11.8%, 14.9% Cash, Due 3/2023)(K)	21,100		21,100		21,100
Counsel Press, Inc. – Term Debt (L+13.0%, 16.1% Cash, Due 3/2023)(K)	6,400		6,400		6,400
Horizon Facilities Services, Inc. – Term Debt (L+7.5%, 10.6% Cash, Due 6/2026)(K)	57,700		57,700		57,700
Mason West, LLC – Term Debt (L+10.0%, 13.1% Cash, Due 7/2025)(K)	25,250		25,250		25,250
			110,450		110,450
Healthcare, Education, and Childcare – 4.5%
Educators Resource, Inc. – Term Debt (L+10.5%, 13.6% Cash, Due 11/2023) (K)	20,000		20,000		20,000

Home and Office Furnishings, Housewares, and Durable Consumer Products – 8.3%
Brunswick Bowling Products, Inc. – Term Debt (L+10.0%, 13.1% Cash, Due 1/2026) (K)	17,700		17,700		17,700
Brunswick Bowling Products, Inc. – Term Debt (L+10.0%, 13.1% Cash, Due 1/2026) (K)	6,850		6,850		6,850
Ginsey Home Solutions, Inc. – Term Debt (L+10.0%, 13.5% Cash, Due 11/2025)(K)	12,200		12,200		12,200
			36,750		36,750
Hotels, Motels, Inns, and Gaming Total – 7.7%
Nocturne Villa Rentals, Inc. – Line of Credit, $2,000 available (L+8.0%, 11.1% Cash, Due 6/2023)(K)	—		—		—
Nocturne Villa Rentals, Inc. – Term Debt (L+10.5%, 13.6% Cash, Due 6/2026)(K)	34,050		34,050		34,050
			34,050		34,050
Leisure, Amusement, Motion Pictures, and Entertainment – 6.3%
Schylling, Inc. – Term Debt (L+11.0%, 14.1% Cash, Due 5/2025)(K)	27,981		27,981		27,981

Total Secured First Lien Debt			$	274,031	$	273,715

Secured Second Lien Debt – 12.0%
Aerospace and Defense – 5.4%
Galaxy Technologies Holdings, Inc. – Term Debt (L+4.1%, 7.2% Cash, Due 10/2026)(K)	$	6,500	$	6,500	$	6,102
Galaxy Technologies Holdings, Inc. – Term Debt (L+7.0%, 10.1% Cash, Due 10/2026)(K)	18,796		18,796		17,644
			25,296		23,746
Automobile – 0.3%
Country Club Enterprises, LLC – Term Debt (L+8.0%, 11.1% Cash, Due 7/2027)(J)	1,500		1,500		1,499
Country Club Enterprises, LLC – Guaranty ($1,000) (Q)			—		—
			1,500		1,499
Cargo Transport – 2.9%
Diligent Delivery Systems – Term Debt (L+9.0%, 12.1% Cash, Due 11/2022)(J)	13,000		12,996		13,000

Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) – 3.4%
SFEG Holdings, Inc. – Term Debt (L+7.0%, 10.1% Cash, Due 11/2024)(K)	3,128		3,128		3,128
SFEG Holdings, Inc. – Term Debt (L+7.0%, 10.1% Cash, Due 11/2024)(K)	11,736		11,736		11,736
			14,864		14,864

Total Secured Second Lien Debt			$	54,656	$	53,109

Table of Contents

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

SEPTEMBER 30, ~~2021~~

2022

(DOLLAR AMOUNTS IN THOUSANDS)

(UNAUDITED)

Company and Investment^(A)(B)(D)(E)
   Principal/Shares/
Units^(F)(J) Cost    Fair Value
Preferred Equity – 25.3%

Diversified/Conglomerate Services – 12.9%

Bassett Creek Services, Inc. – Preferred Stock^(C)(L)
   4,900 $ 4,900    $ 7,643
Counsel Press, Inc. – Preferred Stock^(C)(L)
   6,995 6,995    28,393
Horizon Facilities Services, Inc. – Preferred Stock^(C)(L)
   10,080 10,080    10,080
Mason West, LLC – Preferred Stock^(C)(L)
   11,206 11,206    10,946




   33,181    57,062
Healthcare, Education, and Childcare – 4.5%

Educators Resource, Inc. – Preferred Stock^(C)(L)
   8,560 8,560    20,005
Home and Office Furnishings, Housewares, and Durable Consumer Products – 2.0%

Brunswick Bowling Products, Inc. – Preferred Stock^(C)(L)
   6,653 6,653    4,512
Ginsey Home Solutions, Inc. – Preferred Stock^(C)(L)
   19,280 9,583    4,245




   16,236    8,757
Hotels, Motels, Inns, and Gaming Total -1.7%

Nocturne Villa Rentals, Inc.- Preferred Stock ^(C)(L)
   6,600 6,600    7,492
Leisure, Amusement, Motion Pictures, and Entertainment – 4.2 %

Schylling, Inc. – Preferred Stock^(C)(L)
   4,000 4,000    18,458
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) – 0.0%

SBS Industries Holdings, Inc. – Preferred Stock^(C)(L)
   27,705 2,771    —




Total Preferred Equity
   $ 71,348    $ 111,774




Common Equity/Equivalents – 1.6%

Aerospace and Defense -1.1%

Galaxy Technologies Holdings, Inc. – Common Stock^(C)(L)
   16,957 $ 11,513    $ 4,760
Cargo Transport – 0.5%

Diligent Delivery Systems – Common Stock Warrants^(C)(L)
   8 % 500    2,061
Diversified/Conglomerate Manufacturing – 0.0%

Phoenix Door Systems, Inc. – Common Stock^(C)(L)
   3,195 1,452    —
Home and Office Furnishings, Housewares, and Durable Consumer Products – 0.0%

Ginsey Home Solutions, Inc. – Common Stock^(C)(L)
   63,747 8    —
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) – 0.0%

SBS Industries Holdings, Inc. – Common Stock^(C)(L)
   221,500 222    —
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0%

Funko Acquisition Holdings, LLC^(M) – Common Units^(C)(S)
   6,290 31    78




Total Common Equity/Equivalents
   $ 13,726    $ 6,899




Total Non-Control/Non-Affiliate Investments
   $ 350,516    $ 383,339

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

Company and Investment(A)(B)(D)(E)
Principal/Shares/ Units(F)(I)
Cost Fair Value
Preferred Equity – 36.2%
Buildings and Real Estate – 4.7%
Dema/Mai Holdings, Inc. - Preferred Equity(C)(K)
21,000 $ 21,000 $ 21,000
Diversified/Conglomerate Services – 12.3%
Counsel Press, Inc. – Preferred Stock(C)(K)
6,995 6,995 27,246
Horizon Facilities Services, Inc. – Preferred Stock(C)(K)
10,080 — 21,454
Mason West, LLC – Preferred Stock(C)(K)
11,206 11,206 5,615
18,201 54,315
Healthcare, Education, and Childcare – 4.3%
Educators Resource, Inc. – Preferred Stock(C)(K)
8,560 8,560 18,937
Home and Office Furnishings, Housewares, and Durable Consumer Products – 6.3%
Brunswick Bowling Products, Inc. – Preferred Stock(C)(K)
6,653 6,653 27,980
Ginsey Home Solutions, Inc. – Preferred Stock(C)(K)
19,280 9,583 —
16,236 27,980
Hotels, Motels, Inns, and Gaming – 4.3%
Nocturne Villa Rentals, Inc. – Preferred Stock (C)(K)
6,600 6,600 19,040
Leisure, Amusement, Motion Pictures, and Entertainment – 3.7%
Schylling, Inc. – Preferred Stock(C)(K)
4,000 4,000 16,475
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) – 0.6%
SFEG Holdings, Inc. – Preferred Stock(C)(K)
29,577 4,643 2,543
Total Preferred Equity $ 79,240 $ 160,290
Common Equity/Equivalents – 0.4%
Aerospace and Defense – 0.0%
Galaxy Technologies Holdings, Inc. – Common Stock(C)(K)
16,957 $ 11,513 $ —
Cargo Transport – 0.4%
Diligent Delivery Systems – Common Stock Warrants(C)(K)
8 %

500 1,827

Diversified/Conglomerate Manufacturing– 0.0%
Phoenix Door Systems, Inc. – Common Stock(C)(K)
3,195 1,452 —
Home and Office Furnishings, Housewares, and Durable Consumer Products – 0.0%
Ginsey Home Solutions, Inc. – Common Stock(C)(K)
63,747 8 —
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic)- 0.0%
SFEG Holdings, Inc. – Common Stock(C)(K)
221,500 222 —
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0%
Funko Acquisition Holdings, LLC(L) – Common Units(C)(P)
4,239 21 58
Total Common Equity/Equivalents $ 13,716 $ 1,885
Total Non-Control/Non-Affiliate Investments $ 421,643 $ 488,999

Table of Contents

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

SEPTEMBER 30, ~~2021~~

2022

(DOLLAR AMOUNTS IN THOUSANDS)

(UNAUDITED)

Company and Investment^(A)(B)(D)(E)
   Principal/Shares/
Units^(F)(J)    Cost    Fair Value
AFFILIATE INVESTMENTS^(O) – 80.1%

Secured First Lien Debt – 52.9%

Chemicals, Plastics, and Rubber – 6.0%

PSI Molded Plastics, Inc. – Term Debt (L+5.5%, 7.0% Cash, Due 1/2024)^(L)
   $ 26,618    $ 26,618    $ 26,618
Diversified/Conglomerate Manufacturing – 1.9%

Edge Adhesives Holdings, Inc.^(M) – Term Debt (L+10.5%, 12.5% Cash, Due 2/2022)^(K)
   8,310    8,310    8,310
Diversified/Conglomerate Services – 22.9%

ImageWorks Display and Marketing Group, Inc. – Term Debt (L+11.0%, 13.0% Cash,
Due 11/2022)^(L)
   22,000    22,000    22,000
J.R. Hobbs Co. - Atlanta, LLC - Term Debt (L+6.0%, 8.0% Cash, Due 10/2024)^(G)(K)
   36,000    36,000    34,200
J.R. Hobbs Co. - Atlanta, LLC – Term Debt (L+10.3%, 11.8% Cash, Due 10/2024)^(G)(K)
   16,500    16,500    15,675
The Maids International, LLC – Term Debt (L+10.5%, 12.0% Cash, Due 3/2025)^(L)
   28,560    28,560    28,560




      103,060    100,435
Home and Office Furnishings, Housewares, and Durable Consumer Products – 6.1%

Old World Christmas, Inc. – Secured First Lien Term Loan (L+9.5%, 11.0% Cash,
Due 12/2025)^(L)
   27,000    27,000    27,000
Leisure, Amusement, Motion Pictures, and Entertainment – 2.0%

SOG Specialty Knives & Tools, LLC – Term Debt (Due 12/2023)^(L)(R)
   538    538    538
SOG Specialty Knives & Tools, LLC – Term Debt (L+4.0%, 6.0% Cash, Due 12/2023)^(L)
   8,399    8,399    8,399




      8,937    8,937
Mining, Steel, Iron and Non-Precious Metals Total – 4.1%

Utah Pacific Bridge & Steel, Ltd., $2,000 available (L+8.5%, 10.0% Cash, Due 7/2022)^(L)
   —      —      —
Utah Pacific Bridge & Steel, Ltd. (L+10.0%, 11.5% Cash, Due 7/2026)^(L)
   18,250    18,250    18,250




      18,250    18,250
Personal and Non-Durable Consumer Products (Manufacturing Only) – 6.1%

The Mountain Corporation – Line of Credit, $0 available (L+5.0%, 9.0% Cash,
Due 5/2022)^(G)(L)
   3,400    3,400    3,400
The Mountain Corporation – Line of Credit, $0 available (L+5.0%, 9.0% Cash,
Due 5/2022)^(G)(L)
   500    500    500
Pioneer Square Brands, Inc. – Term Debt (L+12.0%, 13.0% Cash, Due 8/2022)^(L)
   23,100    23,100    23,100




      27,000    27,000
Telecommunications – 3.8%

B+T Group Acquisition, Inc.^(M) – Line of Credit, $0 available (L+11.0%, 13.0% Cash, Due 12/2021)^(L)
   2,800    2,800    2,800
B+T Group Acquisition, Inc.^(M) – Term Debt (L+11.0%, 13.0% Cash, Due 12/2021)^(L)
   14,000    14,000    14,000




      16,800    16,800




Total Secured First Lien Debt
      $ 235,975    $ 233,350

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

Company and Investment(A)(B)(D)(E)
Principal/Shares/ Units(F)(I)
Cost Fair Value
AFFILIATE INVESTMENTS(N) – 56.1%
Secured First Lien Debt – 33.3%
Diversified/Conglomerate Manufacturing – 0.9%
Edge Adhesives Holdings, Inc.(L) – Term Debt (L+5.5%, 8.6% Cash, Due 8/2024)(K)
9,210 $ 9,210 $ 3,825
Diversified/Conglomerate Services – 18.3%
ImageWorks Display and Marketing Group, Inc. – Term Debt (L+11.0%, 14.1% Cash, Due 11/2022)(K)
22,000 22,000 22,000
J.R. Hobbs Co. - Atlanta, LLC – Line of Credit, $4,000 available (L+6.0%, 9.1% Cash, Due 6/2025)(G)(K)
1,000 1,000 660
J.R. Hobbs Co. - Atlanta, LLC - Term Debt (L+6.0%, 9.1% Cash, Due 6/2025) (G)(K)
16,500 16,500 10,900
J.R. Hobbs Co. - Atlanta, LLC – Term Debt (L+10.3%, 13.4% Cash, Due 6/2025) (G)(K)
26,000 26,000 17,176
J.R. Hobbs Co. - Atlanta, LLC – Term Debt (L+6.0%, 9.1% Cash, Due 6/2025) (G)(K)
2,438 2,438 1,610
The Maids International, LLC – Term Debt (L+10.5%, 13.6% Cash, Due 3/2025)(K)
28,560 28,560 28,560
96,498 80,906
Home and Office Furnishings, Housewares, and Durable Consumer Products – 5.7%
Old World Christmas, Inc. – Secured First Lien Term Loan (L+9.5%, 12.6% Cash, Due 12/2025)(K)
25,000 25,000 25,000
Mining, Steel, Iron and Non-Precious Metals Total – 4.1%
Utah Pacific Bridge & Steel, Ltd. (L+10.0%, 13.1% Cash, Due 7/2026)(K)
18,250 18,250 18,250
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.5%
The Mountain Corporation – Line of Credit, $0 available (L+5.0%, 9.0% Cash, Due 5/2023)(G)(K)
3,400 3,400 2,411
The Mountain Corporation – Line of Credit, $0 available (L+5.0%, 9.0% Cash, Due 5/2023)(G)(K)
900 900 —
4,300 2,411
Telecommunications – 3.8%
B+T Group Acquisition, Inc.(L) – Line of Credit, $0 available (L+11.0%, 14.1% Cash, Due 12/2024)(K)
2,800 2,800 2,800
B+T Group Acquisition, Inc.(L) – Term Debt (L+11.0%, 14.1% Cash, Due 12/2024)(K)
14,000 14,000 14,000
16,800 16,800
Total Secured First Lien Debt $ 170,058 $ 147,192
Secured Second Lien Debt – 5.3%
Chemicals, Plastics, and Rubber – 5.3%
PSI Molded Plastics, Inc. – Term Debt (L+5.5%, 8.6% Cash, Due 1/2024)(K)
$ 26,618 $ 26,618 $ 23,642
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0%
The Mountain Corporation – Term Debt (L+4.0%, 7.1% Cash, Due 4/2024)(G)(K)
11,700 11,700 —
The Mountain Corporation – Delayed Draw Term Debt, $0 available (L+4.0%, 7.1% Cash, Due 4/2024)(G)(K)
1,500 1,500 —
$ 13,200 —
Total Secured Second Lien Debt $ 39,818 $ 23,642
Preferred Equity – 15.6%
Chemicals, Plastics, and Rubber – 0.0%
PSI Molded Plastics, Inc. – Preferred Stock(C)(K)
158,598 $ 19,730 $ —
Diversified/Conglomerate Manufacturing – 0.0%
Edge Adhesives Holdings, Inc.(L) – Preferred Stock(C)(K)
8,199 8,199 —

Table of Contents

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

SEPTEMBER 30, ~~2021~~

2022

(DOLLAR AMOUNTS IN THOUSANDS)

(UNAUDITED)

Company and Investment^(A)(B)(D)(E)
   Principal/Shares/
Units^(F)(J)    Cost    Fair Value
Secured Second Lien Debt – 0.4%

Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.4%

The Mountain Corporation – Term Debt (L+4.0%, 7.0% Cash, Due 4/2024)^(G)(L)
   $ 11,700    $ 11,700    $ 1,672
The Mountain Corporation – Delayed Draw Term Debt, $0 available (L+4.0%, 7.0% Cash, Due 4/2024)^(G)(L)
   1,500    1,500    214




      13,200    1,886




Total Secured Second Lien Debt
      $ 13,200    $ 1,886




Preferred Equity – 26.6%

Chemicals, Plastics, and Rubber – 0.0%

PSI Molded Plastics, Inc. – Preferred Stock^(C)(L)
   158,598    $ 19,730    $ —
Diversified/Conglomerate Manufacturing – 0.0%

Edge Adhesives Holdings, Inc.^(M) – Preferred Stock^(C)(L)
   8,199    8,199    —
Diversified/Conglomerate Services – 4.4%

ImageWorks Display and Marketing Group, Inc. – Preferred Stock^(C)(L)
   67,490    6,749    15,120
J.R. Hobbs Co. – Atlanta, LLC – Preferred Stock^(C)(L)
   10,920    10,920    —
The Maids International, LLC – Preferred Stock^(C)(L)
   6,640    6,640    4,614




      24,309    19,734
Home and Office Furnishings, Housewares, and Durable Consumer Products – 7.5%

Old World Christmas, Inc. – Preferred Stock^(C)(L)
   6,180    —      32,884
Leisure, Amusement, Motion Pictures, and Entertainment – 3.3%

SOG Specialty Knives & Tools, LLC – Preferred Stock^(C)(L)
   14,949    14,949    14,335
Mining, Steel, Iron and Non-Precious Metals – 1.4%

Utah Pacific Bridge & Steel, Ltd. — Preferred Stock^(C)(L)
   6,000    6,000    6,000
Personal and Non-Durable Consumer Products (Manufacturing Only) – 7.0%

The Mountain Corporation – Preferred Stock^(C)(L)
   6,899    6,899    —
Pioneer Square Brands, Inc. – Preferred Stock^(C)(L)
   5,502    5,500    30,925




      12,399    30,925
Telecommunications – 3.0%

B+T Group Acquisition, Inc.^(M) – Preferred Stock^(C)(L)
   14,304    4,722    13,279




Total Preferred Equity
      $ 90,308    $ 117,157

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


Company and Investment(A)(B)(D)(E)	Principal/Shares/ Units(F)(I)		Cost		Fair Value
Diversified/Conglomerate Services – 3.2%
ImageWorks Display and Marketing Group, Inc. – Preferred Stock(C)(K)	67,490		6,749		14,051
J.R. Hobbs Co. – Atlanta, LLC – Preferred Stock(C)(K)	10,920		10,920		—
The Maids International, LLC – Preferred Stock(C)(K)	6,640		6,640		—
			24,309		14,051
Home and Office Furnishings, Housewares, and Durable Consumer Products – 9.9%
Old World Christmas, Inc. – Preferred Stock(C)(K)	6,180		—		43,629

Mining, Steel, Iron and Non-Precious Metals – 1.1%
Utah Pacific Bridge & Steel, Ltd. - Preferred Stock(C)(K)	6,000		6,000		5,118

Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0%
The Mountain Corporation – Preferred Stock(C)(K)	6,899		6,899		—

Telecommunications – 1.4%
B+T Group Acquisition, Inc.(L) – Preferred Stock(C)(K)	14,304		4,722		6,342

Total Preferred Equity			$	69,859	$	69,140

Common Equity/Equivalents – 1.9%
Diversified/Conglomerate Services – 1.9%
Nth Degree Investment Group, LLC – Common Stock(C)(K)	14,360,000		$	1,219	$	8,191

Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0%
The Mountain Corporation – Common Stock(C)(K)	751		1		—

Telecommunications – 0.0%
B+T Group Acquisition, Inc.(L) – Common Stock Warrants(C)(K)	3.5	%	—		58

Total Common Equity/Equivalents			$	1,220	$	8,249

Total Affiliate Investments			$	280,955	$	248,223

CONTROL INVESTMENTS(O) – 0.2%:
Common Equity/Equivalents – 0.2%
Leisure, Amusement, Motion Pictures, and Entertainment – 0.2%
Gladstone SOG Investments, Inc. - Common Stock(C)(K)	100		$	620	$	713
Total Common Equity/Equivalents			$	620	$	713

Total Control Investments			$	620	$	713

TOTAL INVESTMENTS – 166.8%			$	703,218	$	737,935

(A)Certain of the securities listed are issued by affiliate(s) of the indicated portfolio company. The majority of the securities listed, totaling $624.9 million at fair value, are pledged as collateral to our revolving line of credit, as described further in Note 5—Borrowings in the accompanying Notes toConsolidated Financial Statements.

Additionally, under Section 55 of the Investment Company Act of 1940, as amended (the "1940 Act"), we may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of our total assets. As of September 30, 2022, our investment in Funko Acquisition Holdings, LLC ("Funko") was considered a non-qualifying asset under Section 55 of the 1940 Act and represented less than 0.1% of total investments, at fair value.

(B)Unless indicated otherwise, all cash interest rates are indexed to 30-day London Interbank Offered Rate ("LIBOR" or "L"), which was 3.1% as of September 30, 2022. If applicable, paid-in-kind 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 30-day LIBOR plus a spread.Due dates represent the contractual maturity date.

(C)Security is non-income producing.

(D)Category percentages represent the fair value of each category and subcategory as a percentage of net assets as of September 30, 2022.

(E)Unless indicated otherwise, all of our investments are valued using Level 3 inputs within the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 820, "Fair Value Measurements and Disclosures" ("ASC 820") fair value hierarchy. Refer to Note 3—Investments in the accompanying Notes toConsolidated Financial Statements for additional information.

(F)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.

Table of Contents

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

SEPTEMBER 30, ~~2021~~

2022

(DOLLAR AMOUNTS IN THOUSANDS)

(UNAUDITED)

Company and Investment^(A)(B)(D)(E)
   Principal/Shares/
Units^(F)(J) Cost    Fair Value
Common Equity/Equivalents – 0.2%

Diversified/Conglomerate Services – 0.0%

Nth Degree Investment Group, LLC – Common Units^(C)(L)
   14,360,000 $ 1,219    —
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0%

The Mountain Corporation – Common Stock^(C)(L)
   751 1    —
Telecommunications – 0.2%

B+T Group Acquisition, Inc.^(M) – Common Stock Warrant^(C)(L)
   3.5 % —      771




Total Common Equity/Equivalents
   $ 1,220    $ 771




Total Affiliate Investments
   $ 340,703    $ 353,164




TOTAL INVESTMENTS – 167.2%
   $ 691,219    $ 736,503

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

~~GLADSTONE INVESTMENT CORPORATION~~

~~CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)~~

~~SEPTEMBER 30, 2021~~

~~(DOLLAR AMOUNTS IN THOUSANDS)~~

~~(UNAUDITED)~~

^(A)

Certain of the securities listed are issued by affiliate(s) of the indicated portfolio company. The majority of the securities listed, totaling $549.1 million at fair value, are pledged as collateral to our revolving line of credit, as described further in Note 5 — ~~Borrowings~~ ~~in the accompanying~~ ~~Notes to~~~~Consolidated Financial Statements~~~~. Additionally, under Section 55 of 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 investment in Funko Acquisition Holdings, LLC (“Funko”) was considered a ~~non-qualifying~~ ~~asset under Section 55 of the 1940 Act and represented less than 0.1% of total investments, at fair value.~~

^(B)

~~Unless indicated otherwise, all cash interest rates are indexed to~~ ~~30-day~~ ~~London Interbank Offered Rate (“LIBOR” or “L”), which was 0.1% as of September 30, 2021. If applicable,~~ ~~paid-in-kind~~ ~~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~~ ~~30-day~~ ~~LIBOR plus a spread. Due dates represent the contractual maturity date.~~

^(C)	~~Security is~~ ~~non-income~~ ~~producing.~~

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

^(E)

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.~~

^(F)

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.

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

^(H)

$5.1 million of the debt security was participated to a third-party but is accounted for as collateral for a secured borrowing under accounting principles generally accepted in the U.S. and presented as Secured borrowing on our accompanying ~~Consolidated Statements of Assets and Liabilities~~ ~~as of September 30, 2021.~~

^(I)	~~Reserved.~~

^(J)	~~Represents the principal balance for debt investments and the number of shares/units held for equity investments. Warrants are represented as a percentage of ownership, as applicable.~~

^(K)	~~Fair value was based on internal yield analysis or on estimates of value submitted by ICE Data Pricing and Reference Data, LLC. Refer to Note 3 —~~ ~~Investments~~ ~~in the accompanying~~ ~~Notes to~~~~Consolidated Financial Statements~~ ~~for additional information.~~

^(L)

Fair value was based on the total enterprise value of the portfolio company, which is generally allocated to the portfolio company’s securities in order of their relative priority in the capital structure. Refer to Note 3 — ~~Investments~~ ~~in the accompanying~~ ~~Notes to~~~~Consolidated Financial Statements~~ ~~for additional information.~~

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

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

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

^(P)	Control investments, as defined by the 1940 Act, are those where we have the power to exercise a controlling influence over the management or policies of the portfolio company, which may include owning, with the power to vote, more than 25.0% of the issued and outstanding voting securities.

^(Q)	~~Reserved.~~

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

^(S)

Our investment in Funko was valued using Level 2 inputs within the ASC 820 fair value hierarchy. Our common units in Funko are convertible into class A common stock in Funko, Inc. upon meeting certain requirements. Fair value was based on the closing market price of shares of Funko, Inc. as of the reporting date, less a discount for lack of marketability. Funko, Inc. is traded on the Nasdaq Global Select Market under the trading symbol “FNKO.” Refer to Note 3 — ~~Investments~~ ~~in the accompanying~~ ~~Notes to~~~~Consolidated Financial Statements~~ ~~for additional information.~~

^(T)	~~Refer to Note 10 —~~ ~~Commitments and Contingencies~~ ~~in the accompanying~~ ~~Notes to~~~~Consolidated Financial Statements~~ ~~for additional information regarding this guaranty.~~

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

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

~~GLADSTONE INVESTMENT CORPORATION~~

~~CONSOLIDATED SCHEDULE OF INVESTMENTS~~

~~MARCH 31, 2021~~

~~(DOLLAR AMOUNTS IN THOUSANDS)~~

Company and Investment^(A)(B)(D)(E)
   Principal/Shares/
Units^(F)(J)    Cost    Fair Value
NON-CONTROL/NON-AFFILIATE INVESTMENTS^(N) – 77.9%

Secured First Lien Debt – 48.9%

Diversified/Conglomerate Manufacturing – 1.1%

Phoenix Door Systems, Inc. – Line of Credit, $0 available (L+7.0%, 9.0% Cash (0.3% Unused Fee), Due 3/2022)^(L)
   $ 1,150    $ 1,150    $ 1,150
Phoenix Door Systems, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 9/2024)^(L)
   3,200    3,200    3,200




      4,350    4,350
Diversified/Conglomerate Services – 30.6%

Bassett Creek Services, Inc. – Term Debt (L+10.0%, 12.0% Cash, Due 4/2023)^(K)
   37,500    37,500    36,656
Counsel Press, Inc. – Term Debt (L+11.8%, 12.8% Cash, Due 3/2023)^(L)
   21,100    21,100    21,100
Counsel Press, Inc. – Term Debt (L+13.0%, 14.0% Cash, Due 3/2023)^(L)
   6,400    6,400    6,400
Horizon Facilities Services, Inc. – Term Debt (L+9.5%, 12.0% Cash, Due 6/2024)^(G)(L)
   27,700    27,700    27,700
Mason West, LLC – Line of Credit, $3,000 available (L+8.0%, 10.0% Cash, Due 7/2021)^(L)
   —      —      —
Mason West, LLC – Term Debt (L+10.0%, 12.5% Cash, Due 7/2025)^(L)
   25,250    25,250    25,250




      117,950    117,106
Healthcare, Education, and Childcare – 5.2%

Educators Resource, Inc. – Term Debt (L+10.5%, 13.0% Cash, Due 11/2023)^(L)
   20,000    20,000    20,000
Home and Office Furnishings, Housewares, and Durable Consumer Products – 6.4%

Brunswick Bowling Products, Inc. – Term Debt (L+10.0%, 12.0% Cash, Due 1/2023)^(L)
   17,700    17,700    17,700
Brunswick Bowling Products, Inc. – Term Debt (L+10.0%, 12.0% Cash, Due 1/2023)^(L)
   6,850    6,850    6,850




      24,550    24,550
Leisure, Amusement, Motion Pictures, and Entertainment – 5.6%

Schylling, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 8/2024)^(L)
   13,081    13,081    13,081
Schylling, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 8/2024)^(L)
   8,500    8,500    8,500




      21,581    21,581




Total Secured First Lien Debt
      $ 188,431    $ 187,587




Secured Second Lien Debt – 11.0%

Automobile – 1.0%

Country Club Enterprises, LLC – Term Debt (L+8.0%, 10.0% Cash, Due 2/2022)^(K)
   $ 4,000    $ 4,000    $ 3,890
Country Club Enterprises, LLC – Guaranty ($1,000)^(T)
   —      —      —




      4,000    3,890
Cargo Transport – 3.4%

Diligent Delivery Systems – Term Debt (L+9.0%, 11.0% Cash, Due 11/2022)^(Q)
   13,000    12,970    13,000
Home and Office Furnishings, Housewares, and Durable Consumer Products – 3.5%

Ginsey Home Solutions, Inc. – Term Debt (L+10.0%, 13.5% Cash, Due 1/2025)^(H)(L)
   13,300    13,300    13,300
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) – 3.1%

SBS Industries Holdings, Inc. – Term Debt (L+7.0%, 9.0% Cash, Due 11/2024)^(L)
   11,736    11,736    11,736




Total Secured Second Lien Debt
      $ 42,006    $ 41,926

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

(H)Reserved.

~~GLADSTONE INVESTMENT CORPORATION~~

~~CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)~~

~~MARCH 31, 2021~~

~~(DOLLAR AMOUNTS IN THOUSANDS)~~

Company and Investment^(A)(B)(D)(E)
   Principal/Shares/
Units^(F)(J) Cost    Fair Value
Preferred Equity – 17.3%

Diversified/Conglomerate Services – 9.2%

Bassett Creek Services, Inc. – Preferred Stock^(C)(L)
   4,900 $ 4,900    $ —
Counsel Press, Inc. – Preferred Stock^(C)(L)
   6,995 6,995    21,348
Horizon Facilities Services, Inc. – Preferred Stock^(C)(L)
   10,080 10,080    3,663
Mason West, LLC – Preferred Stock^(C)(L)
   11,206 11,206    9,774




   33,181    34,785
Healthcare, Education, and Childcare – 2.9%

Educators Resource, Inc. – Preferred Stock^(C)(L)
   8,560 8,560    11,194
Home and Office Furnishings, Housewares, and Durable Consumer Products – 2.5%

Brunswick Bowling Products, Inc. – Preferred Stock^(C)(L)
   6,653 6,653    1,015
Ginsey Home Solutions, Inc. – Preferred Stock^(C)(L)
   19,280 9,583    8,550




   16,236    9,565
Leisure, Amusement, Motion Pictures, and Entertainment – 2.1%

Schylling, Inc. – Preferred Stock^(C)(L)
   4,000 4,000    7,936
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) – 0.6%

SBS Industries Holdings, Inc. – Preferred Stock^(C)(L)
   27,705 2,771    2,463




Total Preferred Equity
   $ 64,748    $ 65,943




Common Equity/Equivalents – 0.7%

Cargo Transport – 0.6%

Diligent Delivery Systems – Common Stock Warrants^(C)(Q)
   8 % $ 500    $ 2,211
Diversified/Conglomerate Manufacturing – 0.1%

Phoenix Door Systems, Inc. – Common Stock^(C)(L)
   3,195 1,452    460
Home and Office Furnishings, Housewares, and Durable Consumer Products – 0.0%

Ginsey Home Solutions, Inc. – Common Stock^(C)(L)
   63,747 8    —
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) – 0.0%

SBS Industries Holdings, Inc. – Common Stock^(C)(L)
   221,500 222    —
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0%

Funko Acquisition Holdings, LLC^(M) – Common Units^(C)(S)
   7,178 33    95




Total Common Equity/Equivalents
   $ 2,215    $ 2,766




Total Non-Control/Non-Affiliate Investments
   $ 297,400    $ 298,222

(I)Represents the principal balance, presented in thousands, for debt investments and the number of shares/units held for equity investments. Warrants are represented as a percentage of ownership, as applicable.

(J)Fair value was based on internal yield analysis or on estimates of value submitted by ICE Data Pricing and Reference Data, LLC. Refer to Note 3—Investments in the accompanying Notes toConsolidated Financial Statements for additional information.

(K)Fair value was based on the total enterprise value of the portfolio company, which is generally allocated to the portfolio company’s securities in order of their relative priority in the capital structure. Refer to Note 3—Investments in the accompanying Notes toConsolidated Financial Statements for additional information.

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

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

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

(O)Control investments, as defined by the 1940 Act, are those where we have the power to exercise a controlling influence over the management or policies of the portfolio company, which may include owning, with the power to vote, more than 25.0% of the issued and outstanding voting securities.

(P)Our investment in Funko was valued using Level 2 inputs within the ASC 820 fair value hierarchy. Our common units in Funko are convertible into class A common stock in Funko, Inc. upon meeting certain requirements. Fair value was based on the closing market price of shares of Funko, Inc. as of the reporting date, less a discount for lack of marketability. Funko, Inc. is traded on the Nasdaq Global Select Market under the trading symbol “FNKO.” Refer to Note 3—Investments in the accompanying Notes toConsolidated Financial Statements for additional information.

(Q)Refer to Note 10—Commitments and Contingencies in the accompanying Notes toConsolidated Financial Statements for additional information regarding this guaranty.

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

Table of Contents

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS ~~(Continued)~~

MARCH 31, ~~2021~~

2022

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment^(A)(B)(D)(E)
   Principal/Shares/
Units^(F)(J)    Cost    Fair Value
AFFILIATE INVESTMENTS^(O) – 80.9%

Secured First Lien Debt – 47.6%

Beverage, Food, and Tobacco – 2.4%

Head Country, Inc. – Term Debt (L+10.5%, 12.5% Cash, Due 2/2023)^(L)
   $ 9,050    $ 9,050    $ 9,050
Chemicals, Plastics, and Rubber – 6.0%

PSI Molded Plastics, Inc. – Term Debt (L+5.5%, 7.0% Cash, Due 1/2024)^(L)
   26,618    26,618    22,985
Diversified/Conglomerate Manufacturing – 5.4%

D.P.M.S., Inc. – Line of Credit, $0 available (L+6.5%, 9.0% Cash (0.5% Unused Fee), Due 10/2023)^(L)
   1,500    1,500    1,500
D.P.M.S., Inc. – Term Debt (10.0% Cash, Due 10/2023)^(I)(L)
   10,796    10,796    5,751
Edge Adhesives Holdings, Inc.^(M) – Line of Credit, $0 available (L+8.0%, 10.0% Cash, Due 9/2021)^(K)
   1,020    1,020    1,005
Edge Adhesives Holdings, Inc.^(M) – Term Debt (L+10.5%, 12.5% Cash, Due 2/2022)^(K)
   9,300    9,300    9,161
Edge Adhesives Holdings, Inc.^(M) – Term Debt (L+11.8%, 13.8% Cash, Due 2/2022)^(K)
   3,000    3,000    2,955




      25,616    20,372
Diversified/Conglomerate Services – 13.3%

ImageWorks Display and Marketing Group, Inc. – Term Debt (L+11.0%, 13.0% Cash,
Due 11/2022)^(L)
   22,000    22,000    22,000
The Maids International, LLC – Term Debt (L+10.5%, 12.0% Cash, Due 3/2025)^(L)
   28,560    28,560    28,560




      50,560    50,560
Home and Office Furnishings, Housewares, and Durable Consumer Products – 7.1%

Old World Christmas, Inc. – Secured First Lien Term Loan (L+9.5%, 11.0% Cash, Due 12/2025)^(L)
   27,000    27,000    27,000
Leisure, Amusement, Motion Pictures, and Entertainment – 2.3%

SOG Specialty Knives & Tools, LLC – Term Debt (Due 12/2023)^(L)(R)
   538    538    538
SOG Specialty Knives & Tools, LLC – Term Debt (L+4.0%, 6.0% Cash,
Due 12/2023)^(L)
   8,399    8,399    8,399




      8,937    8,937
Personal and Non-Durable Consumer Products (Manufacturing Only) – 7.0%

The Mountain Corporation – Line of Credit, $0 available (L+5.0%, 9.0% Cash, Due 4/2021)^(G)(L)
   3,400    3,400    3,400
Pioneer Square Brands, Inc. – Term Debt (L+12.0%, 13.0% Cash, Due 8/2022)^(Q)
   23,100    23,100    23,215




      26,500    26,615
Telecommunications – 4.1%

B+T Group Acquisition, Inc.^(M) – Line of Credit, $0 available (L+11.0%, 13.0% Cash, Due 12/2021)^(G)(K)
   2,800    2,800    2,597
B+T Group Acquisition, Inc.^(M) – Term Debt (L+11.0%, 13.0% Cash,
Due 12/2021)^(G)(K)
   14,000    14,000    12,985




      16,800    15,582




Total Secured First Lien Debt
      $ 191,081    $ 181,101

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


Company and Investment(A)(B)(D)(E)	Principal/Shares/ Units(F)(I)		Cost		Fair Value

NON-CONTROL/NON-AFFILIATE INVESTMENTS(M) – 99.2%
Secured First Lien Debt – 52.4%
Diversified/Conglomerate Manufacturing – 1.1%
Phoenix Door Systems, Inc – Line of Credit, $150 available (L+7.0%, 9.0% Cash (0.3% Unused Fee), Due 3/2024)(J)	$	2,000	$	2,000	$	1,920
Phoenix Door Systems, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 9/2024)(J)	3,200		3,200		3,072
			5,200		4,992
Diversified/Conglomerate Services – 28.8%
Bassett Creek Services, Inc. – Term Debt(L+10.0%, 12.0% Cash, Due 4/2023)(K)	48,000		48,000		48,000
Counsel Press, Inc. – Term Debt (L+11.8%, 12.8% Cash, Due 3/2023)(K)	21,100		21,100		21,100
Counsel Press, Inc. – Term Debt (L+13.0%, 14.0% Cash, Due 3/2023)(K)	6,400		6,400		6,400
Horizon Facilities Services, Inc. – Term Debt (L+9.5%, 12.0% Cash, Due 6/2024)(K)	27,700		27,700		27,700
Mason West, LLC – Term Debt (L+10.0%, 12.5% Cash, Due 7/2025)(K)	25,250		25,250		25,250
			128,450		128,450
Healthcare, Education, and Childcare – 4.5%
Educators Resource, Inc. – Term Debt (L+10.5%, 13.0% Cash, Due 11/2023) (K)	20,000		20,000		20,000

Home and Office Furnishings, Housewares, and Durable Consumer Products – 5.5%
Brunswick Bowling Products, Inc. – Term Debt (L+10.0%, 12.0% Cash, Due 1/2023) (K)	17,700		17,700		17,700
Brunswick Bowling Products, Inc. – Term Debt (L+10.0%, 12.0% Cash, Due 1/2023) (K)	6,850		6,850		6,850
			24,550		24,550
Hotels, Motels, Inns, and Gaming Total – 6.2%
Nocturne Villa Rentals, Inc. – Line of Credit, $2,000 available (L+8.0%, 10.0% Cash, Due 6/2023)(K)	—		—		—
Nocturne Villa Rentals, Inc. – Term Debt (L+10.5%, 12.5% Cash, Due 6/2026)(K)	27,700		27,700		27,700
			27,700		27,700
Leisure, Amusement, Motion Pictures, and Entertainment – 6.3%
Schylling, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 5/2025)(K)	27,981		27,981		27,981

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

Secured Second Lien Debt – 15.0%
Aerospace and Defense – 5.7%
Galaxy Technologies Holdings, Inc. – Term Debt (L+4.1%, 7.1% Cash, Due 10/2026)(K)	$	6,500	$	6,500	$	6,500
Galaxy Technologies Holdings, Inc. – Term Debt (L+7.0%, 10.0% Cash, Due 10/2026)(K)	18,796		18,796		18,796
			25,296		25,296
Automobile – 0.3%
Country Club Enterprises, LLC – Term Debt (L+8.0%, 10.0% Cash, Due 7/2027)(J)	1,500		1,500		1,498
Country Club Enterprises, LLC - Guaranty ($1,000) (Q)			—		—
			1,500		1,498

Cargo Transport – 2.9%
Diligent Delivery Systems – Term Debt (L+9.0%, 11.0% Cash, Due 11/2022)(J)	13,000		12,987		13,000

Home and Office Furnishings, Housewares, and Durable Consumer Products – 3.0%
Ginsey Home Solutions, Inc. – Term Debt (L+10.0%, 13.5% Cash, Due 1/2025)(H)(L)	13,300		13,300		13,300

Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) – 3.1%
SFEG Holdings, Inc. – Term Debt (L+7.0%, 9.0% Cash, Due 11/2024)(G)(J)	3,128		3,128		2,909
SFEG Holdings, Inc. – Term Debt (L+7.0%, 9.0% Cash, Due 11/2024)(G)(J)	11,736		11,736		10,914
			14,864		13,823

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

Table of Contents

GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS ~~(Continued)~~

MARCH 31, ~~2021~~

2022

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment^(A)(B)(D)(E)
   Principal/Shares/
Units^(F)(J)    Cost    Fair Value
Secured Second Lien Debt – 12.6%

Diversified/Conglomerate Services – 12.0%

J.R. Hobbs Co. – Atlanta, LLC – Line of Credit, $0 available (L+6.0%, 8.0% Cash, Due 10/2024)^(K)
   $ 10,000    $ 10,000    $ 9,975
J.R. Hobbs Co. – Atlanta, LLC – Term Debt (L+10.3%, 11.8% Cash, Due 10/2024)^(K)
   36,000    36,000    35,910




      46,000    45,885
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.6%

The Mountain Corporation – Term Debt (L+4.0%, 7.0% Cash, Due 4/2024)^(G)(L)
   11,700    11,700    1,849
The Mountain Corporation – Delayed Draw Term Debt, $0 available (L+4.0%, 7.0% Cash, Due 4/2024)^(G)(L)
   1,500    1,500    237




      13,200    2,086




Total Secured Second Lien Debt
      $ 59,200    $ 47,971




Preferred Equity – 20.7%

Beverage, Food, and Tobacco – 1.7%

Head Country, Inc. – Preferred Stock^(C)(L)
   4,000    $ 4,000    $ 6,469
Chemicals, Plastics, and Rubber – 0.0%

PSI Molded Plastics, Inc. – Preferred Stock^(C)(L)
   158,598    19,730    —
Diversified/Conglomerate Manufacturing – 0.0%

Channel Technologies Group, LLC – Preferred Stock^(C)(L)
   2,279    1,841    —
Edge Adhesives Holdings, Inc.^(M) – Preferred Stock^(C)(L)
   8,199    8,199    —




      10,040    —
Diversified/Conglomerate Services – 3.5%

ImageWorks Display and Marketing Group, Inc. – Preferred Stock^(C)(L)
   67,490    6,749    9,819
J.R. Hobbs Co. – Atlanta, LLC – Preferred Stock^(C)(L)
   10,920    10,920    —
The Maids International, LLC – Preferred Stock^(C)(L)
   6,640    6,640    3,560




      24,309    13,379
Home and Office Furnishings, Housewares, and Durable Consumer Products – 5.3%

Old World Christmas, Inc. – Preferred Stock^(C)(L)
   6,180    —      20,248
Leisure, Amusement, Motion Pictures, and Entertainment – 1.8%

SOG Specialty Knives & Tools, LLC – Preferred Stock^(C)(L)
   14,949    14,949    6,754
Personal and Non-Durable Consumer Products (Manufacturing Only) – 8.4%

The Mountain Corporation – Preferred Stock^(C)(L)
   6,899    6,899    —
Pioneer Square Brands, Inc. – Preferred Stock^(C)(Q)
   5,502    5,500    32,055




      12,399    32,055
Telecommunications – 0.0%

B+T Group Acquisition, Inc.^(M) – Preferred Stock^(C)(L)
   14,304    4,722    —




Total Preferred Equity
      $ 90,149    $ 78,905

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

Company and Investment(A)(B)(D)(E)
Principal/Shares/
Units(F)(I)
Cost Fair Value
Preferred Equity – 31.4%
Diversified/Conglomerate Services – 15.2%
Bassett Creek Services, Inc. – Preferred Stock(C)(K)
4,900 $ 4,900 $ 17,150
Counsel Press, Inc. – Preferred Stock(C)(K)
6,995 6,995 25,374
Horizon Facilities Services, Inc. – Preferred Stock(C)(K)
10,080 10,080 17,807
Mason West, LLC – Preferred Stock(C)(K)
11,206 11,206 7,553
33,181 67,884
Healthcare, Education, and Childcare – 4.3%
Educators Resource, Inc. – Preferred Stock(C)(K)
8,560 8,560 19,252
Home and Office Furnishings, Housewares, and Durable Consumer Products – 5.6%
Brunswick Bowling Products, Inc. – Preferred Stock(C)(K)
6,653 6,653 21,485
Ginsey Home Solutions, Inc. – Preferred Stock(C)(K)
19,280 9,583 3,263
16,236 24,748
Hotels, Motels, Inns, and Gaming Total – 2.3%
Nocturne Villa Rentals, Inc. – Preferred Stock (C)(K)
6,600 6,600 10,223
Leisure, Amusement, Motion Pictures, and Entertainment – 4.0%
Schylling, Inc. – Preferred Stock(C)(K)
4,000 4,000 17,820
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) – 0.0%
SFEG Holdings, Inc. – Preferred Stock(C)(K)
29,577 4,643 —
Total Preferred Equity $ 73,220 $ 139,927
Common Equity/Equivalents – 0.4%
Aerospace and Defense – 0.0%
Galaxy Technologies Holdings, Inc. – Common Stock(C)(K)
16,957 $ 11,513 $ —
Cargo Transport – 0.4%
Diligent Delivery Systems – Common Stock Warrants(C)(K)
8 %

500 1,533

Diversified/Conglomerate Manufacturing– 0.0%
Phoenix Door Systems, Inc. – Common Stock(C)(K)
3,195 1,452 —
Home and Office Furnishings, Housewares, and Durable Consumer Products – 0.0%
Ginsey Home Solutions, Inc. – Common Stock(C)(K)
63,747 8 —
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) – 0.0%
SFEG Holdings, Inc. – Common Stock(C)(K)
221,500 222 —
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0%
Funko Acquisition Holdings, LLC(L) – Common Units(C)(P)
6,290 30 74
Total Common Equity/Equivalents $ 13,725 $ 1,607
Total Non-Control/Non-Affiliate Investments $ 388,773 $ 442,124
AFFILIATE INVESTMENTS(N) – 60.8%
Secured First Lien Debt – 42.9%
Chemicals, Plastics, and Rubber – 6.0%
PSI Molded Plastics, Inc. – Term Debt (L+5.5%, 7.0% Cash, Due 1/2024)(K)
$ 26,618 $ 26,618 $ 26,618
Diversified/Conglomerate Manufacturing – 2.0%
Edge Adhesives Holdings, Inc.(L) – Term Debt (L+5.5%, 7.5% Cash, Due 8/2024)(J)
9,210 9,210 9,072

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GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS ~~(Continued)~~

MARCH 31, ~~2021~~

2022

(DOLLAR AMOUNTS IN THOUSANDS)

Company and Investment^(A)(B)(D)(E)
   Principal/Shares/
Units^(F)(J) Cost    Fair Value
Common Equity/Equivalents – 0.0%

Diversified/Conglomerate Manufacturing – 0.0%

Channel Technologies Group, LLC – Common Stock^(C)(L)
   2,319,184 $ —      $ —
D.P.M.S., Inc. – Common Stock^(C)(L)
   627 1    —




   1    —
Diversified/Conglomerate Services – 0.0%

Nth Degree Investment Group, LLC – Common Units^(C)(L)
   14,360,000 1,219    —
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0%

The Mountain Corporation – Common Stock^(C)(L)
   751 1    —
Telecommunications – 0.0%

B+T Group Acquisition, Inc.^(M) – Common Stock Warrant^(C)(L)
   3.5 % —      —




Total Common Equity/Equivalents
   $ 1,221    $ —




Total Affiliate Investments
   $ 341,651    $ 307,977




CONTROL INVESTMENTS^(P) – 7.2%:

Secured Second Lien Debt – 3.4%

Aerospace and Defense – 3.4%

Galaxy Technologies, Inc. – Line of Credit, $0 available (L+4.5%, 6.5% Cash (0.5% Unused Fee), Due 8/2023)^(L)
   $ 5,000 $ 5,000    $ 5,000
Galaxy Technologies, Inc. – Term Debt (L+6.0%, 10.0% Cash, Due 8/2023)^(L)
   8,000 8,000    8,000




   $ 13,000    $ 13,000




Preferred Equity – 3.8%

Aerospace and Defense – 3.8%

Galaxy Technologies, Inc. – Preferred Stock^(C)(L)
   5,517,444 $ 11,464    $ 14,630
Common Equity – 0.0%

Aerospace and Defense – 0.0%

Galaxy Technologies, Inc. – Common Stock^(C)(L)
   88,843 $ 48    $ —




Total Control Investments
   $ 24,512    $ 27,630




TOTAL INVESTMENTS – 166.0%
   $ 663,563    $ 633,829

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

Company and Investment(A)(B)(D)(E)
Principal/Shares/
Units(F)(I)
Cost Fair Value
Diversified/Conglomerate Services – 20.5%
ImageWorks Display and Marketing Group, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 11/2022)(K)
22,000 22,000 22,000
J.R. Hobbs Co. - Atlanta, LLC - Term Debt (L+6.0%, 8.0% Cash, Due 10/2024) (G)(K)
16,500 16,500 15,023
J.R. Hobbs Co. - Atlanta, LLC – Term Debt (L+10.3%, 11.8% Cash, Due 10/2024) (G)(K)
26,000 26,000 23,672
J.R. Hobbs Co. - Atlanta, LLC – Term Debt (L+6.0%, 8.0% Cash, Due 3/2023) (G)(K)
2,438 2,438 2,219
J.R. Hobbs Co. - Atlanta, LLC - Guaranty ($9,250) (Q)
— — —
The Maids International, LLC – Term Debt (L+10.5%, 12.0% Cash, Due 3/2025)(K)
28,560 28,560 28,560
95,498 91,474
Home and Office Furnishings, Housewares, and Durable Consumer Products – 5.6%
Old World Christmas, Inc. – Secured First Lien Term Loan (L+9.5%, 11.0% Cash, Due 12/2025)(K)
25,000 25,000 25,000
Mining, Steel, Iron and Non-Precious Metals Total – 4.1%
Utah Pacific Bridge & Steel, Ltd., $2,000 available (L+8.5%, 10.0% Cash, Due 7/2022)(K)
— — —
Utah Pacific Bridge & Steel, Ltd. (L+10.0%, 11.5% Cash, Due 7/2026)(K)
18,250 18,250 18,250
18,250 18,250
Personal and Non-Durable Consumer Products (Manufacturing Only) – 1.0%
The Mountain Corporation – Line of Credit, $0 available (L+5.0%, 9.0% Cash, Due 5/2022)(G)(K)
3,400 3,400 3,400
The Mountain Corporation – Line of Credit, $100 available (L+5.0%, 9.0% Cash, Due 5/2023)(G)(K)
800 800 800
4,200 4,200
Telecommunications – 3.7%
B+T Group Acquisition, Inc.(L) – Line of Credit, $0 available (L+11.0%, 13.0% Cash, Due 12/2024)(K)
2,800 2,800 2,800
B+T Group Acquisition, Inc.(L) – Term Debt (L+11.0%, 13.0% Cash, Due 12/2024)(K)
14,000 14,000 14,000
16,800 16,800
Total Secured First Lien Debt $ 195,576 $ 191,414
Secured Second Lien Debt – 0.2%
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.2%
The Mountain Corporation – Term Debt (L+4.0%, 7.0% Cash, Due 4/2024)(G)(K)
$ 11,700 $ 11,700 $ 923
The Mountain Corporation – Delayed Draw Term Debt, $0 available (L+4.0%, 7.0% Cash, Due 4/2024)(G)(K)
1,500 1,500 118
$ 13,200 $ 1,041
Total Secured Second Lien Debt $ 13,200 $ 1,041
Preferred Equity – 17.4%
Chemicals, Plastics, and Rubber – 0.0%
PSI Molded Plastics, Inc. – Preferred Stock(C)(K)
158,598 $ 19,730 $ —
Diversified/Conglomerate Manufacturing – 0.0%
Edge Adhesives Holdings, Inc.(L) – Preferred Stock(C)(K)
8,199 8,199 —
Diversified/Conglomerate Services – 4.3%
ImageWorks Display and Marketing Group, Inc. – Preferred Stock(C)(K)
67,490 6,749 16,405
J.R. Hobbs Co. – Atlanta, LLC – Preferred Stock(C)(K)
10,920 10,920 —
The Maids International, LLC – Preferred Stock(C)(K)
6,640 6,640 2,679
24,309 19,084
Home and Office Furnishings, Housewares, and Durable Consumer Products – 8.5%
Old World Christmas, Inc. – Preferred Stock(C)(K)
6,180 — 37,842
Mining, Steel, Iron and Non-Precious Metals –1.3%
Utah Pacific Bridge & Steel, Ltd. - Preferred Stock(C)(K)
6,000 6,000 6,000

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GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS ~~(Continued)~~

MARCH 31, ~~2021~~

2022

(DOLLAR AMOUNTS IN THOUSANDS)

^(A)

Certain of the securities listed are issued by affiliate(s) of the indicated portfolio company. The majority of the securities listed, totaling $524.0 million at fair value, are pledged as collateral to our revolving line of credit, as described further in Note 5 — ~~Borrowings~~ ~~in the accompanying~~ ~~Notes to~~~~Consolidated Financial Statements~~~~. Additionally, under Section 55 of the 1940 Act, we may not acquire any~~ ~~non-qualifying~~ assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of our total assets. As of March 31, 2021, our investment in Funko Acquisition Holdings, LLC (“Funko”) was considered a ~~non-qualifying~~ ~~asset under Section 55 of the 1940 Act and represented less than 0.1% of total investments, at fair value.~~

^(B)

~~Unless indicated otherwise, all cash interest rates are indexed to~~ ~~30-day~~ ~~LIBOR, which was 0.1% as of March 31, 2021. If applicable,~~ ~~paid-in-kind~~ ~~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~~ ~~30-day~~ ~~LIBOR plus a spread. Due dates represent the contractual maturity date.~~

^(C)	~~Security is~~ ~~non-income~~ ~~producing.~~

^(D)	~~Category percentages represent the fair value of each category and subcategory as a percentage of net assets as of March 31, 2021.~~

^(E)	~~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.~~

^(F)

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

^(H)

$5.1 million of the debt security was participated to a third-party, but is accounted for as collateral for a secured borrowing under accounting principles generally accepted in the U.S. and presented as Secured borrowing on our accompanying ~~Consolidated Statements of Assets and Liabilities~~ ~~as of March 31, 2021.~~

^(I)	~~Debt security has a fixed interest rate.~~

^(J)	~~Represents the principal balance for debt investments and the number of shares/units held for equity investments. Warrants are represented as a percentage of ownership, as applicable.~~

^(K)	~~Fair value was based on internal yield analysis or on estimates of value submitted by ICE Data Pricing and Reference Data, LLC. Refer to Note 3 —~~ ~~Investments~~ ~~in the accompanying~~ ~~Notes to~~~~Consolidated Financial Statements~~ ~~for additional information.~~

^(L)

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

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

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

^(P)	Control investments, as defined by the 1940 Act, are those where we have the power to exercise a controlling influence over the management or policies of the portfolio company, which may include owning, with the power to vote, more than 25.0% of the issued and outstanding voting securities.

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

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

^(S)

^(T)	~~Refer to Note 10 —~~ ~~Commitments and Contingencies~~ ~~in the accompanying~~ ~~Notes to~~~~Consolidated Financial Statements~~ ~~for additional information regarding this guaranty.~~

^(U)	~~Reserved.~~

^(V)	Cumulative gross unrealized depreciation for federal income tax purposes is $109.0 million; cumulative gross unrealized appreciation for federal income tax purposes is $78.5 million. Cumulative net unrealized depreciation is $30.5 million, based on a tax cost of $664.3 million.

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

Company and Investment(A)(B)(D)(E)
Principal/Shares/
Units(F)(I)
Cost Fair Value
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0%
The Mountain Corporation – Preferred Stock(C)(K)
6,899 6,899 —
Telecommunications – 3.3%
B+T Group Acquisition, Inc.(L) – Preferred Stock(C)(K)
14,304 4,722 14,746
Total Preferred Equity $ 69,859 $ 77,672
Common Equity/Equivalents – 0.3%
Diversified/Conglomerate Services – 0.1%
Nth Degree Investment Group, LLC – Common Stock(C)(K)
14,360,000 $ 1,219 $ 511
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0%
The Mountain Corporation – Common Stock(C)(K)
751 1 —
Telecommunications – 0.2%
B+T Group Acquisition, Inc.(L) – Common Stock Warrants(C)(K)
3.5 % — 921
Total Common Equity/Equivalents $ 1,220 $ 1,432
Total Affiliate Investments $ 279,855 $ 271,559
CONTROL INVESTMENTS(O) – 0.2%:
Common Equity/Equivalents – 0.2%
Leisure, Amusement, Motion Pictures, and Entertainment – 0.2%
Gladstone SOG Investments, Inc. - Common Stock(C)(K)
100 $ 620 $ 713
Total Common Equity/Equivalents $ 620 $ 713
Total Control Investments $ 620 $ 713
TOTAL INVESTMENTS – 160.2%(R)
$ 669,248 $ 714,396

(A)Certain of the securities listed are issued by affiliate(s) of the indicated portfolio company. The majority of the securities listed, totaling $537.5 million at fair value, are pledged as collateral to our revolving line of credit, as described further in Note 5—Borrowings in the accompanying Notes toConsolidated Financial Statements. Additionally, under Section 55 of the 1940 Act, we may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of our total assets. As of March 31, 2022, our investment in Funko was considered a non-qualifying asset under Section 55 of the 1940 Act and represented less than 0.1% of total investments, at fair value.

(B)Unless indicated otherwise, all cash interest rates are indexed to 30-day LIBOR, which was 0.5% as of March 31, 2022. If applicable, paid-in-kind 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 30-day LIBOR plus a spread.Due dates represent the contractual maturity date.

(C)Security is non-income producing.

(D)Category percentages represent the fair value of each category and subcategory as a percentage of net assets as of March 31, 2022.

(E)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 toConsolidated Financial Statements for additional information.

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

(H)$5.1 million of the debt security was participated to a third-party, but is accounted for as collateral for a secured borrowing under accounting principles generally accepted in the U.S. and presented as Secured borrowing on our accompanying Consolidated Statements of Assets and Liabilities as of March 31, 2022.

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GLADSTONE INVESTMENT CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

MARCH 31, 2022

(DOLLAR AMOUNTS IN THOUSANDS)

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

(Q)Refer to Note 10—Commitments and Contingencies in the accompanying Notes toConsolidated Financial Statements for additional information regarding this guaranty.

(R)Cumulative gross unrealized appreciation for federal income tax purposes is $140.8 million; cumulative gross unrealized depreciation for federal income tax purposes is $97.1 million. Cumulative net unrealized appreciation is $43.8 million, based on a tax cost of $670.6 million.

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GLADSTONE INVESTMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, ~~2021~~

2022

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA AND AS OTHERWISE INDICATED)

(UNAUDITED)

NOTE 1. ORGANIZATION

Gladstone Investment Corporation (“Gladstone Investment”) was incorporated under the General Corporation Law of the State of Delaware on February 18, 2005, and completed an initial public offering on June 22, 2005. The terms “the Company,” “we,” “our” and “us” all refer to Gladstone Investment and its consolidated subsidiaries. We are an externally advised, closed-end, non-diversified management investment company that has elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), and are applying the guidance of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, “Financial Services-Investment Companies” (“ASC 946”). In addition, we have elected to be treated for U.S. federal income tax purposes as a regulated investment company (“RIC”) under the Internal Revenue Code of 1986, as amended (the “Code”). We were established for the purpose of investing in debt and equity securities of established private businesses in the United States (“U.S.”). Debt investments primarily take the form of two types of loans: secured first lien loans and secured second lien loans. Equity investments primarily take the form of preferred or common equity (or warrants or options to acquire the foregoing), often in connection with buyouts and other recapitalizations. Our investment objectives are to: (i) achieve and grow current income by investing in debt securities of established businesses that we believe will provide stable earnings and cash flow to pay expenses, make principal and interest payments on our outstanding indebtedness and make distributions to stockholders that grow over time, and (ii) provide our stockholders with long-term capital appreciation in the value of our assets by investing in equity securities of established businesses, generally in combination with the aforementioned debt securities, that we believe can grow over time to permit us to sell our equity investments for capital gains. We intend that our investment portfolio over time will consist of approximately 75.0% in debt investments and 25.0% in equity investments, at cost.

As of September 30, 2022, our investment portfolio was comprised of 76.6% in debt investments and 23.4% in equity investments, at cost.

Gladstone Business Investment, LLC (“Business Investment”), a wholly-owned subsidiary of ours, was established on August 11, 2006 for the sole purpose of holding certain investments pledged as collateral under our line of credit. The financial statements of Business Investment are consolidated with those of Gladstone Investment. ~~Refer to Note 12 —~~ ~~Unconsolidated Significant Subsidiaries~~ ~~for additional information regarding our unconsolidated significant subsidiaries.~~

We are externally managed by Gladstone Management Corporation (the “Adviser”), an affiliate of ours and a U.S. Securities and Exchange Commission (“SEC”) registered investment adviser, pursuant to an investment advisory and management agreement (the “Advisory Agreement”). Administrative services are provided by Gladstone Administration, LLC (the “Administrator”), an affiliate of ours and the Adviser, pursuant to an administration agreement (the “Administration Agreement”). Refer to Note 4 — Related Party Transactions for more information regarding these arrangements.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unaudited Interim Financial Statements and Basis of Presentation

We prepare our interim financial statements in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6, 10 and 12 of SEC Regulation S-X. Accordingly, we have not included in this quarterly report all of the information and notes required by GAAP for annual financial statements. The accompanying Consolidated Financial Statements include our accounts and those of our wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. In accordance with Article 6 of Regulation S-X, we do not consolidate portfolio company investments. Under the investment company rules and regulations pursuant to the American Institute of Certified Public Accountants ~~(“AICPA”)~~ Audit and Accounting Guide for Investment Companies, codified in ASC 946, we are precluded from consolidating any entity other than another investment company, except that ASC 946 provides for the consolidation of a controlled operating company that provides substantially all of its services to the investment company or its consolidated subsidiaries. In our opinion, all adjustments, consisting solely of normal recurring accruals, necessary for the fair statement of financial statements for the interim periods have been included. The results of operations for the three and six months ended September 30, ~~2021~~2022 are not necessarily indicative of results that ultimately may be achieved for the fiscal year ending March 31, ~~2022~~2023 or any future interim period. The interim financial statements and notes thereto should be read in conjunction with the financial

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statements and notes thereto included in our annual report on Form 10-K for the fiscal year ended March 31, ~~2021,~~2022, as filed with the SEC on May 11, ~~2021.~~

2022.

Use of Estimates

Preparing financial statements requires management to make estimates and assumptions that affect the amounts reported in our accompanying Consolidated Financial Statements and these Notes to Consolidated Financial Statements. Actual results may differ from those estimates.

~~Reclassifications~~

~~Certain prior period amounts have been reclassified to conform to the current period presentation in the~~ ~~Consolidated Financial Statements~~ ~~and the accompanying~~ ~~Notes to Consolidated Financial Statements~~. Reclassifications did not impact net increase (decrease) in net assets resulting from operations, total assets, total liabilities or total net assets, or Consolidated Statements of Changes in Net Assets and Consolidated Statements of Cash Flows classifications.

Investment Valuation Policy

Accounting Recognition

We record our investments at fair value in accordance with the FASB ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”) and the 1940 Act. Investment transactions are recorded on the trade date. Realized gains or losses are generally measured by the difference between the net proceeds from the repayment or sale and the cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized, and include investments charged off during the period, net of recoveries. Unrealized appreciation or depreciation primarily reflects the change in investment fair values, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.

Board Responsibility

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 (“~~Board of ~~Directors”)~~Directors has the ultimate responsibility for reviewing and determining, in good faith, the fair value of our investments for which market quotations are not readily available based on our ~~investment~~Policy and for overseeing the valuation ~~policy (which has been approved by our Board of Directors) (the “Policy”).~~designee. Such review ~~occurs in three phases. First, prior to its quarterly meetings, the Board of Directors receives~~and oversight includes receiving written ~~valuation recommendations~~fair value determinations and supporting materials provided by ~~professionals of~~ the ~~Adviser~~valuation designee, in coordination with the Administrator and ~~Administrator~~ with the oversight ~~and direction from~~by the Company’s chief valuation officer ~~(the~~(collectively, the “Valuation Team”). ~~Second, the~~The Valuation Committee of our Board of Directors (comprised entirely of independent directors) meets to review the valuation ~~recommendations~~determinations and supporting materials, discusses the information provided by the Valuation Team, determines whether the Valuation Team has followed the Policy, ~~determines whether the Valuation Team’s recommended fair value is reasonable in light of the Policy,~~ and reviews other facts and ~~circumstances. Third, after~~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 ~~determine~~approve in good faith the Valuation Designee’s determined fair ~~value~~values of such investments in accordance with the Policy.

There is no single standard for determining fair value (especially for privately-held businesses), as fair value depends upon the specific facts and circumstances of each individual investment. In determining the fair value of our investments, the Valuation Team, led by the chief valuation officer, uses the Policy, and each quarter the Valuation Committee and Board of Directors review the Policy to determine if changes thereto are advisable and whether the Valuation Team has applied the Policy consistently.

Use of Third-Party Valuation Firms

The Valuation Team engages third-party valuation firms to provide independent assessments of fair value of certain of our investments.

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ICE Data Pricing and Reference Data, LLC (“ICE”), a valuation specialist, generally provides estimates of fair value on our 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.

We may engage other independent valuation firms to provide earnings multiple ranges, as well as other information, and evaluate such information for incorporation into the total enterprise value (“TEV”) of certain of our investments. Generally, at least once per year, we engage an independent valuation firm to value or review the valuation of each of our significant equity investments, which includes providing the information noted above. The Valuation Team evaluates such information for incorporation into our TEV, including review of all inputs provided by the independent valuation firm. The Valuation Team then makes a recommendation to our Valuation Committee 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.

Valuation Techniques

In accordance with ASC 820, the Valuation Team uses the following techniques when valuing our investment portfolio:

•

~~Total Enterprise Value~~ — In determining the fair value using a TEV, the Valuation Team first calculates the TEV of the portfolio company by incorporating some or all of the following factors: the portfolio company’s ability to make payments and other specific portfolio company attributes; the earnings of the portfolio company (the trailing or projected twelve month revenue or earnings before interest, taxes, depreciation and amortization (“EBITDA”)); EBITDA multiples obtained from our indexing methodology whereby the original transaction EBITDA multiple at the time of our closing is indexed to a general subset of comparable disclosed transactions and EBITDA multiples from recent sales to third parties of similar securities in similar industries; a comparison to publicly traded securities in similar industries; and other pertinent factors. The Valuation Team generally reviews industry statistics and may use outside experts when gathering this information. Once the TEV is determined for a portfolio company, the Valuation Team generally allocates the TEV to the portfolio company’s securities based on the facts and circumstances of the securities, which typically results in the allocation of fair value to securities based on the order of their relative priority in the capital structure. Generally, the Valuation Team uses TEV to value our equity investments and, in the circumstances where we have the ability to effectuate a sale of a portfolio company, our debt investments.

•Total Enterprise Value — In determining the fair value using a TEV, the Valuation Team first calculates the TEV of the portfolio company by incorporating some or all of the following factors: the portfolio company’s ability to make payments and other specific portfolio company attributes; the earnings of the portfolio company (the trailing or projected twelve month revenue or earnings before interest, taxes, depreciation and amortization (“EBITDA”)); EBITDA multiples obtained from our indexing methodology whereby the original transaction EBITDA multiple at the time of our closing is indexed to a general subset of comparable disclosed transactions and EBITDA multiples from recent sales to third parties of similar securities in similar industries; a comparison to publicly traded securities in similar industries; and other pertinent factors. The Valuation Team generally reviews industry statistics and may use outside experts when gathering this information. Once the TEV is determined for a portfolio company, the Valuation Team generally allocates the TEV to the portfolio company’s securities based on the facts and circumstances of the securities, which typically results in the allocation of fair value to securities based on the order of their relative priority in the capital structure. Generally, the Valuation Team uses TEV to value our equity investments and, in the circumstances where we have the ability to effectuate a sale of a portfolio company, our debt investments.

TEV is primarily calculated using EBITDA and EBITDA multiples; however, TEV may also be calculated using revenue and revenue multiples or a discounted cash flow (“DCF”) analysis whereby future expected cash flows of the portfolio company are discounted to determine a net present value using estimated risk-adjusted discount rates, which incorporate adjustments for nonperformance and liquidity risks. ~~Generally, the~~

•Yield Analysis — The Valuation Team ~~uses a DCF analysis to calculate TEV to corroborate estimates~~generally determines the fair value of ~~value~~our debt investments for ~~our equity investments where~~which we do not have the ability to effectuate a sale of athe applicable portfolio company using the yield analysis, which includes a DCF calculation and assumptions that the Valuation Team believes market participants would use, including: estimated remaining life, current market yield, current leverage, and interest rate spreads. This technique develops a modified discount rate that incorporates risk premiums including, among other things, increased probability of default, increased loss upon default, and increased liquidity risk. Generally, the Valuation Team uses the yield analysis to corroborate both estimates of value provided by ICE and market quotes.

•Market Quotes — For our investments for which a limited market exists, we generally base fair value on readily available and reliable market quotations, which are corroborated by the Valuation Team (generally by using the yield analysis described above). In addition, the Valuation Team assesses trading activity for similar investments and evaluates variances in quotations and other market insights to determine if any available quoted prices are reliable. Typically, the Valuation Team uses the lower indicative bid price in the bid-to-ask price range obtained from the respective originating syndication agent’s trading desk on or near the valuation date. The Valuation Team may take further steps to consider additional information to validate that price in accordance with the Policy. For securities that are publicly traded, we generally base fair value on the closing market price of the

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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 ~~debt~~the restriction, which includes consideration of ~~credit-impaired portfolio companies.~~

•

~~Yield Analysis~~ — The Valuation Team generally determines the fair value of our debt investments for which we do not have the ability to effectuate a sale of the applicable portfolio company using the yield analysis, which includes a DCF calculation and assumptions that the Valuation Team believes market participants would use, including: estimated remaining life, current market yield, current leverage, and interest rate spreads. This technique develops a modified discount rate that incorporates risk premiums including, among other things, increased probability of default, increased loss upon default, and increased liquidity risk. Generally, the Valuation Team uses the yield analysis to corroborate both estimates of value provided by ICE and market quotes.

•

~~Market Quotes~~ — For our investments for which a limited market exists, we generally base fair value on readily available and reliable market quotations, which are corroborated by the Valuation Team (generally by using the yield analysis described above). In addition, the Valuation Team assesses trading activity for similar investments and evaluates variances in quotations and other market insights to determine if any available quoted prices are reliable. Typically, the Valuation Team uses the lower indicative bid price in the ~~bid-to-ask~~ price range obtained from the respective originating syndication agent’s trading desk on or near the valuation date. The Valuation Team may take further steps to consider additional information to validate that price in accordance with the Policy. For securities that are publicly traded, we generally base fair value on the closing market price of the securities we hold as of the reporting date. For restricted securities that are publicly traded, we generally base fair value on the closing market price of the securities we hold as of the reporting date less a discount for the restriction, which includes consideration of the nature and term to expiration of the restriction.

•

~~Investments in Funds~~ — For equity investments in other funds for which we cannot effectuate a sale of the fund, the Valuation Team generally determines the fair value of our invested capital at the net asset value (“NAV”) provided by the fund. Any invested capital that is not yet reflected in the NAV provided by the fund is valued at par value. The Valuation Team may also determine fair value of our investments in other investment funds based on the capital accounts of the underlying entity.

the nature and term to expiration of the restriction.

•Investments in Funds — For equity investments in other funds for which we cannot effectuate a sale of the fund, the Valuation Team generally determines the fair value of our invested capital at the net asset value (“NAV”) provided by the fund. Any invested capital that is not yet reflected in the NAV provided by the fund is valued at par value. The Valuation Team may also determine fair value of our investments in other investment funds based on the capital accounts of the underlying entity.

In addition to the valuation techniques listed above, the Valuation Team may also consider other factors when determining the fair value of our investments, including: the nature and realizable value of the collateral, including external parties’ guaranties, any relevant offers or letters of intent to acquire the portfolio company, timing of expected loan repayments, and the markets in which the portfolio company operates.

Fair value measurements of our investments may involve subjective judgments and estimates and, due to the uncertainty inherent in valuing these securities, the determinations of fair value may fluctuate from period to period and may differ materially from the values that could be obtained if a ready market for these securities existed. Our NAV could be materially affected if the determinations regarding the fair value of our investments are materially different from the values that we ultimately realize upon our disposal of such securities. Additionally, changes in the market environment and other events that may occur over the life of the investment may cause the gains or losses ultimately realized on these investments to be different than the valuations currently assigned. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we could realize significantly less than the value at which it is recorded.

Refer to Note 3 — Investments for additional information regarding fair value measurements and our application of ASC 820.

Revenue Recognition

Interest Income Recognition

Interest income, adjusted for amortization of premiums, amendment fees and acquisition costs and the accretion of discounts, is recorded on the accrual basis to the extent that such amounts are expected to be collected. Generally, when a loan becomes 90 days or more past due, or if our qualitative assessment indicates that the debtor is unable to service its debt or other obligations, we will place the loan on non-accrual status and cease recognizing interest income on that loan until the borrower has demonstrated the ability and intent to pay contractual amounts due. However, we remain contractually entitled to this interest. Interest payments received on non-accrual loans may be recognized as income or applied to the cost basis, depending upon management’s judgment. Generally, non-accrual loans are restored to accrual status when past-due principal and interest are paid and, in management’s judgment, are likely to remain current, or, due to a restructuring, the interest income is deemed to be collectible. As of September 30, ~~2021,~~2022, our loans to J.R. Hobbs Co. – Atlanta, LLC (“J.R. Hobbs”), and The Mountain Corporation (“The Mountain”)~~, and SBS Industries Holdings, Inc.~~ were on non-accrual status, with an aggregate debt cost basis of ~~$81.3~~$63.4 million, or ~~15.8%~~11.8% of the cost basis of all debt investments in our portfolio, and an aggregate fair value of ~~$66.7~~$32.8 million, or ~~13.3%~~6.6% of the fair value of all debt investments in our portfolio. As of March 31, ~~2021,~~2022, our loans to ~~B+T Group Acquisition, Inc., Horizon Facilities Services, Inc., and~~J.R. Hobbs, The Mountain, and SFEG Holdings, Inc. were on non-accrual status, with an aggregate debt cost basis of ~~$61.1~~$77.2 million, or ~~12.4%~~15.1% of the cost basis of all debt investments in our portfolio, and an aggregate fair value of ~~$48.8~~$60.0 million, or ~~10.3%~~12.2% of the fair value of all debt investments in our portfolio.

Paid-in-kind (“PIK”) interest, computed at the contractual rate specified in the loan agreement, is added to the principal balance of the loan and recorded as interest income. As of September 30, ~~2021~~2022 and March 31, ~~2021,~~2022, we did not have any loans with a PIK interest component.

Success Fee Income Recognition

We record success fees as income when earned, which often occurs upon receipt of cash. Success fees are generally contractually due upon a change of control in a portfolio company, typically resulting from an exit or sale, and are non-recurring.

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Dividend Income Recognition

We accrue dividend income on preferred and common equity securities to the extent that such amounts are expected to be collected and if we have the option to collect such amounts in cash or other consideration.

Related Party Fees

We are party to the Advisory Agreement with the Adviser, which is owned and controlled by our chairman and chief executive officer. In accordance with the Advisory Agreement, we pay the Adviser fees as compensation for its services, consisting of a base management fee and an incentive fee. Additionally, we pay the Adviser a loan servicing fee as compensation for its services as servicer under the terms of the Fifth Amended and Restated Credit Agreement dated April 30, 2013, as amended (the ~~“Credit Facility”~~"Credit Facility").

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

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

Recent Accounting Pronouncements

In ~~August 2021,~~June 2022, the FASB issued Accounting Standards Update ~~2021-06,~~ “~~Presentation~~2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of ~~Financial Statements (Topic 205): Financial Services – Depository~~Equity Securities Subject to Contractual Sale Restrictions” (“ASU 2022-03”), which clarifies the measurement and ~~Lending (Topic 924), and Financial Services – Investment Companies (Topic 946)” (“~~presentation of fair value for equity securities subject to contractual restrictions that prohibit the sale of the equity security. ASU ~~2021-06”),~~ ~~which modifies the disclosure requirements~~2022-03 is effective for ~~acquired and disposed businesses. ASU~~ ~~2021-06~~ ~~was effective upon issuance. The~~annual reporting periods beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. Our adoption of ASU ~~2021-06~~2022-03 did not have a material impact on our financial position, results of operations or cash flows.

NOTE 3. INVESTMENTS

Fair Value

In accordance with ASC 820, we determine the fair value of our investments to be the price that would be received for an investment in a current sale, which assumes an orderly transaction between willing market participants on the measurement date. This fair value definition focuses on exit price in the principal, or most advantageous, market and prioritizes, within a measurement of fair value, the use of market-based inputs over entity-specific inputs. ASC 820 also establishes the following three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of a financial instrument as of the measurement date.

•

~~Level~~ 1 ~~— inputs to the valuation methodology are quoted prices (unadjusted) for identical financial instruments in active markets;~~

•

~~Level~~ 2 — inputs to the valuation methodology include quoted prices for similar financial instruments in active or inactive markets, and inputs that are observable for the financial instrument, either directly or indirectly, for substantially the full term of the financial instrument. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists, or instances where prices vary substantially over time or among brokered market makers; and

•

~~Level~~ 3 — inputs to the valuation methodology are unobservable and significant to the fair value measurement. Unobservable inputs are those inputs that reflect assumptions that market participants would use when pricing the financial instrument and can include the Valuation Team’s assumptions based upon the best available information.

•Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical financial instruments in active markets;

•Level 2 — inputs to the valuation methodology include quoted prices for similar financial instruments in active or inactive markets, and inputs that are observable for the financial instrument, either directly or indirectly, for substantially the full term of the financial instrument. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists, or instances where prices vary substantially over time or among brokered market makers; and

•Level 3 — inputs to the valuation methodology are unobservable and significant to the fair value measurement. Unobservable inputs are those inputs that reflect assumptions that market participants would use when pricing the financial instrument and can include the Valuation Team’s assumptions based upon the best available information.

When a determination is made to classify our investments within Level 3 of the valuation hierarchy, such determination is based upon the significance of the unobservable factors to the overall fair value measurement. However, Level 3 financial instruments typically include, in addition to the unobservable, or Level 3, inputs, observable inputs (or components that are actively quoted and can be validated to external sources). The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement.

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As of September 30, ~~2021~~2022 and March 31, ~~2021,~~2022, all of our investments were valued using Level 3 inputs within the ASC 820 fair value hierarchy, except for our investment in Funko Acquisition Holdings, LLC (“Funko”), which was valued using Level 2 inputs.

We transfer investments in and out of Level 1, 2 and 3 of the valuation hierarchy as of the beginning balance sheet date, based on changes in the use of observable and unobservable inputs utilized to perform the valuation for the period. There were no transfers in or out of Level 1, 2 and 3 during the six months ended September 30, 2022 and 2021, ~~and 2020,~~ respectively.

As of September 30, ~~2021~~2022 and March 31, ~~2021,~~2022, our investments, by security type, at fair value were categorized as follows within the ASC 820 fair value hierarchy:

   Fair Value Measurements
   Fair Value    Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)    Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
As of September 30, 2021:

Secured first lien debt
   $ 431,413    $ —      $ —   $ 431,413
Secured second lien debt
   68,489    —      —   68,489
Preferred equity
   228,931    —      —   228,931
Common equity/equivalents
   7,670    —      78 ^(A) 7,592






Total Investments as of September 30, 2021
   $ 736,503    $ —      $ 78 $ 736,425

   Fair Value Measurements
   Fair Value    Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)    Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
As of March 31, 2021:

Secured first lien debt
   $ 368,688    $ —      $ —   $ 368,688
Secured second lien debt
   102,897    —      —   102,897
Preferred equity
   159,478    —      —   159,478
Common equity/equivalents
   2,766    —      95 ^(A) 2,671






Total Investments as of March 31, 2021
   $ 633,829    $ —      $ 95 $ 633,734

^(A)

Fair value was determined based on the closing market price of shares of Funko, Inc. (our units in Funko can be converted into common shares of Funko, Inc.) at the reporting date less a discount for lack of marketability, as our investment was subject to certain restrictions.

Fair Value Measurements
Fair Value
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
As of September 30, 2022:
Secured first lien debt $ 420,907 $ — $ — $ 420,907
Secured second lien debt 76,751 — — 76,751
Preferred equity 229,430 — —

229,430
Common equity/equivalents 10,847 —

58 (A) 10,789
Total Investments as of September 30, 2022 $ 737,935 $ — $ 58 $ 737,877


			Fair Value Measurements

	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
As of March 31, 2022:
Secured first lien debt	$	425,087	$	—	$	—		$	425,087
Secured second lien debt	67,958		—		—			67,958
Preferred equity	217,599		—		—			217,599
Common equity/equivalents	3,752		—		74		(A)	3,678
Total Investments as of March 31, 2022	$	714,396	$	—	$	74		$	714,322

(A)Fair value was determined based on the closing market price of shares of Funko, Inc. (our units in Funko can be converted into common shares of Funko, Inc.) at the reporting date less a discount for lack of marketability, as our investment was subject to certain restrictions.

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The following table presents our investments, valued using Level 3 inputs within the ASC 820 fair value hierarchy, and carried at fair value as of September 30, ~~2021~~2022 and March 31, ~~2021,~~2022, by caption on our accompanying Consolidated Statements of Assets and Liabilities, and by security type:

   Total Recurring Fair Value Measurements
Reported in Consolidated Statements
of Assets and Liabilities
Valued Using Level 3 Inputs
   September 30, 2021    March 31, 2021
Non-Control/Non-Affiliate Investments

Secured first lien debt
   $ 198,063    $ 187,587
Secured second lien debt
   66,603    41,926
Preferred equity
   111,774    65,943
Common equity/equivalents^(A)
   6,821    2,671




Total Non-Control/Non-Affiliate Investments
   383,261    298,127
Affiliate Investments

Secured first lien debt
   233,350    181,101
Secured second lien debt
   1,886    47,971
Preferred equity
   117,157    78,905
Common equity/equivalents
   771    —




Total Affiliate Investments
   353,164    307,977
Control Investments

Secured first lien debt
   —      —
Secured second lien debt
   —      13,000
Preferred equity
   —      14,630
Common equity/equivalents
   —      —




Total Control Investments
   —      27,630




Total investments at fair value using Level 3 inputs
   $ 736,425    $ 633,734

^(A)

~~Excludes our investment in Funko with a fair value of $78 and $95 as of September 30, 2021 and March 31, 2021, respectively, which was valued using Level 2 inputs.~~

Total Recurring Fair Value Measurements
Reported in Consolidated Statements
of Assets and Liabilities
Valued Using Level 3 Inputs
September 30, 2022 March 31, 2022
Non-Control/Non-Affiliate Investments
Secured first lien debt $ 273,715 $ 233,673
Secured second lien debt 53,109 66,917
Preferred equity 160,290 139,927
Common equity/equivalents(A)
1,827 1,533
Total Non-Control/Non-Affiliate Investments 488,941 442,050
Affiliate Investments
Secured first lien debt 147,192 191,414
Secured second lien debt 23,642 1,041
Preferred equity 69,140 77,672
Common equity/equivalents 8,249 1,432
Total Affiliate Investments 248,223 271,559
Control Investments
Secured first lien debt — —
Secured second lien debt — —
Preferred equity — —
Common equity/equivalents 713 713
Total Control Investments 713 713
Total investments at fair value using Level 3 inputs $ 737,877 $ 714,322

(A)Excludes our investment in Funko with a fair value of $58 thousand and $74 thousand as of September 30, 2022 and March 31, 2022, respectively, which was valued using Level 2 inputs.

In accordance with ASC 820, the following table provides quantitative information about our investments valued using Level 3 fair value measurements as of September 30, ~~2021~~2022 and March 31, ~~2021.~~2022. The table below is not intended to be all-inclusive, but rather provides information on the significant Level 3 inputs as they relate to our fair value measurements. The weighted-average calculations in the table below are based on the principal balances for all debt-related calculations and on the cost basis for all equity-related calculations for the particular input.

   Quantitative Information about Level 3 Fair Value Measurements
   Fair Value as of Valuation
Technique/
Methodology    Unobservable
Input    Range / Weighted-Average as of
   September 30,
2021    March 31,
2021    September 30, 2021    March 31, 2021
Secured first lien debt
   $ 368,746    $ 303,330 ^(A) �� TEV    EBITDA
multiple    4.2x – 8.4x / 7.0x    4.6x – 8.0x / 7.0x
         EBITDA
$2,620 – $19,505 /
$7,800


$1,403 – $9,500 /
$5,746

         Revenue
multiple    0.7x – 0.7x / 0.7x    0.6x – 0.7x / 0.6x
         Revenue
$14,147 – $14,147 /
$14,147

$14,474 – $30,537 /
$26,110

   62,667    65,358 Yield Analysis    Discount Rate
10.0% – 13.8% /
12.6%


13.3% – 17.9% /
14.7%

Secured second lien debt
   40,481    53,122 ^(B) TEV    EBITDA
multiple    6.7x – 6.8x / 6.8x    5.9x – 6.6x / 6.2x
         EBITDA
$3,913 – $5,813 /
$5,158

$4,551 – $5,100 /
$4,772

         Revenue
multiple    0.7x – 0.7x / 0.7x    0.7x – 0.7x / 0.7x
         Revenue
$14,147 – $14,147
/ $14,147

$14,474 – $14,474 /
$14,474

   28,008    49,775 Yield Analysis    Discount Rate
10.9% – 13.1% /
11.4%

8.1% – 13.5% /
11.2%

Preferred equity
   228,931    159,478 ^(C) TEV    EBITDA
multiple    4.2x – 8.4x / 6.8x    5.6x – 8.0x / 6.6x
         EBITDA
$1,711 – $19,505 /
$6,359

$2,587 – $9,720 /
$5,938

         Revenue
multiple    0.7x – 0.7x / 0.7x    0.6x – 0.7x / 0.6x
         Revenue
$14,147 – $14,147 /
$14,147

$14,474 – $30,537 /
$25,465

Common equity/equivalents^(E)
   7,592    2,671 ^(D) TEV    EBITDA
multiple    4.9x – 8.5x / 6.7x    4.6x – 7.1x / 5.7x
         EBITDA
$871 – $13,237 /
$5,835

$1,403 – $7,135 /
$4,132

         Revenue
multiple    0.7x – 0.7x / 0.7x    0.7x – 0.7x / 0.7x
         Revenue
$14,147 – $14,147 /
$14,147

$14,474 – $14,474 /
$14,474






Total
   $ 736,425    $ 633,734

^(A)	~~Fair value as of March 31, 2021 includes one proprietary debt investment with a fair value of $23.2 million, which was valued at the expected payoff amount as the unobservable input.~~

^(B)	~~Fair value as of March 31, 2021 includes one proprietary debt investment with a fair value of $13.0 million, which was valued at the expected payoff amount as the unobservable input.~~

^(C)	~~Fair value as of March 31, 2021 includes one proprietary equity investment with a fair value of $32.1 million, which was valued at the expected exit amount as the unobservable input.~~

^(D)	~~Fair value as of March 31, 2021 includes one proprietary equity investment with a fair value of $2.2 million, which was valued at the expected exit amount as the unobservable input.~~

^(E)	~~Fair value as of both September 30, 2021 and March 31, 2021 excludes our investment in Funko with a fair value of $78 and $95, respectively, which was valued using Level 2 inputs.~~

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Quantitative Information about Level 3 Fair Value Measurements

Fair Value as of

Valuation
Technique/
Methodology

Unobservable
Input

Range / Weighted-Average as of

September 30,
2022

March 31,
2022

September 30,
2022

March 31,
2022

Secured first
lien debt

415,473

411,023

TEV

EBITDA multiple

3.2x – 8.0x /

6.4x

3.4x – 9.3x /

7.0x

EBITDA

$3,604–$17,320 /

$10,537

$3,990 - $13,707/$8,221

Revenue multiple

0.3x –0.6x /

0.3x

0.7x – 0.7x /

0.7x

Revenue

$13,188 – $99,672 /

$80,503

$14,072 – $14,072/$14,072

5,434

14,064

Yield Analysis

Discount Rate

14.5% – 17.5% / 16.2%

11.3% – 15.2% / 14.6%

Secured second
lien debt

62,252

39,637

TEV

EBITDA multiple

5.1x – 6.4x /

5.7x

5.6x – 6.8x /

6.0x

EBITDA

$5,302 – $5,616 /

$5,489

$3,953 – $5,488 / $4,959

Revenue multiple

0.5x –0.5x /

0.5x

0.7x – 0.7x

/0.7x

Revenue

$13,188 – $13,188 /

$13,188

$14,072 – $14,072 / $14,072

14,499

28,321

Yield Analysis

Discount Rate

11.2% –12.1% /

12.0%

10.0% – 12.2% / 11.6%

Preferred
equity

229,430

217,599

TEV

EBITDA multiple

3.2x – 8.0x /

6.1x

3.4x – 9.3x /

6.8x

EBITDA

$3,604 – $17,320 /

$8,714

$1,210 – $13,707 / $6,926

Revenue multiple

0.3x – 0.6x /

0.4x

0.7x – 0.7x /

0.7x

Revenue

$13,188 – $99,672 /

$50,473

$14,072 – $14,072 / $14,072

Common equity/

equivalents(A)

10,789

3,678

TEV

EBITDA multiple

4.4x – 7.5x /

5.2x

4.8x – 8.4x /

5.8x

EBITDA

$1,065 – $22,002 /

$6,562

$829 – $13,707 / $5,709

Revenue multiple

0.5x – 0.5x /

0.5x

0.7x – 0.7x /

0.7x

Revenue

$13,188 – $13,188 /

$13,188

$14,072 – $14,072 / $14,072

Total

737,877

714,322

(A)Fair value as of both September 30, 2022 and March 31, 2022 excludes our investment in Funko with a fair value of $58 thousand and $74 thousand, respectively, which was valued using Level 2 inputs.

Fair value measurements can be sensitive to changes in one or more of the valuation inputs. Changes in discount rates, EBITDA or EBITDA multiples (or revenue or revenue multiples), each in isolation, may change the fair value of certain of our investments. Generally, an increase/(decrease) in discount rates or a (decrease)/increase in EBITDA or EBITDA multiples (or revenue or revenue multiples) may result in a (decrease)/increase in the fair value of certain of our investments.

Changes in Level 3 Fair Value Measurements of Investments

The following tables provide our portfolio’s changes in fair value, broken out by security type, during the three and six months ended September 30, ~~2021~~2022 and ~~2020~~2021 for all investments for which the Adviser determines fair value using unobservable (Level 3) inputs.

Table of Contents

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

   Secured
First Lien
Debt Secured
Second Lien
Debt    Preferred
Equity Common
Equity/
Equivalents Total
Three Months ended September 30, 2021:

Fair value as of June 30, 2021
   $ 416,973 $ 57,044    $ 202,465 $ 2,021 $ 678,503
Total gain (loss):

Net realized gain (loss)^(A)
   —   —      —   —   —
Net unrealized appreciation (depreciation)^(B)
   (2,618 ) 4,098    36,500 (10,463 ) 27,517
Reversal of previously recorded (appreciation) depreciation upon realization^(B)
   —   —      —   —   —
New investments, repayments and settlements^(C):

Issuances / originations
   24,400 5    6,000 30,405
Settlements / repayments
   —   —      —   —   —
Sales
   —   —      —   —   —
Transfers^(D)
   (7,342 ) 7,342    (16,034 ) 16,034 —




Fair value as of September 30, 2021
   $ 431,413 $ 68,489    $ 228,931 $ 7,592 $ 736,425

   Secured
First Lien
Debt Secured
Second Lien
Debt Preferred
Equity Common
Equity/
Equivalents Total
Six Months ended September 30, 2021:

Fair value as of March 31, 2021
   $ 368,688 $ 102,897 $ 159,478 $ 2,671 $ 633,734
Total gain (loss):

Net realized gain (loss)^(A)
   —   —   1,786 —   1,786
Net unrealized appreciation (depreciation)^(B)
   3,232 4,126 79,356 (11,113 ) 75,601
Reversal of previously recorded (appreciation) depreciation upon realization^(B)
   60 —   (629 ) —   (569 )
New investments, repayments and settlements^(C):

Issuances / originations
   28,450 6,509 12,600 —   47,559
Settlements / repayments
   (14,060 ) —   —   —   (14,060 )
Sales
   —   —   �� (7,626 ) —   (7,626 )
Transfers^(D)
   45,043 (45,043 ) (16,034 ) 16,034 —


Fair value as of September 30, 2021
   $ 431,413 $ 68,489 $ 228,931 $ 7,592 $ 736,425

   Secured
First Lien
Debt Secured
Second Lien
Debt Preferred
Equity Common
Equity/
Equivalents Total
Three Months ended September 30, 2020:

Fair value as of June 30, 2020
   $ 312,628 $ 116,134 $ 122,237 $ 10,295 $ 561,294
Total gain (loss):

Net realized gain (loss)^(A)
   —   —   —   114 114
Net unrealized appreciation (depreciation)^(B)
   1,355 951 (2,636 ) 1,971 1,641
Reversal of previously recorded (appreciation) depreciation upon realization^(B)
   —   —   —   —   —
New investments, repayments and settlements^(C):

Issuances / originations
   33,399 105 23,581 —   57,085
Settlements / repayments
   (8,000 ) —   —   —   (8,000 )
Sales
   —   —   (3,106 ) (114 ) (3,220 )
Transfers^(D)
   17,114 (17,114 ) —   —   —


Fair value as of September 30, 2020
   $ 356,496 $ 100,076 $ 140,076 $ 12,266 $ 608,914

   Secured
First Lien
Debt Secured
Second
Lien Debt Preferred
Equity Common
Equity/
Equivalents Total
Six Months ended September 30, 2020:

Fair value as of March 31, 2020
   $ 308,248 $ 123,340 $ 119,849 $ 14,454 $ 565,891
Total gain (loss):

Net realized gain (loss)^(A)
   —   —   —   114 114
Net unrealized appreciation (depreciation)^(B)
   (1,215 ) 390 (248 ) (2,188 ) (3,261 )
Reversal of previously recorded (appreciation) depreciation upon realization^(B)
   —   —   —   —   —
New investments, repayments and settlements^(C):

Issuances / originations
   33,499 310 23,581 —   57,390
Settlements / repayments
   (8,000 ) —   —   —   (8,000 )
Sales
   —   —   (3,106 ) (114 ) (3,220 )
Transfers^(D)
   23,964 (23,964 ) —   —   —


Fair value as of September 30, 2020
   $ 356,496 $ 100,076 $ 140,076 $ 12,266 $ 608,914

^(A)	~~Included in net realized gain (loss) on investments on our accompanying~~ ~~Consolidated Statements of Operations~~ ~~for the respective periods ended September 30, 2021 and 2020.~~

^(B)	~~Included in net unrealized appreciation (depreciation) of investments on our accompanying~~ ~~Consolidated Statements of Operations~~ ~~for the respective periods ended September 30, 2021 and 2020.~~

^(C)

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

^(D)

Secured
First Lien
Debt Secured
Second Lien
Debt
Preferred
Equity
Common
Equity/
Equivalents Total
Three Months ended September 30, 2022:
Fair value as of June 30, 2022 $ 376,752 $ 67,936 $ 238,665 $ 6,072 $ 689,425
Total gain (loss):
Net realized gain (loss)(A)
— — 2,218 — 2,218
Net unrealized appreciation (depreciation)(B)
(11,677) (4,507) 845 4,717 (10,622)
Reversal of previously recorded (appreciation) depreciation upon realization(B)
— — — — —
New investments, repayments and settlements(C):
Issuances / originations 70,250 4,000 — — 74,250
Settlements / repayments — (5,096) — — (5,096)
Sales(D)
— — (12,298) — (12,298)
Transfers(E)
(14,418) 14,418 — — —
Fair value as of September 30, 2022 $ 420,907 $ 76,751 $ 229,430 $ 10,789 $ 737,877


	Secured First Lien Debt		Secured Second Lien Debt		Preferred Equity		Common Equity/ Equivalents		Total
Six Months ended September 30, 2022:
Fair value as of March 31, 2022	$	425,087	$	67,958	$	217,599	$	3,678	$	714,322
Total gain (loss):
Net realized gain (loss)(A)	—		—		6,946		—		6,946
Net unrealized appreciation (depreciation)(B)	(18,812)		(4,534)		18,061		7,111		1,826
Reversal of previously recorded (appreciation) depreciation upon realization(B)	—		—		(12,250)		—		(12,250)
New investments, repayments and settlements(C):
Issuances / originations	77,050		4,005		21,000		—		102,055
Settlements / repayments	(48,000)		(5,096)		—		—		(53,096)
Sales(D)	—		—		(21,926)		—		(21,926)
Transfers(E)	(14,418)		14,418		—		—		—
Fair value as of September 30, 2022	$	420,907	$	76,751	$	229,430	$	10,789	$	737,877

Table of Contents


	Secured First Lien Debt		Secured Second Lien Debt		Preferred Equity		Common Equity/ Equivalents		Total
Three Months ended September 30, 2021:
Fair value as of June 30, 2021	$	416,973	$	57,044	$	202,465	$	2,021	$	678,503
Total gain (loss):
Net realized gain (loss)(A)	—		—		—		—		—
Net unrealized appreciation (depreciation)(B)	(2,618)		4,098		36,500		(10,463)		27,517
Reversal of previously recorded (appreciation) depreciation upon realization(B)	—		—		—		—		—
New investments, repayments and settlements(C):
Issuances / originations	24,400		5		6,000		—		30,405
Settlements / repayments	—		—		—		—		—
Sales	—		—		—		—		—
Transfers(E)	(7,342)		7,342		(16,034)		16,034		—
Fair value as of September 30, 2021	$	431,413	$	68,489	$	228,931	$	7,592	$	736,425


	Secured First Lien Debt		Secured Second Lien Debt		Preferred Equity		Common Equity/ Equivalents		Total
Six Months ended September 30, 2021:
Fair value as of March 31, 2021	$	368,688	$	102,897	$	159,478	$	2,671	$	633,734
Total gain (loss):
Net realized gain (loss)(A)	—		—		1,786		—		1,786
Net unrealized appreciation (depreciation)(B)	3,232		4,126		79,356		(11,113)		75,601
Reversal of previously recorded (appreciation) depreciation upon realization(B)	60		—		(629)		—		(569)
New investments, repayments and settlements(C):
Issuances / originations	28,450		6,509		12,600		—		47,559
Settlements / repayments	(14,060)		—		—		—		(14,060)
Sales	—		—		(7,626)		—		(7,626)
Transfers(E)	45,043		(45,043)		(16,034)		16,034		—
Fair value as of September 30, 2021	$	431,413	$	68,489	$	228,931	$	7,592	$	736,425

(A)Included in net realized gain (loss) on investments on our accompanying Consolidated Statements of Operations for the respective periods ended September 30, 2022 and 2021.

(B)Included in net unrealized appreciation (depreciation) of investments on our accompanying Consolidated Statements of Operations for the respective periods ended September 30, 2022 and 2021.

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

(D)Includes $10.1 million return of preferred equity cost basis from Horizon Facilities Services, Inc. ("Horizon").

(E)2022: Transfers represent (1) secured second lien debt of Ginsey with a total cost basis and fair value of $12.2 million, which was converted into secured first lien debt during the three months ended September 30, 2022 and (2) secured first lien debt of PSI Molded Plastics, Inc. with a total cost basis and fair value of $26.6 million, which was converted into secured second lien debt during the three months ended September 30, 2022.

2021: Transfers represent (1) secured second lien debt of J.R. Hobbs ~~Co. – Atlanta, LLC~~ with a total cost basis and fair value of $52.5 million and $52.4 million, respectively, which was converted into secured first lien debt during the three months ended June 30, 2021, (2) secured first lien debt of D.P.M.S., Inc. with a total cost basis and fair value of $12.3 million and $7.3 million, respectively, which was converted into secured second lien debt of Galaxy Technologies Holdings, Inc. (“Galaxy Technologies Holdings”) during the three months ended September 30, 2021 and (3) preferred equity of Galaxy Technologies, Inc. with a total cost basis and fair value of $11.5 million and $16.0 million, respectively, which was converted into common equity of Galaxy Technologies Holdings during the three months ended September 30, 2021.

~~2020: Transfers represent (1) secured second lien debt of Brunswick Bowling Products, Inc. with a total cost basis and fair value of $6.9 million,~~ which was converted into secured first lien debt during the three months ended June 30, ~~2020 and~~2021, (2) secured ~~second~~first lien debt of ~~PSI Molded Plastics,~~D.P.M.S., Inc., with a total cost basis and fair value of ~~$26.6~~$12.3 million and ~~$17.1~~$7.3 million, respectively, which was converted into secured ~~first~~second lien debt of Galaxy Technologies Holdings, Inc. (“Galaxy Technologies Holdings”) during the three months ended September 30, ~~2020.~~

2021 and (3) preferred equity of Galaxy Technologies, Inc. with a total cost basis and fair value of $11.5 million and $16.0 million, respectively, which was converted into common equity of Galaxy Technologies Holdings during the three months ended September 30, 2021.

Table of Contents

Investment Activity

During the six months ended September 30, ~~2021,~~2022, the following significant transactions occurred:

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

~~In June 2021,~~2022, we invested ~~$10.0~~an additional $6.4 million in the form of secured first lien debt in Nocturne Villa Rentals, Inc. ~~(“Nocturne”~~("Nocturne") ~~through a combination of secured first lien debt and preferred equity. Nocturne, headquartered in Telluride, Colorado, is a luxury vacation rental manager.~~

to fund an add-on acquisition.

•In June 2021, we invested an additional $6.5 million in J.R. Hobbs in the form of secured second lien debt. In connection with the investment, our secured second lien debt was converted to secured first lien debt.

~~In June 2021,~~2022, we sold our investment in ~~Head Country,~~Bassett Creek Services, Inc. ~~(“Head Country”~~("Bassett Creek"), which resulted in success fee income of ~~$2.0~~$3.0 million and a realized gain on preferred equity of ~~$3.6~~$4.7 million. In connection with the sale, we received net cash proceeds of ~~$16.7~~$57.6 million, including the repayment of our debt investment of ~~$9.1~~$48.0 million at par.

•In June 2022, we invested $21.0 million in a new portfolio company, Dema/Mai Holdings, Inc. (“Dema/Mai”), in the form of preferred equity to acquire Mai Mechanical, LLC, a leading provider of plumbing and mechanical services focused on multi-family residential construction headquartered in Denver, Colorado, from J.R. Hobbs, an existing portfolio company. In July ~~2021,~~2022, we invested an additional ~~$5.9~~$39.1 million in the form of secured first lien debt ~~into Nocturne.~~

in Dema/Mai to fund the acquisition of Dema Plumbing, a plumbing and mechanical systems installation and service provider to single-family residential homebuilders.

•In July ~~2021,~~2022, we recapitalized our investment in Horizon and invested ~~$24.3~~an additional $30.0 million in ~~Utah Pacific Bridge & Steel, Ltd. (“Utah Pacific”) through a combination~~the form of secured first lien ~~debt and preferred equity. Utah Pacific, headquartered in Lindon, Utah, is a manufacturer~~debt. In connection with this investment, we received equity proceeds of ~~large steel components used in bridge replacement, rehabilitation, and construction.~~

In September 2021, one of our portfolio companies, D.P.M.S., Inc. (“Danco”), merged with another of our portfolio companies, Galaxy Technologies, Inc. (“Galaxy”), into a newly formed portfolio company, Galaxy Technologies Holdings, Inc. (“Galaxy Technologies Holdings”). Our debt investments in Danco, which totaled $12.3 million, which were recognized as a $10.1 million return of preferred equity cost basis and a realized gain of $2.2 million, as well as dividend income of $3.1 million and success fee income of $1.7 million.

•In August 2022, in conjunction with a refinancing at ~~principal and cost, and Galaxy, which totaled $13.0~~Ginsey, our outstanding $13.3 million ~~at principal and cost, were converted into two~~of secured second lien ~~term loans with~~debt was reduced to $12.2 million and converted to secured first lien debt. The reduction in our cost basis was the result of a $5.1 million payment made by Ginsey to extinguish our secured borrowing liability, which was partially offset by an ~~aggregate cost and principal of $25.3 million to Galaxy Technologies Holdings. Our common equity~~additional investment in ~~Danco, with a cost basis~~Ginsey of ~~$0.0 million, and our preferred and common equity investments in Galaxy, with an aggregate cost basis~~$4.0 million. Refer to Note 5 - Borrowings for discussion of ~~$11.5 million, were converted into a common equity investment in Galaxy Technologies Holdings with a combined cost basis of $11.5 million.~~

the secured borrowing liability.

Investment Concentrations

As of September 30, ~~2021,~~2022, our investment portfolio consisted of investments in 2726 portfolio companies located in 1918 states across 1415 different industries with an aggregate fair value of ~~$736.5~~$737.9 million. Our investments in Horizon, Old World Christmas, Inc., Dema/Mai, Counsel Press, Inc., ~~Pioneer Square Brands Inc., J.R. Hobbs,~~ and ~~Bassett Creek Services, Inc.~~Nocturne represented our five largest portfolio investments at fair value and collectively comprised ~~$264.8~~$315.7 million, or ~~35.9%~~42.8%, of our total investment portfolio at fair value as of September 30, ~~2021.~~

2022.

The following table summarizes our investments by security type as of September 30, ~~2021~~2022 and March 31, ~~2021:~~

   September 30, 2021 March 31, 2021
   Cost Fair Value Cost Fair Value
Secured first lien debt
   $ 434,106    62.8 % $ 431,413    58.6 % $ 379,512    57.2 % $ 368,688    58.2 %
Secured second lien debt
   80,511    11.6 68,489    9.3 114,206    17.2 102,897    16.2










Total debt
   514,617    74.4 499,902    67.9 493,718    74.4 471,585    74.4
Preferred equity
   161,656    23.4 228,931    31.1 166,361    25.1 159,478    25.2
Common equity/equivalents
   14,946    2.2 7,670    1.0 3,484    0.5 2,766    0.4










Total equity/equivalents
   176,602    25.6 236,601    32.1 169,845    25.6 162,244    25.6










Total investments
   $ 691,219    100.0 % $ 736,503    100.0 % $ 663,563    100.0 % $ 633,829    100.0 %

2022:


	September 30, 2022								March 31, 2022
	Cost				Fair Value				Cost				Fair Value
Secured first lien debt	$	444,089	63.2	%	$	420,907	57.0	%	$	429,457	64.2	%	$	425,087	59.5	%
Secured second lien debt	94,474		13.4	%	76,751		10.4	%	81,147		12.1	%	67,958		9.5	%
Total debt	538,563		76.6	%	497,658		67.4	%	510,604		76.3	%	493,045		69.0	%

Preferred equity	149,099		21.2	%	229,430		31.1	%	143,079		21.4	%	217,599		30.5	%
Common equity/equivalents	15,556		2.2	%	10,847		1.5	%	15,565		2.3	%	3,752		0.5	%
Total equity/equivalents	164,655		23.4	%	240,277		32.6	%	158,644		23.7	%	221,351		31.0	%
Total investments	$	703,218	100.0	%	$	737,935	100.0	%	$	669,248	100.0	%	$	714,396	100.0	%

Table of Contents

Investments at fair value consisted of the following industry classifications as of September 30, ~~2021~~2022 and March 31, ~~2021:~~

   September 30, 2021 March 31, 2021
   Fair Value    Percentage of
Total Investments Fair Value    Percentage of
Total Investments
Diversified/Conglomerate Services
   $ 295,181    40.1 % $ 261,714    41.3 %
Home and Office Furnishings, Housewares, and Durable Consumer Products
   106,491    14.6 94,663    15.0
Leisure, Amusement, Motion Pictures, and Entertainment
   63,311    8.6 45,209    7.1
Personal and Non-Durable Consumer Products (Manufacturing Only)
   59,889    8.1 60,852    9.6
Healthcare, Education, and Childcare
   40,005    5.4 31,194    4.9
Telecommunications
   30,850    4.2 15,582    2.5
Aerospace and Defense
   30,056    4.1 27,630    4.4
Chemicals, Plastics, and Rubber
   26,618    3.6 22,985    3.6
Mining, Steel, Iron and Non-Precious Metals
   24,250    3.3 —      —
Hotels, Motels, Inns, and Gaming
   16,992    2.3 —      —
Cargo Transport
   15,076    2.0 15,211    2.4
Diversified/Conglomerate Manufacturing
   12,792    1.7 25,181    4.0
Machinery (Non-agriculture, Non-construction, and Non-electronic)
   11,032    1.5 14,199    2.2
Beverage, Food, and Tobacco
   —      —   15,519    2.4
Other < 2.0%
   3,960    0.5 3,890    0.6






Total investments
   $ 736,503    100.0 % $ 633,829    100.0 %

2022:


	September 30, 2022				March 31, 2022
	Fair Value		Percentage of Total Investments		Fair Value		Percentage of Total Investments
Diversified/Conglomerate Services	$	267,913	36.3	%	$	307,403	43.0	%
Home and Office Furnishings, Housewares, and Durable Consumer Products	133,359		18.1	%	125,440		17.6	%
Buildings and Real Estate	60,050		8.1	%	—		—	%
Hotels, Motels, Inns, and Gaming	53,090		7.2	%	37,923		5.3	%
Leisure, Amusement, Motion Pictures, and Entertainment	45,169		6.1	%	46,514		6.5	%
Healthcare, Education, and Childcare	38,937		5.3	%	39,252		5.5	%
Aerospace and Defense	23,746		3.2	%	25,296		3.5	%
Chemicals, Plastics, and Rubber	23,642		3.2	%	26,618		3.7	%
Mining, Steel, Iron and Non-Precious Metals	23,368		3.2	%	24,250		3.4	%
Telecommunications	23,200		3.1	%	32,467		4.6	%
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic)	17,407		2.4	%	13,823		1.9	%
Cargo Transport	14,827		2.0	%	14,533		2.0	%
Diversified/Conglomerate Manufacturing	9,259		1.3	%	14,064		2.0	%
Other < 2.0%	3,968		0.5	%	6,813		1.0	%
Total investments	$	737,935	100.0	%	$	714,396	100.0	%

Investments at fair value were included in the following geographic regions of the U.S. as of September 30, ~~2021~~2022 and March 31, ~~2021:~~

   September 30, 2021 March 31, 2021
Location
   Fair Value    Percentage of
Total Investments Fair Value    Percentage of
Total Investments
West
   214,697    29.2 % 160,581    25.3 %
South
   192,267    26.1 182,529    28.8
Northeast
   187,621    25.5 163,938    25.9
Midwest
   141,918    19.2 126,781    20.0






Total investments
   $ 736,503    100.0 % $ 633,829    100.0 %






2022:

September 30, 2022 March 31, 2022
Location Fair Value Percentage of
Total Investments Fair Value Percentage of
Total Investments
West $ 236,774 32.1 % $ 158,607 22.2 %
Northeast 218,107 29.6 % 194,100 27.2 %
South 172,784 23.4 % 188,978 26.4 %
Midwest 110,270 14.9 % 172,711 24.2 %
Total investments $ 737,935 100.0 % $ 714,396 100.0 %

The geographic region indicates the location of the headquarters for our portfolio companies. A portfolio company may have additional business locations in other geographic regions.

Table of Contents

Investment Principal Repayments

The following table summarizes the contractual principal repayment and maturity of our investment portfolio by fiscal year, assuming no voluntary prepayments, as of September 30, ~~2021:~~

      Amount
For the remaining six months ending March 31:
   2022    $ 30,460
For the fiscal years ending March 31:
   2023    114,850
   2024    93,055
   2025    171,777
   2026    52,250
   Thereafter    52,246



Total contractual repayments
   $ 514,638
   Adjustments to cost basis of debt investments    (21 )
   Investments in equity securities    176,602



Total cost basis of investments held as of September 30, 2021:
   $ 691,219

2022:

Amount
For the remaining six months ending March 31, 2023 $ 87,050
For the fiscal years ending March 31:
2024 54,268
2025 85,834
2026 136,369
2027 135,295
Thereafter 39,750
Total contractual repayments $ 538,566
Adjustments to cost basis of debt investments (3)
Investments in equity securities 164,655
Total cost basis of investments held as of September 30, 2022: $ 703,218

Receivables from Portfolio Companies

Receivables from portfolio companies represent non-recurring costs that we incurred on behalf of portfolio companies. Such receivables, net of any allowance for uncollectible receivables, are included in Other assets, net on our accompanying Consolidated Statements of Assets and Liabilities. We generally maintain an allowance for uncollectible receivables from portfolio companies when the receivable balance becomes 90 days or more past due or if it is determined, based upon management’s judgment, that the portfolio company is unable to pay its obligations. We write-off accounts receivable when we have exhausted collection efforts and have deemed the receivables uncollectible. As of September 30, ~~2021~~2022 and March 31, ~~2021,~~2022, we had gross receivables from portfolio companies of ~~$1.8~~$2.1 million and ~~$1.5~~$1.7 million, respectively. As of September 30, ~~2021~~2022 and March 31, ~~2021,~~2022, the allowance for uncollectible receivables was ~~$1.1~~$1.4 million and ~~$0.9~~$1.3 million, respectively.

NOTE 4. RELATED PARTY TRANSACTIONS

Transactions with the Adviser

We pay the Adviser certain fees as compensation for its services under the Advisory Agreement, consisting of a base management fee and an incentive fee and a loan servicing fee for the Adviser’s role as servicer pursuant to the Credit Facility, all as described below. On July ~~13, 2021,~~12, 2022, our Board of Directors, including a majority of the directors who are not parties to the Advisory Agreement or interested persons of either party, approved the annual renewal of the Advisory Agreement through August 31, ~~2022.~~

2023.

Two of our executive officers, David Gladstone (our chairman and chief executive officer) and Terry Lee Brubaker (our vice chairman and chief operating officer) serve as directors and executive officers of the Adviser, which is 100% indirectly owned and controlled by Mr. Gladstone. David Dullum (our president) is also the executive vice president of private equity (buyouts) of the Adviser. Michael LiCalsi, our general counsel and secretary (who also serves as the Administrator’s president, general counsel and secretary), is also the executive vice president of administration of our Adviser.

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

   Three Months Ended September 30, Six Months Ended September 30,
   2021 2020 2021 2020
Average total assets subject to base management fee^(A)
   $ 715,400 $ 597,800 $ 689,700 $ 584,500
Multiplied by prorated annual base management fee of 2.0%
   0.5 % 0.5 % 1.0 % 1.0 %


Base management fee^(B)
   3,577 2,989 6,897 5,845
Credits to fees from Adviser - other^(B)
   (930 ) (1,070 ) (2,181 ) (1,805 )


Net base management fee
   $ 2,647 $ 1,919 $ 4,716 $ 4,040


Loan servicing fee^(B)
   1,794 1,747 3,662 3,456
Credits to base management fee - loan servicing fee^(B)
   (1,794 ) (1,747 ) (3,662 ) (3,456 )


Net loan servicing fee
   $ —   $ —   $ —   $ —


Incentive fee – income-based
   $ 1,757 $ —   $ 3,695 $ —
Incentive fee – capital gains-based^(C)
   5,594 452 15,904 (302 )


Total incentive fee^(B)
   $ 7,351 $ 452 $ 19,599 $ (302 )
Credits to fees from Adviser - other^(B)
   —   —   —   —


Net total incentive fee
   $ 7,351 $ 452 $ 19,599 $ (302 )

^(A)

Average total assets subject to the base management fee is defined in the Advisory Agreement as total assets, including investments made with proceeds of borrowings, less any uninvested cash or cash equivalents resulting from borrowings, valued at the end of the applicable quarters within the respective periods and adjusted appropriately for any share issuances or repurchases during the periods.

^(B)	~~Reflected as a line item on our accompanying~~ ~~Consolidated Statement of Operations~~.

^(C)	~~The capital gains-based incentive fees are recorded in accordance with GAAP and do not necessarily reflect amounts contractually due under the terms of the Advisory Agreement.~~


	Three Months Ended September 30,						Six Months Ended September 30,
	2022			2021			2022			2021
Average total assets subject to base management fee(A)	$	722,600		$	715,400		$	717,600		$	689,700
Multiplied by prorated annual base management fee of 2.0%	0.5		%	0.5		%	1.0		%	1.0		%
Base management fee(B)	3,613			3,577			7,176			6,897
Credits to fees from Adviser - other(B)	(1,625)			(930)			(2,375)			(2,181)
Net base management fee	$	1,988		$	2,647		$	4,801		$	4,716

Loan servicing fee(B)	1,916			1,794			3,674			3,662
Credits to base management fee - loan servicing fee(B)	(1,916)			(1,794)			(3,674)			(3,662)
Net loan servicing fee	$	—		$	—		$	—		$	—

Incentive fee – income-based	$	2,437		$	1,757		$	4,513		$	3,695
Incentive fee – capital gains-based(C)	(1,669)			5,594			(736)			15,904
Total incentive fee(B)	$	768		$	7,351		$	3,777		$	19,599
Credits to fees from Adviser - other(B)	—			—			—			—
Net total incentive fee	$	768		$	7,351		$	3,777		$	19,599

(A)Average total assets subject to the base management fee is defined in the Advisory Agreement as total assets, including investments made with proceeds of borrowings, less any uninvested cash or cash equivalents resulting from borrowings, valued at the end of the applicable quarters within the respective periods and adjusted appropriately for any share issuances or repurchases during the periods.

(B)Reflected as a line item on our accompanying Consolidated Statements of Operations.

(C)The capital gains-based incentive fees are recorded in accordance with GAAP and do not necessarily reflect amounts contractually due under the terms of the Advisory Agreement.

Base Management Fee

The base management fee is payable quarterly to the Adviser pursuant to our Advisory Agreement and is assessed at an annual rate of 2.0%, computed on the basis of the value of our average gross assets at the end of the two most recently completed quarters (inclusive of the current quarter), which are total assets, including investments made with proceeds of borrowings, less any uninvested cash or cash equivalents resulting from borrowings, valued at the end of the applicable quarters within the respective period and adjusted appropriately for any share issuances or repurchases during the period.

Additionally, pursuant to the requirements of the 1940 Act, the Adviser makes available significant managerial assistance to our portfolio companies. The Adviser may also provide other services to our portfolio companies under certain agreements and may receive fees for services other than managerial assistance. Such services may include: (i) assistance obtaining, sourcing or structuring credit facilities, long term loans or additional equity from unaffiliated third parties; (ii) negotiating important contractual financial relationships; (iii) consulting services regarding restructuring of the portfolio company and financial modeling as it relates to raising additional debt and equity capital from unaffiliated third parties; and (iv) taking a primary role in interviewing, vetting and negotiating employment contracts with candidates in connection with adding and retaining key portfolio company management team members. The Adviser non-contractually, unconditionally, and irrevocably credits 100% of any fees received for such services against the base management fee that we would otherwise be required to pay to the Adviser; however, pursuant to the terms of the Advisory Agreement, a small percentage of certain of such fees, totaling ~~$63~~$70 thousand and ~~$132~~$106 thousand for the three and six months ended September 30, ~~2021,~~2022, respectively, and ~~$71~~$63 thousand and ~~$97~~$132 thousand for the three and six months ended September 30, ~~2020,~~2021, respectively, was retained by the Adviser in the form of reimbursement, at cost, for tasks completed by personnel of the Adviser, primarily related to the valuation of portfolio companies.

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Loan Servicing Fee

The Adviser also services the loans held by our wholly-owned subsidiary, Business Investment (the borrower under the Credit Facility), in return for which the Adviser receives a 2.0% annual fee based on the monthly aggregate outstanding balance of loans pledged under the Credit Facility. Since Business Investment is a consolidated subsidiary of ours, coupled with the fact that the total base management fee paid to the Adviser pursuant to the Advisory Agreement cannot exceed 2.0% of total assets (less any uninvested cash or cash equivalents resulting from borrowings) during any given calendar year, we treat payment of the loan servicing fee pursuant to the Credit Facility as a pre-payment of the base management fee under the Advisory Agreement. Accordingly, these loan servicing fees are 100% non-contractually, unconditionally, and irrevocably credited back to us by the Adviser.

Incentive Fee

The incentive fee payable to the Adviser under our Advisory Agreement consists of two parts: an income-based incentive fee and a capital gains-based incentive fee.

The income-based incentive fee rewards the Adviser if our quarterly net investment income (before giving effect to any incentive fee) exceeds 1.75% of our net assets, which we define as total assets less indebtedness and before taking into account any incentive fees payable or contractually due but not payable during the period, at the end of the immediately preceding calendar quarter, adjusted appropriately for any share issuances or repurchases during the period (the “Hurdle Rate”). The income-based incentive fee with respect to our pre-incentive fee net investment income is payable quarterly to the Adviser and is computed as follows:

•No incentive fee in any calendar quarter in which our pre-incentive fee net investment income does not exceed the Hurdle Rate;

•100.0% of our pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the Hurdle Rate but is less than 2.1875% of our net assets, adjusted appropriately for any share issuances or repurchases during the period, in any calendar quarter; and

•20.0% of the amount of our pre-incentive fee net investment income, if any, that exceeds 2.1875% of our net assets, adjusted appropriately for any share issuances or repurchases during the period, in any calendar quarter.

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 realized capital gains, less any realized capital losses and unrealized depreciation, calculated as of the end of the preceding calendar year. The capital gains-based incentive fee payable to the Adviser is calculated based on (i) cumulative aggregate realized capital gains since our inception, less (ii) cumulative aggregate realized capital losses since our inception, less (iii) the entire portfolio’s aggregate unrealized capital depreciation, if any, as of the date of the calculation. If this number is positive at the applicable calculation date, then the capital gains-based incentive fee for such year equals 20.0% of such amount, less the aggregate amount of any capital gains-based incentive fees paid in respect of our portfolio in all prior years. For calculation purposes, cumulative aggregate realized capital gains, if any, equals the sum of the excess between the net sales price of each investment, when sold, and the original cost of such investment since our inception. Cumulative aggregate realized capital losses equals the sum of the deficit between the net sales price of each investment, when sold, and the original cost of such investment since our inception. The entire portfolio’s aggregate unrealized capital depreciation, if any, equals the sum of the deficit between the fair value of each investment security as of the applicable calculation date and the original cost of such investment security. As of and for the period ended September 30, ~~2021,~~2022, no capital gains-based incentive fees were contractually due to the Adviser. ~~As of and for~~During the year ended March 31, ~~2021, no~~2022, capital gains-based incentive fees of $5.3 million were contractually due and paid to the Adviser.

In accordance with GAAP, accrual of the capital gains-based incentive fee is determined as if our investments had been liquidated at their fair values as of the end of the reporting period. Therefore, GAAP requires that the capital gains-based incentive fee accrual consider the 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 any such unrealized capital appreciation will be realized in the future. Accordingly, a GAAP accrual is calculated at the end of the reporting period based on (i) cumulative aggregate realized capital gains since our inception, plus (ii) the entire portfolio’s aggregate unrealized capital appreciation, if any, less (iii) cumulative aggregate realized capital losses since our inception, less (iv) the entire portfolio’s aggregate unrealized capital depreciation, if any. If such amount is positive at the

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end of a reporting period, a capital gains-based incentive fee equal to 20.0% of such amount, less the aggregate amount of capital gains-based incentive fees accrued in all prior years, is recorded, regardless of whether such amount is contractually due under the terms of the Advisory Agreement. If such amount is negative, then there is no accrual for such period and prior period accruals are reversed, as appropriate. During the three and six months ended September 30, 2022, we recorded a reversal of $1.7 million and $0.7 million, respectively, of previously accrued capital gains-based incentive fees. During the three and six months ended September 30, 2021, we recorded capital gains-based incentive fees of $5.6 million and $15.9 million, respectively. During the three months ended September 30, 2020, we recorded capital gains-based incentive fees of $0.5 million. During the six months ended September 30, 2020, we recorded a reversal of $0.3 million of previously accrued capital gains-based incentive fees.

Transactions with the Administrator

We reimburse the Administrator pursuant to the Administration Agreement for our allocable portion of the Administrator’s expenses incurred while performing services to us, which are primarily rent and salaries and benefits expenses of the Administrator’s employees, including our chief financial officer and treasurer, chief valuation officer, chief compliance officer, and general counsel and secretary, and their respective staffs. Two of our executive officers, David Gladstone (our chairman and chief executive officer) and Terry Lee Brubaker (our vice chairman and chief operating officer) serve as members of the board of managers and executive officers of the Administrator, which is 100% indirectly owned and controlled by Mr. Gladstone. Another of our officers, Mr. LiCalsi (our general counsel &and secretary), serves as the Administrator’s president as well as the executive vice president of administration for the Adviser.

Our allocable portion of the Administrator’s expenses is generally derived by multiplying the Administrator’s total expenses by the approximate percentage of time during the current quarter the Administrator’s employees performed services for us in relation to their time spent performing services for all companies serviced by the Administrator. On July ~~13, 2021,~~12, 2022, our Board of Directors, including a majority of the directors who are not parties to the Administration Agreement or interested persons of either party, approved the annual renewal of the Administration Agreement through August 31, ~~2022.~~

2023.

Transactions with Gladstone Securities, LLC

Gladstone Securities, LLC (“Gladstone Securities”) is a privately held broker dealer registered with the Financial Industry Regulatory Authority and insured by the Securities Investor Protection Corporation. Gladstone Securities is an affiliate of ours, as its parent company is 100% owned and controlled by David Gladstone, our chairman and chief executive officer. Mr. Gladstone also serves on the board of managers of Gladstone Securities.

Other Transactions

From time to time, Gladstone Securities provides services, such as investment banking and due diligence services, to certain of our portfolio companies, for which it receives a fee. Any such fees paid by portfolio companies to Gladstone Securities do not impact the fees we pay to the Adviser or the non-contractual, unconditional, and irrevocable credits against the base management fee. During the three and six months ended September 30, 2022, the fees received by Gladstone Securities from our portfolio companies totaled $1.0 million and $1.3 million. During the three and six months ended September 30, 2021, the fees received by Gladstone Securities from our portfolio companies totaled $0.3 million and $0.4 million, respectively. During the three and six months ended September 30, 2020, the fees received by Gladstone Securities from our portfolio companies totaled $0.4 million and $0.4 million, respectively.

million.

Related Party Fees Due

Amounts due to related parties on our accompanying Consolidated Statements of Assets and Liabilities were as follows:

   As of
September 30,    As of
March 31,
   2021    2021
Base management and loan servicing fee due to Adviser, net of credits
   $ 1,266    $ 1,435
Incentive fee due to Adviser^(A)
   30,080    14,163
Other due to Adviser
   53    66




Total fees due to Adviser
   $ 31,399    $ 15,664
Fee due to Administrator
   $ 571    $ 577




Total related party fees due
   $ 31,970    $ 16,241

^(A)

Includes a capital gains-based incentive fee of $28.3 million and $12.4 million as of September 30, 2021 and March 31, 2021, respectively, recorded in accordance with GAAP requirements, and which was not contractually due under the terms of the Advisory Agreement. Refer to Note 4 — ~~Related Party Transactions~~ — ~~Transactions with the Adviser~~ — ~~Incentive Fee~~ ~~for additional information, including capital gains-based incentive fee payments made.~~


	As of September 30,		As of March 31,
	2022		2022
Base management and loan servicing fee due to Adviser, net of credits	$	73	$	1,648
Incentive fee due to Adviser(A)	27,097		27,577
Other due to Adviser	621		63
Total fees due to Adviser	27,791		29,288
Fee due to Administrator	615		627
Total related party fees due	$	28,406	$	29,915

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(A)Includes a capital gains-based incentive fee of $24.7 million and $25.4 million as of September 30, 2022 and March 31, 2022, respectively, recorded in accordance with GAAP requirements, and which was not contractually due under the terms of the Advisory Agreement. Refer to Note 4 — Related Party Transactions — Transactions with the Adviser — Incentive Fee for additional information, including capital gains-based incentive fee payments made.

Net expenses receivable from Gladstone Capital Corporation, one of our affiliated funds, for reimbursement purposes, which includes certain co-investment expenses, totaled ~~$38~~$13 thousand and ~~$0,~~$27 thousand, as of September 30, ~~2021~~2022 and March 31, ~~2021,~~2022, respectively. These amounts are generally settled in the quarter subsequent to being incurred and have been included in Other assets, net on the accompanying Consolidated Statements of Assets and ~~Liabilities~~ ~~as of September 30, 2021 and March 31, 2021, respectively.~~

Liabilities.

NOTE 5. BORROWINGS

Revolving Line of Credit

On March 8, 2021, we, through our wholly-owned subsidiary, Business Investment, entered into Amendment No. 6 to the ~~Fifth Amended and Restated~~ Credit ~~Agreement, originally entered into on April 30, 2013 and as previously amended,~~Facility with KeyBank National Association (“KeyBank”) as administrative agent, lead arranger, managing agent and lender, the Adviser, as servicer, and certain other lenders party thereto. The revolving period was extended to February 29, 2024, and if not renewed or extended by such date, all principal and interest will be due and payable on February 28, 2026 (two years after the revolving period end date). As of September 30, ~~2021,~~2022, the Credit Facility provided ~~two~~ a one-year extension ~~options~~option that may be exercised on or before ~~the first and second anniversary of~~ March 8, ~~2021,~~2023, subject to approval by all lenders. ~~Additionally, the~~ ~~COVID-19~~ ~~Relief Period (described below) was extended to September 30, 2021.~~

On August 10, 2020, we, through Business Investment, entered into Amendment No. 5 to the Credit Facility. Among other things, Amendment No. 5 amended the Credit Facility to (i) add London Interbank Offered Rate (“LIBOR”) replacement language; (ii) implement a 0.5% LIBOR floor; (iii) reduce the facility size from $200.0 million to $180.0 million, which may be expanded to $300.0 million through additional commitments; and (iv) provide certain other changes to existing terms and covenants. ~~In addition, Amendment No. 5 provided for certain temporary changes during the~~ ~~COVID-19~~ Relief Period (August 10, 2020 until March 31, 2021, subject to extension under certain conditions) including: (i) amending the definition of “Effective Advance Rate,” provided that during such period the overall effective advance rate does not exceed 55%; and (ii) removing or changing certain “Excess Concentration Limits” (as defined in the Credit Facility).

Advances under the Credit Facility generally bear interest at 30-day LIBOR, subject to a floor of 0.5%, plus 2.85% per annum until February 29, 2024, with the margin then increasing to 3.10% for the period from February 29, 2024 to February 28, 2025, and increasing further to 3.35% thereafter. The Credit Facility has an unused commitment fee on the daily unused commitment amount of 0.50% per annum if the average unused commitment amount for the period is less than or equal to 50% of the total commitment amount, 0.75% per annum if the average unused commitment amount for the period is greater than 50% but less than or equal to 65% of the total commitment amount, and 1.00% per annum if the average unused commitment amount for the period is greater than 65% of the total commitment amount.

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

   As of
September 30,    As of
March 31,
   2021    2021
Commitment amount
   $ 180,000    $ 180,000
Borrowings outstanding at cost
   8,900    22,400
Availability^(A)
   171,100    157,600

   For the Three Months
Ended
September 30, For the Six Months
Ended
September 30,
   2021 2020 2021 2020
Weighted-average borrowings outstanding
   $ 24,355 $ 106,123 $ 25,354 $ 80,503
Effective interest rate^(B)
   10.0 % 3.6 % 9.6 % 4.5 %
Commitment (unused) fees incurred
   $ 397 $ 122 $ 786 $ 490

^(A)	Availability is subject to various constraints, characteristics and applicable advance rates based on collateral quality under the Credit Facility, which equated to an adjusted availability of $171.1 million and $157.6 million as of September 30, 2021 and March 31, 2021, respectively.

^(B)	~~Excludes the impact of deferred financing costs and includes unused commitment fees.~~


	As of September 30, 2022		As of March 31, 2022
Commitment amount	$	180,000	$	180,000
Borrowings outstanding at cost	$	16,600	$	—
Availability(A)	$	163,400	$	180,000


	For the Three Months Ended September 30,						For the Six Months Ended September 30,
	2022			2021			2022			2021
Weighted-average borrowings outstanding	$	11,671		$	24,355		$	5,867		$	25,354
Effective interest rate(B)	20.1		%	10.0		%	35.5		%	9.6		%
Commitment (unused) fees incurred	$	431		$	397		$	886		$	786

(A)Availability is subject to various constraints, characteristics and applicable advance rates based on collateral quality under the Credit Facility, which equated to an adjusted availability of $163.4 million and $180.0 million as of September 30, 2022 and March 31, 2022, respectively.

(B)Excludes the impact of deferred financing costs and includes unused commitment fees.

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Among other things, the Credit Facility contains a performance guaranty that requires us to maintain (i) a minimum net worth (defined in the Credit Facility to include our mandatory redeemable term preferred stock) of the greater of $210.0 million or $210.0 million plus 50% of all equity and subordinated debt raised, minus 50% of any equity or subordinated debt redeemed or retired after November 16, 2016, which equated to ~~$286.3~~$286.5 million as of September 30, ~~2021~~2022; (ii) asset coverage with respect to senior securities representing indebtedness of at least 150% (or such percentage as may be set forth in Section 18 of the 1940 Act, as modified by Section 61 of the 1940 Act); and (iii) our status as a BDC under the 1940 Act and as a RIC under the Code. As of September 30, ~~2021,~~2022, and as defined in the performance guaranty of the Credit Facility, we had a net worth of ~~$695.2~~$698.6 million, asset coverage on our senior securities representing indebtedness of ~~254.5%~~254.1%, calculated in compliance with the requirements of Sections 18 and 61 of the 1940 Act, and an active status as a BDC and RIC. As of September 30, ~~2021,~~2022, we were in compliance with all covenants under the Credit Facility.

Fair Value

We elected to apply the fair value option of ASC Topic 825, “Financial Instruments,” to the Credit Facility, which was consistent with our application of ASC 820 to our investments. Generally, the fair value of the Credit Facility is determined using a yield analysis, which includes a DCF calculation and also takes into account the assumptions the Valuation Team believes market participants would use, including the estimated remaining life, counterparty credit risk, current market yield and interest rate spreads of similar securities as of the measurement date. As of September 30, ~~2021~~2022 and March 31, ~~2021,~~2022, the discount rate used to determine the fair value of the Credit Facility was 30-day LIBOR, with a 0.5% floor, plus 2.85% per annum, plus an unused commitment fee of 1.0%. Generally, an increase or decrease in the discount rate used in the DCF calculation may result in a corresponding decrease or increase, respectively, in the fair value of the Credit Facility. As of each of September 30, ~~2021~~2022 and March 31, ~~2021,~~2022, the Credit Facility was valued using Level 3 inputs and any changes in its fair value are recorded in Net unrealized ~~depreciation (appreciation)~~appreciation (depreciation) of other on our accompanying Consolidated Statements of Operations.

The following tables provide relevant information and disclosures about the Credit Facility as of September 30, ~~2021~~2022 and March 31, ~~2021,~~2022, and for the three and six months ended September 30, ~~2021~~2022 and ~~2020,~~2021, as required by ASC 820:

   Level 3 – Borrowings
   Recurring Fair Value Measurements
   Reported in Consolidated
   Statements of Assets and Liabilities Using
Significant Unobservable Inputs (Level 3)
   September 30, 2021    March 31, 2021
Credit Facility
   $ 8,900    $ 22,400

Fair Value Measurements of Borrowings Using Significant
Unobservable Inputs (Level 3) Reported in
Consolidated Statements of Assets and Liabilities

   Credit
   Facility
Three Months Ended September 30, 2021:

Fair value at June 30, 2021
   $ 41,900
Borrowings
   32,900
Repayments
   (65,900 )


Fair value at September 30, 2021
   $ 8,900


Six Months Ended September 30, 2021:

Fair value at March 31, 2021
   $ 22,400
Borrowings
   62,700
Repayments
   (76,200 )


Fair value at September 30, 2021
   $ 8,900

Fair Value Measurements of Borrowings Using Significant
Unobservable Inputs (Level 3) Reported in
Consolidated Statements of Assets and Liabilities

   Credit
   Facility
Three Months Ended September 30, 2020:

Fair value at June 30, 2020
   $ 59,500
Borrowings
   63,300
Repayments
   (6,200 )


Fair value at September 30, 2020
   $ 116,600


Six Months Ended September 30, 2020:

Fair value at March 31, 2020
   $ 49,200
Borrowings
   81,500
Repayments
   (14,100 )


Fair value at September 30, 2020
   $ 116,600


	Level 3 – Borrowings
	Recurring Fair Value Measurements Reported in Consolidated Statements of Assets and Liabilities Using Significant Unobservable Inputs (Level 3)
	September 30, 2022		March 31, 2022
Credit Facility	$	16,600	$	—


Fair Value Measurements of Borrowings Using Significant Unobservable Inputs (Level 3) Reported in Consolidated Statements of Assets and Liabilities
	Credit Facility
Three Months Ended September 30, 2022:
Fair value at June 30, 2022	$	—
Borrowings	41,500
Repayments	(24,900)
Unrealized appreciation (depreciation)	—
Fair value at September 30, 2022	$	16,600

Six Months Ended September 30, 2022:
Fair value at March 31, 2022	$	—
Borrowings	41,500
Repayments	(24,900)
Unrealized appreciation (depreciation)	—
Fair value at September 30, 2022	$	16,600

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Fair Value Measurements of Borrowings Using Significant Unobservable Inputs (Level 3) Reported in Consolidated Statements of Assets and Liabilities
	Credit Facility
Three Months Ended September 30, 2021:
Fair value at June 30, 2021	$	41,900
Borrowings	32,900
Repayments	(65,900)
Unrealized appreciation (depreciation)	—
Fair value at September 30, 2021	$	8,900

Six Months Ended September 30, 2021:
Fair value at March 31, 2021	$	22,400
Borrowings	62,700
Repayments	(76,200)
Unrealized appreciation (depreciation)	—
Fair value at September 30, 2021	$	8,900

The fair value of the collateral under the Credit Facility was ~~$549.1~~$624.9 million and ~~$524.0~~$537.5 million as of September 30, ~~2021~~2022 and March 31, ~~2021,~~2022, respectively.

Notes Payable

5.00% Notes due 2026

In March 2021, we completed a public offering of 5.00% Notes due 2026 with an aggregate principal amount of $127.9 million (the “2026 Notes”), which resulted in net proceeds of approximately $123.8 million after deducting underwriting discounts, commissions and offering costs borne by us. The 2026 Notes are traded under the ticker symbol “GAINN” on the Nasdaq Global Select Market (“Nasdaq”). The 2026 Notes will mature on May 1, 2026 and may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after May 1, 2023. The 2026 Notes bear interest at a rate of 5.00% per year, which is payable quarterly in arrears.

The indenture relating to the 2026 Notes contains certain covenants, including (i) an inability to incur additional debt or issue additional debt or preferred securities unless the Company’s asset coverage meets the threshold specified in the 1940 Act after such borrowing, (ii) an inability to declare any dividend or distribution (except a dividend payable in our stock) on a class of our capital stock or to purchase shares of our capital stock unless the Company’s asset coverage meets the threshold specified in the 1940 Act at the time of (and giving effect to) such declaration or purchase, and (iii) if, at any time, we are not subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), we will provide the holders of the 2026 Notes ~~as applicable,~~ and the trustee with audited annual consolidated financial statements and unaudited interim consolidated financial statements.

The 2026 Notes are recorded at the aggregate principal amount, less underwriting discounts, commissions, and offering costs, on our accompanying Consolidated Statements of Assets and Liabilities. Total underwriting discounts, commissions, and offering costs related to this offering were $4.1 million, which have been recorded as discounts to the aggregate principal amount on our accompanyingConsolidated Statements of Assets and Liabilities and are being amortized over the period ending May 1, 2026, the maturity date.

4.875% Notes due 2028

In August 2021, we completed a public offering of 4.875% Notes due 2028 with an aggregate principal amount of $134.6 million (the “2028 Notes”), which resulted in net proceeds of approximately $131.3 million after deducting underwriting discounts, commissions and offering costs borne by us. The 2028 Notes are traded under the ticker symbol “GAINZ” on ~~the~~ Nasdaq. The 2028 Notes will mature on November 1, 2028 and may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after November 1, 2023. The 2028 Notes bear interest at a rate of 4.875% per year, which is payable quarterly in arrears.

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The indenture relating to the 2028 Notes contains certain covenants, including (i) an inability to incur additional debt or issue additional debt or preferred securities unless the Company’s asset coverage meets the threshold specified in the 1940 Act after such borrowing, (ii) an inability to declare any dividend or distribution (except a dividend payable in our stock) on a class of our capital stock or to purchase shares of our capital stock unless the Company’s asset coverage meets the threshold specified in the 1940 Act at the time of (and giving effect to) such declaration or purchase, and (iii) if, at any time, we are not subject to the reporting requirements of the Exchange Act, we will provide the holders of the 2028 Notes ~~as applicable,~~ and the trustee with audited annual consolidated financial statements and unaudited interim consolidated financial statements.

The 2028 Notes are recorded at the aggregate principal amount, less underwriting discounts, commissions, and offering costs, on our accompanying Consolidated Statements of Assets and Liabilities. Total underwriting discounts, commissions, and offering costs related to this offering were $3.3 million, which have been recorded as discounts to the aggregate principal amount on our accompanyingConsolidated Statements of Assets and Liabilities and are being amortized over the period ending November 1, 2028, the maturity date.

The following tables summarize our 2026 Notes and 2028 Notes as of September 30, ~~2021~~2022 and March 31, ~~2021:~~

2022:

As of September 30, 2022:
Description Ticker
Symbol Date Issued
Maturity Date(A)
Interest
Rate Notes
Outstanding Principal
Amount per
Note Aggregate
Principal Amount
2026 Notes GAINN March 2, 2021 May 1, 2026 5.00% 5,117,500 $ 25.00 $ 127,938
2028 Notes GAINZ August 18, 2021 November 1, 2028 4.875% 5,382,000 $ 25.00 134,550
Notes payable, gross(B)
10,499,500 262,488
Less: Unamortized Discounts (5,686)
Notes payable, net(C)
$ 256,802

As of March 31, 2022:
Description Ticker
Symbol Date Issued
Maturity Date(A)
Interest
Rate Notes
Outstanding Principal
Amount per
Note Aggregate
Principal Amount
2026 Notes GAINN March 2, 2021 May 1, 2026 5.00% 5,117,500 $ 25.00 $ 127,938
2028 Notes GAINZ August 18, 2021 November 1, 2028 4.875% 5,382,000 $ 25.00 134,550
Notes payable, gross(B)
10,499,500 262,488
Less: Unamortized Discounts (6,236)
Notes payable, net(C)
$ 256,252

(A)The 2026 Notes can be redeemed at our option at any time on or after May 1, 2023. The 2028 Notes can be redeemed at our option at any time on or after November 1, 2023.

(B)As of September 30, ~~2021~~:

Description
   Ticker
Symbol    Date Issued    Maturity Date^(A)        Interest
Rate Notes
Outstanding        Principal
Amount
per Note        Aggregate
Principal
Amount
2026 Notes
   GAINN    March 2, 2021    May 1, 2026    5.00 % 5,117,500    $ 25.00    $ 127,938
2028 Notes
   GAINZ    August 18, 2021    November 1, 2028    4.875 % 5,382,000    $ 25.00    $ 134,550




Notes payable, gross^(B)

10,499,500       $ 262,488
Less: Discounts

      (6,862 )


Notes payable, net^(C)

      $ 255,626

As2022 and March 31, 2022, asset coverage on our senior securities representing indebtedness, calculated pursuant to Sections 18 and 61 of ~~March~~ ~~31, 2021~~:

Description
   Ticker
Symbol    Date Issued    Maturity Date^(A)        Interest
Rate Notes
Outstanding        Principal
Amount
per Note        Aggregate
Principal
Amount
2026 Notes
   GAINN      March 2, 2021            May 1, 2026          5.00 % 5,117,500    $ 25.00    $ 127,938


Notes payable, gross^(B)

      $ 127,938
Less: Discounts

      (4,055 )


Notes payable, net^(C)

      $ 123,883

^(A)

~~The 2026 Notes can be redeemed at our option at any time on or after May 1, 2023. The 2028 Notes can be redeemed at our option at any time on or after November 1, 2023.~~

^(B)

As of September 30, 2021 and March 31, 2021, asset coverage on our senior securities representing indebtedness, calculated pursuant to Sections 18 and 61 of the 1940 Act, was 254.5% and 398.0%, respectively.

^(C)

~~Reflected as a line item on our accompanying Consolidated Statement of Assets and Liabilities.~~

the 1940 Act, was 254.1% and 252.9%, respectively.

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

The fair value, based on the last reported closing prices, of the 2026 Notes and 2028 Notes as of September 30, ~~2021~~2022 was ~~$133.1~~$121.8 million and ~~$144.1~~$124.8 million, respectively. The fair value, based on the last reported closing prices, of the 2026 Notes and 2028 Notes as of March 31, ~~2021~~2022 was ~~$132.3 million.~~$128.3 million and $134.3 million, respectively. We consider the closing prices of the 2026 Notes and 2028 Notes to be Level 1 inputs within the ASC 820 hierarchy.

Secured Borrowing

In August 2012, we entered into a participation agreement with a third-party related to $5.0 million of our secured second lien term debt investment in Ginsey ~~Home Solutions, Inc. (“Ginsey”). In~~and in May 2014, we amended the agreement with the third-party to include an additional $0.1 million. ASC Topic 860, “Transfers and Servicing” ~~requires~~required us to treat the participation as a financing-type transaction. Specifically, the third-party ~~has~~had a senior claim to our remaining investment in the event of default by Ginsey which, in part, resulted in the loan participation bearing a rate of interest lower than the contractual rate established at origination. Therefore, our accompanying Consolidated Statements of Assets and Liabilitiesas of March 31, 2022 reflect the entire secured second lien term debt investment in Ginsey and a corresponding $5.1 million secured borrowing liability. ~~The~~In conjunction with the August 2022 refinancing at Ginsey, the $5.1 million secured borrowing ~~has a stated fixed interest rate~~liability was extinguished.

Table of ~~7.0% and a maturity date of January 3, 2025.~~

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NOTE 6. MANDATORILY REDEEMABLE PREFERRED STOCK

In August 2021, we used a portion of the proceeds from the issuance of our 2028 Notes to voluntarily redeem all outstanding shares of our 6.375% Series E Cumulative Term Preferred Stock (or “Series E Term Preferred Stock” or “Series E”), which had a liquidation preference of $25.00 per share. In connection with the voluntary redemption of our Series E Term Preferred Stock, we incurred a loss on extinguishment of debt of $2.0 million, which was recorded in Realized loss on other in our accompanyingConsolidated Statements of Operations and which was primarily comprised of unamortized deferred issuance costs at the time of redemption.

~~The following table summarizes our Series E Term Preferred Stock outstanding as of March 31, 2021:~~

~~As of March~~ ~~31, 2021~~:

Class of Term
Preferred
Stock
Ticker
Symbol Date Issued Mandatory
Redemption Date Interest
Rate Shares
Outstanding Liquidation
Preference
per Share Aggregate
Liquidation
Preference
Series E
GAINL August 22, 2018 August 31, 2025 6.375 % 3,774,853 $ 25.00 $ 94,371

Term preferred stock, gross^(A)
3,774,853 $ 25.00 $ 94,371
Less: Discounts
(2,162 )

Term preferred stock, net^(B)
$ 92,209

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

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

The following tables summarize dividends declared by our Board of Directors and paid by us on our Series E Term Preferred Stock ~~and our 6.25% Series D Cumulative Term Preferred Stock (“Series D Term Preferred Stock”)~~ during the six months ended September 30, ~~2021 and 2020:~~

2021:

For the Six Months Ended September 30, 2021:

Declaration Date
   Record
Date    Payment
Date    Dividend per
Share of
Series E Term Preferred
Stock^(A)
April 13, 2021
   April 23, 2021    April 30, 2021    $ 0.13281250
April 13, 2021
   May 19, 2021    May 28, 2021    0.13281250
April 13, 2021
   June 18, 2021    June 30, 2021    0.13281250
July 13, 2021
   July 23, 2021    July 30,2021    0.13281250
July 13, 2021
   August 23, 2021    August 30, 2021    0.07968750 ^(B)


      Total    $ 0.61093750

~~For the Six Months Ended September~~ ~~30, 2020~~:

Declaration Date
   Record
Date    Payment
Date    Dividend per
Share of
Series D Term
Preferred Stock^(C)    Dividend per
Share of
Series E Term
Preferred Stock^(A)
April 14, 2020
   April 24, 2020    April 30, 2020    $ 0.13020833    $ 0.13281250
April 14, 2020
   May 19, 2020    May 29, 2020    0.13020833    0.13281250
April 14, 2020
   June 19, 2020    June 30, 2020    0.13020833    0.13281250
July 14, 2020
   July 24, 2020    July 31, 2020    0.13020833    0.13281250
July 14, 2020
   August 24, 2020    August 31, 2020    0.13020833    0.13281250
July 14, 2020
   September 23, 2020    September 30, 2020    0.13020833    0.13281250




      Total    $ 0.78124998    $ 0.79687500

^(A)

~~We voluntarily redeemed all outstanding shares~~

Declaration Date

Record
Date

Payment

Date

Dividend per

Share of ~~our~~

Series E Term

Preferred Stock on (A)

April 13, 2021

April 23, 2021

April 30, 2021

0.1328125

April 13, 2021

May 19, 2021

May 28, 2021

0.1328125

April 13, 2021

June 18, 2021

June 30, 2021

0.1328125

July 13, 2021

July 23, 2021

July 30, 2021

0.1328125

July 13, 2021

August ~~19, 2021.~~

23, 2021

August 31, 2021

0.0796875

(B)

^(B)

~~Represents accrued and unpaid dividends up to, but excluding, the redemption date of August 19, 2021.~~

^(C)

~~We voluntarily redeemed all outstanding shares of our Series D Term Preferred Stock on March 3, 2021.~~

Total

0.6109375

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

(B)Represents accrued and unpaid dividends up to, but excluding, the redemption date of August 19, 2021.

The federal income tax characteristics of dividends paid to our preferred stockholders generally constitute ordinary income or capital gains to the extent of our current and accumulated earnings and profits and are reported after the end of the calendar year based on tax information for the full fiscal year. Estimates of tax characterization made on a quarterly basis may not be representative of the actual tax characterization of dividends for the full year. Estimates made on a quarterly basis are updated as of each interim reporting date. If we determined theThe tax characterization of dividends paid to our preferred stockholders induring the ~~current~~ calendar year ~~as of September 30,~~ended December 31, 2021 was 71.3% ~~would be~~ from ordinary income and 28.7% ~~would be~~ from capital gains.

~~In accordance with ASC Topic 480, “~~~~Distinguishing Liabilities from Equity~~,” mandatorily redeemable financial instruments should be classified as liabilities on the balance sheet. Our mandatorily redeemable preferred stock was recorded at the liquidation preference, less discounts, on our accompanying ~~Consolidated Statements of Assets and Liabilities~~ ~~as of March 31, 2021. The related dividend payments to preferred stockholders are treated as dividend expense on our accompanying~~ ~~Consolidated Statements of Operations~~ ~~on the~~ ~~ex-dividend~~ ~~date.~~

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

NOTE 7. REGISTRATION STATEMENT AND COMMON EQUITY OFFERINGS

Registration Statement

On September 3, 2021, we filed a registration statement on Form N-2 (File No. 333-259302), which the SEC declared effective on October 15, 2021. The registration statement permits us to issue, through one or more transactions, up to an aggregate of $300.0 million in securities, consisting of common stock, preferred stock, subscription rights, debt securities, and warrants to purchase common stock, preferred stock, or debt securities, including through concurrent, separate offerings of such securities.As of ~~the date of this report,~~September 30, 2022, we had the ability to issue up to ~~$300.0~~$299.5 million of the securities registered under the registration statement.

Common Equity Offering

In August 2022, we entered into equity distribution agreements with Oppenheimer & Co. and Virtu Americas LLC (each a “Sales Agent”), under which we have the ability to issue and sell shares of our common stock, from time to time, through the Sales Agents, up to an aggregate offering price of $50.0 million in what is commonly referred to as an “at-the-market” program (“Common Stock ATM Program”). As of September 30, 2022, we had remaining capacity to sell up to an additional $49.5 million of common stock under the Common Stock ATM program.

During the three and six months ended September 30, 2022, we sold 29,640 shares of our common stock under the Common Stock ATM Program at a weighted-average gross price of $15.75 per share and raised approximately $0.5 million of gross proceeds. The weighted-average net price per share, after deducting commissions and offering costs borne by us, was $15.59 and resulted in total net proceeds of approximately $0.5 million. These sales were above our then current

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estimated NAV per share. We did not sell any shares of our common stock under the Common Stock ATM Program during the three and six months ended September 30, 2021.

NOTE 8. NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS PER WEIGHTED-AVERAGE COMMON SHARE

The following table sets forth the computation of basic and diluted Net increase in net assets resulting from operations per weighted-average common share for the three and six months ended September 30, ~~2021~~2022 and ~~2020:~~

   Three Months Ended
September 30,    Six Months Ended September 30,
   2021    2020    2021    2020
Numerator: net increase in net assets resulting from operations
   $ 28,135    $ 6,630    $ 75,274    $ 6,669
Denominator: basic and diluted weighted-average common shares
   33,205,023    33,205,023    33,205,023    33,148,652








Basic and diluted net increase in net assets resulting from operations per weighted-average common share
   $ 0.85    $ 0.20    $ 2.27    $ 0.20








2021:


	Three Months Ended September 30,				Six Months Ended September 30,
	2022		2021		2022		2021
Net increase in net assets resulting from operations	$	3,075	$	28,135	$	15,110	$	75,274
Basic and diluted weighted-average common shares	33,218,901		33,205,023		33,212,000		33,205,023
Basic and diluted net increase in net assets resulting from operations per weighted-average common share	$	0.09	$	0.85	$	0.45	$	2.27

NOTE 9. DISTRIBUTIONS TO COMMON STOCKHOLDERS

To qualify to be taxed as a RIC under Subchapter M of the Code, we must generally distribute to our stockholders, for each taxable year, at least 90% of our taxable ordinary income plus the excess of our net short-term capital gains over net long-term capital losses (“Investment Company Taxable Income”). The amount to be paid out as distributions to our stockholders is determined by our Board of Directors and is based upon management’s estimate of Investment Company Taxable Income and net long-term capital gains, as well as amounts to be distributed in accordance with Section 855(a) of the Code. Based on that estimate, our Board of Directors declares monthly distributions, and supplemental distributions, as appropriate, to stockholders each quarter and deemed distributions of long-term capital gains annually as of the end of the fiscal year, as applicable.

The U.S. federal income tax characteristics of cash distributions paid to our common stockholders generally are reported to stockholders on IRS Form 1099 after the end of each calendar year. Estimates of tax characterization made on a quarterly basis may not be representative of the actual tax characterization of cash distributions for the full year. Estimates made on a quarterly basis are updated as of each interim reporting date. If we determined the tax characterization of cash distributions paid to common stockholders induring the current calendar year as of September 30, ~~2021, 71.3%~~2022, 61.1% would be from ordinary income and ~~28.7%~~38.9% would be from capital gains.

We paid the following cash distributions to our common stockholders for the six months ended September 30, ~~2021~~2022 and ~~2020:~~

Fiscal Year
   Declaration Date    Record Date    Payment Date    Distribution per Common Share
2022
   April 13, 2021    April 23, 2021    April 30, 2021    $ 0.070
   April 13, 2021    May 19, 2021    May 28, 2021    0.070
   April 13, 2021    June 8, 2021    June 17, 2021    0.060 ^(A)
   April 13, 2021    June 18, 2021    June 30, 2021    0.070
   July 13, 2021    July 23, 2021    July 30, 2021    0.070
   July 13, 2021    August 23, 2021    August 31, 2021    0.070
   July 13, 2021    September 3, 2021    September 15, 2021    0.030 ^(A)
   July 13, 2021    September 22, 2021    September 30, 2021    0.070


      Six Months Ended September 30, 2021:    $ 0.510

Fiscal Year
   Declaration Date    Record Date    Payment Date    Distribution per Common Share
2021
   April 14, 2020    April 24, 2020    April 30, 2020    $ 0.070
   April 14, 2020    May 19, 2020    May 29, 2020    0.070
   April 14, 2020    June 8, 2020    June 17, 2020    0.090 ^(A)
   April 14, 2020    June 19, 2020    June 30, 2020    0.070
   July 14, 2020    July 24, 2020    July 31, 2020    0.070
   July 14, 2020    August 24, 2020    August 31, 2020    0.070
   July 14, 2020    September 23, 2020    September 30, 2020    0.070


      Six Months Ended September 30, 2020:    $ 0.510

2021:

For the Six Months Ended September 30, 2022:

^(A)

~~Represents a supplemental distribution to common stockholders.~~

Declaration Date

Record Date

Payment Date

Distribution per
Common Share

April 12, 2022

April 22, 2022

April 29, 2022

0.075

April 12, 2022

May 20, 2022

May 31, 2022

0.075

April 12, 2022

June 6, 2022

June 15, 2022

0.120

(A)

April 12, 2022

June 22, 2022

June 30, 2022

0.075

July 12, 2022

July 22, 2022

July 29, 2022

0.075

July 12, 2022

August 23, 2022

August 31, 2022

0.075

July 12, 2022

September 22, 2022

September 30, 2022

0.075

Six Months Ended September 30, 2022

0.570

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For the Six Months Ended September 30, 2021:

Declaration Date

Record Date

Payment Date

Distribution per
Common Share

April 13, 2021

April 23, 2021

April 30, 2021

0.070

April 13, 2021

May 19, 2021

May 28, 2021

0.070

April 13, 2021

June 8, 2021

June 17, 2021

0.060

(A)

April 13, 2021

June 18, 2021

June 30, 2021

0.070

July 13, 2021

July 23, 2021

July 30, 2021

0.070

July 13, 2021

August 23, 2021

August 31, 2021

0.070

July 13, 2021

September 3, 2021

September 15, 2021

0.030

(A)

July 13, 2021

September 22, 2021

September 30, 2021

0.070

Six Months Ended September 30, 2021

0.510

(A)Represents a supplemental distribution to common stockholders.

Aggregate cash distributions to our common stockholders declared and paid were $18.9 million and $16.9 million for ~~both~~ the six months ended September 30, 2022 and 2021, ~~and 2020.~~

respectively.

For the three and six months ended September 30, 2022, we recorded $0.4 million and $1.3 million, respectively, of net adjustments for estimated permanent book-tax differences to reflect tax character, which decreased Capital in excess of par value and increased Overdistributed net investment income and Accumulated net realized gain in excess of distributions on our accompanying Consolidated Statements of Assets and Liabilities.

For the three months ended September 30, 2021, we recorded $2.1 million of net adjustments for estimated permanent book-tax differences to reflect tax character, which decreased Capital in excess of par value and increased Overdistributed net investment income and Accumulated net realized gain in excess of distributions on our accompanying Consolidated Statements of Assets and Liabilities. For the six months ended September 30, 2021, we recorded $2.7 million of net adjustments for estimated permanent book-tax differences to reflect tax character, which decreased Capital in excess of par value and Overdistributed net investment income and increased Accumulated net realized gain in excess of distributions on our accompanying Consolidated Statements of Assets and Liabilities.

~~For the three and six months ended September 30, 2020, we recorded $0.4 million and $0.6 million, respectively, of net adjustments for estimated~~ ~~permanent book-tax differences~~ to reflect tax character, which decreased Capital in excess of par value and Accumulated net realized gain in excess of distributions and increased Underdistributed net investment income for both periods on our accompanying ~~Consolidated Statements of Assets and Liabilities~~.

We may distribute our net long-term capital gains, if any, in cash or elect to retain some or all of such gains, pay taxes at the U.S. federal corporate-level income tax rate on the amount retained, and designate the retained amount as a “deemed distribution.” If we elect to retain net long-term capital gains and deem them distributed, each U.S. common stockholder will be treated as if they received a distribution of their pro-rata share of the retained net long-term capital gain and the U.S. federal income tax paid. As a result, each U.S. common stockholder will (i) be required to report their pro rata share of the retained gain on their tax return as long-term capital gain, (ii) receive a refundable tax credit for their pro-rata share of federal income tax paid by us on the retained gain, and (iii) increase the tax basis of their shares of common stock by an amount equal to the deemed distribution less the tax credit. To use the deemed distribution approach, we must provide written notice to our common stockholders prior to the expiration of 60 days after the close of the relevant taxable year. For the year ended March 31, ~~2021,~~2022, we did not elect to retain long-term capital gains and to treat them as deemed distributions to common stockholders.

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NOTE 10. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

We are party to certain legal proceedings incidental to the normal course of our business. We are required to establish reserves for litigation matters where those matters present loss contingencies that are both probable and estimable. When loss contingencies are not both probable and estimable, we do not establish reserves. Based on current knowledge, we do not believe that loss contingencies, if any, arising from pending investigations, litigation or regulatory matters will have a material adverse effect on our financial condition, results of operation 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, ~~2021~~2022 and March 31, ~~2021,~~2022, we had no established reserves for such loss contingencies.

Escrow Holdbacks

From time to time, we enter into arrangements relating to exits of certain investments whereby specific amounts of the proceeds are held in escrow to be used to satisfy potential obligations, as stipulated in the sales agreements. We record escrow amounts in Restricted cash and cash equivalents, if received in cash but subject to potential obligations or other contractual restrictions, or as escrow receivables in Other assets, net, if not yet received in cash, on our accompanying Consolidated Statements of Assets and Liabilities. We establish reserves and holdbacks against escrow amounts if we determine that it is probable and estimable that a portion of the escrow amounts will not ultimately be released or received at the end of the escrow period. Reserves and holdbacks against escrow amounts were ~~$0.4~~$0.9 million and ~~$0.7~~$0.2 million as of September 30, ~~2021~~2022 and March 31, ~~2021,~~2022, respectively.

Financial Commitments and Obligations

We may have line of credit and delayed draw term ~~loan~~debt commitments to certain of our portfolio companies that have not been fully drawn. Since these ~~line~~lines of credit and delayed draw term ~~loan~~debt commitments have expiration dates and we expect many will never be fully drawn, the total line of credit and delayed draw term ~~loan~~debt commitment amounts do not necessarily represent future cash requirements. We estimate the fair value of the combined unused line of credit and delayed draw term ~~loan~~debt commitments as of September 30, ~~2021~~2022 and March 31, ~~2021~~2022 to be ~~immaterial.~~

~~We have also extended~~insignificant.

As of September 30, 2022, a guaranty ~~on behalf of~~is in place with one of our portfolio ~~companies.~~companies, Country Club Enterprises, LLC (“CCE”), whereby we have guaranteed $1.0 million of CCE’s obligations. As of September 30, ~~2021,~~2022, we have not been required to make any payments on this guaranty, or any guaranties that existed in previous periods, and we consider the credit risk to be remote and the fair value of the guaranty as of September 30, ~~2021~~2022 and March 31, ~~2021~~2022 to be ~~immaterial.~~

~~As of September 30, 2021, the following guaranty was outstanding:~~

insignificant.

A $1.0 million continuing guaranty of a wholesale financing facility agreement (the “Floor Plan Facility”) between DLL Finance LLC (f/k/a Agricredit Acceptance, LLC) and Country Club Enterprises, LLC (“CCE”). The Floor Plan Facility provides CCE with financing to bridge the time and cash flow gap between the order and delivery of golf carts to customers.

The following table summarizes the principal balances of unused line of credit and delayed draw term ~~loan~~debt commitments and guaranties as of September 30, ~~2021~~2022 and March 31, ~~2021,~~2022, which are not reflected as liabilities in the accompanying Consolidated Statements of Assets and Liabilities:

   September 30, 2021    March 31, 2021
Unused line of credit and delayed draw term loan commitments
   $ 4,300    $ 3,000
Guaranties
   1,000    1,000




Total
   $ 5,300    $ 4,000


	September 30, 2022		March 31, 2022
Unused line of credit and delayed draw term debt commitments	$	8,200	$	4,250
Guaranties	1,000		10,250
Total	$	9,200	$	14,500

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NOTE 11. FINANCIAL HIGHLIGHTS

   Three Months Ended
September 30, Six Months Ended September 30,
   2021 2020 2021 2020
Per Common Share Data:

Net asset value at beginning of period^(A)
   $ 12.66 $ 10.87 $ 11.52 $ 11.17
Income from investment operations^(B)

Net investment income (loss)
   0.07 0.13 —   0.26
Net realized gain (loss) on investments and other
   (0.05 ) 0.02 0.01 0.04
Net unrealized appreciation (depreciation) of investments
   0.83 0.05 2.26 (0.10 )


Total from investment operations
   0.85 0.20 2.27 0.20
Effect of equity capital activity^(B)

Cash distributions to common stockholders from net investment income^(C)
   (0.16 ) (0.20 ) (0.36 ) (0.48 )
Cash distributions to common stockholders from realized gains^(C)
   (0.08 ) (0.01 ) (0.15 ) (0.03 )


Total from equity capital activity
   (0.24 ) (0.21 ) (0.51 ) (0.51 )
Other, net^(B)(E)
   —   —   (0.01 ) —


Net asset value at end of period^(A)
   $ 13.27 $ 10.86 $ 13.27 $ 10.86


Per common share market value at beginning of period
   $ 14.41 $ 10.24 $ 12.23 $ 7.85
Per common share market value at end of period
   13.87 9.10 13.87 9.10
Total investment return^(F)
   (2.13 )% (9.10 )% 17.51 % 21.91 %
Common stock outstanding at end of period^(A)
   33,205,023 33,205,023 33,205,023 33,205,023
Statement of Assets and Liabilities Data:

Net assets at end of period
   $ 440,701 $ 360,526 $ 440,701 $ 360,526
Average net assets^(G)
   426,635 360,232 410,553 362,964
Senior Securities Data:

Total borrowings, at cost
   $ 276,484 $ 121,696 $ 276,484 $ 121,696
Mandatorily redeemable preferred stock^(H)
   —   138,715 —   138,715
Ratios/Supplemental Data:

Ratio of net expenses to average net assets – annualized^(I)
   15.35 % 8.30 % 17.88 % 7.72 %
Ratio of net investment income (loss) to average net assets – annualized^(J)
   2.03 4.85 (0.07 ) 4.71

^(A)	~~Based on actual shares of common stock outstanding at the beginning or end of the corresponding period, as appropriate.~~

^(B)	~~Based on weighted-average basic common share data for the corresponding period.~~

^(C)

The tax character of distributions is determined based on taxable income calculated in accordance with income tax regulations, which may differ from amounts determined under GAAP. For further information on the estimated character of our distributions to common stockholders, including changes in estimates, as applicable, refer to Note 9 — ~~Distributions to Common Stockholders~~.

^(D)	~~Reserved.~~

^(E)	Represents the impact of the different share amounts (weighted-average basic common shares outstanding for the corresponding period and actual common shares outstanding at the end of the period) in the Per Common Share Data calculations and rounding impacts.

^(F)

Total return equals the change in the market value of our common stock from the beginning of the period, taking into account dividends reinvested in accordance with the terms of our dividend reinvestment plan. Total return does not take into account distributions that may be characterized as a return of capital. For further information on the estimated character of our distributions to common stockholders, including changes in estimates, as applicable, refer to Note 9 — ~~Distributions to Common Stockholders~~.

^(G)	~~Calculated using the average balance of net assets at the end of each month of the reporting period.~~

^(H)	~~Represents the aggregate liquidation preference of our mandatorily redeemable preferred stock.~~

^(I)

~~Ratio of net expenses to average net assets is computed using total expenses, net of any~~ ~~non-contractual,~~ ~~unconditional, and irrevocable credits of fees from the Adviser. Had we not received any~~ ~~non-contractual,~~ unconditional, and irrevocable credits of fees from the Adviser, the ratio of expenses to average net assets—annualized would have been 17.90% and 11.42% for the three months ended September 30, 2021 and 2020, respectively, and 20.73% and 10.26% for the six months ended September 30, 2021 and 2020, respectively.

^(J)

~~Had we not received any~~ ~~non-contractual,~~ unconditional, and irrevocable credits of fees from the Adviser, the ratio of net investment income (loss) to average net assets—annualized would have been (0.52)% and 1.72% for the three months ended September 30, 2021 and 2020, respectively, and (2.91)% and 1.81% for the six months ended September 30, 2021 and 2020, respectively.


	Three Months Ended September 30,						Six Months Ended September 30,
	2022			2021			2022			2021
Per Common Share Data:
Net asset value at beginning of period(A)	$	13.44		$	12.66		$	13.43		$	11.52
Income from investment operations(B)
Net investment income	0.34			0.07			0.57			—
Net realized gain (loss) on investments and other	0.07			(0.05)			0.20			0.01
Net unrealized appreciation (depreciation) of investments	(0.32)			0.83			(0.32)			2.26
Total from investment operations	0.09			0.85			0.45			2.27
Effect of equity capital activity(B)
Cash distributions to common stockholders from net investment income(C)	(0.14)			(0.16)			(0.24)			(0.36)
Cash distributions to common stockholders from net realized gains(C)	(0.08)			(0.08)			(0.33)			(0.15)
Total from equity capital activity	(0.22)			(0.24)			(0.57)			(0.51)
Other, net(B)(D)	—			—			—			(0.01)
Net asset value at end of period(A)	$	13.31		$	13.27		$	13.31		$	13.27

Per common share market value at beginning of period	$	14.08		$	14.41		$	16.13		$	12.23
Per common share market value at end of period	$	12.10		$	13.87		$	12.10		$	13.87
Total investment return(E)	(12.64)		%	(2.13)		%	(21.91)		%	17.51		%
Common stock outstanding at end of period(A)	33,234,663			33,205,023			33,234,663			33,205,023

Statement of Assets and Liabilities Data:
Net assets at end of period	$	442,470		$	440,701		$	442,470		$	440,701
Average net assets(F)	$	449,419		$	426,635		$	447,398		$	410,553

Senior Securities Data:
Total borrowings, at cost	$	279,088		$	276,484		$	279,088		$	276,484

Ratios/Supplemental Data:
Ratio of net expenses to average net assets – annualized(G)	8.35		%	15.35		%	9.52		%	17.88		%
Ratio of net investment income (loss) to average net assets – annualized(H)	10.16		%	2.03		%	8.40		%	(0.07)		%

(A)Based on actual shares of common stock outstanding at the beginning or end of the corresponding period, as appropriate.

(B)Based on weighted-average basic common share data for the corresponding period.

(C)The tax character of distributions is determined based on taxable income calculated in accordance with income tax regulations, which may differ from amounts determined under GAAP. For further information on the estimated character of our distributions to common stockholders, including changes in estimates, as applicable, refer to Note 9 — Distributions to Common Stockholders.

(D)Represents the impact of the different share amounts (weighted-average basic common shares outstanding for the corresponding period and actual common shares outstanding at the end of the period) in the Per Common Share Data calculations and rounding impacts.

(E)Total return equals the change in the market value of our common stock from the beginning of the period, taking into account dividends reinvested in accordance with the terms of our dividend reinvestment plan. Total return does not take into account distributions that may be characterized as a return of capital. For further information on the estimated character of our distributions to common stockholders, including changes in estimates, as applicable, refer to Note 9 — Distributions to Common Stockholders.

(F)Calculated using the average balance of net assets at the end of each month of the reporting period.

(G)Ratio of net expenses to average net assets is computed using total expenses, net of any non-contractual, unconditional, and irrevocable credits of fees from the Adviser. Had we not received any non-contractual, unconditional, and irrevocable credits of fees from the Adviser, the ratio of expenses to average net assets - annualized would have been 11.50% and 17.90% for the three months ended September 30, 2022 and 2021, respectively, and 12.23% and 20.73% for the six months ended September 30, 2022 and 2021, respectively.

(H)Had we not received any non-contractual, unconditional, and irrevocable credits of fees from the Adviser, the ratio of net investment income (loss) to average net assets - annualized would have been 7.01% and (0.52)% for the three months ended September 30, 2022 and 2021, respectively, and 5.69% and (2.91)% for the six months ended September 30, 2022 and 2021, respectively.

NOTE 12. UNCONSOLIDATED SIGNIFICANT SUBSIDIARIES

In accordance with the SEC’s Regulation S-X, we do not consolidate portfolio company investments. Further, in accordance with ASC 946, we are precluded from consolidating any entity other than another investment company, except that ASC 946 provides for the consolidation of a controlled operating company that provides substantially all of its services to the investment company or its consolidated subsidiaries. We did not have any unconsolidated subsidiaries that met any of the significance conditions under Rule 1-02(w) of the SEC’s Regulation S-X as of or during the six month periods ended September 30, ~~2021~~2022 and ~~2020.~~

2021.

NOTE 13. SUBSEQUENT EVENTS

Investment Activity

•In October ~~2021,~~2022, we invested ~~$10.5~~an additional $8.4 million ~~in an existing portfolio company, Bassett Creek Services, Inc.,~~ in the form of secured first lien ~~debt.~~

debt in Nocturne to fund an add-on acquisition.

Distributions and Dividends

In October ~~2021,~~2022, our Board of Directors declared the following monthly ~~and supplemental~~ distributions to common stockholders:

Record Date
   Payment Date    Distribution per Common Share
October 22, 2021
   October 29, 2021    $ 0.075
November 19, 2021
   November 30, 2021    0.075
December 7, 2021
   December 15, 2021    0.090 ^(A)
December 23, 2021
   December 31, 2021    0.075


   Total for the Quarter:    $ 0.315

^(A)

~~Represents a supplemental distribution to common stockholders.~~

Record Date

Payment Date

Distribution per Common Share

October 21, 2022

October 31, 2022

0.080

November 18, 2022

November 30, 2022

0.080

December 6, 2022

December 15, 2022

0.120

(A)

December 20, 2022

December 30, 2022

0.080

Total for the Quarter:

0.360

(A) Represents a supplemental distribution to common stockholders.

Election of Director

Effective October 11, 2022, Paula Novara was elected to our Board of Directors. Ms. Novara also serves as head of human resources, facilities and office management and IT of the Adviser and certain of its affiliates.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

All statements contained herein, other than historical facts, may constitute “forward-looking statements.” These statements may relate to, among other things, our future operating results, our business prospects and the prospects of our portfolio companies, actual and potential conflicts of interest with Gladstone Management Corporation (the “Adviser”) and its affiliates, the use of borrowed money to finance our investments, the adequacy of our financing sources and working capital, and our ability to co-invest, among other factors. In some cases, you can identify forward-looking statements by terminology such as “estimate,” “may,” “might,” “believe,” “will,” “provided,” “anticipate,” “future,” “could,” “growth,” “plan,” “project,” “intend,” “expect,” “should,” “would,” “if,” “seek,” “possible,” “potential,” “likely” or the negative or variations of such terms or comparable terminology. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Such factors include: (1) changes in the economy and the capital markets; (2) risks associated with negotiation and consummation of pending and future transactions; (3) the loss of one or more of our executive officers, in particular David Gladstone, David Dullum, or Terry Lee Brubaker; (4) changes in our investment objectives and strategy; (5) availability, terms (including the possibility of interest rate volatility) and deployment of capital; (6) changes in our industry, interest rates, exchange rates, regulation, or the general ~~economy;~~economy, including inflation; (7) our business prospects and the prospects of our portfolio companies; (8) the degree and nature of our competition; (9) changes in governmental regulation, tax rates and similar matters; (10) our ability to exit investments in a timely manner; (11) our ability to maintain our qualification as a regulated investment company (“RIC”) and as a business development company (“BDC”); (12) the impact of COVID-19 generally and on the economy, the capital markets and our portfolio companies, including the measures taken by governmental authorities to address ~~it;~~it, which may precipitate or exacerbate other risks and/or uncertainties; and (13) those factors described in Item 1A.“Risk ~~Factors~~”Factors” herein and the “Risk Factors” sections of our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2021,~~2022, filed with the U.S. Securities and Exchange Commission (“SEC”) on May 11, ~~2021~~2022 (the “Annual Report”). We caution readers not to place undue reliance on any such forward-looking statements. Actual results could differ materially from those anticipated in our forward-looking statements and future results could differ materially from historical performance. We have based forward-looking statements on information available to us on the date of this Quarterly Report on Form 10-Q (the “Quarterly Report”). Except as required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this Quarterly Report. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the SEC, including subsequent annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. The forward-looking statements contained in this Quarterly Report are excluded from the safe harbor protection provided by the Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933, as amended.

In this Quarterly Report, the “Company,” “we,” “us,” and “our” refer to Gladstone Investment Corporation and its wholly-owned subsidiaries unless the context otherwise indicates. Dollar amounts, except per share amounts, are in thousands, unless otherwise indicated.

The following analysis of our financial condition and results of operations should be read in conjunction with our accompanying Consolidated Financial Statements and the notes thereto contained elsewhere in this Quarterly Report and in our Annual Report. Historical financial condition and results of operations and percentage relationships among any amounts in the financial statements are not necessarily indicative of financial condition, results of operations or percentage relationships for any future periods.

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OVERVIEW

General

We were incorporated under the General Corporation Law of the State of Delaware on February 18, 2005. On June 22, 2005, we completed our initial public offering and commenced operations. We operate as an externally managed, closed-end, non-diversified management investment company and have elected to be treated as a BDC under the Investment Company Act of 1940, as amended (the “1940 Act”). For U.S. federal income tax purposes, we have elected to be treated as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). To continue to qualify as a RIC for U.S. federal income tax purposes and obtain favorable RIC tax treatment, we must meet certain requirements, including certain minimum distribution requirements.

~~We are externally managed by the Adviser, an affiliate of ours and an~~ ~~SEC-registered~~ investment adviser, pursuant to an investment advisory and management agreement (the “Advisory Agreement”). We have also entered into an administration agreement (the “Administration Agreement”) with Gladstone Administration, LLC (the “Administrator”), an affiliate of ours and the Adviser. Each of the Adviser and the Administrator are privately-held companies that are indirectly owned and controlled by David Gladstone, our chairman and chief executive officer. David Dullum, our president, also serves as the executive vice president of private equity (buyouts) of the Adviser. Michael LiCalsi, our general counsel and secretary, also serves as the Administrator’s president, general counsel, and secretary, as well as the executive vice president of administration of the Adviser).

Additionally, Gladstone Securities, LLC (“Gladstone Securities”), a privately-held broker-dealer (indirectly owned and controlled by Mr. Gladstone, our chairman and chief executive officer) registered with the Financial Industry Regulatory Authority and insured by the Securities Investor Protection Corporation, has provided other services, such as investment banking and due diligence services, to certain of our portfolio companies, for which Gladstone Securities receives a fee. Any such fees paid by portfolio companies to Gladstone Securities do not impact the fees we pay to the Adviser or the ~~non-contractual,~~ ~~unconditional, and irrevocable credits against the base management fee. For additional information refer to Note 4 —~~ ~~Related Party Transactions~~ ~~in the accompanying~~ ~~Notes to Consolidated Financial Statements~~.

We were established for the purpose of investing in debt and equity securities of established private businesses operating in the United States (“U.S.”). Our investment objectives are to: (i) achieve and grow current income by investing in debt securities of established businesses that we believe will provide stable earnings and cash flow to pay expenses, make principal and interest payments on our outstanding indebtedness, and make distributions to our stockholders that grow over time; and (ii) provide our stockholders with long-term capital appreciation in the value of our assets by investing in equity securities of established businesses, generally in combination with the aforementioned debt securities, that we believe can grow over time to permit us to sell our equity investments for capital gains. To achieve our objectives, our investment strategy is to invest in several categories of debt and equity securities, with individual investments generally totaling up to ~~$40~~$70 million, although investment size may vary depending upon our total assets or available capital at the time of investment. We expect that our investment portfolio over time will consist of approximately 75% in debt ~~securities~~investments and 25% in equity ~~securities,~~investments, at cost. As of September 30, ~~2021,~~2022, our investment portfolio was comprised of ~~74.4%~~76.6% in debt ~~securities~~investments and ~~25.6%~~23.4% in equity ~~securities,~~investments, at cost.

We focus on investing in lower middle market private businesses (which we generally define as companies with annual earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $3 million to $20 million) (“Lower Middle Market”) in the U.S. that meet certain criteria, including: the sustainability of the business’ free cash flow and its ability to grow it over time, adequate assets for loan collateral, experienced management teams with a significant ownership interest in the portfolio company, reasonable capitalization of the portfolio company, including an ample equity contribution or cushion based on prevailing enterprise valuation multiples, and the potential to realize appreciation and gain liquidity in our equity position, if any. We anticipate that liquidity in our equity position will be achieved through a merger or acquisition of the portfolio company, a public offering of the portfolio company’s stock, or, to a lesser extent, by exercising our right to require the portfolio company to repurchase our warrants, though there can be no assurance that we will always have these rights. We invest in portfolio companies that ~~need~~seek funds for management buyouts and/or growth capital to finance acquisitions, ~~including management buyouts,~~ recapitalize or, to a lesser extent, refinance their existing debt facilities. We seek to avoid investing in high-risk, early-stage enterprises.

We invest by ourselves or jointly with other funds and/or management of the portfolio company, depending on the opportunity. In July 2012, the SEC granted us an exemptive order (the ~~“Co-Investment~~“Co-Investment Order”) that expanded our ability to co-invest, under certain circumstances, with certain of our affiliates, including Gladstone Capital ~~Corporation (“Gladstone Capital”)~~ and any future BDC or closed-end management investment company that is advised (or sub-advised if it controls the fund) by the Adviser, or any combination of the foregoing, subject to the conditions in the Co-Investment ~~Order. Since 2012, we have opportunistically made several~~ ~~co-investments~~ ~~with Gladstone Capital pursuant to the~~ ~~Co-Investment~~ Order. We believe the Co-Investment Order has enhanced and will continue to enhance our ability to further our investment objectives and strategies. If we are participating in an investment with one or more co-investors, whether or not an affiliate of ours, our investment is likely to be smaller than if we were investing alone.

We are externally managed by the Adviser, an investment adviser registered with the SEC and an affiliate of ours, pursuant to an investment advisory and management agreement (the “Advisory Agreement”). The Adviser manages our investment activities. We have also entered into an administration agreement with Gladstone Administration, LLC, an affiliate of ours and the Adviser, whereby we pay separately for administrative services.

Our shares of common stock, our 5.00% Notes due 2026 (“2026 Notes”), and our 4.875% Notes due 2028 (“2028 Notes”) are traded on the Nasdaq Global Select Market (“Nasdaq”) under the trading symbols “GAIN,” “GAINN,” and “GAINZ,” respectively.

~~Business~~

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siness

Portfolio Activity

While the business environment remains competitive, we continue to see new investment opportunities consistent with our investment strategy of providing a combination of debt and equity in support of management and independent sponsor-led buyouts of Lower Middle Market companies in the U.S. During the six months ended September 30, ~~2021,~~2022, we invested in ~~two new portfolio companies, exited~~ one ~~portfolio company, merged two existing portfolio companies into a~~ new portfolio company and ~~dissolved~~exited one portfolio company. From our initial public offering in June 2005 through September 30, ~~2021,~~2022, we invested in 5556 companies, excluding investments in syndicated loans, for a total of approximately ~~$1.4~~$1.6 billion, before giving effect to principal repayments and divestitures.

The majority of the debt securities in our portfolio have a success fee component, which enhances the yield on our debt investments. Unlike paid-in-kind (“PIK”) income, we generally do not recognize success fees as income until payment has been received. Due to the contingent nature of success fees, there are no guarantees that we will be able to collect any or all of these success fees or know the timing of any such collections. As a result, as of September 30, ~~2021,~~2022, we had unrecognized, contractual success fees of ~~$49.0~~$50.7 million, or ~~$1.48~~$1.53 per common share. Consistent with accounting principles generally accepted in the U.S. (“GAAP”), we have not recognized success fee receivables and related income in our accompanying Consolidated Financial Statements until earned.

From inception through September 30, ~~2021,~~2022, we completed sales of 2528 portfolio companies that we acquired under our buyout strategy (which excludes investments in syndicated loans). In the aggregate, these sales have generated ~~$240.8~~$267.3 million in net realized gains and ~~$33.4~~$39.4 million in other income upon exit, for a total increase to our net assets of ~~$274.2~~$306.7 million. We believe, in aggregate, these transactions were equity-oriented investment successes and exemplify our investment strategy of striving to achieve returns through current income on the debt portion of our investments and capital gains from the equity portion. The 2528 liquidity events have offset any realized losses since inception, which were primarily incurred during the 2008-2009 recession in connection with the sale of performing syndicated loans at a realized loss to pay off a former lender. The successful exits, in part, enabled us to increase the monthly distribution by ~~75.0%~~87.5% from March 2011 through September 30, ~~2021,~~2022, and allowed us to declare and pay 1316 supplemental distributions to common stockholders through September 30, ~~2021.~~

2022.

Capital Raising Efforts

We have been able to meet our capital needs through extensions of and increases to the Fifth Amended and Restated Credit Agreement dated April 30, 2013, as amended from time to time (the “Credit Facility”), and by accessing the capital markets in the form of public offerings of unsecured notes, as well as common and preferred ~~stock and unsecured notes.~~stock. We have successfully extended the Credit Facility’s revolving period multiple times, most recently to February 2024, and currently have a total commitment amount of $180.0 million (with a potential total commitment of $300.0 million through additional commitments from new or existing lenders). During the ~~six months~~year ended ~~September 30, 2021,~~March 31, 2022, we issued our 2028 Notes for gross proceeds of $134.6 million. During the ~~year~~three and six months ended ~~March 31, 2021,~~September 30, 2022, we ~~issued our 2026 Notes for gross proceeds of $127.9 million and~~ sold ~~155,560~~29,640 shares of our common stock under our ~~at-the-market~~"at-the-market" program (the ~~“Common~~"Common Stock ATM ~~Program”~~Program") for gross proceeds of approximately ~~$1.8 million, and 784,853 shares of our Series E Term Preferred Stock under our preferred stock~~ ~~at-the-market~~ ~~program (the “Series E ATM Program”) for gross proceeds of approximately $19.3~~$0.5 million. Refer to “Liquidity and Capital Resources — Revolving Line of Credit” for further discussion of the Credit Facility and to “Liquidity and Capital Resources — Equity — Common Stock” ~~and “~~~~Liquidity and Capital Resources — Equity — Term Preferred Stock~~~~” for~~ further discussion of our common ~~stock and mandatorily redeemable preferred stock, including our~~ ~~at-the-market~~ ~~programs.~~

stock.

Although we have been able to access the capital markets historically, market conditions, including the impact of COVID-19, inflation, and rising interest rates, may continue to affect the trading price of our common stock and thus our ability to finance new investments through the issuance of common equity. On September 30, ~~2021,~~2022, the closing market price of our common stock was ~~$13.87~~$12.10 per share, representing a ~~4.5% premium~~9.1% discount to our net asset value (“NAV”) of ~~$13.27~~$13.31 per share as of September 30, ~~2021.~~2022. When our common stock trades below NAV, our ability to issue additional equity is constrained by provisions of the 1940 Act, which generally prohibits the issuance and sale of our common stock at an issuance price below the then-current NAV per share without stockholder approval, other than through sales to our then-existing stockholders pursuant to a rights offering.

ATM sales during the three and six months ended September 30, 2022 were above our then-current estimated NAV per share.

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Regulatory Compliance

Our ability to seek external debt financing, to the extent that it is available under current market conditions, is further subject to the asset coverage limitations of the 1940 Act, which require us to have asset coverage (as defined in Sections 18 and 61 of the 1940 Act), of at least 150% on each of our senior securities representing indebtedness and our senior securities that are stock (such as our previously outstanding series of term preferred stock).

On April 10, 2018, our Board of Directors, including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) thereof, approved the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act. As a result, our asset coverage requirements for senior securities changed from 200% to 150%, which was effective as of April 10, 2019, one year after the date of the Board of Directors’ approval.

As of September 30, ~~2021,~~2022, our asset coverage ratio on our senior securities representing indebtedness was ~~254.5%~~254.1%.

Investment Highlights

Investment Activity

During the six months ended September 30, ~~2021,~~2022, the following significant transactions occurred:

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

to fund an add-on acquisition.

•In June 2021, we invested an additional $6.5 million in J.R. Hobbs Co. – Atlanta, LLC (“J.R. Hobbs”) in the form of secured second lien debt. In connection with the investment, our secured second lien debt was converted to secured first lien debt.

•In June 2022, we invested $21.0 million in a new portfolio company, Dema/Mai Holdings, Inc. (“Dema/Mai”), in the form of preferred equity to acquire Mai Mechanical, LLC, a leading provider of plumbing and mechanical services focused on multi-family residential construction headquartered in Denver, Colorado, from J.R. Hobbs Co. - Atlanta, LLC ("J.R. Hobbs"), an existing portfolio company. In July ~~2021,~~2022, we invested an additional ~~$5.9~~$39.1 million in the form of secured first lien debt ~~into Nocturne.~~

in Dema/Mai to fund the acquisition of Dema Plumbing, a plumbing and mechanical systems installation and service provider to single-family residential homebuilders.

•In July ~~2021,~~2022, we invested $24.3 million in Utah Pacific Bridge & Steel, Ltd. (“Utah Pacific”) through a combination of secured first lien debt and preferred equity. Utah Pacific, headquartered in Lindon, Utah, is a manufacturer of large steel components used in bridge replacement, rehabilitation, and construction.

~~In September 2021, one of~~recapitalized our portfolio companies, D.P.M.S., Inc. (“Danco”), merged with another of our portfolio companies, Galaxy Technologies, Inc. (“Galaxy”), into a newly formed portfolio company, Galaxy Technologies Holdings, Inc. (“Galaxy Technologies Holdings”). Our debt investments in Danco, which totaled $12.3 million at principal and cost, and Galaxy, which totaled $13.0 million at principal and cost, were converted into two second lien term loans with an aggregate cost and principal of $25.3 million to Galaxy Technologies Holdings. Our common equity investment in Danco, with a cost basis of $0.0 million, and our preferred and common equity investments in Galaxy, with an aggregate cost basis of $11.5 million, were converted into a common equity investment in Galaxy Technologies Holdings with a combined cost basis of $11.5 million.

~~The following significant investment activity occurred subsequent to September 30, 2021. Also refer to Note 13 –~~ ~~Subsequent Events~~ ~~in the accompanying~~ ~~Notes to Consolidated Financial Statements~~.

~~In October 2021, we invested $10.5 million in an existing portfolio company, Bassett Creek~~Horizon Facilities Services, Inc., ("Horizon") and invested an additional $30.0 million in the form of secured first lien debt.

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

•In August 2022, in conjunction with a refinancing at Ginsey Home Solutions, Inc. ("Ginsey"), our outstanding $13.3 million of secured second lien debt was reduced to $12.2 million and converted to secured first lien debt. The reduction in our cost basis was the result of a $5.1 million payment made by Ginsey to extinguish our secured borrowing liability, which was partially offset by an additional investment in Ginsey of $4.0 million.

Subsequent to September 30, 2022, in October 2022, we invested an additional $8.4 million in the form of secured first lien debt in Nocturne to fund an add-on acquisition. Also refer to Note 13 – Subsequent Events in the accompanying Notes to Consolidated Financial Statements.

Recent Developments

Distributions and Dividends

In October ~~2021,~~2022, our Board of Directors declared the following monthly ~~and supplemental~~ cash distributions to common stockholders:

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^(A)

~~Represents a supplemental distribution to common stockholders.~~

Record Date

Payment Date

Distribution per Common Share

October 21, 2022

October 31, 2022

0.080

November 18, 2022

November 30, 2022

0.080

December 6, 2022

December 15, 2022

0.120

(A)

December 20, 2022

December 30, 2022

0.080

Total for the Quarter:

0.360

(A) Represents a supplemental distribution to common stockholders.

Election of Director

LIBOR Transition

In general, our investments in debt securities have a term of five years, accrue interest at variable rates (based on the one-month London Interbank Offered Rate (“LIBOR”)) and, to a lesser extent, at fixed rates. Most U.S. dollar LIBOR are currently anticipated to be phased out in June 2023. LIBOR may transition to a new standard rate, the Secured Overnight Financing Rate (“SOFR”), which will incorporate certain overnight repo market data collected from multiple data sets. To attain an equivalent one-month rate, we currently intend to adjust the SOFR to minimize the difference between the interest that a borrower would be paying using LIBOR versus what it will be paying using SOFR. We are currently monitoring the transition and cannot assure you whether SOFR will become a standard rate for variable rate debt. We ~~expect we will need to continue to renegotiate a limited number of~~have amended all outstanding loan agreements with our portfolio companies to include fallback language providing a mechanism for the parties to negotiate a new reference interest rate in the event that LIBOR ceases to exist. Assuming that SOFR replaces LIBOR and is appropriately adjusted to equate to one-month LIBOR, we expect that there should be minimal impact on our operations.

COVID-19 Impact

We continue to closely monitor and work with our portfolio companies to navigate the significant challenges created by the continuing COVID-19 pandemic, and remain focused on ensuring the safety of the Adviser’s and Administrator’s personnel and of the employees of our portfolio companies, while also managing our ongoing business activities. While we are closely monitoring all of our portfolio companies, our portfolio continues to be diverse from a geographic and industry perspective. Through proactive measures and continued diligence, the management teams of our portfolio companies ~~continue to demonstrate~~have demonstrated their ability to ~~respond~~respond effectively and efficiently to the challenges posed by COVID-19, including its variants, ~~and~~ related orders imposed by state and local governments, including paused or reversed reopening ~~orders.~~orders, and operating challenges, including but not limited to, labor shortages, supply chain delays and increased material costs. We believe we have sufficient levels of liquidity to support our existing portfolio companies, as necessary, and ~~selectively deploy~~continue our buyout strategy by deploying capital in new investment opportunities.

Impact of Inflation

We believe the effects of inflation, if any, on our historical results of operations and financial condition have been immaterial. During the six months ended September 30, 2022, general inflationary pressures and certain commodity price volatility have impacted our portfolio companies to varying degrees; however, the broad based impact of these pricing changes have largely been mitigated by price adjustments without adverse sales implications, and thus, have not materially impacted our portfolio companies’ ability to service their indebtedness, including our loans. Notwithstanding the results to date, we expect that the cumulative effect of these inflationary pressures may impact the profit margins or sales of certain portfolio companies and their ability to service their debts. We continue to monitor the current inflationary environment to anticipate any impact on our portfolio companies, including their availability to pay interest on our loans. We cannot assure you that our results of operations and financial condition or that of our portfolio companies will not be materially impacted by inflation in the future.

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RESULTS OF OPERATIONS

Comparison of the Three Months Ended September 30, ~~2021~~2022 to the Three Months Ended September 30, ~~2020~~

   For the Three Months Ended September 30,
   2021    2020    $ Change    % Change
INVESTMENT INCOME

Interest income
   $ 14,298    $ 11,840    $ 2,458    20.8 %
Dividend and success fee income
   4,240    —      4,240    NM








Total investment income
   18,538    11,840    6,698    56.6








EXPENSES

Base management fee
   3,577    2,989    588    19.7
Loan servicing fee
   1,794    1,747    47    2.7
Incentive fee
   7,351    452    6,899    NM
Administration fee
   571    390    181    46.4
Interest and dividend expense
   3,884    3,213    671    20.9
Amortization of deferred financing costs and discounts
   452    466    (14 )    (3.0 )
Other
   1,468    1,032    436    42.2








Expenses before credits from Adviser
   19,097    10,289    8,808    85.6
Credits to fees from Adviser
   (2,724 )    (2,817 )    93    (3.3 )








Total expenses, net of credits to fees
   16,373    7,472    8,901    119.1








NET INVESTMENT INCOME
   2,165    4,368    (2,203 )    (50.4 )








REALIZED AND UNREALIZED GAIN (LOSS)

Net realized gain on investments
   464    621    (157 )    (25.3 )
Net realized loss on other
   (1,998 )    —    (1,998 )    NM
Net unrealized appreciation (depreciation) of investments
   27,504    1,641    25,863    NM








Net realized and unrealized gain (loss)
   25,970    2,262    23,708    NM








NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
   $ 28,135    $ 6,630    $ 21,505    324.4








BASIC AND DILUTED PER COMMON SHARE:

Net investment income
   $ 0.07    $ 0.13    $ (0.06 )    (46.2 )%








Net increase in net assets resulting from operations
   $ 0.85    $ 0.20    $ 0.65    325.0

2021

For the Three Months Ended September 30,
2022 2021 $ Change % Change
INVESTMENT INCOME
Interest income $ 14,237 $ 14,298 $ (61) (0.4) %
Dividend and success fee income 6,558 4,240 2,318 54.7 %
Total investment income 20,795 18,538 2,257 12.2 %
EXPENSES
Base management fee 3,613 3,577 36 1.0 %
Loan servicing fee 1,916 1,794 122 6.8 %
Incentive fee 768 7,351 (6,583) (89.6) %
Administration fee 562 571 (9) (1.6) %
Interest and dividend expense 3,857 3,884 (27) (0.7) %
Amortization of deferred financing costs and discounts 450 452 (2) (0.4) %
Other 1,754 1,468 286 19.5 %
Expenses before credits from Adviser 12,920 19,097 (6,177) (32.3) %
Credits to fees from Adviser (3,541) (2,724) (817) 30.0 %
Total expenses, net of credits to fees 9,379 16,373 (6,994) (42.7) %
NET INVESTMENT INCOME (LOSS) 11,416 2,165 9,251 NM
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain on investments 2,302 464 1,838 396.1 %
Net realized loss on other — (1,998) 1,998 100.0 %
Net unrealized (depreciation) appreciation of investments (10,643) 27,504 (38,147) (138.7) %
Net realized and unrealized (loss) gain (8,341) 25,970 (34,311) (132.1) %
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,075 $ 28,135 $ (25,060) (89.1) %
WEIGHTED-AVERAGE SHARES OF COMMON STOCK OUTSTANDING
Basic and diluted 33,218,901 33,205,023 13,878 NM
BASIC AND DILUTED PER COMMON SHARE:
Net investment income (loss) $ 0.34 $ 0.07 $ 0.27 385.7 %
Net increase in net assets resulting from operations $ 0.09 $ 0.85 $ (0.76) (89.4) %

NM = Not Meaningful

Investment Income

Total investment income increased ~~56.6%~~12.2% for the three months ended September 30, ~~2021,~~2022, as compared to the prior year ~~period. The increase was~~period, due to ~~increases~~an increase in ~~both interest income and~~ dividend and success fee income, partially offset by a decrease in interest income.

Interest income from our investments in debt securities ~~increased 20.8%~~decreased 0.4% for the three months ended September 30, ~~2021,~~2022, as compared to the prior year period. During the three months ended September 30, 2021, we received $1.6 million of past due interest from certain loans that were previously on non-accrual ~~status.~~ status compared to no such collection in the current year period. Generally, the level of interest income from investments is directly related to the principal balance of our interest-bearing investment portfolio outstanding during the period multiplied by the weighted-average yield.

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The weighted-average principal balance of our interest-bearing investment portfolio during the three months ended September 30, ~~2021~~2022was ~~$425.5~~$467.0 million, compared to ~~$388.7~~$425.5 million for the prior year period. This increase was primarily due to the ~~$79.5~~$84.4 million of follow-on debt investments in existing portfolio companies, the origination of $57.3 million of new debt investments, and $11.7 million of loans returned to accrual status, ~~the origination of $54.2 million of new debt investments, and $48.4 million of~~ ~~follow-on~~ ~~debt investments to existing portfolio companies,~~ partially offset by ~~$64.2~~$90.4 million of ~~loans placed on~~ ~~non-accrual~~ ~~status and $43.3 million of~~ pay-offs, restructurings, or write-offs of debt investments, and $52.5 million of loans placed on non-accrual status, after June 30, ~~2020,~~2021, and their respective impact on the weighted-average principal balance when considering timing of new investments, pay-offs, restructurings, write-offs, and accrual status changes, as applicable.

The weighted-average yield on our interest-bearing investments, excluding cash and cash equivalents and receipts recorded as dividend and success fee income, was ~~13.3%~~12.1% for the three months ended September 30, ~~2021,~~2022, compared to ~~12.1%~~13.3% for the prior year period. The weighted-average yield may vary from period to period, based on the current stated interest rate on interest-bearing ~~investments.~~

investments, coupled with any collection of past due interest during the period. During the three months ended September 30, 2021, we collected $1.6 million in past due interest from portfolio companies that were previously on non-accrual status, including $1.5 million from B+T Group Acquisition, Inc. ("B+T"), $0.1 million from Horizon and $45 thousand from PSI Molded Plastics, Inc. ("PSI Molded"). We had no collections of past due interest during the three months ended September 30, 2022.

As of September 30, 2022, our loans to J.R. Hobbs and The Mountain Corporation (“The Mountain”) were on non-accrual status, with an aggregate debt cost basis of $63.4 million. As of September 30, 2021, our loans to J.R. Hobbs, The Mountain ~~Corporation (“The Mountain”),~~ and ~~SBS Industries~~SFEG Holdings, ~~Inc (“SBS”~~Inc. ("SFEG") were on non-accrual status, with an aggregate debt cost basis of $81.3 million. As of September 30, 2020, certain of our loans to B+T Group Acquisition, Inc. (“B+T”), Horizon Facilities Services, Inc. (“Horizon”), The Mountain, PSI Molded Plastics, Inc. (“PSI Molded”), and SOG Specialty Knives & Tools, LLC (“SOG”), were on ~~non-accrual~~ ~~status, with an aggregate debt cost basis of $94.9 million.~~

Dividend and success fee income for the three months ended September 30, ~~2021~~2022 increased ~~$4.2~~$2.3 million from the prior year period. During the three months ended September 30, 2022, dividend and success fee income consisted of $4.8 million of dividend income and $1.7 million of success fee income. During the three months ended September 30, 2021, dividend and success fee income consisted of $2.6 million of success fee income and $1.6 million of dividend income. ~~During the three months ended September 30, 2020, we did not earn any dividend and success fee income.~~

As of September 30, ~~2021 and~~2022, our investment in Horizon represented 10.7% of the total investment portfolio at fair value. As of March 31, ~~2021,~~2022, no single investment represented greater than 10% of the total investment portfolio at fair value.

Expenses

Total expenses, net of any non-contractual, unconditional, and irrevocable credits from the Adviser, ~~increased 119.1%~~decreased 42.7% during the three months ended September 30, ~~2021,~~2022, as compared to the prior year period, primarily due to ~~an increase~~a decrease in the incentive ~~fee, as well as increases in interest and dividend expense, and the base management~~ fee.

In accordance with GAAP, we recorded a ~~$5.6~~$1.7 million reversal of previously accrued capital gains-based incentive fee during the three months ended September 30, ~~2021,~~2022, compared to a capital gains-based incentive fee of ~~$0.5~~$5.6 million during the three months ended September 30, ~~2020.~~ 2021. The capital gains-based incentive fee was a result of the net impact of net realized gains ~~(losses)~~ and net unrealized appreciation (depreciation) on investments during the respective periods. The income-based incentive fee increased by ~~$1.8~~$0.7 million for the three months ended September 30, ~~2021, as compared to the prior year period, as the increase in~~ ~~pre-incentive~~ ~~fee net investment income more than offset the increase in net assets, which drives the hurdle rate.~~

~~The base management fee, loan servicing fee, incentive fee, and their related~~ ~~non-contractual,~~ ~~unconditional, and irrevocable credits are computed quarterly, as described under~~ ~~“Transactions with the Adviser”~~ ~~in Note 4 —~~ ~~Related Party Transactions~~ ~~in the accompanying~~ ~~Notes to Consolidated Financial Statements~~ ~~and are summarized in the following table:~~

   Three Months Ended September 30,
   2021 2020
Average total assets subject to base management fee^(A)
   $ 715,400 $ 597,800
Multiplied by prorated annual base management fee of 2.0%
   0.5 % 0.5 %


Base management fee^(B)
   3,577 2,989
Credits to fees from Adviser - other^(B)
   (930 ) (1,070 )


Net base management fee
   $ 2,647 $ 1,919


Loan servicing fee^(B)
   1,794 1,747
Credits to base management fee - loan servicing fee^(B)
   (1,794 ) (1,747 )


Net loan servicing fee
   $ —   $ —


Incentive fee – income-based
   $ 1,757 $ —
Incentive fee – capital gains-based^(C)
   5,594 452


Total incentive fee^(B)
   $ 7,351 $ 452
Credits to fees from Adviser - other^(B)
   —   —


Net total incentive fee
   $ 7,351 $ 452

^(A)

^(B)	~~Reflected as a line item on our~~ ~~Consolidated Statement of Operations~~.

^(C)	~~The capital gains-based incentive fees are recorded in accordance with GAAP and do not necessarily reflect amounts contractually due under the terms of the Advisory Agreement.~~

~~Interest and dividend expense increased 20.9% during the three months ended September 30, 2021,~~2022, as compared to the prior year period, primarily due to an increase in ~~interest~~pre-incentive fee net investment income, coupled with an increase in net assets, which drives the hurdle rate.

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The base management fee, loan servicing fee, incentive fee, and their related non-contractual, unconditional, and irrevocable credits are computed quarterly, as described under “Transactions with the Adviser” in Note 4 — Related Party Transactions in the accompanying Notes to Consolidated Financial Statements and are summarized in the following table:


	Three Months Ended September 30,
	2022			2021
Average total assets subject to base management fee(A)	$	722,600		$	715,400
Multiplied by prorated annual base management fee of 2.0%	0.5		%	0.5		%
Base management fee(B)	$	3,613		$	3,577
Credits to fees from Adviser - other(B)	(1,625)			(930)
Net base management fee	$	1,988		$	2,647

Loan servicing fee(B)	$	1,916		$	1,794
Credits to base management fee - loan servicing fee(B)	(1,916)			(1,794)
Net loan servicing fee	$	—		$	—

Incentive fee – income-based	$	2,437		$	1,757
Incentive fee – capital gains-based(C)	(1,669)			5,594
Total incentive fee(B)	$	768		$	7,351
Credits to fees from Adviser - other(B)	—			—
Net total incentive fee	$	768		$	7,351

(B)Reflected as a line item on our Consolidated Statements of Operations.

(C)The capital gains-based incentive fees are recorded in accordance with GAAP and do not necessarily reflect amounts contractually due under the terms of the Advisory Agreement.

Interest and dividend expense ~~which was partially offset by~~decreased 0.7% during the three months ended September 30, 2022, as compared to the prior year period, due to a decrease in dividend expense, partially offset by an increase in interest expense. Dividend expense decreased by $0.8 million as a result of the 6.375% Series E Cumulative Term Preferred Stock (“Series E Term Preferred Stock”) redemption August 2021. Interest expense increased by ~~$2.0~~$0.8 million primarily due to the issuance of ~~the 2026 Notes in March 2021 and~~ the 2028 Notes in August 2021, which was partially offset by lower interest expense related to the Credit Facility. The weighted-average balance outstanding on the Credit Facility during the three months ended September 30, ~~2021~~2022, was ~~$24.4~~$11.7 million as compared to ~~$106.1~~$24.4 million in the prior year period.

The effective interest rate on the Credit Facility, excluding the impact of deferred financing costs, during the three months ended September 30, ~~2021~~2022 was ~~10.0%~~20.1%, as compared to ~~3.6%~~10.0% in the prior year period. The increase in the effective interest rate on the Credit Facility was primarily a result of an increase in unused commitment fees on the undrawn portion of the Credit ~~Facility. Dividend expense decreased by $1.4 million~~Facility as ~~a result~~well as increased interest rates on the drawn portion of the 6.25% Series D Cumulative Term Preferred Stock (“Series D Term Preferred Stock”) and 6.375% Series E Cumulative Term Preferred Stock (“Series E Term Preferred Stock”) redemptions in March 2021 and August 2021, respectively, partially offset by the Series E ATM Program sales during the prior fiscal year.

Credit Facility.

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Realized and Unrealized Gain (Loss)

The realized gains (losses) and unrealized appreciation (depreciation) across our investments for the three months ended September 30, 2022and 2021 were as follows:

Three Months Ended September 30, 2022
Portfolio Company Realized Gain (Loss) Unrealized Appreciation (Depreciation) Reversal of Unrealized (Appreciation) Depreciation Net Gain (Loss)
Old World Christmas, Inc. $ — $ 6,460 $ — $ 6,460
Nth Degree Investment Group, LLC — 5,055 — 5,055
Nocturne Villas Rentals, Inc. — 2,670 — 2,670
Brunswick Bowling Products, Inc. — 1,592 — 1,592
Horizon Facilities Service, Inc. 2,218 (1,776) — 442
ImageWorks Display and Marketing Group, Inc. — (1,222) — (1,222)
The Maids International, LLC — (1,424) — (1,424)
Galaxy Technologies Holding, Inc. — (1,549) — (1,549)
Counsel Press, Inc. — (2,119) — (2,119)
PSI Molded Plastics, Inc. — (2,976) — (2,976)
B+T Group Acquisition, Inc — (3,033) — (3,033)
Edge Adhesives Holdings, Inc. — (5,144) — (5,144)
J.R. Hobbs Co. - Atlanta, LLC — (6,410) — (6,410)
Other, net (<$1.0 million, net) 84 (752) (15) (683)
Total $ 2,302 $ (10,628) $ (15) $ (8,341)

Three Months Ended September 30, 2021
Portfolio Company Realized Gain (Loss) Unrealized Appreciation (Depreciation) Reversal of Unrealized (Appreciation) Depreciation Net Gain (Loss)
Schylling, Inc. $ — $ 6,277 $ — $ 6,277
Bassett Creek Services, Inc. — 5,474 — 5,474
Counsel Press, Inc. — 4,903 — 4,903
Old World Christmas, Inc. — 3,986 — 3,986
B +T Group Acquisition, Inc. — 3,971 — 3,971
Educators Resources, Inc. — 3,607 — 3,607
Horizon Facilities Service, Inc. — 2,983 — 2,983
ImageWorks Display and Marketing Group, Inc. — 2,938 — 2,938
Brunswick Bowling Products, Inc. — 2,326 — 2,326
Mason West, LLC — 2,064 — 2,064
The Maids International, LLC — 1,873 — 1,873
SOG Specialty Knives and Tools, LLC — 1,796 — 1,796
Nocturne Villa Rentals, Inc. — 892 — 892
Diligent Delivery Systems — 525 — 525
J.R. Hobbs Co. - Atlanta, LLC — (2,625) (2,625)
SBS Industries Holdings, Inc. — (3,278) — (3,278)
Ginsey Home Solutions, Inc. — (3,903) — (3,903)
Galaxy Technologies Holdings, Inc. — (6,320) — (6,320)
Other, net (<$1.0 million, net) 464 15 — 479
Total $ 464 $ 27,504 $ — $ 27,968

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Net Realized Gain (Loss) on Investments

During the three months ended September 30, 2022, we recorded net realized gains on investments of $2.3 million, primarily due to a $2.2 million realized gain from the recapitalization of Horizon and realized gains related to prior period exits of certain investments. During the three months ended September 30, 2021, we recorded net realized gains on investments of $0.5 million, primarily related to previous exits of certain investments. ~~During the three months ended September 30, 2020, we recorded net realized gains on investments of $0.6 million related to previous exits of certain investments.~~

Net Realized ~~Gain (Loss)~~Loss on Other

During the three months ended September 30, 2021, we recorded a net realized loss on other of $2.0 million, ~~which primarily~~ related to unamortized deferred issuance costs written off upon the redemption of our Series E Term Preferred Stock in August 2021. During the three months ended September 30, ~~2020,~~2022, there were no realized gains or losses on other.

Net Unrealized Appreciation (Depreciation) of Investments

~~During the three months ended September 30, 2021, we recorded net~~

Net unrealized ~~appreciation~~depreciation of investments of ~~$27.5 million. The realized gains (losses) and unrealized appreciation (depreciation) across our investments~~$10.6 million for the three months ended September 30, ~~2021~~2022 was primarily due to the decreased performance of certain of our portfolio companies and decreased comparable transaction multiples used to estimate the fair value of certain of our portfolio companies. These amounts were ~~as follows:~~

   Three Months Ended September 30, 2021
Portfolio Company
   Realized
Gain
(Loss)    Unrealized
Appreciation
(Depreciation)    Reversal of
Unrealized
(Appreciation)
Depreciation    Net Gain
(Loss)
Schylling, Inc.
   $ —      $ 6,277    $ —      $ 6,277
Basset Creek Services, Inc.
   —      5,474    —      5,474
Counsel Press, Inc.
   —      4,903    —      4,903
Old World Christmas, Inc.
   —      3,986    —      3,986
B+T Group Acquisition, Inc.
   —      3,971    —      3,971
Educators Resource, Inc.
   —      3,607    —      3,607
Horizon Facilities Service, Inc.
   —      2,983    —      2,983
ImageWorks Display and Marketing Group, Inc.
   —      2,938    —      2,938
Brunswick Bowling Products, Inc.
   —      2,326    —      2,326
Mason West, LLC
   —      2,064    —      2,064
The Maids International, LLC
   —      1,873    —      1,873
SOG Specialty Knives and Tools, LLC
   —      1,796    —      1,796
Nocturne Villa Rentals, Inc.
   —      892    —      892
Diligent Delivery Systems
   —      525    —      525
J.R. Hobbs Co. – Atlanta, LLC
   —      (2,625 )    —      (2,625 )
SBS Industries Holdings, Inc.
   —      (3,278 )    —      (3,278 )
Ginsey Home Solutions, Inc.
   —      (3,903 )    —      (3,903 )
Galaxy Technologies Holdings, Inc.
   —      (6,320 )    —      (6,320 )
Other, net (<$1.0 million, net)
   464    15    —      479








Total
   $ 464    $ 27,504    $ —      $ 27,968

~~The primary drivers~~partially offset by increased performance of ~~net~~certain of our other portfolio companies, driven partially by the reversal of the impact of COVID-19 on certain of our portfolio companies and the markets in which they operate. In part, the performance of certain of our portfolio companies was driven by the impact COVID-19, and its variants, has had or is expected to have on our portfolio companies and the markets in which they operate, including government restrictions on the portfolio companies’ ability to operate under historical conditions, current and future shutdowns and reopening restrictions, operating challenges, including but not limited to, labor shortages, supply chain delays, increased material costs and demand for their products, and general economic outlook, or the reversal of such impact towards pre-COVID-19 levels.

Net unrealized appreciation of investments of $27.5 million for the three months ended September 30, 2021 ~~were~~was primarily due to the increased performance of certain portfolio companies and an increase in comparable transaction multiples used to estimate the fair value of certain of our portfolio companies, which were partially offset by a decline in performance of certain other portfolio companies. In part, the performance of certain of our portfolio companies was driven by the impact COVID-19, and its variants, has had or is expected to have on our portfolio companies and the markets in which they operate, including government restrictions on the portfolio companies’ ability to operate under historical conditions, current and future shutdowns and reopening restrictions, as well as demand for their products and general economic ~~outlook, or the reversal of such impact towards~~ ~~pre-COVID-19~~ ~~levels.~~

outlook.

During the three months ended September 30, 2020, we recorded net unrealized appreciation of investments of $1.6 million. The realized gains (losses) and unrealized appreciation (depreciation) across our investments for the three months ended September 30, 2020~~were as follows:~~

   Three Months Ended September 30, 2020
Portfolio Company
   Realized
Gain
(Loss)    Unrealized
Appreciation
(Depreciation)    Reversal of
Unrealized
(Appreciation)
Depreciation    Net Gain
(Loss)
Pioneer Square Brands, Inc.
   $ —      $ 11,867    $ —      $ 11,867
Ginsey Home Solutions, Inc.
   —      2,414    —      2,414
Frontier Packaging, Inc.
   —      2,150    —      2,150
SOG Specialty Knives & Tools, LLC
   —      1,982    —      1,982
ImageWorks Display and Marketing Group, Inc.
   —      1,451    —      1,451
Counsel Press, Inc.
   —      (1,239 )    —      (1,239 )
Edge Adhesives Holdings, Inc.
   —      (1,269 )    —      (1,269 )
D.P.M.S., Inc.
   —      (2,253 )    —      (2,253 )
PSI Molded Plastics, Inc.
   —      (4,592 )    —      (4,592 )
Brunswick Bowling Products, Inc.
   —      (8,606 )    —      (8,606 )
Other, net (<$1.0 million, net)
   621    (264 )    —      357








Total
   $ 621    $ 1,641    $ —      $ 2,262

The primary driver of net unrealized appreciation of investments of $1.6 million for the three months ended September 30, 2020 was an increase in performance of certain of our portfolio companies, which was partially offset by decreased performance of certain of our other portfolio companies and a decrease in comparable multiples used to estimate the fair value of some of our portfolio companies. In part, the performance of certain of our portfolio companies was driven by the impact ~~COVID-19~~ has had or is expected to have on our portfolio companies and the markets in which they operate, including government restrictions on the portfolio companies’ ability to operate under historical conditions, current and future shutdowns and reopening restrictions, as well as demand for their products and general economic outlook.

Across our entire investment portfolio, we recorded net unrealized ~~appreciation~~depreciation of ~~$1.5 million and $26.0~~$16.1 million on our debt positions and appreciation of $5.5 million million on our equity positions, ~~respectively,~~ for the three months ended September 30, ~~2021.~~2022. As of September 30, ~~2021,~~2022, the fair value of our investment portfolio was more than the cost basis by ~~$45.3~~$34.7 million, as compared to June 30, ~~2021,~~2022, when the fair value of our investment portfolio was more than the cost basis by ~~$17.8~~$45.4 million, representing net unrealized ~~appreciation~~depreciation of ~~$27.5~~$10.6 million for the three months ended September 30, ~~2021.~~2022. Our entire portfolio had a fair value of ~~106.6%~~104.9% of cost as of September 30, ~~2021.~~

2022.

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Comparison of the Six Months Ended September 30, ~~2021~~2022 to the Six Months Ended September 30, ~~2020~~

   For the Six Months Ended September 30,
   2021    2020    $ Change    % Change
INVESTMENT INCOME

Interest income
   $ 30,290    $ 22,365    $ 7,925    35.4 %
Dividend and success fee income
   6,274    182    6,092    NM








Total investment income
   36,564    22,547    14,017    62.2








EXPENSES

Base management fee
   6,897    5,845    1,052    18.0
Loan servicing fee
   3,662    3,456    206    6.0
Incentive fee
   19,599    (302 )    19,901    NM
Administration fee
   970    836    134    16.0
Interest and dividend expense
   7,688    6,232    1,456    23.4
Amortization of deferred financing costs and discounts
   908    840    68    8.1
Other
   2,822    2,360    462    19.6








Expenses before credits from Adviser
   42,546    19,267    23,279    120.8
Credits to fees from Adviser
   (5,843 )    (5,261 )    (582 )    11.1








Total expenses, net of credits to fees
   36,703    14,006    22,697    162.1








NET INVESTMENT (LOSS) INCOME
   (139 )    8,541    (8,680 )    (101.6 )








REALIZED AND UNREALIZED GAIN (LOSS)

Net realized gain on investments
   2,393    1,374    1,019    74.2
Net realized loss on other
   (1,998 )    —      (1,998 )    NM
Net unrealized appreciation (depreciation) of investments
   75,018    (3,246 )    78,264    NM








Net realized and unrealized gain (loss)
   75,413    (1,872 )    77,285    NM








NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
   $ 75,274    $ 6,669    $ 68,605    NM








BASIC AND DILUTED PER COMMON SHARE:

Net investment (loss) income
   $ —      $ 0.26    $ (0.26 )    (100.0 )








Net increase in net assets resulting from operations
   $ 2.27    $ 0.20    $ 2.07    NM %

2021

For the Six Months Ended September 30,
2022 2021 $ Change % Change
INVESTMENT INCOME
Interest income $ 26,978 $ 30,290 $ (3,312) (10.9) %
Dividend and success fee income 13,114 6,274 6,840 109.0 %
Total investment income 40,092 36,564 3,528 9.6 %
EXPENSES
Base management fee 7,176 6,897 279 4.0 %
Loan servicing fee 3,674 3,662 12 0.3 %
Incentive fee 3,777 19,599 (15,822) NM
Administration fee 942 970 (28) (2.9) %
Interest and dividend expense 7,641 7,688 (47) (0.6) %
Amortization of deferred financing costs and discounts 898 908 (10) (1.1) %
Other 3,246 2,822 424 15.0 %
Expenses before credits from Adviser 27,354 42,546 (15,192) (35.7) %
Credits to fees from Adviser (6,049) (5,843) (206) 3.5 %
Total expenses, net of credits to fees 21,305 36,703 (15,398) (42.0) %
NET INVESTMENT INCOME (LOSS) 18,787 (139) 18,926 NM
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain on investments 6,754 2,393 4,361 182.2 %
Net realized loss on other — (1,998) 1,998 (100.0) %
Net unrealized (depreciation) appreciation of investments (10,431) 75,018 (85,449) (113.9) %
Net realized and unrealized (loss) gain (3,677) 75,413 (79,090) (104.9) %
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 15,110 $ 75,274 $ (60,164) (79.9) %
WEIGHTED-AVERAGE SHARES OF COMMON STOCK OUTSTANDING
Basic and diluted 33,212,000 33,205,023 6,977 NM
BASIC AND DILUTED PER COMMON SHARE:
Net investment income (loss) $ 0.57 $ — $ 0.57 NM
Net increase in net assets resulting from operations $ 0.45 $ 2.27 $ (1.82) (80.2) %

NM = Not Meaningful

Investment Income

Total investment income increased ~~62.2%~~9.6% for the six months ended September 30, ~~2021,~~2022, as compared to the prior year ~~period. The increase was~~period, due to ~~increases~~an increase in ~~both interest income and~~ dividend and success fee income, partially offset by a decrease in interest income.

Interest income from our investments in debt securities ~~increased 35.4%~~decreased 10.9% for the six months ended September 30, ~~2021,~~2022, as compared to the prior year period. During the six months ended September 30, 2021, we received $3.9 million of past due interest from certain loans that were previously on non-accrual ~~status.~~ status compared to no such collection in the current year period. Generally, the level of interest income from investments is directly related to the principal balance of our interest-bearing investment portfolio outstanding during the period multiplied by the weighted-average yield.

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The weighted-average principal balance of our interest-bearing investment portfolio during the six months ended September 30, ~~2021~~ 2022was ~~$445.7~~$449.1 million, compared to ~~$373.5~~$445.7 million for the prior year period. This increase was primarily due to ~~$79.5~~the $91.2 million of follow-on debt investments in existing portfolio companies, the origination of $60.7 million of new debt investments, and $11.7 million of loans returned to accrual status, ~~the origination of $54.2~~partially offset by $104.5 million of ~~new~~pay-offs, restructurings, or write-offs of debt investments and ~~$48.5 million~~ ~~of follow-on debt~~ ~~investments to existing portfolio companies, partially offset by~~ $64.2 million of loans placed on non-accrual status ~~and $43.3 million of~~ ~~pay-offs, restructurings,~~ ~~or write-offs of debt investments~~ after March 31, ~~2020,~~2021, and their respective impact on the weighted-average principal balance when considering timing of new investments, pay-offs, restructurings, write-offs, and accrual status changes, as applicable.

The weighted-average yield on our interest-bearing investments, excluding cash and cash equivalents and receipts recorded as dividend and success fee ~~and other~~ income, was ~~13.6%~~12.0% for the six months ended September 30, ~~2021,~~2022, compared to ~~11.9%~~13.6% for the prior year period. The weighted-average yield may vary from period to period, based on the current stated interest rate on interest-bearing ~~investments.~~

investments, coupled with any collection of past due interest during the period. During the six months ended September 30, 2021, we collected $3.9 million in past due interest from portfolio companies that were previously on non-accrual status, including $2.8 million from B+T, $1.0 million from SOG Specialty Knives and Tools, LLC, $0.1 million from PSI, and $0.1 million from Horizon. We had no collections of past due interest during six months ended September 30, 2022.

As of September 30, 2022, our loans to J.R. Hobbs and The Mountain were on non-accrual status, with an aggregate debt cost basis of $63.4 million. As of September 30, 2021, our loans to J.R. Hobbs, The Mountain and ~~SBS~~SFEG were on non-accrual status, with an aggregate debt cost basis of $81.3 million. ~~As of September 30, 2020, our loans to B+T, Horizon, The Mountain, PSI Molded, and SOG were on~~ ~~non-accrual~~ ~~status, with an aggregate debt cost basis of $94.9 million.~~

Dividend and success fee income for the six months ended September 30, ~~2021~~2022 increased ~~by $6.1~~$6.8 million from the prior year period. During the six months ended September 30, 2022, dividend and success fee income consisted of $6.7 million of success fee income and $6.4 million of dividend income. During the six months ended September 30, 2021, dividend and success fee income consisted primarily of $4.7 million of success fee income and $1.6 million of dividend income. ~~During the six months ended September 30, 2020, dividend and success fee income consisted of $0.2 million of success fee income.~~

Expenses

Total expenses, net of any non-contractual, unconditional, and irrevocable credits from the Adviser, ~~increased 162.1%~~decreased 42.0% during the six months ended September 30, ~~2021,~~2022, as compared to the prior year period, primarily due to ~~an increase~~a decrease in the incentive ~~fee, as well as increases in interest and dividend expense, and the base management fee, partially offset by an increase in credits to fees from the Adviser.~~

fee.

In accordance with GAAP, we recorded a ~~$15.9~~$0.7 million reversal of previously accrued capital gains-based incentive fee during the six months ended September 30, ~~2021,~~2022, compared to a ~~$0.3~~$15.9 million ~~reversal of the~~ capital gains-based incentive fee recorded during the six months ended September 30, ~~2020.~~ 2021. The capital gains-based incentive fee was a result of the net impact of net realized gains ~~(losses)~~ and net unrealized appreciation (depreciation) on investments during the respective periods. The income-based incentive fee increased by ~~$3.7~~$0.8 million for the six months ended September 30, ~~2021,~~2022, as compared to the prior year period, ~~as the~~primarily due to an increase in pre-incentive fee net investment income, ~~more than offset the~~coupled with an increase in net assets, which drives the hurdle rate.

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The base management fee, loan servicing fee, incentive fee, and their related non-contractual, unconditional, and irrevocable credits are computed quarterly, as described under “Transactions with the Adviser” in Note 4 — Related Party Transactions in the accompanying Notes to Consolidated Financial Statements and are summarized in the following table:

   Six Months Ended September 30,
   2021 2020
Average total assets subject to base management fee^(A)
   $ 689,700 $ 584,500
Multiplied by prorated annual base management fee of 2.0%
   1.0 % 1.0 %


Base management fee^(B)
   6,897 5,845
Credits to fees from Adviser - other^(B)
   (2,181 ) (1,805 )


Net base management fee
   $ 4,716 $ 4,040


Loan servicing fee^(B)
   3,662 3,456
Credits to base management fee - loan servicing fee^(B)
   (3,662 ) (3,456 )


Net loan servicing fee
   $ —   $ —


Incentive fee – income-based
   $ 3,695 $ —
Incentive fee – capital gains-based^(C)
   15,904 (302 )


Total incentive fee^(B)
   $ 19,599 $ (302 )
Credits to fees from Adviser - other^(B)
   —   —


Net total incentive fee
   $ 19,599 $ (302 )

^(A)

^(B)	~~Reflected as a line item on our~~ ~~Consolidated Statement of Operations~~.

^(C)	~~The capital gains-based incentive fees are recorded in accordance with GAAP and do not necessarily reflect amounts contractually due under the terms of the Advisory Agreement.~~


	Six Months Ended September 30,
	2022			2021
Average total assets subject to base management fee(A)	$	717,600		$	689,700
Multiplied by prorated annual base management fee of 2.0%	1.0		%	1.0		%
Base management fee(B)	$	7,176		$	6,897
Credits to fees from Adviser - other(B)	(2,375)			(2,181)
Net base management fee	$	4,801		$	4,716

Loan servicing fee(B)	$	3,674		$	3,662
Credits to base management fee - loan servicing fee(B)	(3,674)			(3,662)
Net loan servicing fee	$	—		$	—

Incentive fee – income-based	$	4,513		$	3,695
Incentive fee – capital gains-based(C)	(736)			15,904
Total incentive fee(B)	$	3,777		$	19,599
Credits to fees from Adviser - other(B)	—			—
Net total incentive fee	$	3,777		$	19,599

(B)Reflected as a line item on our Consolidated Statements of Operations.

(C)The capital gains-based incentive fees are recorded in accordance with GAAP and do not necessarily reflect amounts contractually due under the terms of the Advisory Agreement.

Interest and dividend expense ~~increased 23.4%~~decreased 0.6% during the six months ended September 30, ~~2021,~~2022, as compared to the prior year period, ~~primarily~~ due to ~~the increase~~a decrease in ~~interest~~dividend expense, partially offset by an increase in interest expense. Dividend expense decreased by $2.3 million as a ~~decrease in dividend expense.~~result of the Series E Term Preferred Stock redemption August 2021. Interest expense increased by ~~$3.4~~$2.3 million primarily due to the issuance of ~~the 2026 Notes in March 2021 and~~ the 2028 Notes in August 2021, which was partially offset by lower interest expense related to the Credit Facility. The weighted-average balance outstanding on the Credit Facility during the six months ended September 30, ~~2021~~2022, was ~~$25.4~~$5.9 million as compared to ~~$80.5~~$25.4 million in the prior year period. The effective interest rate on the Credit Facility, excluding the impact of deferred financing costs, during the six months ended September 30, ~~2021~~2022 was ~~9.6%~~35.5%, as compared to ~~4.5%~~9.6% in the prior year period. The increase in the effective interest rate on the Credit Facility was primarily a result of an increase in unused ~~commitment~~commitments fees on the undrawn portion of the Credit ~~Facility. Dividend expense decreased by $2.0 million~~Facility as ~~a result~~well as increased interest rates on the drawn portion of the 6.25% Series D Cumulative Term Preferred Stock (“Series D Term Preferred Stock”) and 6.375% Series E Cumulative Term Preferred Stock (“Series E Term Preferred Stock”) redemptions in March 2021 and August 2021, respectively, partially offset by the Series E ATM Program sales during the prior fiscal year.

Credit Facility.

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Realized and Unrealized Gain (Loss)

The realized gains (losses) and unrealized appreciation (depreciation) across our investments for the six months ended September 30, 2022and 2021 were as follows:

Six Months Ended September 30, 2022
Portfolio Company Realized Gain (Loss) Unrealized Appreciation (Depreciation) Reversal of Unrealized (Appreciation) Depreciation Net Gain (Loss)
Horizon Facilities Service, Inc. $ 2,218 $ 13,728 $ — $ 15,946
Nocturne Villa Rentals, Inc. — 8,817 — 8,817
Nth Degree Investment Group, LLC — 7,680 — 7,680
Brunswick Bowling Products, Inc. — 6,495 — 6,495
Old World Christmas, Inc. — 5,786 — 5,786
Specialized Fabrication Equipment Group, LLC — 3,584 — 3,584
Counsel Press, Inc. — 1,871 — 1,871
Utah Pacific Bridge & Steel, Ltd. — (882) — (882)
Schylling Inc. — (1,345) — (1,345)
Galaxy Technologies Holdings, Inc. — (1,549) — (1,549)
Mason West, LLC — (1,938) — (1,938)
ImageWorks Display and Marketing Group, Inc. — (2,354) — (2,354)
The Maids International, LLC — (2,679) — (2,679)
The Mountain, Inc. — (2,930) — (2,930)
PSI Molded Plastics, Inc. — (2,976) — (2,976)
Ginsey Home Solutions, Inc. — (3,263) — (3,263)
Edge Adhesives Holdings, Inc. — (5,247) — (5,247)
Bassett Creek Services, Inc. 4,728 — (12,250) (7,522)
B+T Group Acquisition, Inc. — (9,267) — (9,267)
J.R. Hobbs Co. – Atlanta, LLC — (11,568) — (11,568)
Other, net (<$1.0 million, net) (192) (128) (16) (336)
Total $ 6,754 $ 1,835 $ (12,266) $ (3,677)

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Six Months Ended September 30, 2021
Portfolio Company Realized Gain (Loss) Unrealized Appreciation (Depreciation) Reversal of Unrealized (Appreciation) Depreciation Net Gain (Loss)
B+T Group Acquisition, Inc. $ — $ 15,268 $ — $ 15,268
Old World Christmas, Inc. — 12,636 12,636
Schylling, Inc. — 10,522 — 10,522
Educators Resource, Inc. — 8,811 — 8,811
Bassett Creek Services, Inc. — 8,487 — 8,487
SOG Specialty Knives and Tools, LLC — 7,580 — 7,580
Counsel Press, Inc. — 7,045 — 7,045
Horizon Facilities Service, Inc. — 6,417 — 6,417
ImageWorks Display and Marketing Group, Inc. — 5,302 — 5,302
PSI Molded Plastics, Inc. — 3,633 — 3,633
Brunswick Bowling Products, Inc. — 3,498 — 3,498
Galaxy Tool Holding Corporation — 1,404 — 1,404
Mason West, LLC — 1,172 — 1,172
Head Country, Inc. 3,627 — (2,469) 1,158
The Maids International, LLC — 1,054 — 1,054
Channel Technologies Group, LLC (1,841) — 1,841 —
Pioneer Square Brands, Inc. — (1,244) — (1,244)
J.R. Hobbs Co. - Atlanta, LLC — (2,511) — (2,511)
SBS Industries Holdings, Inc. — (3,167) — (3,167)
Ginsey Homes Solutions, Inc. — (4,305) — (4,305)
Galaxy Technologies Holdings, Inc. — (6,320) — (6,320)
Other, net (<$1.0 million, net) 607 312 52 971
Total $ 2,393 $ 75,594 $ (576) $ 77,411

Net Realized Gain (Loss) on Investments

During the six months ended September 30, 2022, we recorded net realized gains on investments of $6.8 million, primarily due to a $4.7 million realized gain from the exit of Bassett Creek, a $2.2 million realized gain from the recapitalization of Horizon and realized gains related to prior period exits of certain investments. During the six months ended September 30, 2021, we recorded net realized gains on investments of $2.4 million, primarily related to a $3.6 million realized gain from the exit of Head Country, Inc. ("Head Country") and $0.5 million of realized gains related to previous exits of certain investments, partially offset by a $1.8 million realized loss from the dissolution of ~~CTG. During the six months ended September 30, 2020, we recorded net realized gains on investments of $1.4 million related to previous exits of certain investments.~~

Channel Technologies Group, LLC ("CTG").

Net Realized Gain ~~(Loss)~~Loss on Other

During the six months ended September 30, 2021, we recorded a net realized loss on other of $2.0 million ~~which primarily~~ related to unamortized deferred issuance costs written off upon the redemption of our Series E Term Preferred Stock in August 2021. During the six months ended September 30, ~~2020,~~2022, there were no realized gains or losses on other.

Net Unrealized Appreciation (Depreciation) of Investments

~~During the six months ended September 30, 2021, we recorded net~~

Net unrealized ~~appreciation~~depreciation of investments of ~~$75.0 million. The realized gains (losses) and unrealized appreciation (depreciation) across our investments~~$10.4 million for the six months ended September 30, ~~2021 were as follows:~~

   Six Months Ended September 30, 2021
Portfolio Company
   Realized
Gain
(Loss)    Unrealized
Appreciation
(Depreciation)    Reversal of
Unrealized
(Appreciation)
Depreciation    Net Gain
(Loss)
B+T Group Acquisition, Inc.
   $ —      $ 15,268    $ —      $ 15,268
Old World Christmas, Inc.
   —      12,636    —      12,636
Schylling, Inc.
   —      10,522    —      10,522
Educators Resource, Inc.
   —      8,811    —      8,811
Basset Creek Services, Inc.
   —      8,487    —      8,487
SOG Specialty Knives and Tools, LLC
   —      7,580    —      7,580
Counsel Press, Inc.
   —      7,045    —      7,045
Horizon Facilities Service, Inc.
   —      6,417    —      6,417
ImageWorks Display and Marketing Group, Inc.
   —      5,302    —      5,302
PSI Molded Plastics, Inc.
   —      3,633    —      3,633
Brunswick Bowling Products, Inc.
   —      3,498    —      3,498
Galaxy Tool Holding Corporation
   —      1,404    —      1,404
Mason West, LLC
   —      1,172    —      1,172
Head Country, Inc.
   3,627    —      (2,469 )    1,158
The Maids International, LLC
   —      1,054    —      1,054
Channel Technologies Group, LLC
   (1,841 )    —      1,841    —
Pioneer Square Brands, Inc.
   —      (1,244 )    —      (1,244 )
J.R. Hobbs Co. – Atlanta, LLC
   —      (2,511 )    —      (2,511 )
SBS Industries Holdings, Inc.
   —      (3,167 )    —      (3,167 )
Ginsey Home Solutions, Inc.
   —      (4,305 )    —      (4,305 )
Galaxy Technologies Holdings, Inc.
   —      (6,320 )    —      (6,320 )
Other, net (<$1.0 million, net)
   607    312    52    971








Total
   $ 2,393    $ 75,594    $ (576 )    $ 77,411

~~The primary drivers~~2022 was primarily due to the reversal of unrealized appreciation of our investment in Bassett Creek upon its exit, partially offset by net unrealized appreciation across our portfolio. The net appreciation was driven primarily by increased performance of certain of our portfolio companies, driven partially by the reversal of the impact of COVID-19 on certain of our portfolio companies and the markets in which they operate. These amounts were partially offset by decreased performance of certain of our other portfolio companies and decreased comparable transaction multiples used to estimate the fair value of certain of our portfolio companies. These amounts were partially offset by increased performance of certain of our other portfolio companies, driven partially by the reversal of the impact of COVID-19 on certain of our portfolio companies and the markets in which they operate. In part, the performance of certain of our portfolio companies was driven by the impact COVID-19, and its variants, has had or is expected to have on our portfolio companies and the markets in which they

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operate, including government restrictions on the portfolio companies’ ability to operate under historical conditions, current and future shutdowns and reopening restrictions, operating challenges, including but not limited to, labor shortages, supply chain delays, increased material costs and demand for their products, and general economic outlook, or the reversal of such impact towards pre-COVID-19 levels.

Net unrealized appreciation of investments of $75.0 million for the six months ended September 30, 2021 ~~were~~was primarily due to the increased performance of certain portfolio companies, the reversal of previously recorded unrealized depreciation of our investment in CTG upon its dissolution, and an increase in comparable transaction multiples used to estimate the fair value of certain of our portfolio companies, which were partially offset by the reversal of previously recorded unrealized appreciation of our investment in Head Country and a decline in performance of certain other portfolio companies. In part, the performance of certain of our portfolio companies was driven by the impact COVID-19, and its variants, has had or is expected to have on our portfolio companies and the markets in which they operate, including government restrictions on the portfolio companies’ ability to operate under historical conditions, current and future shutdowns and reopening restrictions, as well as demand for their products and general economic ~~outlook, or the reversal of such impact towards~~ ~~pre-COVID-19~~ ~~levels.~~

outlook.

During the six months ended September 30, 2020, we recorded net unrealized depreciation of investments of $3.2 million. The realized gains (losses) and unrealized appreciation (depreciation) across our investments for the six months ended September 30, 2020 were as follows:

   Six Months Ended September 30, 2020
Portfolio Company
   Realized
Gain
(Loss)    Unrealized
Appreciation
(Depreciation)    Reversal of
Unrealized
(Appreciation)
Depreciation    Net Gain
(Loss)
Pioneer Square Brands, Inc.
   $ —      $ 16,215    $ —      $ 16,215
Ginsey Home Solutions, Inc.
   —      3,670    —      3,670
Frontier Packaging, Inc.
   —      2,534    —      2,534
SOG Specialty Knives and Tools, LLC
   —      2,159    —      2,159
Galaxy Tool Holding Corporation
   —      1,798    —      1,798
Head Country, Inc.
   —      846    —      846
Cambridge Sound Management, Inc.
   740    —      —      740
B+T Group Acquisition, Inc.
   —      (588 )    —      (588 )
Horizon Facilities Services, Inc.
   —      (1,415 )    —      (1,415 )
Bassett Creek Services, Inc.
   —      (1,828 )    —      (1,828 )
Counsel Press, Inc.
   —      (1,980 )    —      (1,980 )
D.P.M.S., Inc.
   —      (2,637 )    —      (2,637 )
Nth Degree, Inc.
   113    (3,649 )    —      (3,536 )
PSI Molded Plastics, Inc.
   —      (4,215 )    —      (4,215 )
Brunswick Bowling Products, Inc.
   —      (13,222 )    —      (13,222 )
Other, net (<$1.0 million, net)
   521    (934 )    —      (413 )








Total
   $ 1,374    $ (3,246 )    $ —      $ (1,872 )

The primary drivers of net unrealized depreciation of $3.2 million for the six months ended September 30, 2020 were a decline in performance of certain portfolio companies, and a decrease in comparable multiples used to estimate the fair value of certain of our portfolio companies, which were partially offset by increased performance of certain of our other portfolio companies. In part, the performance of certain of our portfolio companies was driven by the impact ~~COVID-19~~ has had or is expected to have on our portfolio companies and the markets in which they operate, including government restrictions on the portfolio companies’ ability to operate under historical conditions, current and future shutdowns and reopening restrictions, as well as demand for their products and general economic outlook.

Across our entire investment portfolio, we recorded net unrealized ~~appreciation~~depreciation of ~~$7.4 million and $67.6~~$23.3 million on our debt positions and appreciation of $12.9 million on our equity positions, ~~respectively,~~ for the six months ended September 30, ~~2021.~~2022. As of September 30, ~~2021,~~2022, the fair value of our investment portfolio was more than the cost basis by ~~$45.3~~$34.7 million, as compared to March 31, ~~2021,~~2022, when the fair value of our investment portfolio was ~~less~~more than the cost basis by ~~$29.7~~$45.1 million, representing net unrealized ~~appreciation~~depreciation of ~~$75.0~~$10.4 million for the six months ended September 30, ~~2021.~~2022. Our entire portfolio had a fair value of ~~106.6%~~104.9% of cost as of September 30, ~~2021.~~

2022.

LIQUIDITY AND CAPITAL RESOURCES

Operating Activities

Net cash used in operating activities for the six months ended September 30, ~~2021~~2022 was ~~$6.3~~$9.4 million, as compared to net cash used in operating activities of ~~$59.4~~$6.3 million for the six months ended September 30, ~~2020.~~2021. This change was primarily due to ~~a decrease~~an increase in ~~purchases~~purchase of investments, partially offset by an increase in principal repayments of investments and net proceeds from the sale of ~~investments, as well as a decrease in tax payments for our deemed distributions declared in prior fiscal years.~~

investments.

Purchases of investments were $102.0 million during the six months ended September 30, 2022, compared to $47.6 million during the six months ended September 30, ~~2021, compared to $57.4 million during the six months ended September 30, 2020.~~2021. Principal repayments and net proceeds from the sale of investments totaled $69.7 million during the six months ended September 30, 2022, compared to $22.2 million during the six months ended September 30, ~~2021, compared to $2.1 million during the three months ended~~2021.

As of September 30, ~~2020.~~

2022, we had equity investments in and/or loans to 26 portfolio companies with an aggregate cost basis of $703.2 million. As of September 30, 2021, we had equity investments in and/or loans to 27 portfolio companies with an aggregate cost basis of $691.2 million. ~~As of September 30, 2020, we had equity investments in or loans to 29 portfolio companies with an aggregate cost basis of $655.9 million.~~

The following table summarizes our total portfolio investment activity during the six months ended September 30, ~~2021~~2022 and ~~2020:~~

   Six Months Ended September 30,
   2021    2020
Beginning investment portfolio, at fair value
   $ 633,829    $ 565,924
New investments
   34,200    46,902
Disbursements to existing portfolio companies
   13,350    10,480
Unscheduled principal repayments
   (14,060 )    (8,000 )
Net proceeds from sales of investments
   (7,648 )    (3,107 )
Net realized gain on investments
   1,805    —
Net unrealized appreciation (depreciation) of investments
   75,594    (3,246 )
Reversal of net unrealized appreciation of investments
   (576 )    —
Amortization of premiums, discounts, and acquisition costs, net
   9    9




Ending investment portfolio, at fair value
   $ 736,503    $ 608,962

2021:


	Six Months Ended September 30,
	2022		2021
Beginning investment portfolio, at fair value	$	714,396	$	633,829
New investments	60,050		34,200
Disbursements to existing portfolio companies	41,996		13,350
Unscheduled principal repayments (A)	(53,096)		(14,060)
Net proceeds from sale and recapitalization of investments	(21,690)		(7,648)
Net realized gain on investments	6,701		1,805
Net unrealized appreciation (depreciation) of investments	1,835		75,594
Reversal of net unrealized appreciation of investments	(12,266)		(576)
Amortization of premiums, discounts, and acquisition costs, net	9		9
Ending investment portfolio, at fair value	$	737,935	$	736,503

(A)The six months ended September 30, 2022 includes $5.1 million of non-cash principal repayments related to the August 2022 refinancing at Ginsey.

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The following table summarizes the contractual principal repayment and maturity of our investment portfolio by fiscal year, assuming no voluntary prepayments, as of September 30, ~~2021:~~

2022:

Financing Activities

Net cash used in financing activities for the six months ended September 30, 2022 was $2.1 million, which consisted primarily of $18.9 million in distributions to common stockholders, partially offset by $16.6 million of net borrowings under the Credit Facility.

Net cash provided by financing activities for the six months ended September 30, 2021 was $6.3 million, which consisted primarily of $134.6 million in gross proceeds from the issuance of our 2028 Notes, partially offset by the redemption of our Series E Term Preferred Stock of $94.4 million, $16.9 million in distributions to common stockholders, $13.5 million of net repayments under the Credit Facility, and $3.4 million of deferred financing and offering costs.

Net cash provided by financing activities for the six months ended September 30, 2020 was $57.9 million, which consisted primarily of $67.4 million of net borrowings under the Credit Facility, $6.3 million of gross proceeds from the issuance of mandatorily redeemable preferred stock under the Series E ATM Program, and $1.7 million of gross proceeds from the issuance of common stock under the Common Stock ATM Program, partially offset by $16.9 million in distributions to common stockholders.

Distributions and Dividends to Stockholders

Common Stock Distributions

To qualify to be taxed as a RIC and thus avoid corporate level federal income tax on the income we distribute to our stockholders, we are required, among other requirements, to distribute to our stockholders on an annual basis at least 90% of our taxable ordinary income plus the excess of our net short-term capital gains over net long-term capital losses (“Investment Company Taxable Income”), determined without regard to the dividends paid deduction. Additionally, the Credit Facility generally restricts the amount of distributions to stockholders that we can pay out to be no greater than the sum of certain amounts, including our net investment income, plus net capital gains, plus amounts elected by the Company to be considered as having been paid during the prior fiscal year in accordance with Section 855(a) of the Code. In accordance with these requirements, our Board of Directors declared, and we paid, monthly cash distributions of ~~$0.07~~$0.075 per common share for each of the six months from April through September ~~2021,~~2022, and a supplemental ~~distributions~~distribution of ~~$0.06 and $0.03~~$0.12 per common share in June ~~and September 2021, respectively.~~2022. See also “Recent ~~Developments—~~Developments - Distributions and Dividends” for a discussion of cash distributions to common stockholders declared by our Board of Directors in October ~~2021.~~

2022.

For the fiscal year ended March 31, ~~2021,~~2022, Investment Company Taxable Income exceeded distributions declared and paid, and, in accordance with Section 855(a) of the Code, we elected to treat ~~$16.1~~$13.9 million of the first distributions paid subsequent to fiscal year-end as having been paid in the prior year. In addition, for the fiscal year ended March 31, ~~2021,~~2022, net capital gains exceeded distributions declared and paid, and, in accordance with Section 855(a) of the Code, we elected to treat ~~$8.5~~$15.7 million of the first distributions paid subsequent to fiscal year-end as having been paid in the prior year. For the year ended March 31, ~~2021,~~2022, we recorded ~~$2.0~~$2.8 million of net adjustments for estimated permanent book-tax differences to reflect tax character, which decreased Capital in excess of par value and ~~Accumulated net realized gain in excess of distributions and increased~~ Underdistributed ~~net investment income. For the six months ended September 30, 2021, we recorded $2.7 million of net adjustments for estimated permanent~~ ~~book-tax differences~~ ~~to reflect tax character, which decreased Capital in excess of par value and Overdistributed~~ net investment income and increased Accumulated net realized gain in excess of distributions.

For the six months ended September 30, 2022, we recorded $1.3 million of net adjustments for estimated permanent book-tax differences to reflect tax character, which decreased Capital in excess of par value and increased Overdistributed net investment income and Accumulated net realized gain in excess of distributions.

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Preferred Stock Dividends

Our Board of Directors declared and we paid monthly cash dividends of $0.1328125 per share to holders of our Series E Term Preferred Stock per month from April through July 2021 and $0.07968750 per share of our Series E Term Preferred Stock for the period from August 1, 2021 up to, but excluding, the redemption date of August 19, 2021. In accordance with GAAP, we treat these monthly dividends as an operating expense.

Dividend Reinvestment Plan

Our common stockholders who hold their shares through our transfer agent, Computershare, Inc. (“Computershare”), have the option to participate in a dividend reinvestment plan offered by Computershare, as the plan agent. This is an “opt in” dividend reinvestment plan, meaning that common stockholders may elect to have their cash distributions automatically reinvested in additional shares of our common stock. Common stockholders who do not make such election will receive their distributions in cash. Any distributions reinvested under the plan will be taxable to a common stockholder to the same extent, and with the same character, as if the common stockholder had received the distribution in cash. The common stockholder generally will have an adjusted basis in the additional common shares purchased through the plan equal to the dollar amount that would have been received if the U.S. stockholder had received the dividend or distribution in cash. The additional common shares will have a new holding period commencing on the day following the date on which the shares are credited to the common stockholder’s account. Computershare purchases shares in the open market in connection with the obligations under the plan. The Computershare dividend reinvestment plan is not open to holders of our preferred stock.

Equity

Registration Statement

On September 3, 2021, we filed a registration statement on Form N-2 (File No. 333-259302), which the SEC declared effective on October 15, 2021. The registration statement permits us to issue, through one or more transactions, up to an aggregate of $300.0 million in securities, consisting of common stock, preferred stock, subscription rights, debt securities, and warrants to purchase common stock, preferred stock, or debt securities, including through concurrent, separate offerings of such securities.As of the date of this report, we ~~had~~have the ability to issue up to ~~$300.0~~$299.5 million of the securities registered under the registration statement.

Common Stock

In December 2019, we entered into equity distribution agreements with Wedbush Securities, Inc., Cantor Fitzgerald & Co., and Ladenburg Thalmann & Co., Inc., under which we have the ability to issue and sell shares of our common stock, from time to time, through such sales agents, up to an aggregate offering price of $35.0 million. On August 11, 2021, we terminated the equity distribution agreements with each of such sales agents. We did not sell any shares of our common stock under this ATM program during the year ended March 31, 2022.

In August 2022, we entered into equity distribution agreements with Oppenheimer & Co. and Virtu Americas LLC (each a ~~“Common Stock ATM Sales~~“Sales Agent”), under which we have the ability to issue and sell shares of our common stock, from time to time, through the ~~Common Stock ATM~~ Sales Agents, up to an aggregate offering price of ~~$35.0~~$50.0 million in ~~the~~ what is commonly referred to as an “at-the-market” program (“Common Stock ATM ~~Program. On August 11, 2021,~~Program”). As of September 30, 2022, we ~~terminated the equity distribution agreements with each~~had remaining capacity to sell up to an additional $49.5 million of ~~the Common Stock ATM Sales Agents.~~

~~We did not sell any shares of our~~ common stock under the Common Stock ATM ~~Program during~~program.

During the three and six months ended September 30, ~~2021. During the year ended March 31, 2021,~~2022, we sold ~~155,560~~29,640 shares of our common stock under the Common Stock ATM Program at a weighted-average gross price of ~~$11.39~~$15.75 per share and raised approximately ~~$1.8~~$0.5 million of gross proceeds. The weighted-average net price per share, after deducting commissions and offering costs borne by us, was ~~$11.17~~$15.59 and resulted in total net proceeds of approximately ~~$1.7~~$0.5 million. These sales were above our then current estimated NAV per share.

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We anticipate issuing equity securities to obtain additional capital in the future. However, we cannot determine the timing or terms of any future equity issuances or whether we will be able to issue equity on terms favorable to us, or at all. When our common stock is trading at a price below NAV per share, the 1940 Act places regulatory constraints on our ability to obtain additional capital by issuing common stock. Generally, the 1940 Act provides that we may not issue and sell our common stock at a price below our NAV per common share, other than to our then-existing common stockholders pursuant to a rights offering, without first obtaining approval from our stockholders and our independent directors and meeting other stated requirements. On September 30, ~~2021,~~2022, the closing market price of our common stock was ~~$13.87~~$12.10 per share, representing a ~~4.5% premium~~9.1% discount to our NAV per share of ~~$13.27~~$13.31 as of September 30, ~~2021.~~

2022.

Term Preferred Stock

In August 2018, we completed a public offering of 2,990,000 shares of our Series E Term Preferred Stock at a public offering price of $25.00 per share. Gross proceeds totaled $74.8 million and net proceeds, after deducting underwriting discounts and offering costs borne by us, were $72.1 million. Total underwriting discounts and offering costs related to this offering were $2.7 million, which have been recorded as discounts to the liquidation value on our accompanying Consolidated Statements of Assets and Liabilities and were amortized over the period ending August 31, 2025, the mandatory redemption date, prior to redemption in August 2021. Prior to redemption in August 2021, the Series E Term Preferred Stock provided for a fixed dividend equal to 6.375% per year, payable monthly.

In May 2020, we entered into sales agreements with Wedbush Securities, Inc. and Virtu Americas LLC (each a “Series E ATM Sales Agent”), under which we ~~have~~had the ability to issue and sell shares of our Series E Term Preferred Stock, from time to time, through the Series E ATM Sales Agents, up to $50.0 million aggregate liquidation preference in the Series E ATM Program. On August 10, 2021, we terminated our sales agreements with each of the Series E ATM Sales Agents.

We did not sell any shares of our Series E Term Preferred Stock under the Series E ATM Program during the ~~six months ended September 30, 2021. During the~~ year ended March 31, 2021, we sold 784,853 shares of our Series E Term Preferred Stock under the Series E ATM Program with an aggregate liquidation preference of $19.6 million. The weighted-average gross price per share net of discounts was $24.56 and resulted in gross proceeds of approximately $19.3 million. After deducting commissions and offering costs borne by us, net proceeds totaled approximately $19.1 million.

2022.

In March 2021, we used a portion of the proceeds from the issuance of our 2026 Notes, to voluntarily redeem all outstanding shares of our Series D Term Preferred Stock, which had a liquidation preference of $25.00 per share. In connection with the voluntary redemption, we incurred a loss on extinguishment of debt of $0.8 million, which was recorded in Realized loss on other in our Consolidated Statements of Operations and which was primarily comprised of unamortized deferred issuance costs at the time of redemption. Prior to redemption in March 2021, the Series D Term Preferred Stock provided for a fixed dividend equal to 6.25% per year, payable monthly, and would have otherwise been subject to mandatory redemption on September 30, 2023.

In August 2021, we used a portion of the proceeds from the issuance of our 2028 Notes, to voluntarily redeem all outstanding shares of our Series E Term Preferred Stock, which had a liquidation preference of $25.00 per share. In connection with the voluntary redemption, we incurred a loss on extinguishment of debt of $2.0 million, which was recorded in Realized loss on other in our accompanying Consolidated Statements of Operations and which was primarily comprised of unamortized deferred issuance costs at the time of redemption.

Revolving Line of Credit

On March 8, 2021, we, through our wholly-owned subsidiary, Gladstone Business Investment, LLC (“Business Investment”), entered into Amendment No. 6 to the ~~Fifth Amended and Restated~~ Credit ~~Agreement, originally entered into on April 30, 2013,~~Facility with KeyBank National Association (“KeyBank”) as administrative agent, lead arranger, managing agent and lender, the Adviser, as servicer, and certain other lenders party thereto. The revolving period was extended to February 29, 2024, and if not renewed or extended by such date, all principal and interest will be due and payable on February 28, 2026 (two years after the revolving period end date). As of September 30, ~~2021,~~2022, the Credit Facility provided ~~two~~ a one-year extension ~~options~~option that may be exercised on or before ~~the first and second anniversary of~~ March 8, ~~2021,~~2023, subject to approval by all lenders. ~~Additionally, as part of this amendment, the~~ ~~COVID-19~~ ~~Relief Period (described below) was extended to September 30, 2021. We incurred fees of approximately $1.0 million in connection with this amendment.~~

On August 10, 2020, we, through Business Investment, entered into Amendment No. 5 to the Credit Facility. Among other things, Amendment No. 5 amended the Credit Facility to (i) add LIBOR replacement language; (ii) implement a 0.5% LIBOR floor; (iii) reduce the facility size from $200.0 million to $180.0 million, which may be expanded to $300.0 million through additional commitments; and (iv) provide certain other changes to existing terms and covenants. ~~In addition, Amendment No. 5 provided for certain temporary changes during the~~ ~~COVID-19~~ ~~Relief Period (August 10, 2020 until March 31, 2021, subject to extension under certain conditions) including: (i) amending the definition~~

Table of “Effective Advance Rate,” provided that during such period the overall effective advance rate does not exceed 55%; and (ii) removing or changing certain “Excess Concentration Limits” (as defined in the Credit Facility).

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At September 30, 2022, we had $16.6 million borrowings outstanding on the Credit Facility and as of the date of this report, we had $29.2 million outstanding under the Credit Facility.

Interest is payable monthly during the term of the Credit Facility. Available borrowings are subject to various constraints and applicable advance rates, which are generally based on the size, characteristics, and quality of the collateral pledged by Business Investment. The Credit Facility also requires that any interest and principal payments on pledged loans be remitted directly by the borrower into a lockbox account with KeyBank. KeyBank is also the trustee of the account and generally remits the collected funds to us once a month.

Among other things, the Credit Facility contains covenants that require Business Investment to maintain its status as a separate legal entity, prohibit certain significant corporate transactions (such as mergers, consolidations, liquidations or dissolutions) and restrict certain material changes to our credit and collection policies without the lenders’ consent. The Credit Facility also generally seeks to restrict distributions to stockholders to the sum of (i) our net investment income, (ii) net capital gains, and (iii) amounts deemed by the Company to be considered as having been paid during the prior fiscal year in accordance with Section 855(a) of the Code. Loans eligible to be pledged as collateral are subject to certain limitations, including, among other things, restrictions on geographic concentrations, industry concentrations, loan size, payment frequency and status, average life, portfolio company leverage, and lien property. The Credit Facility also requires Business Investment to comply with other financial and operational covenants, which obligate Business Investment to, among other things, maintain certain financial ratios, including asset and interest coverage and a minimum number of obligors required in the borrowing base. Additionally, the Credit Facility contains a performance guaranty that requires the Company to maintain (i) a minimum net worth (defined in the Credit Facility to include our mandatory redeemable term preferred stock) of the greater of $210.0 million or $210.0 million plus 50% of all equity and subordinated debt raised, minus 50% of any equity or subordinated debt redeemed or retired after November 16, 2016, which equated to ~~$286.3~~$286.5 million as of September 30, ~~2021,~~2022, (ii) asset coverage with respect to senior securities representing indebtedness of at least 150% (or such percentage as may be set forth in Section 18 of the 1940 Act, as modified by Section 61 of the 1940 Act), and (iii) our status as a BDC under the 1940 Act and as a RIC under the Code. As of September 30, ~~2021,~~2022, and as defined in the performance guaranty of the Credit Facility, we had a net worth of ~~$695.2~~$698.6 million, asset coverage on our senior securities representing indebtedness of ~~254.5%~~254.1%, calculated in ~~accordance~~compliance with the requirements of Sections 18 and 61 of the 1940 Act, and an active status as a BDC and RIC. As of September 30, ~~2021,~~2022, we had availability, after adjustments for various constraints based on collateral quality, of ~~$171.1~~$163.4 million under the Credit Facility and were in compliance with all covenants under the Credit Facility.

As of the date of this report, we had $29.2 million outstanding under the Credit Facility.

Notes Payable

5.00% Notes due 2026

In March 2021, we completed a public offering of the 2026 Notes with an aggregate principal amount of $127.9 million, which resulted in net proceeds of approximately $123.8 million after deducting underwriting discounts, commissions and offering costs borne by us. The 2026 Notes are traded under the ticker symbol “GAINN” on Nasdaq. The 2026 Notes will mature on May 1, 2026 and may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after May 1, 2023. The 2026 Notes bear interest at a rate of 5.00% per year (which equates to $6.4 million per year), payable quarterly in arrears.

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The 2026 Notes are recorded at the aggregate principal amount, less underwriting discounts, commissions, and offering costs, on our accompanyingConsolidated Statements of Assets and Liabilities. Total underwriting discounts, commissions, and offering costs related to this offering were $4.1 million, which have been recorded as discounts to the aggregate principal amount on our accompanyingConsolidated Statements of Assets and Liabilities and are being amortized over the period ending May 1, 2026, the maturity date.

4.875% Notes due 2028

In August 2021, we completed a public offering of the 2028 Notes with an aggregate principal amount of $134.6 million, which resulted in net proceeds of approximately $131.3 million after deducting underwriting discounts, commissions and offering costs borne by us. The 2028 Notes are traded under the ticker symbol “GAINZ” on Nasdaq. The 2028 Notes will mature on November 1, 2028 and may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after November 1, 2023. The 2028 Notes bear interest at a rate of 4.875% per year (which equates to $6.6 million per year), payable quarterly in arrears.

The 2028 Notes are recorded at the aggregate principal amount, less underwriting discounts, commissions, and offering costs, on our accompanyingConsolidated Statements of Assets and Liabilities. Total underwriting discounts, commissions, and offering costs related to this offering were $3.3 million, which have been recorded as discounts to the aggregate principal amount on our accompanyingConsolidated Statements of Assets and Liabilities and are being amortized over the period ending November 1, 2028, the maturity date.

OFF-BALANCE SHEET ARRANGEMENTS

Unlike PIK income, we generally do not recognize success fees as income until payment has been received. Due to the contingent nature of success fees, there are no guarantees that we will be able to collect any or all of these success fees or know the timing of any such collections. As a result, as of September 30, ~~2021~~2022 and March 31, ~~2021,~~2022, we had unrecognized, contractual off-balance sheet success fee receivables of ~~$49.0~~$50.7 million and ~~$46.2~~$50.5 million (or approximately ~~$1.48~~$1.53 and ~~$1.39~~$1.52 per common share), respectively, on our debt investments. Consistent with GAAP, we have not recognized success fee receivables and related income in our accompanying Consolidated Financial Statements until earned.

CONTRACTUAL OBLIGATIONS

We have line of credit and delayed draw term ~~loan~~debt commitments to certain of our portfolio companies that have not been fully drawn. Since these line of credit and delayed draw term ~~loan~~debt commitments have expiration dates and we expect many will never be fully drawn, the total line of credit and delayed draw term ~~loan~~debt commitment amounts do not necessarily represent future cash requirements. We estimate the fair value of the combined unused line of credit and delayed draw term ~~loan~~debt commitments as of September 30, ~~2021~~2022 to be immaterial.

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As of September 30, ~~2021,~~2022, we have ~~also~~ extended a guaranty on behalf of one of our portfolio companies, Country Club Enterprises, LLC (“CCE”), whereby we have guaranteed $1.0 million of CCE’s obligations. As of September 30, ~~2021,~~2022, we have not been required to make payments on this or any previous ~~guaranties,~~guaranty, and we consider the credit risks to be remote and the fair value of this guaranty to be immaterial.

The following table shows our contractual obligations as of September 30, ~~2021,~~2022, at ~~cost/liquidation preference:~~

   Payments Due by Period
Contractual Obligations^(A)
   Total    Less than 1 Year    1-3 Years    3-5 Years    More than 5 Years
Credit Facility^(B)
   $ 8,900    $ —      $ —      $ 8,900    $ —
Notes payable
   262,488    —      —      127,938    134,550
Secured borrowing
   5,096    —      —      5,096    —
Interest payments on obligations^(C)
   85,957    15,355    30,716    26,221    13,665










Total
   $ 362,441    $ 15,355    $ 30,716    $ 168,155    $ 148,215

^(A)	~~Excludes unused line of credit and delayed draw term loan commitments and guaranties to our portfolio companies in the aggregate principal amount of $5.3 million.~~

^(B)	~~Principal balance of borrowings outstanding under the Credit Facility, based on the maturity date following the current contractual revolving period end date.~~

^(C)	Includes interest payments due on the Credit Facility, 2026 Notes, 2028 Notes, and secured borrowing, as applicable. The amount of interest payments calculated for purposes of this table was based upon rates and outstanding balances as of September 30, 2021.

cost:

Payments Due by Period
Contractual Obligations(A)
Total Less than
1 Year 1-3 Years 3-5 Years More than
5 Years
Credit Facility(B)
$ 16,600 $ — $ — $ 16,600 $ —
Notes payable 262,488 — — 127,938 134,550
Interest payments on obligations(C)
74,827 15,621 31,249 17,953 10,004
Total $ 353,915 $ 15,621 $ 31,249 $ 162,491 $ 144,554

(A)Excludes unused line of credit and delayed draw term debt commitments and guaranties to our portfolio companies in the aggregate principal amount of $9.2 million.

(B)Principal balance of borrowings outstanding under the Credit Facility, based on the maturity date following the current contractual revolving period end date.

(C)Includes interest payments due on the Credit Facility, 2026 Notes, and 2028 Notes, as applicable. The amount of interest payments calculated for purposes of this table was based upon rates and outstanding balances as of September 30, 2022.

Critical Accounting ~~Policies~~

Estimates

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported consolidated amounts of assets and liabilities, including disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the period reported. Actual results could differ materially from those estimates under different assumptions or conditions. We have identified our investment valuation policy ~~(which~~(which has been approved by our Board of Directors) as our most critical accounting policy, which is described in Note 2 — Summary of Significant Accounting Policies in the accompanying Notes to Consolidated Financial Statements included elsewhere in this Quarterly Report. Additionally, refer to Note 3 — Investments in the accompanying Notes to Consolidated Financial Statements included elsewhere in this Quarterly Report for additional information regarding fair value measurements and our application of Financial Accounting Standards Board Accounting Standards Codification Topic 820, “Fair Value Measurements and Disclosures.” We have also identified our revenue recognition policy as a critical accounting policy, which is described in Note 2 — Summary of Significant Accounting Policies in the accompanying Notes to Consolidated Financial Statements included elsewhere in this Quarterly Report.

Investment Valuation

Credit Monitoring and Risk Rating

The Adviser monitors a wide variety of key credit statistics that provide information regarding our portfolio companies to help us assess credit quality and portfolio performance and, in some instances, are used as inputs in our valuation techniques. Generally, we, through the Adviser, participate in periodic board meetings of our portfolio companies in which we hold board seats and also require them to provide annual audited and monthly unaudited financial statements. Using these statements or comparable information and board discussions, the Adviser calculates and evaluates certain credit statistics.

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The Adviser risk rates all of our investments in debt securities. The Adviser does not risk rate equity securities. For loans that have been rated by a SEC-registered Nationally Recognized Statistical Rating Organization (“NRSRO”), the Adviser generally uses the average of two corporate level NRSRO’s risk ratings for such security. For all other debt securities, the Adviser uses a proprietary risk rating system. While the Adviser seeks to mirror the NRSRO systems, we cannot provide any assurance that the Adviser’s risk rating system will provide the same risk rating as an NRSRO for these securities. The Adviser’s risk rating system is used to estimate the probability of default on debt securities and the expected loss, if there is a default. The Adviser’s risk rating system uses a scale of 0 to >10, with >10 being the lowest probability of default. It is the Adviser’s understanding that most debt securities of Lower Middle Market companies do not exceed the grade of BBB on an NRSRO scale, so there would be no debt securities in the Lower Middle Market that would meet the definition of AAA, AA or A. Therefore, the Adviser’s scale begins with the designation >10 as the best risk rating which may be equivalent to a BBB from an NRSRO; however, no assurance can be given that a >10 on the Adviser’s scale is equal to a BBB or Baa2 on an NRSRO scale. The Adviser’s risk rating system covers both qualitative and quantitative aspects of the business and the securities we hold.

The following table reflects risk ratings for all loans in our portfolio as of September 30, ~~2021~~2022 and March 31, ~~2021:~~

Rating
   September 30, 2021    March 31, 2021
Highest
   9.0    9.0
Average
   6.6    6.2
Weighted-average
   7.0    6.6
Lowest
   4.0    4.0

2022:

Rating September 30, 2022 March 31, 2022
Highest 9.0 9.0
Average 6.4 6.5
Weighted-average 7.3 7.0
Lowest 3.0 3.0

Tax Status

We intend to continue to maintain our qualification as a RIC under Subchapter M of the Code for U.S. federal income tax purposes. As a RIC, we generally are not subject to U.S. federal income tax on the portion of our taxable income and gains distributed to our stockholders. To maintain our qualification as a RIC, we must maintain our status as a BDC and meet certain source-of-income and asset diversification requirements. In addition, to qualify to be taxed as a RIC, we must distribute to stockholders at least 90% of our Investment Company Taxable Income, determined without regard to the dividends paid deduction. Our policy generally is to make distributions to our stockholders in an amount up to 100% of Investment Company Taxable Income. We may retain some or all of our net long-term capital gains, if any, and designate them as deemed distributions, or distribute such gains to stockholders in cash. See “— Liquidity and Capital Resources — Distributions and Dividends to Stockholders.”

In an effort to limit federal excise taxes, we have to distribute to stockholders, during each calendar year, an amount close to the sum of: (1) 98% of our ordinary income for the calendar year, (2) 98.2% of our net capital gains (both long-term and short-term), if any, for the one-year period ending on October 31 of the calendar year, and (3) any income realized, but not distributed, in the preceding period (to the extent that income tax was not imposed on such amounts), less certain reductions, as applicable. Under the RIC Modernization Act, we are permitted to carryforward any capital losses that we may incur for an unlimited period, and such capital loss carryforwards will retain their character as either short-term or long-term capital losses. Our capital loss carryforward balance was $0 as of both September 30, ~~2021~~2022and March 31, ~~2021.~~

2022.

Recent Accounting Pronouncements

Refer to Note 2 — Summary of Significant Accounting Policies in the accompanying Notes to Consolidated Financial Statements included elsewhere in this Quarterly Report for a description of recent accounting pronouncements.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. The prices of securities held by us may decline in response to certain events, including those directly involving the companies whose securities are owned by us; conditions affecting the general economy, including COVID-19 or other health emergencies; overall market changes; local, regional or global political, social or economic instability; and interest rate fluctuations.

The primary risk we believe we are exposed to is interest rate risk. Because we borrow money to make investments, our net investment income is dependent upon the difference between the rates at which we borrow funds, such as under the Credit Facility (which is variable) and our unsecured notes (which are fixed), and the rates at which we invest those funds. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income. We use a combination of debt and equity capital to finance our investing activities. We may use interest rate risk management techniques to limit our exposure to interest rate fluctuations. Such techniques may include various interest rate hedging activities to the extent permitted by the 1940 Act.

We target to have approximately 90% of the loans in our portfolio at variable rates or variable rates with a floor mechanism, and up to approximately 10% at fixed rates. As of September 30, ~~2021~~2022and March 31, ~~2021,~~2022, all of our variable-rate loans have rates associated with the current 30-day LIBOR rate and our total debt investment portfolio consisted of the following breakdown based on the principal balance:

Rates:
   September 30, 2021 March 31, 2021
Variable rates with a floor
   99.9 % 97.7 %
Fixed rates
   0.1 2.3


Total
   100.0 % 100.0 %


Rates:	September 30, 2022		March 31, 2022
Variable rates with a floor	100.0	%	100.0	%
Fixed rates	—		—	%
Total	100.0	%	100.0	%

There have been no material changes in the quantitative and qualitative market risk disclosures during the six months ended September 30, ~~2021~~2022 from those included in our Annual Report.

ITEM 4. CONTROLS AND PROCEDURES.

a)Evaluation of Disclosure Controls and Procedures

As of September 30, ~~2021~~2022 (the end of the period covered by this report), we, including our chief executive officer and chief financial officer, evaluated the effectiveness, design and operation of our disclosure controls and procedures. Based on that evaluation, our management, including the chief executive officer and chief financial officer, concluded that our disclosure controls and procedures were effective at a reasonable assurance level in timely alerting management, including the chief executive officer and chief financial officer, of material information about us required to be included in periodic SEC filings. However, in evaluation of the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

b)Changes in Internal Control over Financial Reporting

There were no changes in internal controls for the three months ended September 30, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we may become involved in various investigations, claims and legal proceedings that arise in the ordinary course of our business. Furthermore, third parties may try to seek to impose liability on us in connection with the activities of our portfolio companies. While we do not expect that the resolution of these matters, if they arise, would materially affect our business, financial condition, results of operations or cash flows, resolution will be subject to various uncertainties and could result in the expenditure of significant financial and managerial resources. Further, we are not named as a party to any proceeding that involves a claim for damages that exceeds 10% of our consolidated current assets.

ITEM 1A. RISK FACTORS.

Our business is subject to certain risks and events that, if they occur, could adversely affect our financial condition and results of operations and the trading price of our securities. For a discussion of these risks, please refer to the section captioned “Item 1A. Risk Factors” in Part I of our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2021,~~2022, as filed with the SEC on May 11, ~~2021.~~2022. The risks described in our Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Not applicable.

~~Issuer Purchases of Equity Securities~~

The following table provides information with respect to the purchases made by us of the Series E Term Preferred Stock during the second quarter of our fiscal year 2022. We elected to voluntarily redeem the entirety of the then issued and outstanding Series E Term Preferred Stock, pursuant to their terms, on August 19, 2021. On November 1, 2021, we filed a Certificate of Elimination of the Series E Term Preferred Stock with the Secretary of the State of Delaware, thereby removing the Certificate of Designation of the Series E Term Preferred Stock from our Amended and Restated Certificate of Incorporation.

~~We do not have any existing publicly announced repurchase plans or programs with respect to any class of our equity securities.~~

Period
   (a)
Total Number
of Shares of
Series E
Term
Preferred
Stock
Purchased    (b)
Average Price
Paid per Share
of Series E
Term Preferred
Stock    (c)
Total Number of
Shares of Series E
Term Preferred
Stock Purchased
as Part of Publicly
Announced Plans
or Programs    (d)
Maximum Number
of Shares of Series
E Term Preferred
Stock that May Yet
Be Purchased
Under the Plans or
Programs
July 1 through 31, 2021
   —      —      —      —
August 1 through 31, 2021
   3,774,853    $ 25.00    —      —
September 1 through 30, 2021
   —      —      —      —








Total
   3,774,853    $ 25.00    —      —

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

Not applicable.

ITEM 6. EXHIBITS

See the exhibit index.

~~EXHIBIT INDEX~~

Table of Contents


Exhibit			Description
3.1
~~3.1a~~		Amended and Restated Certificate of Incorporation, incorporated by reference to Exhibit A.2 to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-2 (File No. 333-123699), filed May 13, 2005.
3.2
~~3.1.b~~		~~Certificate of Designation of 6.375% Series E Cumulative Term Preferred Stock Due 2025, incorporated by reference to Exhibit 3.1 to the Current Report on Form~~ ~~8-K~~ ~~(File No.~~ ~~814-00704),~~ ~~filed August~~ ~~16, 2018.~~

~~3.1.c~~	Certificate of Increase of Shares Designated as 6.375% Series E Cumulative Term Preferred Stock due 2025 of Gladstone Investment Corporation incorporated by reference to Exhibit 3.1 to the Current Report on Form ~~8-K~~ ~~(File No.~~ ~~814-00704),~~ ~~filed May~~ ~~21, 2020~~.

~~3.2~~	Second Amended and Restated Bylaws, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K ~~(File~~(File No. 814-00704), filed May 15, ~~2020~~2020..
4.1
~~3.3~~		Certificate of Elimination of 6.375% Series E Cumulative Term Preferred Stock Due 2025*

~~4.1~~	Specimen Stock Certificate, incorporated by reference to Exhibit d to Pre-Effective Amendment No. 3 to the Registration Statement on Form N-2 (File No. 333-123699), filed June 21, ~~2005~~2005..
4.2
~~4.2~~		~~Specimen 6.375% Series E Cumulative Term Preferred Stock Due 2025 Stock Certificate incorporated by reference to Exhibit 4.1 to the Current Report on Form~~ ~~8-K~~ ~~(File No.~~ ~~814-00704),~~ ~~filed August~~ ~~16, 2018~~.

~~4.3~~	Indenture, dated as of May 22, 2020, between Gladstone Investment Corporation and UMB Bank, National Association, as trustee incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 814-00704), filed May 22, ~~2020~~2020..
4.3
~~4.4~~		Second Supplemental Indenture between Gladstone Investment Corporation and UMB Bank, National Association, dated as of March 2, 2021, incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 814-00704), filed March 2, 2021.
4.4
~~4.5~~		Third Supplemental Indenture between Gladstone Investment Corporation and UMB Bank, National Association, dated as of August 18, 2021, incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 814-00704), filed August 18, 2021.
31.1*
31.1*		Certification of Chief Executive Officer pursuant to section 302 of The Sarbanes-Oxley Act of 2002.
31.2*
31.2*		Certification of Chief Financial Officer and Treasurer pursuant to section 302 of The Sarbanes-Oxley Act of 2002.
32.1**
~~32.1†~~		Certification of Chief Executive Officer pursuant to section 906 of The Sarbanes-Oxley Act of 2002.
32.2**
~~32.2†~~		Certification of Chief Financial Officer and Treasurer pursuant to section 906 of The Sarbanes-Oxley Act of 2002.
101.INS***			XBRL Instance Document
101.SCH***			XBRL Taxonomy Extension Schema Document
101.CAL***			XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB***			XBRL Taxonomy Extension Label Linkbase Document
101.PRE***			XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF***			XBRL Definition Linkbase
104			Cover Page Interactive Data File (formatted in iXBRL and contained in Exhibit 101)

______________________

*
*						Filed herewith
**						Furnished herewith
***						Attached as Exhibit 101 to this Quarterly Report on Form 10-Q are the following materials, formatted in Inline eXtensible Business Reporting Language (iXBRL): (i) the Consolidated Statements of Assets and Liabilities as of September 30, 2022, and March 31, 2022, (ii) the Consolidated Statements of Operations for the three and six months ended September 30, 2022 and 2021, (iii) Consolidated Statements of Changes in Net Assets for the three and six months ended September 30, 2022 and 2021, (iv) Consolidated Statements of Cash Flows for the six months ended September 30, 2022 and 2021, (v) Consolidated Schedules of Investments as of September 30, 2022 and March 31, 2022, (vi) the Notes to Consolidated Financial Statements

†	~~Furnished herewith~~

All other exhibits for which provision is made in the applicable regulations of the Securities and Exchange Commission are not required under the related instruction or are inapplicable and therefore have been omitted.

Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


GLADSTONE INVESTMENT CORPORATION

~~GLADSTONE INVESTMENT CORPORATION~~By:		/s/ Rachael Easton

~~By:~~Rachael Easton			~~/s/ Julia Ryan~~
				~~Julia Ryan~~
	Chief Financial Officer and Treasurer
				(principal financial and accounting officer)

Date: November ~~2, 2021~~

1, 2022


	September 30, 2021			March 31, 2021
ASSETS
Investments at fair value
Non-Control/Non-Affiliate investments (Cost of $350,516 and $297,400, respectively)	$	383,339		$	298,222
Affiliate investments (Cost of $340,703 and $341,651, respectively)		353,164			307,977
Control investments (Cost of $0 and $24,512, respectively)		—			27,630
Cash and cash equivalents		2,184			2,062
Restricted cash and cash equivalents		238			336
Interest receivable		2,651			3,369
Due from administrative agent		1,820			1,164
Deferred financing costs, net		1,164			1,359
Other assets, net		1,372			1,612

TOTAL ASSETS	$	745,932		$	643,731

LIABILITIES
Borrowings:
Line of credit at fair value (Cost of $8,900 and $22,400, respectively)	$	8,900		$	22,400
Notes payable, net		255,626			123,883
Secured borrowing		5,096			5,096

Total borrowings		269,622			151,379
Mandatorily redeemable preferred stock, $0.001 par value per share, $25.00 liquidation preference per share; 5,990,000 shares authorized; 0 and 3,774,853 shares issued and outstanding, respectively, net		—			92,209
Accounts payable and accrued expenses		1,475			563
Interest payable		1,901			591
Fees due to Adviser^(A)		31,399			15,664
Fee due to Administrator^(A)		571			577
Other liabilities		263			384

TOTAL LIABILITIES	$	305,231		$	261,367

Commitments and contingencies^(B)
NET ASSETS	$	440,701		$	382,364

ANALYSIS OF NET ASSETS
Common stock, $0.001 par value per share, 100,000,000 shares authorized, 33,205,023 shares issued and outstanding	$	33		$	33
Capital in excess of par value		398,083			400,796
Cumulative net unrealized appreciation (depreciation) of investments		45,284			(29,734	)
(Overdistributed) underdistributed net investment income		(10,098	)		2,592
Accumulated net realized gain in excess of distributions		7,399			8,677

Total distributable earnings		42,585			(18,465	)

TOTAL NET ASSETS	$	440,701		$	382,364

NET ASSET VALUE PER SHARE	$	13.27		$	11.52


	2021			2020
NET ASSETS, MARCH 31	$	382,364		$	369,031
OPERATIONS
Net investment (loss) income		(2,304	)		4,173
Net realized gain on investments		1,929			753
Net unrealized appreciation (depreciation) of investments		47,514			(4,887	)

Net increase in net assets from operations		47,139			39

DISTRIBUTIONS^(A)
Distributions to common stockholders from net investment income ($0.20 and $0.28 per share, respectively)		(6,593	)		(9,272	)
Distributions to common stockholders from net realized gains ($0.07 and $0.02 per share, respectively)		(2,372	)		(666	)

Net decrease in net assets from distributions		(8,965	)		(9,938	)

CAPITAL ACTIVITY
Issuance of common stock		—			1,772
Discounts, commissions, and offering costs for issuance of common stock		—			(35	)

Net increase in net assets from capital activity		—			1,737

NET INCREASE (DECREASE) IN NET ASSETS		38,174			(8,162	)

NET ASSETS, JUNE 30	$	420,538		$	360,869

OPERATIONS
Net investment income		2,165			4,368
Net realized gain on investments		464			621
Net realized loss on other		(1,998	)		—
Net unrealized appreciation of investments		27,504			1,641

Net increase in net assets from operations		28,135			6,630

DISTRIBUTIONS^(A)
Distributions to common stockholders from net investment income ($0.16 and $0.20 per share, respectively)		(5,490	)		(6,553	)
Distributions to common stockholders from net realized gains ($0.08 and $0.01 per share, respectively)		(2,482	)		(420	)

Net decrease in net assets from distributions		(7,972	)		(6,973	)

NET INCREASE (DECREASE) IN NET ASSETS		20,163			(343	)

NET ASSETS, SEPTEMBER 30	$	440,701		$	360,526


Company and Investment^(A)(B)(D)(E)	Principal/Shares/ Units^(F)(J)		Cost		Fair Value
NON-CONTROL/NON-AFFILIATE INVESTMENTS^(N) – 87.1%
Secured First Lien Debt – 45.0%
Diversified/Conglomerate Manufacturing – 1.0%
Phoenix Door Systems, Inc. – Line of Credit, $100 available (L+7.0%, 9.0% Cash (0.3% Unused Fee), Due 3/2022)^(K)	$	1,350	$	1,350	$	1,330
Phoenix Door Systems, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 9/2024)^(K)		3,200		3,200		3,152

				4,550		4,482
Diversified/Conglomerate Services – 26.8%
Bassett Creek Services, Inc. – Term Debt (L+10.0%, 12.0% Cash, Due 4/2023)^(L)		37,500		37,500		37,500
Counsel Press, Inc. – Term Debt (L+11.8%, 12.8% Cash, Due 3/2023)^(L)		21,100		21,100		21,100
Counsel Press, Inc. – Term Debt (L+13.0%, 14.0% Cash, Due 3/2023)^(L)		6,400		6,400		6,400
Horizon Facilities Services, Inc. – Term Debt (L+9.5%, 12.0% Cash, Due 6/2024)^(L)		27,700		27,700		27,700
Mason West, LLC – Term Debt (L+10.0%, 12.5% Cash, Due 7/2025)^(L)		25,250		25,250		25,250

				117,950		117,950
Healthcare, Education, and Childcare – 4.5%
Educators Resource, Inc. – Term Debt (L+10.5%, 13.0% Cash, Due 11/2023)^(L)		20,000		20,000		20,000

Home and Office Furnishings, Housewares, and Durable Consumer Products – 5.6%
Brunswick Bowling Products, Inc. – Term Debt (L+10.0%, 12.0% Cash, Due 1/2023)^(L)		17,700		17,700		17,700
Brunswick Bowling Products, Inc. – Term Debt (L+10.0%, 12.0% Cash, Due 1/2023)^(L)		6,850		6,850		6,850

				24,550		24,550
Hotels, Motels, Inns, and Gaming Total – 2.2%
Nocturne Villa Rentals, Inc. – Line of Credit, $2,200 available (L+8.0%, 10.0% Cash, Due 6/2022)^(L)		800		800		800
Nocturne Villa Rentals, Inc. – Term Debt (L+10.5%, 12.5% Cash, Due 6/2026)^(L)		8,700		8,700		8,700

				9,500		9,500
Leisure, Amusement, Motion Pictures, and Entertainment – 4.9%
Schylling, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 8/2024)^(L)		13,081		13,081		13,081
Schylling, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 8/2024)^(L)		8,500		8,500		8,500

				21,581		21,581

Total Secured First Lien Debt			$	198,131	$	198,063

Secured Second Lien Debt – 15.2%
Aerospace and Defense – 5.8%
Galaxy Technologies Holdings, Inc. – Term Debt (L+4.1%, 7.1% Cash, Due 10/2026)^(L)	$	6,500	$	6,500	$	6,500
Galaxy Technologies Holdings, Inc. – Term Debt (L+7.0%, 10.0% Cash, Due 10/2026)^(L)		18,796		18,796		18,796

				25,296		25,296
Automobile – 0.9%
Country Club Enterprises, LLC – Term Debt (L+8.0%, 10.0% Cash, Due 2/2022)^(K)		4,000		4,000		3,960
Country Club Enterprises, LLC – Guaranty ($1,000)^(T)		—		—		—

				4,000		3,960
Cargo Transport – 3.0%
Diligent Delivery Systems – Term Debt (L+9.0%, 11.0% Cash, Due 11/2022)^(K)		13,000		12,979		13,015

Home and Office Furnishings, Housewares, and Durable Consumer Products – 3.0%
Ginsey Home Solutions, Inc. – Term Debt (L+10.0%, 13.5% Cash, Due 1/2025)^(H)(L)		13,300		13,300		13,300

Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) – 2.5%
SBS Industries Holdings, Inc. – Term Debt (L+7.0%, 9.0% Cash, Due 11/2024)^(G)(K)		11,736		11,736		11,032

Total Secured Second Lien Debt			$	67,311	$	66,603


	Total Recurring Fair Value Measurements Reported in *Consolidated Statements* *of Assets and Liabilities* Valued Using Level 3 Inputs
	September 30, 2021		March 31, 2021
Non-Control/Non-Affiliate Investments
Secured first lien debt	$	198,063	$	187,587
Secured second lien debt		66,603		41,926
Preferred equity		111,774		65,943
Common equity/equivalents^(A)		6,821		2,671

Total Non-Control/Non-Affiliate Investments		383,261		298,127
Affiliate Investments
Secured first lien debt		233,350		181,101
Secured second lien debt		1,886		47,971
Preferred equity		117,157		78,905
Common equity/equivalents		771		—

Total Affiliate Investments		353,164		307,977
Control Investments
Secured first lien debt		—		—
Secured second lien debt		—		13,000
Preferred equity		—		14,630
Common equity/equivalents		—		—

Total Control Investments		—		27,630

Total investments at fair value using Level 3 inputs	$	736,425	$	633,734


	Secured First Lien Debt			Secured Second Lien Debt			Preferred Equity			Common Equity/ Equivalents			Total
Six Months ended September 30, 2020:
Fair value as of March 31, 2020	$	308,248		$	123,340		$	119,849		$	14,454		$	565,891
Total gain (loss):
Net realized gain (loss)^(A)		—			—			—			114			114
Net unrealized appreciation (depreciation)^(B)		(1,215	)		390			(248	)		(2,188	)		(3,261	)
Reversal of previously recorded (appreciation) depreciation upon realization^(B)		—			—			—			—			—
New investments, repayments and settlements^(C):
Issuances / originations		33,499			310			23,581			—			57,390
Settlements / repayments		(8,000	)		—			—			—			(8,000	)
Sales		—			—			(3,106	)		(114	)		(3,220	)
Transfers^(D)		23,964			(23,964	)		—			—			—

Fair value as of September 30, 2020	$	356,496		$	100,076		$	140,076		$	12,266		$	608,914


	September 30, 2021					March 31, 2021
Location	Fair Value		Percentage of Total Investments			Fair Value		Percentage of Total Investments
West		214,697		29.2	%		160,581		25.3	%
South		192,267		26.1			182,529		28.8
Northeast		187,621		25.5			163,938		25.9
Midwest		141,918		19.2			126,781		20.0

Total investments	$	736,503		100.0	%	$	633,829		100.0	%


		Amount
For the remaining six months ending March 31:	2022	$	30,460
For the fiscal years ending March 31:	2023		114,850
	2024		93,055
	2025		171,777
	2026		52,250
	Thereafter		52,246

	Total contractual repayments	$	514,638
	Adjustments to cost basis of debt investments		(21	)
	Investments in equity securities		176,602

	Total cost basis of investments held as of September 30, 2021:	$	691,219


		Amount
For the remaining six months ending March 31, 2023		$	87,050
For the fiscal years ending March 31:
	2024	54,268
	2025	85,834
	2026	136,369
	2027	135,295
	Thereafter	39,750
	Total contractual repayments	$	538,566
	Adjustments to cost basis of debt investments	(3)
	Investments in equity securities	164,655
	Total cost basis of investments held as of September 30, 2022:	$	703,218


	As of September 30,		As of March 31,
	2021		2021
Base management and loan servicing fee due to Adviser, net of credits	$	1,266	$	1,435
Incentive fee due to Adviser^(A)		30,080		14,163
Other due to Adviser		53		66

Total fees due to Adviser	$	31,399	$	15,664
Fee due to Administrator	$	571	$	577

Total related party fees due	$	31,970	$	16,241


	For the Three Months Ended September 30,						For the Six Months Ended September 30,
	2021			2020			2021			2020
Weighted-average borrowings outstanding	$	24,355		$	106,123		$	25,354		$	80,503
Effective interest rate^(B)		10.0	%		3.6	%		9.6	%		4.5	%
Commitment (unused) fees incurred	$	397		$	122		$	786		$	490


	Level 3 – Borrowings
	Recurring Fair Value Measurements
	Reported in *Consolidated*
	*Statements of Assets and Liabilities* Using Significant Unobservable Inputs (Level 3)
	September 30, 2021		March 31, 2021
Credit Facility	$	8,900	$	22,400


Fair Value Measurements of Borrowings Using Significant
Unobservable Inputs (Level 3) Reported in
*Consolidated Statements of Assets and Liabilities*
	Credit
	Facility
Three Months Ended September 30, 2021:
Fair value at June 30, 2021	$	41,900
Borrowings		32,900
Repayments		(65,900	)

Fair value at September 30, 2021	$	8,900

Six Months Ended September 30, 2021:
Fair value at March 31, 2021	$	22,400
Borrowings		62,700
Repayments		(76,200	)

Fair value at September 30, 2021	$	8,900


As of September 30, 2022:
Description	Ticker Symbol	Date Issued	Maturity Date(A)	Interest Rate	Notes Outstanding	Principal Amount per Note		Aggregate Principal Amount
2026 Notes	GAINN	March 2, 2021	May 1, 2026	5.00%	5,117,500	$	25.00	$	127,938
2028 Notes	GAINZ	August 18, 2021	November 1, 2028	4.875%	5,382,000	$	25.00	134,550
Notes payable, gross(B)					10,499,500			262,488
Less: Unamortized Discounts								(5,686)
Notes payable, net(C)								$	256,802


Class of Term Preferred Stock	Ticker Symbol		Date Issued		Mandatory Redemption Date		Interest Rate			Shares Outstanding		Liquidation Preference per Share		Aggregate Liquidation Preference
Series E		GAINL		August 22, 2018		August 31, 2025		6.375	%		3,774,853	$	25.00	$	94,371

Term preferred stock, gross^(A)											3,774,853	$	25.00	$	94,371
Less: Discounts															(2,162	)

Term preferred stock, net^(B)														$	92,209


Declaration Date	Record Date		Payment Date	Dividend per Share of Series E Term Preferred Stock^(A)
April 13, 2021		April 23, 2021	April 30, 2021	$	0.13281250
April 13, 2021		May 19, 2021	May 28, 2021		0.13281250
April 13, 2021		June 18, 2021	June 30, 2021		0.13281250
July 13, 2021		July 23, 2021	July 30,2021		0.13281250
July 13, 2021		August 23, 2021	August 30, 2021		0.07968750	^(B)

			Total	$	0.61093750


	Three Months Ended September 30,				Six Months Ended September 30,
	2021		2020		2021		2020
Numerator: net increase in net assets resulting from operations	$	28,135	$	6,630	$	75,274	$	6,669
Denominator: basic and diluted weighted-average common shares		33,205,023		33,205,023		33,205,023		33,148,652

Basic and diluted net increase in net assets resulting from operations per weighted-average common share	$	0.85	$	0.20	$	2.27	$	0.20


	Three Months Ended September 30, 2022
Portfolio Company	Realized Gain (Loss)		Unrealized Appreciation (Depreciation)		Reversal of Unrealized (Appreciation) Depreciation		Net Gain (Loss)
Old World Christmas, Inc.	$	—	$	6,460	$	—	$	6,460
Nth Degree Investment Group, LLC	—		5,055		—		5,055
Nocturne Villas Rentals, Inc.	—		2,670		—		2,670
Brunswick Bowling Products, Inc.	—		1,592		—		1,592
Horizon Facilities Service, Inc.	2,218		(1,776)		—		442
ImageWorks Display and Marketing Group, Inc.	—		(1,222)		—		(1,222)
The Maids International, LLC	—		(1,424)		—		(1,424)
Galaxy Technologies Holding, Inc.	—		(1,549)		—		(1,549)
Counsel Press, Inc.	—		(2,119)		—		(2,119)
PSI Molded Plastics, Inc.	—		(2,976)		—		(2,976)
B+T Group Acquisition, Inc	—		(3,033)		—		(3,033)
Edge Adhesives Holdings, Inc.	—		(5,144)		—		(5,144)
J.R. Hobbs Co. - Atlanta, LLC	—		(6,410)		—		(6,410)
Other, net (<$1.0 million, net)	84		(752)		(15)		(683)
Total	$	2,302	$	(10,628)	$	(15)	$	(8,341)


	Three Months Ended September 30, 2021
Portfolio Company	Realized Gain (Loss)		Unrealized Appreciation (Depreciation)		Reversal of Unrealized (Appreciation) Depreciation		Net Gain (Loss)
Schylling, Inc.	$	—	$	6,277	$	—	$	6,277
Bassett Creek Services, Inc.	—		5,474		—		5,474
Counsel Press, Inc.	—		4,903		—		4,903
Old World Christmas, Inc.	—		3,986		—		3,986
B +T Group Acquisition, Inc.	—		3,971		—		3,971
Educators Resources, Inc.	—		3,607		—		3,607
Horizon Facilities Service, Inc.	—		2,983		—		2,983
ImageWorks Display and Marketing Group, Inc.	—		2,938		—		2,938
Brunswick Bowling Products, Inc.	—		2,326		—		2,326
Mason West, LLC	—		2,064		—		2,064
The Maids International, LLC	—		1,873		—		1,873
SOG Specialty Knives and Tools, LLC	—		1,796		—		1,796
Nocturne Villa Rentals, Inc.	—		892		—		892
Diligent Delivery Systems	—		525		—		525
J.R. Hobbs Co. - Atlanta, LLC	—		(2,625)				(2,625)
SBS Industries Holdings, Inc.	—		(3,278)		—		(3,278)
Ginsey Home Solutions, Inc.	—		(3,903)		—		(3,903)
Galaxy Technologies Holdings, Inc.	—		(6,320)		—		(6,320)
Other, net (<$1.0 million, net)	464		15		—		479
Total	$	464	$	27,504	$	—	$	27,968


	Three Months Ended September 30, 2021
Portfolio Company	Realized Gain (Loss)		Unrealized Appreciation (Depreciation)			Reversal of Unrealized (Appreciation) Depreciation		Net Gain (Loss)
Schylling, Inc.	$	—	$	6,277		$	—	$	6,277
Basset Creek Services, Inc.		—		5,474			—		5,474
Counsel Press, Inc.		—		4,903			—		4,903
Old World Christmas, Inc.		—		3,986			—		3,986
B+T Group Acquisition, Inc.		—		3,971			—		3,971
Educators Resource, Inc.		—		3,607			—		3,607
Horizon Facilities Service, Inc.		—		2,983			—		2,983
ImageWorks Display and Marketing Group, Inc.		—		2,938			—		2,938
Brunswick Bowling Products, Inc.		—		2,326			—		2,326
Mason West, LLC		—		2,064			—		2,064
The Maids International, LLC		—		1,873			—		1,873
SOG Specialty Knives and Tools, LLC		—		1,796			—		1,796
Nocturne Villa Rentals, Inc.		—		892			—		892
Diligent Delivery Systems		—		525			—		525
J.R. Hobbs Co. – Atlanta, LLC		—		(2,625	)		—		(2,625	)
SBS Industries Holdings, Inc.		—		(3,278	)		—		(3,278	)
Ginsey Home Solutions, Inc.		—		(3,903	)		—		(3,903	)
Galaxy Technologies Holdings, Inc.		—		(6,320	)		—		(6,320	)
Other, net (<$1.0 million, net)		464		15			—		479

Total	$	464	$	27,504		$	—	$	27,968


	Three Months Ended September 30, 2020
Portfolio Company	Realized Gain (Loss)		Unrealized Appreciation (Depreciation)			Reversal of Unrealized (Appreciation) Depreciation		Net Gain (Loss)
Pioneer Square Brands, Inc.	$	—	$	11,867		$	—	$	11,867
Ginsey Home Solutions, Inc.		—		2,414			—		2,414
Frontier Packaging, Inc.		—		2,150			—		2,150
SOG Specialty Knives & Tools, LLC		—		1,982			—		1,982
ImageWorks Display and Marketing Group, Inc.		—		1,451			—		1,451
Counsel Press, Inc.		—		(1,239	)		—		(1,239	)
Edge Adhesives Holdings, Inc.		—		(1,269	)		—		(1,269	)
D.P.M.S., Inc.		—		(2,253	)		—		(2,253	)
PSI Molded Plastics, Inc.		—		(4,592	)		—		(4,592	)
Brunswick Bowling Products, Inc.		—		(8,606	)		—		(8,606	)
Other, net (<$1.0 million, net)		621		(264	)		—		357

Total	$	621	$	1,641		$	—	$	2,262


	Six Months Ended September 30, 2020
Portfolio Company	Realized Gain (Loss)		Unrealized Appreciation (Depreciation)			Reversal of Unrealized (Appreciation) Depreciation		Net Gain (Loss)
Pioneer Square Brands, Inc.	$	—	$	16,215		$	—	$	16,215
Ginsey Home Solutions, Inc.		—		3,670			—		3,670
Frontier Packaging, Inc.		—		2,534			—		2,534
SOG Specialty Knives and Tools, LLC		—		2,159			—		2,159
Galaxy Tool Holding Corporation		—		1,798			—		1,798
Head Country, Inc.		—		846			—		846
Cambridge Sound Management, Inc.		740		—			—		740
B+T Group Acquisition, Inc.		—		(588	)		—		(588	)
Horizon Facilities Services, Inc.		—		(1,415	)		—		(1,415	)
Bassett Creek Services, Inc.		—		(1,828	)		—		(1,828	)
Counsel Press, Inc.		—		(1,980	)		—		(1,980	)
D.P.M.S., Inc.		—		(2,637	)		—		(2,637	)
Nth Degree, Inc.		113		(3,649	)		—		(3,536	)
PSI Molded Plastics, Inc.		—		(4,215	)		—		(4,215	)
Brunswick Bowling Products, Inc.		—		(13,222	)		—		(13,222	)
Other, net (<$1.0 million, net)		521		(934	)		—		(413	)

Total	$	1,374	$	(3,246	)	$	—	$	(1,872	)


	Payments Due by Period
Contractual Obligations^(A)	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
Credit Facility^(B)	$	8,900	$	—	$	—	$	8,900	$	—
Notes payable		262,488		—		—		127,938		134,550
Secured borrowing		5,096		—		—		5,096		—
Interest payments on obligations^(C)		85,957		15,355		30,716		26,221		13,665

Total	$	362,441	$	15,355	$	30,716	$	168,155	$	148,215


	Payments Due by Period
Contractual Obligations(A)	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
Credit Facility(B)	$	16,600	$	—	$	—	$	16,600	$	—
Notes payable	262,488		—		—		127,938		134,550
Interest payments on obligations(C)	74,827		15,621		31,249		17,953		10,004
Total	$	353,915	$	15,621	$	31,249	$	162,491	$	144,554


Rating	September 30, 2021		March 31, 2021
Highest		9.0		9.0
Average		6.6		6.2
Weighted-average		7.0		6.6
Lowest		4.0		4.0


Period	(a) Total Number of Shares of Series E Term Preferred Stock Purchased		(b) Average Price Paid per Share of Series E Term Preferred Stock		(c) Total Number of Shares of Series E Term Preferred Stock Purchased as Part of Publicly Announced Plans or Programs		(d) Maximum Number of Shares of Series E Term Preferred Stock that May Yet Be Purchased Under the Plans or Programs
July 1 through 31, 2021		—		—		—		—
August 1 through 31, 2021		3,774,853	$	25.00		—		—
September 1 through 30, 2021		—		—		—		—

Total		3,774,853	$	25.00		—		—