Gladstone Investment Corporation Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

INVESTMENTS

INVESTMENTS

3 Months Ended

Jun. 30, 2026

Investments, Debt and Equity Securities [Abstract]

Fair Value

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

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

•Level 2 — inputs to the valuation methodology include quoted prices for similar financial instruments in active or inactive markets, and inputs that are observable for the financial instrument, either directly or indirectly, for substantially the full term of the financial instrument. Level 2 inputs are 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. Investments in funds measured using NAV as a practical expedient are not categorized within the fair value hierarchy.

As of June 30, 2026 and March 31, 2026, all of our investments were valued using Level 3 inputs within the ASC 820 fair value hierarchy, except for our investment in money market funds, which was valued using Level 1 inputs, and our investment in Gladstone Alternative Income Fund ("Gladstone Alternative"), which was valued using NAV as a practical expedient.

We transfer investments in and out of Level 1, 2 and 3 of the valuation hierarchy as of the beginning balance sheet date, based on changes in the use of observable and unobservable inputs utilized to perform the valuation for the period. There were no transfers in or out of Level 1, 2 and 3 during the three months ended June 30, 2026 and 2025.

As of June 30, 2026 and March 31, 2026, our investments, by security type, at fair value were categorized as follows within the ASC 820 fair value hierarchy:


	Fair Value Measurements

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value
As of June 30, 2026:
Secured first lien debt	$	—	$	—	$	564,631	$	564,631
Secured second lien debt	—		—		102,789		102,789
Preferred equity	—		—		429,510		429,510
Common equity/equivalents	—		—		180,145		180,145
Total	$	—	$	—	$	1,277,075	$	1,277,075
Investments measured at NAV (A)	—		—		—		4,945
Total Investments	$	—	$	—	$	1,277,075	$	1,282,020
Cash equivalents	25		—		—		25
Total Investments and Cash Equivalents as of June 30, 2026	$	25	$	—	$	1,277,075	$	1,282,045


	Fair Value Measurements

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value
As of March 31, 2026:
Secured first lien debt	$	—	$	—	$	570,602	$	570,602
Secured second lien debt	—		—		99,197		99,197
Preferred equity	—		—		426,949		426,949
Common equity/equivalents	—		—		207,495		207,495
Total	$	—	$	—	$	1,304,243	$	1,304,243
Investments measured at NAV (A)	—		—		—		5,005
Total Investments	$	—	$	—	$	1,304,243	$	1,309,248
Cash equivalents	25		—		—		25
Total Investments and Cash Equivalents as of March 31, 2026	$	25	$	—	$	1,304,243	$	1,309,273

(A)Includes our investment in Gladstone Alternative as of June 30, 2026 and March 31, 2026. Investments that are measured at fair value using NAV as a practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented elsewhere in this Quarterly Report.

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 June 30, 2026 and March 31, 2026, 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
	June 30, 2026		March 31, 2026
Non-Control/Non-Affiliate Investments
Secured first lien debt	$	368,906	$	374,285
Secured second lien debt	100,389		97,397
Preferred equity	294,724		304,782
Common equity/equivalents	180,145		207,495
Total Non-Control/Non-Affiliate Investments	944,164		983,959

Affiliate Investments
Secured first lien debt	195,221		195,704
Secured second lien debt	2,400		1,800
Preferred equity	134,786		122,167
Common equity/equivalents (A)	—		—
Total Affiliate Investments	332,407		319,671

Control Investments
Secured first lien debt	504		613
Secured second lien debt	—		—
Preferred equity	—		—
Common equity/equivalents	—		—
Total Control Investments	504		613

Total investments at fair value using Level 3 inputs	$	1,277,075	$	1,304,243

(A)Excludes our investment in Gladstone Alternative as of June 30, 2026 and March 31, 2026 with a fair value of $4.9 million and $5.0 million, respectively, which was valued using NAV as a practical expedient.

In accordance with ASC 820, the following table provides quantitative information about our investments valued using Level 3 fair value measurements as of June 30, 2026 and March 31, 2026. 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. Significant level 3 inputs were weighted by the relative fair value of the investments.

Quantitative Information about Level 3 Fair Value Measurements

Fair Value as of

Valuation
Technique/
Methodology

Unobservable
Input

Range / Weighted-Average as of

June 30, 2026

March 31, 2026

June 30, 2026

March 31, 2026

Secured first
lien debt

564,631

570,602

TEV

EBITDA multiple

3.8x – 9.0x /

6.5x

3.6x – 8.7x /

6.4x

EBITDA

$367 – $39,298 /

$11,867

$430 – $28,973 / $11,991

Revenue multiple

0.4x – 0.6x /

0.4x

0.3x – 0.6x /

0.5x

Revenue

$20,670 – $92,487 /

$72,978

$21,768 – $99,974 / $62,789

Secured second
lien debt

102,789

99,197

TEV

EBITDA multiple

5.2x – 9.2x /

7.9x

5.0x – 10.3x /

7.6x

EBITDA

$3,177 – $51,487 /

$30,610

$3,000 – $44,315 / $19,510

Preferred
equity

429,510

426,949

TEV

EBITDA multiple

3.8x – 9.0x /

6.2x

3.6x – 8.7x /

6.4x

EBITDA

$367 – $39,298 /

$18,946

$430 – $28,973 / $9,870

Revenue multiple

0.4x – 0.6x /

0.4x

0.3x – 0.6x /

0.4x

Revenue

$20,670 – $92,487 /

$92,487

$21,768 – $99,974 / $76,364

Common equity/
equivalents

180,145

207,495

TEV

EBITDA multiple

5.0x – 9.2x /

9.0x

5.0x – 10.3x /

9.0x

EBITDA

$1,647 – $51,487 /

$48,426

$1,210 – $44,315 / $32,353

Total

1,277,075

1,304,243

Fair value measurements can be sensitive to changes in one or more of the valuation inputs. Changes in discount rates, EBITDA or EBITDA multiples (or revenue or revenue multiples), each in isolation, may change the fair value of certain of our investments. Generally, an increase/(decrease) in market yields or discount rates or a (decrease)/increase in EBITDA or EBITDA multiples (or revenue or revenue multiples) may result in a (decrease)/increase 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 months ended June 30, 2026 and 2025 for all investments for which the Adviser determines fair value using unobservable (Level 3) inputs.

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 June 30, 2026:
Fair value as of March 31, 2026	$	570,602	$	99,197	$	426,949	$	207,495	$	1,304,243
Total gain (loss):
Net realized gain (loss)(A)	(9,000)		—		—		—		(9,000)
Net unrealized (depreciation) appreciation(B)	(592)		2,992		2,561		(27,350)		(22,389)
Reversal of previously recorded depreciation upon realization(B)	3,621		—		—		—		3,621
New investments, repayments and settlements(C):
Issuances / originations	—		600		—		—		600
Settlements / repayments	—		—		—		—		—
Sales	—		—		—		—		—
Transfers	—		—		—		—		—
Fair value as of June 30, 2026	$	564,631	$	102,789	$	429,510	$	180,145	$	1,277,075
Change in unrealized (depreciation) appreciation attributable to investments still held at June 30, 2026	$	(592)	$	2,992	$	2,561	$	(27,350)	$	(22,389)


	Secured First Lien Debt		Secured Second Lien Debt		Preferred Equity		Common Equity/ Equivalents		Total
Three Months Ended June 30, 2025:
Fair value as of March 31, 2025	$	514,334	$	103,580	$	302,163	$	54,268	$	974,345
Total gain (loss):
Net realized gain (loss)(A)	—		—		—		—		—
Net unrealized (depreciation) appreciation (B)	1,152		376		(3,683)		1,073		(1,082)
Reversal of previously recorded (appreciation) depreciation upon realization(B)	—		—		—		—		—
New investments, repayments and settlements(C):
Issuances / originations	45,941		—		16,901		—		62,842
Settlements / repayments	(4,370)		—		—		—		(4,370)
Sales	—		—		—		—		—
Transfers(D)	—		(10,616)		10,616		—		—
Fair value as of June 30, 2025	$	557,057	$	93,340	$	325,997	$	55,341	$	1,031,735
Change in unrealized appreciation (depreciation) attributable to investments still held at June 30, 2025	$	1,152	$	376	$	(3,683)	$	1,073	$	(1,082)

Included in net realized gain (loss) on investments on our accompanying Consolidated Statements of Operations for the respective three months ended June 30, 2026 and 2025.

(B)Included in net unrealized (depreciation) appreciation of investments on our accompanying Consolidated Statements of Operations for the respective three months ended June 30, 2026 and 2025.

(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)Transfers represent secured second lien debt of PSI Molded Plastics, Inc. ("PSI Molded") with a total cost basis of $10.6 million, which was converted to preferred equity in June 2025.

Investment Concentrations

As of June 30, 2026, our investment portfolio consisted of investments in 29 portfolio companies located in 20 states and Canada across 16 different industries with an aggregate fair value of approximately $1.3 billion. Our investments in SFEG Holdings, Inc. ("SFEG"), The E3 Company, LLC, Schylling, Inc., Brunswick Bowling Products, Inc. and Old World Christmas, Inc., represented our five largest portfolio investments at fair value and collectively comprised $550.0 million, or 42.9%, of our total investment portfolio at fair value as of June 30, 2026.

The following table summarizes our investments by security type as of June 30, 2026 and March 31, 2026:


	June 30, 2026								March 31, 2026
	Cost				Fair Value				Cost				Fair Value
Secured first lien debt	$	584,008	55.9	%	$	564,631	44.0	%	$	593,008	56.3	%	$	570,602	43.6	%
Secured second lien debt	153,440		14.7	%	102,789		8.1	%	152,840		14.5	%	99,197		7.6	%
Total debt	737,448		70.6	%	667,420		52.1	%	745,848		70.8	%	669,799		51.2	%

Preferred equity	257,403		24.7	%	429,510		33.5	%	257,403		24.5	%	426,949		32.6	%
Common equity/equivalents	49,597		4.7	%	185,090		14.4	%	49,597		4.7	%	212,500		16.2	%
Total equity/equivalents	307,000		29.4	%	614,600		47.9	%	307,000		29.2	%	639,449		48.8	%
Total investments	$	1,044,448	100.0	%	$	1,282,020	100.0	%	$	1,052,848	100.0	%	$	1,309,248	100.0	%

Investments at fair value consisted of the following industry classifications as of June 30, 2026 and March 31, 2026:


	June 30, 2026				March 31, 2026
	Fair Value		Percentage of Total Investments		Fair Value		Percentage of Total Investments
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic)	$	222,005	17.3	%	$	258,692	19.8	%
Diversified/Conglomerate Services	194,037		15.1	%	189,148		14.4	%
Home and Office Furnishings, Housewares, and Durable Consumer Products	173,346		13.5	%	166,553		12.7	%
Aerospace and Defense	169,054		13.2	%	174,542		13.4	%
Oil and Gas	123,550		9.6	%	125,605		9.6	%
Leisure, Amusement, Motion Pictures, and Entertainment	110,550		8.6	%	105,339		8.0	%
Buildings and Real Estate	64,830		5.1	%	68,987		5.3	%
Electronics	62,968		4.9	%	62,723		4.8	%
Chemicals, Plastics, and Rubber	52,499		4.1	%	49,715		3.8	%
Healthcare, Education, and Childcare	41,823		3.3	%	41,630		3.2	%
Mining, Steel, Iron and Non-Precious Metals	40,574		3.2	%	37,713		2.9	%
Telecommunications	7,459		0.6	%	7,942		0.6	%
Other < 2.0%	19,325		1.5	%	20,659		1.5	%
Total investments	$	1,282,020	100.0	%	$	1,309,248	100.0	%

Investments at fair value were included in the following geographic regions of the U.S. and Canada as of June 30, 2026 and March 31, 2026:


	June 30, 2026				March 31, 2026
Location	Fair Value		Percentage of Total Investments		Fair Value		Percentage of Total Investments
United States
South	$	616,300	48.1	%	$	649,436	49.6	%
West	224,589		17.5	%	227,294		17.3	%
Midwest	218,088		17.0	%	216,726		16.6	%
Northeast	199,303		15.5	%	193,837		14.8	%
Canada	23,740		1.9	%	21,955		1.7	%
Total investments	$	1,282,020	100.0	%	$	1,309,248	100.0	%

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

Investment Principal Repayments

The following table summarizes the contractual principal repayment and maturity of our investment portfolio by fiscal year, assuming no voluntary prepayments, as of June 30, 2026:


		Amount
For the remaining nine months ending March 31, 2027		$	40,340
For the fiscal years ending March 31:
	2028	111,442
	2029	288,690
	2030	159,506
	2031	137,470
	Thereafter	—
	Total contractual repayments	$	737,448
	Investments in equity securities	307,000
	Total cost basis of investments held as of June 30, 2026:	$	1,044,448

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 June 30, 2026 and March 31, 2026, we had gross receivables from portfolio companies of $4.3 million and $2.6 million, respectively. As of June 30, 2026 and March 31, 2026, the allowance for uncollectible receivables was $1.5 million and $1.4 million, respectively.