Quarterly report [Sections 13 or 15(d)]

INVESTMENTS

v3.25.4
INVESTMENTS
 9 Months Ended
Dec. 31, 2025
Investments, Debt and Equity Securities [Abstract]  
INVESTMENTS INVESTMENTS
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 December 31, 2025 and March 31, 2025, 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 and nine months ended December 31, 2025 and 2024, respectively.
As of December 31, 2025 and March 31, 2025, 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 December 31, 2025:
Secured first lien debt
 $ —  $ —  $ 604,516  $ 604,516 
Secured second lien debt
 —  —  90,273  90,273 
Preferred equity
 —  —  429,702  429,702 
Common equity/equivalents
 — 

—  93,226  93,226 
Total $ —  $ —  $ 1,217,717  $ 1,217,717 
Investments measured at NAV (A)
—  —  —  5,075 
Total Investments
 $ —  $ —  $ 1,217,717  $ 1,222,792 
Cash equivalents 25  —  —  25 
Total Investments and Cash Equivalents as of December 31, 2025
 $ 25  $ —  $ 1,217,717  $ 1,222,817 

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, 2025:
Secured first lien debt
 $ —  $ —  $ 514,334  $ 514,334 
Secured second lien debt
 —  —  103,580  103,580 
Preferred equity
 —  —  302,163  302,163 
Common equity/equivalents
 —  —  54,268  54,268 
Total $ —  $ —  $ 974,345  $ 974,345 
Investments measured at NAV (A)
—  —  —  4,975 
Total Investments $ —  $ —  $ 974,345  $ 979,320 
Cash equivalents 1,354  —  —  1,354 
Total Investments and Cash Equivalents as of March 31, 2025
 $ 1,354  $ —  $ 974,345  $ 980,674 
(A)Includes our investment in Gladstone Alternative as of December 31, 2025 and March 31, 2025. 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 December 31, 2025 and March 31, 2025, 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
December 31, 2025 March 31, 2025
Non-Control/Non-Affiliate Investments
Secured first lien debt $ 407,810  $ 300,751 
Secured second lien debt 90,273  92,964 
Preferred equity 297,685  200,606 
Common equity/equivalents 93,226  54,268 
Total Non-Control/Non-Affiliate Investments 888,994  648,589 
Affiliate Investments
Secured first lien debt 196,003  213,240 
Secured second lien debt —  10,616 
Preferred equity 132,017  101,557 
Common equity/equivalents (A)
—  — 
Total Affiliate Investments 328,020  325,413 
Control Investments
Secured first lien debt 703  343 
Secured second lien debt —  — 
Preferred equity —  — 
Common equity/equivalents —  — 
Total Control Investments 703  343 
Total investments at fair value using Level 3 inputs $ 1,217,717  $ 974,345 
(A)Excludes our investment in Gladstone Alternative as of December 31, 2025 and March 31, 2025 with a fair value of $5.1 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 December 31, 2025 and March 31, 2025. 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
December 31, 2025 March 31, 2025 December 31, 2025 March 31, 2025
Secured first
lien debt		 $ 604,516  $ 514,334  TEV EBITDA multiple
3.3x – 8.7x /
6.3x
3.7x – 7.9x /
6.0x
EBITDA
$490 – $24,930 /
$11,398
$1,208 – $25,038 / $12,162
Revenue multiple
0.3x – 0.6x /
0.5x
0.3x – 0.6x /
0.4x
Revenue
$22,244 – $103,885 /
$65,066
$6,690 – $102,791 / $72,303
Secured second
lien debt		 90,273  90,956  TEV EBITDA multiple
5.0x – 7.5x /
 6.8x
6.1x – 7.2x /
6.8x
EBITDA
$6,323 – $35,188 /
$23,546
$3,637 – $24,234 / $16,900
—  12,624  Yield Analysis Discount Rate N/A
20.7% – 20.7% / 20.7%
Preferred
equity		 429,702  302,163  TEV EBITDA multiple
3.3x – 8.7x /
6.4x
3.7x – 7.9x /
6.1x
EBITDA
$490 – $24,930 /
$9,715
$2,153 – $25,038 / $11,029
Revenue multiple
0.3x – 0.6x /
0.4x
0.3x – 0.6x /
0.4x
Revenue
$22,244 – $103,885 /
$79,238
$6,690 – $102,791 / $53,604
Common equity/
equivalents		 93,226  54,268  TEV EBITDA multiple
5.0x – 7.5x /
7.1x
5.5x – 7.2x /
6.8x
EBITDA
$1,111 – $35,188 /
$26,034
$1,208 – $24,234 / $18,562
Total $ 1,217,717  $ 974,345 

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 and nine months ended December 31, 2025 and 2024 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 December 31, 2025:
Fair value as of September 30, 2025
 $ 593,979  $ 90,633  $ 365,278  $ 75,894  $ 1,125,784 
Total gain (loss):
Net realized gain (loss)(A)
—  —  3,481  —  3,481 
Net unrealized (depreciation) appreciation(B)
(3,863) (360) 57,126  17,332  70,235 
Reversal of previously recorded depreciation upon realization(B)
—  —  —  —  — 
New investments, repayments and settlements(C):
Issuances / originations
 30,140  —  7,298  —  37,438 
Settlements / repayments
 (15,740) —  —  —  (15,740)
Sales(D)
—  —  (3,481) —  (3,481)
Transfers
 —  —  —  —  — 
Fair value as of December 31, 2025
 $ 604,516  $ 90,273  $ 429,702  $ 93,226  $ 1,217,717 

Secured
First Lien
Debt		 Secured
Second Lien
Debt
Preferred
Equity
 Common
Equity/
Equivalents		 Total
Nine Months Ended December 31, 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)
(29,938) —  3,481  —  (26,457)
Net unrealized appreciation (depreciation)(B)
(3,454) (2,691) 71,623  38,958  104,436 
Reversal of previously recorded depreciation upon realization(B)
19,104  —  —  —  19,104 
New investments, repayments and settlements(C):
Issuances / originations
 126,016  —  45,300  —  171,316 
Settlements / repayments
 (21,546) —  —  —  (21,546)
Sales(D)
—  —  (3,481) —  (3,481)
Transfers(E)
—  (10,616) 10,616  —  — 
Fair value as of December 31, 2025
 $ 604,516  $ 90,273  $ 429,702  $ 93,226  $ 1,217,717 
Secured
First Lien
Debt
Secured
Second Lien
Debt
Preferred
Equity
Common
Equity/
Equivalents
 Total
Three Months Ended December 31, 2024:
Fair value as of September 30, 2024
 $ 469,480  $ 111,344  $ 228,528  $ 43,955  $ 853,307 
Total gain (loss):
Net realized gain (loss)(A)
—  —  —  —  — 
Net unrealized (depreciation)
appreciation (B)
454  (2,601) 33,081  6,395  37,329 
Reversal of previously recorded (appreciation) depreciation upon realization(B)
—  —  —  —  — 
New investments, repayments and settlements(C):
Issuances / originations
 135,477  —  46,617  —  182,094 
Settlements / repayments
 (5,500) —  —  —  (5,500)
Sales
 —  —  —  —  — 
Transfers
 —  —  —  —  — 
Fair value as of December 31, 2024
 $ 599,911  $ 108,743  $ 308,226  $ 50,350  $ 1,067,230 
Secured
First Lien
Debt
Secured
Second Lien
Debt
Preferred
Equity
Common
Equity/
Equivalents
 Total
Nine Months Ended December 31, 2024:
Fair value as of March 31, 2024
 $ 474,856  $ 138,703  $ 213,480  $ 93,447  $ 920,486 
Total gain (loss):
Net realized gain (loss)(A)
—  —  —  42,284  42,284 
Net unrealized appreciation (depreciation)(B)
(22,020) (4,960) 48,129  1,150  22,299 
Reversal of previously recorded (appreciation) depreciation upon realization(B)
—  —  —  (38,028) (38,028)
New investments, repayments and settlements(C):
Issuances / originations
 155,575  —  46,617  —  202,192 
Settlements / repayments
 (8,500) (25,000) —  —  (33,500)
Sales
 —  —  —  (48,503) (48,503)
Transfers
 —  —  —  —  — 
Fair value as of December 31, 2024
 $ 599,911  $ 108,743  $ 308,226  $ 50,350  $ 1,067,230 
Included in net realized gain (loss) on investments on our accompanying Consolidated Statements of Operations for the respective three and nine months ended December 31, 2025 and 2024.
(B)Included in net unrealized appreciation (depreciation) of investments on our accompanying Consolidated Statements of Operations for the respective three and nine months ended December 31, 2025 and 2024.
(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)The three and nine months ended December 31, 2025 includes $3.5 million of proceeds from the equity distribution recognized as realized gain from Old World Christmas, Inc.
(E)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 Activity
During the nine months ended December 31, 2025, the following significant transactions occurred:

•In May 2025, we invested $49.5 million in a new portfolio company, Smart Chemical Solutions, LLC ("Smart Chemical"), in the form of $35.7 million of secured first lien debt and $13.8 million of preferred equity. Smart Chemical, headquartered in Midland, Texas, is a provider of production chemicals for onshore oil and gas operators throughout the United States.

•In May 2025, we invested $12.8 million in a new portfolio company, Sun State Nursery and Landscaping, LLC ("Sun State"), in the form of $9.8 million of secured first lien debt and $3.1 million of preferred equity. Sun State, headquartered in Jacksonville, Florida, is a commercial landscaping installation and maintenance provider in the Jacksonville area.

•In June 2025, we restructured our investment in PSI Molded. As a result of the restructuring, we converted debt with a cost basis of $10.6 million into preferred equity.

•In July 2025, we invested $67.6 million in a new portfolio company, Global GRAB Technologies, Inc. ("Global GRAB"), in the form of $46.5 million of secured first lien debt and $21.1 million of preferred equity. Global GRAB, headquartered in Franklin, Tennessee, is a provider of turnkey perimeter security and hostile vehicle mitigation systems, serving various government and commercial organizations.

•In September 2025, we entered into a new $20.0 million secured first lien term loan with J.R. Hobbs, restructuring our previously outstanding first lien term loans and line of credit with an aggregate total cost basis of $49.9 million, which resulted in a realized loss of $29.9 million.

•In December 2025, we invested $33.1 million in a new portfolio company, Rowan Energy Inc. (“Rowan”), in the form of $25.8 million of secured first lien debt and $7.3 million of preferred equity. Rowan, headquartered in Oklahoma, specializes in advanced frac sand filtration, completion-equipment deployment and field-operations support.
Investment Concentrations
As of December 31, 2025, 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 $1.2 billion. Our investments in SFEG Holdings, Inc., The E3 Company, LLC, Schylling, Inc., Global GRAB Technologies, Inc., and Detroit Defense, Inc., represented our five largest portfolio investments at fair value and collectively comprised $463.9 million, or 37.9%, of our total investment portfolio at fair value as of December 31, 2025.
The following table summarizes our investments by security type as of December 31, 2025 and March 31, 2025:
December 31, 2025 March 31, 2025
Cost Fair Value Cost Fair Value
Secured first lien debt $ 658,558  62.2  % $ 604,516  49.4  % $ 584,026  62.2  % $ 514,334  52.5  %
Secured second lien debt 93,340  8.8  % 90,273  7.4  % 103,956  11.1  % 103,580  10.6  %
Total debt 751,898  71.0  % 694,789  56.8  % 687,982  73.3  % 617,914  63.1  %
Preferred equity 257,403  24.3  % 429,702  35.2  % 201,487  21.5  % 302,163  30.9  %
Common equity/equivalents 49,597  4.7  % 98,301  8.0  % 49,597  5.2  % 59,243  6.0  %
Total equity/equivalents 307,000  29.0  % 528,003  43.2  % 251,084  26.7  % 361,406  36.9  %
Total investments
 $ 1,058,898  100.0  % $ 1,222,792  100.0  % $ 939,066  100.0  % $ 979,320  100.0  %
Investments at fair value consisted of the following industry classifications as of December 31, 2025 and March 31, 2025:
December 31, 2025 March 31, 2025
Fair Value Percentage of
Total Investments		 Fair Value Percentage of Total Investments
Diversified/Conglomerate Services $ 194,985  15.9 % $ 170,360  17.4 %
Aerospace and Defense 177,420  14.5 % 107,869  10.9 %
Home and Office Furnishings, Housewares, and Durable Consumer Products 166,499  13.7 % 159,236  16.3 %
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) 144,712  11.9 % 105,432  10.8 %
Oil and Gas 124,804  10.2 % 69,589  7.1 %
Leisure, Amusement, Motion Pictures, and Entertainment 104,103  8.5 % 78,460  8.0 %
Buildings and Real Estate 71,450  5.8 % 69,320  7.1 %
Electronics 67,587  5.5 % 71,573  7.2 %
Chemicals, Plastics, and Rubber 51,665  4.2 % 11,612  1.2 %
Healthcare, Education, and Childcare 44,920  3.7 % 51,501  5.3 %
Mining, Steel, Iron and Non-Precious Metals 36,882  3.0 % 41,010  4.2 %
Cargo Transport 9,933  0.8 % 12,624  1.3 %
Telecommunications 8,241  0.7 % 7,585  0.8 %
Printing and Publishing 7,873  0.6 % 11,681  1.2 %
Other < 2.0% 11,718  1.0 % 11,468  1.2 %
Total investments $ 1,222,792  100.0 % $ 979,320  100.0 %
Investments at fair value were included in the following geographic regions of the U.S. and Canada as of December 31, 2025 and March 31, 2025:
December 31, 2025 March 31, 2025
Location Fair Value Percentage of
Total Investments		 Fair Value Percentage of
Total Investments
United States
South
 $ 552,028  45.1  % $ 317,294  32.4  %
West
 232,000  19.0  % 222,062  22.7  %
Midwest
 214,196  17.5  % 227,415  23.2  %
Northeast
 199,389  16.3  % 182,669  18.7  %
Canada 25,179  2.1  % 29,880  3.0  %
Total investments $ 1,222,792  100.0  % $ 979,320  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.
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 December 31, 2025:

Amount
For the remaining three months ending March 31, 2026
 $ 13,000 
For the fiscal years ending March 31:
2027 36,340 
2028 114,042 
2029 291,540 
2030 159,506 
Thereafter 137,470 
Total contractual repayments $ 751,898 
Investments in equity securities 307,000 
Total cost basis of investments held as of December 31, 2025:
 $ 1,058,898 
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 December 31, 2025 and March 31, 2025, we had gross receivables from portfolio companies of $2.2 million and $2.3 million, respectively. As of December 31, 2025 and March 31, 2025, the allowance for uncollectible receivables was $1.4 million and $1.7 million, respectively.