glad-20250331

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one):


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

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025


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: 814-00237

GLADSTONE CAPITAL CORPORATION

(Exact name of registrant as specified in its charter)


Maryland			54-2040781
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

1521 WESTBRANCH DRIVE, SUITE 100			22102
McLean, Virginia			(Zip Code)
(Address of principal executive office)

(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

GLAD

The Nasdaq Stock Market LLC

7.75% notes due 2028

GLADZ

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 ý No o

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 ý No o

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	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	o
Emerging growth company	o

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. o

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

The number of shares of the issuer’s common stock, $0.001 par value per share, outstanding as of May 5, 2025 was 22,329,852.

Table of Contents

GLADSTONE CAPITAL CORPORATION

TABLE OF CONTENTS


PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Consolidated Statements of Assets and Liabilities as of March 31 , 202 5 and September 30, 2024	2
	Consolidated Statements of Operations for the three and six months ended Ma rch 31, 202 5 and 2024	3
	Consolidated Statements of Changes in Net Assets for the s ix months ended March 31, 2025 a nd 2024	4
	Consolidated Statements of Cash Flows for the six months ended March 31 , 202 5 and 2024	5
	Consolidated Schedules of Investments as of March 31, 202 5 and September 30, 2024	6
	Notes to Consolidated Financial Statements	18

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	45
	Overview	45
	Results of Operations	49
	Liquidity and Capital Resources	58

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	65

Item 4.	Controls and Procedures	65

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	66

Item 1A.	Risk Factors	66

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

Item 3.	Defaults Upon Senior Securities	66

Item 4.	Mine Safety Disclosures	66

Item 5.	Other Information	66

Item 6.	Exhibits	67

SIGNATURES		69

Table of Contents

Part I. Financial information

Item I Financial Statements (Unaudited)

GLADSTONE CAPITAL CORPORATION

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(UNAUDITED)


	March 31, 2025		September 30, 2024
ASSETS
Investments, at fair value:
Non-Control/Non-Affiliate investments (Cost of $700,669 and $716,481, respectively)	$	685,471	$	750,904
Affiliate investments (Cost of $21,746 and $16,746, respectively)	15,932		7,438
Control investments (Cost of $66,778 and $37,784, respectively)	61,233		37,918
Cash and cash equivalents	2,643		2,172
Restricted cash and cash equivalents	154		132
Interest receivable, net	5,643		5,923
Due from administrative agent	2,018		2,802
Deferred financing costs, net	550		1,053
Other assets, net	3,136		4,126
TOTAL ASSETS	$	776,780	$	812,468
LIABILITIES
Line of credit at fair value (Cost of $25,100 and $70,600, respectively)	$	25,149	$	70,600
Notes payable, net of unamortized deferred financing costs of $2,471 and $2,990, respectively	254,529		254,010
Accounts payable and accrued expenses	1,066		1,230
Interest payable	2,782		2,916
Fees due to Adviser(A)	1,990		3,889
Fee due to Administrator(A)	846		569
Other liabilities	631		513
TOTAL LIABILITIES	$	286,993	$	333,727
Commitments and contingencies(B)
Preferred stock, $0.001 par value per share, 6,000,000 and 6,000,000 shares authorized, respectively, and 523,193 and 349,931 shares issued and outstanding, respectively	$	11,728	$	7,846
NET ASSETS
Common stock, $0.001 par value per share, 44,000,000 and 44,000,000 shares authorized, respectively, and 22,329,852 and 22,230,587 shares issued and outstanding, respectively	$	44	$	44
Capital in excess of par value	494,632		492,305
Cumulative net unrealized appreciation (depreciation) of investments	(26,557)		25,249
Cumulative net unrealized appreciation of other	(49)		—
Under distributed net investment income	5,591		6,144
Accumulated net realized gains (losses)	4,398		(52,847)
Total distributable loss	(16,617)		(21,454)
TOTAL NET ASSETS	$	478,059	$	470,895
NET ASSET VALUE PER COMMON SHARE	$	21.41	$	21.18

(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.

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GLADSTONE CAPITAL CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(UNAUDITED)


	Three Months Ended March 31,				Six Months Ended March 31,
	2025		2024		2025		2024
INVESTMENT INCOME
Interest income
Non-Control/Non-Affiliate investments	$	19,913	$	22,020	$	39,903	$	42,830

Control investments	439		285		885		1,036
Cash and cash equivalents	86		25		207		52
Total interest income (excluding PIK interest income)	20,438		22,330		40,995		43,918
PIK interest income
Non-Control/Non-Affiliate investments	900		1,303		1,663		2,630

Control investments	—		82		—		163
Total PIK interest income	900		1,385		1,663		2,793
Total interest income	21,338		23,715		42,658		46,711
Dividend income
Non-Control/Non-Affiliate investments	—		—		—		185
Affiliate investments	26		—		26		—
Total dividend income	26		—		26		185
Prepayment fee income
Non-Control/Non-Affiliate investments	121		215		658		215
Other income	84		67		187		107
Total investment income	21,569		23,997		43,529		47,218
EXPENSES
Base management fee(A)	3,441		3,439		6,993		6,684
Loan servicing fee(A)	2,278		2,260		4,456		4,388
Incentive fee(A)	2,407		2,669		5,111		5,653
Administration fee(A)	462		469		936		923
Interest expense	5,019		5,732		9,762		10,764
Amortization of deferred financing costs	527		441		1,045		870
Professional fees	99		278		495		508
Other general and administrative expenses	515		638		1,209		1,133
Expenses, before credits from Adviser	14,748		15,926		30,007		30,923
Credit to base management fee - loan servicing fee(A)	(2,278)		(2,260)		(4,456)		(4,388)
Credits to fees from Adviser - other(A)	(2,146)		(446)		(4,491)		(2,028)
Total expenses, net of credits	10,324		13,220		21,060		24,507
NET INVESTMENT INCOME	11,245		10,777		22,469		22,711
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss):
Non-Control/Non-Affiliate investments	7,702		219		65,426		219

Control investments	—		—		—		259
Other	4		1,949		94		1,952
Total net realized gain (loss)	7,706		2,168		65,520		2,430
Net unrealized appreciation (depreciation):
Non-Control/Non-Affiliate investments	(8,476)		7,542		(49,621)		14,593
Affiliate investments	3,527		(334)		3,494		(39)
Control investments	(4,965)		3,487		(5,679)		3,946
Other	(49)		—		(49)		—
Total net unrealized appreciation (depreciation)	(9,963)		10,695		(51,855)		18,500
Net realized and unrealized gain (loss)	(2,257)		12,863		13,665		20,930
PREFERRED STOCK DIVIDENDS	191		8		362		8
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	8,797	$	23,632	$	35,772	$	43,633
BASIC AND DILUTED PER COMMON SHARE:
Net investment income(B)	$	0.50	$	0.49	$	1.00	$	1.04
Net increase (decrease) in net assets resulting from operations(B)	$	0.39	$	1.09	$	1.60	$	2.00
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING: Basic and Diluted(B)	22,329,852		21,754,449		22,320,576		21,754,449

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

(B)Per share amounts and weighted average common shares outstanding have been adjusted on a retroactive basis to reflect the Reverse Stock Split effected on April 4, 2024. Refer to Note 2—Summary of Significant Accounting Policies in the accompanying Notes to Consolidated Financial Statements for additional information.

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

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GLADSTONE CAPITAL CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(DOLLAR AMOUNTS IN THOUSANDS)

(UNAUDITED)


	2025		2024
NET ASSETS, SEPTEMBER 30	$	470,895	$	408,695
OPERATIONS
Net investment income	11,224		11,934
Net realized gain (loss) on investments	57,724		259
Net realized gain (loss) on other	90		3
Net unrealized appreciation (depreciation) of investments	(41,892)		7,805
Preferred stock dividends	(171)		—
Net increase (decrease) in net assets resulting from operations	26,975		20,001
DISTRIBUTIONS
Distributions to common stockholders from net investment income ($0.50 per share and $0.49 per share, respectively)(A)(B)	(11,053)		(10,768)
Distributions to common stockholders from realized gains ($0.40 per share and $0.00 per share, respectively)(A)	(8,932)		—
Net decrease in net assets from distributions	(19,985)		(10,768)
CAPITAL TRANSACTIONS
Issuance of common stock	2,471		—
Discounts, commissions and offering costs for issuance of common stock	(40)		—
Net increase (decrease) in net assets resulting from capital transactions	2,431		—
NET INCREASE (DECREASE) IN NET ASSETS	9,421		9,233
NET ASSETS, DECEMBER 31	$	480,316	$	417,928
OPERATIONS
Net investment income	11,245		10,777
Net realized gain (loss) on investments	7,702		219
Net realized gain (loss) on other	4		1,949
Net unrealized appreciation (depreciation) of investments	(9,914)		10,695
Net unrealized appreciation of other	(49)		—
Preferred stock dividends	(191)		(8)
Net increase (decrease) in net assets resulting from operations	8,797		23,632
DISTRIBUTIONS
Distributions to common stockholders from net investment income ($0.50 per share and $0.49 per share, respectively)(A)(B)	(11,054)		(10,769)
Net decrease in net assets from distributions	(11,054)		(10,769)
CAPITAL TRANSACTIONS
Issuance of common stock	—		—
Discounts, commissions and offering costs for issuance of common stock	—		—
Net increase (decrease) in net assets resulting from capital transactions	—		—
NET INCREASE (DECREASE) IN NET ASSETS	(2,257)		12,863
NET ASSETS, MARCH 31	$	478,059	$	430,791

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

(B)Per share amounts have been adjusted on a retroactive basis to reflect the Reverse Stock Split effected on April 4, 2024. Refer to Note 2—Summary of Significant Accounting Policies in the accompanying Notes to Consolidated Financial Statements for additional information.

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

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GLADSTONE CAPITAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(DOLLAR AMOUNTS IN THOUSANDS)

(UNAUDITED)


	Six Months Ended March 31,
	2025		2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase (decrease) in net assets resulting from operations	$	35,772	$	43,633
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Purchase of investments	(197,211)		(102,733)
Principal repayments on investments	157,784		35,983
Net proceeds from sale of investments	88,927		3,182
Increase in investments due to PIK interest or other	(1,861)		(2,604)
Net change in premiums, discounts and amortization	(301)		330
Net realized loss (gain) on investments	(65,426)		(478)
Net realized loss (gain) on other	(94)		(1,952)
Net unrealized depreciation (appreciation) of investments	51,806		(18,500)
Net unrealized appreciation of other	49		—
Amortization of deferred financing costs	1,045		870
Changes in assets and liabilities:
Decrease (increase) in interest receivable, net	280		(1,584)
Decrease (increase) in funds due from administrative agent	784		296
Decrease (increase) in other assets, net	987		(702)
Increase (decrease) in accounts payable and accrued expenses	(164)		3
Increase (decrease) in interest payable	(134)		55
Increase (decrease) in fees due to Adviser(A)	(1,899)		34
Increase (decrease) in fee due to Administrator(A)	277		226
Increase (decrease) in other liabilities	118		(1,335)
Net cash provided by (used in) operating activities	70,739		(45,276)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from line of credit	148,500		134,300
Repayments on line of credit	(194,000)		(64,900)
Financing costs	(23)		(152)
Proceeds from issuance of common stock	2,471		—
Proceeds from issuance of preferred stock	3,882		1,576
Discounts, commissions and offering costs for issuance of common stock	(37)		—
Distributions paid to common stockholders	(31,039)		(21,537)
Net cash provided by (used in) financing activities	(70,246)		49,287
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS	493		4,011
CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF PERIOD	2,304		1,401
CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD	$	2,797	$	5,412
CASH PAID FOR INTEREST	$	9,896	$	10,709
NON-CASH ACTIVITIES	$	—	$	—

(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.

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GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS MARCH 31, 2025 (UNAUDITED) (DOLLAR AMOUNTS IN THOUSANDS)
Company and Investment(A)(B)(K)(Q)	Principal/ Shares/ Units(I)(J)		Cost		Fair Value
NON-CONTROL/NON-AFFILIATE INVESTMENTS(M) – 143.4%
Secured First Lien Debt – 105.7%
Aerospace and Defense – 12.2%
Ohio Armor Holdings, LLC – Term Debt (S + 8.0%, 12.3% Cash, Due 2/2026)(C)	$	15,975	$	15,975	$	15,975
SpaceCo Holdings, LLC – Line of Credit, $2,500 available (S + 6.4%, 10.7% Cash, Due 4/2026)(C)(H)(T)	—		—		—
SpaceCo Holdings, LLC – Term Debt (S + 6.4%, 10.7% Cash, Due 4/2026)(C)(H)(T)	42,164		41,953		42,164
			57,928		58,139
Beverage, Food, and Tobacco – 13.7%
Café Zupas – Line of Credit, $1,750 available (S + 7.0%, 11.3% Cash, Due 12/2027)(C)	—		—		—
Café Zupas – Delayed Draw Term Loan, $700 available (S + 7.0%, 11.3% Cash, Due 12/2027)(C)	9,800		9,800		9,800
Café Zupas – Term Debt (S + 7.0%, 11.3% Cash, Due 12/2027)(C)	26,250		26,097		26,250
Eegee’s LLC – Line of Credit, $0 available (S + 7.8%, 12.1% Cash, Due 6/2026)(E)(P)(U)	3,300		3,300		2,479
Eegee’s LLC – Line of Credit, $4,000 available (14.5% PIK, Due 4/2025)(E)(F)(P)(U)	500		500		376
Eegee’s LLC – Delayed Draw Term Loan, $0 available (S + 7.8%, 12.1% Cash, Due 6/2026)(E)(P)(U)	3,171		3,171		2,382
Eegee’s LLC – Term Debt (S + 7.8%, 12.1% Cash, Due 6/2026)(E)(P)(U)	17,968		17,968		13,497
Wings ‘N More Restaurants LLC – Line of Credit, $1,500 available (S + 6.4%, 10.7% Cash, Due 11/2029)(C)	—		—		—
Wings ‘N More Restaurants LLC – Term Debt (S + 6.4%, 10.7% Cash, Due 11/2029)(C)	10,500		10,500		10,448
Wings ‘N More Restaurants LLC – Delayed Draw Term Loan, $5,000 available (S + 6.4%, 10.7% Cash, Due 11/2029)(C)	—		—		—
			71,336		65,232
Buildings and Real Estate – 0.5%
GFRC 360, LLC – Line of Credit, $95 available (S + 8.0%, 12.3% Cash, Due 9/2025)(C)	1,355		1,355		1,362
GFRC 360, LLC – Term Debt (S + 8.0%, 12.3% Cash, Due 9/2025)(C)	1,000		1,000		1,006
			2,355		2,368
Diversified/Conglomerate Manufacturing – 25.3%
Engineering Manufacturing Technologies, LLC – Line of Credit, $2,300 available (S + 8.3%, 12.6% Cash, Due 10/2026)(E)	700		700		459
Engineering Manufacturing Technologies, LLC – Term Debt (S + 8.3%, 8.0% Cash, 4.6% PIK, Due 10/2026)(E)	22,629		22,629		14,834
NeoGraf Solutions LLC – Line of Credit, $4,500 available (S + 7.0%, 11.0% Cash, 0.3% PIK, Due 1/2028)(C)	—		—		—
NeoGraf Solutions LLC – Term Debt (S + 7.0%, 11.0% Cash, 0.3% PIK, Due 1/2028)(C)	27,545		27,545		27,545
OCI, LLC – Term Debt (S + 7.5%, 11.8% Cash, Due 5/2028)(C)	16,500		16,500		16,665
Torrent Photonics Holdco LLC – Term Debt (S + 9.5%, 13.8% Cash, Due 4/2027)(C)	11,589		11,589		11,696
Torrent Photonics Holdco LLC – Term Debt (S + 9.5%, 13.8% Cash, Due 4/2025)(C)	500		500		504
Unirac Holdings, Inc. – Line of Credit, $1,856 available (S + 6.5%, 10.8% Cash, Due 9/2027)(C)	367		367		367
Unirac Holdings, Inc. – Delayed Draw Term Loan, $0 available (S + 6.5%, 10.8% Cash, Due 9/2027)(C)	1,087		1,087		1,087
Unirac Holdings, Inc. – Term Debt (S + 6.5%, 10.8% Cash, Due 9/2027)(C)	14,606		14,339		14,606
Viron International Corp.(S) – Term Debt (S + 7.0%, 11.3% Cash, Due 2/2030)(C)	19,350		19,350		19,350
Viva Railings, LLC – Line of Credit, $4,000 available (S + 7.1%, 11.4% Cash, Due 5/2027)(C)	—		—		—
Viva Railings, LLC – Term Debt (S + 7.1%, 11.4% Cash, Due 5/2027)(C)	13,984		13,984		13,984
			128,590		121,097
Diversified/Conglomerate Service – 17.5%
Axios Industrial Group, LLC – Term Debt (S + 9.6%, 13.9% Cash, Due 10/2027)(C)	16,190		16,065		16,190
Leadpoint Business Services, LLC – Term Debt (S + 8.5%, 12.8% Cash, Due 2/2028)(C)	28,117		28,117		28,398
Quality Environmental Midco, Inc. – Line of Credit, $3,000 available (12.0% Cash, Due 11/2028)(C)(F)	—		—		—
Quality Environmental Midco, Inc. – Term Debt (12.0% Cash, Due 11/2028)(C)(F)	13,000		13,000		13,260
Total Access Elevator, LLC – Line of Credit, $3,000 available (S + 6.9%, 11.2% Cash, Due 4/2029)(C)	—		—		—
Total Access Elevator, LLC – Term Debt (S + 6.9%, 11.2% Cash, Due 4/2029)(C)	6,500		6,500		6,695

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

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GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS MARCH 31, 2025 (UNAUDITED) (DOLLAR AMOUNTS IN THOUSANDS)
Company and Investment(A)(B)(K)(Q)	Principal/ Shares/ Units(I)(J)		Cost		Fair Value
Total Access Elevator, LLC – Delayed Draw Term Loan, $2,500 available (S + 6.9%, 11.2% Cash, Due 4/2029)(C)	—		—		—
WorkforceQA, LLC – Line of Credit, $800 available (S + 6.5%, 10.8% Cash, Due 12/2026)(C)	1,200		1,200		1,200
WorkforceQA, LLC – Term Debt (S + 6.5%, 10.8% Cash, Due 12/2026)(C)	18,113		18,063		18,113
			82,945		83,856
Healthcare, Education, and Childcare – 32.4%
ALS Education, LLC – Line of Credit, $3,000 available (S + 6.8%, 11.1% Cash, Due 12/2028)(C)	—		—		—
ALS Education, LLC – Term Debt (S + 6.8%, 11.1% Cash, Due 12/2028)(C)	31,240		31,240		31,396
Freedom Dental Management, Inc. – Term Debt (S + 7.3%, 11.6% Cash, Due 6/2030)(C)	15,000		15,000		14,955
HH-Inspire Acquisition, Inc. – Line of Credit, $0 available (S + 8.0%, 12.3% Cash, 2.0% PIK, Due 4/2028)(C)	1,843		1,843		1,697
HH-Inspire Acquisition, Inc. – Term Debt (S + 8.0%, 12.3% Cash, 2.0% PIK, Due 4/2028)(C)	19,822		19,724		18,256
Giving Home Health Care, LLC – Term Debt (S + 5.8%, 10.0% Cash, Due 4/2029)(C)(H)	28,125		28,125		28,462
Turn Key Health Clinics, LLC – Line of Credit, $4,000 available (S + 7.3%, 11.6% Cash, Due 6/2026)(C)	—		—		—
Turn Key Health Clinics, LLC – Term Debt (S + 7.3%, 11.6% Cash, Due 6/2026)(C)	17,500		17,500		17,500
Vet's Choice Radiology LLC(S) – Term Debt (S + 7.0%, 11.3% Cash, Due 12/2027)(C)	42,750		42,750		42,606
			156,182		154,872
Machinery – 3.4%
Arc Drilling Holdings LLC – Line of Credit, $5,000 available (S + 7.0%, 11.3% Cash, Due 9/2029)(C)	—		—		—
Arc Drilling Holdings LLC – Term Debt (S + 7.0%, 11.3% Cash, Due 9/2029)(C)	16,000		16,000		16,320
			16,000		16,320
Oil and Gas – 0.0%
FES Resources Holdings LLC – Term Debt (4.5% Cash, Due 12/2024)(E)(F)	325		325		—
Telecommunications – 0.7%
B+T Group Acquisition, Inc.(S) – Line of Credit, $0 available (S + 2.0%, 7.0% Cash, Due 12/2026)(E)	1,320		1,320		556
B+T Group Acquisition, Inc.(S) – Line of Credit, $52 available (S + 2.0%, 7.0% Cash, Due 6/2025)(E)	398		398		168
B+T Group Acquisition, Inc.(S) – Term Debt (S + 2.0%, 7.0% Cash, Due 12/2026)(E)	6,000		6,000		2,527
			7,718		3,251
Total Secured First Lien Debt			$	523,379	$	505,135
Secured Second Lien Debt – 28.5%
Automobile – 3.7%
Sea Link International IRB, Inc. – Term Debt (11.3% Cash, 2.0% PIK, Due 12/2025)(C)(F)	$	13,584	$	13,584	$	13,584
Sea Link International IRB, Inc. – Term Debt (12.0% Cash, 2.0% PIK, Due 12/2025)(C)(F)	4,120		4,120		4,120
			17,704		17,704
Beverage, Food, and Tobacco – 4.5%
8th Avenue Food & Provisions, Inc. – Term Debt (S + 7.9%, 12.2% Cash, Due 10/2026)(D)	3,683		3,683		3,388
Dutch Gold Honey, Inc.(S) – Term Debt (S + 7.5%, 11.8% Cash, Due 8/2030)(C)	18,000		18,000		18,000
			21,683		21,388
Cargo Transportation – 4.2%
RPM Freight Systems, LLC – Term Debt (S + 7.7%, 12.0% Cash, Due 11/2029)(C)	20,000		20,000		20,200
RPM Freight Systems, LLC – Delayed Draw Term Loan, $5,000 available (S + 7.7%, 12.0% Cash, Due 11/2029)(C)	—		—		—
			20,000		20,200
Diversified/Conglomerate Manufacturing – 7.8%
OCI, LLC – Term Debt (7.0% Cash, 7.0% PIK, Due 11/2028)(C)(F)	2,237		2,237		2,358
Springfield, Inc. – Term Debt (S + 11.1%, 15.4% Cash, Due 12/2026)(C)	30,000		30,000		30,000
Tube Bending Technology, LLC – Term Debt (13.5% Cash, Due 6/2026)(C)(F)	5,000		5,000		4,916
			37,237		37,274
Healthcare, Education, and Childcare – 4.8%
Pan-Am Dental, LLC – Term Debt (12.0% Cash, Due 6/2030)(C)(F)	23,000		23,000		23,096

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

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GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS MARCH 31, 2025 (UNAUDITED) (DOLLAR AMOUNTS IN THOUSANDS)
Company and Investment(A)(B)(K)(Q)	Principal/ Shares/ Units(I)(J)			Cost		Fair Value
Oil and Gas – 3.5%
Imperative Holdings Corporation – Term Debt (S + 9.8%, 14.1% Cash, Due 8/2028)(C)	16,516			16,426		16,516
Total Secured Second Lien Debt				$	136,050	$	136,178
Unsecured Debt – 0.0%
Diversified/Conglomerate Service – 0.0%
Frontier Financial Group Inc. – Convertible Debt (6.0%, Due 6/2022)(E)(F)	$	198		$	198	$	23
Preferred Equity – 3.9%
Automobile – 0.1%
Sea Link International IRB, Inc. – Preferred Stock(E)(G)	98,039			$	98	$	241
Beverage, Food, and Tobacco – 0.0%
Triple H Food Processors, LLC – Preferred Stock(E)(G)	75			75		182
Buildings and Real Estate – 0.0%
GFRC 360, LLC – Preferred Stock(E)(G)	1,000			1,025		11
Diversified/Conglomerate Manufacturing – 0.6%
Torrent Photonics Holdco LLC – Preferred Stock(E)(G)	2,650			2,650		2,800
Diversified/Conglomerate Service – 0.9%
Frontier Financial Group Inc. – Preferred Stock(E)(G)	766			500		—
Frontier Financial Group Inc. – Preferred Stock Warrant(E)(G)	168			—		—
Quality Environmental Midco, Inc. – Preferred Equity(E)(G)	3,000,000			3,000		4,522
				3,500		4,522
Healthcare, Education, and Childcare – 1.7%
HH-Inspire Acquisition, Inc. – Preferred Stock(E)(G)	1,681,949			2,604		1,917
Pan-Am Dental, LLC – Preferred Stock(E)(G)	5,909,091			5,909		6,040
				8,513		7,957
Oil and Gas – 0.6%
FES Resources Holdings LLC – Preferred Equity Units(E)(G)	6,350			6,350		—
Imperative Holdings Corporation – Preferred Equity Units(E)(G)	972,569			488		2,693
				6,838		2,693
Telecommunications – 0.0%
B+T Group Acquisition, Inc.(S) – Preferred Stock(E)(G)	6,130			2,024		—
Total Preferred Equity				$	24,723	$	18,406
Common Equity – 5.3%
Aerospace and Defense – 0.2%
Ohio Armor Holdings, LLC – Common Equity(E)(G)	100			$	1,000	$	1,054
Automobile – 0.1%
Sea Link International IRB, Inc.– Common Equity Units(E)(G)	823,333			823		364
Beverage, Food, and Tobacco – 1.3%
Dutch Gold Honey, Inc.(S) – Common Stock(E)(G)	900,000			900		900
Salt & Straw, LLC – Common Warrant(E)(G)	0.5		%	—		121
Sokol & Company Holdings, LLC – Common Stock(E)(G)	450,000			450		3,193
Triple H Food Processors, LLC – Common Stock(E)(G)	250,000			250		1,885
				1,600		6,099
Buildings and Real Estate – 0.0%
GFRC 360, LLC – Common Stock Warrants(E)(G)	45		%	—		—
Diversified/Conglomerate Manufacturing – 0.4%
Engineering Manufacturing Technologies, LLC – Common Stock(E)(G)	16,000			3,000		—
OCI, LLC – Common Units (E)(G)	306			—		—
NeoGraf Solutions LLC – Common Stock(E)(G)	2,000,000			2,000		1,995
Viron International Corp.(S) – Common Stock(E)(G)	447			15		15
				5,015		2,010
Diversified/Conglomerate Service – 0.3%
Total Access Elevator, LLC – Common Stock(E)(G)	750,000			750		1,214
WorkforceQA, LLC – Common Stock(E)(G)	529			532		414
				1,282		1,628

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

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GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS MARCH 31, 2025 (UNAUDITED) (DOLLAR AMOUNTS IN THOUSANDS)
Company and Investment(A)(B)(K)(Q)	Principal/ Shares/ Units(I)(J)			Cost		Fair Value
Healthcare, Education, and Childcare – 1.6%
Giving Home Health Care, LLC – Common Stock(E)(G)	10,667			—		6,151
GSM MidCo LLC – Common Stock(E)(G)	767			767		1,602
Leeds Novamark Capital I, L.P. – Limited Partnership Interest ($843 uncalled capital commitment)(G)(L)(R)	3.5		%	—		36
				767		7,789
Machinery – 1.4%
Arc Drilling Holdings LLC – Common Stock(E)(G)	53,333			5,333		6,636
Oil and Gas – 0.0%
FES Resources Holdings LLC – Common Equity Units(E)(G)	6,233			—		—
Total Safety Holdings, LLC – Common Equity(E)(G)	435			499		149
				499		149
Telecommunications – 0.0%
B+T Group Acquisition, Inc.(S) – Common Stock Warrant(E)(G)	1.5		%	—		—
Total Common Equity				$	16,319	$	25,729
Total Non-Control/Non-Affiliate Investments				$	700,669	$	685,471
AFFILIATE INVESTMENTS(N) – 3.3%
Secured First Lien Debt – 0.0%
Diversified/Conglomerate Manufacturing – 0.0%
Edge Adhesives Holdings, Inc.(S) – Term Debt (S + 5.5%, 9.8% Cash, Due 8/2026)(E)(P)	$	6,140		$	6,140	$	229
Preferred Equity – 1.4%
Diversified/Conglomerate Manufacturing – 0.0%
Edge Adhesives Holdings, Inc.(S) – Preferred Stock(E)(G)	5,466			$	5,466	$	—
Diversified/Conglomerate Service – 1.2%
Encore Dredging Holdings, LLC – Preferred Stock(E)(G)	3,840,000			3,840		5,657
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.2%
Canopy Safety Brands, LLC – Preferred Stock(E)(G)	500,000			500		968
Total Preferred Equity				$	9,806	$	6,625
Common Equity – 1.9%
Finance – 1.0%
Gladstone Alternative Income Fund – Common Stock(G)(R)	500,000			$	5,000	$	4,975
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.9%
Canopy Safety Brands, LLC – Common Stock(E)(G)	1,170,370			800		4,103
Total Common Equity				$	5,800	$	9,078
Total Affiliate Investments				$	21,746	$	15,932
CONTROL INVESTMENTS(O) – 12.8%
Secured First Lien Debt – 7.6%
Diversified/Conglomerate Manufacturing – 0.9%
Lonestar EMS, LLC – Term Debt (12.0% Cash, Due 6/2027)(E)(F)	$	4,200		$	4,141	$	4,200
Healthcare, Education, and Childcare – 5.1%
Technical Resource Management, LLC – Line of Credit, $500 available (S + 8.0%, 12.3% Cash, 2.5% PIK, Due 4/2028)(C)	2,508			2,508		2,348
Technical Resource Management, LLC – Term Debt (S + 8.0%, 12.3% Cash, 2.5% PIK, Due 4/2028)(C)	23,565			23,497		22,065
				26,005		24,413
Personal and Non-Durable Consumer Products (Manufacturing Only) – 1.6%
WB Xcel Holdings, LLC – Line of Credit, $0 available (S + 10.5%, 14.8% Cash, Due 11/2026)(E)	5,150			5,150		2,604
WB Xcel Holdings, LLC – Term Debt (S + 10.5%, 14.8% Cash, Due 11/2026)(E)	9,775			9,775		4,943
				14,925		7,547
Printing and Publishing – 0.0%
TNCP Intermediate HoldCo, LLC – Line of Credit, $2,000 available (11.0% Cash, Due 10/2027)(E)(F)	—			—		—
Total Secured First Lien Debt				$	45,071	$	36,160

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

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GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS MARCH 31, 2025 (UNAUDITED) (DOLLAR AMOUNTS IN THOUSANDS)
Company and Investment(A)(B)(K)(Q)	Principal/ Shares/ Units(I)(J)			Cost		Fair Value
Secured Second Lien Debt – 1.8%
Automobile– 1.8%
Defiance Integrated Technologies, Inc. – Term Debt (S + 9.6%, 13.9% Cash, Due 1/2027)(E)	$	8,792		$	8,792	$	8,792
Unsecured Debt – 0.1%
Healthcare, Education, and Childcare – 0.1%
Technical Resource Management, LLC – Term Debt (14.0% PIK, Due 10/2028)(E)(F)	$	333		$	333	$	312
Preferred Equity – 0.0%
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0%
WB Xcel Holdings, LLC – Preferred Stock(E)(G)	333			$	2,750	$	—
Common Equity – 3.3%
Automobile– 0.2%
Defiance Integrated Technologies, Inc. – Common Stock(E)(G)	33,321			$	581	$	853
Diversified/Conglomerate Manufacturing – 2.0%
Lonestar EMS, LLC – Common Units(E)(G)	100		%	6,750		9,601
Healthcare, Education, and Childcare – 0.0%
Technical Resource Management, LLC – Common Stock(E)(G)	2,000,000			2,000		—
Technical Resource Management, LLC – Common Warrants(E)(G)	958,041			—		—
				2,000		—
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0%
WB Xcel Holdings, LLC – Common Warrant(E)(G)	1			1		—
Printing and Publishing – 1.1%
TNCP Intermediate HoldCo, LLC – Common Equity Units(E)(G)	790,000			500		5,515
Total Common Equity				$	9,832	$	15,969
Total Control Investments				$	66,778	$	61,233
TOTAL INVESTMENTS – 159.5%				$	789,193	$	762,636

(A)Certain of the securities listed in this schedule are issued by affiliate(s) of the indicated portfolio company. The majority of the securities listed, totaling $691.1 million at fair value, are pledged as collateral under our revolving line of credit, as described further in Note 5—Borrowings in the accompanying Notes to Consolidated Financial Statements. Under the Investment Company Act of 1940, as amended (the “1940 Act”), we may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of our total assets. As of March 31, 2025, our investments in Leeds Novamark Capital I, L.P. (“Leeds”) and Gladstone Alternative Income Fund (“Gladstone Alternative”) are considered non-qualifying assets under Section 55 of the 1940 Act. Such non-qualifying assets represent 0.7% of total investments, at fair value, as of March 31, 2025.

(B)Unless indicated otherwise, all cash interest rates are indexed to one-month Secured Overnight Financing Rate (“SOFR” or “S”), which was 4.32% as of March 31, 2025. If applicable, paid-in-kind (“PIK”) interest rates are noted separately from the cash interest rate. Certain securities are subject to an interest rate floor. The cash interest rate is the greater of the floor or the reference rate plus a spread. Due dates represent the contractual maturity date.

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

(D)Fair value was based on the indicative bid price on or near March 31, 2025, offered by the respective syndication agent’s trading desk.

(E)Fair value was based on the total enterprise value of the portfolio company, which was then allocated to the portfolio company’s securities in order of their relative priority in the capital structure.

(F)Debt security has a fixed interest rate.

(G)Security is non-income producing.

(H)The cash interest rate on this investment was indexed to 90-day SOFR, which was 4.29% as of March 31, 2025.

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

(J)Where applicable, aggregates all shares of a class of stock owned without regard to specific series owned within such class (some series of which may or may not be voting shares) or aggregates all warrants to purchase shares of a class of stock owned without regard to specific series of such class of stock such warrants allow us to purchase.

(K)Category percentages represent the fair value of each category and subcategory as a percentage of net assets as of March 31, 2025.

(L)There are certain limitations on our ability to withdraw our partnership interest prior to dissolution of the entity, which must occur no later than May 9, 2024 or two years after all outstanding leverage has matured.

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

(N)Affiliate investments, as defined by the 1940 Act, are those in which we own, with the power to vote, between and inclusive of 5.0% and 25.0% of the issued and outstanding voting securities.

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

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

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

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

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

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

(T)Investment was exited subsequent to March 31, 2025. Refer to Note 12 – Subsequent Events in the accompanying Notes to the Consolidated Financial Statements for additional information.

(U)In December 2024, Eegee’s LLC filed for Chapter 11 bankruptcy.

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

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GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2024 (DOLLAR AMOUNTS IN THOUSANDS)
Company and Investment(A)(B)(K)(Q)	Principal/ Shares/ Units(I)(J)		Cost		Fair Value
NON-CONTROL/NON-AFFILIATE INVESTMENTS(M) – 159.5%
Secured First Lien Debt – 114.8%
Aerospace and Defense – 19.7%
Antenna Research Associates, Inc. – Term Debt (S + 10.0%, 14.8% Cash, 4.0% PIK, Due 11/2026)(E)(U)	$	31,267	$	31,267	$	31,267
Ohio Armor Holdings, LLC – Term Debt (S + 8.0%, 12.8% Cash, Due 2/2026)(C)	16,563		16,563		16,563
SpaceCo Holdings, LLC – Line of Credit, $0 available (S + 6.4%, 11.0% Cash, Due 12/2025)(C)(H)	2,000		2,000		2,000
SpaceCo Holdings, LLC – Term Debt (S + 6.4%, 11.0% Cash, Due 12/2025)(C)(H)	42,757		42,376		42,757
			92,206		92,587
Beverage, Food, and Tobacco – 15.2%
Café Zupas – Line of Credit, $700 available (S + 7.5%, 12.3% Cash, Due 12/2027)(C)	1,050		1,050		1,061
Café Zupas – Delayed Draw Term Loan, $3,150 available (S + 7.5%, 12.3% Cash, Due 12/2027)(C)	7,350		7,350		7,424
Café Zupas – Term Debt (S + 7.5%, 12.3% Cash, Due 12/2027)(C)	26,250		26,074		26,513
Eegee’s LLC – Line of Credit, $500 available (S + 7.8%, 12.6% Cash, Due 6/2026)(C)	1,500		1,500		1,135
Eegee’s LLC – Delayed Draw Term Loan, $0 available (S + 7.8%, 8.0% Cash, 4.6% PIK, Due 6/2026)(C)	3,145		3,145		2,380
Eegee’s LLC – Term Debt (S + 7.8%, 8.0% Cash, 4.6% PIK, Due 6/2026)(C)	17,824		17,824		13,486
Salt & Straw, LLC – Line of Credit, $2,000 available (S + 9.1%, 13.9% Cash, Due 9/2027)(C)	—		—		—
Salt & Straw, LLC – Delayed Draw Term Loan, $3,500 available (S + 9.1%, 13.9% Cash, Due 9/2027)(C)	10,850		10,693		10,850
Sokol & Company Holdings, LLC – Term Debt (S + 6.8%, 11.6% Cash, Due 8/2027)(C)	8,500		8,500		8,500
			76,136		71,349
Buildings and Real Estate – 0.5%
GFRC 360, LLC – Line of Credit, $95 available (S + 8.0%, 12.8% Cash, Due 9/2025)(C)	1,355		1,355		1,355
GFRC 360, LLC – Term Debt (S + 8.0%, 12.8% Cash, Due 9/2025)(C)	1,000		1,000		1,000
			2,355		2,355
Diversified/Conglomerate Manufacturing – 24.2%
Engineering Manufacturing Technologies, LLC – Line of Credit, $3,000 available (S + 8.3%, 13.1% Cash, Due 10/2026)(E)	—		—		—
Engineering Manufacturing Technologies, LLC – Term Debt (S + 8.3%, 10.0% Cash, 3.1% PIK, Due 10/2026)(E)	22,230		22,230		19,283
NeoGraf Solutions LLC – Line of Credit, $4,500 available (S + 7.0%, 11.0% Cash, 0.8% PIK, Due 1/2028)(C)	—		—		—
NeoGraf Solutions LLC – Term Debt (S + 7.0%, 11.0% Cash, 0.8% PIK, Due 1/2028)(C)	27,524		27,524		26,350
OCI, LLC – Term Debt (S + 7.5%, 12.3% Cash, Due 5/2028)(C)	18,500		18,500		18,685
Torrent Photonics Holdco LLC – Term Debt (S + 9.5%, 14.3% Cash, Due 4/2027)(C)	12,149		12,128		12,265
Unirac Holdings, Inc. – Line of Credit, $1,244 available (S + 6.5%, 11.3% Cash, Due 9/2027)(C)	978		978		978
Unirac Holdings, Inc. – Delayed Draw Term Loan, $0 available (S + 6.5%, 11.3% Cash, Due 9/2027)(C)	1,097		1,097		1,108
Unirac Holdings, Inc. – Term Debt (S + 6.5%, 11.3% Cash, Due 9/2027)(C)	14,738		14,494		14,885
Viva Railings, LLC – Line of Credit, $4,000 available (S + 7.1%, 11.9% Cash, Due 5/2027)(C)	—		—		—
Viva Railings, LLC – Term Debt (S + 7.1%, 11.9% Cash, Due 5/2027)(C)	20,202		20,202		20,202
			117,153		113,756
Diversified/Conglomerate Service – 30.9%
Axios Industrial Group, LLC – Term Debt (S + 9.6%, 14.4% Cash, Due 10/2027)(C)	11,325		11,301		11,357
Axios Industrial Group, LLC – Term Debt (S + 12.6%, 17.4% Cash, Due 10/2027)(C)	3,000		2,925		3,008
DKI Ventures, LLC – Line of Credit, $25 available (9.0% Cash, Due 12/2025)(E)(F)	350		350		159
DKI Ventures, LLC – Term Debt (9.0% Cash, Due 12/2025)(E)(F)	5,915		5,915		2,684
ENET Holdings, LLC – Line of Credit, $2,500 available (S + 7.3%, 12.1% Cash, Due 4/2025)(C)	—		—		—
ENET Holdings, LLC – Term Debt (S + 7.3%, 12.1% Cash, Due 4/2028)(C)	22,289		22,289		21,973

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

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GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2024 (DOLLAR AMOUNTS IN THOUSANDS)
Company and Investment(A)(B)(K)(Q)	Principal/ Shares/ Units(I)(J)	Cost		Fair Value
Fix-It Group, LLC – Line of Credit, $3,000 available (S + 7.1%, 11.9% Cash, Due 12/2026)(C)	—	—		—
Fix-It Group, LLC – Term Debt (S + 7.1%, 11.9% Cash, Due 12/2026)(C)	13,324	13,324		13,457
Fix-It Group, LLC – Delayed Draw Term Loan, $0 available (S + 7.1%, 11.9% Cash, Due 12/2026)(C)	6,781	6,781		6,781
Leadpoint Business Services, LLC – Term Debt (S + 8.5%, 13.3% Cash, Due 2/2028)(C)	25,500	25,475		26,010
MCG Energy Solutions, LLC – Term Debt (S + 7.6%, 12.4% Cash, 3.5% PIK, Due 3/2026)(E)	20,290	20,264		20,290
Quality Environmental Midco, Inc. – Line of Credit, $3,000 available (12.0% Cash, Due 11/2028)(C)(F)	—	—		—
Quality Environmental Midco, Inc. – Term Debt (12.0% Cash, Due 11/2028)(C)(F)	13,000	13,000		13,390
Total Access Elevator, LLC – Line of Credit, $3,000 available (S + 6.9%, 11.7% Cash, Due 4/2029)(C)	—	—		—
Total Access Elevator, LLC – Term Debt (S + 6.9%, 11.7% Cash, Due 4/2029)(C)	6,500	6,500		6,695
Total Access Elevator, LLC – Delayed Draw Term Loan, $2,500 available (S + 6.9%, 11.7% Cash, Due 4/2029)(C)	—	—		—
WorkforceQA, LLC – Line of Credit, $800 available (S + 6.5%, 11.3% Cash, Due 12/2026)(C)	1,200	1,200		1,200
WorkforceQA, LLC – Term Debt (S + 6.5%, 11.3% Cash, Due 12/2026)(C)	16,306	16,286		16,306
WorkforceQA, LLC – Term Debt (S + 7.5%, 12.3% Cash, Due 12/2026)(C)	2,406	2,403		2,406
		148,013		145,716
Healthcare, Education, and Childcare – 20.2%
ALS Education, LLC – Line of Credit, $3,000 available (S + 6.8%, 11.6% Cash, Due 12/2028)(C)	—	—		—
ALS Education, LLC – Term Debt (S + 6.8%, 11.6% Cash, Due 12/2028)(C)	31,680	31,680		31,997
HH-Inspire Acquisition, Inc. – Line of Credit, $110 available (S + 8.0%, 12.8% Cash, Due 4/2028)(C)(H)	1,727	1,727		1,677
HH-Inspire Acquisition, Inc. – Term Debt (S + 8.0%, 12.8% Cash, Due 4/2028)(C)(H)	15,852	15,852		15,399
HH-Inspire Acquisition, Inc. – Term Debt (S + 8.0%, 12.8% Cash, Due 4/2028)(C)(H)	3,193	3,193		3,102
Technical Resource Management, LLC – Line of Credit, $1,000 available (S + 8.0%, 12.8% Cash, Due 4/2028)(C)	2,000	2,000		2,008
Technical Resource Management, LLC – Term Debt (S + 8.0%, 12.8% Cash, 2.5% PIK, Due 4/2028)(C)	23,234	23,158		23,327
Turn Key Health Clinics, LLC – Line of Credit, $4,000 available (S + 7.3%, 12.1% Cash, Due 6/2026)(C)	—	—		—
Turn Key Health Clinics, LLC – Term Debt (S + 7.3%, 12.1% Cash, Due 6/2026)(C)	17,500	17,500		17,500
		95,110		95,010
Machinery – 3.6%
Arc Drilling Holdings LLC – Line of Credit, $4,000 available (S + 7.0%, 11.8% Cash, Due 9/2029)(C)	1,000	1,000		1,000
Arc Drilling Holdings LLC – Term Debt (S + 7.0%, 11.8% Cash, Due 9/2029)(C)	16,000	16,000		16,000
		17,000		17,000
Oil and Gas – 0.0%
FES Resources Holdings LLC – Term Debt (4.5% Cash, Due 12/2024)(E)(F)	325	325		163
Telecommunications – 0.5%
B+T Group Acquisition, Inc.(S) – Line of Credit, $0 available (S + 2.0%, 7.0% Cash, Due 12/2026)(E)(P)	1,320	1,320		471
B+T Group Acquisition, Inc.(S) – Line of Credit, $127 available (S + 2.0%, 7.0% Cash, Due 6/2025)(E)(P)	323	323		115
B+T Group Acquisition, Inc.(S) – Term Debt (S + 2.0%, 7.0% Cash, Due 12/2026)(E)(P)	6,000	6,000		2,139
		7,643		2,725
Total Secured First Lien Debt		$	555,941	$	540,661
Secured Second Lien Debt – 22.3%
Automobile – 3.4%
Sea Link International IRB, Inc. – Term Debt (11.3% Cash, 2.0% PIK, Due 12/2025)(C)(F)	12,331	12,314		12,331
Sea Link International IRB, Inc. – Term Debt (12.0% Cash, 2.0% PIK, Due 12/2025)(C)(F)	4,079	4,079		4,079
		16,393		16,410
Beverage, Food, and Tobacco – 0.7%
8th Avenue Food & Provisions, Inc. – Term Debt (S + 7.9%, 12.7% Cash, Due 10/2026)(D)	3,683	3,683		3,241

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

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GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2024 (DOLLAR AMOUNTS IN THOUSANDS)
Company and Investment(A)(B)(K)(Q)	Principal/ Shares/ Units(I)(J)		Cost		Fair Value
Cargo Transportation – 4.3%
RPM Freight Systems, LLC – Term Debt (S + 7.7%, 12.5% Cash, Due 11/2029)(C)	20,000		20,000		20,200
RPM Freight Systems, LLC – Delayed Draw Term Loan, $5,000 available (S + 7.7% 12.5% Cash, Due 11/2029)(C)	—		—		—
			20,000		20,200
Diversified/Conglomerate Manufacturing – 6.9%
OCI, LLC – Term Debt (7.0% Cash, 7.0% PIK, Due 11/2028)(C)(F)	2,159		2,159		2,303
Springfield, Inc. – Term Debt (S + 11.1%, 15.9% Cash, Due 12/2026)(C)	30,000		30,000		30,000
			32,159		32,303
Diversified/Conglomerate Service – 3.2%
Perimeter Solutions Group – Term Debt (S + 8.5%, 13.3% Cash, Due 2/2029)(C)(U)	15,000		15,000		15,000

Oil and Gas – 3.8%
Imperative Holdings Corporation – Term Debt (S + 9.8%, 14.6% Cash, Due 8/2028)(C)	18,015		17,909		18,015
Total Secured Second Lien Debt			$	105,144	$	105,169
Unsecured Debt – 0.1%
Diversified/Conglomerate Service – 0.1%
Frontier Financial Group Inc. – Convertible Debt (6.0% Cash, Due 6/2022)(E)(F)	198		198		32
Preferred Equity – 5.8%
Automobile – 0.1%
Sea Link International IRB, Inc. – Preferred Stock(E)(G)	98,039		98		220
Beverage, Food, and Tobacco – 2.0%
Salt & Straw, LLC – Preferred Equity(E)(G)	7,000,000		7,000		9,450
Triple H Food Processors, LLC – Preferred Stock(E)(G)	75		75		167
			7,075		9,617
Buildings and Real Estate – 0.0%
GFRC 360, LLC – Preferred Stock(E)(G)	1,000		1,025		—
Diversified/Conglomerate Manufacturing – 0.1%
Torrent Photonics Holdco LLC – Preferred Stock(E)(G)	2,650		2,650		552
Diversified/Conglomerate Service – 2.9%
Frontier Financial Group Inc. – Preferred Stock(E)(G)	766		500		—
Frontier Financial Group Inc. – Preferred Stock Warrant(E)(G)	168		—		—
MCG Energy Solutions, LLC – Preferred Stock(E)(G)	7,000,000		7,000		9,954
Quality Environmental Midco, Inc. – Preferred Equity(E)(G)	3,000,000		3,000		3,582
			10,500		13,536
Healthcare, Education, and Childcare – 0.2%
HH-Inspire Acquisition, Inc. – Preferred Stock(E)(G)	1,329,054		2,251		1,047
Oil and Gas – 0.5%
FES Resources Holdings LLC – Preferred Equity Units(E)(G)	6,350		6,350		—
Imperative Holdings Corporation – Preferred Equity Units(E)(G)	972,569		488		2,275
			6,838		2,275
Telecommunications – 0.0%
B+T Group Acquisition, Inc.(S) – Preferred Stock(E)(G)	6,130		2,024		—
Total Preferred Equity			$	32,461	$	27,247
Common Equity – 16.5%
Aerospace and Defense – 12.8%
Antenna Research Associates, Inc. – Common Equity Units(E)(G)(U)	4,283		4,283		59,423
Ohio Armor Holdings, LLC – Common Equity(E)(G)	100		1,000		1,086
			5,283		60,509
Automobile – 0.1%
Sea Link International IRB, Inc.– Common Equity Units(E)(G)	823,333		823		160
Beverage, Food, and Tobacco – 0.9%
Salt & Straw, LLC – Common Warrant(E)(G)	0.4	%	—		47
Sokol & Company Holdings, LLC – Common Stock(E)(G)	1,500,000		1,500		2,727
Triple H Food Processors, LLC – Common Stock(E)(G)	250,000		250		1,346
			1,750		4,120

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

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GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2024 (DOLLAR AMOUNTS IN THOUSANDS)
Company and Investment(A)(B)(K)(Q)	Principal/ Shares/ Units(I)(J)		Cost		Fair Value
Buildings and Real Estate – 0.0%
GFRC 360, LLC – Common Stock Warrants(E)(G)	45.0	%	—		—

Diversified/Conglomerate Manufacturing – 0.2%
Engineering Manufacturing Technologies, LLC – Common Stock(E)(G)	6,000		3,000		—
OCI, LLC – Common Units (E)(G)	306		—		—
NeoGraf Solutions LLC – Common Stock(E)(G)	2,000,000		2,000		859
			5,000		859
Diversified/Conglomerate Service – 0.3%
Total Access Elevator, LLC – Common Equity(E)(G)	750,000		750		1,234
WorkforceQA, LLC – Common Stock(E)(G)	532		532		346
			1,282		1,580
Healthcare, Education, and Childcare – 1.2%
Giving Home Health Care, LLC – Warrant(E)(G)	10,667		—		3,995
GSM MidCo LLC – Common Stock(E)(G)	767		767		1,583
Leeds Novamark Capital I, L.P. – Limited Partnership Interest ($843 uncalled capital commitment)(G)(L)(R)	3.5	%	—		38
Technical Resource Management, LLC – Common Stock(E)(G)	2,000,000		2,000		34
			2,767		5,650
Machinery – 1.0%
Arc Drilling Holdings LLC – Common Stock(E)(G)	53,333		5,333		4,816
Oil and Gas – 0.0%
FES Resources Holdings LLC – Common Equity Units(E)(G)	6,233		—		—
Total Safety Holdings, LLC – Common Equity(E)(G)	435		499		101
			499		101
Telecommunications – 0.0%
B+T Group Acquisition, Inc.(S) – Common Stock Warrant(E)(G)	1.5	%	—		—
Total Common Equity			$	22,737	$	77,795
Total Non-Control/Non-Affiliate Investments			$	716,481	$	750,904
AFFILIATE INVESTMENTS(N) – 1.6%
Secured First Lien Debt – 0.1%
Diversified/Conglomerate Manufacturing – 0.1%
Edge Adhesives Holdings, Inc. (S) – Term Debt (S + 5.5%, 10.3% Cash, Due 8/2026)(E)(P)	6,140		6,140		380
Preferred Equity – 0.9%
Diversified/Conglomerate Manufacturing – 0.0%
Edge Adhesives Holdings, Inc.(S) – Preferred Stock(E)(G)	5,466		5,466		$	—
Diversified/Conglomerate Service– 0.7%
Encore Dredging Holdings, LLC – Preferred Stock(E)(G)	3,840,000		3,840		3,168
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.2%
Canopy Safety Brands, LLC – Preferred Stock(E)(G)	500,000		500		931
Total Preferred Equity			$	9,806	$	4,099
Common Equity – 0.6%
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.6%
Canopy Safety Brands, LLC – Common Stock(E)(G)	1,170,370		800		2,959
Total Affiliate Investments			$	16,746	$	7,438
CONTROL INVESTMENTS(O) – 8.0%
Secured First Lien Debt – 3.0%
Diversified/Conglomerate Manufacturing – 0.9%
Lonestar EMS, LLC – Term Debt (12.0% Cash, Due 6/2027)(E)(F)	4,200		4,130		4,200

Personal and Non-Durable Consumer Products (Manufacturing Only) – 2.1%
WB Xcel Holdings, LLC – Line of Credit, $0 available (S + 10.5%, 15.3% Cash, Due 11/2026)(E)(P)	4,750		4,750		3,171
WB Xcel Holdings, LLC – Term Debt (S + 10.5%, 15.3% Cash, Due 11/2026)(E)(P)	9,775		9,775		6,525
			14,525		9,696

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

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GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2024 (DOLLAR AMOUNTS IN THOUSANDS)
Company and Investment(A)(B)(K)(Q)	Principal/ Shares/ Units(I)(J)		Cost		Fair Value
Printing and Publishing – 0.0%
TNCP Intermediate HoldCo, LLC – Line of Credit, $2,000 available (11.0% Cash, Due 10/2027)(E)(F)	—		—		—
Total Secured First Lien Debt			$	18,655	$	13,896
Secured Second Lien Debt – 1.8%
Automobile – 1.8%
Defiance Integrated Technologies, Inc. – Term Debt (S + 9.6%, 14.4% Cash, Due 1/2027)(E)	8,547		8,547		8,547
Preferred Equity – 0.0%
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0%
WB Xcel Holdings, LLC – Preferred Stock(E)(G)	333		2,750		—
Common Equity – 3.2%
Automobile – 0.6%
Defiance Integrated Technologies, Inc. – Common Stock(E)(G)	33,321		581		2,949
Diversified/Conglomerate Manufacturing – 1.7%
Lonestar EMS, LLC – Common Units(E)(G)	100.0	%	6,750		8,214
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0%
WB Xcel Holdings, LLC – Common Warrant(E)(G)	1		1		—
Printing and Publishing – 0.9%
TNCP Intermediate HoldCo, LLC – Common Equity Units(E)(G)	790,000		500		4,312
Total Common Equity			$	7,832	$	15,475
Total Control Investments			$	37,784	$	37,918
TOTAL INVESTMENTS(T) – 169.1%			$	771,011	$	796,260

(A)Certain of the securities listed in this schedule are issued by affiliate(s) of the indicated portfolio company. The majority of the securities listed, totaling $714.4 million at fair value, are pledged as collateral under our revolving line of credit, as described further in Note 5—Borrowings in the accompanying Notes to Consolidated Financial Statements. Under the 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, 2024, our investment in Leeds is considered a non-qualifying asset under Section 55 of the 1940 Act. Such non-qualifying assets represent less than 0.1% of total investments, at fair value, as of September 30, 2024.

(B)Unless indicated otherwise, all cash interest rates are indexed to one-month SOFR, which was 4.85% as of September 30, 2024. If applicable, PIK interest rates are noted separately from the cash interest rate. Certain securities are subject to an interest rate floor. The cash interest rate is the greater of the floor or SOFR plus a spread. Due dates represent the contractual maturity date.

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

(D)Fair value was based on the indicative bid price on or near September 30, 2024, offered by the respective syndication agent’s trading desk.

(F)Debt security has a fixed interest rate.

(G)Security is non-income producing.

(H)The cash interest rate on this investment was indexed to 90-day SOFR, which was 4.59% as of September 30, 2024.

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

(K)Category percentages represent the fair value of each category and subcategory as a percentage of net assets as of September 30, 2024.

(N)Affiliate investments, as defined by the 1940 Act, are those in which we own, with the power to vote, between and inclusive of 5.0% and 25.0% of the issued and outstanding voting securities.

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

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

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(Q)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.

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

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

(T)Cumulative gross unrealized depreciation for federal income tax purposes is $66.1 million; cumulative gross unrealized appreciation for federal income tax purposes is $85.8 million. Cumulative net unrealized appreciation is $19.7 million, based on a tax cost of $776.5 million.

(U)Investment was exited subsequent to September 30, 2024.

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

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GLADSTONE CAPITAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MARCH 31, 2025

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

NOTE 1. ORGANIZATION

Gladstone Capital Corporation was incorporated under the Maryland General Corporation Law on May 30, 2001 and completed an initial public offering on August 24, 2001. The terms “the Company,” “we,” “our” and “us” all refer to Gladstone Capital Corporation and its consolidated subsidiaries. We are an externally managed, closed-end, non-diversified management investment company that has elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), and are applying the guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946 “Financial Services-Investment Companies” (“ASC 946”). In addition, we have elected to be treated for U.S. federal income tax purposes as a regulated investment company (“RIC”) under the Internal Revenue Code of 1986, as amended (the “Code”). We were established for the purpose of investing in debt and equity securities of established private businesses operating in the United States (“U.S.”). Our investment objectives are to: (1) achieve and grow current income by investing in debt securities of established lower middle market companies (which we generally define as companies with annual earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $3 million to $25 million) in the U.S. that we believe will provide stable earnings and cash flow to pay expenses, make principal and interest payments on our outstanding indebtedness and make distributions to stockholders that grow over time; and (2) provide our stockholders with long-term capital appreciation in the value of our assets by investing in equity securities, in connection with our debt investments, that we believe can grow over time to permit us to sell our equity investments for capital gains.

Gladstone Business Loan, LLC (“Business Loan”), a wholly-owned subsidiary of ours, was established on February 3, 2003, for the sole purpose of holding certain investments pledged as collateral under our line of credit. The financial statements of Business Loan are consolidated with those of Gladstone Capital Corporation. We may also have significant subsidiaries (as defined under Rule 1-02(w)(2) of the U.S. Securities and Exchange Commission’s (“SEC”) Regulation S-X) whose financial statements are not consolidated with ours. We did not have any unconsolidated subsidiaries that met any of the significance conditions under Rule 1-02(w)(2) of the SEC’s Regulation S-X as of or during the three and six month periods ended March 31, 2025 and March 31, 2024.

We are externally managed by Gladstone Management Corporation (the “Adviser”), an affiliate of ours and an SEC registered investment adviser, pursuant to an investment advisory and management agreement (as amended and/or restated from time to time, the “Advisory Agreement”). Administrative services are provided by Gladstone Administration, LLC (the “Administrator”), an affiliate of ours and the Adviser, pursuant to an administration agreement (the “Administration Agreement”). Refer to Note 4—Related Party Transactions for additional information regarding these arrangements.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unaudited Interim Financial Statements and Basis of Presentation

We prepare our interim financial statements in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6, 10 and 12 of Regulation S-X. Accordingly, we have not included in this quarterly report all of the information and notes required by GAAP for annual financial statements. The accompanying Consolidated Financial Statements include our accounts and those of our wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. In accordance with Article 6 of Regulation S-X, we do not consolidate portfolio company investments. Under the investment company rules and regulations pursuant to the American Institute of Certified Public Accountants Audit and Accounting Guide for Investment Companies, codified in ASC 946, we are precluded from consolidating any entity other than another investment company, except that ASC 946 provides for the consolidation of a controlled operating company that provides substantially all of its services to the investment company or its consolidated subsidiaries. In our opinion, all adjustments, consisting solely of normal recurring accruals, necessary for the fair statement of financial statements for the interim periods have been included. The results of operations for the three and six months ended March 31, 2025 are not necessarily indicative of results that ultimately may be achieved for the fiscal year ending

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September 30, 2025 or any future interim periods. The interim financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024, as filed with the SEC on November 13, 2024.

Retroactive Adjustments for Reverse Stock Split

The outstanding shares and per share amounts of the Company’s common stock in the consolidated financial statements and notes to the consolidated financial statements have been retroactively adjusted for the 1-for-2 reverse stock split (the “Reverse Stock Split”) effected on April 4, 2024 (effective April 5, 2024 for trading purposes) for all activity prior to that date.

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.

Cash and cash equivalents

We consider all short-term, highly liquid investments that are both readily convertible to cash and have a maturity of three months or less at the time of purchase to be cash equivalents. Cash is carried at cost, which approximates fair value. We place our cash with financial institutions, and at times, cash held in checking accounts may exceed the Federal Deposit Insurance Corporation insured limit. We seek to mitigate this concentration of credit risk by depositing funds with major financial institutions. We held $2.4 million and $2.2 million of cash equivalents in Dreyfus Treasury Obligations Cash Management fund as of March 31, 2025 and September 30, 2024, respectively. Investments in money market funds represent Level 1 investments within the FASB ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”) fair value hierarchy.

Investment Valuation Policy

Accounting Recognition

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

Board Responsibility

Our board of directors (the “Board of Directors”) has approved investment valuation policies and procedures pursuant to Rule 2a-5 under the 1940 Act (the “Policy”) and, in July 2022, designated the Adviser to serve as the Board of Directors’ valuation designee ("Valuation Designee") under the 1940 Act.

In accordance with the 1940 Act, our Board of Directors has the ultimate responsibility for reviewing the good faith fair value determination of our investments for which market quotations are not readily available based on our Policy and for overseeing the Valuation Designee. Such review and oversight includes receiving written fair value determinations and supporting materials provided by the Valuation Designee, in coordination with the Administrator and with the oversight by the Company's chief valuation officer (collectively, the “Valuation Team”). The Valuation Committee of our Board of Directors (comprised entirely of independent directors) meets to review the valuation determinations and supporting materials, discusses the information provided by the Valuation Team, determines whether the Valuation Team has followed the Policy, and reviews other facts and circumstances, including current valuation risks, conflicts of interest, material valuation matters, appropriateness of valuation methodologies, back-testing results, price challenges/overrides, and ongoing monitoring and oversight of pricing services. After the Valuation Committee concludes its meeting, it and the chief valuation officer, representing the Valuation Designee, present the Valuation Committee’s findings on the Valuation Designee's determinations to the entire Board of Directors so that the full Board of Directors may review the Valuation Designee's determined fair values of such investments in accordance with the Policy.

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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.

A third-party valuation firm generally provides estimates of fair value on our debt investments. The Valuation Team generally assigns the third-party valuation firm’s estimates of fair value to our debt investments where we do not have the ability to effectuate a sale of the applicable portfolio company. The Valuation Team corroborates the third-party valuation firm’s estimates of fair value using one or more of the valuation techniques discussed below. The Valuation Team’s estimate of value on a specific debt investment may significantly differ from the third-party valuation firm’s. When this occurs, our Valuation Committee and Board of Directors review whether the Valuation Team has followed the Policy and the Valuation Committee reviews whether the Valuation Designee’s determined fair value is reasonable in light of the Policy and other relevant facts and circumstances.

We may engage other independent valuation firms to provide earnings multiple ranges, as well as other information, and evaluate such information for incorporation into the total enterprise value (“TEV”) of certain of our investments. Generally, at least once per year, we engage an independent valuation firm to value or review the valuation of each of our significant equity investments, which includes providing the information noted above. The Valuation Team evaluates such information for incorporation into our TEV, including review of all inputs provided by the independent valuation firm. The Valuation Team then presents a determination to our Valuation Committee as to the fair value. Our Valuation Committee reviews the determined fair value and whether it is reasonable in light of the Policy and other relevant facts and circumstances.

Valuation Techniques

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

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

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

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

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

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

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

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

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

Revenue Recognition

Interest Income Recognition

Interest income, including the amortization of premiums, acquisition costs and amendment fees, the accretion of original issue discounts (“OID”), and paid-in-kind (“PIK”) interest, is recorded on the accrual basis to the extent that such amounts are expected to be collected. Generally, when a loan becomes 90 days or more past due or if our qualitative assessment indicates that the debtor is unable to service its debt or other obligations, we will place the loan on non-accrual status and cease recognizing interest income on that loan for financial reporting purposes until the borrower has demonstrated the ability and intent to pay contractual amounts due. However, we remain contractually entitled to this interest. Interest payments received on non-accrual loans may be recognized as income or applied to the cost basis depending upon management’s judgment. Generally, non-accrual loans are restored to accrual status when past due principal and interest are paid and, in management’s judgment, are likely to remain current, or due to a restructuring such that the interest income is deemed to be collectible. As of March 31, 2025, our loans to B+T Group Acquisition, Inc., Edge Adhesives Holdings, Inc., Eegee’s LLC, and WB Xcel Holdings, LLC were on non-accrual status with a cost basis of $53.7 million, or 7.5% of the cost basis of all debt investments in our portfolio, and a fair value of $29.8 million, or 4.3% of the fair value of all debt investments in our portfolio. As of September 30, 2024, our loans to B+T Group Acquisition, Inc., Edge Adhesives Holdings, Inc., and WB Xcel Holdings, LLC were on non-accrual status with a cost basis of $28.3 million, or 4.1% of the cost basis of all debt investments in our portfolio, and a fair value of $12.8 million, or 1.9% of the fair value of all debt investments in our portfolio.

We currently hold, and we expect to hold in the future, some loans in our portfolio that contain OID or PIK provisions. We recognize OID for loans originally issued at discounts and recognize the income over the life of the obligation based on an

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effective yield calculation. PIK interest, computed at the contractual rate specified in a loan agreement, is added to the principal balance of a loan and recorded as income over the life of the obligation. Thus, the actual collection of PIK income may be deferred until the time of debt principal repayment. To maintain our ability to be taxed as a RIC, we may need to pay out both OID and PIK non-cash income amounts in the form of distributions, even though we have not yet collected the cash on either.

As of each of March 31, 2025 and September 30, 2024, we held two OID loans. We recorded OID income of $0.1 million and $0.2 million during the three and six months ended March 31, 2025, respectively, and $0.1 million during each of the three and six months ended March 31, 2024. The unamortized balance of OID investments as of March 31, 2025 and September 30, 2024 totaled $0.4 million and $0.6 million, respectively. As of March 31, 2025 and September 30, 2024, we had seven and eight investments which had a PIK interest component, respectively. We recorded PIK interest income of $0.9 million and $1.7 million during the three and six months ended March 31, 2025, respectively, and $1.4 million and $2.8 million during the three and six months ended March 31, 2024, respectively. We collected $2.6 million and $7.2 million of PIK interest in cash during the three and six months ended March 31, 2025, respectively, and $0 during each of the three and six months ended March 31, 2024.

Success Fee Income Recognition

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

Dividend Income Recognition

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

Related Party Fees

We are party to the Advisory Agreement with the Adviser, which is indirectly owned by our chairman and chief executive officer. In accordance with the Advisory Agreement, we pay the Adviser fees as compensation for its services, consisting of a base management fee and an incentive fee. Additionally, we pay the Adviser a loan servicing fee as compensation for its services as servicer under the terms of our revolving line of credit with KeyBank National Association (“KeyBank”), as administrative agent, lead arranger and lender (as amended and/or restated from time to time, our “Credit Facility”). These fees are accrued at the end of the quarter when the services are performed and generally paid the following quarter.

We are also party to the Administration Agreement with the Administrator, which is indirectly owned and controlled by our chairman and chief executive officer, whereby we pay separately for administrative services. Refer to Note 4 — Related Party Transactions for additional information regarding these related party fees and agreements.

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NOTE 3. INVESTMENTS

Fair Value

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

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

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

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

When a determination is made to classify our investments within Level 3 of the valuation hierarchy, such determination is based upon the significance of the unobservable factors to the overall fair value measurement. However, Level 3 financial instruments typically include, in addition to the unobservable, or Level 3, inputs, observable inputs (or components that are actively quoted and can be validated to external sources). The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. Investments in funds measured using NAV as a practical expedient are not categorized within the fair value hierarchy.

As of March 31, 2025, all of our investments were valued using Level 3 inputs within the ASC 820 fair value hierarchy, except for our investments in Gladstone Alternative Income Fund (“Gladstone Alternative”) and Leeds Novamark Capital I, L.P. (“Leeds”), which were valued using NAV as a practical expedient. As of September 30, 2024, all of our investments were valued using Level 3 inputs within the ASC 820 fair value hierarchy, except for our investment in Leeds, which was valued using NAV as a practical expedient.

We transfer investments in and out of Level 1, 2, and 3 of the valuation hierarchy as of the beginning balance sheet date, based on changes in the use of observable and unobservable inputs utilized to perform the valuation for the period. During the six months ended March 31, 2025 and 2024, there were no investments transferred into or out of Levels 1, 2 or 3 of the valuation hierarchy.

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As of March 31, 2025 and September 30, 2024, 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 March 31, 2025:
Secured first lien debt	$	—	$	—	$	541,524	$	541,524
Secured second lien debt	—		—		144,970		144,970
Unsecured debt	—		—		335		335
Preferred equity	—		—		25,031		25,031
Common equity/equivalents	—		—		45,765		45,765
Total	$	—	$	—	$	757,625	$	757,625
Investments measured at NAV(A)	—		—		—		5,011
Total Investments as of March 31, 2025	$	—	$	—	$	757,625	$	762,636


	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 September 30, 2024:
Secured first lien debt	$	—	$	—	$	554,937	$	554,937
Secured second lien debt	—		—		113,716		113,716
Unsecured debt	—		—		32		32
Preferred equity	—		—		31,346		31,346
Common equity/equivalents	—		—		96,191		96,191
Total	$	—	$	—	$	796,222	$	796,222
Investments measured at NAV(A)	—		—		—		38
Total Investments as of September 30, 2024	$	—	$	—	$	796,222	$	796,260

(A)Includes our investments in Gladstone Alternative and Leeds as of March 31, 2025 and our investment in Leeds as of September 30, 2024. 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.

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The following table presents our portfolio investments, valued using Level 3 inputs within the ASC 820 fair value hierarchy and carried at fair value as of March 31, 2025 and September 30, 2024, by caption on our accompanying Consolidated Statements of Assets and Liabilities and by security type:


	Total Recurring Fair Value Measurements Reported in
	Consolidated Statements of Assets and Liabilities Using Significant Unobservable Inputs (Level 3)
	March 31, 2025			September 30, 2024
Non-Control/Non-Affiliate Investments
Secured first lien debt	$	505,135		$	540,661
Secured second lien debt	136,178			105,169
Unsecured debt	23			32
Preferred equity	18,406			27,247
Common equity/equivalents	25,693		(A)	77,757		(B)
Total Non-Control/Non-Affiliate Investments	$	685,435		$	750,866
Affiliate Investments
Secured first lien debt	$	229		$	380
Preferred equity	6,625			4,099
Common equity/equivalents	4,103			2,959
Total Affiliate Investments	$	10,957		$	7,438
Control Investments
Secured first lien debt	$	36,160		$	13,896
Secured second lien debt	8,792			8,547
Unsecured debt	312			—
Common equity/equivalents	15,969			15,475
Total Control Investments	$	61,233		$	37,918
Total Investments at Fair Value Using Level 3 Inputs	$	757,625		$	796,222

(A)Excludes our investments in Gladstone Alternative and Leeds with fair values of $5.0 million and $36 thousand, respectively, as of March 31, 2025, which were valued using NAV as a practical expedient.

(B)Excludes our investment in Leeds with a fair value of $38 thousand as of September 30, 2024, which was valued using NAV as a practical expedient.

In accordance with ASC 820, the following table provides quantitative information about our Level 3 fair value measurements of our investments as of March 31, 2025 and September 30, 2024. 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.

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The weighted average calculations in the table below are based on the principal balances for all debt related calculations and on the cost basis for all equity related calculations for the particular input.

Quantitative Information about Level 3 Fair Value Measurements

Range / Weighted Average as of

March 31,
2025

September 30,
2024

Valuation

Techniques/

Methodologies

Unobservable

Input

March 31,
2025

September 30,
2024

Secured first lien debt

467,857

464,090

Yield Analysis

Discount Rate

9.9% - 17.5%

/ 11.7%

10.8% - 17.3%

/ 12.6%

73,667

90,847

TEV

EBITDA multiple

5.5x – 7.1x

/ 6.2x

4.1x – 13.9x

/ 10.0x

EBITDA

$2,504 - $4,222

/ $3,355

$3,020 - $16,211

/ $10,309

Revenue multiple

0.4x – 0.7x

/ 0.6x

0.2x – 4.6x

/ 2.1x

Revenue

$10,667 - $21,318

/ $15,691

$6,336 - $21,118

/ $13,981

Secured second lien debt

132,790

101,928

Yield Analysis

Discount Rate

11.7% - 15.4%

/ 13.3%

12.2% - 16.0%

/ 14.1%

3,388

3,241

Market Quote

IBP

92.0% - 92.0%

/ 92.0%

88.0% - 88.0%

/ 88.0%

8,792

8,547

TEV

EBITDA multiple

5.4x – 5.4x

/ 5.4x

5.4x – 5.4x

/ 5.4x

EBITDA

$2,543 - $2,543

/ $2,543

$3,343 - $3,343

/ $3,343

Unsecured debt

335

TEV

EBITDA multiple

7.1x – 7.1x

/ 7.1x

0.0x – 0.0x

/ 0.0x

EBITDA

$4,222 - $4,222

/ $4,222

$0 - $0

/ $0

Revenue multiple

1.0x – 1.0x

/ 1.0x

1.0x – 1.0x

/ 1.0x

Revenue

$5,616 - $5,616

/ $5,616

$7,834 - $7,834

/ $7,834

Preferred and common equity / equivalents(A)

70,796

127,537

TEV

EBITDA multiple

5.0x – 14.5x

/ 7.8x

4.1x – 13.9x

/ 8.0x

EBITDA

$1,318 -$144,799

/ $10,694

$1,182 -$144,458

/ $10,847

Revenue multiple

0.4x – 1.0x

/ 0.5x

0.2x– 4.6x

/ 2.0x

Revenue

$5,402 -$21,318

/ $10,537

$4,672 -$21,118

/ $12,587

Total Level 3 Investments, at Fair Value

757,625

796,222

(A)Fair value as of March 31, 2025 excludes our investments in Gladstone Alternative and Leeds with fair values of $5.0 million and $36 thousand, respectively, as of March 31, 2025, which were valued using NAV as a practical expedient. Fair value as of September 30, 2024 excludes our investment in Leeds with a fair value of $38 thousand, which was valued using NAV as a practical expedient.

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, discount rates, or a (decrease)/increase in EBITDA or EBITDA multiples (or revenue or revenue multiples) may result in a (decrease)/increase, respectively, in the fair value of certain of our investments.

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Changes in Level 3 Fair Value Measurements of Investments

The following tables provide the changes in fair value, broken out by security type, during the three and six months ended March 31, 2025 and 2024 for all investments for which we determine fair value using unobservable (Level 3) inputs.

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)


Three months ended March 31, 2025	Secured First Lien Debt		Secured Second Lien Debt		Unsecured Debt		Preferred Equity		Common Equity/ Equivalents		Total
Fair Value as of December 31, 2024	$	586,409	$	127,234	$	359	$	31,294	$	49,164	$	794,460
Total gains (losses):
Net realized gain (loss)(A)	—		—		—		2,954		4,748		7,702
Net unrealized appreciation (depreciation)(B)	(7,292)		(12)		(35)		3,691		1,606		(2,042)
Reversal of prior period net depreciation (appreciation) on realization(B)	(22)		—		—		(2,954)		(4,870)		(7,846)
New investments, repayments and settlements: (C)
Issuances/originations	27,111		18,453		11		—		915		46,490
Settlements/repayments	(64,682)		(705)		—		—		—		(65,387)
Net proceeds from sales	—		—		—		(9,954)		(5,798)		(15,752)

Fair Value as of March 31, 2025	$	541,524	$	144,970	$	335	$	25,031	$	45,765	$	757,625

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)


Six months ended March 31, 2025	Secured First Lien Debt		Secured Second Lien Debt		Unsecured Debt		Preferred Equity		Common Equity/ Equivalents		Total
Fair Value as of September 30, 2024	$	554,937	$	113,716	$	32	$	31,346	$	96,191	$	796,222
Total gains (losses):
Net realized gain (loss)(A)	(4,074)		—		—		5,404		64,096		65,426
Net unrealized appreciation (depreciation)(B)	(10,826)		103		(30)		6,827		14,002		10,076
Reversal of prior period net depreciation (appreciation) on realization(B)	3,559		—		—		(5,404)		(60,010)		(61,855)
New investments, repayments and settlements: (C)
Issuances/originations	138,865		47,697		333		6,262		915		194,072
Settlements/repayments	(140,937)		(16,546)		—		—		—		(157,483)
Net proceeds from sales	—		—		—		(19,404)		(69,429)		(88,833)

Fair Value as of March 31, 2025	$	541,524	$	144,970	$	335	$	25,031	$	45,765	$	757,625

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Fair Value Measurements Using Significant Unobservable Inputs (Level 3)


Three months ended March 31, 2024	Secured First Lien Debt		Secured Second Lien Debt		Unsecured Debt		Preferred Equity		Common Equity/ Equivalents		Total
Fair Value as of December 31, 2023	$	546,602	$	126,571	$	23	$	29,722	$	46,799	$	749,717
Total gains (losses):
Net realized gain (loss)(A)	—		—		—		219		—		219
Net unrealized appreciation (depreciation)(B)	(1,998)		2,287		10		2,496		7,636		10,431
Reversal of prior period net depreciation (appreciation) on realization(B)	(19)		157		—		130		—		268
New investments, repayments and settlements: (C)
Issuances/originations	29,951		15,177		—		1,000		—		46,128
Settlements/repayments	(10,687)		(3,783)		—		—		—		(14,470)
Net proceeds from sales	—		—		—		(969)		—		(969)

Fair Value as of March 31, 2024	$	563,849	$	140,409	$	33	$	32,598	$	54,435	$	791,324

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)


Six months ended March 31, 2024	Secured First Lien Debt		Secured Second Lien Debt		Unsecured Debt		Preferred Equity		Common Equity/ Equivalents		Total
Fair Value as of September 30, 2023	$	510,701	$	127,854	$	24	$	26,855	$	39,128	$	704,562
Total gains (losses):
Net realized gain (loss)(A)	—		—		—		219		259		478
Net unrealized appreciation (depreciation)(B)	4,998		1,543		9		(3,637)		15,591		18,504
Reversal of prior period net depreciation (appreciation) on realization(B)	(19)		157		—		130		(283)		(15)
New investments, repayments and settlements: (C)
Issuances/originations	79,975		15,362		—		10,000		—		105,337
Settlements/repayments	(31,806)		(4,507)		—		—		—		(36,313)
Net proceeds from sales	—		—		—		(969)		(260)		(1,229)

Fair Value as of March 31, 2024	$	563,849	$	140,409	$	33	$	32,598	$	54,435	$	791,324

(A)Included in net realized gain (loss) on investments on our accompanying Consolidated Statements of Operations for the corresponding period.

(B)Included in net unrealized appreciation (depreciation) on investments on our accompanying Consolidated Statements of Operations for the corresponding period.

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

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Investment Activity

Proprietary Investments

As of March 31, 2025 and September 30, 2024, we held 49 and 47 proprietary investments with an aggregate fair value of $759.1 million and $792.9 million, or 99.5% and 99.6% of the total investment portfolio at fair value, respectively. The following significant proprietary investment transactions occurred during the six months ended March 31, 2025:

•In October 2024, our $15.0 million debt investment in Perimeter Solutions Group paid off at par. We also received a $0.5 million prepayment penalty in conjunction with the payoff.

•In October 2024, our investment in Antenna Research Associates, Inc. was sold, which resulted in a net realized gain on our common equity of approximately $59.3 million and the repayment of our debt investment of $31.3 million at par.

•In November 2024, we invested an additional $28.9 million in Giving Home Healthcare, LLC, an existing portfolio company, through secured first lien debt.

•In November 2024, we invested $10.5 million in Wings ‘N More Restaurants, LLC (“Wings”) through secured first lien debt. We also extended Wings a $1.5 million secured first lien line of credit commitment and a $5.0 million secured first lien delayed draw term loan commitment, both of which were unfunded as of March 31, 2025.

•In November 2024, our $22.3 million debt investment in ENET Holdings, LLC paid off at par.

•In December 2024, we invested $42.8 million in Vet’s Choice Radiology, LLC through secured first lien debt.

•In December 2024, we invested $28.9 million in Pan-Am Dental, LLC through secured second lien debt and preferred equity.

•In December 2024, we invested $15.0 million in Freedom Dental Management, Inc. through secured first lien debt.

•In December 2024, we invested $5.0 million in Tube Bending Technology, LLC through secured second lien debt.

•In December 2024, we invested $5.0 million in Gladstone Alternative, one of our affiliated funds, through common equity.

•In December 2024, our investment in Salt and Straw, LLC, paid off which resulted in a realized gain of approximately $2.5 million on our preferred equity and the repayment of our debt investment of $10.9 million at par. We also received a $0.1 million prepayment penalty in conjunction with the payoff. We continue to hold warrants for common equity in Salt and Straw, LLC.

•In December 2024, we sold our debt investments in DKI Ventures, LLC, which resulted in a net realized loss on our debt of approximately $4.1 million.

•In January 2025, our $20.6 million debt investment in Fix-It Group, LLC paid off at par. We also received a $0.1 million prepayment penalty.

•In January 2025, our $5.4 million debt investment in Sokol and Company, LLC (“Sokol”) paid off at par. Additionally, in February 2025, a portion of our common equity investment in Sokol was sold, representing a return of our equity cost basis of $1.1 million and a realized gain of $4.7 million.

•In February 2025, we invested $18.9 million in Dutch Gold Honey, Inc. through secured second lien debt and common equity.

•In February 2025, we invested $19.4 million in Viron International, LLC through secured first lien debt and common equity.

•In March 2025, we received a $6.0 million partial repayment on our debt investment in Viva Railings, LLC.

•In March 2025, we exited our investment in MCG Energy Solutions, LLC, which resulted in a realized gain on our preferred equity investment of approximately $3.0 million and the repayment of our debt investment of $20.4 million at par.

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Syndicated Investments

As of March 31, 2025 and September 30, 2024, we held two syndicated investments with an aggregate fair value of $3.5 million and $3.3 million, or 0.5% and 0.4% of the total investment portfolio at fair value, respectively.

Investment Concentrations

As of March 31, 2025, our investment portfolio consisted of investments in 51 portfolio companies located in 21 states in 14 different industries, with an aggregate fair value of $762.6 million. The five largest investments at fair value as of March 31, 2025 totaled $186.8 million, or 24.5% of our total investment portfolio, as compared to the five largest investments at fair value as of September 30, 2024 totaling $232.7 million, or 29.2% of our total investment portfolio. As of March 31, 2025 and September 30, 2024, our average investment by obligor was $15.5 million and $15.7 million at cost, respectively.

The following table outlines our investments by security type as of March 31, 2025 and September 30, 2024:


	March 31, 2025								September 30, 2024
	Cost				Fair Value				Cost				Fair Value
Secured first lien debt	$	574,590	72.8	%	$	541,524	71.0	%	$	580,736	75.3	%	$	554,937	69.7	%
Secured second lien debt	144,842		18.3		144,970		19.0		113,691		14.8		113,716		14.3
Unsecured debt	531		0.1		335		0.1		198		0.0		32		0.0
Total debt investments	719,963		91.2		686,829		90.1		694,625		90.1		668,685		84.0
Preferred equity	37,279		4.7		25,031		3.3		45,017		5.8		31,346		3.9
Common equity/equivalents	31,951		4.1		50,776		6.6		31,369		4.1		96,229		12.1
Total equity investments	69,230		8.8		75,807		9.9		76,386		9.9		127,575		16.0
Total Investments	$	789,193	100.0	%	$	762,636	100.0	%	$	771,011	100.0	%	$	796,260	100.0	%

Our investments at fair value consisted of the following industry classifications as of March 31, 2025 and September 30, 2024:


	March 31, 2025				September 30, 2024
Industry Classification	Fair Value		Percentage of Total Investments		Fair Value		Percentage of Total Investments
Healthcare, Education, and Childcare	$	218,439	28.6	%	$	101,707	12.8	%
Diversified/Conglomerate Manufacturing	177,211		23.2		160,264		20.1
Diversified/Conglomerate Service	95,686		12.5		179,032		22.5
Beverage, Food, and Tobacco	92,901		12.2		88,327		11.1
Aerospace and Defense	59,193		7.8		153,096		19.2
Automobile	27,954		3.7		28,286		3.6
Machinery	22,956		3.0		21,816		2.7
Cargo Transportation	20,200		2.7		20,200		2.5
Oil and Gas	19,358		2.5		20,554		2.6
Personal and Non-Durable Consumer Products	12,618		1.7		13,586		1.7
Printing and Publishing	5,515		0.7		4,312		0.5
Other, < 2.0%	10,605		1.4		5,080		0.7
Total Investments	$	762,636	100.0	%	$	796,260	100.0	%

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Our investments at fair value were included in the following U.S. geographic regions as of March 31, 2025 and September 30, 2024:


	March 31, 2025				September 30, 2024
Location	Fair Value		Percentage of Total Investments		Fair Value		Percentage of Total Investments
South	$	250,685	32.9	%	$	314,010	39.4	%
West	243,031		31.8		249,082		31.3
Midwest	215,704		28.3		192,897		24.2
Northeast	53,216		7.0		40,271		5.1
Total Investments	$	762,636	100.0	%	$	796,260	100.0	%

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

Investment Principal Repayments

The following table summarizes the contractual principal repayment and maturity of our investment portfolio by fiscal year, assuming no voluntary prepayments, as of March 31, 2025:


		Amount
For the remaining six months ending September 30:	2025(A)	$	9,175
For the fiscal years ending September 30:	2026	138,231
	2027	160,243
	2028	220,197
	2029	92,463
	Thereafter	100,775
	Total contractual repayments	$	721,084
	Adjustments to cost basis of debt investments	(1,121)
	Investments in equity securities	69,230
	Investments held as of March 31, 2025 at cost:	$	789,193

(A)Includes debt investments with contractual principal amounts totaling $0.5 million for which the maturity date has passed as of March 31, 2025.

Receivables from Portfolio Companies

Receivables from portfolio companies represent non-recurring costs incurred on behalf of such portfolio companies and are included in other assets on our accompanying Consolidated Statements of Assets and Liabilities. We generally maintain an allowance for uncollectible receivables from portfolio companies when the receivable balance becomes 90 days or more past due or if it is determined, based upon management’s judgment, that the portfolio company is unable to pay its obligations. We write off accounts receivable when we have exhausted collection efforts and have deemed the receivables uncollectible. As of March 31, 2025 and September 30, 2024, we had gross receivables from portfolio companies of $1.9 million and $1.7 million, respectively. The allowance for uncollectible receivables was $94 thousand and $75 thousand as of March 31, 2025 and September 30, 2024, respectively.

NOTE 4. RELATED PARTY TRANSACTIONS

Transactions with the Adviser

We have been externally managed by the Adviser pursuant to the Advisory Agreement since October 1, 2004 pursuant to which we pay the Adviser a base management fee and an incentive fee for its services. Our Board of Directors, including a majority of the directors who are not parties to the Advisory Agreement or interested persons of us or the Adviser, unanimously approved the Advisory Agreement.

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We also pay the Adviser a loan servicing fee for its role of servicer pursuant to our Credit Facility. The entire loan servicing fee paid to the Adviser by Business Loan is non-contractually, unconditionally and irrevocably credited against the base management fee otherwise payable to the Adviser, since Business Loan is a consolidated subsidiary of ours, and overall, the base management fee (including any loan servicing fee) cannot exceed 1.75% of total assets (including investments made with proceeds of borrowings, less any uninvested cash or cash equivalents resulting from borrowings) during any given fiscal year pursuant to the Advisory Agreement.

David Gladstone (our chairman and chief executive officer) serves as a director and executive officer of the Adviser, which, as of March 31, 2025, is 100% indirectly owned by Mr. Gladstone. Robert Marcotte (our president) also serves as executive vice president of private equity (debt) of the Adviser. Michael LiCalsi, our general counsel and secretary (who also serves as the Administrator’s president, general counsel and secretary), is also the executive vice president of administration of our Adviser.

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


	Three Months Ended March 31,						Six Months Ended March 31,
	2025			2024			2025			2024
Average total assets subject to base management fee(A)(B)	$	786,514		$	786,057		$	799,200		$	763,886
Multiplied by prorated annual base management fee of 1.75%	0.4375		%	0.4375		%	0.8750		%	0.8750		%
Base management fee(C)	$	3,441		$	3,439		$	6,993		$	6,684
Portfolio company fee credit	(712)			(325)			(2,808)			(1,876)
Syndicated loan fee credit	(11)			(27)			(21)			(58)
Net Base Management Fee	$	2,718		$	3,087		$	4,164		$	4,750
Loan servicing fee(C)	2,278			2,260			4,456			4,388
Credit to base management fee - loan servicing fee(C)	(2,278)			(2,260)			(4,456)			(4,388)
Net Loan Servicing Fee	$	—		$	—		$	—		$	—
Incentive fee(C)	2,407			2,669			5,111			5,653
Incentive fee credit	(1,423)			(94)			(1,662)			(94)
Net Incentive Fee	$	984		$	2,575		$	3,449		$	5,559
Portfolio company fee credit	(712)			(325)			(2,808)			(1,876)
Syndicated loan fee credit	(11)			(27)			(21)			(58)
Incentive fee credit	(1,423)			(94)			(1,662)			(94)
Credits to Fees From Adviser - other(C)	$	(2,146)		$	(446)		$	(4,491)		$	(2,028)

(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 period.

(B)Excludes our investment in Gladstone Alternative valued at the end of the applicable quarters with the respective periods.

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

Base Management Fee

The base management fee is payable quarterly to the Adviser pursuant to our Advisory Agreement and is assessed at an annual rate of 1.75%, computed on the basis of the value of our average total assets at the end of the two most recently-completed quarters (inclusive of the current quarter), which are total assets, including investments made with proceeds of borrowings, less any uninvested cash or cash equivalents resulting from borrowings and adjusted appropriately for any share issuances or repurchases during the period.

Additionally, pursuant to the requirements of the 1940 Act, the Adviser makes available significant managerial assistance to our portfolio companies. The Adviser may also provide other services to our portfolio companies under certain agreements and may receive fees for services other than managerial assistance. Such services may include: (i) assistance obtaining, sourcing or structuring credit facilities, long term loans or additional equity from unaffiliated third parties; (ii) negotiating important contractual financial relationships; (iii) consulting services regarding restructuring of the portfolio company and financial modeling as it relates to raising additional debt and equity capital from unaffiliated third parties; and (iv) taking a primary role in interviewing, vetting and negotiating employment contracts with candidates in

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connection with adding and retaining key portfolio company management team members. The Adviser non-contractually, unconditionally, and irrevocably credits 100% of any fees for such services against the base management fee that we would otherwise be required to pay to the Adviser.

Our Board of Directors accepted a non-contractual, unconditional, and irrevocable credit from the Adviser to reduce the annual base management fee on syndicated loan participations to 0.5%, to the extent that proceeds resulting from borrowings were used to purchase such syndicated loan participations, for each of the three and six months ended March 31, 2025 and 2024.

Loan Servicing Fee

The Adviser also services the loans held by Business Loan (the borrower under the Credit Facility), in return for which the Adviser receives a 1.5% annual fee payable monthly based on the aggregate outstanding balance of loans pledged under our Credit Facility. As discussed in the notes to the table above, we treat payment of the loan servicing fee pursuant to the Credit Facility as a pre-payment of the base management fee under the Advisory Agreement. Accordingly, these loan servicing fees are 100% non-contractually, unconditionally and irrevocably credited back to us by the Adviser.

Incentive Fee

The incentive fee consists of two parts: an income-based incentive fee and a capital gains-based incentive fee. The income-based incentive fee rewards the Adviser if our quarterly net investment income (before giving effect to any incentive fee) exceeds 1.75% (2.0% during the period from April 1, 2020 through March 31, 2023) of our net assets, which we define as total assets less indebtedness and before taking into account any incentive fees payable or contractually due but not payable during the period, at the end of the immediately preceding calendar quarter, adjusted appropriately for any share issuances or repurchases during the period (the “hurdle rate”). The income-based incentive fee with respect to our pre-incentive fee net investment income is generally payable quarterly to the Adviser and is computed as follows:

•no incentive fee in any calendar quarter in which our pre-incentive fee net investment income does not exceed the hurdle rate;

•100.0% of our pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 2.1875% (2.50% from April 1, 2022 through March 31, 2023) of our net assets, adjusted appropriately for any share issuances or repurchases during the period, in any calendar quarter; and

•20.0% of the amount of our pre-incentive fee net investment income, if any, that exceeds 2.1875% (2.50% from April 1, 2022 through March 31, 2023) of our net assets, adjusted appropriately for any share issuances or repurchases during the period, in any calendar quarter.

The second part of the incentive fee is a capital gains-based incentive fee that is determined and payable in arrears as of the end of each fiscal year (or upon termination of the Advisory Agreement, as of the termination date) and equals 20.0% of our “net realized capital gains” (as defined herein) as of the end of the fiscal year. In determining the capital gains-based incentive fee payable to the Adviser, we calculate “net realized capital gains” at the end of each applicable year by subtracting the sum of our cumulative aggregate realized capital losses and our entire portfolio’s aggregate unrealized capital depreciation from our cumulative aggregate realized capital gains. For this purpose, cumulative aggregate realized capital gains, if any, equals the sum of the differences between the net sales price of each investment, when sold, and the original cost of such investment since inception. Cumulative aggregate realized capital losses equals the sum of the amounts by which the net sales price of each investment, when sold, is less than the original cost of such investment since inception. The entire portfolio’s aggregate unrealized capital depreciation, if any, equals the sum of the difference between the valuation of each investment as of the applicable calculation date and the original cost of such investment. At the end of the applicable fiscal year, the amount of capital gains that serves as the basis for our calculation of the capital gains-based incentive fee equals the cumulative aggregate realized capital gains less cumulative aggregate realized capital losses, less the entire portfolio’s aggregate unrealized capital depreciation, if any. If this number is positive at the end of such fiscal year, then the capital gains-based incentive fee for such year equals 20.0% of such amount, less the aggregate amount of any capital gains-based incentive fees paid in respect of our portfolio in all prior years. No capital gains-based incentive fee has been recorded or paid since our inception through March 31, 2025, as cumulative unrealized capital depreciation has exceeded cumulative realized capital gains net of cumulative realized capital losses.

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In accordance with GAAP, a capital gains-based incentive fee accrual is calculated using the aggregate cumulative realized capital gains and losses and aggregate cumulative unrealized capital appreciation and depreciation. If such amount is positive at the end of a period, then GAAP requires us to record a capital gains-based incentive fee equal to 20.0% of such amount, less the aggregate amount of actual capital gains-based incentive fees paid in all prior years. If such amount is negative, then there is no accrual for such period. GAAP requires that the capital gains-based incentive fee accrual consider the cumulative aggregate unrealized capital appreciation in the calculation, as a capital gains-based incentive fee would be payable if such unrealized capital appreciation were realized. There can be no assurance that such unrealized capital appreciation will be realized in the future. No GAAP accrual for a capital gains-based incentive fee has been recorded from our inception through March 31, 2025.

Our Board of Directors accepted non-contractual, unconditional and irrevocable credits from the Adviser to reduce the income-based incentive fee to the extent net investment income did not cover 100.0% of distributions to common stockholders for the three and six months ended March 31, 2025 and 2024.

Transactions with the Administrator

We have entered into the Administration Agreement with the Administrator to provide administrative services. We reimburse the Administrator pursuant to the Administration Agreement for the portion of expenses the Administrator incurs while performing services for us. The Administrator’s expenses are primarily rent and the salaries, benefits and expenses of the Administrator’s employees, including: our chief financial officer and treasurer, chief compliance officer, chief valuation officer, and general counsel and secretary (who also serves as the Administrator’s president, general counsel and secretary) and their respective staffs. David Gladstone (our chairman and chief executive officer) serves as a member of the board of managers and executive officer of the Administrator, which, as of March 31, 2025, is 100% indirectly owned and controlled by Mr. Gladstone. Another of our officers, Michael LiCalsi (our general counsel and secretary), serves as the Administrator’s president as well as the executive vice president of administration for the Adviser.

Our allocable portion of the Administrator’s expenses is generally derived by multiplying the Administrator’s total expenses by the approximate percentage of time during the current quarter the Administrator’s employees performed services for us in relation to their time spent performing services for all companies serviced by the Administrator. On July 9, 2024, our Board of Directors, including a majority of the directors who are not parties to the Administration Agreement or interested persons of either party, approved the renewal of the Administration Agreement through August 31, 2025.

Transactions with Gladstone Securities, LLC

Gladstone Securities, LLC (“Gladstone Securities”), a privately-held broker-dealer registered with the Financial Industry Regulatory Authority and insured by the Securities Investor Protection Corporation, which is 100% indirectly owned and controlled by Mr. Gladstone, our chairman and chief executive officer, has provided other services, such as investment banking and due diligence services, to certain of our portfolio companies, for which Gladstone Securities receives a fee. Any such fees paid by portfolio companies to Gladstone Securities do not impact the fees we pay to the Adviser or the non-contractual, unconditional and irrevocable credits against the base management fee or incentive fee. Gladstone Securities received fees from portfolio companies totaling $0.2 million and $0.4 million during the three and six months ended March 31, 2025, respectively, and $0.1 million during each of the three and six months ended March 31, 2024.

We entered into a dealer manager agreement (the “Dealer Manager Agreement”) with Gladstone Securities pursuant to which Gladstone Securities serves as our exclusive dealer manager in connection with the offering of our Series A Preferred Stock (as defined in Note 6—Cumulative Redeemable Preferred Stock Offering). Under the Dealer Manager Agreement, Gladstone Securities provides certain sales, promotional and marketing services to us in connection with the offering of the Series A Preferred Stock (the “Series A Offering”), and we pay Gladstone Securities (i) selling commissions of up to 7.0% of the gross proceeds from sales of Series A Preferred Stock in the offering, and (ii) a dealer manager fee of up to 3.0% of the gross proceeds from sales of Series A Preferred Stock in the offering. Gladstone Securities may, in its sole discretion, reallow a portion of the dealer manager fee to participating broker-dealers in support of the Series A Offering. The terms of the Dealer Manager Agreement were approved by our board of directors, including its independent directors. During the three and six months ended March 31, 2025, we paid Gladstone Securities selling commissions and dealer manager fees totaling $0.2 million and $0.4 million, respectively, related to the offering of Series A Preferred Stock, which are netted against gross proceeds from the sales. During each of the three and six months ended March 31, 2024, we paid Gladstone Securities selling commissions and dealer manager fees totaling $0.2 million.

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Investment in Affiliated Fund

In December 2024, we invested in Gladstone Alternative, one of our affiliated funds, that is a registered, non-diversified, closed-end management investment company that operates as an interval fund. The fair value of the investment in Gladstone Alternative will be excluded from the average total assets subject to base management fee for the purposes of calculating the base management fee we pay to the Adviser.

Related Party Fees Due

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


	March 31, 2025		September 30, 2024
Base management fee due to (from) Adviser	$	452	$	809
Loan servicing fee due to Adviser	554		509
Incentive fee due to Adviser	984		2,571
Total fees due to Adviser	1,990		3,889
Fee due to Administrator	846		569
Total Related Party Fees Due	$	2,836	$	4,458

In addition to the above fees, other operating expenses due to the Adviser as of March 31, 2025 and September 30, 2024 totaled $99 thousand and $52 thousand, respectively. In addition, net expenses payable to Gladstone Investment Corporation (for reimbursement purposes), which includes certain co-investment expenses, totaled $94 thousand and $75 thousand as of March 31, 2025 and September 30, 2024, respectively. These amounts are generally settled in the quarter subsequent to being incurred and are included in other liabilities on the accompanying Consolidated Statements of Assets and Liabilities as of March 31, 2025 and September 30, 2024.

NOTE 5. BORROWINGS

Revolving Line of Credit

On May 13, 2021, we, through Business Loan, entered into a sixth amended and restated credit agreement with KeyBank as administrative agent, lead arranger, managing agent and lender, the Adviser, as servicer, and certain other lenders party thereto (the “Credit Facility”).

As of March 31, 2025, our Credit Facility had a total commitment amount of $293.7 million with an “accordion” feature that permits us to increase the size of the facility to $350.0 million. The Credit Facility has a revolving period end date of October 31, 2025, and a final maturity date of October 31, 2027 (at which time all principal and interest will be due and payable if the Credit Facility is not extended by the revolving period end date). The interest rate margin is 3.00% during the revolving period and 3.50% thereafter (in each case plus a 10 basis point SOFR credit spread adjustment).

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


	March 31, 2025		September 30, 2024
Commitment amount	$	293,659	$	293,659
Line of credit outstanding, at cost	25,100		70,600
Availability(A)	250,953		200,381


	For the Three Months Ended March 31,						For the Six Months Ended March 31,
	2025			2024			2025			2024
Weighted average borrowings outstanding, at cost	$	53,680		$	90,258		$	39,787		$	69,306
Weighted average interest rate(B)	11.4		%	9.9		%	13.9		%	10.9		%
Commitment (unused) fees incurred	$	611		$	313		$	1,289		$	750

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(A) Available borrowings are subject to various constraints imposed under our Credit Facility, based on the aggregate loan balance pledged by Business Loan, which varies as loans are added and repaid, regardless of whether such repayments are prepayments or made as contractually required.

(B) Includes unused commitment fees and excludes the impact of deferred financing costs.

Our Credit Facility also requires that any interest or principal payments on pledged loans be remitted directly by the borrower into a lockbox account with KeyBank. KeyBank is also the trustee of the account and generally remits the collected funds to us once each month. Amounts collected in the lockbox account with KeyBank are presented as Due from administrative agent on the accompanying Consolidated Statements of Assets and Liabilities as of March 31, 2025 and September 30, 2024.

Our Credit Facility contains covenants that require Business Loan to maintain its status as a separate legal entity, prohibit certain significant corporate transactions (such as mergers, consolidations, liquidations or dissolutions), and restrict material changes to our credit and collection policies without the lenders’ consent. Our Credit Facility also generally limits distributions to our stockholders on a fiscal year basis to the sum of our net investment income, net capital gains and amounts elected to have been paid during the prior year in accordance with Section 855(a) of the Code. Business Loan is also subject to certain limitations on the type of loan investments it can apply as collateral towards the borrowing base to receive additional borrowing availability under our Credit Facility, including restrictions on geographic concentrations, sector concentrations, loan size, payment frequency and status, average life and lien property. Our Credit Facility further requires Business Loan to comply with other financial and operational covenants, which obligate Business Loan to, among other things, maintain certain financial ratios, including asset and interest coverage and a minimum number of 25 obligors required in the borrowing base.

Additionally, we are required to maintain (i) a minimum net worth (defined in our Credit Facility to include any outstanding redeemable preferred stock) of $325.0 million plus 50.0% of all equity and subordinated debt raised after May 13, 2021 less 50% of any equity and subordinated debt retired or redeemed after May 13, 2021, which equates to $422.2 million as of March 31, 2025, (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 March 31, 2025, and as defined in our Credit Facility, we had a net worth of $732.0 million, asset coverage on our “senior securities representing indebtedness” of 270.9%, calculated in accordance with the requirements of Section 18 and 61 of the 1940 Act, and an active status as a BDC and RIC. In addition, we had 33 obligors in our Credit Facility’s borrowing base as of March 31, 2025. As of March 31, 2025, we were in compliance with all of our Credit Facility covenants.

Fair Value

We elected to apply the fair value option of ASC 825, “Financial Instruments,” specifically for the Credit Facility, which was consistent with our application of ASC 820 to our investments. Generally, the fair value of our Credit Facility is determined using a yield analysis which includes a DCF calculation and the assumptions that the Valuation Team believes market participants would use, including the estimated remaining life, counterparty credit risk, current market yield and interest rate spreads of similar securities as of the measurement date. As of March 31, 2025, the discount rate used to determine the fair value of our Credit Facility was one-month Term SOFR, plus 2.75% per annum, plus a 1.00% unused commitment fee. As of September 30, 2024, the discount rate used to determine the fair value of our Credit Facility was one-month Term SOFR, plus 3.10% per annum, plus a 1.00% unused commitment fee. Generally, an increase or decrease in the discount rate used in the DCF calculation may result in a corresponding decrease or increase, respectively, in the fair value of our Credit Facility. As of March 31, 2025 and September 30, 2024, our Credit Facility was valued using Level 3 inputs and any changes in its fair value are recorded in net unrealized depreciation (appreciation) of other on our accompanying Consolidated Statements of Operations.

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The following tables present our Credit Facility carried at fair value as of March 31, 2025 and September 30, 2024, on our accompanying Consolidated Statements of Assets and Liabilities for Level 3 of the hierarchy established by ASC 820 and the changes in fair value of our Credit Facility during the three and six months ended March 31, 2025 and 2024:


	Total Recurring Fair Value Measurement Reported in
	Consolidated Statements of Assets and Liabilities Using Significant Unobservable Inputs (Level 3)
	March 31, 2025		September 30, 2024
Credit Facility	$	25,149	$	70,600


Fair Value Measurements Using Significant Unobservable Data Inputs (Level 3)
	Three Months Ended March 31,
	2025		2024
Fair value as of December 31, 2024 and 2023, respectively	$	61,500	$	85,000
Borrowings	61,000		64,100
Repayments	(97,400)		(31,900)
Net unrealized appreciation	49		—
Fair Value as of March 31, 2025 and 2024, respectively	$	25,149	$	117,200


Fair Value Measurements Using Significant Unobservable Data Inputs (Level 3)
	Six Months Ended March 31,
	2025		2024
Fair value as of September 30, 2024 and 2023, respectively	$	70,600	$	47,800
Borrowings	148,500		134,300
Repayments	(194,000)		(64,900)
Net unrealized appreciation	49		—
Fair Value as of March 31, 2025 and 2024, respectively	$	25,149	$	117,200

The fair value of the collateral under our Credit Facility totaled approximately $691.1 million and $714.4 million as of March 31, 2025 and September 30, 2024, respectively.

Notes Payable

In August 2023, we completed an offering of $57.0 million aggregate principal amount of 7.75% Notes due 2028 (the “2028 Notes”) for net proceeds of approximately $55.1 million after deducting underwriting discounts, commissions and offering expenses borne by us. The 2028 Notes are traded under the ticker symbol “GLADZ” on the Nasdaq Global Select Market. The 2028 Notes will mature on September 1, 2028 and may be redeemed in whole or in part at any time or from time to time at our option on or after September 1, 2025. The 2028 Notes bear interest at a rate of 7.75% per year. Interest is payable quarterly on March 1, June 1, September 1, and December 1 of each year (which equates to approximately $4.4 million per year).

In November 2021, we completed a private placement of $50.0 million aggregate principal amount of 3.75% Notes due 2027 (the “2027 Notes”) for net proceeds of approximately $48.5 million after deducting initial purchasers’ costs, commissions and offering expenses borne by us. The 2027 Notes will mature on May 1, 2027 and may be redeemed in whole or in part at any time or from time to time at the Company’s option prior to maturity at par plus a “make-whole” premium, if applicable. The 2027 Notes bear interest at a rate of 3.75% per year. Interest is payable semi-annually on May 1 and November 1 of each year (which equates to approximately $1.9 million per year).

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(the “Exchange Notes”) that had been registered with the SEC under the Securities Act of 1933, as amended. The terms of the Exchange Notes are identical to those of the Restricted Notes, except that the transfer restrictions and registration rights relating to the Restricted Notes do not apply to the Exchange Notes, and the Exchange Notes do not provide for the payment of additional interest in the event of a registration default.

In December 2020, we completed an offering of $100.0 million aggregate principal amount of 5.125% Notes due 2026 (the “2026 Notes”) for net proceeds of approximately $97.7 million after deducting underwriting discounts, commissions and offering expenses borne by us. In March 2021, we completed an offering of an additional $50.0 million aggregate principal amount of the 2026 Notes for net proceeds of approximately $50.6 million after adding premiums and deducting underwriting costs, commissions and offering expenses borne by us. The 2026 Notes will mature on January 31, 2026 and may be redeemed in whole or in part at any time or from time to time at the Company’s option prior to maturity at par plus a “make-whole” premium, if applicable. The 2026 Notes bear interest at a rate of 5.125% per year. Interest is payable semi-annually on January 31 and July 31 of each year (which equates to approximately $7.7 million per year).

The indenture relating to the 2028 Notes, the 2027 Notes, and the 2026 Notes contains certain covenants, including (i) an inability to incur additional debt or issue additional debt or preferred securities unless the Company’s asset coverage meets the threshold specified in the 1940 Act after such borrowing, (ii) an inability to declare any dividend or distribution (except a dividend payable in our stock) on a class of our capital stock or to purchase shares of our capital stock unless the Company’s asset coverage meets the threshold specified in the 1940 Act at the time of (and giving effect to) such declaration or purchase, and (iii) if, at any time, we are not subject to the reporting requirements of the Exchange Act, we will provide the holders of the 2028 Notes, the 2027 Notes, and the 2026 Notes, as applicable, and the trustee with audited annual consolidated financial statements and unaudited interim consolidated financial statements.

The 2028 Notes, 2027 Notes, and 2026 Notes are recorded at the principal amount, plus applicable premiums, less discounts and offering costs, on our Consolidated Statements of Assets and Liabilities.

The fair value, based on the last quoted closing price, of the 2028 Notes as of March 31, 2025 was $58.4 million. We consider the trading price of the 2028 Notes to be a Level 1 input within the ASC 820 hierarchy. The fair value, based on a DCF analysis, of the 2027 Notes as of March 31, 2025 was $47.2 million. The fair value, based on a DCF analysis, of the 2026 Notes as of March 31, 2025 was $148.2 million. We consider the 2027 Notes and 2026 Notes to be Level 3 within the ASC 820 fair value hierarchy.

NOTE 6. CUMULATIVE REDEEMABLE PREFERRED STOCK OFFERING

In May 2023, we entered into a Dealer Manager Agreement pursuant to which we may sell a maximum of 6,000,000 shares of 6.25% Series A Cumulative Redeemable Preferred Stock (the “Series A Preferred Stock”), par value $0.001 per share, on a “reasonable best efforts” basis through our affiliated dealer manager, Gladstone Securities, at a public offering price of $25.00 per share. Pursuant to the Dealer Manager Agreement, the offering will terminate on the date that is the earlier of (1) December 31, 2026 (unless earlier terminated or extended by our Board of Directors) and (2) the date on which all 6,000,000 shares of Series A Preferred Stock offered are sold. See Note 4, Related-Party Transactions—Other Transactions, for a discussion of the commissions and fees to be paid to Gladstone Securities in connection with the Series A Offering.

The Series A Preferred Stock is currently being sold pursuant to our shelf registration statement on Form N-2 (File No. 333-275934) (the “2024 Registration Statement”), under the Securities Act of 1933, as amended, and a prospectus supplement, dated November 22, 2024, and a base prospectus dated January 17, 2024. As of March 31, 2025, we had a remaining capacity to sell up to an additional 5,476,807 of Series A Preferred Shares under the Dealer Manager Agreement.

During the three and six months ended March 31, 2025, we sold 72,868 and 173,262 shares of Series A Preferred Stock, respectively, for gross proceeds of $1.8 million and $4.3 million, respectively, and net proceeds of $1.6 million and $3.9 million, respectively. During each of the three and six months ended March 31, 2024, we sold 70,044 shares of Series A Preferred Stock for gross proceeds of $1.8 million and net proceeds of $1.6 million. There were 523,193 and 349,931 shares of Series A Preferred Stock outstanding as of March 31, 2025 and September 30, 2024, respectively.

In accordance with ASC 480-10-S99-3A, the Company’s Series A Preferred Stock has been classified in temporary equity on the Consolidated Statements of Assets and Liabilities. The Series A Preferred Stock is recorded net of offering and

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issuance costs. Dividend payments to our preferred stockholders are included in preferred stock dividends on our Consolidated Statements of Operations, which totaled $0.2 million and $0.4 million during the three and six months ended March 31, 2025, respectively, and $8 thousand during each of the three and six months ended March 31, 2024.

We may be required to mandatorily redeem some or all of the shares of our Series A Preferred Stock if we fail to maintain asset coverage of at least the minimum amount required by Sections 18 and 61 of the 1940 Act (which is currently 150%). The asset coverage on our “senior securities that are stock” as of March 31, 2025 was 259.0%, calculated in accordance with Sections 18 and 61 of the 1940 Act.

We paid cash dividends of $0.130208 per share to holders of our Series A Preferred Stock for each month during the three and six months ended March 31, 2025.

NOTE 7. REGISTRATION STATEMENT AND COMMON EQUITY OFFERINGS

Reverse Stock Split

On April 4, 2024, we completed a 1-for-2 Reverse Stock Split of the Company’s issued and outstanding common stock, by the filing of Articles of Amendment with the State Department of Assessments and Taxation of Maryland pursuant to the Maryland General Corporation Law. The Reverse Stock Split became effective at 4:05 p.m. Eastern Time on April 4, 2024. The Reverse Stock Split was effective for purposes of trading as of the opening of business on the Nasdaq Global Select Market on April 5, 2024.

As a result of the Reverse Stock Split, every two shares of common stock issued and outstanding were automatically combined into one new share of common stock. The Reverse Stock Split did not modify any rights or preferences of the shares of common stock. The common stock issued pursuant to the Reverse Stock Split remains fully paid and non-assessable. The Reverse Stock Split did not affect the number of authorized shares of common stock or the par value of the common stock.

Common Stock At-the-Market Offerings

In August 2024, we entered into an equity distribution agreement with Jefferies LLC and Huntington Securities, Inc, under which we have the ability to issue and sell, from time to time, shares of our common stock with an aggregate offering price of up to $150.0 million in an “at the market offering” (the “2024 ATM Program”). During the three and six months ended March 31, 2025, we sold 0 and 99,265 shares of our common stock, respectively, under the 2024 ATM Program, at a weighted-average price of $24.90 per share and raised $2.5 million of gross proceeds. Net proceeds, after deducting commissions and offering costs borne by us, were approximately $2.4 million. As of March 31, 2025, we had a remaining capacity to sell up to an additional $136.5 million of our common stock under the 2024 ATM Program.

Shelf Registration Statement

Our 2024 Registration Statement, which was declared effective on January 17, 2024, permits us to issue, through one or more transactions, up to an aggregate of $700.0 million in securities, consisting of common stock, preferred stock, subscription rights, debt securities and warrants to purchase common stock or preferred stock. As of March 31, 2025, we had the ability to issue up to $684.4 million in securities under the 2024 Registration Statement.

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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 (decrease) in net assets resulting from operations per weighted average common share for the six months ended March 31, 2025 and 2024:


	Three Months Ended March 31,				Six Months Ended March 31,
	2025		2024		2025		2024
Numerator: basic and diluted net increase (decrease) in net assets resulting from operations per common share	$	8,797	$	23,632	$	35,772	$	43,633
Denominator: basic and diluted weighted average common share	22,329,852		21,754,449		22,320,576		21,754,449
Basic and diluted net increase (decrease) in net assets resulting from operations per common share	$	0.39	$	1.09	$	1.60	$	2.00

NOTE 9. DISTRIBUTIONS TO COMMON STOCKHOLDERS

To qualify to be taxed as a RIC under Subchapter M of the Code, we must generally distribute to our stockholders, for each taxable year, at least 90% of our taxable ordinary income plus the excess of our net short-term capital gains over net long-term capital losses (“Investment Company Taxable Income”). The amount to be paid out as distributions to our stockholders is determined by our Board of Directors quarterly and is based on management’s estimate of Investment Company Taxable Income. Based on that estimate, our Board of Directors declares three monthly distributions to common stockholders each quarter.

The federal income tax characteristics of all distributions will be reported to stockholders on the IRS Form 1099 after the end of each calendar year. Estimates of tax characterization made on a quarterly basis may not be representative of the actual tax characterization of cash distributions for the full year. Estimates made on a quarterly basis are updated as of each interim reporting date.

For the calendar year ended December 31, 2024, 83.1% of distributions to common stockholders were deemed to be paid from ordinary income and 16.9% were deemed to be paid from capital gains for 1099 stockholder reporting purposes. For the calendar year ended December 31, 2023, 100.0% of distributions to common stockholders were deemed to be paid from ordinary income for 1099 stockholder reporting purposes.

We paid the following monthly distributions to common stockholders for the six months ended March 31, 2025 and 2024:

Fiscal Year

Declaration Date

Record Date

Payment Date

Distribution per Common Share

2025

October 8, 2024

October 22, 2024

October 31, 2024

0.165

October 8, 2024

November 20, 2024

November 29, 2024

0.165

November 12, 2024

December 4, 2024

December 18, 2024(A)

0.400

October 8, 2024

December 20, 2024

December 31, 2024

0.165

January 14, 2025

January 24, 2025

January 31, 2025

0.165

January 14, 2025

February 19, 2025

February 28, 2025

0.165

January 14, 2025

March 19, 2025

March 31, 2025

0.165

Six Months Ended March 31, 2025:

1.39

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Fiscal Year

Declaration Date

Record Date

Payment Date

Distribution per Common Share(B)

2024

October 10, 2023

October 20, 2023

October 31, 2023

0.165

October 10, 2023

November 20, 2023

November 30, 2023

0.165

October 10, 2023

December 18, 2023

December 29, 2023

0.165

January 9, 2024

January 23, 2024

January 31, 2024

0.165

January 9, 2024

February 21, 2024

February 29, 2024

0.165

January 9, 2024

March 21, 2024

March 29, 2024

0.165

Six Months Ended March 31, 2024:

0.99

(A) Represents a supplemental distribution to common stockholders.

(B) Per share data has been adjusted on a retroactive basis to reflect the Reverse Stock Split effected on April 4, 2024, as described in Note 2 - Summary of Significant Accounting Policies.

Aggregate distributions declared and paid to our common stockholders were approximately $31.0 million and $21.5 million for the six months ended March 31, 2025 and 2024, respectively, and were declared based on estimates of Investment Company Taxable Income. For the fiscal year ended September 30, 2024, our current and accumulated earnings and profits exceeded common stock distributions declared and paid, and, in accordance with Section 855(a) of the Code, we elected to treat $6.6 million of the first common distributions paid to common stockholders in the subsequent fiscal year as having been paid in the prior year.

For the six months ended March 31, 2025 and the fiscal year ended September 30, 2024, we recorded the following adjustments for book-tax differences to reflect tax character. Results of operations, total net assets, and cash flows were not affected by these adjustments.


	Six Months Ended March 31, 2025		Year Ended September 30, 2024
Undistributed net investment income	$	(553)	$	(1,299)
Accumulated net realized gain (loss)	657		1,310
Capital in excess of par value	(104)		(11)

NOTE 10. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

We are party to certain legal proceedings incidental to the normal course of our business. We are required to establish reserves for litigation matters where those matters present loss contingencies that are both probable and estimable. When loss contingencies are not both probable and estimable, we do not establish reserves. Based on current knowledge, we do not believe that loss contingencies, if any, arising from pending investigations, litigation or regulatory matters will have a material adverse effect on our financial condition, results of operations or cash flows. Additionally, based on our current knowledge, we do not believe such loss contingencies are both probable and estimable and therefore, as of March 31, 2025 and September 30, 2024, 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

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at the end of the escrow period. Reserves and holdbacks against escrow amounts were $1.5 million and $0.1 million as of March 31, 2025 and September 30, 2024, respectively.

Financial Commitments and Obligations

We have lines of credit, delayed draw term loans, and an uncalled capital commitment with certain of our portfolio companies that have not been fully drawn. Since these commitments have expiration dates and we expect many will never be fully drawn, the total commitment amounts do not necessarily represent future cash requirements. We estimate the fair value of the combined unused lines of credit, the unused delayed draw term loans and the uncalled capital commitment as of March 31, 2025 and September 30, 2024 to be immaterial.

The following table summarizes the amounts of our unused lines of credit, delayed draw term loans and uncalled capital commitment, at cost, as of March 31, 2025 and September 30, 2024, which are not reflected as liabilities in the accompanying Consolidated Statements of Assets and Liabilities:


	March 31, 2025		September 30, 2024
Unused line of credit commitments(A)	$	43,852	$	42,601
Delayed draw term loans(A)	13,200		14,150
Uncalled capital commitment	843		843
Total	$	57,895	$	57,594

(A) There may be specific covenant requirements that temporarily limit a portfolio company’s availability to draw on an unused line of credit commitment or a delayed draw term loan.

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NOTE 11. FINANCIAL HIGHLIGHTS


	Three Months Ended March 31,						Six Months Ended March 31,
	2025			2024			2025			2024
Per Common Share Data:
Net asset value at beginning of period(A)	$	21.51		$	19.22		$	21.18		$	18.78
Income from operations(B)
Net investment income	0.50			0.49			1.00			1.04
Net realized and unrealized gain (loss) on investments	(0.10)			0.51			0.61			0.87
Net realized and unrealized gain (loss) on other	(0.01)			0.09			(0.01)			0.09
Total from operations	0.39			1.09			1.60			2.00
Distributions to common stockholders from(B)(C)
Net investment income	(0.50)			(0.49)			(1.00)			(0.98)
Realized gains	—			—			(0.40)			—
Total distributions	(0.50)			(0.49)			(1.40)			(0.98)
Capital share transactions(B)
Anti-dilutive effect of common stock issuance(D)	—			—			0.02			—
Total capital share transactions	—			—			0.02			—
Other, net	0.01			(0.01)			$	0.01		$	0.01
Net asset value at end of period(A)	$	21.41		$	19.81		$	21.41		$	19.81
Per common share market value at beginning of period	$	28.44		$	21.40		$	24.05		$	19.28
Per common share market value at end of period	27.46			21.46			27.46			21.46
Total return(E)	(1.77)		%	2.66		%	20.06		%	16.77		%
Common stock outstanding at end of period(A)	22,329,852			21,754,449			22,329,852			21,754,449
Statement of Assets and Liabilities Data:
Net assets at end of period	$	478,059		$	430,791		$	478,059		$	430,791
Average net assets(F)	481,597			424,518			480,458			418,742
Senior Securities Data:
Borrowings under line of credit, at cost	25,100			117,200			25,100			117,200
Preferred Stock	13,080			1,751			13,080			1,751
Notes Payable	257,000			257,000			257,000			257,000
Ratios/Supplemental Data:
Ratio of net expenses to average net assets – annualized(G)(H)	8.58		%	12.46		%	8.77		%	11.70		%
Ratio of net investment income to average net assets – annualized(I)	9.34		%	10.15		%	9.35		%	10.85		%

(A) Based on actual shares outstanding at the end of the corresponding period. Per share data and shares outstanding have been adjusted on a retroactive basis to reflect the Reverse Stock Split effected on April 4, 2024, as described in Note 2— Summary of Significant Accounting Policies.

(B) Based on weighted average basic per share data.

(C) The tax character of distributions is determined based on taxable income calculated in accordance with income tax regulations, which may differ from amounts determined under GAAP.

(D) During the six months ended March 31, 2025, the anti-dilution was a result of issuing common shares during the period at a price above the then current NAV per share.

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

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

(G) Ratio of net expenses to average net assets is computed using total expenses, net of credits from the Adviser, to the base management, loan servicing and incentive fees.

(H) Had we not received any non-contractual, unconditional and irrevocable credits of fees from the Adviser, the ratio of net expenses to average net assets would have been 12.29% and 12.53% for the three and six months ended March 31, 2025, respectively, and 15.04% and 14.81% for the three and six months ended March 31, 2024, respectively.

(I) Had we not received any non-contractual, unconditional and irrevocable credits of fees from the Adviser, the ratio of net investment income to average net assets would have been 5.68% and 5.65% for the three and six months ended March 31, 2025, respectively, and 7.62% and 7.80% for the three and six months ended March 31, 2024, respectively.

NOTE 12. SUBSEQUENT EVENTS

Portfolio Activity

In April 2025, our $42.2 million debt investment in SpaceCo Holdings, LLC paid off at par.

In April 2025, our investment in Eegees, LLC was restructured as part of the bankruptcy process resulting in a new $20.5 million investment in Eegee Acquisition Corporation comprised of secured first lien debt and common equity.

Distributions and Dividends

On April 8, 2025, our Board of Directors declared the following distributions to common and preferred stockholders:

Record Date

Payment Date

Distribution per Common Share

April 21, 2025

April 30, 2025

0.165

May 21, 2025

May 30, 2025

0.165

June 20, 2025

June 30, 2025

0.165

Total for the Quarter:

0.495

Record Date

Payment Date

Distribution per Series A Preferred Stock

April 25, 2025

May 5, 2025

0.130208

May 27, 2025

June 5, 2025

0.130208

June 25, 2025

July 3, 2025

0.130208

Total for the Quarter:

0.390624

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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”), our investment 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, including stock price volatility, inflation, elevated interest rates, tariffs and trade wars and risks of recession; (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 or Robert L. Marcotte; (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 or the general economy; (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”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), and as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”); and (12) those factors described herein, including Item 1A. “Risk Factors” of this Quarterly Report on Form 10-Q and in the “Risk Factors” section of our Annual Report on Form 10-K (our “Annual Report”) for the fiscal year ended September 30, 2024, filed with the U.S. Securities and Exchange Commission (“SEC”) on November 13, 2024. 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 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 on Form 10-Q. 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 from time to time, including 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 on Form 10-Q 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.

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 on Form 10-Q 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 or results of operations for any future periods. Except per share amounts, dollar amounts in the tables included herein are in thousands unless otherwise indicated.

OVERVIEW

General

We were incorporated under the Maryland General Corporation Law on May 30, 2001. We operate as an externally managed, closed-end, non-diversified management investment company, and have elected to be treated as a BDC under the 1940 Act. In addition, for federal income tax purposes we have elected to be treated as a RIC under the Code. To continue to qualify as a RIC for federal income tax purposes and obtain favorable RIC tax treatment, we must meet certain requirements, including certain minimum distribution requirements.

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We were established for the purpose of investing in debt and equity securities of established private businesses operating in the U.S. Our investment objectives are to: (1) achieve and grow current income by investing in debt securities of established lower middle market companies in the U.S. that we believe will provide stable earnings and cash flow to pay expenses, make principal and interest payments on our outstanding indebtedness and make distributions to stockholders that grow over time; and (2) provide our stockholders with long-term capital appreciation in the value of our assets by investing in equity securities, in connection with our debt investments, that we believe can grow over time to permit us to sell our equity investments for capital gains. To achieve our investment objectives, our primary investment strategy is to invest in several categories of debt and equity securities, with each investment generally ranging from $8 million to $40 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 90.0% debt investments and 10.0% equity investments, at cost. As of March 31, 2025, our investment portfolio was made up of approximately 91.2% debt investments and 8.8% equity investments, at cost.

We focus on investing in lower middle market companies (which we generally define as companies with annual earnings before interest, taxes, depreciation and amortization of $3 million to $25 million) in the U.S. that meet certain criteria, including the following: 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 borrower, reasonable capitalization of the borrower, including an ample equity contribution or cushion based on prevailing enterprise valuation multiples and, to a lesser extent, the potential to realize appreciation and gain liquidity in our equity position, if any. We lend to borrowers that need funds for growth capital or to finance acquisitions or recapitalize or refinance their existing debt facilities. We seek to avoid investing in high-risk, early-stage enterprises. Our targeted portfolio companies are generally considered too small for the larger capital marketplace.

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 Order”) that expanded our ability to co-invest, under certain circumstances, with certain of our affiliates, including Gladstone Investment Corporation, Gladstone Alternative Income Fund (“Gladstone Alternative”), and any future BDC or registered 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 co-investments with Gladstone Investment Corporation and Gladstone Alternative 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, 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 Adviser manages our investment activities. We have also entered into an administration agreement with Gladstone Administration, LLC (the “Administrator”), an affiliate of ours and the Adviser, whereby we pay separately for administrative services.

Additionally, Gladstone Securities, LLC (“Gladstone Securities”), a privately-held broker-dealer registered with the Financial Industry Regulatory Authority and insured by the Securities Investor Protection Corporation, which is 100% indirectly owned and controlled by Mr. Gladstone, our chairman and chief executive officer, has provided other services, such as investment banking and due diligence services, to certain of our portfolio companies, for which Gladstone Securities receives a fee.

Business

Portfolio and Investment Activity

In general, our investments in debt securities have a term of no more than seven years, accrue interest at variable rates (generally based on one-month Term Secured Overnight Financing Rate (“SOFR”)) and, to a lesser extent, at fixed rates. We seek debt instruments that pay interest monthly or, at a minimum, quarterly, may have a success fee or deferred interest provision and are primarily interest only, with all principal and any accrued but unpaid interest due at maturity. Generally, success fees accrue at a set rate and are contractually due upon a change of control of a portfolio company, typically from an exit or sale. Some debt securities have deferred interest whereby some portion of the interest payment is added to the principal balance so that the interest is paid, together with the principal, at maturity. This form of deferred interest is often called paid-in-kind (“PIK”) interest.

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Typically, our equity investments consist of common stock, preferred stock, limited liability company interests, or warrants to purchase the foregoing. Often, these equity investments occur in connection with our original investment, recapitalizing a business, or refinancing existing debt.

During the six months ended March 31, 2025, we invested $145.4 million in eight new portfolio companies and extended $51.8 million in investments to existing portfolio companies. In addition, we exited six portfolio companies during the six months ended March 31, 2025. We received a total of $246.6 million in combined net proceeds and principal repayments from the aforementioned portfolio company exits, as well as principal repayments by existing portfolio companies, during the six months ended March 31, 2025. Our overall portfolio consists of 51 portfolio companies as of March 31, 2025 and increased by $18.2 million at cost since September 30, 2024. From our initial public offering in August 2001 through March 31, 2025, we have made 688 different loans to, or investments in, 285 companies for a total of approximately $3.0 billion, before giving effect to principal repayments on investments and divestitures.

During the six months ended March 31, 2025, the following significant transactions occurred: