Quarterly report [Sections 13 or 15(d)]

INVESTMENTS

v3.26.1
INVESTMENTS
 6 Months Ended
Mar. 31, 2026
Investments, Debt and Equity Securities [Abstract]  
INVESTMENTS 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, 2026, all of our investments were valued using Level 3 inputs within the ASC 820 fair value hierarchy, except for our investments in money market funds, which were valued using Level 1 inputs, and our investment in Gladstone Alternative Income Fund (“Gladstone Alternative”), which was valued using NAV as a practical expedient. As of September 30, 2025, all of our investments were valued using Level 3 inputs within the ASC 820 fair value hierarchy, except for our investments in money market funds, which were valued using Level 1 inputs, and our investments in Gladstone Alternative and Leeds Novamark Capital I, L.P. (“Leeds”), which were 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, 2026 and 2025, there were no investments transferred into or out of Levels 1, 2 or 3 of the valuation hierarchy.
As of March 31, 2026 and September 30, 2025, our investments, by security type, at fair value were categorized as follows within the ASC 820 fair value hierarchy:
Fair Value Measurements
Quoted Prices in
Active Markets
for Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
 Fair Value
As of March 31, 2026:
Secured first lien debt
 $ —  $ —  $ 630,527  $ 630,527 
Secured second lien debt
 —  —  185,141  185,141 
Unsecured debt
 —  —  341 

341 
Preferred equity
 —  —  37,394 

37,394 
Common equity/equivalents
 — 

—  48,436  48,436 
Total
 $ —  $ —  $ 901,839  $ 901,839 
Investments measured at NAV(A)
—  —  —  5,005 
Total Investments
$ —  $ —  $ 901,839  $ 906,844 
Cash Equivalents
 3,177  —  —  3,177 
Total Investments and Cash Equivalents as of March 31, 2026
 $ 3,177  $ —  $ 901,839  $ 910,021 
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, 2025:
Secured first lien debt
 $ —  $ —  $ 622,371  $ 622,371 
Secured second lien debt
 —  —  150,542  150,542 
Unsecured debt
 —  — 

333 

333 
Preferred equity
 —  — 

31,214 

31,214 
Common equity/equivalents
 — 

—  49,553  49,553 
Total
 $ —  $ —  $ 854,013  $ 854,013 
Investments measured at NAV(A)
—  —  —  5,111 
Total Investments
$ —  $ —  $ 854,013  $ 859,124 
Cash Equivalents
 31,774  —  —  31,774 
Total Investments and Cash Equivalents as of September 30, 2025
 $ 31,774  $ —  $ 854,013  $ 890,898 
(A)Includes our investment in Gladstone Alternative as of March 31, 2026 and our investments in Gladstone Alternative and Leeds as of September 30, 2025. Investments that are measured at fair value using NAV as a practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented elsewhere in this quarterly report.
The following table presents our portfolio investments, valued using Level 3 inputs within the ASC 820 fair value hierarchy and carried at fair value as of March 31, 2026 and September 30, 2025, by caption on our accompanying Consolidated Statements of Assets and Liabilities and by security type:
Total Recurring Fair Value Measurements Reported in
Consolidated Statements of Assets and Liabilities
Using Significant Unobservable Inputs (Level 3)
March 31, 2026 September 30, 2025
Non-Control/Non-Affiliate Investments
Secured first lien debt $ 522,097  $ 517,762 
Secured second lien debt 166,349  131,750 
Unsecured debt 16  17 
Preferred equity 22,698  16,794 
Common equity/equivalents 35,466  29,958 
(B)
Total Non-Control/Non-Affiliate Investments
 $ 746,626  $ 696,281 
Affiliate Investments
Secured first lien debt $ 33,102  $ 34,713 
Preferred equity 9,224  9,420 
Common equity/equivalents 5,760 
(A)
 4,703 
(B)
Total Affiliate Investments $ 48,086  $ 48,836 
Control Investments
Secured first lien debt $ 75,328  $ 69,896 
Secured second lien debt 18,792  18,792 
Unsecured debt 325  316 
Preferred equity 5,472  5,000 
Common equity/equivalents 7,210  14,892 
Total Control Investments
 $ 107,127  $ 108,896 
Total Investments at Fair Value Using Level 3 Inputs $ 901,839  $ 854,013 
(A)Excludes our investment in Gladstone Alternative with a fair value of $5.0 million as of March 31, 2026, which was valued using NAV as a practical expedient.
(B)Excludes our investments in Gladstone Alternative and Leeds with fair values of $5.1 million and $36 thousand, respectively, as of September 30, 2025, which were 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, 2026 and September 30, 2025. The table below is not intended to be all-inclusive, but rather provides information on the significant Level 3 inputs as they relate to our fair value measurements.
The weighted average calculations in the table below are based on the principal balances for all debt related calculations and on the cost basis for all equity related calculations for the particular input.
Quantitative Information about Level 3 Fair Value Measurements

Range / Weighted Average as of

March 31,
2026		 September 30,
2025
Valuation
Techniques/
Methodologies
Unobservable
Input
 March 31,
2026		 September 30,
2025


Secured first lien debt
 $ 551,387  $ 548,670 
Yield Analysis
 Discount Rate
9.1% - 20.0%
/ 11.2%
9.4% - 19.8%
/ 11.7%

79,140  73,701 
TEV
EBITDA multiple
3.6x – 8.3x
/ 6.2x
3.5x – 8.0x
/ 6.0x


EBITDA
$430 - $4,173
/ $3,486
$538 - $4,655
/ $3,540


Revenue multiple
0.6x – 0.8x
/ 0.7x
0.6x – 0.8x
/ 0.7x


Revenue
$7,269 - $21,768
/ $14,346
$10,844 - $21,649
/ $15,090


Secured second lien debt
 166,349  141,750 
Yield Analysis
 Discount Rate
11.2% - 14.8%
/ 12.5%
11.4% - 15.2%
/ 13.1%

18,792  8,792 
TEV
 EBITDA multiple
5.0x – 5.6x
/ 5.3x
5.4x – 5.4x
/ 5.4x


EBITDA
$2,363 - $11,319
/ $7,129
$2,345 - $2,345
/ $2,345


Unsecured debt
 341  333 
TEV
EBITDA multiple
8.3x – 8.3x
/ 8.3x
8.0x – 8.0x
/ 8.0x
EBITDA
$3,654 - $3,654
/ $3,654
$3,804 - $3,804
/ $3,804
Revenue multiple
0.9x – 0.9x
/ 0.9x
0.9x – 0.9x
/ 0.9x


Revenue
$4,513 - $4,513
/ $4,513
$4,846 - $4,846
/ $4,846


Preferred and common equity / equivalents(A)
85,830  80,767 
TEV
 EBITDA multiple
3.6x – 15.2x
/ 7.2x
3.5x – 14.6x
/ 6.8x


EBITDA
$430 -$146,305
/ $10,144
$538 -$142,549
/ $10,222


Revenue multiple
0.6x – 0.9x
/ 0.8x
0.6x– 0.9x
/ 0.7x


Revenue
$4,513 -$21,768
/ $10,540
$4,846 -$21,649
/ $12,394
Total Level 3 Investments, at Fair Value
 $ 901,839  $ 854,013 

(A)Fair value as of March 31, 2026 excludes our investment in Gladstone Alternative with a fair value of $5.0 million, which was valued using NAV as a practical expedient. Fair value as of September 30, 2025 includes one proprietary equity investment totaling $2.2 million, which was valued using the payoff amount as the unobservable input. Fair value as of September 30, 2025 excludes our investments in Gladstone Alternative and Leeds with fair values of $5.1 million and $36 thousand, respectively, which were 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.
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, 2026 and 2025 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, 2026 Secured
First Lien
Debt		 Secured
Second Lien
Debt		 Unsecured
Debt		 Preferred
Equity		 Common
Equity/
Equivalents		 Total
Fair Value as of December 31, 2025 $ 647,576  $ 170,662  $ 346  $ 36,761  $ 42,492  $ 897,837 
Total gains (losses):
Net realized gain (loss)(A)
(213) —  —  —  —  (213)
Net unrealized appreciation (depreciation)(B)
(611) (1,159) (18) 633  6,646  5,491 
Reversal of prior period net depreciation (appreciation) on realization(B)
(642) —  —  —  —  (642)
New investments, repayments and settlements: (C)
Issuances/originations
 29,114  16,342  13  —  83  45,552 
Settlements/repayments
 (44,697) (704) —  —  —  (45,401)
Net proceeds from sales
 —  —  —  —  (785) (785)
Fair Value as of March 31, 2026
 $ 630,527  $ 185,141  $ 341  $ 37,394  $ 48,436  $ 901,839 
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Six months ended March 31, 2026 Secured
First Lien
Debt		 Secured
Second
Lien Debt		 Unsecured
Debt		 Preferred
Equity		 Common
Equity/
Equivalents		 Total
Fair Value as of September 30, 2025 $ 622,371  $ 150,542  $ 333  $ 31,214  $ 49,553  $ 854,013 
Total gains (losses):
Net realized gain (loss)(A)
(325) —  —  —  1,790  1,465 
Net unrealized appreciation (depreciation)(B)
(634) (420) (18) 1,240  1,825  1,993 
Reversal of prior period net depreciation (appreciation) on realization(B)
(811) (145) —  —  (1,790) (2,746)
New investments, repayments and settlements: (C)
Issuances/originations
 86,390  55,413  26  4,940  83  146,852 
Settlements/repayments
 (76,464) (20,249) —  —  —  (96,713)
Net proceeds from sales
 —  —  —  —  (3,025) (3,025)
Fair Value as of March 31, 2026
 $ 630,527  $ 185,141  $ 341  $ 37,394  $ 48,436  $ 901,839 
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 
(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.
Investment Concentrations
As of March 31, 2026, our investment portfolio consisted of investments in 55 portfolio companies located in 22 states in 17 different industries, with an aggregate fair value of $906.8 million. The five largest investments at fair value as of March 31, 2026 totaled $208.8 million, or 23.0% of our total investment portfolio, as compared to the five largest investments at fair value as of September 30, 2025 totaling $196.5 million, or 22.9% of our total investment portfolio. As of March 31, 2026 and September 30, 2025, our average investment by obligor was $16.8 million and $15.9 million at cost, respectively.
The following table outlines our investments by security type as of March 31, 2026 and September 30, 2025:
March 31, 2026 September 30, 2025
Cost Fair Value Cost Fair Value
Secured first lien debt $ 655,732  70.8  % $ 630,527  69.5  % $ 646,131  73.7  % $ 622,371  72.4  %
Secured second lien debt 185,101  20.0  185,141  20.4  149,937  17.1  150,542  17.5 
Unsecured debt 581  0.1  341  0.1  555  0.1  333  0.1 
Total debt investments 841,414  90.9  816,009  90.0  796,623  90.9  773,246  90.0 
Preferred equity 42,369  4.6  37,394  4.1  37,429  4.3  31,214  3.6 
Common equity/equivalents 41,410  4.5  53,441  5.9  42,562  4.8  54,664  6.4 
Total equity investments
 83,779  9.1  90,835  10.0  79,991  9.1  85,878  10.0 
Total Investments
 $ 925,193  100.0  % $ 906,844  100.0  % $ 876,614  100.0  % $ 859,124  100.0  %
Our investments at fair value consisted of the following industry classifications as of March 31, 2026 and September 30, 2025:
March 31, 2026 September 30, 2025
Industry Classification Fair Value Percentage of
Total
Investments		 Fair Value Percentage of
Total
Investments
Healthcare, Education, and Childcare $ 245,796  27.1  % $ 273,262  31.8  %
Diversified/Conglomerate Manufacturing 220,479  24.3  202,466  23.6 
Diversified/Conglomerate Service 147,229  16.2  152,042  17.7 
Beverage, Food, and Tobacco 89,760  9.9  54,605  6.4 
Cargo Transportation 49,928  5.5  20,000  2.3 
Home and Office Furnishings, Housewares and Durable Consumer Products 29,882  3.3  30,000  3.5 
Machinery
 26,129  2.9  26,381  3.1 
Personal, Food, and Miscellaneous Supplies 22,791  2.5  23,700  2.7 
Ecological 18,000  2.0  —  — 
Oil and Gas
 15,998  1.8  17,512  2.0 
Personal and Non-Durable Consumer Products 14,486  1.6  13,866  1.6 
Automobile 9,337  1.0  27,361  3.2 
Printing and Publishing 5,161  0.6  5,809  0.7 
Other, < 2.0%
 11,868  1.3  12,120  1.4 
Total Investments $ 906,844  100.0  % $ 859,124  100.0  %
Our investments at fair value were included in the following U.S. geographic regions as of March 31, 2026 and September 30, 2025:
March 31, 2026 September 30, 2025
Location
Fair Value
Percentage of
Total
Investments
Fair Value
Percentage of
Total Investments
South $ 325,853  35.9  % $ 287,371  33.5  %
West 233,167  25.7  233,564  27.2 
Midwest 221,458  24.4  237,417  27.6 
Northeast 126,366  14.0  100,772  11.7 
Total Investments $ 906,844  100.0  % $ 859,124  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, 2026:
Amount
For the remaining six months ending September 30:
2026(A)
$ 13,626 
For the fiscal years ending September 30:
 2027 137,238 

2028 160,674 

2029 147,753 

2030 264,495 

Thereafter 118,910 

Total contractual repayments
 $ 842,696 

Adjustments to cost basis of debt investments (1,282)

Investments in equity securities 83,779 

Investments held as of March 31, 2026 at cost:
 $ 925,193 
(A)Includes debt investments with contractual principal amounts totaling $0.2 million for which the maturity date has passed as of March 31, 2026.
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, 2026 and September 30, 2025, we had gross receivables from portfolio companies of $2.9 million and $2.4 million, respectively. The allowance for uncollectible receivables was $66 thousand and $52 thousand as of March 31, 2026 and September 30, 2025, respectively.