[Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements, including assets, operations, cash flows, and investment schedules [Consolidated Statements of Assets and Liabilities](index=4&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities%20as%20of%20June%2030%2C%202025%20and%20March%2031%2C%202025) Total assets increased to $1,053,909 thousand by June 30, 2025, while liabilities also rose, decreasing net assets and NAV per share to $12.99 | Metric (in thousands) | June 30, 2025 | March 31, 2025 | | :-------------------- | :------------ | :------------- | | **ASSETS** | | | | Investments at fair value | $1,036,745 | $979,320 | | Cash and cash equivalents | $4,118 | $14,298 | | Total Assets | $1,053,909 | $1,006,404 | | **LIABILITIES** | | | | Total borrowings | $518,625 | $455,709 | | Total Liabilities | $568,605 | $507,320 | | **NET ASSETS** | | | | Total Net Assets | $485,304 | $499,084 | | Net Asset Value Per Share | $12.99 | $13.55 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20for%20the%20three%20months%20ended%20June%2030%2C%202025%20and%202024) Total investment income increased to $23,544 thousand, but higher expenses reduced net investment income, though net assets from operations turned positive due to significantly lower net unrealized depreciation | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | | Total investment income | $23,544 | $22,178 | | Total expenses, net of credits | $14,456 | $9,764 | | Net investment income | $9,088 | $12,414 | | Net realized gain | $0 | $2 | | Net unrealized depreciation | $(1,316) | $(18,942) | | Net increase (decrease) in net assets from operations | $7,772 | $(6,526) | | Basic and Diluted EPS (Net investment income) | $0.25 | $0.34 | | Basic and Diluted EPS (Net increase (decrease) in net assets) | $0.21 | $(0.18) | [Consolidated Statements of Changes in Net Assets](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets%20for%20the%20three%20months%20ended%20June%2030%2C%202025%20and%202024) Net assets decreased by $13,780 thousand, driven by distributions offset by a net increase from operations and capital activity | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | | Net Assets, March 31 | $499,084 | $492,711 | | Net increase (decrease) in net assets from operations | $7,772 | $(6,526) | | Net decrease in net assets from distributions | $(28,788) | $(8,805) | | Net increase in net assets from capital activity | $7,236 | $0 | | Net decrease in net assets | $(13,780) | $(15,331) | | Net Assets, June 30 | $485,304 | $477,380 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20three%20months%20ended%20June%2030%2C%202025%20and%202024) Operating activities used $50,181 thousand in cash due to increased investment purchases, while financing activities provided $40,382 thousand, resulting in a net decrease in cash | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | | Net cash (used in) provided by operating activities | $(50,181) | $12,321 | | Net cash provided by (used in) financing activities | $40,382 | $(12,351) | | Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents | $(9,799) | $(30) | | Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period | $5,355 | $3,190 | [Consolidated Schedules of Investments](index=8&type=section&id=Consolidated%20Schedules%20of%20Investments%20as%20of%20June%2030%2C%202025%20and%20March%2031%2C%202025) The investment portfolio's fair value increased to $1,036,745 thousand, with new investments and a restructuring of PSI Molded Plastics, Inc | Investment Type | June 30, 2025 (Cost) | June 30, 2025 (Fair Value) | March 31, 2025 (Cost) | March 31, 2025 (Fair Value) | | :---------------- | :------------------- | :------------------------- | :-------------------- | :-------------------------- | | Secured first lien debt | $625,596 (62.7%) | $557,057 (53.7%) | $584,026 (62.2%) | $514,334 (52.5%) | | Secured second lien debt | $93,340 (9.4%) | $93,340 (9.0%) | $103,956 (11.1%) | $103,580 (10.6%) | | Total debt | $718,936 (72.1%) | $650,397 (62.7%) | $687,982 (73.3%) | $617,914 (63.1%) | | Preferred equity | $229,005 (23.0%) | $325,997 (31.5%) | $201,487 (21.5%) | $302,163 (30.9%) | | Common equity/equivalents | $49,597 (4.9%) | $60,351 (5.8%) | $49,597 (5.2%) | $59,243 (6.0%) | | Total equity/equivalents | $278,602 (27.9%) | $386,348 (37.3%) | $251,084 (26.7%) | $361,406 (36.9%) | | Total investments | $997,538 (100.0%) | $1,036,745 (100.0%) | $939,066 (100.0%) | $979,320 (100.0%) | - The top 5 portfolio investments by fair value as of June 30, 2025, including SFEG Holdings, Inc., Detroit Defense, Inc., The E3 Company, LLC, Nielsen-Kellerman Acquisition Corp., and Brunswick Bowling Products, Inc., collectively comprised **$403.1 million**, or **38.9%**, of the total investment portfolio[82](index=82&type=chunk) | Industry Classification | June 30, 2025 (Fair Value) | Percentage of Total Investments | | :---------------------- | :--------------------------- | :------------------------------ | | Diversified/Conglomerate Services | $188,845 | 18.2% | | Home and Office Furnishings, Housewares, and Durable Consumer Products | $150,749 | 14.5% | | Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) | $109,985 | 10.6% | | Aerospace and Defense | $105,170 | 10.1% | | Leisure, Amusement, Motion Pictures, and Entertainment | $79,588 | 7.7% | | Oil and Gas | $72,286 | 7.0% | | Electronics | $71,334 | 6.9% | | Buildings and Real Estate | $69,075 | 6.7% | | Chemicals, Plastics, and Rubber | $54,980 | 5.3% | | Healthcare, Education, and Childcare | $48,197 | 4.6% | | Mining, Steel, Iron and Non-Precious Metals | $43,505 | 4.2% | | Cargo Transport | $13,000 | 1.3% | | Printing and Publishing | $12,611 | 1.2% | | Other < 2.0% | $17,420 | 1.7% | | Total investments | $1,036,745 | 100.0% | - New investments in Q2 2025 included **Smart Chemical Solutions, LLC** for **$49.5 million** (secured first lien debt: **$35.7 million**, preferred equity: **$13.8 million**), a provider of production chemicals for onshore oil and gas operators[84](index=84&type=chunk) - Another new investment was **Sun State Nursery and Landscaping, LLC** for **$12.8 million** (secured first lien debt: **$9.8 million**, preferred equity: **$3.1 million**), a commercial landscaping installation and maintenance provider[84](index=84&type=chunk) - **PSI Molded Plastics, Inc.** restructured **$10.6 million** of debt into preferred equity in June 2025[84](index=84&type=chunk) [Notes to Consolidated Financial Statements](index=16&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on organization, accounting policies, investment valuation, related party transactions, borrowings, capital, distributions, and commitments [Note 1. Organization](index=18&type=section&id=NOTE%201.%20ORGANIZATION) This note details the company's structure as a BDC and RIC, outlining its investment objectives and target portfolio composition - Gladstone Investment Corporation is an externally managed, closed-end, non-diversified management investment company, elected to be treated as a **Business Development Company (BDC)** and a **Regulated Investment Company (RIC)**[42](index=42&type=chunk) - Investment objectives include achieving and growing **current income from debt securities** and providing **long-term capital appreciation from equity securities**[42](index=42&type=chunk) - Target investment portfolio composition is approximately **75.0% debt** and **25.0% equity at cost**, with the current portfolio at **72.1% debt** and **27.9% equity** as of June 30, 2025[42](index=42&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=18&type=section&id=NOTE%202.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines interim financial statement preparation, fair value investment valuation, revenue recognition, and segment reporting policies - Interim financial statements are prepared in accordance with **GAAP** for interim financial information and **SEC Regulation S-X** requirements[45](index=45&type=chunk) - Investments are recorded at **fair value** in accordance with **FASB ASC Topic 820** and the **1940 Act**, with the Board of Directors overseeing the valuation designee for fair value determinations[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) - Revenue recognition policies include accruing interest income to the extent expected to be collected, placing loans 90 days or more past due on **non-accrual status**, recognizing success fees upon cash receipt, and accruing dividend income if expected to be collected in cash[60](index=60&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) - The company adopted **ASU 2023-07 (Segment Reporting)** as of March 31, 2025, and has **one reporting segment** with the Chief Executive Officer as the Chief Operating Decision Maker (CODM)[68](index=68&type=chunk)[69](index=69&type=chunk) [Note 3. Investments](index=22&type=section&id=NOTE%203.%20INVESTMENTS) This note details investment valuation using Level 3 inputs, fair value measurements, unobservable inputs for debt, and changes in fair value measurements - All investments were valued using **Level 3 inputs** within the **ASC 820 fair value hierarchy** as of June 30, 2025 and March 31, 2025, except for the investment in Gladstone Alternative Income Fund, which was valued using NAV as a practical expedient[72](index=72&type=chunk) | Fair Value Measurements (in thousands) | June 30, 2025 | March 31, 2025 | | :------------------------------------- | :------------ | :------------- | | Secured first lien debt | $557,057 | $514,334 | | Secured second lien debt | $93,340 | $103,580 | | Preferred equity | $325,997 | $302,163 | | Common equity/equivalents | $55,341 | $54,268 | | Total investments at fair value using Level 3 inputs | $1,031,735 | $974,345 | | Unobservable Input (Secured first lien debt) | Range / Weighted-Average as of June 30, 2025 | | :------------------------------------------- | :------------------------------------------- | | EBITDA multiple | 3.7x – 8.0x / 6.0x | | EBITDA (in thousands) | $408 – $25,038 / $11,738 | | Revenue multiple | 0.3x – 0.6x / 0.4x | | Revenue (in thousands) | $21,248 – $94,874 / $75,263 | | Changes in Level 3 Fair Value Measurements (in thousands) | Secured First Lien Debt | Secured Second Lien Debt | Preferred Equity | Common Equity/Equivalents | Total | | :---------------------------------------- | :---------------------- | :----------------------- | :--------------- | :------------------------ | :------ | | Fair value as of March 31, 2025 | $514,334 | $103,580 | $302,163 | $54,268 | $974,345 | | Net unrealized appreciation (depreciation) | $1,152 | $376 | $(3,683) | $1,073 | $(1,082) | | Issuances / originations | $45,941 | $0 | $16,901 | $0 | $62,842 | | Settlements / repayments | $(4,370) | $0 | $0 | $0 | $(4,370) | | Transfers | $0 | $(10,616) | $10,616 | $0 | $0 | | Fair value as of June 30, 2025 | $557,057 | $93,340 | $325,997 | $55,341 | $1,031,735 | [Note 4. Related Party Transactions](index=29&type=section&id=NOTE%204.%20RELATED%20PARTY%20TRANSACTIONS) This note details base management and incentive fees paid to the Adviser, including credits, administration fees, and related party fees due - The company pays Gladstone Management Corporation (the "Adviser") a **base management fee** (2.0% annual rate on average gross assets) and an **incentive fee** (income-based and capital gains-based)[92](index=92&type=chunk)[95](index=95&type=chunk) - The Adviser non-contractually, unconditionally, and irrevocably credits **100% of certain fees** received for managerial assistance services against the base management fee[93](index=93&type=chunk) - Loan servicing fees paid to the Adviser (2.0% annual fee on monthly aggregate outstanding balance of loans pledged under the Credit Facility) are **100% credited back** to the company[94](index=94&type=chunk) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | | Base management fee | $5,080 | $4,618 | | Credits to fees from Adviser - other | $(1,399) | $(627) | | Net base management fee | $3,681 | $3,991 | | Loan servicing fee | $2,672 | $2,222 | | Credits to base management fee - loan servicing fee | $(2,672) | $(2,222) | | Net loan servicing fee | $0 | $0 | | Total incentive fee | $(209) | $(3,788) | - Administration fees paid to Gladstone Administration, LLC were **$0.4 million** for Q2 2025 and **$0.5 million** for Q2 2024[101](index=101&type=chunk) | Related Party Fees Due (in thousands) | June 30, 2025 | March 31, 2025 | | :------------------------------------ | :------------ | :------------- | | Base management and loan servicing fee due to Adviser, net of credits | $1,696 | $2,027 | | Incentive fee due to Adviser | $39,115 | $41,663 | | Total related party fees due | $41,885 | $44,584 | [Note 5. Borrowings](index=33&type=section&id=NOTE%205.%20BORROWINGS) This note details the Credit Facility terms, outstanding borrowings, availability, compliance with covenants, and notes payable - The Credit Facility has a total commitment of **$270.0 million** with an accordion feature up to **$300.0 million**, a revolving period ending **October 30, 2026**, and final maturity on **October 30, 2028**[106](index=106&type=chunk) - Advances bear interest at **30-day Term SOFR** (floor 0.35%, 10 bps credit spread adjustment) plus a margin of **3.15%** (increasing to 3.40% and 3.65% thereafter), with unused commitment fees ranging from **0.50% to 1.00%**[107](index=107&type=chunk) | Credit Facility Metric (in thousands) | June 30, 2025 | March 31, 2025 | | :------------------------------------ | :------------ | :------------- | | Commitment amount | $270,000 | $270,000 | | Borrowings outstanding at cost | $62,000 | $0 | | Availability | $208,000 | $270,000 | - The company was in compliance with all Credit Facility covenants as of June 30, 2025, including a net worth of **$940.4 million** (minimum **$416.6 million**) and asset coverage of **189.8%** (minimum **150%**)[109](index=109&type=chunk)[213](index=213&type=chunk) | Notes Payable (in thousands) | Principal Amount | Unamortized Discounts | Notes Payable, Net | | :--------------------------- | :--------------- | :-------------------- | :----------------- | | 5.00% Notes due 2026 | $127,938 | | | | 4.875% Notes due 2028 | $134,550 | | | | 8.00% Notes due 2028 | $74,750 | | | | 7.875% Notes due 2030 | $126,500 | | | | **Total as of June 30, 2025** | **$463,738** | **$(7,382)** | **$456,356** | | **Total as of March 31, 2025** | **$463,738** | **$(8,029)** | **$455,709** | [Note 6. Registration Statement and Common Equity Offerings](index=38&type=section&id=NOTE%206.%20REGISTRATION%20STATEMENT%20AND%20COMMON%20EQUITY%20OFFERINGS) This note details the registration statement for securities issuance and activity under the 2024 Common Stock ATM Program - A registration statement on Form N-2, effective **April 18, 2024**, permits the issuance of up to **$450.0 million** in various securities, with **$314.1 million** of this capacity remaining as of June 30, 2025[130](index=130&type=chunk) - Under the 2024 Common Stock ATM Program, the company sold **515,295 shares** for **$7.3 million** gross proceeds (weighted-average gross price of **$14.23 per share**) during the three months ended June 30, 2025, with **$65.6 million** capacity remaining[131](index=131&type=chunk)[133](index=133&type=chunk) [Note 7. Net Increase (Decrease) in Net Assets Resulting From Operations Per Weighted-Average Common Share](index=38&type=section&id=NOTE%207.%20NET%20INCREASE%20(DECREASE)%20IN%20NET%20ASSETS%20RESULTING%20FROM%20OPERATIONS%20PER%20WEIGHTED-AVERAGE%20COMMON%20SHARE) This note presents the net increase or decrease in net assets from operations per weighted-average common share | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :---------------------------------------------------- | :------------------------------- | :------------------------------- | | Net increase (decrease) in net assets from operations | $7,772 | $(6,526) | | Weighted-average common shares outstanding | 36,908,943 | 36,688,667 | | Basic and diluted net increase (decrease) in net assets per share | $0.21 | $(0.18) | [Note 8. Distributions to Common Stockholders](index=38&type=section&id=NOTE%208.%20DISTRIBUTIONS%20TO%20COMMON%20STOCKHOLDERS) This note outlines the company's RIC distribution requirements, declared distributions for Q2 2025, and aggregate cash distributions - To qualify as a **RIC**, the company must distribute at least **90% of its Investment Company Taxable Income**, with distributions determined by the Board based on estimated taxable income and net long-term capital gains[136](index=136&type=chunk)[137](index=137&type=chunk) | Declaration Date | Record Date | Payment Date | Distribution per Common Share (Q2 2025) | | :--------------- | :---------- | :----------- | :-------------------------------------- | | April 8, 2025 | April 21, 2025 | April 30, 2025 | $0.08 | | April 8, 2025 | May 21, 2025 | May 30, 2025 | $0.08 | | April 8, 2025 | June 4, 2025 | June 13, 2025 | $0.54 (Supplemental) | | April 8, 2025 | June 20, 2025 | June 30, 2025 | $0.08 | | **Total for Q2 2025** | | | **$0.78** | - Aggregate cash distributions to common stockholders were **$28.8 million** for Q2 2025, compared to **$8.8 million** for Q2 2024[140](index=140&type=chunk) [Note 9. Commitments and Contingencies](index=40&type=section&id=NOTE%209.%20COMMITMENTS%20AND%20CONTINGENCIES) This note addresses legal proceedings, escrow holdbacks, and unused line of credit commitments - The company is party to certain legal proceedings but does not believe loss contingencies will have a **material adverse effect** on financial condition, results of operations, or cash flows[145](index=145&type=chunk) - Escrow holdbacks for investment exits are recorded in Restricted cash and cash equivalents or Other assets, net, with reserves against escrow amounts of **$1.0 million** as of June 30, 2025 and March 31, 2025[146](index=146&type=chunk) | Commitment (in thousands) | June 30, 2025 | March 31, 2025 | | :------------------------ | :------------ | :------------- | | Unused line of credit commitments | $3,596 | $3,440 | [Note 10. Financial Highlights](index=41&type=section&id=NOTE%2010.%20FINANCIAL%20HIGHLIGHTS) This note provides per common share data, including net asset value, investment income, distributions, and key financial ratios | Per Common Share Data | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | | Net asset value at beginning of period | $13.55 | $13.43 | | Net investment income | $0.25 | $0.34 | | Net unrealized depreciation | $(0.04) | $(0.52) | | Total from investment operations | $0.21 | $(0.18) | | Cash distributions to common stockholders from net investment income | $(0.27) | $(0.24) | | Cash distributions to common stockholders from net realized gains | $(0.51) | $0 | | Net asset value at end of period | $12.99 | $13.01 | | Total investment return | 12.76% | (0.08)% | | Common stock outstanding at end of period | 37,352,676 | 36,688,667 | | Ratios/Supplemental Data | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | | Ratio of net expenses to average net assets – annualized | 11.72% | 8.01% | | Ratio of net investment income to average net assets – annualized | 7.37% | 10.18% | [Note 11. Unconsolidated Significant Subsidiaries](index=42&type=section&id=NOTE%2011.%20UNCONSOLIDATED%20SIGNIFICANT%20SUBSIDIARIES) This note confirms the absence of unconsolidated significant subsidiaries during the reporting period - The company did not have any unconsolidated subsidiaries that met the significance conditions under **Rule 1-02(w)(2) of SEC's Regulation S-X** as of or during the three months ended June 30, 2025 and 2024[150](index=150&type=chunk) [Note 12. Subsequent Events](index=42&type=section&id=NOTE%2012.%20SUBSEQUENT%20EVENTS) This note details a new investment in Global GRAB Technologies, Inc., declared monthly distributions, and common stock sales under the ATM program - In July 2025, the company invested **$67.6 million** in a new portfolio company, **Global GRAB Technologies, Inc.**, consisting of **$46.5 million** in secured first lien debt and **$21.1 million** in preferred equity[151](index=151&type=chunk) - The Board of Directors declared monthly distributions of **$0.08 per common share** for July, August, and September 2025, totaling **$0.24** for the quarter[152](index=152&type=chunk) - Subsequent to June 30, 2025, the company sold **866,554 shares** of common stock under its 2024 Common Stock ATM program, raising approximately **$12.1 million** in net proceeds at a weighted-average gross price of **$14.14 per share**[153](index=153&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's discussion and analysis of the company's financial condition and results of operations [Overview](index=44&type=section&id=Overview) Gladstone Investment Corporation operates as a BDC and RIC, focusing on debt and equity investments in U.S. lower middle market private businesses - Investment strategy focuses on lower middle market private businesses (EBITDA **$4 million-$15 million**) in the U.S., seeking management buyouts and growth capital[159](index=159&type=chunk) - From inception through June 30, 2025, the company invested in **64 companies** for approximately **$2.1 billion** and exited **33 portfolio companies**, generating **$353.4 million** in net realized gains and **$45.4 million** in other income[163](index=163&type=chunk)[165](index=165&type=chunk) - As of June 30, 2025, unrecognized, contractual success fees totaled **$55.6 million**, or **$1.49 per common share**[164](index=164&type=chunk) - The company's asset coverage ratio on senior securities representing indebtedness was **189.8%** as of June 30, 2025, exceeding the **150% requirement**[171](index=171&type=chunk) - As of June 30, 2025, the common stock closing market price was **$14.27 per share**, a **9.9% premium** to its NAV of **$12.99 per share**[167](index=167&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) Total investment income increased, but higher expenses reduced net investment income, though net assets from operations turned positive due to significantly lower net unrealized depreciation | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Total investment income | $23,544 | $22,178 | $1,366 | 6.2% | | Total expenses, net of credits | $14,456 | $9,764 | $4,692 | 48.1% | | Net investment income | $9,088 | $12,414 | $(3,326) | (26.8)% | | Net realized gain on investments | $0 | $2 | $(2) | (100.0)% | | Net unrealized depreciation | $(1,316) | $(18,942) | $17,626 | (93.1)% | | Net increase (decrease) in net assets from operations | $7,772 | $(6,526) | $14,298 | NM | - Interest income increased by **$1.0 million (5.0%)** due to a higher weighted-average principal balance of interest-bearing investments (**$610.0 million** vs. **$571.0 million**)[176](index=176&type=chunk)[177](index=177&type=chunk) - Weighted-average yield on interest-bearing investments decreased to **14.1%** from **14.5%**[178](index=178&type=chunk) - Dividend and success fee income increased by **$0.3 million (22.1%)**, consisting of **$1.1 million** dividend income and **$0.8 million** success fee income[181](index=181&type=chunk) - Interest expense increased by **$2.0 million (31.2%)** due to the issuance of 7.785% 2030 Notes and an increase in the effective interest rate on the Credit Facility (**14.0%** vs. **10.8%**), despite decreased borrowings[184](index=184&type=chunk) - Net unrealized depreciation of investments was **$1.0 million** for Q2 2025, a significant improvement from **$18.9 million** in Q2 2024, primarily due to a decrease in the performance of certain portfolio companies, partially offset by increased performance of others and higher transaction multiples[188](index=188&type=chunk)[189](index=189&type=chunk) [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) Operating activities used significant cash due to investment purchases, while financing activities provided cash, with the company maintaining compliance with debt covenants - Net cash used in operating activities was **$50.2 million** for Q2 2025, compared to **$12.3 million** provided in Q2 2024, mainly due to increased investment purchases (**$62.8 million** vs. **$0.6 million**)[192](index=192&type=chunk)[193](index=193&type=chunk) - Net cash provided by financing activities was **$40.4 million** for Q2 2025, primarily from **$62.0 million** net borrowings under the Credit Facility and **$7.3 million** from common stock issuance, partially offset by **$28.8 million** in distributions[196](index=196&type=chunk) - The company paid monthly cash distributions of **$0.08 per common share** and a supplemental distribution of **$0.54 per common share** in June 2025[198](index=198&type=chunk) - As of June 30, 2025, the Credit Facility had **$62.0 million** outstanding and **$208.0 million** in adjusted availability[213](index=213&type=chunk) | Contractual Obligations (in thousands) | Total | Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | | :----------------------------------- | :-------- | :--------------- | :-------- | :-------- | :---------------- | | Credit Facility | $62,000 | $0 | $0 | $62,000 | $0 | | Notes payable | $463,738 | $127,938 | $0 | $335,800 | $0 | | Interest payments on obligations | $114,704 | $34,701 | $59,125 | $20,878 | $0 | | **Total** | **$640,442** | **$162,639** | **$59,125** | **$418,678** | **$0** | - The Adviser's proprietary risk rating system for debt securities uses a scale of **0 to >10**, with **>10** being the lowest probability of default[232](index=232&type=chunk) - The weighted-average risk rating for the loan portfolio was **7.7** as of June 30, 2025 and March 31, 2025[233](index=233&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=60&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, with its loan portfolio entirely at variable rates with a floor - Primary market risk is **interest rate risk**, affecting net investment income due to differences between variable borrowing rates (Credit Facility) and fixed/variable investment rates[237](index=237&type=chunk) - Target portfolio composition is approximately **90% variable-rate loans** (with floor) and up to **10% fixed-rate loans**[238](index=238&type=chunk) | Rates | June 30, 2025 | March 31, 2025 | | :------------ | :------------ | :------------- | | Variable rates with a floor | 100.0 % | 100.0 % | | Fixed rates | — % | — % | | Total | 100.0 % | 100.0 % | [Item 4. Controls and Procedures](index=60&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Disclosure controls and procedures were evaluated as **effective** at a reasonable assurance level as of June 30, 2025[239](index=239&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025[240](index=240&type=chunk) [PART II. OTHER INFORMATION:](index=61&type=section&id=PART%20II.%20OTHER%20INFORMATION%3A) This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=61&type=section&id=Item%201.%20Legal%20Proceedings) The company is not subject to any material legal proceedings or threatened legal proceedings - No material legal proceedings are currently active or threatened against the company[241](index=241&type=chunk) [Item 1A. Risk Factors](index=61&type=section&id=Item%201A.%20Risk%20Factors) For a comprehensive discussion of risks, refer to the Annual Report on Form 10-K for the fiscal year ended March 31, 2025 - Refer to the **"Risk Factors"** section in the Annual Report on Form 10-K for the fiscal year ended March 31, 2025, for a discussion of business risks[242](index=242&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=61&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable for the reporting period [Item 3. Defaults Upon Senior Securities](index=61&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable for the reporting period [Item 4. Mine Safety Disclosures](index=61&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable for the reporting period [Item 5. Other Information](index=61&type=section&id=Item%205.%20Other%20Information) No officers or directors adopted or terminated Rule 10b5-1 trading arrangements during the reporting period - No officers or directors adopted or terminated **Rule 10b5-1 trading arrangements** or non-Rule 10b5-1 trading arrangements during Q2 2025[246](index=246&type=chunk) [Item 6. Exhibits](index=62&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including corporate documents and XBRL data - Exhibit list includes Amended and Restated Certificate of Incorporation, Bylaws, Specimen Stock Certificate, Indentures for various Notes, and Certifications (CEO, CFO)[248](index=248&type=chunk) - **XBRL Instance Document** and **Taxonomy Extension files** are attached as Exhibit 101[248](index=248&type=chunk) [SIGNATURE](index=63&type=section&id=SIGNATURE) The report is duly signed by Taylor Ritchie, Chief Financial Officer and Treasurer, on August 12, 2025 - Report signed by **Taylor Ritchie**, Chief Financial Officer and Treasurer, on **August 12, 2025**[253](index=253&type=chunk)

Financial Data and Key Metrics Changes - The meeting reported that proxies were received for approximately 62.53% of the total outstanding shares, indicating a quorum for the meeting [4]. Business Line Data and Key Metrics Changes - No specific business line data or key metrics were discussed during the meeting. Market Data and Key Metrics Changes - No specific market data or key metrics were discussed during the meeting. Company Strategy and Development Direction and Industry Competition - The company proposed the election of two directors and the ratification of PwC as the independent registered public accounting firm for the fiscal year ending March 31, 2026, indicating a focus on governance and compliance [5][6]. Management Comments on Operating Environment and Future Outlook - No specific comments from management regarding the operating environment or future outlook were provided during the meeting. Other Important Information - The results of the voting confirmed the election of David Gladstone and John Outland as directors, and the ratification of PwC as the independent auditor for the upcoming fiscal year [8]. Q&A Session All Questions and Answers - No Q&A session was conducted during the meeting.

Group 1 - The article discusses high-yield baby bonds, specifically focusing on Gladstone Investment (NASDAQ: GAIN) and its offerings [1] - The investment group Trade With Beta provides insights on mispriced preferred stocks and baby bonds, along with a range of investment strategies and portfolio management [2] - The service includes weekly reviews of over 1200 equities and IPO previews, indicating a comprehensive approach to investment analysis [2]

Core Viewpoint - Gladstone Investment (NASDAQ: GAIN) is positioned to benefit from higher equity-driven returns in a record stock market, making it a favorable addition to passive income investment portfolios [1]. Group 1: Company Overview - Gladstone Investment is classified as a business development company (BDC) [1]. - The company is expected to capitalize on the current market conditions, particularly the record highs in the stock market [1]. Group 2: Investment Strategy - The stock of Gladstone Investment is being overweighted in passive income investment portfolios due to its potential for growth [1]. - The focus is on innovation, disruption, and growth buyouts, indicating a strategy that seeks to identify value stocks within the market [1].

Valuation Insights - The valuation of assets in the market is currently at levels described as "priced to perfection" [1] - The earnings yield of the S&P 500 has significantly decreased, indicating stretched valuations [1]

Group 1 - The article discusses a well-known Business Development Company (BDC) that is favored for its short-duration products with high yields [1] - Following a crash in the BDC sector, many companies experienced a significant decline in performance [1] - The investing group Trade With Beta offers features such as frequent picks for mispriced preferred stocks and baby bonds, weekly reviews of over 1200 equities, IPO previews, and hedging strategies [1] Group 2 - The article emphasizes the importance of active investor participation and offers a free trial for interested parties [1] - The analyst has disclosed a beneficial long position in shares of GAINI and GAINZ, indicating a personal investment interest [1]

Core Insights - Business Development Companies (BDCs) have gained popularity due to their ability to generate higher income in a high-interest-rate environment [1] - The current interest rate environment has exposed vulnerabilities in certain BDCs to unfavorable shifts [1] - A hybrid investment strategy combining classic dividend growth stocks, BDCs, REITs, and Closed-End Funds can enhance investment income while achieving total returns comparable to traditional index funds like the S&P [1]

Financial Data and Key Metrics Changes - The company generated adjusted net investment income (NII) of $0.97 per share, covering the annual dividend of $0.96 per share [7][13] - The total fair value of the portfolio increased to $979 million from approximately $921 million at the prior year end, although it was slightly lower than the $1.1 billion reported at the end of the last quarter [8] - Total investment income for the fiscal year was $93.7 million, up from $87.3 million in the prior year [13] Business Line Data and Key Metrics Changes - The company invested a total of $221 million during the year, an increase from $184 million in the prior year, which included investments in four new portfolio companies and add-on investments [9] - The company maintained a monthly distribution to shareholders of $0.08 per share, aggregating to $1.66 per share for the year, with a supplemental distribution of $0.54 per share declared for April [9][19] Market Data and Key Metrics Changes - The company noted good liquidity in the M&A market, although it is a competitive environment with new variables regarding tariffs impacting evaluations of new opportunities [10][11] - The company is cautiously optimistic about new acquisitions, expecting to close two new acquisitions shortly [11] Company Strategy and Development Direction - The company aims to reward shareholders with meaningful supplemental distributions from realized capital gains while maintaining and growing monthly distributions from operating income [9] - The management is focused on evaluating supply chain alternatives and production strategies to navigate the current economic environment [11] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the economic landscape, noting that while there are challenges due to tariffs, the current portfolio is in good shape with a strong balance sheet [12][18] - The recent pause on tariffs was seen as a relief, although the company is awaiting a permanent solution [11] Other Important Information - The company ended the fiscal year with $55.3 million in spillover, sufficient to cover current monthly distributions and the supplemental distribution [19][54] - The net asset value (NAV) increased to $13.55 per share compared to $13.30 per share at the end of the prior quarter [17] Q&A Session Summary Question: How much of the portfolio has exposure to tariff risk? - Most portfolio companies have some exposure to tariff risk, particularly those manufacturing in China, but management is not overly concerned as they have been proactive in addressing these issues [24][25] Question: How much exposure does the portfolio have to lower-income customers? - The portfolio does not have significant exposure to lower-income customers, focusing instead on consumer products that are not categorized as essential goods [27][28] Question: Update on non-accrual companies? - There are four companies on non-accrual status, with three being profitable, including Hobbs, which management is optimistic about bringing back on accrual [30][31] Question: What gives cautious optimism for buyout activity? - The company is close to closing a couple of acquisitions and has a strong pipeline of companies under review, although economic uncertainty remains a concern [41][42] Question: Rationale for the dividend recap of Educators Resource? - The dividend recap was seen as a reinvestment decision, allowing management to take some liquidity while the company continues to perform well [48][49]

Financial Data and Key Metrics Changes - For the fiscal year ended 03/31/2025, the company generated adjusted net investment income (NII) of $0.97 per share, covering the annual dividend of $0.96 per share [5][6] - The total fair value of the portfolio increased to $979 million from approximately $921 million at the prior year end, although it was slightly lower than the $1.1 billion reported at the end of the last quarter [6][9] - Total investment income for the fiscal year was $93.7 million, up from $87.3 million in the prior year, primarily due to increases in dividend and success fee income [13][14] Business Line Data and Key Metrics Changes - The company invested a total of $221 million during the year, an increase from $184 million in the prior year, which included investments in four new portfolio companies and add-on investments [7][8] - The company maintained a monthly distribution to shareholders of $0.08 per share, aggregating to $1.66 per share for the year, including supplemental distributions [8][20] Market Data and Key Metrics Changes - The company noted good liquidity in the M&A market, although it is a competitive environment impacted by tariffs affecting cost, customer demand, and supply chain dynamics [9][10] - The company is cautiously optimistic about new acquisitions, expecting to close two new acquisitions shortly [10][11] Company Strategy and Development Direction - The company aims to continue its buyout strategy while being cautious in assessing risks related to tariffs and their impact on portfolio companies [10][12] - The management team has added experienced talent to support portfolio growth and manage the current portfolio of 25 operating companies [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current portfolio's performance and the potential for continued earnings and distributions despite economic uncertainties [12][19] - The recent pause on tariffs was seen as a relief, but management remains cautious about the long-term implications [11][12] Other Important Information - The company ended the fiscal year with $55.3 million in spillover, sufficient to cover current monthly distributions and the recently declared supplemental distribution [19][55] - The company has four portfolio companies on non-accrual status, with three of them being profitable and showing improvement [17][32] Q&A Session Summary Question: How much of the portfolio has exposure to tariff risk? - Management indicated that most companies have some exposure, particularly those producing in China, but they are not overly concerned as they have been proactive in managing inventory and supply chains [25][26] Question: What is the exposure to lower-income customers in the consumer sector? - Management stated that the consumer products in the portfolio are not primarily targeted at lower-income customers, and the impact of tariff costs is relatively small [28][30] Question: Update on non-accrual companies, specifically Hobbs? - Management remains optimistic about Hobbs and expects it to return to accrual status by the end of the year, with improvements in profitability noted [31][32] Question: What is the rationale for the dividend recap with Educators Resource? - The dividend recap was seen as a reinvestment decision, allowing the management team to gain liquidity while the company continues to perform well [49][52] Question: Current spillover amount? - The company ended the year with $55.3 million in spillover, which covers the current monthly distribution and the supplemental distribution to be paid in June [54][55]

分组1 - Gladstone Investment (GAIN) reported quarterly earnings of $0.26 per share, exceeding the Zacks Consensus Estimate of $0.23 per share, and showing an increase from $0.24 per share a year ago, resulting in an earnings surprise of 13.04% [1] - The company posted revenues of $27.55 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 11.19%, compared to $23.65 million in the same quarter last year [2] - The stock has increased approximately 6% since the beginning of the year, while the S&P 500 has declined by 0.6% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.23 on revenues of $25.43 million, and for the current fiscal year, it is $0.93 on revenues of $99.56 million [7] - The Zacks Industry Rank for Financial - SBIC & Commercial Industry is in the bottom 28% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Chicago Atlantic BDC, Inc., another company in the same industry, is expected to report quarterly earnings of $0.34 per share, reflecting a significant year-over-year change of +3500% [9]