Gladstone Investment Corporation (NASDAQ:GAIN) Q2 2023 Earnings Conference Call November 2, 2022 8:30 AM ET Company Participants David Gladstone - Chief Executive Officer Michael LiCalsi - General Counsel and Secretary Dave Dullum - President Rachael Easton - Chief Financial Officer Conference Call Participants Mickey Schleien - Ladenburg Thalmann Kyle Joseph - Jefferies Operator Greetings and welcome to the Gladstone Investment Second Quarter Earnings Call. [Operator Instructions] As a reminder, this confe ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR 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: 814-00704 GLADSTONE INVESTMENT CORPORATION (Exact name of registrant as specified in its charter) Delaware 83 ...

Financial Data and Key Metrics Changes - Adjusted net investment income (NII) for Q1 FY2023 was $8.3 million or $0.25 per share, a decrease from $8.7 million or $0.26 per share in the prior quarter [20] - Total assets increased slightly to approximately $743 million from about $740 million at the end of Q4 FY2022 [9] - Net expenses decreased by $0.6 million compared to the prior quarter, primarily due to a decrease in accrued capital gains based incentive fees [24] - Net asset value (NAV) per share remained stable at $13.44, compared to $13.43 in the previous quarter [26] Business Line Data and Key Metrics Changes - The company made a new buyout investment of $21 million and an additional investment of $39.1 million in Dema Plumbing, creating a new portfolio company [10] - An add-on acquisition of $6.4 million was made for an existing portfolio company [11] - The company successfully exited one portfolio company, generating both capital gains and income [11] Market Data and Key Metrics Changes - The company noted that three portfolio companies were on nonaccrual status, with one expected to return to accrual soon [23] - The market for buyouts is competitive, with a noted moderation in buyout values anticipated [15][38] Company Strategy and Development Direction - The company continues to focus on a buyout strategy that generates income for monthly distributions and capital gains for supplemental distributions [13] - The balance sheet remains strong with low leverage and significant liquidity, allowing for support of portfolio companies and new acquisitions [14] - The company aims to remain patient and selective in its due diligence while aggressively seeking new acquisitions [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges such as inflationary costs and supply chain disruptions affecting portfolio companies [8] - There is an expectation of a slowdown in the buyout pipeline, but the company is still working on several promising opportunities [36] - Management expressed confidence in the portfolio's strength and the potential for good earnings and distributions over the next year [18] Other Important Information - Monthly distributions to shareholders were maintained at $0.075 per share, with a supplemental distribution of $0.12 per share paid in June 2022 [12] - The company has a strong liquidity position with no outstanding balance on its credit facility as of June 30, 2022 [14] Q&A Session Summary Question: How is the pipeline developing in the current economic environment? - Management noted a slight slowdown in the buyout pipeline but mentioned ongoing activity with several good companies [36] Question: Are sellers being realistic in their pricing given the current volatility? - Management indicated that sellers are adjusting their expectations, but there remains a wide bid-ask spread due to differing valuations [40][42] Question: How exposed is the portfolio to consumer market weaknesses? - Management acknowledged some exposure to consumer products but stated that the portfolio remains strong and diversified [45] Question: Any updates on IRS refunds for deemed distributions? - Management confirmed that there has been no significant progress on IRS refunds for deemed distributions, with only a few reports of success from specific brokerage firms [52]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 814-00704 GLADSTONE INVESTMENT CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 83-0423116 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 1521 WESTBRANCH DRIVE, SUITE 100 22102 MCLEAN, VIRGINIA (Zip Code) Fo ...

Gladstone Investment Corporation (NASDAQ:GAIN) Q4 2022 Earnings Conference Call May 12, 2022 8:30 AM ET Company Participants David Gladstone - Chief Executive Officer Michael LiCalsi - General Counsel and Secretary Dave Dullum - President Rachael Easton - Chief Financial Officer Conference Call Participants Mickey Schleien - Ladenburg Thalmann Operator Greetings and welcome to the Gladstone Investment Corporation’s Fourth Quarter ended March 31, 2022 Earnings Call and Webcast. [Operator Instructions] As a r ...

Investment Portfolio - As of March 31, 2022, the investment portfolio consisted of 26 portfolio companies with an aggregate fair value of $714.4 million[30]. - The five largest portfolio investments represented $272.7 million, or 38.1% of the total investment portfolio at fair value[30]. - The investment portfolio was comprised of 76.3% in debt securities and 23.7% in equity securities at cost as of March 31, 2022[20]. - Secured first lien debt securities accounted for 64.2% of the total fair value of investments as of March 31, 2022[30]. - The company has invested in 55 companies from its initial public offering in 2005 through March 31, 2022[25]. - As of March 31, 2022, total investments at fair value reached $714.396 million, an increase from $633.829 million in 2021, representing a growth of 12.7%[32]. - The largest sector by fair value in 2022 was Diversified/Conglomerate Services, accounting for 43.0% of total investments, up from 41.3% in 2021[32]. - The Midwest region saw a significant increase in fair value, rising to $172.711 million (24.2% of total investments) from $126.781 million (20.0%) in 2021, marking a growth of 36.3%[32]. - The Home and Office Furnishings sector also grew, with fair value increasing to $125.440 million (17.6% of total investments) from $94.663 million (15.0%), a growth of 32.5%[32]. - Telecommunications investments increased to $32.467 million (4.6% of total investments) from $15.582 million (2.5%), showing a growth of 108.5%[32]. Investment Strategy - The company focuses on lower middle market private businesses with annual EBITDA of $3 million to $20 million[21]. - The company aims to achieve a high level of current income and capital gains through investments in secured debt securities and equity[29]. - The investment strategy includes a target of approximately 75% in debt securities and 25% in equity securities over time[20]. - The company emphasizes a disciplined, value- and income-oriented investment philosophy, focusing on minimizing capital loss while seeking capital appreciation[45]. - The investment committee, composed of experienced professionals, plays a crucial role in evaluating and approving investment opportunities[42]. - The company aims to invest in established companies with positive cash flow and strong competitive positions, avoiding speculative business plans[36]. - The investment process includes extensive due diligence, including financial analysis, management interviews, and market research[36]. - The company maintains ongoing management of investments, continuously monitoring financial performance and collaborating with portfolio company management[50]. Fees and Incentives - The base management fee is assessed at an annual rate of 2.0% based on the average gross assets value at the end of the two most recently completed quarters[58]. - The income-based incentive fee rewards the Adviser if quarterly net investment income exceeds 1.75% of net assets, with a tiered structure for additional income[61]. - As of March 31, 2022, capital gains-based incentive fees of $5.3 million were contractually due and paid to the Adviser, while no fees were due for the previous year[63]. - The Adviser provides significant managerial assistance to portfolio companies, including sourcing credit facilities and negotiating financial relationships[59]. - Loan servicing fees of 2.0% are based on the monthly aggregate outstanding balance of loans under the Credit Facility, credited back to the company[65]. - The capital gains-based incentive fee accrual considers unrealized capital appreciation, with recorded fees of $18.3 million and $5.0 million for the years ended March 31, 2022, and 2021, respectively[64]. - The Adviser non-contractually credits 100% of fees received for certain services against the base management fee, with a small percentage retained for reimbursement[59]. Tax and Regulatory Compliance - The company must distribute at least 90% of its taxable ordinary income to qualify as a RIC[70]. - At least 90% of the company's gross income for each taxable year must come from specific sources, including dividends and interest[71]. - The company is subject to a 4% nondeductible federal excise tax if it does not distribute at least 98% of its ordinary income for the calendar year[73]. - The company must maintain its status as a Business Development Company (BDC) to qualify for certain tax treatments[71]. - The company has a capital loss carryforward of $0 as of March 31, 2022[73]. - The company may retain some or all of its net long-term capital gains and designate the retained amount as a "deemed distribution" to stockholders[79]. - The company must maintain an asset coverage of at least 150% for its senior securities representing indebtedness to pay dividends or distributions[93]. - The company is required to distribute at least 90% of its Investment Company Taxable Income annually to maintain its RIC status[158]. Risks and Challenges - The company faces significant risks from global economic and political conditions, which could negatively impact its business and financial condition[104]. - The COVID-19 pandemic has adversely affected global commercial activity and may continue to impact the company's portfolio companies[108]. - The company may experience fluctuations in quarterly and annual results due to inflation affecting its portfolio companies[107]. - The ability to raise capital may be hindered by volatility in the capital markets, which could adversely affect investment valuations[106]. - Changes in interest rates and credit spreads may negatively impact the company's investments and financial condition[104]. - The company may face challenges in renewing or replacing its Credit Facility, which could impact liquidity and investment funding[95]. - Rising interest rates could negatively impact the operating performance of portfolio companies due to increased debt service obligations[115]. - The company operates in a highly competitive market, facing competition from larger entities with greater financial resources[129]. - Investments in Lower Middle Market portfolio companies are subject to significant risks, particularly during economic downturns[130]. - The transition from LIBOR to alternative reference rates, such as SOFR, poses uncertainty and potential risks for the company's debt investments[127]. - The company may face increased borrowing costs as market interest rates rise, potentially decreasing funds available for distribution[114]. - The company’s ability to make new investments may be affected by rising interest rates, which could impact its overall investment strategy[115]. Financial Condition - As of March 31, 2022, the company had a net worth of $701.2 million and asset coverage of 252.9% for senior securities representing indebtedness[153]. - The Credit Facility allows for maximum borrowings of $180.0 million, with a revolving period end date of February 29, 2024[153]. - The company had no borrowings outstanding under the Credit Facility as of March 31, 2022, and total assets were $740.4 million[163]. - The effective annual cash interest rate on outstanding indebtedness was 5.0% as of March 31, 2022, requiring an annual return of at least 1.9% to cover interest payments[163]. - The company may face risks related to unrealized depreciation in its investment portfolio, which could lead to realized losses and affect distributions to stockholders[154]. - The company must maintain compliance with various covenants under the Credit Facility, including maintaining a minimum net worth of $210.0 million plus 50% of equity raised[153]. - If unable to renew or replace the Credit Facility, the company may face liquidity issues and be forced to sell assets at disadvantageous terms[155]. - The company is exposed to risks associated with leverage, which can magnify potential gains or losses on investments[161]. Management and Governance - The company does not currently have any employees and relies on the Adviser and Administrator for necessary services[99]. - As of March 31, 2022, the Adviser and Administrator collectively had 69 full-time employees, with 37 in investment management and portfolio management[100]. - The company's success is heavily dependent on the Adviser and its key management personnel, including David Gladstone and David Dullum[176]. - The Adviser can resign with 60 days' notice, which may disrupt operations and adversely affect financial condition if a suitable replacement is not found[178]. - The management compensation structure may incentivize the Adviser to make high-risk investments, potentially increasing risk to the investment portfolio[182]. - The company may be obligated to pay the Adviser incentive compensation even if there is a net decrease in net assets, which could lead to financial strain[183]. - Conflicts of interest may arise due to overlapping responsibilities of the company's executives and those of the Adviser, potentially impacting investment returns[187]. - As of March 31, 2022, the Board of Directors has approved transactions involving investments in portfolio companies where affiliates have investments, subject to regulatory restrictions[188]. Distribution Policies - The company intends to distribute up to 100% of its Investment Company Taxable Income to stockholders through monthly distributions, although it may retain some net realized long-term capital gains[196]. - Distributions to common stockholders may include a return of capital, which could affect tax liabilities and reduce the asset base[198]. - The company's common stock has traded at times significantly below its net asset value (NAV), impacting the ability to raise capital through stock issuance[200]. Debt and Notes - The Notes issued by the company are unsecured and effectively subordinated to any secured indebtedness, ranking pari passu with all outstanding unsecured debt[204]. - The indenture for the Notes offers limited protection, allowing the company to incur additional debt and engage in various corporate transactions without restrictions[208]. - The company is dependent on informal relationships with investment bankers and brokers for deal flow, which is crucial for portfolio growth[194]. - The company may face challenges in satisfying obligations related to the Notes due to potential recapitalization and additional debt incurred[212]. - Future debt issued by the company could include more protections for holders, potentially affecting the market and trading levels of the Notes[213]. - An active trading market for the Notes may not exist, limiting the ability to sell and affecting market prices[214]. - If an active trading market does not develop, liquidity and trading prices for the Notes may be negatively impacted[214]. - Holders of the Notes may face financial risks for an indefinite period if trading conditions do not improve[214].

Gladstone Investment Corporation (NASDAQ:GAIN) Q3 2022 Earnings Conference Call February 9, 2022 8:30 AM ET Company Participants David Gladstone - Chairman and Chief Executive Officer Michael LiCalsi - General Counsel and Secretary David Dullum - President Rachael Easton - Chief Financial Officer Conference Call Participants Mickey Schleien - Ladenburg Adrian Day - Adrian Day Asset Management Operator Greetings and welcome to the Gladstone Investment Corporation’s Third Quarter Earnings Conference Call. At ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2021 OR 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: 814-00704 GLADSTONE INVESTMENT CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 83- ...

Financial Data and Key Metrics Changes - The company reported adjusted net investment income (NII) of $0.23 per share for Q2 FY2022, showing an improvement from $0.20, $0.24, and $0.24 in the previous three quarters [12] - Net asset value (NAV) per share increased from $12.66 at June 30, 2021, to $13.27 at September 30, 2021 [14] - Total assets rose to $746 million from $713 million over the same period [14] Business Line Data and Key Metrics Changes - The company made one new buyout during the quarter and continued to invest in existing portfolio companies for add-on acquisitions, which is a focus area for value building [15] - Investment income increased quarter-over-quarter, primarily due to other income, despite a decline in interest income due to one loan going into non-accrual [21][22] Market Data and Key Metrics Changes - The company noted that the flow of buyout opportunities remains strong, although purchase price expectations are elevated, necessitating a patient and selective approach [18] Company Strategy and Development Direction - The company aims to continue generating income from monthly distributions and capital gains, which supports supplemental distributions [16] - A strong and liquid balance sheet allows the company to support portfolio companies with add-on acquisitions and interim financing [17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges such as supply chain issues and inflation but expressed optimism about the portfolio's performance and recovery from COVID impacts [12][19] - The company expects continued good earnings and distributions for the fiscal year [19] Other Important Information - The company increased its monthly distribution to shareholders by 7%, amounting to $0.075 per share, with an annual run rate of $0.90 per share [14] - A supplemental distribution of $0.09 per share was declared to be paid in December 2021 [14] Q&A Session Summary Question: How are portfolio companies dealing with supply shortages and inflation? - Management indicated that portfolio companies are managing supply chain issues reasonably well, with some able to pass on price increases to customers, although margins may tighten slightly [33][36] Question: What is the situation with J.R. Hobbs and their backlog? - J.R. Hobbs is experiencing a large backlog due to delays in construction projects, but they have not lost business and are expected to work through this backlog positively [39] Question: Was the unrealized appreciation due to valuation multiples or company performance? - Management noted that the unrealized appreciation was a combination of operational improvements and EBITDA increases, with performance upticking outweighing any increase in multiples [42]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ 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: 814-00704 GLADSTONE INVESTMENT CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 83 ...