Gladstone Investment Corp (NASDAQ:GAIN) Q4 2019 Earnings Conference Call May 13, 2020 8:30 AM ET Company Participants David Gladstone - Chairman & CEO Michael LiCalsi - President, General Counsel & Secretary David Dullum - President Julia Ryan - CFO & Treasurer Conference Call Participants Ryan Carr - Jefferies Bryce Rowe - National Securities Corporation Mickey Schleien - Ladenburg Thalmann & Co. Operator Ladies and gentlemen, thank you for standing by, and welcome to the Gladstone Investment Corporation's ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 2020 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 83-0423116 (Sta ...

Gladstone Investment Corporation (NASDAQ:GAIN) Q3 2019 Earnings Conference Call February 5, 2020 8:30 AM ET Company Participants David Gladstone - Chairman & Chief Executive Officer Michael LiCalsi - General Counsel & Secretary David Dullum - President Julia Ryan - Chief Financial Officer Conference Call Participants Mickey Schleien - Ladenburg Operator Ladies and gentlemen, thank you for standing by and welcome to the Gladstone Investment Corporation Third Quarter's Earning Ending December 31st, 2019 Earni ...

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 December 31, 2019 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- ...

Gladstone Investment Corporation (NASDAQ:GAIN) Q2 2019 Earnings Conference Call November 5, 2019 8:30 AM ET Company Participants Michael LiCalsi - General Counsel and Secretary David Gladstone - Chairman and Chief Executive Officer Julia Ryan - Interim Chief Financial Officer Conference Call Participants Henry Coffey - Wedbush Mickey Schleien - Ladenburg Matt Sherwood - CCP Ryan Carr - Jefferies Operator Ladies and gentlemen, thank you for standing by and welcome to the Gladstone Investment Corporation's Se ...

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, 2019 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 ...

Gladstone Investment Corporation (NASDAQ:GAIN) Q1 2019 Earnings Conference Call August 1, 2019 8:30 AM ET Company Participants David Gladstone - Chairman and Chief Executive Officer Michael LiCalsi - General Counsel and Secretary David Dullum - President Nicole Schaltenbrand - Interim Chief Financial Officer Conference Call Participants Kyle Joseph - Jefferies LLC Mickey Schlein - Ladenburg Thalmann Financial Services, Inc. Operator Good day, ladies and gentlemen, and welcome to the Gladstone Investment Cor ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION:) This section provides the unaudited consolidated financial statements and management's discussion and analysis for Gladstone Investment Corporation [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements of Gladstone Investment Corporation, including statements of assets and liabilities, operations, changes in net assets, cash flows, and schedules of investments, along with comprehensive notes detailing accounting policies, investment specifics, related party transactions, borrowings, and other financial disclosures [Consolidated Statements of Assets and Liabilities](index=4&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities%20as%20of%20June%2030%2C%202019%20and%20March%2031%2C%202019) This statement provides a snapshot of the company's financial position, detailing total assets, liabilities, and net assets as of specific dates Consolidated Statements of Assets and Liabilities (in thousands) | Metric | June 30, 2019 | March 31, 2019 | | :----------------------------------- | :----------------------------- | :---------------------------- | | Total Assets | $641,946 | $635,100 | | Total Liabilities | $238,440 | $227,990 | | Total Net Assets | $403,506 | $407,110 | | Net Asset Value Per Share | $12.29 | $12.40 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20for%20the%20three%20months%20ended%20June%2030%2C%202019%20and%202018) This statement outlines the company's financial performance over a period, detailing investment income, expenses, and net increase in net assets from operations Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | | :--------------------------------------- | :------------------------------------ | :------------------------------------ | | Total Investment Income | $17,310 | $15,504 | | Total Expenses, net of credits to fees | $8,455 | $15,446 | | Net Investment Income | $8,855 | $58 | | Net Realized Gain | $533 | $14,108 | | Net Unrealized (Depreciation) Appreciation | $(3,342) | $18,161 | | Net Increase in Net Assets from Operations | $6,046 | $32,327 | | Basic and Diluted Net Investment Income per Share | $0.27 | $— | | Basic and Diluted Net Increase in Net Assets per Share | $0.18 | $0.99 | [Consolidated Statements of Changes in Net Assets](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets%20for%20the%20three%20months%20ended%20June%2030%2C%202019%20and%202018) This statement tracks the changes in the company's net assets over a period, reflecting operational results and distributions Consolidated Statements of Changes in Net Assets (in thousands) | Metric | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | | :--------------------------------------- | :------------------------------------ | :------------------------------------ | | Net Assets, March 31 | $407,110 | $354,200 | | Net Increase in Net Assets from Operations | $6,046 | $32,327 | | Net Decrease in Net Assets from Distributions | $(9,650) | $(8,555) | | Net (Decrease) Increase in Net Assets | $(3,604) | $25,608 | | Net Assets, June 30 | $403,506 | $379,808 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20three%20months%20ended%20June%2030%2C%202019%20and%202018) This statement details the cash inflows and outflows from operating, investing, and financing activities over a period Consolidated Statements of Cash Flows (in thousands) | Metric | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | | :--------------------------------------- | :------------------------------------ | :------------------------------------ | | Net cash (used in) provided by operating activities | $(10,312) | $10,683 |\n| Net cash provided by (used in) financing activities | $10,725 | $(11,336) | | Net Increase (Decrease) in Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents | $413 | $(653) | | Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents at End of Period | $4,018 | $3,314 | [Consolidated Schedules of Investments](index=9&type=section&id=Consolidated%20Schedules%20of%20Investments%20as%20of%20June%2030%2C%202019%20and%20March%2031%2C%202019) This schedule provides a detailed breakdown of the company's investment portfolio by fair value, type, and security Total Investments at Fair Value (in thousands) | Date | Amount (in thousands) | | :--- | :-------------------- | | June 30, 2019 | $631,186 | | March 31, 2019 | $624,172 | Investment Breakdown by Type (June 30, 2019, at fair value, in thousands) | Investment Type | Fair Value (in thousands) | Percentage of Net Assets | | :-------------- | :------------------------ | :----------------------- | | Non-Control/Non-Affiliate | $327,365 | 81.3% | | Affiliate | $293,292 | 72.8% | | Control | $10,529 | 2.5% | Investment Breakdown by Security Type (June 30, 2019, at fair value, in thousands) | Security Type | Non-Control/Non-Affiliate (in thousands) | Affiliate (in thousands) | Control (in thousands) | | :------------ | :--------------------------------------- | :----------------------- | :--------------------- | | Secured First Lien Debt | $168,528 | $170,058 | $— | | Secured Second Lien Debt | $30,380 | $36,095 | $10,000 | | Preferred Equity | $111,041 | $77,069 | $529 | | Common Equity/Equivalents | $17,416 | $10,070 | $— | [Notes to Consolidated Financial Statements](index=21&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and additional information supporting the consolidated financial statements, covering accounting policies, investment details, and other financial disclosures [NOTE 1. ORGANIZATION](index=21&type=section&id=NOTE%201.%20ORGANIZATION) This note describes the company's legal structure, investment objectives, and target portfolio composition - Gladstone Investment Corporation is an externally advised, closed-end, non-diversified management investment company that has elected to be treated as a business development company (BDC) and a regulated investment company (RIC)[61](index=61&type=chunk) - The company's investment objectives are to achieve and grow current income by investing in debt securities and provide long-term capital appreciation by investing in equity securities of established private businesses in the U.S[61](index=61&type=chunk) - The company intends its investment portfolio to consist of approximately **75.0% in debt investments** and **25.0% in equity investments**, at cost[61](index=61&type=chunk) [NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=21&type=section&id=NOTE%202.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and methods used in preparing the financial statements, including fair value measurement and revenue recognition - Interim financial statements are prepared in accordance with GAAP for interim financial information and SEC Regulation S-X[64](index=64&type=chunk) - Investments are recorded at fair value in accordance with FASB ASC Topic 820 and the 1940 Act, with the Board of Directors having ultimate responsibility for fair value determination[68](index=68&type=chunk)[69](index=69&type=chunk) - Interest income is recognized on an accrual basis, while loans **90 days or more past due** are generally placed on non-accrual status. Success fees are recorded as income when earned, often upon cash receipt[79](index=79&type=chunk)[81](index=81&type=chunk) Non-Accrual Loans (Debt Cost Basis, in thousands) | Date | Amount (in thousands) | | :--- | :-------------------- | | June 30, 2019 | $56,400 | | March 31, 2019 | $68,300 | [NOTE 3. INVESTMENTS](index=25&type=section&id=NOTE%203.%20INVESTMENTS) This note provides detailed information on the company's investment portfolio, including valuation methodologies, activity, and breakdowns by industry and geography - As of June 30, 2019, all investments were valued using **Level 3 inputs** within the ASC 820 fair value hierarchy, except for Funko Acquisition Holdings, LLC, which was valued using Level 2 inputs[93](index=93&type=chunk) - During the three months ended June 30, 2019, the company invested **$38.8 million** in one new portfolio company (Horizon Facilities Services, Inc.) and received **$41.5 million** from repayments and sales[113](index=113&type=chunk)[202](index=202&type=chunk)[203](index=203&type=chunk) Investment Portfolio by Industry (Fair Value, June 30, 2019, in thousands) | Industry Classification | Fair Value (in thousands) | Percentage of Total Investments | | :---------------------- | :------------------------ | :------------------------------ | | Diversified/Conglomerate Services | $258,403 | 40.9% | | Home and Office Furnishings, Housewares, and Durable Consumer Products | $84,194 | 13.3% | | Diversified/Conglomerate Manufacturing | $51,105 | 8.1% | Investment Portfolio by Geographic Region (Fair Value, June 30, 2019, in thousands) | Location | Fair Value (in thousands) | Percentage of Total Investments | | :------- | :------------------------ | :------------------------------ | | South | $262,778 | 41.6% | | West | $165,273 | 26.2% | | Northeast | $151,827 | 24.1% | [NOTE 4. RELATED PARTY TRANSACTIONS](index=32&type=section&id=NOTE%204.%20RELATED%20PARTY%20TRANSACTIONS) This note details transactions with related parties, including management and incentive fees paid to the Adviser - The company pays its Adviser a base management fee (**2.0% annual rate** on average gross assets) and an incentive fee (income-based and capital gains-based)[117](index=117&type=chunk)[121](index=121&type=chunk)[125](index=125&type=chunk) - A loan servicing fee paid to the Adviser is **100% non-contractually, unconditionally, and irrevocably credited back** against the base management fee[124](index=124&type=chunk) Incentive Fee Summary (Three Months Ended June 30, in thousands) | Metric | 2019 (in thousands) | 2018 (in thousands) | | :------------------------ | :------------------ | :------------------ | | Incentive fee – income-based | $2,081 | $1,078 | | Incentive fee – capital gains-based | $(512) | $6,508 | | Total incentive fee | $1,569 | $7,586 | Total Related Party Fees Due (in thousands) | Date | Amount | | :--- | :----- | | June 30, 2019 | $24,908 | | March 31, 2019 | $25,068 | [NOTE 5. BORROWINGS](index=35&type=section&id=NOTE%205.%20BORROWINGS) This note describes the company's credit facility, including commitment amounts, interest rates, outstanding borrowings, and covenant compliance - The Credit Facility's revolving period was extended to **August 22, 2021**, and the commitment amount was increased from **$165.0 million to $200.0 million**, with potential expansion to **$300.0 million**[134](index=134&type=chunk) - Advances under the Credit Facility generally bear interest at **30-day LIBOR plus 2.85% per annum**[136](index=136&type=chunk) Credit Facility Summary (in thousands) | Metric | June 30, 2019 | March 31, 2019 | | :------------------------ | :------------ | :------------- | | Commitment amount | $200,000 | $200,000 | | Borrowings outstanding at cost | $73,500 | $53,000 | | Availability | $126,500 | $147,000 | | Adjusted Availability | $120,500 | $137,500 | - As of June 30, 2019, the company was in compliance with all covenants under the Credit Facility, maintaining a net worth of **$530.6 million** and asset coverage on senior securities representing indebtedness of **763.7%**[139](index=139&type=chunk) [NOTE 6. MANDATORILY REDEEMABLE PREFERRED STOCK](index=37&type=section&id=NOTE%206.%20MANDATORILY%20REDEEMABLE%20PREFERRED%20STOCK) This note provides details on the company's mandatorily redeemable preferred stock, including redemption dates, interest rates, and fair values Series D Term Preferred Stock (June 30, 2019, in thousands) | Metric | Value | | :------------------------ | :-------------------- | | Mandatory Redemption Date | September 30, 2023 | | Interest Rate | 6.250% | | Shares Outstanding | 2,300,000 | | Total Liquidation Preference | $57,500 (in thousands) | Series E Term Preferred Stock (June 30, 2019, in thousands) | Metric | Value | | :------------------------ | :-------------------- | | Mandatory Redemption Date | August 31, 2025 | | Interest Rate | 6.375% | | Shares Outstanding | 2,990,000 | | Total Liquidation Preference | $74,750 (in thousands) | - As of June 30, 2019, asset coverage on senior securities that are stock was **287.5%**[146](index=146&type=chunk) Fair Value of Preferred Stock (June 30, 2019, in thousands) | Series | Fair Value | | :----- | :--------- | | Series D | $58,535 | | Series E | $78,099 | | Total | $136,634 | [NOTE 7. REGISTRATION STATEMENT AND COMMON EQUITY OFFERINGS](index=38&type=section&id=NOTE%207.%20REGISTRATION%20STATEMENT%20AND%20COMMON%20EQUITY%20OFFERINGS) This note outlines the company's registration statement for securities offerings and remaining capacity under its 'at-the-market' program - A registration statement on Form N-2 was filed on June 14, 2019, and declared effective on July 24, 2019, allowing the company to issue up to **$300.0 million** in various securities[154](index=154&type=chunk) - As of June 30, 2019, the company had remaining capacity to sell up to an additional **$31.8 million** of common stock under its 'at-the-market' (ATM) program[155](index=155&type=chunk)[236](index=236&type=chunk) [NOTE 8. NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS PER WEIGHTED-AVERAGE COMMON SHARE](index=39&type=section&id=NOTE%208.%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 attributable to operations on a per weighted-average common share basis Net Increase in Net Assets per Weighted-Average Common Share | Period | Amount | | :------------------------ | :----- | | Three Months Ended June 30, 2019 | $0.18 | | Three Months Ended June 30, 2018 | $0.99 | [NOTE 9. DISTRIBUTIONS TO COMMON STOCKHOLDERS](index=39&type=section&id=NOTE%209.%20DISTRIBUTIONS%20TO%20COMMON%20STOCKHOLDERS) This note details the company's distribution policy to common stockholders, including monthly and supplemental cash distributions, to maintain RIC status - To maintain RIC status, the company must distribute at least **90% of its Investment Company Taxable Income** annually[159](index=159&type=chunk) Monthly Cash Distributions to Common Stockholders (Three Months Ended June 30, 2019) | Payment Date | Distribution per Common Share | | :----------- | :---------------------------- | | April 30, 2019 | $0.068 | | May 31, 2019 | $0.068 | | June 14, 2019 | $0.090 (Supplemental) | | June 28, 2019 | $0.068 | | Total | $0.294 | - For the fiscal year ended March 31, 2019, the company elected to retain **$50.0 million ($1.52 per common share)** of long-term capital gains as deemed distributions, incurring **$10.5 million** in federal taxes[165](index=165&type=chunk) [NOTE 10. COMMITMENTS AND CONTINGENCIES](index=41&type=section&id=NOTE%2010.%20COMMITMENTS%20AND%20CONTINGENCIES) This note discloses the company's legal proceedings, reserves, and unused commitments, including lines of credit and guaranties - The company is party to certain legal proceedings but does not believe they will have a material adverse effect on its financial condition or results of operations[168](index=168&type=chunk) - Reserves and holdbacks against escrow amounts from investment exits totaled **$2.4 million** as of June 30, 2019[169](index=169&type=chunk) Unused Line of Credit Commitments and Guaranties (in thousands) | Item | June 30, 2019 | March 31, 2019 | | :------------------------ | :------------ | :------------- | | Unused line of credit commitments | $4,025 | $1,259 | | Guaranties | $1,000 | $1,000 | | Total | $5,025 | $2,259 | [NOTE 11. FINANCIAL HIGHLIGHTS](index=42&type=section&id=NOTE%2011.%20FINANCIAL%20HIGHLIGHTS) This note provides key financial metrics and ratios per common share, including net asset value, investment income, and total investment return Per Common Share Data (Three Months Ended June 30) | Metric | 2019 | 2018 | | :--------------------------------------- | :--- | :--- | | Net asset value at beginning of period | $12.40 | $10.85 | | Net investment income | $0.27 | $— | | Net increase in net assets from operations | $0.18 | $0.99 | | Net asset value at end of period | $12.29 | $11.57 | | Total investment return | (0.72)% | 19.19% | Ratios/Supplemental Data (Annualized, Three Months Ended June 30) | Metric | 2019 | 2018 | | :--------------------------------------- | :----- | :----- | | Ratio of net expenses to average net assets | 8.29% | 16.96% | | Ratio of net investment income to average net assets | 8.68% | 0.06% | [NOTE 12. UNCONSOLIDATED SIGNIFICANT SUBSIDIARIES](index=43&type=section&id=NOTE%2012.%20UNCONSOLIDATED%20SIGNIFICANT%20SUBSIDIARIES) This note identifies unconsolidated significant subsidiaries and provides their key financial performance data - Galaxy Tool Holding Corporation, a designer and manufacturer of precision tools and molds, is identified as an unconsolidated significant subsidiary[176](index=176&type=chunk) Galaxy Tool Holding Corporation Income Statement (Three Months Ended June 30, in thousands) | Metric | 2019 | 2018 | | :------- | :--- | :--- | | Net sales | $6,862 | $6,212 | | Net profit (loss) | $425 | $(1,480) | [NOTE 13. SUBSEQUENT EVENTS](index=43&type=section&id=NOTE%2013.%20SUBSEQUENT%20EVENTS) This note discloses significant events occurring after the reporting period, including declared distributions and dividends Distributions and Dividends Declared (July-September 2019 Quarter) | Security Type | Distribution/Dividend per Share | | :------------------------ | :------------------------------ | | Common Stock | $0.234 (including $0.030 supplemental) | | Series D Term Preferred Stock | $0.39062499 | | Series E Term Preferred Stock | $0.39843750 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and operational results, including an overview of its business, investment strategy, recent portfolio activity, capital raising efforts, and regulatory compliance. It also details the comparison of financial performance for the three months ended June 30, 2019, versus 2018, and discusses liquidity and capital resources [Overview](index=44&type=section&id=Overview) This overview describes the company's business model as an externally managed BDC and RIC, its investment focus, portfolio composition, and recent activity - Gladstone Investment Corporation operates as an externally managed BDC and RIC, focusing on investing in debt and equity securities of established private U.S. businesses, primarily in the lower middle market (EBITDA of **$3 million to $20 million**)[183](index=183&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk) - As of June 30, 2019, the investment portfolio consisted of **29 companies**, with **73.1% in debt securities** and **26.9% in equity securities**, at cost[187](index=187&type=chunk)[191](index=191&type=chunk) - During Q2 2019, the company exited two portfolio companies, invested **$38.8 million** in one new company (Horizon Facilities Services, Inc.), and made **$12.5 million** in follow-on investments[191](index=191&type=chunk)[202](index=202&type=chunk)[203](index=203&type=chunk) - Unrecognized contractual success fees totaled **$31.7 million**, or **$0.97 per common share**, as of June 30, 2019[193](index=193&type=chunk)[252](index=252&type=chunk) - The company's common stock traded at an **8.6% discount** to its NAV (**$11.23 vs $12.29**) as of June 30, 2019, which constrains its ability to issue additional equity[196](index=196&type=chunk)[238](index=238&type=chunk) - Effective April 10, 2019, the company's asset coverage requirement for senior securities changed from **200% to 150%**. As of June 30, 2019, asset coverage for indebtedness was **763.7%** and for stock was **287.5%**[200](index=200&type=chunk)[201](index=201&type=chunk) [Results of Operations](index=48&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, comparing key income and expense metrics for the current and prior periods Key Financial Results (Three Months Ended June 30, in thousands, except per share) | Metric | 2019 | 2018 | $ Change | % Change | | :--------------------------------------- | :--- | :--- | :------- | :------- | | Total Investment Income | $17,310 | $15,504 | $1,806 | 11.6% | | Interest income | $11,875 | $13,314 | $(1,439) | (10.8)% | | Dividend, success fee, and other income | $5,435 | $2,190 | $3,245 | 148.2% | | Total expenses, net of credits to fees | $8,455 | $15,446 | $(6,991) | (45.3)% | | Net Investment Income | $8,855 | $58 | $8,797 | NM | | Net realized gain on investments | $533 | $14,108 | $(13,575) | (96.2)% | | Net unrealized (depreciation) appreciation of investments | $(3,047) | $18,068 | $(21,115) | (116.9)% | | Net increase in net assets from operations | $6,046 | $32,327 | $(26,281) | (81.3)% | | Basic and Diluted Net Investment Income per Share | $0.27 | $— | $0.27 | NM | | Basic and Diluted Net Increase in Net Assets per Share | $0.18 | $0.99 | $(0.81) | (81.8)% | - The significant increase in Net Investment Income was primarily driven by a **148.2% increase** in dividend, success fee, and other income, coupled with a **45.3% decrease** in total expenses (net of credits), mainly due to a reversal of the capital gains-based incentive fee[208](index=208&type=chunk)[212](index=212&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk) - Net unrealized depreciation of investments was **$3.0 million** in Q2 2019, compared to net unrealized appreciation of **$18.1 million** in Q2 2018, primarily due to the reversal of previously recorded unrealized appreciation upon the exit of Jackrabbit and a decline in performance of certain portfolio companies[219](index=219&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash flow activities, capital structure, borrowing capacity, and compliance with financial covenants - Net cash used in operating activities was **$10.3 million** for the three months ended June 30, 2019, primarily due to higher purchases of investments (**$51.2 million**) and a decrease in other liabilities[225](index=225&type=chunk)[226](index=226&type=chunk) - Net cash provided by financing activities was **$10.7 million** for the three months ended June 30, 2019, mainly from **$20.5 million** of net borrowings on the Credit Facility, partially offset by **$9.7 million** in common stockholder distributions[228](index=228&type=chunk) - Common stockholders received monthly cash distributions of **$0.068 per share** and a supplemental distribution of **$0.09 per share** in June 2019[230](index=230&type=chunk) - The Credit Facility has a **$200.0 million commitment**, with **$120.5 million adjusted availability** as of June 30, 2019, and the company was in compliance with all covenants[246](index=246&type=chunk)[251](index=251&type=chunk) Contractual Obligations as of June 30, 2019 (at cost, in thousands) | Contractual Obligations | Total | Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | | :---------------------- | :---- | :--------------- | :-------- | :-------- | :---------------- | | Credit Facility | $73,500 | $— | $— | $73,500 | $— | | Mandatorily redeemable preferred stock | $132,250 | $— | $— | $57,500 | $74,750 | | Secured borrowing | $5,096 | $— | $5,096 | $— | $— | | Interest payments on obligations | $66,749 | $13,929 | $27,290 | $19,970 | $5,560 | | Total | $277,595 | $13,929 | $32,386 | $150,970 | $80,310 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section addresses the company's exposure to market risks, primarily interest rate risk, and its approach to managing it. The company targets a specific mix of fixed and variable-rate loans in its portfolio and is monitoring the transition from LIBOR to SOFR - The primary market risk exposure is interest rate risk, which affects net investment income based on the difference between borrowing and investment rates[266](index=266&type=chunk) - The company targets approximately **90% of its loans at variable rates** (with a floor mechanism) and **10% at fixed rates**[267](index=267&type=chunk) Debt Investment Portfolio Breakdown (June 30, 2019, by principal balance) | Rate Type | Percentage | | :------------------------ | :--------- | | Variable rates with a floor | 97.4% | | Fixed rates | 2.6% | | Total | 100.0% | - The company is monitoring the anticipated phase-out of LIBOR by late 2021 and its expected transition to SOFR, anticipating minimal impact with appropriate adjustments to loan documents[205](index=205&type=chunk) [Item 4. Controls and Procedures](index=59&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms that management, including the chief executive officer and acting principal financial officer, evaluated the effectiveness of the company's disclosure controls and procedures and concluded they were effective as of June 30, 2019. No material changes in internal control over financial reporting were reported - As of June 30, 2019, management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level[268](index=268&type=chunk) - There were no changes in internal control over financial reporting during the three months ended June 30, 2019, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[269](index=269&type=chunk) [PART II. OTHER INFORMATION](index=60&type=section&id=PART%20II.%20OTHER%20INFORMATION:) This section includes legal proceedings, risk factors, and other miscellaneous disclosures not covered in the financial information [Item 1. Legal Proceedings](index=60&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the company is involved in routine legal proceedings but does not anticipate any material adverse effects on its financial condition or operations from these matters - The company is party to certain legal proceedings incidental to the normal course of business, but does not expect them to have a material adverse effect on its financial condition, results of operation, or cash flows[270](index=270&type=chunk) - No proceeding involves a claim for damages that exceeds **10% of the company's consolidated current assets**[270](index=270&type=chunk) [Item 1A. Risk Factors](index=60&type=section&id=Item%201A.%20Risk%20Factors) This section directs readers to the company's Annual Report on Form 10-K for a comprehensive discussion of risk factors - For a discussion of risk factors, refer to the section captioned 'Item 1A. Risk Factors' in Part I of the Annual Report on Form 10-K for the fiscal year ended March 31, 2019[271](index=271&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=60&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable for the reporting period - Not applicable[272](index=272&type=chunk) [Item 3. Defaults Upon Senior Securities](index=60&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable for the reporting period - Not applicable[273](index=273&type=chunk) [Item 4. Mine Safety Disclosures](index=60&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable for the reporting period - Not applicable[274](index=274&type=chunk) [Item 5. Other Information](index=60&type=section&id=Item%205.%20Other%20Information) This item is not applicable for the reporting period - Not applicable[275](index=275&type=chunk) [Item 6. Exhibits](index=61&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, stock certificates, and required certifications - The exhibits include the Amended and Restated Certificate of Incorporation, Certificates of Designation for Series D and E Preferred Stock, Amended and Restated Bylaws, Specimen Stock Certificates, and Certifications of the Chief Executive Officer and Acting Principal Financial Officer[277](index=277&type=chunk) [SIGNATURES](index=62&type=section&id=SIGNATURES) This section contains the formal signature block, confirming the report's authorization and signing [SIGNATURE](index=62&type=section&id=SIGNATURE) This section contains the formal signature block, confirming that the report has been duly authorized and signed on behalf of Gladstone Investment Corporation - The report was signed by Nicole Schaltenbrand, Acting Principal Financial Officer, on July 31, 2019[281](index=281&type=chunk)

Gladstone Investment (NASDAQ:GAIN) Q4 2018 Results Earnings Conference Call May 14, 2019 8:30 AM ET Company Participants David Gladstone - Chairman and CEO Michael LiCalsi - General Counsel and Secretary David Dullum - President Julia Ryan - Chief Financial Officer Conference Call Participants Henry Coffey - Wedbush Operator Good day, ladies and gentlemen, and welcome to the Gladstone Investment Corporation's Fourth Quarter and Year Ended March 31, 2019 Earnings Call and Web Call. At this time, all particip ...

PART I [ITEM 1. BUSINESS](index=4&type=section&id=ITEM%201%20Business) The company operates as a BDC and RIC, investing in debt and equity of U.S. lower middle market businesses - 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)[14](index=14&type=chunk) - The company's investment objectives are to achieve and grow current income through debt securities and provide long-term capital appreciation through equity securities of established U.S. private businesses[19](index=19&type=chunk) - The investment strategy targets lower middle market private businesses (**EBITDA of $3 million to $20 million**) with sustainable free cash flow, adequate collateral, experienced management, and potential for equity appreciation[20](index=20&type=chunk) Investment Portfolio Composition (at Cost) | Security Type | March 31, 2019 | March 31, 2018 | | :-------------- | :------------- | :------------- | | Debt Securities | 75.1% | 73.8% | | Equity Securities | 24.9% | 26.2% | | **Total** | **100.0%** | **100.0%** | Top 5 Portfolio Investments (Fair Value) | Company | March 31, 2019 (Fair Value) | Percentage of Total Portfolio | | :------------------------------ | :-------------------------- | :---------------------------- | | Nth Degree, Inc. | $60.2 million | 9.7% | | J.R. Hobbs Co. – Atlanta, LLC | $53.8 million | 8.6% | | Brunswick Bowling Products, Inc.| $41.4 million | 6.6% | | Counsel Press, Inc. | $40.2 million | 6.4% | | Pioneer Square Brands, Inc. | $32.1 million | 5.1% | | **Total Top 5** | **$227.8 million** | **36.4%** | - The company's investment process involves extensive due diligence, including financial analysis, site visits, management interviews, and market research, with all investments requiring approval from the Adviser's investment committee[33](index=33&type=chunk)[37](index=37&type=chunk)[40](index=40&type=chunk) - The company's competitive advantages include management expertise, extensive network for investment opportunities, a disciplined value- and income-oriented investment philosophy, a longer investment horizon, and flexible transaction structuring[43](index=43&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) - The company pays its Adviser a base management fee (**2.0% of average gross assets**) and an incentive fee, with certain fees credited back to the company[63](index=63&type=chunk)[64](index=64&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) - To qualify as a RIC, the company must distribute at least **90% of its taxable ordinary income** and net short-term capital gains, and meet income source and asset diversification requirements[80](index=80&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk)[86](index=86&type=chunk) Adviser and Administrator Staffing (as of April 30, 2019) | Functional Area | Number of Individuals | | :------------------------------------------------ | :-------------------- | | Executive management | 11 | | Accounting, administration, compliance, human resources, legal, and treasury | 23 | | Investment management, portfolio management, and due diligence | 35 | | **Total** | **69** | [ITEM 1A. RISK FACTORS](index=21&type=section&id=ITEM%201A%20Risk%20Factors) The company faces significant risks across economic, investment, financing, regulatory, and management categories - The company faces risks from market conditions, including changes in interest rates, credit availability, and economic downturns, which can negatively impact business, results of operations, and investment valuations[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - Investments in Lower Middle Market companies are **inherently risky** due to limited resources, lack of public information, unpredictable operating results, and high leverage, potentially leading to significant losses[120](index=120&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk) - Valuation of privately held securities involves subjective judgments and estimates, which can fluctuate and materially differ from realized values, adversely affecting **Net Asset Value (NAV)**[124](index=124&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk)[130](index=130&type=chunk) - The company's business plan relies on external financing, which is constrained by the 1940 Act's asset coverage limitations (**150% for senior securities** as of April 10, 2019)[144](index=144&type=chunk)[145](index=145&type=chunk)[147](index=147&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) - **Significant potential conflicts of interest** exist with the external Adviser due to shared management, allocation of investment opportunities, and the incentive fee structure[184](index=184&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk)[190](index=190&type=chunk)[198](index=198&type=chunk) - Investment in the company's securities carries risks such as fluctuating operating results, no guaranteed distributions, trading at a discount to NAV, and **potential dilution from future equity offerings**[199](index=199&type=chunk)[200](index=200&type=chunk)[202](index=202&type=chunk)[203](index=203&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk) [ITEM 1B. UNRESOLVED STAFF COMMENTS](index=39&type=section&id=ITEM%201B%20Unresolved%20Staff%20Comments) There are no unresolved staff comments to report - The company has no unresolved staff comments[227](index=227&type=chunk) [ITEM 2. PROPERTIES](index=40&type=section&id=ITEM%202%20Properties) The company does not own any material real estate, operating from premises leased by its affiliates - The company does not own any material real estate or physical properties; it operates from premises leased by its Adviser and Administrator[228](index=228&type=chunk) [ITEM 3. LEGAL PROCEEDINGS](index=40&type=section&id=ITEM%203%20Legal%20Proceedings) The company may be involved in ordinary course legal proceedings not expected to materially affect its finances - The company may be involved in legal proceedings and claims, including those related to portfolio companies, which could result in costs and diversion of management time, though no material adverse effect on financial condition is currently expected[229](index=229&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=40&type=section&id=ITEM%204%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the registrant[230](index=230&type=chunk) PART II [ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES](index=41&type=section&id=ITEM%205%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section details the market for the company's stock, its distribution policy, and stockholder expenses - The company's common stock (GAIN) and preferred stock (GAINM, GAINL) are traded on the Nasdaq Global Select Market[15](index=15&type=chunk)[233](index=233&type=chunk) Common Stock Performance and Distributions | Quarter Ended/Ending | NAV (A) | High Sales Price | Low Sales Price | Distributions per Common Share | | :------------------- | :------ | :--------------- | :-------------- | :----------------------------- | | 3/31/2018 | $10.85 | $11.42 | $9.00 | $0.1950 | | 6/30/2018 | $11.57 | $12.26 | $9.81 | $0.2610 (C) | | 9/30/2018 | $12.30 | $12.15 | $10.95 | $0.2010 | | 12/31/2018 | $12.53 | $11.50 | $8.70 | $0.2640 (C) | | 3/31/2019 | $12.40 | $12.07 | $9.23 | $0.2040 | | 6/30/2019 (through May 10, 2019) | * | $12.70 | $11.67 | $0.2940 (C) | - The company generally distributes up to 100% of its Investment Company Taxable Income to stockholders monthly and may retain net realized long-term capital gains, designating them as deemed distributions[89](index=89&type=chunk)[234](index=234&type=chunk) Annual Expenses (as a percentage of net assets attributable to common stock) | Expense Category | Percentage (FY2019) | | :----------------- | :------------------ | | Base management fee | 3.06% | | Loan servicing fee | 1.64% | | Incentive fees | 3.32% | | Interest payments on borrowed funds | 1.29% | | Dividend expense on mandatorily redeemable preferred stock | 2.21% | | Other expenses | 1.16% | | **Total Annual Expenses** | **12.68%** | Senior Securities Data (Total Amount Outstanding Exclusive of Treasury Securities) | Class and Year | March 31, 2019 | March 31, 2018 | | :------------------------------------------ | :------------- | :------------- | | 6.25% Series D Cumulative Term Preferred Stock due 2023 | $57,500,000 | $57,500,000 | | 6.375% Series E Cumulative Term Preferred Stock due 2025 | $74,750,000 | — | | Revolving credit facilities | $53,000,000 | $107,000,000 | | Secured borrowings | $5,095,785 | $5,095,785 | [ITEM 6. SELECTED FINANCIAL DATA](index=48&type=section&id=ITEM%206%20Selected%20Financial%20Data) This section presents a five-year summary of key consolidated financial and operational data Consolidated Selected Financial Data (Years Ended March 31) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :------------------------------------------------ | :----- | :----- | :----- | :----- | :----- | | **Statement of Operations Data:** | | | | | | | Total investment income | $59,663 | $58,355 | $51,875 | $50,955 | $41,643 | | Total expenses, net of credits from Adviser | $52,122 | $36,395 | $29,453 | $30,239 | $21,746 | | Net investment income | $7,541 | $21,960 | $22,422 | $20,716 | $19,897 | | Net increase in net assets resulting from operations | $81,590 | $60,687 | $44,763 | $24,854 | $50,214 | | **Per Common Share Data:** | | | | | | | Net increase in net assets resulting from operations per common share | $2.49 | $1.88 | $1.48 | $0.82 | $1.88 | | Net investment income per common share | $0.23 | $0.68 | $0.74 | $0.68 | $0.75 | | Cash distributions declared per common share | $0.93 | $0.89 | $0.75 | $0.75 | $0.77 | | **Statement of Assets and Liabilities Data:** | | | | | | | Total assets | $635,100| $610,899| $515,195| $506,260| $483,521| | Net assets | $407,110| $354,200| $301,082| $279,022| $273,429| | Net asset value per common share | $12.40 | $10.85 | $9.95 | $9.22 | $9.18 | | Common shares outstanding | 32,822,459| 32,653,635| 30,270,958| 30,270,958| 29,775,958| | **Senior Securities Data:** | | | | | | | Total borrowings, at cost | $58,096 | $112,096| $74,796 | $100,096| $123,896| | Mandatorily redeemable preferred stock | $132,250| $139,150| $139,150| $121,650| $81,400 | | **Other Unaudited Data:** | | | | | | | Number of portfolio companies | 30 | 33 | 35 | 36 | 34 | | Principal amount of new investments | $57,761 | $59,424 | $54,370 | $69,380 | $108,197| | Proceeds from loan repayments and investments sold| $154,651| $39,859 | $68,825 | $44,582 | $11,260 | | Weighted-average yield on investments (excluding non-accrual) | 13.04% | 13.06% | 12.65% | 12.62% | 12.60% | | Total return | 24.95% | 21.82% | 41.58% | 4.82% | 11.96% | [ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=50&type=section&id=ITEM%207%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes financial performance, liquidity, capital resources, and critical accounting policies - The company's investment portfolio consisted of 30 companies as of March 31, 2019, a net reduction of three companies from the prior year, with **$57.8 million invested in two new portfolio companies**[278](index=278&type=chunk)[289](index=289&type=chunk) - Unrecognized contractual success fees amounted to **$30.1 million** ($0.92 per common share) as of March 31, 2019, which are generally recognized as income upon cash receipt[280](index=280&type=chunk)[374](index=374&type=chunk) - The company successfully exited 16 portfolio companies since inception, generating **$185.9 million in net realized gains** and $23.4 million in other income[281](index=281&type=chunk) - The company's Credit Facility was extended to August 2021 with a total commitment of $200.0 million, and the asset coverage requirement for senior securities changed from **200% to 150%**[282](index=282&type=chunk)[287](index=287&type=chunk) Key Financial Performance (FY2019 vs. FY2018) | Metric | FY2019 | FY2018 | $ Change | % Change | | :------------------------------------------------ | :----- | :----- | :------- | :------- | | Total investment income | $59,663 | $58,355 | $1,308 | 2.2% | | Total expenses, net of credits to fees | $52,122 | $36,395 | $15,727 | 43.2% | | Net investment income | $7,541 | $21,960 | $(14,419)| (65.7)% | | Net realized gain on investments | $68,556 | $1,336 | $67,220 | NM | | Taxes on deemed distribution of long-term capital gains | $(13,500)| — | $(13,500)| NM | | Net unrealized appreciation of investments | $20,180 | $37,891 | $(17,711)| (46.7)% | | Net increase in net assets resulting from operations | $81,590 | $60,687 | $20,903 | 34.4% | - **Net cash provided by operating activities was $93.6 million** in FY2019, a significant increase from net cash used of $29.7 million in FY2018, driven by higher net proceeds from investment sales[339](index=339&type=chunk) Contractual Obligations (as of March 31, 2019, in thousands) | Contractual Obligations | Total | Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | | :---------------------- | :---- | :--------------- | :-------- | :-------- | :---------------- | | Credit Facility | $53,000 | $— | $— | $53,000 | $— | | Mandatorily redeemable preferred stock | $132,250| $— | $— | $57,500 | $74,750 | | Secured borrowing | $5,096 | $— | $5,096 | $— | $— | | Interest payments on obligations | $66,570 | $13,096 | $25,718 | $21,005 | $6,751 | | **Total** | **$256,916**| **$13,096** | **$30,814**| **$131,505**| **$81,501** | [ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=73&type=section&id=ITEM%207A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section addresses the company's exposure to market risks, with a primary focus on interest rate risk - The primary market risk exposure is **interest rate risk**, as net investment income depends on the spread between borrowing and investment rates[386](index=386&type=chunk) Debt Investment Portfolio Breakdown by Rate Type (Principal Balance) | Rate Type | 2019 | 2018 | | :---------------------- | :--- | :--- | | Variable rates with a floor | 97.4%| 97.0%| | Fixed rates | 2.6% | 3.0% | | **Total** | **100.0%**| **100.0%**| Hypothetical Impact of Interest Rate Changes on Net Assets (as of March 31, 2019, in thousands) | Basis Point Change | Increase (Decrease) in Interest Income | Increase (Decrease) in Interest Expense | Net Increase (Decrease) in Net Assets Resulting from Operations | | :----------------- | :------------------------------------- | :-------------------------------------- | :-------------------------------------------------------------- | | Up 300 basis points| $10,694 | $1,613 | $9,081 | | Up 200 basis points| $7,008 | $1,075 | $5,993 | | Up 100 basis points| $3,362 | $538 | $2,824 | | Down 100 basis points| $(2,036) | $(538) | $(1,498) | | Down 200 basis points| $(2,337) | $(1,075) | $(1,262) | | Down 249 basis points| $(2,337) | $(1,341) | $(996) | [ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](index=74&type=section&id=ITEM%208%20Financial%20Statements%20and%20Supplementary%20Data) This item presents the company's audited consolidated financial statements and related reports - The section includes the Consolidated Statements of Assets and Liabilities, Consolidated Statements of Operations, Consolidated Statements of Changes in Net Assets, and Consolidated Statements of Cash Flows for the fiscal years ended March 31, 2019, 2018, and 2017[392](index=392&type=chunk) - Management concluded that the company's **internal control over financial reporting was effective** as of March 31, 2019, based on the COSO framework[396](index=396&type=chunk) - PricewaterhouseCoopers LLP provided an **unqualified opinion** on the consolidated financial statements and the effectiveness of internal control over financial reporting as of March 31, 2019[401](index=401&type=chunk) [ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE](index=126&type=section&id=ITEM%209%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants - There are no changes in or disagreements with accountants on accounting and financial disclosure[607](index=607&type=chunk) [ITEM 9A. CONTROLS AND PROCEDURES](index=126&type=section&id=ITEM%209A%20Controls%20and%20Procedures) Management evaluated and confirmed the effectiveness of the company's disclosure controls and procedures - Management, including the CEO and CFO, concluded that **disclosure controls and procedures were effective** at a reasonable assurance level as of March 31, 2019[608](index=608&type=chunk) - There were no changes in internal controls for the three months ended March 31, 2019, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[611](index=611&type=chunk) [ITEM 9B. OTHER INFORMATION](index=126&type=section&id=ITEM%209B%20Other%20Information) This item is not applicable to the company - No other information is required to be reported under this item[612](index=612&type=chunk) PART III [ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE](index=127&type=section&id=ITEM%2010%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information is incorporated by reference from the company's 2019 Proxy Statement - Information for this item is incorporated by reference from the company's 2019 Proxy Statement[615](index=615&type=chunk) [ITEM 11. EXECUTIVE COMPENSATION](index=127&type=section&id=ITEM%2011%20Executive%20Compensation) Information on executive compensation is incorporated by reference from the 2019 Proxy Statement - Information for this item is incorporated by reference from the company's 2019 Proxy Statement[615](index=615&type=chunk) [ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS](index=127&type=section&id=ITEM%2012%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership is incorporated by reference from the 2019 Proxy Statement - Information for this item is incorporated by reference from the company's 2019 Proxy Statement[616](index=616&type=chunk) [ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE](index=127&type=section&id=ITEM%2013%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Information on related transactions is incorporated by reference from the 2019 Proxy Statement - Information for this item is incorporated by reference from the company's 2019 Proxy Statement[616](index=616&type=chunk) [ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES](index=127&type=section&id=ITEM%2014%20Principal%20Accountant%20Fees%20and%20Services) Information on accountant fees is incorporated by reference from the 2019 Proxy Statement - Information for this item is incorporated by reference from the company's 2019 Proxy Statement[617](index=617&type=chunk) PART IV [ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES](index=128&type=section&id=ITEM%2015%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed with the 10-K report - The report includes consolidated financial statements, schedules of investments, and notes to consolidated financial statements[620](index=620&type=chunk) - Various exhibits are filed, including the Amended and Restated Certificate of Incorporation, Bylaws, Investment Advisory and Management Agreement, and Administration Agreement[620](index=620&type=chunk)[625](index=625&type=chunk) [ITEM 16. FORM 10-K Summary](index=130&type=section&id=ITEM%2016%20Form%2010-K%20Summary) The company does not provide a Form 10-K summary - The company does not provide a Form 10-K Summary[623](index=623&type=chunk) [SIGNATURES](index=131&type=section&id=SIGNATURES) This section contains the required signatures of the registrant's authorized officers and directors - The report is signed by the Chief Financial Officer and Treasurer, Chief Executive Officer and Chairman, Vice Chairman and Chief Operating Officer, and other Directors[629](index=629&type=chunk)[630](index=630&type=chunk)