GLADSTONE INVESTMENT CORPORATION\DE (GAIN) SEC Filings & Earnings Calls

Realized loss on loan restructuring indicates credit risk in portfolio.

“restructuring our previously outstanding secured first lien term loan with a cost basis of $12.0 million, which resulted in a realized loss of $9.0 million.” · word for word

Net asset value declined 3.2% sequentially due to unrealized depreciation.

“Net asset value per common share: $16.24 vs $16.78 prior quarter”

Portfolio Company Credit Losses

“In June 2026, we restructured our existing secured first lien term loan to Home Concepts Acquisition, Inc., with a cost basis of $12.0 million into a new $3.0 million first lien term loan, which resulted in a realized loss of $9.0 million.” · word for word

Concentration Risk in Top Investments

“Our investments in SFEG Holdings, Inc., The E3 Company, LLC, Schylling, Inc., Brunswick Bowling Products, Inc. and Old World Christmas, Inc., represented our five largest portfolio investments at fair value and collectively comprised $550.0 million, or 42.9%, of our total investment portfolio at fair value as of June 30, 2026.”

Equity Investment Valuation Risk

“Across our entire investment portfolio, we recorded net unrealized depreciation of $24.8 million on our equity investments and net unrealized appreciation of $6.0 million on our debt investments for the three months ended June 30, 2026.” · word for word

Dilution risk from below-NAV equity issuance

“Any sale of common stock at a price below NAV per share would result in an immediate dilution to existing common stockholders who do not participate in such sale on at least a pro-rata basis.” · word for word

No limit on discount to NAV in proposed authorization

“If Proposal 2 is approved by stockholders, there would be no limit on the discount to NAV at which shares could be sold pursuant to the authorization.” · word for word

Conflict of interest - Adviser and Administrator owned by Chairman

“Our Adviser and Administrator are 100% indirectly owned by David Gladstone, the chairman of our Board and former chief executive officer.” · word for word

Low insider ownership concentration

“All executive officers and directors as a group (14 persons) 896,906 2.25 %” · word for word

Increased leverage capacity may lead to higher debt levels if drawn.

“Credit facility size increased to $405M.”

Liquidity risk from reduced investment repayments

“Net cash used in operating activities for the year ended March 31, 2026 was $101.6 million, as compared to net cash provided by operating activities of $16.3 million for the year ended March 31, 2025.” · word for word

Credit risk from portfolio companies

“The majority of our portfolio companies are in industries that are directly impacted by inflation, such as manufacturing and consumer goods and services.” · word for word

Interest rate risk

“Advances under the Credit Facility generally bear interest at 30-day Term SOFR, subject to a floor of 0.35%, with a SOFR credit spread adjustment of 10 basis points, plus a margin of 3.15% per annum.” · word for word

GAAP net investment loss due to capital gains incentive fee accrual; adjusted NII declining slightly; portfolio yield stable.

“Net investment loss of ($10.6M) in Q4 vs ($6.5M) prior quarter; adjusted NII per share $0.20 vs $0.21.”

Credit Risk from Non-Accrual Loans

“As of December 31, 2025, our loans to B+T Group Acquisition, Inc., Diligent Delivery Systems and Edge Adhesives Holdings, Inc. were on non-accrual status, with an aggregate debt cost basis of $40.3 million.” · word for word

Concentration Risk in SFEG

“As of December 31, 2025 and March 31, 2025, SFEG Holdings, Inc. represented 11.8% and 10.8% of the total investment portfolio at fair value, respectively.” · word for word

Interest Rate and Leverage Risk

“Interest expense increased $3.1 million, or 48.7%, during the three months ended December 31, 2025, as compared to the prior year period, primarily due to the issuance of the 6.875% 2028 Notes and increased borrowings on our Credit Facility.” · word for word

Net investment loss due to increased capital gains-based incentive fee accruals.

“Net investment loss for the quarter ended December 31, 2025 was $6.5 million... primarily due to an increase in accruals for capital gains-based incentive fees.” · word for word

Realized loss of $29.9M from restructuring a portfolio company investment indicates credit risk in the portfolio

“In September 2025, we entered into a new $20.0 million secured first lien term loan with J.R. Hobbs Co. – Atlanta, LLC (“J.R. Hobbs”), restructuring our previously outstanding first lien term loans and line of credit with an aggregate total cost basis of $49.9 million, which resulted in a realized loss of $29.9 million” · word for word

Expense volatility from capital gains-based incentive fee accruals can cause significant swings in net investment income

“Inclusive of $4.9 million, or $0.13 per weighted-average common share, of capital gains-based incentive fees accrued during the three months ended September 30, 2025 and $0.2 million, or $0.01 per weighted-average common share, of capital gains-based incentive fees reversed during the three months ended June 30, 2025” · word for word

Credit risk from non-accrual loans

“As of September 30, 2025, our loans to B+T Group Acquisition, Inc. ("B+T"), Diligent Delivery Systems ("Diligent") and Edge Adhesives Holdings, Inc. ("Edge") were on non-accrual status, with an aggregate debt cost basis of $40.3 million.” · word for word

Concentration risk in SFEG

“As of September 30, 2025 and March 31, 2025, SFEG Holdings, Inc. ("SFEG") represented 11.5% and 10.8% of the total investment portfolio at fair value, respectively.” · word for word

Interest rate risk on floating rate debt

“As of September 30, 2025, advances under the Credit Facility generally bore interest at 30-day Term SOFR, subject to a floor of 0.35%, with a SOFR credit spread adjustment of 10 basis points, plus a margin of 3.15% per annum until October 30, 2026” · word for word

Liquidity risk from equity issuance constraints

“When our common stock trades below NAV, our ability to issue additional equity is constrained by provisions of the 1940 Act” · word for word