Gladstone Investment Corporationde 10-Q, filed Nov 3, 2020

About this 10-Q

Gladstone Investment Corporationde (GAIN)

10-Q 2020-11-03 For: 2020-09-30

View Original

Added on April 11, 2026

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Gladstone Investment Corporationde filed this 10-Q on November 3, 2020, covering the quarter ended September 30, 2020.

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


DELAWARE		83-0423116
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1521 WESTBRANCH DRIVE, SUITE 100 MCLEAN, VIRGINIA		22102
(Address of principal executive offices)		(Zip Code)


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.001 par value per share	GAIN	The Nasdaq Stock Market LLC
6.250% Series D Cumulative Term Preferred Stock, $0.001 par value per share	GAINM	The Nasdaq Stock Market LLC
6.375% Series E Cumulative Term Preferred Stock, $0.001 par value per share	GAINL	The Nasdaq Stock Market LLC


PART I.	FINANCIAL INFORMATION:

Item 1.	Financial Statements (Unaudited)

	Consolidated Statements of Assets and Liabilities as of September 30, 2020 and March 31, 2020	2
	Consolidated Statements of Operations for the three and six months ended September 30, 2020 and 2019	3
	Consolidated Statements of Changes in Net Assets for the three and six months ended September 30, 2020 and 2019	5
	Consolidated Statements of Cash Flows for the six months ended September 30, 2020 and 2019	6
	Consolidated Schedules of Investments as of September 30, 2020 and March 31, 2020	7
	Notes to Consolidated Financial Statements	19

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

	Overview	45
	Results of Operations	50
	Liquidity and Capital Resources	58

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	65

Item 4.	Controls and Procedures	65

PART II.	OTHER INFORMATION:

Item 1.	Legal Proceedings	66

Item 1A.	Risk Factors	66

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	66

Item 3.	Defaults Upon Senior Securities	66

Item 4.	Mine Safety Disclosures	66

Item 5.	Other Information	66

Item 6.	Exhibits	67

SIGNATURES		68


	September 30,			March 31,
	2020			2020
ASSETS
Investments at fair value
Non-Control/Non-Affiliate investments (Cost of $313,703 and $276,589, respectively)	$	316,228		$	292,129
Affiliate investments (Cost of $320,651 and $311,481, respectively)		264,777			247,637
Control investments (Cost of $21,512 and $21,512 respectively)		27,957			26,158
Cash and cash equivalents		1,667			2,778
Restricted cash and cash equivalents		889			1,282
Interest receivable		2,153			3,429
Due from administrative agent		12,220			771
Deferred financing costs, net		846			991
Other assets, net		1,528			1,202

TOTAL ASSETS	$	628,265		$	576,377


LIABILITIES
Borrowings:
Line of credit at fair value (Cost of $116,600 and $49,200, respectively)	$	116,600		$	49,200
Secured borrowing		5,096			5,096

Total borrowings		121,696			54,296
Mandatorily redeemable preferred stock, $0.001 par value per share, $25.00 liquidation preference per share; 8,990,000 and 6,500,000 shares authorized; 5,548,610 and 5,290,000 shares issued and outstanding, respectively, net		135,722			129,160
Accounts payable and accrued expenses		1,006			1,222
Fees due to Adviser^(A)		7,731			7,178
Fee due to Administrator^(A)		358			582
Other liabilities		1,226			14,908

TOTAL LIABILITIES	$	267,739		$	207,346

Commitments and contingencies^(B)
NET ASSETS	$	360,526		$	369,031


ANALYSIS OF NET ASSETS
Common stock, $0.001 par value per share, 100,000,000 shares authorized, 33,205,023 and 33,049,463 shares issued and outstanding, respectively	$	33		$	33
Capital in excess of par value		402,156			401,023
Cumulative net unrealized depreciation of investments		(46,904	)		(43,658	)
Underdistributed net investment income		2,219			6,370
Accumulated net realized gain in excess of distributions		3,022			5,263

Total distributable earnings		(41,663	)		(32,025	)

TOTAL NET ASSETS	$	360,526		$	369,031


NET ASSET VALUE PER SHARE AT END OF PERIOD	$	10.86		$	11.17


	Three Months Ended September 30,						Six Months Ended September 30,
	2020			2019			2020			2019
INVESTMENT INCOME
Interest income
Non-Control/Non-Affiliate investments	$	7,014		$	6,636		$	12,978		$	12,476
Affiliate investments		4,616			7,274			8,964			13,083
Control investments		210			214			419			428
Cash and cash equivalents		—			19			4			31

Total interest income		11,840			14,143			22,365			26,018
Dividend income
Non-Control/Non-Affiliate investments		—			612			—			2,727
Affiliate investments		—			—			—			3,080

Total dividend income		—			612			—			5,807
Success fee income
Non-Control/Non-Affiliate investments		—			—			182			—
Affiliate investments		—			1,881			—			2,121

Total success fee income		—			1,881			182			2,121

Total investment income		11,840			16,636			22,547			33,946


EXPENSES
Base management fee^(A)		2,989			3,144			5,845			6,315
Loan servicing fee^(A)		1,747			1,593			3,456			3,345
Incentive fee^(A)		452			1,600			(302	)		3,169
Administration fee^(A)		390			423			836			737
Interest expense on borrowings		1,055			1,207			1,972			2,266
Dividends on mandatorily redeemable preferred stock		2,158			2,090			4,260			4,180
Amortization of deferred financing costs and discounts		466			373			840			746
Professional fees		254			467			825			971
Other general and administrative expenses		778			1,357			1,535			1,954

Expenses before credits from Adviser		10,289			12,254			19,267			23,683

Credits to base management fee – loan servicing fee^(A)		(1,747	)		(1,593	)		(3,456	)		(3,345	)
Credits to fees from Adviser – other^(A)		(1,070	)		(608	)		(1,805	)		(1,830	)

Total expenses, net of credits to fees		7,472			10,053			14,006			18,508

NET INVESTMENT INCOME		4,368			6,583			8,541			15,438


REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss):
Non-Control/Non-Affiliate investments		47			791			60			1,321
Affiliate investments		574			20,353			1,314			20,356

Total net realized gain		621			21,144			1,374			21,677
Net unrealized appreciation (depreciation):
Non-Control/Non-Affiliate investments		(4,076	)		8,231			(13,014	)		7,465
Affiliate investments		6,612			(26,617	)		7,970			(26,118	)
Control investments		(895	)		1,532			1,798			(1,248	)
Other		—			131			—			(164	)

Total net unrealized appreciation (depreciation)		1,641			(16,723	)		(3,246	)		(20,065	)

Net realized and unrealized gain (loss)		2,262			4,421			(1,872	)		1,612


NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	6,630		$	11,004		$	6,669		$	17,050


	2020			2019
NET ASSETS, MARCH 31	$	369,031		$	407,110
OPERATIONS
Net investment income		4,173			8,855
Net realized gain on investments		753			533
Net unrealized depreciation of investments		(4,887	)		(3,047	)
Net unrealized appreciation of other		—			(295	)

Net increase in net assets from operations		39			6,046


DISTRIBUTIONS^(A)
Distributions to common stockholders from net investment income ($0.28 and $0.20 per share, respectively)		(9,272	)		(6,523	)
Distributions to common stockholders from net realized gains ($0.02 and $0.09 per share, respectively)		(666	)		(3,127	)

Net decrease in net assets from distributions		(9,938	)		(9,650	)


CAPITAL ACTIVITY
Issuance of common stock		1,772			—
Discounts, commissions, and offering costs for issuance of common stock		(35	)		—

Net increase in net assets from capital activity		1,737			—


NET DECREASE IN NET ASSETS		(8,162	)		(3,604	)


NET ASSETS, JUNE 30	$	360,869		$	403,506


OPERATIONS
Net investment income		4,368			6,583
Net realized gain on investments		621			21,144
Net unrealized appreciation (depreciation) of investments		1,641			(16,854	)
Net unrealized depreciation of other		—			131

Net increase in net assets from operations		6,630			11,004


DISTRIBUTIONS^(A)
Distributions to common stockholders from net investment income ($0.20 and $0.16 per share, respectively)		(6,553	)		(5,236	)
Distributions to common stockholders from net realized gains ($0.01 and $0.07 per share, respectively)		(420	)		(2,444	)

Net decrease in net assets from distributions		(6,973	)		(7,680	)


NET (DECREASE) INCREASE IN NET ASSETS		(343	)		3,324


NET ASSETS, SEPTEMBER 30	$	360,526		$	406,830


	Six Months Ended September 30,
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in net assets resulting from operations	$	6,669		$	17,050
Adjustments to reconcile net increase in net assets resulting from operations to net cash (used in) provided by operating activities:
Purchase of investments		(57,382	)		(71,380	)
Principal repayments of investments		1,000			53,926
Net proceeds from the sale of investments		1,104			34,539
Net realized gain on investments		(1,374	)		(21,677	)
Net unrealized depreciation of investments		3,246			19,901
Net unrealized appreciation of other		—			164
Amortization of premiums, discounts, and acquisition costs, net		(9	)		(9	)
Amortization of deferred financing costs and discounts		840			746
Bad debt expense, net of recoveries		60			148
Changes in assets and liabilities:
Decrease in interest receivable		1,232			79
Increase in due from administrative agent		(1,342	)		(534	)
Increase in other assets, net		(100	)		(33	)
(Decrease) increase in accounts payable and accrued expenses		(216	)		861
Increase in fees due to Adviser^(A)		525			16
(Decrease) increase in fee due to Administrator^(A)		(224	)		79
Decrease in other liabilities		(13,412	)		(9,879	)

Net cash (used in) provided by operating activities		(59,383	)		23,997


CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock		1,772			—
Discounts, commissions, and offering costs for issuance of common stock		(31	)		—
Proceeds from line of credit		81,500			100,000
Repayments on line of credit		(14,100	)		(106,200	)
Proceeds from issuance of mandatorily redeemable preferred stock		6,283			—
Deferred financing and offering costs		(634	)		(133	)
Distributions paid to common stockholders		(16,911	)		(17,330	)

Net cash provided by (used in) financing activities		57,879			(23,663	)


NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS		(1,504	)		334


CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS AT BEGINNING OF PERIOD		4,060			3,605


CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS AT END OF PERIOD	$	2,556		$	3,939


CASH PAID FOR INTEREST	$	1,374		$	1,536


Company and Investment^(A)(B)(D)(E)	Principal/Shares/ Units^(F)(J)		Cost		Fair Value
NON-CONTROL/NON-AFFILIATE INVESTMENTS^(N) – 87.7%
Secured First Lien Debt – 56.3%
Containers, Packaging, and Glass – 2.6%
Frontier Packaging, Inc. – Term Debt (L+10.0%, 12.0% Cash, Due 3/2021)^(L)	$	9,500	$	9,500	$	9,500

Diversified/Conglomerate Manufacturing – 1.1%
Phoenix Door Systems, Inc. – Line of Credit, $80 available (L+7.0%, 9.0% Cash (0.3% Unused Fee), Due 3/2021)^(L)		670		670		670
Phoenix Door Systems, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 9/2024)^(L)		3,200		3,200		3,200

				3,870		3,870

Diversified/Conglomerate Services – 31.2%
Bassett Creek Services, Inc. – Term Debt (L+10.0%, 12.0% Cash, Due 4/2023)^(K)		37,500		37,500		35,672
Counsel Press, Inc. – Term Debt (L+11.8%, 12.8% Cash, Due 3/2023)^(L)		18,000		18,000		18,000
Counsel Press, Inc. – Term Debt (L+13.0%, 14.0% Cash, Due 3/2023)^(L)		5,500		5,500		5,500
Horizon Facilities Services, Inc. – Term Debt (L+9.5%, 12.0% Cash, Due 6/2024)^(G)(L)		27,700		27,700		27,700
Mason West, LLC – Line of Credit, $2,651 available (L+8.0%, 10.0% Cash, Due 7/2021)^(L)		349		349		349
Mason West, LLC – Term Debt (L+10.0%, 12.5% Cash, Due 7/2025)^(L)		25,250		25,250		25,250

			114,299		112,471

Healthcare, Education, and Childcare – 5.5%
Educators Resource, Inc. – Term Debt (L+10.5%, 13.0% Cash, Due 11/2023)^(L)		20,000		20,000		20,000

Home and Office Furnishings, Housewares, and Durable Consumer Products – 6.8%
Brunswick Bowling Products, Inc. – Term Debt (L+10.0%, 12.0% Cash, Due 1/2023)^(L)		17,700		17,700		17,700
Brunswick Bowling Products, Inc. – Term Debt (L+10.0%, 12.0% Cash, Due 1/2023)^(L)		6,850		6,850		6,850

			24,550		24,550

Leisure, Amusement, Motion Pictures, and Entertainment – 6.0%
Schylling, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 8/2024)^(L)		13,081		13,081		13,081
Schylling, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 8/2024)^(L)		8,500		8,500		8,500

			21,581		21,581

Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) – 3.1%
SBS Industries Holdings, Inc. – Term Debt (L+5.0%, 7.0% Cash, Due 11/2024)^(L)		11,355		11,355		11,355


Total Secured First Lien Debt			$	205,155	$	203,327


Secured Second Lien Debt – 11.6%
Automobile – 1.1%
Country Club Enterprises, LLC – Term Debt (L+8.0%, 10.0% Cash, Due 2/2022)^(K)	$	4,000	$	4,000	$	3,830
Country Club Enterprises, LLC – Guaranty ($1,000)^(T)		—		—		—

			4,000		3,830

Cargo Transport – 3.5%
Diligent Delivery Systems – Term Debt (L+9.0%, 11.0% Cash, Due 11/2022)^(K)		13,000		12,960		12,772

Home and Office Furnishings, Housewares, and Durable Consumer Products – 3.7%
Ginsey Home Solutions, Inc. – Term Debt (L+10.0%, 13.5% Cash, Due 1/2025)^(H)(L)		13,300		13,300		13,300

Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) – 3.3%
SBS Industries Holdings, Inc. – Term Debt (L+12.0%, 14.0% Cash, Due 11/2024)^(L)		11,736		11,736		11,736

Total Secured Second Lien Debt			$	41,996	$	41,638


			Fair Value Measurements
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
As of September 30, 2020:
Secured first lien debt	$	356,496	$	—	$	—		$	356,496
Secured second lien debt		100,076		—		—			100,076
Preferred equity		140,076		—		—			140,076
Common equity/equivalents		12,314		—		48	^(A)		12,266

Total Investments as of September 30, 2020	$	608,962	$	—	$	48		$	608,914


	Total Recurring Fair Value Measurements Reported in *Consolidated Statements* *of Assets and Liabilities* Valued Using Level 3 Inputs
	September 30, 2020		March 31, 2020
Non-Control/Non-Affiliate Investments
Secured first lien debt	$	203,327	$	172,406
Secured second lien debt		41,638		48,031
Preferred equity		58,949		60,854
Common equity/equivalents^(A)		12,266		10,805

Total Non-Control/Non-Affiliate Investments		316,180		292,096
Affiliate Investments
Secured first lien debt		153,169		135,842
Secured second lien debt		48,438		65,309
Preferred equity		63,170		42,837
Common equity/equivalents		—		3,649

Total Affiliate Investments		264,777		247,637
Control Investments
Secured first lien debt		—		—
Secured second lien debt		10,000		10,000
Preferred equity		17,957		16,158
Common equity/equivalents		—		—

Total Control Investments		27,957		26,158

Total investments at fair value using Level 3 inputs	$	608,914	$	565,891


	Secured			Secured						Common
	First Lien			Second Lien			Preferred			Equity/
	Debt			Debt			Equity			Equivalents			Total
Three Months ended September 30, 2020:
Fair value as of June 30, 2020	$	312,628		$	116,134		$	122,237		$	10,295		$	561,294
Total gain (loss):
Net realized gain (loss)^(A)		—			—			—			114			114
Net unrealized appreciation (depreciation)^(B)		1,355			951			(2,636	)		1,971			1,641
Reversal of previously recorded (appreciation) depreciation upon realization^(B)		—			—			—			—			—
New investments, repayments and settlements^(C):
Issuances / originations		33,399			105			23,581			—			57,085
Settlements / repayments		(8,000	)		—			—			—			(8,000	)
Sales		—			—			(3,106	)		(114	)		(3,220	)
Transfers^(D)		17,114			(17,114	)		—			—			—

Fair value as of September 30, 2020	$	356,496		$	100,076		$	140,076		$	12,266		$	608,914


	Secured			Secured						Common
	First Lien			Second Lien			Preferred			Equity/
	Debt			Debt			Equity			Equivalents			Total
Six Months ended September 30, 2020:
Fair value as of March 31, 2020	$	308,248		$	123,340		$	119,849		$	14,454		$	565,891
Total gain (loss):
Net realized gain (loss)^(A)		—			—			—			114			114
Net unrealized appreciation (depreciation)^(B)		(1,215	)		390			(248	)		(2,188	)		(3,261	)
Reversal of previously recorded (appreciation) depreciation upon realization^(B)		—			—			—			—			—
New investments, repayments and settlements^(C):
Issuances / originations		33,499			310			23,581			—			57,390
Settlements / repayments		(8,000	)		—			—			—			(8,000	)
Sales		—			—			(3,106	)		(114	)		(3,220	)
Transfers^(D)		23,964			(23,964	)		—			—			—

Fair value as of September 30, 2020	$	356,496		$	100,076		$	140,076		$	12,266		$	608,914


	Secured			Secured						Common
	First Lien			Second Lien			Preferred			Equity/
	Debt			Debt			Equity			Equivalents			Total
Three Months ended September 30, 2019:
Fair value as of June 30, 2019	$	338,586		$	76,475		$	188,639		$	27,099		$	630,799
Total gain (loss):
Net realized gain (loss)^(A)		—			—			2,788			17,576			20,364
Net unrealized appreciation (depreciation)^(B)		(1,532	)		(2,503	)		1,178			(1,202	)		(4,059	)
Reversal of previously recorded (appreciation) depreciation upon realization^(B)		—			67			(2,672	)		(10,029	)		(12,634	)
New investments, repayments and settlements^(C):
Issuances / originations		12,450			5,005			1,500			1,200			20,155
Settlements / repayments		(7,640	)		(13,300	)		—			—			(20,940	)
Sales		—			—			(7,902	)		(17,617	)		(25,519	)
Transfers^(D)		(41,000	)		41,000			—			—			—

Fair value as of September 30, 2019	$	300,864		$	106,744		$	183,531		$	17,027		$	608,166


	September 30, 2020					March 31, 2020
Location	Fair Value		Percentage of Total Investments			Fair Value		Percentage of Total Investments
South	$	179,219		29.4	%	$	182,178		32.2	%
Northeast		150,522		24.7			146,434		25.9
West		146,584		24.1			90,214		15.9
Midwest		132,637		21.8			147,098		26.0

Total investments	$	608,962		100.0	%	$	565,924		100.0	%


		Amount
For the remaining six months ending March 31:	2021	$	20,240
For the fiscal years ending March 31:	2022		58,894
	2023		106,150
	2024		93,055
	2025		175,432
	Thereafter		25,250

	Total contractual repayments	$	479,021
	Adjustments to cost basis of debt investments		(39	)
	Investments in equity securities		176,884

	Total cost basis of investments held as of September 30, 2020:	$	655,866


	As of September 30,		As of March 31,
	2020		2020
Base management and loan servicing fee due to Adviser, net of credits	$	606	$	(222	)
Incentive fee due to Adviser^(A)		7,085		7,387
Other due to Adviser		40		13

Total fees due to Adviser	$	7,731	$	7,178
Fee due to Administrator	$	358	$	582

Total related party fees due	$	8,089	$	7,760


Company and Investment^(A)(B)(D)(E)	Principal/Shares/ Units^(F)(J)		Cost		Fair Value
Secured Second Lien Debt – 13.5%
Diversified/Conglomerate Services – 12.8%
J.R. Hobbs Co. – Atlanta, LLC – Line of Credit, $0 available (L+6.0%, 8.0% Cash, Due 10/2024)^(L)		10,000	$	10,000	$	10,000
J.R. Hobbs Co. – Atlanta, LLC – Term Debt (L+10.3%, 11.8% Cash, Due 10/2024)^(L)		36,000		36,000		36,000

				46,000		46,000

Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.7%
The Mountain Corporation – Term Debt (L+4.0%, 7.0% Cash, Due 4/2024)^(G)(L)		11,700		11,700		2,377
The Mountain Corporation – Delayed Draw Term Debt, $1,200 available (L+4.0%, 7.0% Cash, Due 4/2024)^(G)(L)		300		300		61

				12,000		2,438

Total Secured Second Lien Debt			$	58,000	$	48,438


Preferred Equity – 17.5%
Beverage, Food, and Tobacco – 1.2%
Head Country, Inc. – Preferred Stock^(C)(L)		4,000	$	4,000	$	4,342

Chemicals, Plastics, and Rubber – 0.0%
PSI Molded Plastics, Inc. – Preferred Stock^(C)(L)		158,598		19,730		—

Diversified/Conglomerate Manufacturing – 0.0%
Channel Technologies Group, LLC – Preferred Stock^(C)(L)		2,279		1,841		—
Edge Adhesives Holdings, Inc.^(M) – Preferred Stock^(C)(L)		8,199		8,199		—

				10,040		—

Diversified/Conglomerate Services – 3.7%
ImageWorks Display and Marketing Group, Inc. – Preferred Stock^(C)(L)		67,490		6,749		8,363
J.R. Hobbs Co. – Atlanta, LLC – Preferred Stock^(C)(L)		10,920		10,920		—
The Maids International, LLC – Preferred Stock^(C)(L)		6,640		6,640		5,073

				24,309		13,436

Home and Office Furnishings, Housewares, and Durable Consumer Products – 5.8%
Old World Christmas, Inc. – Preferred Stock^(C)(L)		7,450		7,450		20,868


	For the Three Months Ended September 30,						For the Six Months Ended September 30,
	2020			2019			2020			2019
Weighted-average borrowings outstanding	$	106,123		$	57,120		$	80,503		$	49,935
Effective interest rate^(B)		3.6	%		7.8	%		4.5	%		8.4	%
Commitment (unused) fees incurred	$	122		$	364		$	490		$	763


	Level 3 – Borrowings
	Recurring Fair Value Measurements
	Reported in *Consolidated*
	*Statements of Assets and Liabilities* Using Significant Unobservable Inputs (Level 3)
	September 30, 2020		March 31, 2020
Credit Facility	$	116,600	$	49,200


Fair Value Measurements of Borrowings Using Significant
Unobservable Inputs (Level 3) Reported in
*Consolidated Statements of Assets and Liabilities*
	Credit
	Facility
Three Months Ended September 30, 2020:
Fair value at June 30, 2020	$	59,500
Borrowings		63,300
Repayments		(6,200	)
Unrealized depreciation		—

Fair value at September 30, 2020	$	116,600


Six Months Ended September 30, 2020:
Fair value at March 31, 2020	$	49,200
Borrowings		81,500
Repayments		(14,100	)
Unrealized depreciation		—

Fair value at September 30, 2020	$	116,600


	Fair Value as of
	September 30, 2020		March 31, 2020
Series D Term Preferred Stock	$	56,649	$	53,590
Series E Term Preferred Stock		78,162		64,554

Total	$	134,811	$	118,144


Fiscal Year	Declaration Date	Record Date	Payment Date	Distribution per Common Share
2021	April 14, 2020	April 24, 2020	April 30, 2020	$	0.070
	April 14, 2020	May 19, 2020	May 29, 2020		0.070
	April 14, 2020	June 8, 2020	June 17, 2020		0.090	^(A)
	April 14, 2020	June 19, 2020	June 30, 2020		0.070
	July 14, 2020	July 24, 2020	July 31, 2020		0.070
	July 14, 2020	August 24, 2020	August 31, 2020		0.070
	July 14, 2020	September 23, 2020	September 30, 2020		0.070

		Six Months Ended September 30, 2020:		$	0.510


Fiscal Year	Declaration Date	Record Date	Payment Date	Distribution per Common Share
2020	April 9, 2019	April 22, 2019	April 30, 2019	$	0.068
	April 9, 2019	May 22, 2019	May 31, 2019		0.068
	April 9, 2019	June 5, 2019	June 14, 2019		0.090	^(A)
	April 9, 2019	June 19, 2019	June 28, 2019		0.068
	July 9, 2019	July 22, 2019	July 31, 2019		0.068
	July 9, 2019	August 20, 2019	August 30, 2019		0.068
	July 9, 2019	September 4, 2019	September 13, 2019		0.030	^(A)
	July 9, 2019	September 17, 2019	September 30, 2019		0.068

		Six Months Ended September 30, 2019:		$	0.528


	September 30, 2020		March 31, 2020
Unused line of credit and delayed draw term loan commitments	$	5,181	$	1,230
Guaranties		1,000		1,000

Total	$	6,181	$	2,230


	Three Months Ended September 30,						Six Months Ended September 30,
	2020			2019			2020			2019
Per Common Share Data:
Net asset value at beginning of period^(A)	$	10.87		$	12.29		$	11.17		$	12.40
Income from investment operations^(B)
Net investment income		0.13			0.20			0.26			0.47
Net realized gain on investments and other		0.02			0.65			0.04			0.66
Net unrealized appreciation (depreciation) of investments and other		0.05			(0.51	)		(0.10	)		(0.61	)

Total from investment operations		0.20			0.34			0.20			0.52
Effect of equity capital activity^(B)
Cash distributions to common stockholders from net investment income^(C)		(0.20	)		(0.16	)		(0.48	)		(0.36	)
Cash distributions to common stockholders from realized gains^(C)		(0.01	)		(0.07	)		(0.03	)		(0.17	)

Total from equity capital activity		(0.21	)		(0.23	)		(0.51	)		(0.53	)
Other, net^(B)(E)		—			(0.01	)		—			—

Net asset value at end of period^(A)	$	10.86		$	12.39		$	10.86		$	12.39


Per common share market value at beginning of period	$	10.24		$	11.23		$	7.85		$	11.60
Per common share market value at end of period		9.10			12.34			9.10			12.34
Total investment return^(F)		(9.10	)%		12.07	%		21.91	%		11.26	%
Common stock outstanding at end of period^(A)		33,205,023			32,822,459			33,205,023			32,822,459

Statement of Assets and Liabilities Data:
Net assets at end of period	$	360,526		$	406,830		$	360,526		$	406,830
Average net assets^(G)		360,232			407,970			362,964			407,929

Senior Securities Data:
Total borrowings, at cost	$	121,696		$	51,896		$	121,696		$	51,896
Mandatorily redeemable preferred stock^(H)		138,715			132,250			138,715			132,250

Ratios/Supplemental Data:
Ratio of net expenses to average net assets – annualized^(I)		8.30	%		9.86	%		7.72	%		9.07	%
Ratio of net investment income to average net assets – annualized^(J)		4.85			6.45			4.71			7.57


	For the Six Months Ended September 30,
Income Statement	2020		2019
Net sales	$	12,505	$	14,261
Gross profit		2,360		2,927
Net profit		473		787


Record Date	Payment Date	Distribution per Common Share		Dividend per Share of Series D Term Preferred Stock		Dividend per Share of Series E Term Preferred Stock
October 23, 2020	October 30, 2020	$	0.07	$	0.13020833	$	0.13281250
November 20, 2020	November 30, 2020		0.07		0.13020833		0.13281250
December 23, 2020	December 31, 2020		0.07		0.13020833		0.13281250

	Total for the Quarter:	$	0.21	$	0.39062499	$	0.39843750


	For the Three Months Ended September 30,
	2020			2019			$ Change			% Change
INVESTMENT INCOME
Interest income	$	11,840		$	14,143		$	(2,303	)		(16.3	)%
Dividend and success fee income		—			2,493			(2,493	)		(100.0	)

Total investment income		11,840			16,636			(4,796	)		(28.8	)

EXPENSES
Base management fee		2,989			3,144			(155	)		(4.9	)
Loan servicing fee		1,747			1,593			154			9.7
Incentive fee		452			1,600			(1,148	)		(71.8	)
Administration fee		390			423			(33	)		(7.8	)
Interest and dividend expense		3,213			3,297			(84	)		(2.5	)
Amortization of deferred financing costs and discounts		466			373			93			24.9
Other		1,032			1,824			(792	)		(43.4	)

Expenses before credits from Adviser		10,289			12,254			(1,965	)		(16.0	)
Credits to fees from Adviser		(2,817	)		(2,201	)		(616	)		28.0

Total expenses, net of credits to fees		7,472			10,053			(2,581	)		(25.7	)

NET INVESTMENT INCOME		4,368			6,583			(2,215	)		(33.6	)

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain on investments		621			21,144			(20,523	)		(97.1	)
Net unrealized appreciation (depreciation) of investments		1,641			(16,854	)		18,495			(109.7	)
Net unrealized depreciation of other		—			131			(131	)		(100.0	)

Net realized and unrealized gain		2,262			4,421			(2,159	)		(48.8	)

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	6,630		$	11,004		$	(4,374	)		(39.7	)%

BASIC AND DILUTED PER COMMON SHARE:
Net investment income	$	0.13		$	0.20		$	(0.07	)		(35.0	)%

Net increase in net assets resulting from operations	$	0.20		$	0.34		$	(0.14	)		(41.2	)%


	Three Months Ended September 30, 2020
Portfolio Company	Realized Gain (Loss)		Unrealized Appreciation (Depreciation)			Reversal of Unrealized (Appreciation) Depreciation		Net Gain (Loss)
Pioneer Square Brands, Inc.	$	—	$	11,867		$	—	$	11,867
Ginsey Home Solutions, Inc.		—		2,414			—		2,414
Frontier Packaging, Inc.		—		2,150			—		2,150
SOG Specialty Knives & Tools, LLC		—		1,982			—		1,982
ImageWorks Display and Marketing Group, Inc.		—		1,451			—		1,451
Counsel Press, Inc.		—		(1,239	)		—		(1,239	)
Edge Adhesives Holdings, Inc.		—		(1,269	)		—		(1,269	)
D.P.M.S., Inc.		—		(2,253	)		—		(2,253	)
PSI Molded Plastics, Inc.		—		(4,592	)		—		(4,592	)
Brunswick Bowling Products, Inc.		—		(8,606	)		—		(8,606	)
Other, net (<$1.0 million, net)		621		(264	)		—		357

Total	$	621	$	1,641		$	—	$	2,262


	Three Months Ended September 30, 2019
Portfolio Company	Realized Gain (Loss)		Unrealized Appreciation (Depreciation)			Reversal of Unrealized (Appreciation) Depreciation			Net Gain (Loss)
Alloy Die Casting Co.	$	20,355	$	—		$	(12,634	)	$	7,721
Nth Degree, Inc.		—		7,328			—			7,328
Counsel Press, Inc.		—		3,766			—			3,766
D.P.M.S., Inc.		—		2,730			—			2,730
ImageWorks Display and Marketing Group, Inc.		—		2,602			—			2,602
Old World Christmas, Inc.		—		2,004			—			2,004
Galaxy Tool Holding Corporation		—		1,532			—			1,532
Schylling, Inc.		—		1,269			—			1,269
SBS Industries Holdings, Inc.		—		(1,232	)		—			(1,232	)
SOG Specialty Knives and Tools, LLC		—		(1,443	)		—			(1,443	)
PSI Molded Plastics, Inc.		—		(2,416	)		—			(2,416	)
Ginsey Home Solutions, Inc.		—		(2,718	)		—			(2,718	)
Pioneer Square Brands, Inc.		—		(3,163	)		—			(3,163	)
Meridian Rack & Pinion, Inc.		—		(4,570	)		—			(4,570	)
J.R. Hobbs Co.—Atlanta, LLC		—		(9,530	)		—			(9,530	)
Other, net (<$1.0 million, net)		789		(248	)		(131	)		410

Total	$	21,144	$	(4,089	)	$	(12,765	)	$	4,290


	For the Six Months Ended September 30,
	2020			2019			$ Change			% Change
INVESTMENT INCOME
Interest income	$	22,365		$	26,018		$	(3,653	)		(14.0	)%
Dividend and success fee income		182			7,928			(7,746	)		(97.7	)

Total investment income		22,547			33,946			(11,399	)		(33.6	)

EXPENSES
Base management fee		5,845			6,315			(470	)		(7.4	)
Loan servicing fee		3,456			3,345			111			3.3
Incentive fee		(302	)		3,169			(3,471	)		(109.5	)
Administration fee		836			737			99			13.4
Interest and dividend expense		6,232			6,446			(214	)		(3.3	)
Amortization of deferred financing costs and discounts		840			746			94			12.6
Other		2,360			2,925			(565	)		(19.3	)

Expenses before credits from Adviser		19,267			23,683			(4,416	)		(18.6	)
Credits to fees from Adviser		(5,261	)		(5,175	)		(86	)		1.7

Total expenses, net of credits to fees		14,006			18,508			(4,502	)		(24.3	)

NET INVESTMENT INCOME		8,541			15,438			(6,897	)		(44.7	)

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain on investments		1,374			21,677			(20,303	)		(93.7	)
Net unrealized depreciation of investments		(3,246	)		(19,901	)		16,655			(83.7	)
Net unrealized appreciation of other		—			(164	)		164			(100.0	)

Net realized and unrealized (loss) gain		(1,872	)		1,612			(3,484	)		NM

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	6,669		$	17,050		$	(10,381	)		(60.9	)%

BASIC AND DILUTED PER COMMON SHARE:
Net investment income	$	0.26		$	0.47		$	(0.21	)		(44.7	)

Net increase in net assets resulting from operations	$	0.20		$	0.52		$	(0.32	)		(61.5	)%


	Six Months Ended September 30, 2020
Portfolio Company	Realized Gain (Loss)		Unrealized Appreciation (Depreciation)			Reversal of Unrealized (Appreciation) Depreciation		Net Gain (Loss)
Pioneer Square Brands, Inc.	$	—	$	16,215		$	—	$	16,215
Ginsey Home Solutions, Inc.		—		3,670			—		3,670
Frontier Packaging, Inc.		—		2,534			—		2,534
SOG Specialty Knives and Tools, LLC		—		2,159			—		2,159
Galaxy Tool Holding Corporation		—		1,798			—		1,798
Head Country, Inc.		—		846			—		846
Cambridge Sound Management, Inc.		740		—			—		740
B+T Group Acquisition, Inc.		—		(588	)		—		(588	)
Horizon Facilities Services, Inc.		—		(1,415	)		—		(1,415	)
Bassett Creek Services, Inc.		—		(1,828	)		—		(1,828	)
Counsel Press, Inc.		—		(1,980	)		—		(1,980	)
D.P.M.S., Inc.		—		(2,637	)		—		(2,637	)
Nth Degree, Inc.		113		(3,649	)		—		(3,536	)
PSI Molded Plastics, Inc.		—		(4,215	)		—		(4,215	)
Brunswick Bowling Products, Inc.		—		(13,222	)		—		(13,222	)
Other, net (<$1.0 million, net)		521		(934	)		—		(413	)

Total	$	1,374	$	(3,246	)	$	—	$	(1,872	)


	Six Months Ended September 30, 2019
Portfolio Company	Realized Gain (Loss)			Unrealized Appreciation (Depreciation)			Reversal of Unrealized (Appreciation) Depreciation			Net Gain (Loss)
Alloy Die Casting Co.	$	20,355		$	8,823		$	(12,634	)	$	16,544
Nth Degree, Inc.		—			10,763			—			10,763
Counsel Press, Inc.		—			5,170			—			5,170
D.P.M.S., Inc.		—			3,681			—			3,681
ImageWorks Display and Marketing Group, Inc.		—			1,861			—			1,861
Head Country, Inc.		—			1,708			—			1,708
Old World Christmas, Inc.		—			1,202			—			1,202
Tread Corporation		(2,726	)		—			3,380			654
Horizon Facilities Services, Inc.		—			623			—			623
PSI Molded Plastics, Inc.		—			(1,135	)		—			(1,135	)
Galaxy Tool Holding Corporation		—			(1,248	)		—			(1,248	)
Brunswick Bowling Products, Inc.		—			(1,319	)		—			(1,319	)
Jackrabbit, Inc.		3,198			—			(4,547	)		(1,349	)
SOG Specialty Knives and Tools, LLC		—			(1,947	)		—			(1,947	)
SBS Industries Holdings, Inc.		—			(2,030	)		—			(2,030	)
Educators Resource, Inc.		—			(2,116	)		—			(2,116	)
Pioneer Square Brands, Inc.		—			(2,786	)		—			(2,786	)
Ginsey Home Solutions, Inc.		—			(3,555	)		—			(3,555	)
Meridian Rack & Pinion, Inc.		—			(5,536	)		—			(5,536	)
J.R. Hobbs Co.—Atlanta, LLC		—			(17,822	)		—			(17,822	)
Other, net (<$1.0 million, net)		850			(305	)		(132	)		413

Total	$	21,677		$	(5,968	)	$	(13,933	)	$	1,776


	Payments Due by Period
Contractual Obligations^(A)	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
Credit Facility^(B)	$	116,600	$	—	$	116,600	$	—	$	—
Mandatorily redeemable preferred stock		138,715		—		57,500		81,215		—
Secured borrowing		5,096		—		—		5,096		—
Interest payments on obligations^(C)		50,167		13,415		26,372		10,380		—

Total	$	310,578	$	13,415	$	200,472	$	96,691	$	—


Rating	September 30, 2020	March 31, 2020
Highest	9.0	9.0
Average	6.2	6.5
Weighted-average	6.1	6.9
Lowest	3.0	4.0


Rates:	September 30, 2020			March 31, 2020
Variable rates with a floor		97.6	%		97.5	%
Fixed rates		2.4			2.5

Total		100.0	%		100	%


Exhibit		Description
3.1		Amended and Restated Certificate of Incorporation, incorporated by reference to Exhibit A.2 to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-2 (File No. 333-123699), filed May 13, 2005.
3.1.a		Certificate of Designation of 6.25% Series D Cumulative Term Preferred Stock Due 2023, incorporated by reference to Exhibit 3.5 to the Registration Statement on Form 8-A (File No. 001-34007), filed September 22, 2016.
3.1.b		Certificate of Designation of 6.375% Series E Cumulative Term Preferred Stock Due 2025, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 814-00704), filed August 16, 2018.
3.1.c		Certificate of Increase of Shares Designated as 6.375% Series E Cumulative Term Preferred Stock due 2025 of Gladstone Investment Corporation incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 814-00704), filed May 21, 2020.
3.2		Second Amended and Restated Bylaws, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 814-00704), filed May 15, 2020.
4.1		Specimen Stock Certificate, incorporated by reference to Exhibit d to Pre-Effective Amendment No. 3 to the Registration Statement on Form N-2 (File No. 333-123699), filed June 21, 2005.
4.2		Specimen 6.25% Series D Cumulative Term Preferred Stock Due 2023 Stock Certificate, incorporated by reference to Exhibit 4.5 to the Registration Statement on Form 8-A (File No. 001-34007), filed September 22, 2016.
4.3		Specimen 6.375% Series E Cumulative Term Preferred Stock Due 2025 Stock Certificate incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 814-00704), filed August 16, 2018.
4.4		Indenture, dated as of May 22, 2020, between Gladstone Investment Corporation and UMB Bank, National Association, as trustee incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 814-00704), filed May 22, 2020.
4.5		First Supplemental Indenture, dated as of May 22, 2020, relating to the 6.00% Notes due 2040, between Gladstone Investment Corporation and UMB Bank, National Association, as trustee incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K (File No. 814-00704), filed May 22, 2020.
4.6		Form of 6.00% Notes due 2040 incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K (File No. 814-00704), filed May 22, 2020 (contained in the First Supplemental Indenture filed as Exhibit 4.2 thereto).
10.1		Amendment No. 5 to Fifth Amended and Restated Credit Agreement, dated as of August 10, 2020 by and among Gladstone Business Investment, LLC, as Borrower, Gladstone Management Corporation, as Servicer, Keybank National Association, as administrative agent, swingline lender, managing agent and lead arranger and certain other lenders party thereto, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 814-00704), filed August 10, 2020.
31.1*		Certification of Chief Executive Officer pursuant to section 302 of The Sarbanes-Oxley Act of 2002.
31.2*		Certification of Chief Financial Officer and Treasurer pursuant to section 302 of The Sarbanes-Oxley Act of 2002.
32.1†		Certification of Chief Executive Officer pursuant to section 906 of The Sarbanes-Oxley Act of 2002.
32.2†		Certification of Chief Financial Officer and Treasurer pursuant to section 906 of The Sarbanes-Oxley Act of 2002.


GLADSTONE INVESTMENT CORPORATION
By:		/s/ Julia Ryan
		Julia Ryan
		Chief Financial Officer and Treasurer
		(principal financial and accounting officer)