Gladstone Investment Corporationde 10-Q, filed Feb 2, 2021

About this 10-Q

Gladstone Investment Corporationde (GAIN)

10-Q 2021-02-02 For: 2020-12-31

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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 February 2, 2021, covering the quarter ended December 31, 2020.

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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 December 31, 2020 and March 31, 2020	2

	Consolidated Statements of Operations for the three and nine months ended December 31, 2020 and 2019	3

	Consolidated Statements of Changes in Net Assets for the three and nine months ended December 31, 2020 and 2019	5

	Consolidated Statements of Cash Flows for the nine months ended December 31, 2020 and 2019	6

	Consolidated Schedules of Investments as of December 31, 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	44

	Results of Operations	49

	Liquidity and Capital Resources	57

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	64

Item 4.	Controls and Procedures	64

PART II.	OTHER INFORMATION:

Item 1.	Legal Proceedings	65

Item 1A.	Risk Factors	65

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	65

Item 3.	Defaults Upon Senior Securities	65

Item 4.	Mine Safety Disclosures	65

Item 5.	Other Information	65

Item 6.	Exhibits	66

SIGNATURES		67


	December 31,			March 31,
	2020			2020
ASSETS
Investments at fair value
Non-Control/Non-Affiliate investments (Cost of $292,968 and $276,589, respectively)	$	290,136		$	292,129
Affiliate investments (Cost of $340,401 and $311,481, respectively)		289,421			247,637
Control investments (Cost of $24,512 and $21,512, respectively)		31,331			26,158
Cash and cash equivalents		1,794			2,778
Restricted cash and cash equivalents		866			1,282
Interest receivable		1,775			3,429
Due from administrative agent		4,379			771
Deferred financing costs, net		586			991
Other assets, net		1,414			1,202

TOTAL ASSETS	$	621,702		$	576,377

LIABILITIES
Borrowings:
Line of credit at fair value (Cost of $84,000 and $49,200, respectively)	$	84,000		$	49,200
Secured borrowing		5,096			5,096

Total borrowings		89,096			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; 6,074,853 and 5,290,000 shares issued and outstanding, respectively, net		148,753			129,160
Accounts payable and accrued expenses		1,239			1,222
Fees due to Adviser^(A)		11,871			7,178
Fee due to Administrator^(A)		462			582
Other liabilities		1,458			14,908

TOTAL LIABILITIES	$	252,879		$	207,346

Commitments and contingencies^(B)
NET ASSETS	$	368,823		$	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		401,755			401,023
Cumulative net unrealized depreciation of investments		(46,993	)		(43,658	)
Underdistributed net investment income		3,622			6,370
Accumulated net realized gain in excess of distributions		10,406			5,263

Total distributable earnings		(32,965	)		(32,025	)

TOTAL NET ASSETS	$	368,823		$	369,031

NET ASSET VALUE PER SHARE AT END OF PERIOD	$	11.11		$	11.17


	Three Months Ended December 31,						Nine Months Ended December 31,
	2020			2019			2020			2019
INVESTMENT INCOME
Interest income
Non-Control/Non-Affiliate investments	$	6,804		$	7,234		$	19,782		$	19,710
Affiliate investments		5,123			4,668			14,087			17,751
Control investments		220			211			639			639
Cash and cash equivalents		1			13			5			44

Total interest income		12,148			12,126			34,513			38,144
Dividend income
Non-Control/Non-Affiliate investments		908			3,622			908			6,349
Affiliate investments		4,127			—			4,127			3,080

Total dividend income		5,035			3,622			5,035			9,429
Success fee income
Non-Control/Non-Affiliate investments		189			248			371			248
Affiliate investments		—			—			—			2,121

Total success fee income		189			248			371			2,369

Total investment income		17,372			15,996			39,919			49,942

EXPENSES
Base management fee^(A)		3,116			2,970			8,961			9,285
Loan servicing fee^(A)		1,786			1,794			5,242			5,139
Incentive fee^(A)		3,756			2,873			3,454			6,042
Administration fee^(A)		382			369			1,218			1,106
Interest expense on borrowings		1,092			964			3,064			3,230
Dividends on mandatorily redeemable preferred stock		2,291			2,089			6,551			6,269
Amortization of deferred financing costs and discounts		451			373			1,291			1,119
Professional fees		322			384			1,147			1,355
Other general and administrative expenses		496			633			2,031			2,587

Expenses before credits from Adviser		13,692			12,449			32,959			36,132

Credits to base management fee – loan servicing fee^(A)		(1,786	)		(1,794	)		(5,242	)		(5,139	)
Credits to fees from Adviser—other^(A)		(789	)		(817	)		(2,594	)		(2,647	)

Total expenses, net of credits to fees		11,117			9,838			25,123			28,346

NET INVESTMENT INCOME		6,255			6,158			14,796			21,596

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss):
Non-Control/Non-Affiliate investments		5,816			33,509			5,876			34,830
Affiliate investments		3,289			496			4,603			20,852

Total net realized gain		9,105			34,005			10,479			55,682
Net unrealized appreciation (depreciation):
Non-Control/Non-Affiliate investments		(5,358	)		(29,063	)		(18,372	)		(21,598	)
Affiliate investments		4,894			(4,513	)		12,864			(30,631	)
Control investments		375			6,577			2,173			5,329
Other		—			154			—			(10	)

Total net unrealized depreciation		(89	)		(26,845	)		(3,335	)		(46,910	)

Net realized and unrealized gain (loss)		9,016			7,160			7,144			8,772

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	15,271		$	13,318		$	21,940		$	30,368


	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

OPERATIONS
Net investment income	$	6,255		$	6,158
Net realized gain on investments		9,105			34,005
Net unrealized depreciation of investments		(89	)		(26,999	)
Net unrealized depreciation of other		—			154

Net increase in net assets from operations		15,271			13,318

DISTRIBUTIONS^(A)
Distributions to common stockholders from net investment income ($0.20 and $0.20 per share, respectively)		(6,619	)		(6,533	)
Distributions to common stockholders from realized gains ($0.01 and $0.09 per share, respectively)		(355	)		(3,117	)

Net decrease in net assets from distributions		(6,974	)		(9,650	)

NET INCREASE IN NET ASSETS		8,297			3,668

NET ASSETS, DECEMBER 31	$	368,823		$	410,498


Company and Investment^(A)(B)(D)(E)	Principal/Shares/ Units^(F)(J)		Cost		Fair Value
NON-CONTROL/NON-AFFILIATE INVESTMENTS^(N) – 78.8%
Secured First Lien Debt – 49.6%
Diversified/Conglomerate Manufacturing – 1.2%
Phoenix Door Systems, Inc. – Line of Credit, $200 available (L+7.0%, 9.0% Cash (0.3% Unused Fee), Due 3/2022)^(L)	$	950	$	950	$	950
Phoenix Door Systems, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 9/2024)^(L)		3,200		3,200		3,200

				4,150		4,150
Diversified/Conglomerate Services – 30.5%
Bassett Creek Services, Inc. – Term Debt (L+10.0%, 12.0% Cash, Due 4/2023)^(K)		37,500		37,500		36,141
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, $3,000 available (L+8.0%, 10.0% Cash, Due 7/2021)^(L)		—		—		—
Mason West, LLC – Term Debt (L+10.0%, 12.5% Cash, Due 7/2025)^(L)		25,250		25,250		25,250

				113,950		112,591
Healthcare, Education, and Childcare – 5.4%
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 – 6.7%
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 – 5.8%
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

Total Secured First Lien Debt			$	184,231	$	182,872


Secured Second Lien Debt – 11.4%
Automobile – 1.1%
Country Club Enterprises, LLC – Term Debt (L+8.0%, 10.0% Cash, Due 2/2022)^(K)	$	4,000	$	4,000	$	3,880
Country Club Enterprises, LLC – Guaranty ($1,000)^(T)		—		—		—

				4,000		3,880
Cargo Transport – 3.5%
Diligent Delivery Systems – Term Debt (L+9.0%, 11.0% Cash, Due 11/2022)^(Q)		13,000		12,965		13,000
Home and Office Furnishings, Housewares, and Durable Consumer Products – 3.6%
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) – 3.2%
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			$	42,001	$	41,916


			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 December 31, 2020:
Secured first lien debt	$	361,872	$	—	$	—		$	361,872
Secured second lien debt		103,365		—		—			103,365
Preferred equity		142,559		—		—			142,559
Common equity/equivalents		3,092		—		85	^(A)		3,007

Total Investments as of December 31, 2020	$	610,888	$	—	$	85		$	610,803


	Total Recurring Fair Value Measurements Reported in *Consolidated Statements* *of Assets and Liabilities* Valued Using Level 3 Inputs
	December 31, 2020		March 31, 2020
Non-Control/Non-Affiliate Investments
Secured first lien debt	$	182,872	$	172,406
Secured second lien debt		41,916		48,031
Preferred equity		62,256		60,854
Common equity/equivalents^(A)		3,007		10,805

Total Non-Control/Non-Affiliate Investments		290,051		292,096
Affiliate Investments
Secured first lien debt		179,000		135,842
Secured second lien debt		48,449		65,309
Preferred equity		61,972		42,837
Common equity/equivalents		—		3,649

Total Affiliate Investments		289,421		247,637
Control Investments
Secured first lien debt		—		—
Secured second lien debt		13,000		10,000
Preferred equity		18,331		16,158
Common equity/equivalents		—		—

Total Control Investments		31,331		26,158

Total investments at fair value using Level 3 inputs	$	610,803	$	565,891


	Secured First Lien Debt			Secured Second Lien Debt		Preferred Equity			Common Equity/ Equivalents			Total
Three Months ended December 31, 2020:
Fair value as of September 30, 2020	$	356,496		$	100,076	$	140,076		$	12,266		$	608,914
Total gain (loss):
Net realized gain (loss)^(A)		(8,470	)		—		3,292			14,030			8,852
Net unrealized appreciation (depreciation)^(B)		(700	)		84		9,680			2,678			11,742
Reversal of previously recorded (appreciation) depreciation upon realization^(B)		—			—		(84	)		(11,785	)		(11,869	)
New investments, repayments and settlements^(C):
Issuances / originations		27,280			3,205		1,709			—			32,194
Settlements / repayments		(12,734	)		—		—			—			(12,734	)
Sales		—			—		(12,114	)		(14,182	)		(26,296	)
Transfers^(D)		—			—		—			—			—

Fair value as of December 31, 2020	$	361,872		$	103,365	$	142,559		$	3,007		$	610,803


	Secured First Lien Debt			Secured Second Lien Debt			Preferred Equity			Common Equity/ Equivalents			Total
Three Months ended December 31, 2019:
Fair value as of September 30, 2019	$	300,864		$	106,744		$	183,531		$	17,027		$	608,166
Total gain (loss):
Net realized gain (loss)^(A)		—			—			33,710			(300	)		33,410
Net unrealized appreciation (depreciation)^(B)		(395	)		(2,994	)		4,621			(2,056	)		(824	)
Reversal of previously recorded (appreciation) depreciation upon realization^(B)		—			—			(26,447	)		300			(26,147	)
New investments, repayments and settlements^(C):
Issuances / originations		2,215			19,988			1,726			—			23,929
Settlements / repayments		(15,290	)		(10,000	)		—			—			(25,290	)
Sales		—			—			(52,550	)		—			(52,550	)
Transfers^(D)		(8,602	)		8,602			(12,434	)		12,434			—

Fair value as of December 31, 2019	$	278,792		$	122,340		$	132,157		$	27,405		$	560,694


	December 31, 2020					March 31, 2020
Location	Fair Value		Percentage of Total Investments			Fair Value		Percentage of Total Investments
South	$	175,580		28.7	%	$	182,178		32.2	%
Northeast		153,700		25.2			146,434		25.9
West		147,530		24.2			90,214		15.9
Midwest		134,078		21.9			147,098		26.0

Total investments	$	610,888		100.0	%	$	565,924		100.0	%


		Amount
For the remaining three months ending March 31:	2021	$	9,050
For the fiscal years ending March 31:	2022		39,720
	2023		106,150
	2024		116,851
	2025		164,277
	Thereafter		52,250

	Total contractual repayments	$	488,298
	Adjustments to cost basis of debt investments		(35	)
	Investments in equity securities		169,618

	Total cost basis of investments held as of December 31, 2020:	$	657,881


	As of December 31,		As of March 31,
	2020		2020
Base management and loan servicing fee due to Adviser, net of credits	$	987	$	(222	)
Incentive fee due to Adviser^(A)		10,841		7,387
Other due to Adviser		43		13

Total fees due to Adviser	$	11,871	$	7,178
Fee due to Administrator	$	462	$	582

Total related party fees due	$	12,333	$	7,760


Company and Investment^(A)(B)(D)(E)	Principal/Shares/ Units^(F)(J)		Cost		Fair Value
Secured Second Lien Debt – 13.1%
Diversified/Conglomerate Services – 12.5%
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) – 0.6%
The Mountain Corporation – Term Debt (L+4.0%, 7.0% Cash, Due 4/2024)^(G)(L)		11,700		11,700		2,349
The Mountain Corporation – Delayed Draw Term Debt, $1,000 available (L+4.0%, 7.0% Cash, Due 4/2024)^(G)(L)		500		500		100

				12,200		2,449

Total Secured Second Lien Debt			$	58,200	$	48,449

Preferred Equity – 16.8%
Beverage, Food, and Tobacco – 1.4%
Head Country, Inc. – Preferred Stock^(C)(L)		4,000	$	4,000	$	5,258
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 – 3.4%
ImageWorks Display and Marketing Group, Inc. – Preferred Stock^(C)(L)		67,490		6,749		6,953
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		5,568

				24,309		12,521
Home and Office Furnishings, Housewares, and Durable Consumer Products – 3.6%
Old World Christmas, Inc. – Preferred Stock^(C)(L)		6,180		—		13,445
Leisure, Amusement, Motion Pictures, and Entertainment – 1.2%
SOG Specialty Knives & Tools, LLC – Preferred Stock^(C)(L)		14,949		14,949		4,354
Personal and Non-Durable Consumer Products (Manufacturing Only) – 7.2%
The Mountain Corporation – Preferred Stock^(C)(L)		6,899		6,899		—
Pioneer Square Brands, Inc. – Preferred Stock^(C)(L)		5,502		5,500		26,394


	As of December 31, 2020		As of March 31, 2020
Commitment amount	$	180,000	$	200,000
Borrowings outstanding at cost		84,000		49,200
Availability^(A)		96,000		150,800


	For the Three Months Ended December 31,						For the Nine Months Ended December 31,
	2020			2019			2020			2019
Weighted-average borrowings outstanding	$	104,829		$	37,507		$	88,652		$	45,777
Effective interest rate^(B)		3.8	%		9.3	%		4.2	%		8.6	%
Commitment (unused) fees incurred	$	95		$	414		$	585		$	1,176


	Level 3 – Borrowings
	Recurring Fair Value Measurements Reported in *Consolidated* *Statements of Assets and Liabilities* Using Significant Unobservable Inputs (Level 3)
	December 31, 2020		March 31, 2020
Credit Facility	$	84,000	$	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 December 31, 2020:
Fair value at September 30, 2020	$	116,600
Borrowings		30,200
Repayments		(62,800	)
Unrealized depreciation		—

Fair value at December 31, 2020	$	84,000

Nine Months Ended December 31, 2020:
Fair value at March 31, 2020	$	49,200
Borrowings		111,700
Repayments		(76,900	)
Unrealized depreciation		—

Fair value at December 31, 2020	$	84,000


	Fair Value as of
	December 31, 2020		March 31, 2020
Series D Term Preferred Stock	$	58,604	$	53,590
Series E Term Preferred Stock		95,126		64,554

Total	$	153,730	$	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
	October 13, 2020	October 23, 2020	October 30, 2020		0.070
	October 13, 2020	November 20, 2020	November 30, 2020		0.070
	October 13, 2020	December 23, 2020	December 31, 2020		0.070

		Nine Months Ended December 31, 2020:		$	0.720


	December 31, 2020		March 31, 2020
Unused line of credit and delayed draw term loan commitments	$	5,450	$	1,230
Guaranties		1,000		1,000

Total	$	6,450	$	2,230


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
January 22, 2021	January 29, 2021	$	0.07	$	0.13020833	$	0.13281250
February 17, 2021	February 26, 2021		0.07		0.13020833		0.13281250
March 18, 2021	March 31, 2021		0.07		0.13020833		0.13281250

	Total for the Quarter:	$	0.21	$	0.39062499	$	0.39843750


	For the Three Months Ended December 31,
	2020			2019			$ Change			% Change
INVESTMENT INCOME
Interest income	$	12,148		$	12,126		$	22			0.2	%
Dividend and success fee income		5,224			3,870			1,354			35.0

Total investment income		17,372			15,996			1,376			8.6

EXPENSES
Base management fee		3,116			2,970			146			4.9
Loan servicing fee		1,786			1,794			(8	)		(0.4	)
Incentive fee		3,756			2,873			883			30.7
Administration fee		382			369			13			3.5
Interest and dividend expense		3,383			3,053			330			10.8
Amortization of deferred financing costs and discounts		451			373			78			20.9
Other		818			1,017			(199	)		(19.6	)

Expenses before credits from Adviser		13,692			12,449			1,243			10.0
Credits to fees from Adviser		(2,575	)		(2,611	)		36			(1.4	)

Total expenses, net of credits to fees		11,117			9,838			1,279			13.0

NET INVESTMENT INCOME		6,255			6,158			97			1.6

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain on investments		9,105			34,005			(24,900	)		(73.2	)
Net unrealized depreciation of investments		(89	)		(26,999	)		26,910			99.7
Net unrealized depreciation of other		—			154			(154	)		(100.0	)

Net realized and unrealized gain		9,016			7,160			1,856			25.9

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	15,271		$	13,318		$	1,953			14.7	%

BASIC AND DILUTED PER COMMON SHARE:
Net investment income	$	0.19		$	0.19		$	—			0.0	%

Net increase in net assets resulting from operations	$	0.46		$	0.41		$	0.05			12.2	%


	Three Months Ended December 31, 2020
Portfolio Company	Realized Gain (Loss)			Unrealized Appreciation (Depreciation)			Reversal of Unrealized (Appreciation) Depreciation			Net Gain (Loss)
Pioneer Square Brands, Inc.	$	—		$	4,420		$	—		$	4,420
Educators Resource, Inc.		—			3,488			—			3,488
Old World Christmas, Inc.		3,289			27			—			3,316
Diligent Delivery Systems		—			2,961			—			2,961
Frontier Packaging, Inc.		14,032			—			(11,869	)		2,163
SOG Specialty Knives and Tools, LLC		—			1,806			—			1,806
Schylling, Inc.		—			1,138			—			1,138
Head Country, Inc.		—			916			—			916
Horizon Facilities Service, Inc.		—			909			—			909
The Maids International, LLC		—			495			—			495
Ginsey Home Solutions, Inc.		—			480			—			480
Basset Creek Services, Inc.		—			469			—			469
PSI Molded Plastics, Inc.		—			459			—			459
ImageWorks Display and Marketing Group, Inc.		—			(1,411	)		—			(1,411	)
D.P.M.S., Inc.		—			(1,805	)		—			(1,805	)
Brunswick Bowling Products, Inc.		—			(4,825	)		—			(4,825	)
SBS Industries Holdings, Inc.		(8,470	)		1,580			—			(6,890	)
Other, net (<$1.0 million, net)		254			673			—			927

Total	$	9,105		$	11,780		$	(11,869	)	$	9,016


	Three Months Ended December 31, 2019
Portfolio Company	Realized Gain (Loss)			Unrealized Appreciation (Depreciation)			Reversal of Unrealized (Appreciation) Depreciation			Net Gain (Loss)
Nth Degree, Inc.	$	47,861		$	1,926		$	(40,846	)	$	8,941
Galaxy Tool Holding Corporation		—			6,577			—			6,577
Old World Christmas, Inc.		—			2,447			—			2,447
Counsel Press, Inc.		—			2,152			—			2,152
Pioneer Square Brands, Inc.		—			1,694			—			1,694
B-Dry, LLC.		(14,452	)		—			14,699			247
B+T Group Acquisition, Inc.		—			(526	)		—			(526	)
Diligent Delivery Systems		—			(550	)		—			(550	)
Horizon Facilities Service, Inc.		—			(584	)		—			(584	)
Brunswick Bowling Products, Inc.		—			(1,100	)		—			(1,100	)
Frontier Packaging, Inc.		—			(1,145	)		—			(1,145	)
Educators Resource, Inc.		—			(1,627	)		—			(1,627	)
Ginsey Home Solutions		—			(2,372	)		—			(2,372	)
PSI Molded Plastics, Inc.		—			(2,532	)		—			(2,532	)
SBS Industries Holdings, Inc.		—			(4,358	)		—			(4,358	)
Other, net (<$1.0 million, net)		596			(854	)		—			(258	)

Total	$	34,005		$	(852	)	$	(26,147	)	$	7,006


	For the Nine Months Ended December 31,
	2020			2019			$ Change			% Change
INVESTMENT INCOME
Interest income	$	34,513		$	38,144		$	(3,631	)		(9.5	)%
Dividend and success fee income		5,406			11,798			(6,392	)		(54.2	)

Total investment income		39,919			49,942			(10,023	)		(20.1	)

EXPENSES
Base management fee		8,961			9,285			(324	)		(3.5	)
Loan servicing fee		5,242			5,139			103			2.0
Incentive fee		3,454			6,042			(2,588	)		(42.8	)
Administration fee		1,218			1,106			112			10.1
Interest and dividend expense		9,615			9,499			116			1.2
Amortization of deferred financing costs and discounts		1,291			1,119			172			15.4
Other		3,178			3,942			(764	)		(19.4	)

Expenses before credits from Adviser		32,959			36,132			(3,173	)		(8.8	)
Credits to fees from Adviser		(7,836	)		(7,786	)		(50	)		0.6

Total expenses, net of credits to fees		25,123			28,346			(3,223	)		(11.4	)

NET INVESTMENT INCOME		14,796			21,596			(6,800	)		(31.5	)

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain on investments		10,479			55,682			(45,203	)		(81.2	)
Net unrealized depreciation of investments		(3,335	)		(46,900	)		43,565			92.9
Net unrealized appreciation of other		—			(10	)		10			100.0

Net realized and unrealized (loss) gain		7,144			8,772			(1,628	)		(18.6	)

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	21,940		$	30,368		$	(8,428	)		(27.8	)%

BASIC AND DILUTED PER COMMON SHARE:
Net investment income	$	0.45		$	0.66		$	(0.21	)		(31.8	)

Net increase in net assets resulting from operations	$	0.66		$	0.93		$	(0.27	)		(29.0	)%


	Nine Months Ended December 31, 2020
Portfolio Company	Realized Gain (Loss)			Unrealized Appreciation (Depreciation)			Reversal of Unrealized (Appreciation) Depreciation			Net Gain (Loss)
Pioneer Square Brands, Inc.	$	—		$	20,635		$	—		$	20,635
Frontier Packaging, Inc.		14,032			2,534			(11,869	)		4,697
Ginsey Home Solutions, Inc.		—			4,151			—			4,151
SOG Specialty Knives and Tools, LLC		—			3,964			—			3,964
Educators Resource, Inc.		—			3,335			—			3,335
Old World Christmas, Inc.		3,289			37			—			3,326
Diligent Delivery Systems		—			2,409			—			2,409
Galaxy Technologies, Inc.		—			2,173			—			2,173
Head Country, Inc.		—			1,762			—			1,762
Schylling, Inc.		—			1,069			—			1,069
Cambridge Sound Management, Inc.		740			—			—			740
ImageWorks Display and Marketing Group, Inc.		—			(1,312	)		—			(1,312	)
Bassett Creek Services, Inc.		—			(1,359	)		—			(1,359	)
Counsel Press, Inc.		—			(1,850	)		—			(1,850	)
Nth Degree, Inc.		113			(3,649	)		—			(3,536	)
PSI Molded Plastics, Inc.		—			(3,755	)		—			(3,755	)
D.P.M.S., Inc.		—			(4,442	)		—			(4,442	)
SBS Industries Holdings, Inc.		(8,470	)		1,580			—			(6,890	)
Brunswick Bowling Products, Inc.		—			(18,048	)		—			(18,048	)
Other, net (<$1.0 million, net)		775			(700	)		—			75

Total	$	10,479		$	8,534		$	(11,869	)	$	7,144


	Nine Months Ended December 31, 2019
Portfolio Company	Realized Gain (Loss)			Unrealized Appreciation (Depreciation)			Reversal of Unrealized (Appreciation) Depreciation			Net Gain (Loss)
Nth Degree, Inc.	$	47,861		$	12,689		$	(40,846	)	$	19,704
Alloy Die Casting Co.		20,355			8,823			(12,634	)		16,544
Counsel Press, Inc.		—			7,321			—			7,321
Galaxy Tool Holding Corporation		—			5,329			—			5,329
D.P.M.S., Inc.		—			3,740			—			3,740
Old World Christmas, Inc.		—			3,649			—			3,649
ImageWorks Display and Marketing Group, Inc.		—			2,019			—			2,019
Head Country, Inc.		—			1,423			—			1,423
Tread Corporation		(2,726	)		—			3,380			654
Drew Foam Companies, Inc.		565			—			—			565
B-Dry, LLC		(14,452	)		—			14,699			247
The Mountain Corporation		—			(796	)		—			(796	)
Pioneer Square Brands, Inc.		—			(1,092	)		—			(1,092	)
Frontier Packaging, Inc.		—			(1,303	)		—			(1,303	)
Jackrabbit, Inc.		3,198			—			(4,547	)		(1,349	)
SOG Specialty Knives and Tools, LLC		—			(2,305	)		—			(2,305	)
Brunswick Bowling Products, Inc.		—			(2,419	)		—			(2,419	)
PSI Molded Plastics, Inc.		—			(3,668	)		—			(3,668	)
Educators Resource, Inc.		—			(3,743	)		—			(3,743	)
Meridian Rack & Pinion, Inc.		—			(5,796	)		—			(5,796	)
Ginsey Home Solutions, Inc.		—			(5,926	)		—			(5,926	)
SBS Industries Holdings, Inc.		—			(6,387	)		—			(6,387	)
J.R. Hobbs Co. – Atlanta, LLC		—			(17,822	)		—			(17,822	)
Other, net (<$1.0 million, net)		881			(556	)		(132	)		193

Total	$	55,682		$	(6,820	)	$	(40,080	)	$	8,782


	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)	$	84,000	$	—	$	84,000	$	—	$	—
Mandatorily redeemable preferred stock		151,871		—		57,500		94,371		—
Secured borrowing		5,096		—		—		5,096		—
Interest payments on obligations^(C)		48,873		13,555		24,925		10,393		—

Total	$	289,840	$	13,555	$	166,425	$	109,860	$	—


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


Rates:	December 31, 2020			March 31, 2020
Variable rates with a floor		97.7	%		97.5	%
Fixed rates		2.3			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).

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)