GLADSTONE CAPITAL CORP

For the period ended Mar 31, 2026. Filed May 6, 2026.

About this filing

A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.

Mar 31, 2026 · Filed May 6, 2026

GLAD$19.52+0.7%Stored close · as of Nov 9, 2026

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Contents

Item 2. Results of Operations

RESULTS OF OPERATIONS

Comparison of the Three Months Ended March 31, 2026 to the Three Months Ended March 31, 2025

	Three Months Ended March 31,
	2026	2025	$ Change	% Change
INVESTMENT INCOME
Interest income	$23,196	$21,338	$1,858	8.7%
Other income	2,796	231	2,565	NM
Total investment income	25,992	21,569	4,423	20.5
EXPENSES
Base management fee	4,010	3,441	569	16.5
Loan servicing fee	2,513	2,278	235	10.3
Incentive fee	2,812	2,407	405	16.8
Administration fee	522	462	60	13.0
Interest expense on line of credit and notes payable	5,815	5,019	796	15.9
Amortization of deferred financing costs	696	527	169	32.1
Other expenses	978	614	364	59.3
Expenses, before credits from Adviser	17,346	14,748	2,598	17.6
Credit to base management fee – loan servicing fee	(2,513)	(2,278)	(235)	10.3
Credits to fees from Adviser – other	(679)	(2,146)	1,467	(68.4)
Total expenses, net of credits	14,154	10,324	3,830	37.1
NET INVESTMENT INCOME	11,838	11,245	593	5.3
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on investments	(213)	7,702	(7,915)	(102.8)
Net realized gain (loss) on other	(357)	4	(361)	NM
Net unrealized appreciation (depreciation) of investments	4,779	(9,914)	14,693	(148.2)
Net unrealized appreciation of other	—	(49)	49	(100.0)
Net gain (loss) from investments and other	4,209	(2,257)	6,466	(286.5)
PREFERRED STOCK DIVIDENDS	588	191	397	207.9
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$15,459	$8,797	$6,662	75.7%

NM - Not Meaningful

Investment Income

Interest income increased by 8.7% for the three months ended March 31, 2026, as compared to the prior year period. Generally, the level of interest income from investments is directly related to the principal balance of our interest-bearing investment portfolio outstanding during the period multiplied by the weighted-average yield. The weighted average principal balance of our interest-bearing investment portfolio for the three months ended March 31, 2026 was $794.0 million, compared to $682.6 million for the three months ended March 31, 2025, an increase of $111.4 million, or 16.3%. The weighted average yield on our interest-bearing investments is based on the current stated interest rate on interest-bearing investments, which decreased to 11.8% for the three months ended March 31, 2026, compared to 12.6% for the three months ended March 31, 2025, inclusive of any allowances on interest receivables made during those periods. The decrease in the weighted average yield was driven mainly by decreases in interest rates.

As of March 31, 2026, our loans to B+T Group Acquisition, Inc., Edge Adhesives Holdings, Inc., and WB Xcel Holdings, LLC were on non-accrual status with a cost basis of $28.8 million, or 3.4% of the cost basis of all debt investments in our portfolio, and a fair value of $13.0 million, or 1.6% of the fair value of all debt investments in our portfolio. As of September 30, 2025, our loans to B+T Group Acquisition, Inc., Edge Adhesives Holdings, Inc., and WB Xcel Holdings, LLC were on non-accrual status with a cost basis of $28.8 million, or 3.6% of the cost basis of all debt investments in our portfolio, and a fair value of $13.0 million, or 1.7% of the fair value of all debt investments in our portfolio.

Success fee, dividend and other income increased by $2.6 million during the three months ended March 31, 2026, as compared to the prior year period, primarily due to an increase in dividend income received and prepayment fees received period over period.

As of each of March 31, 2026 and September 30, 2025, no single investment represented greater than 10% of the total investment portfolio at fair value.

Expenses

Expenses, net of any non-contractual, unconditional and irrevocable credits to fees from the Adviser, increased $3.8 million, or 37.1%, for the three months ended March 31, 2026, as compared to the prior year period. This increase was primarily due to a $1.8 million increase in the net incentive fee, a $0.8 million increase in interest expense, and a $0.6 million increase in the net base management fee earned by the Adviser.

Total interest expense on borrowings and notes payable increased by $0.8 million, or 15.9%, during the three months ended March 31, 2026, driven by an increase in the weighted average balance outstanding on our Credit Facility, partially offset by a decrease in the effective interest rate on our Credit Facility and a decrease in interest expense on our notes payable. Interest expense on our Credit Facility increased by $1.6 million due primarily to an increase in the weighted average balance outstanding which was $183.7 million during the three months ended March 31, 2026, as compared to $53.7 million in the prior year period, an increase of 242.1%. The effective interest rate on our Credit Facility, including unused commitment fees incurred, but excluding the impact of deferred financing costs, was 6.9% during the three months ended March 31, 2026, compared to 11.4% during the prior year period. The decrease in the effective interest rate was driven primarily by a $0.4 million decrease in unused commitment fees on the undrawn portion of the Credit Facility and a decrease in interest rates on the drawn portion of the Credit Facility during the three months ended March 31, 2026. Interest expense on our notes payable decreased by $0.8 million during the three months ended March 31, 2026 as compared to the prior year period, primarily due to the October 2025 redemptions of $57.0 million aggregate principal amount of our 7.75% Notes due 2028 (the “2028 Notes”) and $100.0 million aggregate principal amount of our 5.125% Notes due 2026 (the “2026 Notes”).

The net base management fee earned by the Adviser increased by $0.6 million, or 22.6%, for the three months ended March 31, 2026, as compared to the prior year period, resulting primarily from an increase in average total assets subject to the base management fee period over period.

The income-based incentive fee increased by $0.4 million, or 16.8% for the three months ended March 31, 2026, due to higher pre-incentive fee net investment income as compared to the prior year period. During the three months ended March 31, 2025, our Board of Directors accepted non-contractual, unconditional and irrevocable credits from the Adviser of $1.4 million to reduce the income-based incentive fee to the extent net investment income did not cover 100.0% of distributions to common stockholders. There were no such credits during the three months ended March 31, 2026.

The base management, loan servicing and incentive fees, and associated non-contractual, unconditional and irrevocable credits, are computed quarterly, as described under“Transactions with the Adviser” in Note 4—Related Party Transactions of the Notes to Consolidated Financial Statements and are summarized in the following table:

	Three Months EndedMarch 31,
	2026	2025
Average total assets subject to base management fee(A)(B)	$916,571	$786,514
Multiplied by prorated annual base management fee of 1.75%	0.4375%	0.4375%
Base management fee(C)	$4,010	$3,441
Portfolio company fee credit	(679)	(712)
Syndicated loan fee credit	—	(11)
Net Base Management Fee	$3,331	$2,718
Loan servicing fee(C)	2,513	2,278
Credit to base management fee - loan servicing fee(C)	(2,513)	(2,278)
Net Loan Servicing Fee	$—	$—
Incentive fee(C)	2,812	2,407
Incentive fee credit	—	(1,423)
Net Incentive Fee	$2,812	$984
Portfolio company fee credit	(679)	(712)
Syndicated loan fee credit	—	(11)
Incentive fee credit	—	(1,423)
Credits to Fees From Adviser - other(C)	$(679)	$(2,146)

(A)Average total assets subject to the base management fee is defined as total assets, including investments made with proceeds of borrowings, less any uninvested cash or cash equivalents resulting from borrowings, valued at the end of the applicable quarters within the respective periods and adjusted appropriately for any share issuances or repurchases during the periods.

(B)Excludes our investment in Gladstone Alternative valued at the end of the applicable quarters within the respective periods.

(C)Reflected, on a gross basis, as a line item on our Consolidated Statements of Operations.

Net Realized Gain (Loss) on Investments

For the three months ended March 31, 2026, we recorded a net realized loss on investments of $0.2 million, which resulted from a $0.2 million realized loss recognized on the exit of our investment in FES Resources Holdings LLC.

For the three months ended March 31, 2025, we recorded a net realized gain on investments of $7.7 million, which resulted from a $4.7 million realized gain recognized on the partial sale of our common equity investment in Sokol and a $3.0 million realized gain recognized on our investment in MCG Energy Solutions, LLC.

Net Unrealized Appreciation (Depreciation) of Investments

During the three months ended March 31, 2026, we recorded net unrealized appreciation of investments in the aggregate amount of $4.8 million. The net realized gain (loss) and unrealized appreciation (depreciation) across our investments for the three months ended March 31, 2026 were as follows:

Portfolio Company	Realized Gain (Loss)	Unrealized Appreciation (Depreciation)	Reversal of Unrealized (Appreciation)Depreciation	Net Gain (Loss)
Dutch Gold Honey, Inc.	$—	$4,807	$—	$4,807
OCI, LLC	—	2,686	—	2,686
Giving Home Health Care, LLC	—	1,133	—	1,133
Canopy Safety Brands, LLC	—	888	—	888
Total Access Elevator, LLC	—	825	—	825
Sicilian Oven Restaurants LLC	—	806	—	806
HH-Inspire Acquisition, Inc.	—	501	—	501
NeoGraf Solutions, LLC	—	(522)	—	(522)
Pan-Am Dental, LLC	—	(641)	—	(641)
MASSiv Brands, LLC	—	(682)	—	(682)
Eegee Acquisition Corp.	—	(713)	—	(713)
Torrent Photonics Holdco LLC	—	(745)	—	(745)
Vet's Choice Radiology LLC	—	—	(855)	(855)
Technical Resource Management, LLC	—	(1,284)	—	(1,284)
Lonestar EMS, LLC	—	(1,573)	—	(1,573)
Other, net (<$500)	(213)	(65)	213	(65)
Total:	$(213)	$5,421	$(642)	$4,566

The primary drivers of net unrealized appreciation of $4.8 million for the three months ended March 31, 2026 were the improvement in the financial and operational performance of Dutch Gold Honey, Inc. and OCI, LLC, partially offset by the decline in the financial and operational performance of Lonestar EMS, LLC and Technical Resource Management, LLC.

During the three months ended March 31, 2025, we recorded net unrealized depreciation of investments in the aggregate amount of $9.9 million. The net realized gain (loss) and unrealized appreciation (depreciation) across our investments for the three months ended March 31, 2025 were as follows:

Portfolio Company	Realized Gain (Loss)	Unrealized Appreciation (Depreciation)	Reversal of Unrealized (Appreciation)Depreciation	Net Gain (Loss)
Encore Dredging Holdings, LLC	$—	$2,471	$—	$2,471
Giving Home Health Care, LLC	—	1,563	—	1,563
Canopy Safety Brands, LLC	—	1,188	—	1,188
TNCP Intermediate HoldCo, LLC	—	735	—	735
Torrent Photonics Holdco LLC	—	630	—	630
NeoGraf Solutions, LLC	—	573	—	573
Sokol & Company Holdings, LLC	4,748	656	(4,870)	534
MCG Energy Solutions, LLC	2,954	—	(2,976)	(22)
Leadpoint Business Services, LLC	—	(313)	—	(313)
HH-Inspire Acquisition, Inc.	—	(1,166)	—	(1,166)
Technical Resource Management, LLC	—	(2,030)	—	(2,030)
Lonestar EMS, LLC	—	(2,067)	—	(2,067)
Engineering Manufacturing Technologies, LLC	—	(4,029)	—	(4,029)
Other, net (<$500)	—	(279)	—	(279)
Total:	$7,702	$(2,068)	$(7,846)	$(2,212)

The primary drivers of net unrealized depreciation of $9.9 million for the three months ended March 31, 2025 were the

reversal of unrealized appreciation from the partial sale of our common equity investment in Sokol & Company Holdings, LLC and the sale of our investment in MCG Energy Solutions, LLC, partially offset by the increase in the financial and operational performance of certain of our other portfolio companies.

Comparison of the Six Months Ended March 31, 2026 to the Six Months Ended March 31, 2025

	Six Months Ended March 31,
	2026	2025	$ Change	% Change
INVESTMENT INCOME
Interest income	$47,092	$42,658	$4,434	10.4%
Other income	3,411	871	2,540	291.6
Total investment income	50,503	43,529	6,974	16.0
EXPENSES
Base management fee	7,919	6,993	926	13.2
Loan servicing fee	4,964	4,456	508	11.4
Incentive fee	5,511	5,111	400	7.8
Administration fee	1,041	936	105	11.2
Interest expense on line of credit and notes payable	11,743	9,762	1,981	20.3
Amortization of deferred financing costs	1,423	1,045	378	36.2
Other expenses	1,783	1,704	79	4.6
Expenses, before credits from Adviser	34,384	30,007	4,377	14.6
Credit to base management fee – loan servicing fee	(4,964)	(4,456)	(508)	11.4
Credits to fees from Adviser – other	(2,019)	(4,491)	2,472	(55.0)
Total expenses, net of credits	27,401	21,060	6,341	30.1
NET INVESTMENT INCOME	23,102	22,469	633	2.8
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on investments	1,498	65,426	(63,928)	(97.7)
Net realized gain (loss) on other	(1,772)	94	(1,866)	NM
Net unrealized appreciation (depreciation) of investments	(859)	(51,806)	50,947	(98.3)
Net unrealized appreciation of other	—	(49)	49	(100.0)
Net gain (loss) from investments and other	(1,133)	13,665	(14,798)	(108.3)
PREFERRED STOCK DIVIDENDS	1,056	362	694	191.7
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$20,913	$35,772	$(14,859)	(41.5)%

NM - Not Meaningful

Investment Income

Interest income increased by 10.4% for the six months ended March 31, 2026, as compared to the prior year period. Generally, the level of interest income from investments is directly related to the principal balance of our interest-bearing investment portfolio outstanding during the period multiplied by the weighted-average yield. The weighted average principal balance of our interest-bearing investment portfolio for the six months ended March 31, 2026 was $783.0 million, compared to $662.3 million for the six months ended March 31, 2025, an increase of $120.7 million, or 18.2%. The weighted average yield on our interest-bearing investments is based on the current stated interest rate on interest-bearing investments, which decreased to 12.0% for the six months ended March 31, 2026, compared to 12.9% for the six months ended March 31, 2025, inclusive of any allowances on interest receivables made during those periods. The decrease in the weighted average yield was driven mainly by decreases in interest rates.

Success fee, dividend and other income increased by $2.5 million during the six months ended March 31, 2026, as compared to the prior year period, primarily due to an increase in dividend income received period over period and an increase in prepayment fees received period over period.

As of each of March 31, 2026 and September 30, 2025, no single investment represented greater than 10% of the total investment portfolio at fair value

Expenses

Expenses, net of any non-contractual, unconditional and irrevocable credits to fees from the Adviser, increased $6.3 million, or 30.1%, for the six months ended March 31, 2026, as compared to the prior year period. This increase was primarily due to a $2.1 million increase in the net incentive fee, a $2.0 million increase in interest expense, and a $1.7 million increase in the net base management fee earned by the Adviser.

Total interest expense on borrowings and notes payable increased by $2.0 million, or 20.3%, during the six months ended March 31, 2026, driven by an increase in the weighted average balance outstanding on our Credit Facility, partially offset by a decrease in the effective interest rate on our Credit Facility and a decrease in interest expense on our notes payable. Interest expense on our Credit Facility increased by $2.8 million due primarily to an increase in the weighted average balance outstanding which was $152.4 million during the six months ended March 31, 2026, as compared to $39.8 million in the prior year period, an increase of 282.9%. The effective interest rate on our Credit Facility, including unused commitment fees incurred, but excluding the impact of deferred financing costs, was 7.4% during the six months ended March 31, 2026, compared to 13.9% during the prior year period. The decrease in the effective interest rate was driven primarily by a $0.6 million decrease in unused commitment fees on the undrawn portion of the Credit Facility and a decrease in interest rates on the drawn portion of the Credit Facility during the six months ended March 31, 2026. Interest expense on our notes payable decreased by $0.9 million during the six months ended March 31, 2026 as compared to the prior year period, primarily due to the October 2025 redemptions of our 2026 Notes and 2028 Notes.

The net base management fee earned by the Adviser increased by $1.7 million, or 41.7%, for the six months ended March 31, 2026, as compared to the prior year period, resulting primarily from an increase in average total assets subject to the base management fee period over period and a decrease in credits to base management fee from the Adviser for new deal origination fees period over period.

The income-based incentive fee increased by $0.4 million, or 7.8%, for the six months ended March 31, 2026, due to higher pre-incentive fee net investment income as compared to the prior year period. During the six months ended March 31, 2025, our Board of Directors accepted non-contractual, unconditional and irrevocable credits from the Adviser of $1.7 million to reduce the income-based incentive fee to the extent net investment income did not cover 100.0% of distributions to common stockholders. There were no such credits during the six months ended March 31, 2026.

	Six Months EndedMarch 31,
	2026	2025
Average total assets subject to base management fee(A)(B)	$905,029	$799,200
Multiplied by prorated annual base management fee of 1.75%	0.8750%	0.8750%
Base management fee(C)	$7,919	$6,993
Portfolio company fee credit	(2,019)	(2,808)
Syndicated loan fee credit	—	(21)
Net Base Management Fee	$5,900	$4,164
Loan servicing fee(C)	4,964	4,456
Credit to base management fee - loan servicing fee(C)	(4,964)	(4,456)
Net Loan Servicing Fee	$—	$—
Incentive fee(C)	5,511	5,111
Incentive fee credit	—	(1,662)
Net Incentive Fee	$5,511	$3,449
Portfolio company fee credit	(2,019)	(2,808)
Syndicated loan fee credit	—	(21)
Incentive fee credit	—	(1,662)
Credits to Fees From Adviser - other(C)	$(2,019)	$(4,491)

(B)Excludes our investment in Gladstone Alternative valued at the end of the applicable quarters within the respective periods.

(C)Reflected, on a gross basis, as a line item on our Consolidated Statements of Operations.

Net Realized Gain (Loss) on Investments

For the six months ended March 31, 2026, we recorded a net realized gain on investments of $1.5 million, which resulted primarily from a $1.8 million realized gain recognized on the redemption of our equity investment in Sokol, partially offset by a $0.3 million realized loss recognized on the exit of our investment in FES Resources Holdings LLC.

For the six months ended March 31, 2025, we recorded a net realized gain on investments of $65.4 million, which resulted from a $59.3 million realized gain recognized on the sale of our investment in Antenna Research Associates, Inc., a $4.7 million realized gain recognized on the partial sale of our common equity investment in Sokol, a $3.0 million realized gain recognized on our investment in MCG Energy Solutions, LLC, and a $2.5 million realized gain recognized on our investment in Salt & Straw, LLC, partially offset by a $4.1 million realized loss recognized on the sale of our investment in DKI Ventures, LLC.

Net Realized Gain (Loss) on Other

During the six months ended March 31, 2026, we recorded net realized losses on other of $1.8 million, due primarily to the write-off of unamortized deferred offering costs upon the redemption of our 2026 Notes and 2028 Notes.

Net Unrealized Appreciation (Depreciation) of Investments

During the six months ended March 31, 2026, we recorded net unrealized depreciation of investments in the aggregate amount of $0.9 million. The net realized gain (loss) and unrealized appreciation (depreciation) across our investments for the six months ended March 31, 2026 were as follows:

Portfolio Company	Realized Gain (Loss)	Unrealized Appreciation (Depreciation)	Reversal of Unrealized (Appreciation)Depreciation	Net Gain (Loss)
Dutch Gold Honey, Inc.	$—	$5,045	$—	$5,045
OCI, LLC	—	2,690	—	2,690
Giving Home Health Care, LLC	—	1,341	—	1,341
Sicilian Oven Restaurants LLC	—	806	—	806
Total Access Elevator, LLC	—	695	—	695
Axios Industrial Group, LLC	—	663	—	663
Canopy Safety Brands, LLC	—	540	—	540
RPM Freight Systems, LLC	—	489	—	489
Engineering Manufacturing Technologies, LLC	—	479	—	479
FES Resources Holdings LLC	(325)	—	325	—
Sokol & Company Holdings, LLC	1,790	—	(1,790)	—
Vet's Choice Radiology LLC	—	507	(855)	(348)
Arc Drilling Holdings LLC	—	(577)	—	(577)
TNCP Intermediate HoldCo, LLC	—	(648)	—	(648)
Encore Dredging Holdings, LLC	—	(667)	—	(667)
MASSiv Brands, LLC	—	(689)	—	(689)
Torrent Photonics Holdco LLC	—	(698)	—	(698)
Technical Resource Management, LLC	—	(1,138)	—	(1,138)
Eegee Acquisition Corp.	—	(3,406)	—	(3,406)
Lonestar EMS, LLC	—	(3,640)	—	(3,640)
Other, net (<$500)	33	131	(462)	(298)
Total:	$1,498	$1,923	$(2,782)	$639

The primary drivers of net unrealized depreciation of $0.9 million for the six months ended March 31, 2026 were the improvement in the financial and operational performance of Dutch Gold Honey, Inc. and OCI, LLC, partially offset by the decline in the financial and operational performance of Lonestar EMS, LLC and Technical Resource Management, LLC.

During the six months ended March 31, 2025, we recorded net unrealized depreciation of investments in the aggregate amount of $51.8 million. The net realized gain (loss) and unrealized appreciation (depreciation) across our investments for the six months ended March 31, 2025 were as follows:

Portfolio Company	Realized Gain (Loss)	Unrealized Appreciation (Depreciation)	Reversal of Unrealized (Appreciation)Depreciation	Net Gain (Loss)
Sokol & Company Holdings, LLC	$4,748	$6,386	$(4,870)	$6,264
Antenna Research Associates, Inc.	59,348	—	(55,140)	4,208
Giving Home Health Care, LLC	—	2,493	—	2,493
Encore Dredging Holdings, LLC	—	2,489	—	2,489
NeoGraf Solutions, LLC	—	2,310	—	2,310
Torrent Photonics Holdco LLC	—	2,222	—	2,222
Arc Drilling Holdings LLC	—	2,140	—	2,140
Lonestar EMS, LLC	—	1,376	—	1,376
TNCP Intermediate HoldCo, LLC	—	1,203	—	1,203
Canopy Safety Brands, LLC	—	1,181	—	1,181
Quality Environmental Midco, Inc.	—	810	—	810
Triple H Food Processors, LLC	—	554	—	554
MCG Energy Solutions, LLC	2,954	(4)	(2,976)	(26)
Salt & Straw, LLC	2,450	74	(2,607)	(83)
HH-Inspire Acquisition, Inc.	—	(503)	—	(503)
DKI Ventures, LLC	(4,074)	—	3,422	(652)
Eegee's LLC	—	(737)	—	(737)
Technical Resource Management, LLC	—	(1,824)	—	(1,824)
Defiance Integrated Technologies, Inc.	—	(2,096)	—	(2,096)
WB Xcel Holdings, LLC	—	(2,549)	—	(2,549)
Engineering Manufacturing Technologies, LLC	—	(5,089)	—	(5,089)
Other, net (<$500)	—	(387)	316	(71)
Total:	$65,426	$10,049	$(61,855)	$13,620

The primary driver of net unrealized depreciation of $51.8 million for the six months ended March 31, 2025 was the

reversal of unrealized appreciation from the exit of our investment in Antenna Research Associates, Inc., partially offset by the increase in the financial and operational performance of certain of our other portfolio companies.

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