GLADSTONE INVESTMENT CORPORATION\DE

RESULTS OF OPERATIONS

Comparison of the Three Months Ended June 30, 2025 to the Three Months Ended June 30, 2024

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Investment Income

Total investment income increased $1.4 million, or 6.2%, for the three months ended June 30, 2025, as compared to the prior year period, primarily due to an increase in interest income and dividend and success fee income.

Interest income from our investments in debt securities increased $1.0 million, or 5.0%, for the three months ended June 30, 2025, as compared to the prior year period. Generally, the level of interest income from investments is directly related to the weighted-average 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 during the three months ended June 30, 2025 was $610.0 million, compared to $571.0 million for the prior year period. This increase was primarily due to the origination of $176.4 million of new debt investments and $38.8 million of follow-on debt investments in existing portfolio companies, partially offset by $128.0 million of pay-offs, restructurings, or write-offs of debt investments and $30.8 million of existing loans placed on non-accrual status after March 31, 2024, and their respective impact on the weighted-average principal balance when considering the timing of new investments, pay-offs, restructurings, write-offs, and accrual status changes, as applicable. During the three months ended June 30, 2025, we collected $1.5 million in past due interest from SFEG Holdings, Inc. ("SFEG") that was previously on non-accrual status. We had no collections of past due interest during the three months ended June 30, 2024.

The weighted-average yield on our interest-bearing investments, excluding cash and cash equivalents and receipts recorded as dividend and success fee income, was 14.1% for the three months ended June 30, 2025, compared to 14.5% for the prior year period. The weighted-average yield may vary from period to period, based on the current stated interest rate on interest-bearing investments, coupled with any collection of past due interest during the period.

As of June 30, 2025, our loans to B+T Group Acquisition, Inc. ("B+T"), Diligent Delivery Systems ("Diligent"), Edge Adhesives Holdings, Inc. ("Edge"), and J.R. Hobbs Co. – Atlanta, LLC ("J.R. Hobbs") were on non-accrual status, with an aggregate debt cost basis of $90.3 million. As of June 30, 2024, certain of our loans to B+T, Diligent, Edge and J.R. Hobbs were on non-accrual status, with an aggregate debt cost basis of $86.1 million.

As of June 30, 2025 and March 31, 2025, SFEG represented 10.6% and 10.8% of the total investment portfolio at fair value, respectively.

Dividend and success fee income for the three months ended June 30, 2025 increased $0.3 million, or 22.1%, from the prior year period. During the three months ended June 30, 2025, dividend and success fee income consisted of $1.1 million of dividend income and $0.8 million of success fee income. During the three months ended June 30, 2024, dividend and success fee income consisted of $1.6 million of success fee income.

Expenses

Total expenses, net of any non-contractual, unconditional, and irrevocable credits from the Adviser, increased $4.7 million, or 48.1%, during the three months ended June 30, 2025, as compared to the prior year period, primarily due to a decrease in the reversal of previously accrued capital gains-based incentive fees and an increase in interest expense, partially offset by an increase in fee credits from the Adviser and a decrease in other expense.

In accordance with GAAP, during the three months ended June 30, 2025, we recorded a $0.2 million reversal of previously accrued capital gains-based incentive fee compared to a $3.8 million reversal during the three months ended June 30, 2024. The capital gains-based incentive fee is a result of the net impact of net realized gains and net unrealized appreciation (depreciation) on investments during the respective periods.

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

(A)Average total assets subject to the base management fee is defined in the Advisory Agreement 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 as a line item on our Consolidated Statements of Operations.

(D)The capital gains-based incentive fees are recorded in accordance with GAAP and do not necessarily reflect amounts contractually due under the terms of the Advisory Agreement.

Interest expense increased $2.0 million, or 31.2%, during the three months ended June 30, 2025, as compared to the prior year period, primarily due to the issuance of the 7.785% 2030 Notes in December 2024 and an increase in the effective interest rate, partially offset by decreased borrowings on our Credit Facility. The weighted-average balance outstanding under our Credit Facility during the three months ended June 30, 2025 was $36.3 million, compared to $64.7 million in the prior year period. The effective interest rate on our Credit Facility, excluding the impact of deferred financing costs, during the three months ended June 30, 2025 was 14.0%, as compared to 10.8% in the prior year period. The increase in the effective interest rate on the Credit Facility was primarily a result of an increase in unused commitment fees on the undrawn portion of the Credit Facility, partially offset by lower interest rates on the drawn portion of our Credit Facility during the three months ended June 30, 2025.

Other expenses decreased $0.8 million, or 41.3%, during the three months ended June 30, 2025, as compared to the prior year period, due to a decrease in bad debt expense, partially offset by an increase in professional fees and tax expense.

Realized and Unrealized Gain (Loss)

The realized gains (losses) and unrealized appreciation (depreciation) across our investments for the three months ended June 30, 2025 and 2024 were as follows:

Net Realized Gain (Loss) on Investments

During the three months ended June 30, 2025, we did not record any net realized gains or losses on investments. During the three months ended June 30, 2024, we recorded net realized gains on investments of $2 thousand, due to the realized gain from the exit of Funko Acquisition Holdings, LLC.

Net Unrealized Appreciation (Depreciation) of Investments

Net unrealized depreciation of investments of $1.0 million for the three months ended June 30, 2025 was primarily due to a decrease in the performance of certain of our portfolio companies. These decreases were partially offset by increased performance of certain of our other portfolio companies and an increase in transaction multiples used to estimate the fair value of certain of our portfolio companies.

Net unrealized depreciation of investments of $18.9 million for the three months ended June 30, 2024 was primarily due to a decrease in transaction multiples used to estimate the fair value of certain of our portfolio companies and a decrease in performance of certain of our portfolio companies. These decreases were partially offset by increased performance of certain of our other portfolio companies.

Across our entire investment portfolio, we recorded net unrealized depreciation of$2.6 million on ourequity positions and net unrealized appreciation of $1.6 million on our debt investmentsfor thethree months ended June 30, 2025. As of June 30, 2025, the fair value of our investment portfolio was more than our cost basis by $39.2 million, compared to March 31, 2025, when the fair value of our investment portfolio was more than our cost basis by $40.3 million. This resulted in net unrealized depreciation of$1.0 million for thethree months ended June 30, 2025. Our entire portfolio was fair valued at 103.9% of cost as of June 30, 2025.