| ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
2023
| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
_______
| Maryland | 54-2040781 | |||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||
1521 WESTBRANCH DRIVE, SUITE 100
| 22102 | |||||
| McLean, Virginia | (Zip Code) | |||||
| (Address of principal executive office) | ||||||
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||||||||
| Common Stock, $0.001 par value per share | GLAD | The Nasdaq Stock Market LLC | ||||||||||||
| 7.75% notes due 2028 | GLADZ | The Nasdaq Stock Market LLC | ||||||||||||
| Large accelerated filer | o | Accelerated filer |
| |||||||||||
| Non-accelerated filer | ||||||||||||||
| x | Smaller reporting company | |||||||||||||
| o | ||||||||||||||
| Emerging growth company | o | |||||||||||||
43,508,897.
ASSETS Investments, at fair value: Non-Control/Non-Affiliate investments (Cost of$357,481and $318,952, respectively) Affiliate investments (Cost of$50,036and $49,868, respectively) Control investments (Cost of$42,615 and $42,615 respectively) Cash and cash equivalents Restricted cash and cash equivalents Interest receivable, net Due from custodian Deferred financing fees Other assets, net TOTAL ASSETS LIABILITIES Borrowings, at fair value (Cost of$130,500 and $93,000, respectively) Mandatorily redeemable preferred stock, $0.001 par value per share, $25 liquidation preference per share;5,440,000 and 5,440,000 shares authorized, respectively, and2,070,000 and 2,070,000 shares issued and outstanding, respectively Accounts payable and accrued expenses Interest payable Fees due to Adviser(A) Fee due to Administrator(A) Other liabilities TOTAL LIABILITIES Commitments and contingencies(B) NET ASSETS Common stock, $0.001 par value,44,560,000 and 44,560,000 shares authorized, respectively, and26,632,182and26,160,684 shares issued and outstanding, respectively Capital in excess of par value Cumulative net unrealized depreciation of investments Cumulative net unrealized depreciation of other Over distributed net investment income Accumulated net realized losses TOTAL NET ASSETS NET ASSET VALUE PER COMMON SHARE December 31,
2017 September 30,
2017 $ 330,297 $ 290,860 43,856 42,648 18,277 18,865 4,503 5,012 228 258 2,167 1,699 7,418 3,086 668 853 2,308 2,579 $ 409,722 $ 365,860 $ 130,833 $ 93,115 49,870 49,849 511 522 330 264 1,291 1,292 272 244 898 924 $ 184,005 $ 146,210 $ 27 $ 26 352,540 348,248 (57,702 ) (59,062 ) (333 ) (115 ) (207 ) (139 ) (68,608 ) (69,308 ) $ 225,717 $ 219,650 $ 8.48 $ 8.40 (A)Refer to Note 4—Related Party Transactions in the accompanyingNotes to Consolidated Financial Statements for additional information.(B)Refer to Note 10—Commitments and Contingencies in the accompanyingNotes to Consolidated Financial Statements for additional information.December 31,
2023September 30,
2023ASSETS Investments, at fair value: $ 708,506 $ 663,544 10,716 10,421 30,763 30,850 Cash and cash equivalents 1,498 1,306 Restricted cash and cash equivalents 95 95 Interest receivable, net 6,158 6,100 Due from administrative agent 4,184 2,936 Deferred financing costs, net 1,220 1,335 Other assets, net 3,417 2,911 TOTAL ASSETS $ 766,557 $ 719,498 LIABILITIES $ 85,000 $ 47,800 253,359 253,114 Accounts payable and accrued expenses 1,065 1,006 Interest payable 4,323 2,956 2,995 3,872 572 479 Other liabilities 1,315 1,576 TOTAL LIABILITIES $ 348,629 $ 310,803 NET ASSETS $ 44 $ 44 Capital in excess of par value 481,480 481,480 Cumulative net unrealized appreciation (depreciation) of investments (9,649) (17,454) Under (over) distributed net investment income 5,907 4,741 Accumulated net realized losses (59,854) (60,116) Total distributable loss (63,596) (72,829) TOTAL NET ASSETS $ 417,928 $ 408,695 NET ASSET VALUE PER COMMON SHARE $ 9.61 $ 9.39
INVESTMENT INCOME Interest income Non-Control/Non-Affiliate investments Affiliate investments Control investments Cash and cash equivalents Total interest income (excluding PIK interest income) PIK interest income Non-Control/Non-Affiliate investments Affiliate investments Total PIK interest income Total interest income Success fee income Non-Control/Non-Affiliate investments Affiliate investments Total success fee income Other income Total investment income EXPENSES Base management fee(A) Loan servicing fee(A) Incentive fee(A) Administration fee(A) Interest expense on borrowings Dividend expense on mandatorily redeemable preferred stock Amortization of deferred financing fees Professional fees Other general and administrative expenses Expenses, before credits from Adviser Credit to base management fee - loan servicing fee(A) Credit to fees from Adviser - other(A) Total expenses, net of credits NET INVESTMENT INCOME NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized (loss) gain: Non-Control/Non-Affiliate investments Affiliate investments Control investments Other Total net realized gain (loss) Net unrealized appreciation (depreciation): Non-Control/Non-Affiliate investments Affiliate investments Control investments Other Total net unrealized appreciation (depreciation) Net realized and unrealized gain (loss) NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS Three Months Ended
December 31, 2017 2016 $ 7,684 $ 5,809 1,111 1,162 687 445 12 2 9,494 7,418 1,106 997 70 218 1,176 1,215 10,670 8,633 — 391 — 1,142 — 1,533 189 (192 ) 10,859 9,974 1,676 1,378 1,186 983 1,373 1,293 272 300 1,231 556 776 1,029 248 273 255 236 292 401 7,309 6,449 (1,186 ) (983 ) (841 ) (699 ) 5,282 4,767 5,577 5,207 602 3,882 — (2,330 ) (28 ) (5,000 ) (133 ) — 441 (3,448 ) 908 (5,867 ) 1,040 706 (588 ) 4,106 (218 ) 212 1,142 (843 ) 1,583 (4,291 ) $ 7,160 $ 916 Three Months Ended
December 31,2023 2022 INVESTMENT INCOME Interest income Non-Control/Non-Affiliate investments $ 20,810 $ 15,786 Affiliate investments — 874 Control investments 751 690 Cash and cash equivalents 27 19 Total interest income (excluding PIK interest income) 21,588 17,369 PIK interest income Non-Control/Non-Affiliate investments 1,327 788 Affiliate investments — 139 Control investments 81 71 Total PIK interest income 1,408 998 Total interest income 22,996 18,367 Dividend income Non-Control/Non-Affiliate investments 185 507 Control investments — 329 Total dividend income 185 836 Other income 40 91 Total investment income 23,221 19,294 EXPENSES 3,245 2,829 2,128 1,874 2,984 2,181 454 403 Interest expense 5,032 4,629 Amortization of deferred financing costs 429 378 Professional fees 230 281 Other general and administrative expenses 495 304 Expenses, before credits from Adviser 14,997 12,879 (2,128) (1,874) (1,582) (436) Total expenses, net of credits 11,287 10,569 NET INVESTMENT INCOME 11,934 8,725 NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss): Non-Control/Non-Affiliate investments — 10,335 Affiliate investments — — Control investments 259 (1,016) Other 3 253 Total net realized gain (loss) 262 9,572 Net unrealized appreciation (depreciation): Non-Control/Non-Affiliate investments 7,051 (15,225) Affiliate investments 295 2,211 Control investments 459 415 Total net unrealized appreciation (depreciation) 7,805 (12,599) Net realized and unrealized gain (loss) 8,067 (3,027) NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 20,001 $ 5,698 BASIC AND DILUTED PER COMMON SHARE: Net investment income $ 0.27 $ 0.25 Net increase (decrease) in net assets resulting from operations $ 0.46 $ 0.16 43,508,897 35,207,208
CHANGES IN NET ASSETS
THOUSANDS)
BASIC AND DILUTED PER COMMON SHARE: | ||||||||
Net investment income | $ | 0.21 | $ | 0.21 | ||||
|
|
|
| |||||
Net increase in net assets resulting from operations | $ | 0.27 | $ | 0.04 | ||||
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| |||||
Distributions declared and paid per common share | $ | 0.21 | $ | 0.21 | ||||
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WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING:Basic and Diluted | 26,522,788 | 24,778,970 |
| 2023 | 2022 | ||||||||||
| NET ASSETS, SEPTEMBER 30 | $ | 408,695 | $ | 315,487 | |||||||
| OPERATIONS | |||||||||||
| Net investment income | 11,934 | 8,725 | |||||||||
| Net realized gain (loss) on investments | 259 | 9,319 | |||||||||
| Net realized gain (loss) on other | 3 | 253 | |||||||||
| Net unrealized appreciation (depreciation) of investments | 7,805 | (12,599) | |||||||||
| Net increase (decrease) in net assets resulting from operations | 20,001 | 5,698 | |||||||||
| DISTRIBUTIONS | |||||||||||
Distributions to common stockholders from net investment income ($0.25 per share and $0.21 per share, respectively)(A) | (10,768) | (7,398) | |||||||||
| Net decrease in net assets from distributions | (10,768) | (7,398) | |||||||||
| CAPITAL TRANSACTIONS | |||||||||||
| Issuance of common stock | — | 10,721 | |||||||||
| Discounts, commissions and offering costs for issuance of common stock | — | (182) | |||||||||
| Net increase (decrease) in net assets resulting from capital transactions | — | 10,539 | |||||||||
| NET INCREASE (DECREASE) IN NET ASSETS | 9,233 | 8,839 | |||||||||
| NET ASSETS, DECEMBER 31 | $ | 417,928 | $ | 324,326 | |||||||
OPERATIONS Net investment income Net realized gain (loss) on investments Realized loss on other Net unrealized appreciation (depreciation) of investments Net unrealized (depreciation) appreciation of other Net increase in net assets resulting from operations DISTRIBUTIONS Distributions to common stockholders from net investment income Net decrease in net assets from distributions CAPITAL TRANSACTIONS Issuance of common stock Discounts, commissions and offering costs for issuance of common stock Net increase in net assets resulting from capital transactions NET INCREASE IN NET ASSETS NET ASSETS, BEGINNING OF PERIOD NET ASSETS, END OF PERIOD
GLADSTONE CAPITAL CORPORATIONCHANGESCASH FLOWSNET ASSETS(IN THOUSANDS) Three Months Ended
December 31, 2017 2016 $ 5,577 $ 5,207 574 (3,448 ) (133 ) — 1,360 (1,055 ) (218 ) 212 7,160 916 (5,577 ) (5,207 ) (5,577 ) (5,207 ) 4,567 17,344 (83 ) (875 ) 4,484 16,469 6,067 12,178 219,650 201,207 $ 225,717 $ 213,385 Three Months Ended December 31, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net increase (decrease) in net assets resulting from operations $ 20,001 $ 5,698 Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities: Purchase of investments (57,998) (13,379) Principal repayments on investments 21,806 25,563 Net proceeds from sale of investments 263 13,873 Increase in investments due to PIK interest or other (1,211) (1,194) Net change in premiums, discounts and amortization 37 (14) Net realized loss (gain) on investments (259) (9,319) Net realized loss (gain) on other (3) (253) Net unrealized depreciation (appreciation) of investments (7,805) 12,599 Amortization of deferred financing costs 429 378 Changes in assets and liabilities: Decrease (increase) in interest receivable, net (58) (1,376) Decrease (increase) in funds due from administrative agent (1,248) (805) Decrease (increase) in other assets, net (506) (387) Increase (decrease) in accounts payable and accrued expenses 59 86 Increase (decrease) in interest payable 1,367 1,548 (877) 1,052 93 76 Increase (decrease) in other liabilities (261) 377 Net cash provided by (used in) operating activities (26,171) 34,523 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from line of credit 70,200 14,800 Repayments on line of credit (33,000) (48,200) Financing costs (69) (196) Proceeds from issuance of common stock — 10,721 Discounts, commissions and offering costs for issuance of common stock — (161) Distributions paid to common stockholders (10,768) (7,398) Net cash provided by (used in) financing activities 26,363 (30,434) NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS 192 4,089 CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF PERIOD 1,401 2,107 CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD $ 1,593 $ 6,196 CASH PAID FOR INTEREST $ 3,665 $ 3,081 $ — $ 2,416
CASH FLOWS FROM OPERATING ACTIVITIES Net increase in net assets resulting from operations Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities: Purchase of investments Principal repayments on investments Net proceeds from sale of investments Increase in investments due topaid-in-kind interest or other Net change in premiums, discounts and amortization Net realized (gain) loss on investments Net unrealized (appreciation) depreciation of investments Net unrealized appreciation (depreciation) of other Changes in assets and liabilities: Decrease in restricted cash and cash equivalents Amortization of deferred financing fees (Increase) decrease in interest receivable, net Increase in due from custodian Decrease (increase) in other assets, net Decrease in accounts payable and accrued expenses Increase (decrease) in interest payable Decrease in fees due to Adviser(A) Increase in fee due to Administrator(A) (Decrease) increase in other liabilities Net cash (used in) provided by operating activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings Repayments on borrowings Deferred financing fees Proceeds from issuance of common stock Discounts, commissions and offering costs for issuance of common stock Distributions paid to common stockholders Net cash provided by (used in) financing activities NET DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS, END OF PERIOD GLADSTONE CAPITAL CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS(IN THOUSANDS)(UNAUDITED) Three Months Ended
December 31, 2017 2016 $ 7,160 $ 916 (56,938 ) (20,047 ) 18,569 42,234 1,274 8,219 (983 ) (1,095 ) (45 ) 54 (574 ) 3,448 (1,360 ) 1,055 218 (213 ) 30 355 248 273 (468 ) 380 (4,332 ) (779 ) 256 (3,495 ) (11 ) (405 ) 66 (91 ) (1 ) (11 ) 28 18 (26 ) 650 (36,889 ) 31,466 61,100 24,200 (23,600 ) (67,300 ) (42 ) — 4,567 17,344 (68 ) (875 ) (5,577 ) (5,207 ) 36,380 (31,838 ) (509 ) (372 ) 5,012 6,152 $ 4,503 $ 5,780 (A)Refer to Note 4—Related Party Transactions in the accompanyingNotes to Consolidated Financial Statements for additional information.Cost Fair Value Secured First Lien Debt – 126.6% Aerospace and Defense – 19.1% $ 30,328 $ 30,328 $ 30,328 17,444 17,444 17,443 2,000 2,000 2,000 30,078 29,788 30,074 79,560 79,845 Beverage, Food, and Tobacco – 16.2% — — — 1,400 1,400 1,400 26,250 26,250 26,250 1,000 1,000 1,000 3,026 3,026 3,026 17,146 17,146 17,145 — — — 10,850 10,661 10,250 8,500 8,500 8,500 67,983 67,571 Buildings and Real Estate – 0.5% 1,275 1,275 1,276 1,000 1,000 1,001 2,275 2,277 Diversified/Conglomerate Manufacturing – 27.4% — — — 21,630 21,630 21,772 — — — 27,245 27,245 25,074 18,500 18,500 18,870 11,738 11,738 11,648 422 422 426 1,103 1,103 1,114 14,813 14,519 14,961 — — — 20,529 20,529 20,625 115,686 114,490 Diversified/Conglomerate Service – 31.3% 11,324 11,296 11,025 350 350 190 5,915 5,915 3,217 22,289 22,289 21,867 1,900 1,900 1,900 12,200 12,200 12,318 6,911 6,911 6,911
Company and Investment(A)(B)(W)(Y) NON-CONTROL/NON-AFFILIATE INVESTMENTS(M) – 146.3% Secured First Lien Debt – 74.8% Automobile – 1.5% Meridian Rack & Pinion, Inc. (S) – Term Debt (L + 11.5%, 13.5% Cash, Due 12/2018) (C) Beverage, Food, and Tobacco – 3.0% Triple H Food Processors, LLC - Line of Credit, $1,500 available (L + 6.8%, 8.3% Cash, Due 8/2018)(C) Triple H Food Processors, LLC – Term Debt (L + 8.3%, 9.8% Cash, Due 8/2020)(C) Buildings and Real Estate – 0.9% GFRC Holdings, LLC – Line of Credit, $165 available (L + 8.0%, 9.6% Cash, Due 9/2018)(E) GFRC Holdings, LLC – Term Debt (L + 8.0%, 9.6% Cash, Due 9/2018)(E) Diversified/Conglomerate Service – 19.7% IA Tech, LLC – Term Debt (L + 11.0%, 12.6% Cash, Due 6/2021)(C) Travel Sentry, Inc. – Term Debt (L + 8.0%, 9.7% Cash, Due 12/2021)(C)(U) Vision Government Solutions, Inc. – Line of Credit, $0 available (L + 8.8%, 10.3% Cash, Due 1/2019)(C) Vision Government Solutions, Inc. – Delayed Draw Term Loan, $900 available (10.0% Cash, Due 1/2019)(C)(F) Vision Government Solutions, Inc. – Term Debt (L + 8.8%, 10.3% Cash, Due 1/2019)(C) Healthcare, education, and childcare – 8.7% EL Academies, Inc. – Line of Credit, $2,000 available (L + 8.8%, 10.3% Cash, Due 8/2020)(C) EL Academies, Inc. – Delayed Draw Term Loan, $10,000 available (L + 8.8%, 10.3% Cash, Due 8/2022)(C) EL Academies, Inc. – Term Debt (L + 8.8%, 10.3% Cash, Due 8/2022)(C) TWS Acquisition Corporation – Term Debt (L + 8.0%, 9.6% Cash, Due 7/2020)(C) Machinery – 3.0% Arc Drilling Holdings LLC – Line of Credit, $1,000 available (L + 8.0%, 9.6% Cash, Due 11/2020)(I) Arc Drilling Holdings LLC – Term Debt (L + 9.5%, 11.1% Cash, Due 11/2022)(I) Precision International, LLC – Term Debt (10.0% PIK, Due 9/2021)(C)(F) Oil and Gas – 16.9% Impact! Chemical Technologies, Inc. – Line of Credit, $2,164 available (L + 8.8%, 10.3% Cash, Due 12/2020)(I) Impact! Chemical Technologies, Inc. – Term Debt (L + 8.8%, 10.8% Cash, Due 12/2020)(I) WadeCo Specialties, Inc. – Line of Credit, $2,425 available (L + 7.0%, 8.6% Cash, Due 4/2018)(C) WadeCo Specialties, Inc. – Term Debt (L + 7.0% 8.6% Cash, Due 3/2019)(C) WadeCo Specialties, Inc. – Term Debt (L + 9.0%, 12.0% Cash, Due 3/2019)(C) Personal andNon-Durable Consumer Products (Manufacturing Only) – 2.8% Canopy Safety Brands, LLC – Line of Credit, $500 available (L + 6.5%, 8.1% Cash, Due 9/2019)(C) Canopy Safety Brands, LLC – Term Debt (L + 9.5%, 11.1% Cash, Due 9/2021)(C) Printing and Publishing – 0.0% Chinese Yellow Pages Company – Line of Credit, $0 available (PRIME + 4.0%, 8.5% Cash, Due 2/2015)(E)(V) Telecommunications – 18.3% Applied Voice & Speech Technologies, Inc. – Term Debt (L + 9.3%, 10.8% Cash, Due 10/2022)(I) B+T Group Acquisition Inc.(S) – Term Debt (L + 11.0%, 13.0% Cash, NetFortris Corp. – Term Debt (L + 8.4%, 10.0% Cash, Due 2/2021)(C) Total Secured First Lien Debt GLADSTONE CAPITAL CORPORATIONCONSOLIDATED SCHEDULE OF INVESTMENTSDECEMBER 31, 2017(DOLLAR AMOUNTS IN THOUSANDS)(UNAUDITED) Principal/
Shares/
Units(J)(X) Cost Fair
Value $ 4,140 $ 4,140 $ 3,312 — — — 6,600 6,600 6,666 6,600 6,666 1,035 1,035 1,035 1,000 1,000 1,000 2,035 2,035 23,000 23,000 23,690 8,902 8,902 9,192 1,450 1,450 1,431 1,600 1,600 1,511 9,000 9,000 8,531 43,952 44,355 — — — — — — 12,000 12,000 12,030 7,353 7,353 7,537 19,353 19,567 — — — 5,880 5,880 5,880 830 830 822 6,710 6,702 336 336 336 20,000 20,000 20,000 575 575 580 10,191 10,191 10,292 7,000 7,000 7,035 38,102 38,243 — — — 6,500 6,500 6,598 6,500 6,598 107 107 — 11,000 11,000 11,000
Due 12/2019)(C) 6,000 6,000 5,978 24,000 24,000 24,420 41,000 41,398 $ 168,499 $ 168,876 Cost Fair Value 25,500 25,500 25,500 20,180 20,144 19,770 — — — 9,000 9,000 9,000 — — — 5,750 5,750 5,707 1,650 1,650 1,669 200 200 197 10,000 9,972 10,036 1,600 1,596 1,606 134,673 130,913 Healthcare, Education, and Childcare – 29.6% — — — 32,560 32,560 32,560 1,727 1,727 1,761 15,972 15,972 16,292 3,217 3,217 3,281 28,000 27,970 27,922 5,000 4,995 4,986 2,000 2,000 2,051 23,000 23,000 23,586 — — — 400 400 397 11,000 11,000 10,927 122,841 123,763 Machinery – 1.5% — — — 6,023 6,023 6,013 6,023 6,013 Oil and Gas – 0.1% 325 325 325 Telecommunications – 0.9% 1,200 1,200 634 6,000 6,000 3,172 7,200 3,806 Total Secured First Lien Debt $ 536,566 $ 529,003 Secured Second Lien Debt – 28.5% Automobile – 3.9% $ 12,144 $ 12,118 $ 12,134 4,018 4,018 4,018 16,136 16,152 Beverage, Food, and Tobacco – 0.7% 3,683 3,683 2,910
GLADSTONE CAPITAL CORPORATION
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
DECEMBER 31, 2017
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
Company and Investment(A)(B)(W)(Y) | Principal/ Shares/ Units(J)(X) | Cost | Fair Value | |||||||||
Secured Second Lien Debt – 65.1% | ||||||||||||
Automobile – 2.2% | ||||||||||||
Sea Link International IRB, Inc. – Term Debt (11.3% Cash, Due 3/2023)(C)(F) | $ | 5,000 | $ | 4,976 | $ | 5,031 | ||||||
Beverage, Food, and Tobacco – 3.0% | ||||||||||||
The Mochi Ice Cream Company – Term Debt (L + 10.5%, 12.1% Cash, Due 1/2021)(C) | 6,750 | 6,750 | 6,826 | |||||||||
Cargo Transportation – 5.9% | ||||||||||||
AG Transportation Holdings, LLC. – Term Debt (L + 10.0%, 13.3% Cash, Due 3/2020)(C) | 13,000 | 13,000 | 13,098 | |||||||||
Chemicals, Plastics, and Rubber – 0.4% | ||||||||||||
Vertellus Holdings LLC – Term Debt (L + 12.0%, 13.6% Cash, Due 10/2021)(C) | 1,099 | 1,099 | 922 | |||||||||
Diversified/Conglomerate Manufacturing – 9.6% | ||||||||||||
Alloy Die Casting Co.(S) – Term Debt (L + 11.5%, 13.5% Cash, Due 4/2021)(C)(H) | 5,235 | 5,235 | 3,350 | |||||||||
Alloy Die Casting Co.(S) – Term Debt (L + 11.5%, 13.5% Cash, Due 4/2021)(C)(H) | 75 | 75 | 48 | |||||||||
Alloy Die Casting Co.(S) – Term Debt (Due 4/2021)(C)(P) | 390 | 390 | 252 | |||||||||
United Flexible, Inc. – Term Debt (L + 9.5%, 11.1% Cash, 2.0% PIK, Due 2/2022)(C) | 18,085 | 18,005 | 18,107 | |||||||||
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| 23,705 | 21,757 | |||||||||||
Diversified/Conglomerate Service – 20.5% | ||||||||||||
DigiCert Holdings, Inc. – Term Debt (L + 8.0%, 9.6% Cash, Due 10/2025)(D) | 5,000 | 4,975 | 5,013 | |||||||||
Gray Matter Systems, LLC – Delayed Draw Term Loan, $2,000 available (12.0% Cash, Due 11/2023)(F)(I) | — | — | — | |||||||||
Gray Matter Systems, LLC – Term Debt (12.0% Cash, Due 11/2023)(F)(I) | 7,500 | 7,500 | 7,500 | |||||||||
Keystone Acquisition Corp. – Term Debt (L + 9.3%, 10.9% Cash, Due 5/2025)(D)(U) | 4,000 | 3,924 | 3,980 | |||||||||
LDiscovery, LLC – Term Debt (L + 10.0%, 11.6% Cash, Due 12/2023)(D) | 5,000 | 4,820 | 4,000 | |||||||||
Red Ventures, LLC – Term Debt (L + 8.0%, 9.6% Cash, Due 11/2025)(D) | 3,625 | 3,566 | 3,625 | |||||||||
TapRoot Partners, Inc. – Term Debt (L + 10.3%, 11.8% Cash, Due 10/2022)(C) | 22,000 | 22,000 | 22,220 | |||||||||
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| |||||||
| 46,785 | 46,338 | |||||||||||
Healthcare, education, and childcare – 8.0% | ||||||||||||
Medical Solutions Holdings, Inc. – Term Debt (L + 8.3%, 9.8% Cash, Due 12/2023)(D) | 3,000 | 2,957 | 2,970 | |||||||||
Merlin International, Inc. – Term Debt (L + 10.0%, 11.6% Cash, Due 8/2022)(C) | 10,000 | 10,000 | 10,225 | |||||||||
NetSmart Technologies, Inc. – Term Debt (L + 9.5%, 11.1% Cash, Due 10/2023)(D) | 3,660 | 3,610 | 3,660 | |||||||||
New Trident Holdcorp, Inc. – Term Debt (L + 10.0%, 11.7% PIK, Due 7/2020)(D)(U) | 4,000 | 4,000 | 1,191 | |||||||||
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| 20,567 | 18,046 | |||||||||||
Home and Office Furnishings, Housewares and Durable Consumer Products – 4.5% | ||||||||||||
Belnick, Inc. – Term Debt (11.0% Cash, Due 8/2023)(C)(F) | 10,000 | 10,000 | 10,150 | |||||||||
Hotels, Motels, Inns, and Gaming – 3.2% | ||||||||||||
Vacation Rental Pros Property Management, LLC – Term Debt (L + 10.0%, 11.6% Cash, 3.0% PIK, | 7,199 | 7,199 | 6,938 | |||||||||
Oil and Gas – 7.0% | ||||||||||||
Francis Drilling Fluids, Ltd. – Term Debt (L + 10.4%, 11.9% PIK, Due 4/2020)(C) | 17,245 | 17,128 | 10,766 | |||||||||
Francis Drilling Fluids, Ltd. – Term Debt (L + 9.3%, 10.8% PIK, Due 4/2020)(C) | 7,945 | 7,891 | 4,954 | |||||||||
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| 25,019 | 15,720 | |||||||||||
Telecommunications – 0.4% | ||||||||||||
Neustar, Inc. – Term Debt (L + 8.0%, 9.6% Cash, Due 8/2025)(D) | 1,000 | 1,000 | 1,008 | |||||||||
Textiles and Leather – 0.4% | ||||||||||||
ABG Intermediate Holdings 2 LLC – Term Debt (L + 7.8%, 9.4% Cash, Due 9/2025)(D)(U) | 1,000 | 1,000 | 1,010 | |||||||||
|
|
|
| |||||||||
Total Secured Second Lien Debt | $ | 161,100 | $ | 146,844 | ||||||||
|
|
|
| |||||||||
Unsecured Debt – 1.5% | ||||||||||||
Healthcare, education, and childcare – 1.5% | ||||||||||||
Edmentum Ultimate Holdings, LLC – Term Debt (10.0% PIK, Due 6/2020)(C)(F) | $ | 3,352 | $ | 3,352 | $ | 3,356 | ||||||
Preferred Equity – 1.9% | ||||||||||||
Automobile – 0.1% | ||||||||||||
Meridian Rack & Pinion, Inc. (S)– Preferred Stock(E)(G) | 1,449 | $ | 1,449 | $ | 161 | |||||||
Buildings and Real Estate – 0.3% | ||||||||||||
GFRC Holdings, LLC – Preferred Stock(E)(G) | 1,000 | 1,025 | 674 | |||||||||
Cost Fair Value Diversified/Conglomerate Manufacturing – 8.5% 2,048 2,048 2,048 30,000 30,000 29,334 5,000 4,863 4,222 36,911 35,604 Diversified/Conglomerate Service – 4.0% 3,000 2,977 2,820 13,714 13,651 13,989 16,628 16,809 Healthcare, Education, and Childcare – 6.6% 28,800 28,800 27,495 Oil and Gas – 4.8% 20,265 20,130 20,176 Total Secured Second Lien Debt $ 122,288 $ 119,146 Unsecured Debt – 0.0% Diversified/Conglomerate Service – 0.0% $ 198 $ 198 $ 23 Preferred Equity – 5.9% Automobile – 0.1% 98,039 $ 98 $ 192 Beverage, Food, and Tobacco – 1.7% 7,000,000 7,000 7,000 75 75 148 7,075 7,148 Buildings and Real Estate – 0.0% 1,000 1,025 — Diversified/Conglomerate Manufacturing – 0.1% 2,500 2,500 551 Diversified/Conglomerate Service – 2.8% 766 500 — 168 — — 7,000,000 7,000 8,904 2,000,000 2,000 2,000 242,105 750 620 10,250 11,524 Healthcare, Education, and Childcare – 0.5% 1,329,054 2,251 2,159 Oil and Gas – 0.7% 6,350 6,350 791 972,569 488 2,224 6,838 3,015 Telecommunications – 0.0% 6,130 2,024 — Total Preferred Equity $ 32,061 $ 24,589 Common Equity – 8.5% Aerospace and Defense – 6.2% 4,283 $ 4,283 $ 25,205 100 1,000 756 5,283 25,961 Automobile – 0.1% 823,333 823 219 Beverage, Food, and Tobacco – 0.7% 0.4 % — — 1,500,000 1,500 1,615
GLADSTONE CAPITAL CORPORATION
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
DECEMBER 31, 2017
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
Company and Investment(A)(B)(W)(Y) | Principal/ Shares/ Units(J)(X) | Cost | Fair Value | |||||||||
Diversified/Conglomerate Manufacturing – 0.3% | ||||||||||||
Alloy Die Casting, Co.(S)– Preferred Stock(E)(G) | 2,192 | 2,192 | — | |||||||||
United Flexible, Inc. – Preferred Stock(E)(G) | 538 | 538 | 631 | |||||||||
|
|
|
| |||||||||
| 2,730 | 631 | |||||||||||
Diversified/Conglomerate Service – 0.2% | ||||||||||||
Frontier Financial Group Inc. – Preferred Stock(E)(G) | 766 | 500 | 500 | |||||||||
Frontier Financial Group Inc. – Preferred Stock Warrant(E)(G) | 168 | — | — | |||||||||
|
|
|
| |||||||||
| 500 | 500 | |||||||||||
Oil and Gas – 0.8% | ||||||||||||
Francis Drilling Fluids, Ltd. – Preferred Equity Units(E)(G) | 1,656 | 1,215 | — | |||||||||
WadeCo. Specialties, Inc. – Preferred Stock(E)(G) | 1,000 | 618 | 2,098 | |||||||||
|
|
|
| |||||||||
| 1,833 | 2,098 | |||||||||||
Telecommunications – 0.2% | ||||||||||||
B+T Group Acquisition, Inc.(S) – Preferred Stock(E)(G)(J) | 5,503 | 1,799 | — | |||||||||
NetFortris Corp. – Preferred Stock(E)(G) | 1,250,000 | 125 | 375 | |||||||||
|
|
|
| |||||||||
| 1,924 | 375 | |||||||||||
|
|
|
| |||||||||
Total Preferred Equity | $ | 9,461 | $ | 4,439 | ||||||||
|
|
|
| |||||||||
Common Equity – 3.0% | ||||||||||||
Aerospace and Defense – 0.3% | ||||||||||||
FedCap Partners, LLC – Class A Membership Units ($0 Uncalled | 80 | $ | 1,634 | $ | 751 | |||||||
Automobile – 0.2% | ||||||||||||
Sea Link International IRB, Inc. – Common Equity Units(E)(G) | 494,902 | 495 | 378 | |||||||||
Beverage, Food, and Tobacco – 0.2% | ||||||||||||
The Mochi Ice Cream Company – Common Stock(E)(G) | 450 | 450 | — | |||||||||
Triple H Food Processors, LLC – Common Stock(E)(G) | 250,000 | 250 | 442 | |||||||||
|
|
|
| |||||||||
| 700 | 442 | |||||||||||
Buildings and Real Estate – 0.0% | ||||||||||||
GFRC Holdings, LLC – Common Stock Warrants(E)(G) | 45.0 | % | — | — | ||||||||
Cargo Transportation – 0.0% | ||||||||||||
AG Transportation Holdings, LLC – Member Profit Participation(E)(G) | 18.0 | % | 1,000 | — | ||||||||
AG Transportation Holdings, LLC – Profit Participation Warrants(E)(G) | 12.0 | % | 244 | — | ||||||||
|
|
|
| |||||||||
| 1,244 | — | |||||||||||
Chemicals, Plastics, and Rubber – 0.2% | ||||||||||||
Vertellus Holdings LLC – Common Stock Units(E)(G) | 879,121 | 3,017 | 527 | |||||||||
Diversified/Conglomerate Manufacturing – 0.0% | ||||||||||||
Alloy Die Casting, Co.(S) – Common Stock(E)(G) | 270 | 18 | — | |||||||||
United Flexible, Inc. – Common Stock(E)(G) | 1,158 | 148 | — | |||||||||
|
|
|
| |||||||||
| 166 | — | |||||||||||
Healthcare, education, and childcare – 1.1% | ||||||||||||
Edmentum Ultimate Holdings, LLC – Common Stock(E)(G) | 21,429 | 2,636 | — | |||||||||
EL Academies, Inc. – Common Stock(E)(G) | 500 | 500 | 432 | |||||||||
Leeds Novamark Capital I, L.P. – Limited Partnership Interest ($986 uncalled capital commitment)(G)(L)(R) | 3.5 | % | 2,010 | 2,098 | ||||||||
|
|
|
| |||||||||
| 5,146 | 2,530 | |||||||||||
Machinery – 0.7% | ||||||||||||
Arc Drilling Holdings LLC – Common Stock(I)(G) | 16.7 | % | 1,500 | 1,500 | ||||||||
Precision International, LLC – Membership Unit Warrant(E)(G) | 33.3 | % | — | 41 | ||||||||
|
|
|
| |||||||||
| 1,500 | 1,541 | |||||||||||
Oil and Gas – 0.1% | ||||||||||||
Francis Drilling Fluids, Ltd. – Common Equity Units(E)(G) | 1,656 | 1 | — | |||||||||
W3, Co. – Common Equity(D)(G) | 435 | 499 | 131 | |||||||||
|
|
|
| |||||||||
| 500 | 131 | |||||||||||
Personal andNon-Durable Consumer Products (Manufacturing Only) – 0.2% | ||||||||||||
Canopy Safety Brands, LLC – Participation Warrant(E)(G) | 1 | 500 | 325 | |||||||||
Funko Acquisition Holdings, LLC(S) – Common Units(G)(T) | 67,873 | 166 | 157 | |||||||||
|
|
|
| |||||||||
| 666 | 482 | |||||||||||
Telecommunications – 0.0% | ||||||||||||
NetFortris Corp. – Common Stock Warrant(E)(G) | 1 | 1 | — | |||||||||
|
|
|
| |||||||||
Total Common Equity | $ | 15,069 | $ | 6,782 | ||||||||
|
|
|
| |||||||||
TotalNon-Control/Non-Affiliate Investments | $ | 357,481 | $ | 330,297 | ||||||||
|
|
|
| |||||||||
Cost Fair Value 250,000 250 1,248 1,750 2,863 Buildings and Real Estate – 0.0% 45 % — — Diversified/Conglomerate Manufacturing – 0.0% 6,000 3,000 — 306 — — 2,000,000 2,000 — 5,000 — Diversified/Conglomerate Service – 0.1% 532 532 338 Healthcare, Education, and Childcare – 1.4% 10,667 19 3,563 767 767 1,561 3.5 % — 246 2,000,000 2,000 623 2,786 5,993 Machinery – 0.0% 15,000 1,500 203 Oil and Gas – 0.0% 6,233 — — 435 499 146 499 146 Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0% 4,239 22 22 Telecommunications – 0.0% 1.5 % — — Total Common Equity $ 18,195 $ 35,745 Total Non-Control/Non-Affiliate Investments $ 709,308 $ 708,506 Secured First Lien Debt – 0.7% Diversified/Conglomerate Manufacturing – 0.7% $ 6,140 $ 6,140 $ 2,829 Preferred Equity – 1.2% Diversified/Conglomerate Manufacturing – 0.0% 5,466 $ 5,466 $ — Diversified/Conglomerate Service – 1.0% 3,840,000 3,840 4,210 Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.2% 500,000 500 923 Total Preferred Equity $ 9,806 $ 5,133 Common Equity – 0.7% Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.7% 1,170,370 $ 800 $ 2,754 Total Affiliate Investments $ 16,746 $ 10,716 Secured First Lien Debt – 3.5% Diversified/Conglomerate Manufacturing – 0.9% $ 4,007 $ 4,007 $ 4,007 Personal and Non-Durable Consumer Products (Manufacturing Only) – 2.5% 1,468 1,468 1,363 9,800 9,800 9,100 11,268 10,463
GLADSTONE CAPITAL CORPORATION
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
DECEMBER
GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2023 (UNAUDITED) (DOLLAR AMOUNTS IN THOUSANDS) | ||||||||||||||||||||
Company and Investment(A)(B)(K)(Q) | Principal/ Shares/ Units(J)(I) | Cost | Fair Value | |||||||||||||||||
| Printing and Publishing – 0.1% | ||||||||||||||||||||
TNCP Intermediate HoldCo, LLC – Line of Credit, $1,700 available (8.0% Cash, Due 10/2024)(E)(F) | 300 | 300 | 300 | |||||||||||||||||
| Total Secured First Lien Debt | $ | 15,575 | $ | 14,770 | ||||||||||||||||
| Secured Second Lien Debt – 1.8% | ||||||||||||||||||||
| Automobile– 1.8% | ||||||||||||||||||||
Defiance Integrated Technologies, Inc. – Term Debt (S + 9.6%, 15.0% Cash, Due 5/2026)(E) | $ | 7,425 | $ | 7,425 | $ | 7,425 | ||||||||||||||
| Preferred Equity – 0.0% | ||||||||||||||||||||
| Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0% | ||||||||||||||||||||
WB Xcel Holdings, LLC – Preferred Stock(E)(G) | 333 | $ | 2,750 | $ | — | |||||||||||||||
| Common Equity – 2.1% | ||||||||||||||||||||
| Automobile– 0.9% | ||||||||||||||||||||
Defiance Integrated Technologies, Inc. – Common Stock(E)(G) | 33,321 | $ | 580 | $ | 3,805 | |||||||||||||||
| Diversified/Conglomerate Manufacturing – 0.3% | ||||||||||||||||||||
Lonestar EMS, LLC – Common Units(E)(G) | 100 | % | 6,750 | 1,131 | ||||||||||||||||
| Printing and Publishing – 0.9% | ||||||||||||||||||||
TNCP Intermediate HoldCo, LLC – Common Equity Units(E)(G) | 790,000 | 500 | 3,632 | |||||||||||||||||
| Total Common Equity | $ | 7,830 | $ | 8,568 | ||||||||||||||||
| Total Control Investments | $ | 33,580 | $ | 30,763 | ||||||||||||||||
| TOTAL INVESTMENTS – 179.5% | $ | 759,634 | $ | 749,985 | ||||||||||||||||
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
Company and Investment(A)(B)(W)(Y) | Principal/ Shares/ Units(J)(X) | Cost | Fair Value | |||||||||
AFFILIATE INVESTMENTS(N)– 19.4% | ||||||||||||
Secured First Lien Debt – 8.9% | ||||||||||||
Diversified/Conglomerate Manufacturing – 8.9% | ||||||||||||
Edge Adhesives Holdings, Inc. (S) – Term Debt (L + 10.5%, 12.5% Cash, Due 2/2019)(C) | $ | 6,200 | $ | 6,200 | $ | 5,781 | ||||||
Edge Adhesives Holdings, Inc. (S) – Term Debt (L + 11.8%, 13.8% Cash, Due 2/2019)(C) | 1,600 | 1,600 | 1,500 | |||||||||
LWO Acquisitions Company LLC – Line of Credit, $0 available (L + 5.5%. 7.1% Cash, 2.0% PIK, Due 12/2019)(C) | 2,762 | 2,761 | 2,555 | |||||||||
LWO Acquisitions Company LLC – Term Debt (L + 8.5%, 10.1% Cash, 2.0% PIK, Due 12/2019)(C) | 10,998 | 10,979 | 10,173 | |||||||||
|
|
|
| |||||||||
| 21,540 | 20,009 | |||||||||||
|
|
|
| |||||||||
Total Secured First Lien Debt | $ | 21,540 | $ | 20,009 | ||||||||
|
|
|
| |||||||||
Secured Second Lien Debt – 7.4% | ||||||||||||
Diversified Natural Resources, Precious Metals and Minerals – 7.4% | ||||||||||||
Lignetics, Inc. – Term Debt (L + 9.0%, 12.0% Cash, Due 11/2022)(C) | $ | 6,000 | $ | 6,000 | $ | 5,820 | ||||||
Lignetics, Inc. – Term Debt (L + 9.0%, 12.0% Cash, Due 11/2022)(C) | 8,000 | 8,000 | 7,760 | |||||||||
Lignetics, Inc. – Term Debt (L + 9.0%, 12.0% Cash, Due 11/2022)(C) | 3,300 | 3,300 | 3,201 | |||||||||
|
|
|
| |||||||||
| 17,300 | 16,781 | |||||||||||
|
|
|
| |||||||||
Total Secured Second Lien Debt | $ | 17,300 | $ | 16,781 | ||||||||
|
|
|
| |||||||||
Unsecured Debt – 0.0% | ||||||||||||
Diversified/Conglomerate Manufacturing – 0.0% | ||||||||||||
LWO Acquisitions Company LLC – Term Debt (Due 12/2019)(C)(P) | $ | 95 | $ | 95 | $ | 88 | ||||||
Preferred Equity – 0.5% | ||||||||||||
Diversified/Conglomerate Manufacturing – 0.2% | ||||||||||||
Edge Adhesives Holdings, Inc. (S) – Preferred Stock(E)(G) | 2,516 | $ | 2,516 | $ | 385 | |||||||
Diversified Natural Resources, Precious Metals and Minerals – 0.3% | ||||||||||||
Lignetics, Inc. – Preferred Stock(E)(G) | 40,000 | 800 | 837 | |||||||||
|
|
|
| |||||||||
Total Preferred Equity | $ | 3,316 | $ | 1,222 | ||||||||
|
|
|
| |||||||||
Common Equity – 2.6% | ||||||||||||
Diversified/Conglomerate Manufacturing – 0.0% | ||||||||||||
LWO Acquisitions Company LLC – Common Units(E)(G) | 921,000 | $ | 921 | $ | — | |||||||
Diversified Natural Resources, Precious Metals and Minerals – 0.5% | ||||||||||||
Lignetics, Inc. – Common Stock(E)(G) | 152,603 | 1,855 | 1,126 | |||||||||
Textiles and Leather – 2.1% | ||||||||||||
Targus Cayman HoldCo, Ltd. – Common Stock(E)(G) | 3,076,414 | 5,009 | 4,630 | |||||||||
|
|
|
| |||||||||
Total Common Equity | $ | 7,785 | $ | 5,756 | ||||||||
|
|
|
| |||||||||
Total Affiliate Investments | $ | 50,036 | $ | 43,856 | ||||||||
|
|
|
| |||||||||
CONTROL INVESTMENTS(O) – 8.2% | ||||||||||||
Secured First Lien Debt – 3.3% | ||||||||||||
Machinery – 1.8% | ||||||||||||
PIC 360, LLC – Term Debt (14.0%, Due 12/2017)(E)(F) | $ | 4,000 | $ | 4,000 | $ | 4,000 | ||||||
Printing and Publishing – 1.5% | ||||||||||||
Sunshine Media Holdings – Line of Credit, $672 available (8.0% Cash, Due 5/2018)(E)(F) | 1,328 | 1,328 | 1,328 | |||||||||
Sunshine Media Holdings – Term Debt (8.0% Cash, Due 5/2018)(E)(F)(H) | 5,000 | 3,525 | 585 | |||||||||
Sunshine Media Holdings – Term Debt (L + 3.8%, 5.3% Cash, Due 5/2018)(E)(H) | 11,948 | 8,401 | 1,397 | |||||||||
Sunshine Media Holdings – Term Debt (L + 4.0%, 5.6% Cash, Due 5/2018)(E)(H) | 10,700 | 10,700 | — | |||||||||
|
|
|
| |||||||||
| 23,954 | 3,310 | |||||||||||
|
|
|
| |||||||||
Total Secured First Lien Debt | $ | 27,954 | $ | 7,310 | ||||||||
|
|
|
| |||||||||
Secured Second Lien Debt – 3.6% | ||||||||||||
Automobile – 3.6% | ||||||||||||
Defiance Integrated Technologies, Inc. – Term Debt (L + 9.5%, 11.1% Cash, Due 8/2023)(E) | $ | 8,065 | $ | 8,065 | $ | 8,065 | ||||||
2023, our investments in Leeds Novamark Capital I, L.P. (“Leeds”) and Funko Acquisition Holdings, LLC (“Funko”) are considered non-qualifying assets under Section 55 of the 1940 Act. Such non-qualifying assets represent less than 0.1% of total investments, at fair value, as of December 31, 2023.
GLADSTONE CAPITAL CORPORATION
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
DECEMBER
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
Company and Investment(A)(B)(W)(Y) | Principal/ Shares/ Units(J)(X) | Cost | Fair Value | |||||||||
Preferred Equity – 0.0% | ||||||||||||
Printing and Publishing – 0.0% | ||||||||||||
Sunshine Media Holdings – Preferred Stock(E)(G)(J) | 15,270 | $ | 5,275 | $ | — | |||||||
Common Equity – 1.3% | ||||||||||||
Automobile – 1.2% | ||||||||||||
Defiance Integrated Technologies, Inc. – Common Stock(E)(G) | 33,321 | $ | 580 | $ | 2,643 | |||||||
Machinery – 0.1% | ||||||||||||
PIC 360, LLC – Common Equity Units(E)(G) | 1 | 1 | 259 | |||||||||
Printing and Publishing – 0.0% | ||||||||||||
Sunshine Media Holdings – Common Stock(E)(G) | 1,867 | 740 | — | |||||||||
Sunshine Media Holdings – Common Stock Warrants(E)(G) | 72 | — | — | |||||||||
|
|
|
| |||||||||
| 740 | — | |||||||||||
|
|
|
| |||||||||
Total Common Equity | $ | 1,321 | $ | 2,902 | ||||||||
|
|
|
| |||||||||
Total Control Investments | $ | 42,615 | $ | 18,277 | ||||||||
|
|
|
| |||||||||
TOTAL INVESTMENTS – 173.9% | $ | 450,132 | $ | 392,430 | ||||||||
|
|
|
| |||||||||
2023.
GLADSTONE CAPITAL CORPORATION
CONSOLIDATED SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2017
(DOLLAR AMOUNTS IN THOUSANDS)
Company and Investment(A)(B)(W)(Z) | Principal/ Shares/ Units(J)(X) | Cost | Fair Value | |||||||||
NON-CONTROL/NON-AFFILIATE INVESTMENTS(M) – 132.4% | ||||||||||||
Secured First Lien Debt – 67.2% | ||||||||||||
Automobile – 1.7% | ||||||||||||
Meridian Rack & Pinion, Inc. (S) – Term Debt (L + 11.5% 13.5% Cash, Due 12/2018) (C) | $ | 4,140 | $ | 4,140 | $ | 3,643 | ||||||
Beverage, Food, and Tobacco – 3.2% | ||||||||||||
Triple H Food Processors, LLC - Line of Credit, $1,500 available (L + 6.8%, 8.0% Cash, Due 8/2018)(C) | — | — | — | |||||||||
Triple H Food Processors, LLC – Term Debt (L + 8.3%, 9.5% Cash, Due 8/2020)(C) | 6,800 | 6,800 | 6,928 | |||||||||
|
|
|
| |||||||||
| 6,800 | 6,928 | |||||||||||
Buildings and Real Estate – 1.0% | ||||||||||||
GFRC Holdings, LLC – Line of Credit, $20 available (L + 8.0%, 9.2% Cash, Due 9/2018)(E) | 1,180 | 1,180 | 1,180 | |||||||||
GFRC Holdings, LLC – Term Debt (L + 8.0%, 9.2% Cash, Due 9/2018)(E) | 1,000 | 1,000 | 1,000 | |||||||||
|
|
|
| |||||||||
| 2,180 | 2,180 | |||||||||||
Diversified/Conglomerate Service – 20.1% | ||||||||||||
IA Tech, LLC – Term Debt (L + 11.0%, 12.2% Cash, Due 6/2021)(C) | 23,000 | 23,000 | 23,633 | |||||||||
Travel Sentry, Inc. – Term Debt (L + 9.0%, 10.3% Cash, Due 12/2021)(C)(U) | 8,902 | 8,902 | 9,170 | |||||||||
Vision Government Solutions, Inc. – Line of Credit, $0 available (L + 8.8%, 10.0% Cash, Due 1/2019)(C) | 1,450 | 1,450 | 1,420 | |||||||||
Vision Government Solutions, Inc. – Delayed Draw Term Loan, $900 available (10.0% Cash, Due 1/2019)(C)(F) | 1,600 | 1,600 | 1,485 | |||||||||
Vision Government Solutions, Inc. – Term Debt (L + 8.8%, 10.0% Cash, Due 1/2019)(C) | 9,000 | 9,000 | 8,390 | |||||||||
|
|
|
| |||||||||
| 43,952 | 44,098 | |||||||||||
Diversified/Conglomerate Manufacturing – 1.6% | ||||||||||||
Alloy Die Casting Co.(S) – Term Debt (L + 11.5%, 13.5% Cash, Due 10/2018)(C)(H) | 5,235 | 5,235 | 3,272 | |||||||||
Alloy Die Casting Co.(S) – Term Debt (L + 11.5%, 13.5% Cash, Due 10/2018)(C)(H) | 75 | 75 | 47 | |||||||||
Alloy Die Casting Co.(S) – Term Debt (Due 10/2018)(C)(P) | 390 | 390 | 246 | |||||||||
|
|
|
| |||||||||
| 5,700 | 3,565 | |||||||||||
Healthcare, education, and childcare – 9.8% | ||||||||||||
EL Academies, Inc. – Line of Credit (L + 9.5%, 10.7% Cash, Due 8/2020)(I) | — | — | — | |||||||||
EL Academies, Inc. – Delayed Draw Term Loan (L + 9.5%, 10.7% Cash, Due 8/2022)(I) | — | — | — | |||||||||
EL Academies, Inc. – Term Debt (L + 9.5%, 10.7% Cash, Due 8/2022)(I) | 12,000 | 12,000 | 12,000 | |||||||||
TWS Acquisition Corporation – Term Debt (L + 8.0%, 9.2% Cash, Due 7/2020)(C) | 9,432 | 9,432 | 9,609 | |||||||||
|
|
|
| |||||||||
| 21,432 | 21,609 | |||||||||||
Leisure, Amusement, Motion Pictures, Entertainment – 3.6% | ||||||||||||
Flight Fit N Fun LLC – Term Debt (L + 14.0%, 15.2% Cash, Due 9/2020)(Q)(Y) | 7,800 | 7,800 | 7,800 | |||||||||
Machinery – 0.4% | ||||||||||||
Precision International, LLC – Term Debt (10.0% PIK, Due 9/2021)(C)(F) | 808 | 808 | 798 | |||||||||
Oil and Gas – 9.2% | ||||||||||||
WadeCo Specialties, Inc. – Line of Credit, $425 available (L + 7.0%, 8.2% Cash, Due 4/2018)(E) | 2,575 | 2,575 | 2,575 | |||||||||
WadeCo Specialties, Inc. – Term Debt (L + 7.0%, 8.2% Cash, Due 3/2019)(E) | 10,441 | 10,427 | 10,440 | |||||||||
WadeCo Specialties, Inc. – Term Debt (L + 9.0%, 12.0% Cash, Due 3/2019)(E) | 7,000 | 7,000 | 7,000 | |||||||||
|
|
|
| |||||||||
| 20,002 | 20,015 | |||||||||||
Personal andNon-Durable Consumer Products (Manufacturing Only) – 3.0% | ||||||||||||
Canopy Safety Brands, LLC – Line of Credit, $500 available (L + 6.5%, 7.7% Cash, Due 9/2019)(C) | — | — | — | |||||||||
Canopy Safety Brands, LLC – Term Debt (L + 9.5%, 10.7% Cash, Due 9/2021)(C) | 6,600 | 6,600 | 6,616 | |||||||||
|
|
|
| |||||||||
| 6,600 | 6,616 | |||||||||||
Printing and Publishing – 0.0% | ||||||||||||
Chinese Yellow Pages Company – Line of Credit, $0 available (PRIME + 4.0%, 8.0% Cash, Due 2/2015)(E)(V) | 107 | 107 | — | |||||||||
Telecommunications – 13.6% | ||||||||||||
B+T Group Acquisition Inc.(S) – Term Debt (L + 11.0%, 13.0% Cash, Due 12/2019)(C) | 6,000 | 6,000 | 5,955 | |||||||||
NetFortris Corp. – Line of Credit, $2,000 available (L + 8.4%, 9.6% Cash, Due 11/2017)(C) | — | — | — | |||||||||
NetFortris Corp. – Term Debt (L + 8.4%, 9.6% Cash, Due 2/2021)(C) | 24,000 | 24,000 | 24,240 | |||||||||
|
|
|
| |||||||||
| 30,000 | 30,195 | |||||||||||
|
|
|
| |||||||||
Total Secured First Lien Debt | $ | 149,521 | $ | 147,447 | ||||||||
|
|
|
| |||||||||
Cost Fair Value Secured First Lien Debt – 120.3% Aerospace and Defense – 19.3% $ 30,048 $ 30,048 $ 30,048 17,738 17,738 17,294 1,450 1,450 1,434 30,284 29,961 29,944 79,197 78,720 Beverage, Food, and Tobacco – 17.8% — — — 7,970 7,970 7,850 23,460 23,460 23,108 — — — 3,000 3,000 2,865 17,000 17,000 16,235 — — — 10,200 10,133 9,715 13,500 13,500 13,095 75,063 72,868 Buildings and Real Estate – 0.5% 1,275 1,275 1,205 1,000 1,000 945 2,275 2,150 Diversified/Conglomerate Manufacturing – 27.9% — — — 21,500 21,500 19,726 — — — 27,154 27,154 26,000 20,000 20,000 19,800 11,768 11,768 10,900 978 978 980 1,108 1,108 1,111 14,888 14,577 14,925 — — — 20,747 20,747 20,436 117,832 113,878 Diversified/Conglomerate Service – 25.5% 11,550 11,519 11,291 205 205 113 5,915 5,915 3,253 22,289 22,289 21,397 500 500 499 12,200 12,200 12,170 6,911 6,911 6,894
GLADSTONE CAPITAL CORPORATION
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
SEPTEMBER 30, 2017
(DOLLAR AMOUNTS IN THOUSANDS)
Company and Investment(A)(B)(W)(Z) | Principal/ Shares/ Units(J)(X) | Cost | Fair Value | |||||||||
Secured Second Lien Debt – 59.1% | ||||||||||||
Automobile – 2.2% | ||||||||||||
Sea Link International IRB, Inc. – Term Debt (11.3%, Due 11/2021)(C)(F) | $ | 5,000 | $ | 4,975 | $ | 5,025 | ||||||
Beverage, Food, and Tobacco – 3.1% | ||||||||||||
The Mochi Ice Cream Company – Term Debt (L + 10.5%, 11.7% Cash, Due 1/2021)(C) | 6,750 | 6,750 | 6,809 | |||||||||
Cargo Transportation– 6.0% | ||||||||||||
AG Transportation Holdings, LLC. – Term Debt (L + 10.0%, 13.3% Cash, Due 3/2020) (C) | 13,000 | 13,000 | 13,081 | |||||||||
Chemicals, Plastics, and Rubber – 0.4% | ||||||||||||
Vertellus Holdings LLC – Term Debt (L + 12.0%, 13.2% Cash, Due 10/2021)(D) | 1,099 | 1,099 | 929 | |||||||||
Diversified/Conglomerate Service – 16.4% | ||||||||||||
DataPipe, Inc. – Term Debt (L + 8.0%, 9.2% Cash, Due 9/2019)(D)(Y) | 2,000 | 1,966 | 2,005 | |||||||||
HB Capital Resources, Ltd. – Term Debt (L + 10.3%, 11.5% Cash, Due 10/2022)(C) | 22,000 | 22,000 | 22,110 | |||||||||
Keystone Acquisition Corp.– Term Debt (L + 9.3%, 10.5% Cash, Due 5/2025)(D) | 4,000 | 3,922 | 3,960 | |||||||||
LDiscovery, LLC – Term Debt (L + 10.0%, 11.2% Cash, Due 12/2023)(D) | 5,000 | 4,815 | 4,550 | |||||||||
PSC Industrial Holdings Corp.– Term Debt (L + 8.3%, 9.5% Cash, Due 12/2021)(Q)(Y) | 3,500 | 3,452 | 3,500 | |||||||||
|
|
|
| |||||||||
| 36,155 | 36,125 | |||||||||||
Diversified/Conglomerate Manufacturing – 8.2% | ||||||||||||
United Flexible, Inc.– Term Debt (L + 9.5%, 10.7% Cash, 2.0% PIK, Due 2/2022)(C) | 17,993 | 17,909 | 17,903 | |||||||||
Healthcare, education, and childcare – 8.8% | ||||||||||||
Medical Solutions Holdings, Inc. – Term Debt (L + 8.3%, 9.5% Cash, Due 12/2023)(D) | 3,000 | 2,956 | 2,970 | |||||||||
Merlin International, Inc. – Term Debt (L + 10.0%, 11.2% Cash, Due 8/2022)(C) | 10,000 | 10,000 | 10,150 | |||||||||
NetSmart Technologies, Inc.– Term Debt (L + 9.5%, 10.7% Cash, Due 10/2023)(D) | 3,660 | 3,609 | 3,678 | |||||||||
New Trident Holdcorp, Inc.– Term Debt (L + 9.5%, 10.7% Cash, Due 7/2020)(D) | 4,000 | 4,000 | 2,412 | |||||||||
|
|
|
| |||||||||
| 20,565 | 19,210 | |||||||||||
Home and Office Furnishings, Housewares and Durable Consumer Products – 4.6% | ||||||||||||
Belnick, Inc. – Term Debt (11.0%, Due 8/2023)(C)(F) | 10,000 | 10,000 | 10,100 | |||||||||
Hotels, Motels, Inns, and Gaming – 3.2% | ||||||||||||
Vacation Rental Pros Property Management, LLC – Term Debt (L + 10.0%, 11.2% Cash, 3.0% PIK, Due 6/2023)(C) | 7,145 | 7,145 | 7,136 | |||||||||
Oil and Gas – 5.7% | ||||||||||||
Francis Drilling Fluids, Ltd. – Term Debt (L + 10.4%, 11.9% PIK, Due 4/2020)(C) | 16,739 | 16,611 | 8,626 | |||||||||
Francis Drilling Fluids, Ltd. – Term Debt (L + 9.3% 10.8% PIK, Due 4/2020)(C) | 7,733 | 7,673 | 3,931 | |||||||||
|
|
|
| |||||||||
| 24,284 | 12,557 | |||||||||||
Telecommunications – 0.5% | ||||||||||||
Neustar, Inc. – Term Debt (L + 8.0%, 9.2% Cash, Due 8/2025)(D) | 1,000 | 1,000 | 1,015 | |||||||||
|
|
|
| |||||||||
Total Secured Second Lien Debt | $ | 142,882 | $ | 129,890 | ||||||||
|
|
|
| |||||||||
Unsecured Debt – 1.5% | ||||||||||||
Healthcare, education, and childcare – 1.5% | ||||||||||||
Edmentum Ultimate Holdings, LLC – Term Debt (10.0% PIK, Due 6/2020)(C)(F) | $ | 3,324 | $ | 3,324 | $ | 3,324 | ||||||
Preferred Equity – 2.6% | ||||||||||||
Automobile – 0.1% | ||||||||||||
Meridian Rack & Pinion, Inc. (S)– Preferred Stock(E)(G) | 1,449 | $ | 1,449 | $ | 133 | |||||||
Buildings and Real Estate – 0.3% | ||||||||||||
GFRC Holdings, LLC – Preferred Stock(E)(G) | 1,000 | 1,025 | 824 | |||||||||
Diversified/Conglomerate Service – 0.2% | ||||||||||||
Frontier Financial Group Inc. – Preferred Stock(I)(G) | 766 | 500 | 500 | |||||||||
Frontier Financial Group Inc. – Preferred Stock Warrant(I)(G) | 168 | — | — | |||||||||
|
|
|
| |||||||||
| 500 | 500 | |||||||||||
Diversified/Conglomerate Manufacturing – 0.3% | ||||||||||||
Alloy Die Casting, Co.(S)– Preferred Stock(E)(G) | 2,192 | 2,192 | — | |||||||||
United Flexible, Inc.– Preferred Stock(E)(G) | 538 | 538 | 554 | |||||||||
|
|
|
| |||||||||
| 2,730 | 554 | |||||||||||
Leisure, Amusement, Motion Pictures, Entertainment – 0.6% | ||||||||||||
Flight Fit N Fun LLC – Preferred Stock(G)(Q)(Y) | 700,000 | 700 | 1,425 | |||||||||
Cost Fair Value 13,500 13,500 13,399 20,146 20,107 17,628 — — — 5,750 5,750 5,664 400 400 400 10,000 9,971 9,987 1,600 1,595 1,598 110,862 104,293 Healthcare, Education, and Childcare – 26.5% — — — 18,700 18,700 18,700 1,359 1,359 1,347 16,013 16,013 15,872 3,225 3,225 3,197 28,000 27,968 27,965 5,000 4,994 4,994 2,000 2,000 1,970 23,000 23,000 22,655 — — — 500 500 499 11,000 11,000 10,986 108,759 108,185 Machinery – 1.4% — — — 5,928 5,928 5,724 5,928 5,724 Telecommunications – 1.4% 1,200 1,200 978 6,000 6,000 4,890 7,200 5,868 Total Secured First Lien Debt $ 507,116 $ 491,686 Secured Second Lien Debt – 29.5% Automobile – 3.8% 12,083 12,053 11,675 4,000 4,000 4,000 16,053 15,675 Beverage, Food, and Tobacco – 0.6% 3,683 3,683 2,495 Diversified/Conglomerate Manufacturing – 8.9% 2,012 2,012 1,992 30,000 30,000 29,850 5,000 4,856 4,294 36,868 36,136 Diversified/Conglomerate Service – 4.0% 3,000 2,974 2,820
GLADSTONE CAPITAL CORPORATION
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
SEPTEMBER 30, 2017
(DOLLAR AMOUNTS IN THOUSANDS)
Company and Investment(A)(B)(W)(Z) | Principal/ Shares/ Units(J)(X) | Cost | Fair Value | |||||||||
Oil and Gas – 0.9% | ||||||||||||
Francis Drilling Fluids, Ltd. – Preferred Equity Units(E)(G) |
| 1,656 |
| 1,215 | — | |||||||
WadeCo. Specialties, Inc. – Preferred Stock(E)(G) | 1,000 | 618 | 2,000 | |||||||||
|
|
|
| |||||||||
| 1,833 | 2,000 | |||||||||||
Personal andNon-Durable Consumer Products (Manufacturing Only) – 0.1% | ||||||||||||
Funko Acquisition Holdings, LLC(S) – Preferred Equity Units(E)(G) | 260 | 167 | 159 | |||||||||
Telecommunications – 0.1% | ||||||||||||
B+T Group Acquisition, Inc.(S) – Preferred Stock(E)(G)(J) | 5,503 | 1,799 | 140 | |||||||||
|
|
|
| |||||||||
Total Preferred Equity | $ | 10,203 | $ | 5,735 | ||||||||
|
|
|
| |||||||||
Common Equity – 2.0% | ||||||||||||
Aerospace and Defense – 0.3% | ||||||||||||
FedCap Partners, LLC – Class A Membership Units ($0 Uncalled Commitment)(G)(K)(R) | 80 | $ | 1,634 | $ | 751 | |||||||
Automobile– 0.2% | ||||||||||||
Sea Link International IRB, Inc.– Common Equity Units(E)(G) | 494,902 | 495 | 362 | |||||||||
Beverage, Food, and Tobacco – 0.2% | ||||||||||||
The Mochi Ice Cream Company – Common Stock(E)(G) | 450 | 450 | — | |||||||||
Triple H Food Processors, LLC – Common Stock(E)(G) | 250,000 | 250 | 366 | |||||||||
|
|
|
| |||||||||
| 700 | 366 | |||||||||||
Buildings and Real Estate – 0.0% | ||||||||||||
GFRC Holdings, LLC – Common Stock Warrants(E)(G) | 45.0 | % | — | — | ||||||||
Cargo Transportation – 0.0% | ||||||||||||
AG Transportation Holdings, LLC – Member Profit Participation(E)(G) | 18.0 | % | 1,000 | — | ||||||||
AG Transportation Holdings, LLC – Profit Participation Warrants(E)(G) | 12.0 | % | 244 | — | ||||||||
|
|
|
| |||||||||
| 1,244 | — | |||||||||||
Chemicals, Plastics, and Rubber – 0.2% | ||||||||||||
Vertellus Holdings LLC – Common Stock Units(E)(G) | 879,121 | 3,018 | 442 | |||||||||
Diversified/Conglomerate Manufacturing – 0.0% | ||||||||||||
Alloy Die Casting, Co.(S) – Common Stock(E)(G) | 270 | 18 | — | |||||||||
United Flexible, Inc. – Common Stock(E)(G) | 1,158 | 148 | — | |||||||||
|
|
|
| |||||||||
| 166 | — | |||||||||||
Healthcare, education, and childcare – 0.9% | ||||||||||||
Edmentum Ultimate Holdings, LLC – Common Stock(E)(G) | 21,429 | 2,636 | — | |||||||||
EL Academies, Inc. – Common Stock(G)(I) | 500 | 500 | 500 | |||||||||
Leeds Novamark Capital I, L.P. – Limited Partnership Interest ($1,581 uncalled capital commitment)(G)(L)(R) | 3.5 | % | 1,628 | 1,645 | ||||||||
|
|
|
| |||||||||
| 4,764 | 2,145 | |||||||||||
Machinery – 0.0% | ||||||||||||
Precision International, LLC – Membership Unit Warrant(E)(G) | 33.3 | % | — | — | ||||||||
Oil and Gas – 0.1% | ||||||||||||
Francis Drilling Fluids, Ltd. – Common Equity Units(E)(G) | 1,656 | 1 | — | |||||||||
W3, Co. – Common Equity(D)(G) | 435 | 499 | 139 | |||||||||
|
|
|
| |||||||||
| 500 | 139 | |||||||||||
Personal andNon-Durable Consumer Products (Manufacturing Only) – 0.1% | ||||||||||||
Canopy Safety Brands, LLC – Participation Warrant(E)(G) | 1 | 500 | 259 | |||||||||
Funko Acquisition Holdings, LLC(S) – Common Stock(E)(G) | 975 | — | — | |||||||||
|
|
|
| |||||||||
| 500 | 259 | |||||||||||
Telecommunications – 0.0% | ||||||||||||
NetFortris Corp.– Common Stock Warrant(E)(G) | 1 | 1 | — | |||||||||
|
|
|
| |||||||||
Total Common Equity | $ | 13,022 | $ | 4,464 | ||||||||
|
|
|
| |||||||||
TotalNon-Control/Non-Affiliate Investments | $ | 318,952 | $ | 290,860 | ||||||||
|
|
|
| |||||||||
Cost Fair Value 13,645 13,578 13,645 16,552 16,465 Healthcare, Education, and Childcare – 7.1% 28,800 28,800 28,800 Oil and Gas – 5.1% 21,015 20,871 20,858 Total Secured Second Lien Debt $ 122,827 $ 120,429 Unsecured Debt – 0.0% Diversified/Conglomerate Service – 0.0% 198 198 24 Preferred Equity – 5.3% Automobile – 0.0% 98,039 98 183 Beverage, Food, and Tobacco – 0.0% 75 75 141 Buildings and Real Estate – 0.1% 1,000 1,025 253 Diversified/Conglomerate Manufacturing – 0.3% 2,500 2,500 1,225 Diversified/Conglomerate Service – 2.4% 766 500 — 168 — — 7,000,000 7,000 8,904 242,105 750 750 8,250 9,654 Healthcare, Education, and Childcare – 0.8% 1,329,054 2,251 3,451 Oil and Gas – 1.7% 6,350 6,350 4,508 972,569 488 2,318 6,838 6,826 Telecommunications – 0.0% 6,130 2,024 — Total Preferred Equity $ 23,061 $ 21,733 Common Equity – 7.3% Aerospace and Defense – 4.7% 4,283 4,283 18,436 100 1,000 680 5,283 19,116 Automobile – 0.1% 823,333 823 340 Beverage, Food, and Tobacco – 0.8% 0.4 % — 31 1,500,000 1,500 1,612 250,000 250 1,641 1,750 3,284 Buildings and Real Estate – 0.0% 45.0 % — — Diversified/Conglomerate Manufacturing – 0.0% 6,000 3,000 — 306 — — 2,000,000 2,000 — 5,000 — Diversified/Conglomerate Service – 0.1% 532 532 359
GLADSTONE CAPITAL CORPORATION
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
SEPTEMBER 30, 2017
(DOLLAR AMOUNTS IN THOUSANDS)
Company and Investment(A)(B)(W)(Z) | Principal/ Shares/ Units(J)(X) | Cost | Fair Value | |||||||||
AFFILIATE INVESTMENTS(N)– 19.4% | ||||||||||||
Secured First Lien Debt – 8.6% | ||||||||||||
Diversified/Conglomerate Manufacturing – 8.6% | ||||||||||||
Edge Adhesives Holdings, Inc. (S) – Term Debt (L + 10.5%, 12.5% Cash, Due 2/2019)(C) | $ | 6,200 | $ | 6,200 | $ | 5,704 | ||||||
Edge Adhesives Holdings, Inc. (S) – Term Debt (L + 11.8%, 13.8% Cash, Due 2/2019)(C) | 1,600 | 1,600 | 1,480 | |||||||||
LWO Acquisitions Company LLC – Line of Credit, $0 available (L + 5.5%, 6.7% Cash, 2.0% PIK, Due 3/2018)(C) | 2,748 | 2,746 | 2,336 | |||||||||
LWO Acquisitions Company LLC – Term Debt (L + 8.5%, 9.7% Cash, 2.0% PIK, Due 12/2019)(C) | 10,942 | 10,921 | 9,301 | |||||||||
|
|
|
| |||||||||
| 21,467 | 18,821 | |||||||||||
|
|
|
| |||||||||
Total Secured First Lien Debt | $ | 21,467 | $ | 18,821 | ||||||||
|
|
|
| |||||||||
Secured Second Lien Debt – 7.8% | ||||||||||||
Diversified Natural Resources, Precious Metals and Minerals – 7.8% | ||||||||||||
Lignetics, Inc. – Term Debt (L + 9.0%, 12.0% Cash, Due 2/2021)(C) | $ | 6,000 | $ | 6,000 | $ | 5,998 | ||||||
Lignetics, Inc. – Term Debt (L + 9.0%, 12.0% Cash, Due 2/2021)(C) | 8,000 | 8,000 | 7,997 | |||||||||
Lignetics, Inc. – Term Debt (L + 9.0%, 12.0% Cash, Due 2/2021)(C) | 3,300 | 3,300 | 3,299 | |||||||||
|
|
|
| |||||||||
| 17,300 | 17,294 | |||||||||||
|
|
|
| |||||||||
Total Secured Second Lien Debt | $ | 17,300 | $ | 17,294 | ||||||||
|
|
|
| |||||||||
Preferred Equity – 0.4% | ||||||||||||
Diversified/Conglomerate Manufacturing – 0.0% | ||||||||||||
Edge Adhesives Holdings, Inc. (S) – Preferred Stock(E)(G) | 2,516 | $ | 2,516 | $ | — | |||||||
Diversified Natural Resources, Precious Metals and Minerals – 0.4% | ||||||||||||
Lignetics, Inc. – Preferred Stock(E)(G) | 40,000 | 800 | 826 | |||||||||
|
|
|
| |||||||||
Total Preferred Equity | $ | 3,316 | $ | 826 | ||||||||
|
|
|
| |||||||||
Common Equity – 2.6% | ||||||||||||
Diversified/Conglomerate Manufacturing – 0.0% | ||||||||||||
LWO Acquisitions Company LLC – Common Units(E)(G) | 921,000 | $ | 921 | $ | — | |||||||
Diversified Natural Resources, Precious Metals and Minerals – 0.4% | ||||||||||||
Lignetics, Inc. – Common Stock(E)(G) | 152,603 | 1,855 | 828 | |||||||||
Textiles and Leather – 2.2% | ||||||||||||
Targus Cayman HoldCo, Ltd. – Common Stock(E)(G) | 3,076,414 | 5,009 | 4,879 | |||||||||
|
|
|
| |||||||||
Total Common Equity | $ | 7,785 | $ | 5,707 | ||||||||
|
|
|
| |||||||||
Total Affiliate Investments | $ | 49,868 | $ | 42,648 | ||||||||
|
|
|
| |||||||||
CONTROL INVESTMENTS(O) – 8.6% | ||||||||||||
Secured First Lien Debt – 3.5% | ||||||||||||
Machinery – 1.8% | ||||||||||||
PIC 360, LLC – Term Debt (14.0%, Due 12/2017)(E)(F) | $ | 4,000 | $ | 4,000 | $ | 4,000 | ||||||
Printing and Publishing – 1.7% | ||||||||||||
Sunshine Media Holdings – Line of Credit, $672 available (8.0% Cash, Due 5/2018)(E)(F) | 1,328 | 1,328 | 1,328 | |||||||||
Sunshine Media Holdings – Term Debt (8.0% Cash, Due 5/2018)(E)(F)(H) | 5,000 | 3,525 | 679 | |||||||||
Sunshine Media Holdings – Term Debt (L + 3.8%, 5.0% Cash, Due 5/2018)(E)(H) | 11,948 | 8,401 | 1,621 | |||||||||
Sunshine Media Holdings – Term Debt (L + 4.0%, 5.5% Cash, Due 5/2018)(E)(H) | 10,700 | 10,700 | — | |||||||||
|
|
|
| |||||||||
| 23,954 | 3,628 | |||||||||||
|
|
|
| |||||||||
Total Secured First Lien Debt | $ | 27,954 | $ | 7,628 | ||||||||
|
|
|
| |||||||||
Secured Second Lien Debt – 3.7% | ||||||||||||
Automobile – 3.7% | ||||||||||||
Defiance Integrated Technologies, Inc. – Term Debt (L + 9.5%, 11.0% Cash, Due 2/2019)(E) | $ | 8,065 | $ | 8,065 | $ | 8,065 | ||||||
Cost Fair Value Healthcare, Education, and Childcare – 1.5% 10,667 19 2,794 767 767 1,562 3.5 % — 231 2,000,000 2,000 1,415 2,786 6,002 Machinery – 0.1% 15,000 1,500 403 Oil and Gas – 0.0% 6,233 — — 435 499 146 499 146 Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0% 4,239 22 22 Telecommunications – 0.0% 1.5 % — — Total Common Equity $ 18,195 $ 29,672 Total Non-Control/Non-Affiliate Investments $ 671,397 $ 663,544 Secured First Lien Debt – 0.7% Diversified/Conglomerate Manufacturing – 0.7% 6,140 6,140 2,895 Preferred Equity – 1.3% Diversified/Conglomerate Manufacturing – 0.0% 5,466 5,466 $ — Diversified/Conglomerate Service– 1.1% 3,840,000 3,840 4,265 Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.2% 500,000 500 857 Total Preferred Equity $ 9,806 $ 5,122 Common Equity – 0.6% Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.6% 1,170,370 800 2,404 Total Affiliate Investments $ 16,746 $ 10,421 Secured First Lien Debt – 3.9% Diversified/Conglomerate Manufacturing – 0.9% 3,927 3,927 3,927 Personal and Non-Durable Consumer Products (Manufacturing Only) – 2.8% 1,468 1,468 1,468 9,825 9,825 9,825 11,293 11,293 Printing and Publishing – 0.2% 900 900 900 Total Secured First Lien Debt $ 16,120 $ 16,120 Secured Second Lien Debt – 1.8% Automobile – 1.8% 7,425 7,425 7,425 Preferred Equity – 0.0% Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0% 333 2,750 $ —
GLADSTONE CAPITAL CORPORATION
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
SEPTEMBER
GLADSTONE CAPITAL CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2023 (DOLLAR AMOUNTS IN THOUSANDS) | ||||||||||||||||||||
Company and Investment(A)(B)(K)(Q) | Principal/ Shares/ Units(I)(J) | Cost | Fair Value | |||||||||||||||||
| Common Equity – 1.8% | ||||||||||||||||||||
| Automobile – 1.0% | ||||||||||||||||||||
Defiance Integrated Technologies, Inc. – Common Stock(E)(G) | 33,321 | 580 | 3,948 | |||||||||||||||||
| Diversified/Conglomerate Manufacturing – 0.0% | ||||||||||||||||||||
Lonestar EMS, LLC – Common Units(E)(G) | 100.0 | % | 6,750 | — | ||||||||||||||||
| Machinery – 0.1% | ||||||||||||||||||||
PIC 360, LLC – Common Equity Units(E)(G) | 750 | 1 | 284 | |||||||||||||||||
| Printing and Publishing – 0.7% | ||||||||||||||||||||
TNCP Intermediate HoldCo, LLC – Common Equity Units(E)(G) | 790,000 | 500 | 3,073 | |||||||||||||||||
| Total Common Equity | $ | 7,831 | $ | 7,305 | ||||||||||||||||
| Total Control Investments | $ | 34,126 | $ | 30,850 | ||||||||||||||||
TOTAL INVESTMENTS(V) – 172.5% | $ | 722,269 | $ | 704,815 | ||||||||||||||||
(DOLLAR AMOUNTS IN THOUSANDS)
Company and Investment(A)(B)(W)(Z) | Principal/ Shares/ Units(J)(X) | Cost | Fair Value | |||||||||
Preferred Equity – 0.0% | ||||||||||||
Printing and Publishing – 0.0% | ||||||||||||
Sunshine Media Holdings – Preferred Stock(E)(G)(J) | 15,270 | $ | 5,275 | $ | — | |||||||
Common Equity – 1.4% | ||||||||||||
Automobile– 1.3% | ||||||||||||
Defiance Integrated Technologies, Inc. – Common Stock(E)(G) | 33,321 | $ | 580 | $ | 2,856 | |||||||
Machinery – 0.1% | ||||||||||||
PIC 360, LLC – Common Equity Units(E)(G) | 1 | 1 | 316 | |||||||||
Printing and Publishing – 0.0% | ||||||||||||
Sunshine Media Holdings – Common Stock(E)(G) | 1,867 | 740 | — | |||||||||
Sunshine Media Holdings – Common Stock Warrants(E)(G) | 72 | — | — | |||||||||
|
|
|
| |||||||||
| 740 | — | |||||||||||
|
|
|
| |||||||||
Total Common Equity | $ | 1,321 | $ | 3,172 | ||||||||
|
|
|
| |||||||||
Total Control Investments | $ | 42,615 | $ | 18,865 | ||||||||
|
|
|
| |||||||||
TOTAL INVESTMENTS(T) – 160.4% | $ | 411,435 | $ | 352,373 | ||||||||
|
|
|
| |||||||||
2023, our investments in Leeds and Funko are considered non-qualifying assets under Section 55 of the 1940 Act. Such non-qualifying assets represent less than 0.1% of total investments, at fair value, as of September 30, 2023.
STATEMENTS.
2023
subsidiaries that met any of the significance conditions under Rule 1-02(w)(2) of the SEC’s Regulation S-X as of or during the three month periods ended December 31, 2023 and December 31, 2022.
Our accompanying fiscalyear-endConsolidated Statement of Assets and Liabilities was derived from audited financial statements, but does not include all disclosures required by GAAP.
13, 2023.
17
Reclassifications
Certain prior period amounts have been reclassified to conform to the current period presentation in the Consolidated Financial Statements and the accompanying notes. Reclassifications did not impact net increase in net assets resulting from operations, total assets, total liabilities or total net assets, or Statement of Changes in Net Assets and Statement of Cash Flows classifications.
Standard & Poor’s Securities Evaluation, Inc. (“SPSE”), a
circumstances.
circumstances.
|
18
|
the nature and term to expiration of the restriction and the lack of marketability of the security.
19
sale, and are non-recurring.
Deferred Financing and Offering Costs
Deferred financing and offering costs consist of costs incurred to obtain financing, including lender fees and legal fees. Costs associated with our revolving line of credit are deferred and amortized using the straight-line method, which approximates the effective interest method, over the term of the revolving line of credit. Costs associatedAdvisory Agreement with the issuance ofAdviser, which is indirectly owned and controlled by our mandatorily redeemable preferred stock are presented as discounts to the liquidation value of the mandatorily redeemable preferred stockchairman and are amortized using the straight-line method, which approximates the effective interest method, over the terms of the respective financings. See Note 5 —BorrowingsandNote 6 —Mandatorily Redeemable Preferred Stock for further discussion.
Related Party Fees
chief executive officer. In accordance with the Advisory Agreement, we pay the Adviser fees as compensation for its services, consisting of a base management fee and an incentive fee. Additionally, we pay the Adviser a loan servicing fee as compensation for its services as servicer under the terms of our Fifth Amended and Restated Credit Agreementrevolving line of credit with KeyBank National Association (“KeyBank”), as administrative agent, lead arranger and a lender (our(as amended and/or restated from time to time, our “Credit Facility”). These fees are accrued at the end of the quarter when the services are performed and generally paid the following quarter.
end of the quarter when the services are performed and generally paid the following quarter.services. Refer to Note 4—4
20
Recent Accounting Pronouncements
In November 2016, the FASB issued Accounting Standards Update2016-18, “Restricted Cash (a consensus of the Emerging Issues Task Force)” (“ASU2016-18”), which requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. We are currently assessing the impact of ASU2016-18 and do not anticipate a material impact on our financial position, results of operations or cash flows.ASU 2016-18 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted.
In August 2016, the FASB issued Accounting Standards Update2016-15, “Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force)”(“ASU 2016-15”), which is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. We are currently assessing the impact ofASU 2016-15 and do not anticipate a material impact on our cash flows. ASU2016-15 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted.
In March 2016, the FASB issued Accounting Standards Update2016-06, “Contingent Put and Call Options in Debt Instruments”(“ASU 2016-06”), which clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related. The adoption ofASU 2016-06 did not have a material impact on our financial position, results of operations or cash flows. ASU2016-06 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those fiscal years, and we adopted ASU2016-06 effective October 1, 2017.
In January 2016, the FASB issued Accounting Standards Update2016-01,“Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”(“ASU 2016-01”), which changes how entities measure certain equity investments and how entities present changes in the fair value of financial liabilities measured under the fair value option that are attributable to instrument-specific credit risk. We are currently assessing the impact ofASU 2016-01 and do not anticipate a material impact on our financial position, results of operations or cash flows. ASU2016-01 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted for certain aspects ofASU 2016-01 relating to the recognition of changes in fair value of financial liabilities when the fair value option is elected.
In February 2015, the FASB issued Accounting Standards Update2015-02, “Amendments to the Consolidation Analysis”(“ASU 2015-02”), which amends or supersedes the scope and consolidation guidance under existing GAAP. The adoption ofASU 2015-02 did not have a material impact on our financial position, results of operations or cash flows.ASU 2015-02 is effective for annual reporting periods beginning after December 15, 2015 and interim periods within those years, and we adoptedASU 2015-02 effective April 1, 2016. In October 2016, the FASB issued Accounting Standards Update2016-17, “Interests Held through Related Parties That Are under Common Control” (“ASU2016-17”), which amends the consolidation guidance inASU 2015-02 regarding the treatment of indirect interests held through related parties that are under common control. The adoption ofASU 2016-17 did not have a material impact on our financial position, results of operations or cash flows. ASU2016-17 is effective for annual reporting periods beginning after December 15, 2016 and interim periods within those years, and we adopted ASU2015-02 effective October 1, 2017.
In May 2014, the FASB issued Accounting Standards Update2014-09, “Revenue from Contracts with Customers”(“ASU 2014-09”), which was amended in March 2016 by FASB Accounting Standards Update2016-08,“Principal versus Agent Considerations”(“ASU 2016-08”), in April 2016 by FASB Accounting Standards Update2016-10,“Identifying Performance Obligations and Licensing”(“ASU2016-10”), in May 2016 by FASB Accounting Standards Update2016-12,“Narrow-Scope Improvements and Practical Expedients”(“ASU 2016-12”), and in December 2016 by FASB Accounting Standards Update2016-20,“Technical Corrections and Improvements to Topic 606”(“ASU2016-20”). ASU2014-09, as amended, supersedes or replaces nearly all GAAP revenue recognition guidance. The new guidance establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time and will expand disclosures about revenue. In July 2015, the FASB issued Accounting Standards Update2015-14, “Deferral of the Effective Date,” which deferred the effective date ofASU 2014-09.ASU 2014-09, as amended byASU 2015-14,ASU 2016-08,ASU 2016-10,ASU 2016-12, andASU 2016-20, is now effective for annual reporting periods beginning after December 15, 2017 and interim periods within those years, with early adoption permitted for annual reporting periods beginning after December 15, 2016 and interim periods within those years. We continue to assess the impact ofASU 2014-09, as amended, and expect to identify similar performance obligations as compared to existing guidance. As a result, we do not anticipate a material change in the timing of revenue recognition or a material impact on our financial position, results of operations, or cash flows from adopting this standard.
21
definition focuses on exit price in the principal, or most advantageous, market and prioritizes, within a measurement of fair value, the use of market-based inputs over entity-specific inputs. ASC 820 also establishes the following three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of a financial instrument as of the measurement date.
Investments in funds measured using NAV as a practical expedient are not categorized within the fair value hierarchy.
| 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, 2017: | ||||||||||||||||
Secured first lien debt | $ | 196,195 | $ | — | $ | — | $ | 196,195 | ||||||||
Secured second lien debt | 171,690 | — | — | 171,690 | ||||||||||||
Unsecured debt | 3,444 | — | — | 3,444 | ||||||||||||
Preferred equity | 5,661 | — | — | 5,661 | ||||||||||||
Common equity/equivalents | 12,591 | (B) | — | 157 | (A) | 12,434 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments at December 31, 2017 | $ | 389,581 | $ | — | $ | 157 | $ | 389,424 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| 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, 2017: | ||||||||||||||||
Secured first lien debt | $ | 173,896 | $ | — | $ | — | $ | 173,896 | ||||||||
Secured second lien debt | 155,249 | — | — | 155,249 | ||||||||||||
Unsecured debt | 3,324 | — | — | 3,324 | ||||||||||||
Preferred equity | 6,561 | — | — | 6,561 | ||||||||||||
Common equity/equivalents | 13,343 | (B) | — | — | 13,343 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments at September 30, 2017 | $ | 352,373 | $ | — | $ | — | $ | 352,373 | ||||||||
|
|
|
|
|
|
|
| |||||||||
22
| 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, 2023: | ||||||||||||||||||||||||||
| Secured first lien debt | $ | 546,602 | $ | — | $ | — | $ | 546,602 | ||||||||||||||||||
| Secured second lien debt | 126,571 | — | — | 126,571 | ||||||||||||||||||||||
| Unsecured debt | 23 | — | — | 23 | ||||||||||||||||||||||
| Preferred equity | 29,722 | — | — | 29,722 | ||||||||||||||||||||||
| Common equity/equivalents | 46,821 | (A) | — | 22 | (B) | 46,799 | ||||||||||||||||||||
| Total Investments as of December 31, 2023 | $ | 749,739 | $ | — | $ | 22 | $ | 749,717 | ||||||||||||||||||
| 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, 2023: | ||||||||||||||||||||||||||
| Secured first lien debt | $ | 510,701 | $ | — | $ | — | $ | 510,701 | ||||||||||||||||||
| Secured second lien debt | 127,854 | — | — | 127,854 | ||||||||||||||||||||||
| Unsecured debt | 24 | — | — | 24 | ||||||||||||||||||||||
| Preferred equity | 26,855 | — | — | 26,855 | ||||||||||||||||||||||
| Common equity/equivalents | 39,150 | (A) | — | 22 | (B) | 39,128 | ||||||||||||||||||||
| Total Investments as of September 30, 2023 | $ | 704,584 | $ | — | $ | 22 | $ | 704,562 | ||||||||||||||||||
| Total Recurring Fair Value Measurements Reported in | ||||||||
| Consolidated Statements of Assets and Liabilities Using Significant Unobservable Inputs (Level 3) | ||||||||
| December 31, 2017 | September 30, 2017 | |||||||
Non-Control/Non-Affiliate Investments | ||||||||
Secured first lien debt | $ | 168,876 | $ | 147,447 | ||||
Secured second lien debt | 146,844 | 129,890 | ||||||
Unsecured debt | 3,356 | 3,324 | ||||||
Preferred equity | 4,439 | 5,735 | ||||||
Common equity/equivalents | 3,776 | (A) | 2,068 | (B) | ||||
|
|
|
| |||||
Total Non-Control/Non-Affiliate Investments | $ | 327,291 | $ | 288,464 | ||||
|
|
|
| |||||
Affiliate Investments | ||||||||
Secured first lien debt | $ | 20,009 | $ | 18,821 | ||||
Secured second lien debt | 16,781 | 17,294 | ||||||
Unsecured debt | 88 | — | ||||||
Preferred equity | 1,222 | 826 | ||||||
Common equity/equivalents | 5,756 | 5,707 | ||||||
|
|
|
| |||||
Total Affiliate Investments | $ | 43,856 | $ | 42,648 | ||||
|
|
|
| |||||
Control Investments | ||||||||
Secured first lien debt | $ | 7,310 | $ | 7,628 | ||||
Secured second lien debt | 8,065 | 8,065 | ||||||
Common equity/equivalents | 2,902 | 3,172 | ||||||
|
|
|
| |||||
Total Control Investments | $ | 18,277 | $ | 18,865 | ||||
|
|
|
| |||||
Total Investments at Fair Value Using Level 3 Inputs | $ | 389,424 | $ | 349,977 | ||||
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|
|
| |||||
23
| Total Recurring Fair Value Measurements Reported in | ||||||||||||||
Consolidated Statements of Assets and Liabilities Using Significant Unobservable Inputs (Level 3) | ||||||||||||||
| December 31, 2023 | September 30, 2023 | |||||||||||||
| Non-Control/Non-Affiliate Investments | ||||||||||||||
| Secured first lien debt | $ | 529,003 | $ | 491,686 | ||||||||||
| Secured second lien debt | 119,146 | 120,429 | ||||||||||||
| Unsecured debt | 23 | 24 | ||||||||||||
| Preferred equity | 24,589 | 21,733 | ||||||||||||
| Common equity/equivalents | 35,477 | (A) | 29,419 | (B) | ||||||||||
| Total Non-Control/Non-Affiliate Investments | $ | 708,238 | $ | 663,291 | ||||||||||
| Affiliate Investments | ||||||||||||||
| Secured first lien debt | $ | 2,829 | $ | 2,895 | ||||||||||
| Preferred equity | 5,133 | 5,122 | ||||||||||||
| Common equity/equivalents | 2,754 | 2,404 | ||||||||||||
| Total Affiliate Investments | $ | 10,716 | $ | 10,421 | ||||||||||
| Control Investments | ||||||||||||||
| Secured first lien debt | $ | 14,770 | $ | 16,120 | ||||||||||
| Secured second lien debt | 7,425 | 7,425 | ||||||||||||
| Common equity/equivalents | 8,568 | 7,305 | ||||||||||||
| Total Control Investments | $ | 30,763 | $ | 30,850 | ||||||||||
| Total Investments at Fair Value Using Level 3 Inputs | $ | 749,717 | $ | 704,562 | ||||||||||
| Quantitative Information about Level 3 Fair Value Measurements | ||||||||||||||||
| Range / Weighted Average as of | ||||||||||||||||
| December 31, 2017 | September 30, 2017 | Valuation Techniques/ Methodologies | Unobservable Input | December 31, 2017 | September 30, 2017 | |||||||||||
Secured first lien debt(A) | $ | 186,850 | $ | 136,272 | Yield Analysis | Discount Rate | 7.6% - 22.9% /11.6% | 8.0% - 25.0% / 12.5% | ||||||||
| 9,345 | 37,624 | TEV | EBITDA multiple | 3.1x – 3.1x /3.1x | 3.2x – 10.1x / 8.2x | |||||||||||
| EBITDA | $1,408 - $1,408 / $1,408 | $1,378 - $9,420 / $6,676 | ||||||||||||||
| Revenue multiple | 0.3x – 0.4x / 0.3x | 0.3x – 0.4x / 0.3x | ||||||||||||||
| Revenue | $6,219 - $11,035 /$10,719 | $6,934 - $12,094 / $11,733 | ||||||||||||||
Secured second lien | 137,168 | 122,165 | Yield Analysis | Discount Rate | 10.7% - 23.9% /14.4% | 10.8% - 23.3% /14.0% | ||||||||||
| 25,266 | 22,607 | Market Quote | IBP | 80.0% - 101.0% / 96.1% | 84.5% - 101.5% /97.2% | |||||||||||
| 9,256 | 10,477 | TEV | EBITDA multiple | 4.6x – 6.4x /5.2x | 4.8x – 6.6x /5.4x | |||||||||||
| EBITDA | $3,004 - $70,276 / $25,308 | $3,000 - $73,650 / $26,424 | ||||||||||||||
Unsecured debt | 3,444 | 3,324 | Yield Analysis | Discount Rate | 10.0% - 13.9% /10.1% | 10.0% - 10.0% /10.0% | ||||||||||
Preferred and common equity / | 17,964 | 17,370 | TEV | EBITDA multiple | 3.1x – 9.7x / 6.0x | 3.2x – 10.1x / 6.1x | ||||||||||
| EBITDA | $301 -$30,531 /$12,270 | $890 -$84,828/ $12,835 | ||||||||||||||
| Revenue multiple | 0.3x – 1.7x / 0.5x | 0.3x – 6.5 x /0.7x | ||||||||||||||
| Revenue | $6,219 -$513,299 /$130,351 | $2,317 -$503,620/ $128,819 | ||||||||||||||
| 131 | 138 | Market Quotes | IBP | 26.2% - 26.2% /26.2% | 27.9% - 27.9% /27.9% | |||||||||||
|
|
|
| |||||||||||||
Total Level 3 Investments, at Fair Value | $ | 389,424 | $ | 349,977 | ||||||||||||
|
|
|
| |||||||||||||
24
| Quantitative Information about Level 3 Fair Value Measurements | |||||||||||||||||||||||||||||||||||
| Range / Weighted Average as of | |||||||||||||||||||||||||||||||||||
| December 31, 2023 | September 30, 2023 | Valuation Techniques/ Methodologies | Unobservable Input | December 31, 2023 | September 30, 2023 | ||||||||||||||||||||||||||||||
| Secured first lien debt | $ | 491,137 | $ | 461,638 | Yield Analysis | Discount Rate | 11.4% - 17.6% / 13.4% | 11.8% - 29.9% / 14.8% | |||||||||||||||||||||||||||
| 55,465 | 49,063 | TEV | EBITDA multiple | 4.5x – 6.4x / 6.4x | 4.7x – 6.8x / 6.7x | ||||||||||||||||||||||||||||||
| EBITDA | $1,068 - $18,154 / $17,860 | $995 - $14,002 / $13,624 | |||||||||||||||||||||||||||||||||
| Revenue multiple | 0.3x – 0.8x / 0.6x | 0.3x – 0.8x / 0.6x | |||||||||||||||||||||||||||||||||
| Revenue | $9,675 - $33,040 / $17,731 | $14,934 - $16,283 / $15,361 | |||||||||||||||||||||||||||||||||
| Secured second lien debt | 109,194 | 110,820 | Yield Analysis | Discount Rate | 12.3% - 16.4% / 14.8% | 12.5% - 15.6% / 14.5% | |||||||||||||||||||||||||||||
| 9,952 | 9,609 | Market Quote | IBP | 79.0% - 94.0% / 85.2% | 67.8% - 94.0% / 82.2% | ||||||||||||||||||||||||||||||
| 7,425 | 7,425 | TEV | EBITDA multiple | 5.3x – 5.3x / 5.3x | 5.6x – 5.6x / 5.6x | ||||||||||||||||||||||||||||||
| EBITDA | $3,798 - $3,798 / $3,798 | $3,690 - $3,690 / $3,690 | |||||||||||||||||||||||||||||||||
| Unsecured debt | 23 | 24 | TEV | Revenue multiple | 1.0x – 1.0x / 1.0x | 1.0x – 1.0x / 1.0x | |||||||||||||||||||||||||||||
| Revenue | $4,752 - $4,752 / $4,752 | $5,044 - $5,044 / $5,044 | |||||||||||||||||||||||||||||||||
Preferred and common equity / equivalents(A) | 76,521 | 65,983 | TEV | EBITDA multiple | 4.5x – 13.1x / 7.4x | 4.7x – 13.0x / 6.9x | |||||||||||||||||||||||||||||
| EBITDA | $1,068 -$127,874 / $11,049 | $995 -$112,841 / $10,570 | |||||||||||||||||||||||||||||||||
| Revenue multiple | 0.3x – 3.0x / 1.2x | 0.3x– 3.0x / 1.2x | |||||||||||||||||||||||||||||||||
| Revenue | $4,493 -$33,040 / $16,517 | $4,213 -$16,283 / $14,959 | |||||||||||||||||||||||||||||||||
| Total Level 3 Investments, at Fair Value | $ | 749,717 | $ | 704,562 | |||||||||||||||||||||||||||||||
inputs.
Three months ended December 31, 2017 | Secured First Lien Debt | Secured Second Lien Debt | Unsecured Debt | Preferred Equity | Common Equity/ Equivalents | Total | ||||||||||||||||||
Fair Value as of September 30, 2017 | $ | 173,896 | $ | 155,249 | $ | 3,324 | $ | 6,561 | $ | 10,947 | $ | 349,977 | ||||||||||||
Total gains (losses): | ||||||||||||||||||||||||
Net realized gain (loss)(A) | — | — | — | 602 | (28 | ) | 574 | |||||||||||||||||
Net unrealized appreciation (depreciation)(B) | 1,115 | 445 | (3 | ) | 558 | (12 | ) | 2,103 | ||||||||||||||||
Reversal of prior period net (appreciation) depreciation on realization(B) | — | (87 | ) | — | (725 | ) | — | (812 | ) | |||||||||||||||
New investments, repayments and settlements: (C) | ||||||||||||||||||||||||
Issuances/originations | 37,426 | 18,365 | 123 | 125 | 1,500 | 57,539 | ||||||||||||||||||
Settlements/repayments | (12,677 | ) | (5,847 | ) | — | — | — | (18,524 | ) | |||||||||||||||
Net proceeds from sales | — | — | — | (1,301 | ) | 27 | (1,274 | ) | ||||||||||||||||
Transfers | (3,565 | ) | 3,565 | — | (159 | ) | — | (159 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Fair Value as of December 31, 2017 | $ | 196,195 | $ | 171,690 | $ | 3,444 | $ | 5,661 | $ | 12,434 | $ | 389,424 | ||||||||||||
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| |||||||||||||
Three months ended December 31, 2016 | Secured First Lien Debt | Secured Second Lien Debt | Unsecured Debt | Preferred Equity | Common Equity/ Equivalents | Total | ||||||||||||||||||
Fair Value as of September 30, 2016 | $ | 198,721 | $ | 100,320 | $ | 3,012 | $ | 10,262 | $ | 7,755 | $ | 320,070 | ||||||||||||
Total gains (losses): | ||||||||||||||||||||||||
Net realized (loss) gain(A) | (4,899 | ) | 25 | — | 1,426 | — | (3,448 | ) | ||||||||||||||||
Net unrealized appreciation (depreciation)(B) | 2,656 | (3,220 | ) | 1 | 1,116 | (3,246 | ) | (2,693 | ) | |||||||||||||||
Reversal of prior period net depreciation (appreciation) on realization(B) | 2,210 | 66 | — | (1,059 | ) | 370 | 1,587 | |||||||||||||||||
New investments, repayments and settlements: (C) | ||||||||||||||||||||||||
Issuances/originations | 548 | 19,358 | 75 | 394 | 344 | 20,719 | ||||||||||||||||||
Settlements/repayments | (38,865 | ) | (3,426 | ) | 3 | — | — | (42,288 | ) | |||||||||||||||
Net proceeds from sales | (101 | ) | (25 | ) | — | (7,724 | ) | (370 | ) | (8,220 | ) | |||||||||||||
Transfers | (3,940 | ) | 923 | — | — | 3,017 | — | |||||||||||||||||
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|
| |||||||||||||
Fair Value as of December 31, 2016 | $ | 156,330 | $ | 114,021 | $ | 3,091 | $ | 4,415 | $ | 7,870 | $ | 285,727 | ||||||||||||
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25
| Three months ended December 31, 2023 | Secured First Lien Debt | Secured Second Lien Debt | Unsecured Debt | Preferred Equity | Common Equity/ Equivalents | Total | ||||||||||||||||||||||||||||||||
| Fair Value as of September 30, 2023 | $ | 510,701 | $ | 127,854 | $ | 24 | $ | 26,855 | $ | 39,128 | $ | 704,562 | ||||||||||||||||||||||||||
| Total gains (losses): | ||||||||||||||||||||||||||||||||||||||
Net realized gain (loss)(A) | — | — | — | — | 259 | 259 | ||||||||||||||||||||||||||||||||
Net unrealized appreciation (depreciation)(B) | 6,996 | (744) | (1) | (6,133) | 7,955 | 8,073 | ||||||||||||||||||||||||||||||||
Reversal of prior period net depreciation (appreciation) on realization(B) | — | — | — | — | (283) | (283) | ||||||||||||||||||||||||||||||||
New investments, repayments and settlements: (C) | ||||||||||||||||||||||||||||||||||||||
| Issuances/originations | 50,024 | 185 | — | 9,000 | — | 59,209 | ||||||||||||||||||||||||||||||||
| Settlements/repayments | (21,119) | (724) | — | — | — | (21,843) | ||||||||||||||||||||||||||||||||
| Net proceeds from sales | — | — | — | — | (260) | (260) | ||||||||||||||||||||||||||||||||
| Transfers | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Fair Value as of December 31, 2023 | $ | 546,602 | $ | 126,571 | $ | 23 | $ | 29,722 | $ | 46,799 | $ | 749,717 | ||||||||||||||||||||||||||
| Three Months Ended December 31, 2022 | Secured First Lien Debt | Secured Second Lien Debt | Unsecured Debt | Preferred Equity | Common Equity/ Equivalents | Total | ||||||||||||||||||||||||||||||||
| Fair Value as of September 30, 2022 | $ | 463,858 | $ | 115,928 | $ | 55 | $ | 27,046 | $ | 36,273 | $ | 643,160 | ||||||||||||||||||||||||||
| Total gains (losses): | ||||||||||||||||||||||||||||||||||||||
Net realized gain (loss)(A) | — | — | (95) | — | 4,995 | 4,900 | ||||||||||||||||||||||||||||||||
Net unrealized appreciation (depreciation)(B) | (455) | (544) | (10) | (906) | (784) | (2,699) | ||||||||||||||||||||||||||||||||
Reversal of prior period net depreciation (appreciation) on realization(B) | 103 | — | 95 | — | (4,995) | (4,797) | ||||||||||||||||||||||||||||||||
New investments, repayments and settlements: (C) | ||||||||||||||||||||||||||||||||||||||
| Issuances/originations | 11,475 | 182 | — | — | 500 | 12,157 | ||||||||||||||||||||||||||||||||
| Settlements/repayments | (24,738) | (811) | — | — | — | (25,549) | ||||||||||||||||||||||||||||||||
| Net proceeds from sales | — | — | — | — | (7,978) | (7,978) | ||||||||||||||||||||||||||||||||
| Transfers | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Fair Value as of December 31, 2022 | $ | 450,243 | $ | 114,755 | $ | 45 | $ | 26,140 | $ | 28,011 | $ | 619,194 | ||||||||||||||||||||||||||
20172023 and September 30, 2017,2023, we held 38 and 3547 proprietary investments with an aggregate fair value of $356.4$739.9 million and $318.6$695.1 million, or 90.8%98.7% and 90.4%98.6% of the total aggregateinvestment portfolio at fair value, respectively. The following significant proprietary investment transactions occurred during the three months ended December 31, 2017:2023:October 2017, we sold our investment in Flight Fit N Fun LLC for a realized gain of $0.6 million. In connection with the sale, we received net cash proceeds of approximately $9.4 million, including the repayment of our debt investment of $7.8 million at par.
20172023 and September 30, 2017,2023, we held 13 and 12four syndicated investments with an aggregate fair value of $36.0$10.1 million and $33.8$9.7 million, or 9.2%1.3% and 9.6%1.4% of the total investment portfolio at fair value, respectively. The following significant syndicated investment transactions occurred during the three months ended December 31, 2017:In October 2017, PSC Industrial Holdings, LLC paid off at par for net proceeds of $3.5 million.
Investment Concentrations
cost, respectively.
| December 31, 2017 | September 30, 2017 | |||||||||||||||||||||||||||||||
| Cost | Fair Value | Cost | Fair Value | |||||||||||||||||||||||||||||
Secured first lien debt | $ | 217,993 | 48.4 | % | $ | 196,195 | 50.0 | % | $ | 198,942 | 48.4 | % | $ | 173,896 | 49.4 | % | ||||||||||||||||
Secured second lien debt | 186,465 | 41.4 | 171,690 | 43.7 | 168,247 | 40.9 | 155,249 | 44.1 | ||||||||||||||||||||||||
Unsecured debt | 3,447 | 0.8 | 3,444 | 0.9 | 3,324 | 0.8 | 3,324 | 0.9 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Total debt investments | 407,905 | 90.6 | 371,329 | 94.6 | 370,513 | 90.1 | 332,469 | 94.4 | ||||||||||||||||||||||||
Preferred equity | 18,052 | 4.0 | 5,661 | 1.5 | 18,794 | 4.5 | 6,561 | 1.9 | ||||||||||||||||||||||||
Common equity/equivalents | 24,175 | 5.4 | 15,440 | 3.9 | 22,128 | 5.4 | 13,343 | 3.7 | ||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Total equity investments | 42,227 | 9.4 | 21,101 | 5.4 | 40,922 | 9.9 | 19,904 | 5.6 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Total Investments | $ | 450,132 | 100.0 | % | $ | 392,430 | 100.0 | % | $ | 411,435 | 100.0 | % | $ | 352,373 | 100.0 | % | ||||||||||||||||
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| |||||||||||||||||
26
2023:
| December 31, 2023 | September 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
| Cost | Fair Value | Cost | Fair Value | ||||||||||||||||||||||||||||||||||||||||||||
| Secured first lien debt | $ | 558,281 | 73.5 | % | $ | 546,602 | 72.9 | % | $ | 529,376 | 73.3 | % | $ | 510,701 | 72.5 | % | |||||||||||||||||||||||||||||||
| Secured second lien debt | 129,713 | 17.1 | 126,571 | 16.9 | 130,252 | 18.1 | 127,854 | 18.1 | |||||||||||||||||||||||||||||||||||||||
| Unsecured debt | 198 | 0.0 | 23 | 0.0 | 198 | 0.0 | 24 | 0.0 | |||||||||||||||||||||||||||||||||||||||
| Total debt investments | 688,192 | 90.6 | 673,196 | 89.8 | 659,826 | 91.4 | 638,579 | 90.6 | |||||||||||||||||||||||||||||||||||||||
| Preferred equity | 44,617 | 5.9 | 29,722 | 3.9 | 35,617 | 4.9 | 26,855 | 3.8 | |||||||||||||||||||||||||||||||||||||||
| Common equity/equivalents | 26,825 | 3.5 | 47,067 | 6.3 | 26,826 | 3.7 | 39,381 | 5.6 | |||||||||||||||||||||||||||||||||||||||
| Total equity investments | 71,442 | 9.4 | 76,789 | 10.2 | 62,443 | 8.6 | 66,236 | 9.4 | |||||||||||||||||||||||||||||||||||||||
| Total Investments | $ | 759,634 | 100.0 | % | $ | 749,985 | 100.0 | % | $ | 722,269 | 100.0 | % | $ | 704,815 | 100.0 | % | |||||||||||||||||||||||||||||||
| December 31, 2017 | September 30, 2017 | |||||||||||||||
Industry Classification | Fair Value | Percentage of Total Investments | Fair Value | Percentage of Total Investments | ||||||||||||
Diversified/Conglomerate Service | $ | 91,193 | 23.2 | % | $ | 80,723 | 22.9 | % | ||||||||
Oil and gas | 56,192 | 14.3 | 34,712 | 9.9 | ||||||||||||
Healthcare, education and childcare | 43,499 | 11.1 | 46,288 | 13.1 | ||||||||||||
Diversified/Conglomerate Manufacturing | 42,870 | 10.9 | 40,843 | 11.6 | ||||||||||||
Telecommunications | 42,781 | 10.9 | 31,350 | 8.9 | ||||||||||||
Automobile | 19,590 | 5.0 | 20,082 | 5.7 | ||||||||||||
Diversified natural resources, precious metals and minerals | 18,744 | 4.8 | 18,949 | 5.4 | ||||||||||||
Beverage, food and tobacco | 13,934 | 3.6 | 14,103 | 4.0 | ||||||||||||
Cargo Transportation | 13,098 | 3.3 | 13,081 | 3.7 | ||||||||||||
Machinery | 12,502 | 3.2 | 5,114 | 1.4 | ||||||||||||
Home and Office Furnishings, Housewares and Durable Consumer Products | 10,150 | 2.6 | 10,100 | 2.9 | ||||||||||||
Personal andnon-durable consumer products | 7,080 | 1.8 | 7,035 | 2.0 | ||||||||||||
Hotels, Motels, Inns, and Gaming | 6,938 | 1.8 | 7,136 | 2.0 | ||||||||||||
Textiles and leather | 5,640 | 1.4 | 4,879 | 1.4 | ||||||||||||
Printing and publishing | 3,310 | 0.8 | 3,628 | 1.0 | ||||||||||||
Leisure, Amusement, Motion Pictures, Entertainment | — | — | 9,225 | 2.6 | ||||||||||||
Other, < 2.0% | 4,909 | 1.3 | 5,125 | 1.5 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 392,430 | 100.0 | % | $ | 352,373 | 100.0 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
2023:
| December 31, 2023 | September 30, 2023 | |||||||||||||||||||||||||
| Industry Classification | Fair Value | Percentage of Total Investments | Fair Value | Percentage of Total Investments | ||||||||||||||||||||||
| Diversified/Conglomerate Service | $ | 163,817 | 21.8 | % | $ | 135,060 | 19.2 | % | ||||||||||||||||||
| Healthcare, Education, and Childcare | 159,410 | 21.3 | 146,438 | 20.8 | ||||||||||||||||||||||
| Diversified/Conglomerate Manufacturing | 158,612 | 21.1 | 158,061 | 22.4 | ||||||||||||||||||||||
| Aerospace and Defense | 105,806 | 14.1 | 97,836 | 13.9 | ||||||||||||||||||||||
| Beverage, Food, and Tobacco | 80,492 | 10.7 | 78,788 | 11.2 | ||||||||||||||||||||||
| Automobile | 27,793 | 3.7 | 27,571 | 3.9 | ||||||||||||||||||||||
| Oil and Gas | 23,662 | 3.2 | 27,830 | 3.9 | ||||||||||||||||||||||
| Personal and Non-Durable Consumer Products | 14,162 | 1.9 | 14,576 | 2.1 | ||||||||||||||||||||||
| Machinery | 6,216 | 0.9 | 6,411 | 0.9 | ||||||||||||||||||||||
| Other, < 2.0% | 10,015 | 1.3 | 12,244 | 1.7 | ||||||||||||||||||||||
| Total Investments | $ | 749,985 | 100.0 | % | $ | 704,815 | 100.0 | % | ||||||||||||||||||
| December 31, 2017 | September 30, 2017 | |||||||||||||||
Geographic Region | Fair Value | Percentage of Total Investments | Fair Value | Percentage of Total Investments | ||||||||||||
South | $ | 163,988 | 41.8 | % | $ | 150,727 | 42.8 | % | ||||||||
West | 128,806 | 32.8 | 116,302 | 33.0 | ||||||||||||
Midwest | 66,481 | 17.0 | 58,915 | 16.7 | ||||||||||||
Northeast | 33,155 | 8.4 | 26,429 | 7.5 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 392,430 | 100.0 | % | $ | 352,373 | 100.0 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
2023:
| December 31, 2023 | September 30, 2023 | |||||||||||||||||||||||||
| Location | Fair Value | Percentage of Total Investments | Fair Value | Percentage of Total Investments | ||||||||||||||||||||||
| South | $ | 289,458 | 38.6 | % | $ | 273,181 | 38.8 | % | ||||||||||||||||||
| West | 242,651 | 32.4 | 224,235 | 31.8 | ||||||||||||||||||||||
| Midwest | 154,155 | 20.5 | 145,122 | 20.6 | ||||||||||||||||||||||
| Northeast | 63,721 | 8.5 | 62,277 | 8.8 | ||||||||||||||||||||||
| Total Investments | $ | 749,985 | 100.0 | % | $ | 704,815 | 100.0 | % | ||||||||||||||||||
| Amount(A) | ||||||
For the remaining nine months ending September 30: | 2018 | $ | 33,643 | |||
For the fiscal years ending March 31: | 2019 | 53,920 | ||||
| 2020 | 82,103 | |||||
| 2021 | 81,813 | |||||
| 2022 | 45,022 | |||||
| Thereafter | 117,154 | |||||
|
| |||||
Total contractual repayments | $ | 413,655 | ||||
| Adjustments to cost basis of debt investments | (5,750 | ) | ||||
| Investments in equity securities | 42,227 | |||||
|
| |||||
Investments held as of December 31, 2017 at Cost: | $ | 450,132 | ||||
|
| |||||
2023:
| Amount | ||||||||||||||
| For the remaining nine months ending September 30: | 2024(A) | $ | 21,950 | |||||||||||
| For the fiscal years ending September 30: | 2025 | 42,960 | ||||||||||||
| 2026 | 140,846 | |||||||||||||
| 2027 | 253,699 | |||||||||||||
| 2028 | 185,178 | |||||||||||||
| Thereafter | 44,847 | |||||||||||||
| Total contractual repayments | $ | 689,480 | ||||||||||||
| Adjustments to cost basis of debt investments | (1,288) | |||||||||||||
| Investments in equity securities | 71,442 | |||||||||||||
| Investments held as of December 31, 2023 at cost: | $ | 759,634 | ||||||||||||
for uncollectible receivables was $32$14 thousand and $44 at$9 thousand as of December 31, 20172023 and September 30, 2017,2023, respectively.
27
2024.
Michael LiCalsi, our general counsel and secretary (who also serves as the Administrator’s president, general counsel and secretary), is also the executive vice president of administration of our Adviser.
| Three Months Ended December 31, | ||||||||
| 2017 | 2016 | |||||||
Average total assets subject to base management fee(A) | $ | 383,086 | $ | 315,000 | ||||
Multiplied by prorated annual base management fee of 1.75% | 0.4375 | % | 0.4375 | % | ||||
|
|
|
| |||||
Base management fee(B) | $ | 1,676 | $ | 1,378 | ||||
Portfolio company fee credit | (664 | ) | (649 | ) | ||||
Senior syndicated loan fee credit | (92 | ) | (13 | ) | ||||
|
|
|
| |||||
Net Base Management Fee | $ | 920 | $ | 716 | ||||
|
|
|
| |||||
Loan servicing fee(B) | 1,186 | 983 | ||||||
Credit to base management fee - loan servicing fee(B) | (1,186 | ) | (983 | ) | ||||
|
|
|
| |||||
Net Loan Servicing Fee | $ | — | $ | — | ||||
|
|
|
| |||||
Incentive fee(B) | 1,373 | 1,293 | ||||||
Incentive fee credit | (85 | ) | (37 | ) | ||||
|
|
|
| |||||
Net Incentive Fee | $ | 1,288 | $ | 1,256 | ||||
|
|
|
| |||||
Portfolio company fee credit | (664 | ) | (649 | ) | ||||
Senior syndicated loan fee credit | (92 | ) | (13 | ) | ||||
Incentive fee credit | (85 | ) | (37 | ) | ||||
|
|
|
| |||||
Credits to Fees From Adviser - other(B) | $ | (841 | ) | $ | (699 | ) | ||
|
|
|
| |||||
| Three Months Ended December 31, | ||||||||||||||
| 2023 | 2022 | |||||||||||||
Average total assets subject to base management fee(A) | $ | 741,714 | $ | 646,629 | ||||||||||
| Multiplied by prorated annual base management fee of 1.75% | 0.4375 | % | 0.4375 | % | ||||||||||
Base management fee(B) | $ | 3,245 | $ | 2,829 | ||||||||||
| Portfolio company fee credit | (1,551) | (404) | ||||||||||||
| Syndicated loan fee credit | (31) | (32) | ||||||||||||
| Net Base Management Fee | $ | 1,663 | $ | 2,393 | ||||||||||
Loan servicing fee(B) | 2,128 | 1,874 | ||||||||||||
Credit to base management fee - loan servicing fee(B) | (2,128) | (1,874) | ||||||||||||
| Net Loan Servicing Fee | $ | — | $ | — | ||||||||||
Incentive fee(B) | 2,984 | 2,181 | ||||||||||||
| Incentive fee credit | — | — | ||||||||||||
| Net Incentive Fee | $ | 2,984 | $ | 2,181 | ||||||||||
| Portfolio company fee credit | (1,551) | (404) | ||||||||||||
| Syndicated loan fee credit | (31) | (32) | ||||||||||||
| Incentive fee credit | — | — | ||||||||||||
Credits to Fees From Adviser - other(B) | $ | (1,582) | $ | (436) | ||||||||||
28
receive fees for services other than managerial assistance. Such services may include, but are not limited to:include: (i) assistance obtaining, sourcing or structuring credit facilities, long term loans or additional equity from unaffiliated third parties; (ii) negotiating important contractual financial relationships; (iii) consulting services regarding restructuring of the portfolio company and financial modeling as it relates to raising additional debt and equity capital from unaffiliated third parties; and (iv) taking a primary role in interviewing, vetting and negotiating employment contracts with candidates in connection with adding and retaining key portfolio company management team members. The Advisernon-contractually, unconditionally, and irrevocably credits 100% of theseany fees for such services against the base management fee that we would otherwise be required to pay to the Adviser; however, pursuant to the terms of the Advisory Agreement, a small percentage of certain of such fees, totaling $8 and $28 for the three months ended December 31, 2017 and 2016, respectively, was retained by the Adviser in the form of reimbursement, at cost, for tasks completed by personnel of the Adviser primarily for the valuation of portfolio companies.
Adviser.
2022.
Our Board of Directors acceptednon-contractual, unconditional and irrevocable credits from the Adviser to reduce the income-based incentive fee to the extent net investment income did not 100.0% cover distributions to common stockholders for the three months ended December 31, 2017 and 2016.
29
Loan Servicing Fee
The Adviser also services the loans held by Business Loan (the borrower under the Credit Facility), in return for which the Adviser receives a 1.5% annual fee payable monthly based on the aggregate outstanding balance of loans pledged under our Credit Facility. As discussed in the notes to the table above, we treat payment of the loan servicing fee pursuant to our line of credit as apre-payment of the base management fee under the Advisory Agreement. Accordingly, these loan servicing fees are 100%non-contractually, unconditionally and irrevocably credited back to us by the Adviser.
2023.
Another of our officers, Michael LiCalsi (our general counsel and secretary), serves as the Administrator’s president as well as the executive vice president of administration for the Adviser.
2024.
| December 31, 2017 | September 30, 2017 | |||||||
Base management fee due (from) to Adviser | $ | (267 | ) | $ | 45 | |||
Loan servicing fee due to Adviser | 270 | 242 | ||||||
Incentive fee due to Adviser | 1,288 | 1,005 | ||||||
|
|
|
| |||||
Total fees due to Adviser | 1,291 | 1,292 | ||||||
|
|
|
| |||||
Fee due to Administrator | 272 | 244 | ||||||
|
|
|
| |||||
Total Related Party Fees Due | $ | 1,563 | $ | 1,536 | ||||
|
|
|
| |||||
| December 31, 2023 | September 30, 2023 | ||||||||||
| Base management fee due to (from) Adviser | $ | (464) | $ | 670 | |||||||
| Loan servicing fee due to Adviser | 475 | 455 | |||||||||
| Incentive fee due to Adviser | 2,984 | 2,747 | |||||||||
| Total fees due to Adviser | 2,995 | 3,872 | |||||||||
| Fee due to Administrator | 572 | 479 | |||||||||
| Total Related Party Fees Due | $ | 3,567 | $ | 4,351 | |||||||
2023.
30
undrawn amounts, expanded the scope of eligible collateral,October 31, 2025, and amended certain other terms and conditions. If our Credit Facility is not renewed or extended by January 19, 2019,a final maturity date of October 31, 2027 (at which time all principal and interest will be due and payable on or before April 19, 2020 (fifteen months afterif the Credit Facility is not extended by the revolving period end date). Subject to certain terms and conditions, our Credit Facility may be expanded up to a total of $250.0 million through additional commitments of new or existing lenders. We incurred fees of approximately $1.1 million in connection with this amendment, which are being amortized through our Credit Facility’sThe interest rate margin is 3.00% during the revolving period end date of January 19, 2019.
and 3.50% thereafter (in each case plus a 10 basis point SOFR credit spread adjustment).
On October 9, 2015, August 18, 2016, and August 24, 2017, we entered into Amendments No. 1, 2 and 3 to our Credit Facility, respectively, each of which clarified or modified various constraints on available borrowings.
| December 31, 2023 | September 30, 2023 | ||||||||||
| Commitment amount | $ | 233,659 | $ | 223,659 | |||||||
| Line of credit outstanding, at cost | 85,000 | 47,800 | |||||||||
Availability(A) | 130,302 | 169,060 | |||||||||
| For the Three Months Ended December 31, | ||||||||||||||
| 2023 | 2022 | |||||||||||||
| Weighted average borrowings outstanding, at cost | $ | 48,582 | $ | 129,062 | ||||||||||
Weighted average interest rate(B) | 12.7 | % | 6.9 | % | ||||||||||
| Commitment (unused) fees incurred | $ | 437 | $ | 156 | ||||||||||
| December 31, 2017 | September 30, 2017 | |||||||
Commitment amount | $ | 170,000 | $ | 170,000 | ||||
Borrowings outstanding, at cost | 130,500 | 93,000 | ||||||
Availability(A) | 28,940 | 58,576 | ||||||
| For the Three Months Ended December 31, | ||||||||
| 2017 | 2016 | |||||||
Weighted average borrowings outstanding, at cost | $ | 98,228 | $ | 39,278 | ||||
Weighted average interest rate(B) | 5.0 | % | 5.7 | % | ||||
Commitment (unused) fees incurred | $ | 92 | $ | 166 | ||||
based on the aggregate loan balance pledged by Business Loan, which varies as loans are added and repaid, regardless of whether such repayments are prepayments or made as contractually required.
into a lockbox account with KeyBank. KeyBank is also the trustee of the account and generally remits the collected funds to us once aeach month.
Amounts collected in the lockbox account with KeyBank are presented as Due from administrative agent on the accompanying
Consolidated Statement of Assets and Liabilities as of December 31, 2023 and September 30, 2023.31
similar securities as of the measurement date. As of December 31, 2017,2023, the discount rate used to determine the fair value of our Credit Facility was30-day LIBOR, one-month Term SOFR, plus 3.00%3.10% per annum, plus a 0.50%0.75% unused commitment fee. As of September 30, 2017,2023, the discount rate used to determine the fair value of our Credit Facility was30-day LIBOR, one-month Term SOFR, plus 3.15%3.10% per annum, plus a 0.50%1.00% unused commitment fee. Generally, an increase or decrease in the discount rate used in the DCF calculation may result in a corresponding increasedecrease or decrease,increase, respectively, in the fair value of our Credit Facility. As of December 31, 20172023 and September 30, 2017,2023, our Credit Facility was valued using Level 3 inputs and any changes in its fair value are recorded in net unrealized depreciation (appreciation) of other on our accompanying
| Total Recurring Fair Value Measurement Reported in | ||||||||
| Consolidated Statements of Assets and LiabilitiesUsing Significant Unobservable Inputs (Level 3) | ||||||||
| December 31, 2017 | September 30, 2017 | |||||||
Credit Facility | $ | 130,833 | $ | 93,115 | ||||
|
|
|
| |||||
Fair Value Measurements Using Significant Unobservable Data Inputs (Level 3) | ||||||||
| Three Months Ended December 31, | ||||||||
| 2017 | 2016 | |||||||
Fair value as of September 30, 2017 and 2016, respectively | $ | 93,115 | $ | 71,300 | ||||
Borrowings | 61,100 | 24,200 | ||||||
Repayments | (23,600 | ) | (67,300 | ) | ||||
Net unrealized appreciation (depreciation)(A) | 218 | (213 | ) | |||||
|
|
|
| |||||
Fair Value as of December 31, 2017 and 2016, respectively | $ | 130,833 | $ | 27,987 | ||||
|
|
|
| |||||
2022:
| Total Recurring Fair Value Measurement Reported in | |||||||||||
Consolidated Statements of Assets and Liabilities Using Significant Unobservable Inputs (Level 3) | |||||||||||
| December 31, 2023 | September 30, 2023 | ||||||||||
| Credit Facility | $ | 85,000 | $ | 47,800 | |||||||
| Fair Value Measurements Using Significant Unobservable Data Inputs (Level 3) | |||||||||||
| Three Months Ended December 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Fair value as of September 30, 2023 and 2022, respectively | $ | 47,800 | $ | 141,800 | |||||||
| Borrowings | 70,200 | 14,800 | |||||||||
| Repayments | (33,000) | (48,200) | |||||||||
| Net unrealized appreciation | — | — | |||||||||
| Fair Value as of December 31, 2023 and 2022, respectively | $ | 85,000 | $ | 108,400 | |||||||
NOTE 6. MANDATORILY REDEEMABLE PREFERRED STOCK
The shares of our Series 2024 Term Preferred Stock2028 Notes are traded under the ticker symbol “GLADN”“GLADZ” on the Nasdaq Global Select Market. Our Series 2024 Term Preferred StockThe 2028 Notes will mature on September 1, 2028 and may be redeemed in whole or in part at any time or from time to time at our option on or after September 1, 2025.
We may also voluntarily redeem all or a portion of the Series 2024 Term Preferred Stock at our option at the Redemption Price at any
32
time after September 30, 2019. If we fail to redeem our Series 2024 Term Preferred Stock pursuant to the mandatory redemption date of September 30, 2024, or in any other circumstance in which we are required to mandatorily redeem our Series 2024 Term Preferred Stock, then the fixed dividend rate will increase by 4.0% for so long as such failure continues. As of December 31, 2017, we have not redeemed, nor have we been required to redeem, any shares of our outstanding Series 2024 Term Preferred Stock.
In May 2014,2020, we completed a publican offering of approximately 2.4$100.0 million sharesaggregate principal amount of Series 2021 Term Preferred Stock, at a public offering price of $25.00 per share. Gross proceeds totaled $61.0 million and5.125% Notes due 2026 (the “2026 Notes”) for net proceeds of approximately $97.7 million after deducting underwriting discounts, commissions and offering expenses borne by us, wereus. In March 2021, we completed an offering of an additional $50.0 million aggregate principal amount of the 2026 Notes for net proceeds of approximately $58.5$50.6 million after adding premiums and deducting underwriting costs, commissions and offering expenses borne by us. The 2026 Notes will mature on January 31, 2026 and may be redeemed in whole or in part at any time or from time to time at the Company’s option prior to maturity at par plus
We paid the following monthly distributions on our Series 2024 Term Preferred Stock for the three months ended December 31, 2017:
Fiscal Year | Declaration Date | Record Date | Payment Date | Distribution per Series 2024 Term Preferred Share(A) | ||||||
2018 | October 10, 2017 | October 20, 2017 | October 31, 2017 | $ | 0.141667 | |||||
October 10, 2017 | November 20, 2017 | November 30, 2017 | 0.125 | |||||||
October 10, 2017 | December 19, 2017 | December 29, 2017 | 0.125 | |||||||
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| |||||||||
| Three Months Ended December 31, 2017: | $ | 0.391667 | ||||||||
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We paid the following monthly distributions on our Series 2021 Term Preferred Stock for the three months ended December 31, 2016:
Fiscal Year | Declaration Date | Record Date | Payment Date | Distribution per Series 2021 Term Preferred Share | ||||||
2017 | October 11, 2016 | October 21, 2016 | October 31, 2016 | $ | 0.1406250 | |||||
October 11, 2016 | November 17, 2016 | November 30, 2016 | 0.1406250 | |||||||
October 11, 2016 | December 20, 2016 | December 30, 2016 | 0.1406250 | |||||||
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| Three Months Ended December 31, 2016: | $ | 0.4218750 | ||||||||
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The federal income tax characteristics of dividends paid to our preferred stockholders generally constitute ordinary income to the extent of our current and accumulated earnings and profits and is reported after the end of the calendar year based on tax information for the full fiscal year. Estimates of tax characterization made on a quarterly basis may not be representative of the actual tax characterization of dividends for the full year. Estimates made on a quarterly basis are updated as of each interim reporting date. The tax characterization of dividends paid to our preferred stockholders during the calendar years ended December 31, 2017 and 2016 was 100% from ordinary income.
In accordance with ASC 480, “Distinguishing Liabilities from Equity,” mandatorily redeemable financial instruments should be classified as liabilities in the balance sheet and we have recorded our mandatorily redeemable preferred stock as a liability at cost, as of December 31, 2017 and September 30, 2017. The related dividend payments to our mandatorily redeemable preferred stockholders are treated as dividend expense on our statement of operations as of theex-dividend date. Aggregate preferred stockholder dividends declared and paid on our Series 2024 Term Preferred Stock for the three months ended December 31, 2017 was $0.8 million. Aggregate preferred stockholder dividends declared and paid on our Series 2021 Term Preferred Stock for the three months ended December 31, 2016 was $1.0 million.
For disclosure purposes, the fair value, based on the last quoted closing price, for our Series 2024 Term Preferred Stock as of December 31, 2017 was approximately $53.5 million. Liabilities.
The fair value, based on a DCF analysis, of the 2027 Notes as of December 31, 2023 was $45.9 million. The fair value, based on a DCF analysis, of the 2026 Notes as of December 31, 2023 was $145.9 million. We consider the 2027 Notes and 2026 Notes to be Level 3 within the ASC 820 fair value hierarchy.
We filed Post-Effective Amendment No. 2 to our current universal
securities under the Registration Statement.
33
registration statement.
Pursuant to our prior registration statement, in October 2016, we completed a public offering of 2.0 million shares of our common stock at a public offering price of $7.98 per share, which was below our then current NAV per share.
In February 2015,May 2021, we entered into an equity distribution agreements (commonly referred to as“at-the-market agreements” oragreement with Jefferies LLC (as amended and restated, the “Sales Agreements”Agreement”) with KeyBanc Capital Markets Inc. and Cantor Fitzgerald & Co., each a “Sales Agent,” under which we hadhave the ability to issue and sell, from time to time, through the Sales Agents, up toshares of our common stock with an aggregate offering price of $50.0up to $100.0 million shares of our common stock.in an “at the market offering” (the “ATM Program”). In May 2017,July 2023, we terminatedamended and restated the Sales Agreement with KeyBanc Capital Marketsto add Huntington Securities, Inc. and amendedas a sales agent under the ATM Program. We did not issue any shares under the Sales Agreement with Cantor Fitzgerald & Co. to reference our current registration statement. All other material terms of the Sales Agreement with Cantor Fitzgerald & Co. remained unchanged. Duringduring the three months ended December 31, 2017, we sold 471,498 shares of our common stock under the Sales Agreement with Cantor Fitzgerald & Co., at a weighted-average price of $9.69 per share and raised $4.6 million of gross proceeds. Net proceeds, after deducting commissions and offering costs borne by us, were approximately $4.5 million.2023. As of December 31, 2017,2023, we had a remaining capacity to sell up to $37.9an additional $0.4 million of our common stock under the Sales Agreement with Cantor Fitzgerald & Co. We did not sell any shares under the Sales Agreements during the three months ended December 31, 2016.
Agreement.
| Three Months Ended December 31, | ||||||||
| 2017 | 2016 | |||||||
Numerator for basic and diluted net increase in net assets | $ | 7,160 | $ | 916 | ||||
Denominator for basic and diluted weighted average | 26,522,788 | 24,778,970 | ||||||
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| |||||
Basic and diluted net increase in net assets resulting from | $ | 0.27 | $ | 0.04 | ||||
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| |||||
| Three Months Ended December 31, | ||||||||||||||
| 2023 | 2022 | |||||||||||||
| Numerator: basic and diluted net increase (decrease) in net assets resulting from operations per common share | $ | 20,001 | $ | 5,698 | ||||||||||
| Denominator: basic and diluted weighted average common share | 43,508,897 | 35,207,208 | ||||||||||||
| Basic and diluted net increase (decrease) in net assets resulting from operations per common share | $ | 0.46 | $ | 0.16 | ||||||||||
For the calendar year ended December 31, 2022, 93.2% of distributions to common stockholders were deemed to be paid from ordinary income and 6.8% of distributions were deemed to be return of capital for 1099 stockholder reporting purposes.
Fiscal Year | Declaration | Record Date | Payment Date | Distribution per Common Share | ||||||
2018 | October 10, 2017 | October 20, 2017 | October 31, 2017 | $ | 0.07 | |||||
October 10, 2017 | November 20, 2017 | November 30, 2017 | 0.07 | |||||||
October 10, 2017 | December 19, 2017 | December 29, 2017 | 0.07 | |||||||
|
| |||||||||
| Three Months Ended December 31, 2017: | $ | 0.21 | ||||||||
|
| |||||||||
2017 | October 11, 2016 | October 21, 2016 | October 31, 2016 | $ | 0.07 | |||||
October 11, 2016 | November 17, 2016 | November 30, 2016 | 0.07 | |||||||
October 11, 2016 | December 20, 2016 | December 30, 2016 | 0.07 | |||||||
|
| |||||||||
| Three Months Ended December 31, 2016: | $ | 0.21 | ||||||||
|
| |||||||||
| Fiscal Year | Declaration Date | Record Date | Payment Date | Distribution per Common Share | ||||||||||||||||||||||
| 2024 | October 10, 2023 | October 20, 2023 | October 31, 2023 | $ | 0.0825 | |||||||||||||||||||||
| October 10, 2023 | November 20, 2023 | November 30, 2023 | 0.0825 | |||||||||||||||||||||||
| October 10, 2023 | December 18, 2023 | December 29, 2023 | 0.0825 | |||||||||||||||||||||||
| Three Months Ended December 31, 2023: | $ | 0.2475 | ||||||||||||||||||||||||
| Fiscal Year | Declaration Date | Record Date | Payment Date | Distribution per Common Share | ||||||||||||||||||||||
| 2023 | October 11, 2022 | October 21, 2022 | October 31, 2022 | $ | 0.07 | |||||||||||||||||||||
| October 11, 2022 | November 18, 2022 | November 30, 2022 | 0.07 | |||||||||||||||||||||||
| October 11, 2022 | December 20, 2022 | December 30, 2022 | 0.07 | |||||||||||||||||||||||
| Three Months Ended December 31, 2022: | $ | 0.21 | ||||||||||||||||||||||||
34
income for the respective fiscal years.Investment Company Taxable Income. For the fiscal year ended September 30, 2017,2023, our current and accumulated earnings and profits (after taking into account our mandatorily redeemable preferred stock dividends), exceeded common stock distributions declared and paid, and, in accordance with Section 855(a) of the Code, we elected to treat $0.3$5.0 million of the first common distributions paid to common stockholders in the subsequent fiscal year 2018 as having been paid in the respective prior year.
35
| Three Months Ended December 31, 2017 | Year Ended September 30, 2017 | |||||||
Over distributed net investment income | $ | (68 | ) | $ | (4,416 | ) | ||
Accumulated net realized losses | 260 | 6,541 | ||||||
Capital in excess of par value | (192 | ) | (2,125 | ) | ||||
| Three Months Ended December 31, 2023 | Year Ended September 30, 2023 | ||||||||||
| Undistributed net investment income | $ | — | $ | (373) | |||||||
| Accumulated net realized gain (loss) | — | 373 | |||||||||
| Capital in excess of par value | — | — | |||||||||
2023.
| December 31, | September 30, | |||||||
| 2017 | 2017 | |||||||
Unused line of credit commitments | $ | 10,426 | $ | 7,517 | ||||
Delayed draw term loans | 12,900 | 10,900 | ||||||
Uncalled capital commitment | 986 | 1,367 | ||||||
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|
| |||||
Total | $ | 24,312 | $ | 19,784 | ||||
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| |||||
36
| December 31, 2023 | September 30, 2023 | ||||||||||
Unused line of credit commitments(A) | $ | 32,592 | $ | 32,349 | |||||||
Delayed draw term loans(A) | 21,275 | 12,039 | |||||||||
| Uncalled capital commitment | 843 | 843 | |||||||||
| Total | $ | 54,710 | $ | 45,231 | |||||||
Per Common Share Data(A): Net asset value at beginning of period(A) Income from operations(B) Net investment income(B) Net realized and unrealized gain (loss) on investments Net realized and unrealized (loss) gain on other Total from operations Distributions to common stockholders from(B)(C) Net Investment Income Total distributions Capital share transactions(B) Offering costs for issuance of common stock Anti-dilutive (dilutive) effect of common stock issuance(D) Total capital share transactions Other, net(B)(E) Net asset value at end of year(A) Per common share market value at beginning of period Per common share market value at end of period Total return(F) Common stock outstanding at end of year(A) Statement of Assets and Liabilities Data: Net assets at end of year Average net assets(G) Senior securities Data: Borrowings under Credit Facility, at cost Mandatorily redeemable preferred stock Ratios/Supplemental Data: Ratio of net expenses to average net assets(H)(I) Ratio of net investment income to average net assets(J) Income Statement Net sales Gross profit Net loss Three Months Ended
December 31, 2017 2016 $ 8.40 $ 8.62 0.21 0.21 0.07 (0.18 ) (0.01 ) 0.01 0.27 0.04 (0.21 ) (0.21 ) (0.21 ) (0.21 ) — (0.04 ) 0.02 (0.06 ) 0.02 (0.10 ) — 0.01 $ 8.48 $ 8.36 $ 9.50 $ 8.13 9.21 9.39 (0.91 )% 18.40 % 26,632,182 25,517,866 $ 225,717 $ 213,385 225,202 214,052 $ 130,500 $ 28,200 51,750 61,000 9.38 8.91 9.90 9.73 (A)Based on actual shares outstanding at the end of the corresponding period.(B)Based on weighted average basic per share data.(C)The tax character of distributions are determined based on taxable income calculated in accordance with income tax regulations, which may differ from amounts determined under GAAP.(D)During the three months ended December 31, 2017, the anti-dilution was a result of issuing common shares during the period at a price above the then current NAV per share. During the three months ended December 31, 2016, the dilution was a result of issuing common shares during the period at a price below the then current NAV per share.(E)Represents the impact of the different share amounts (weighted average shares outstanding during the fiscal year and shares outstanding at the end of the fiscal year) in the per share data calculations and rounding impacts.(F)Three Months Ended December 31, 2023 2022 Per Common Share Data: $ 9.39 $ 9.08 Net investment income 0.27 0.25 Net realized and unrealized gain (loss) on investments 0.19 (0.10) Net realized and unrealized gain (loss) on other — 0.01 Total from operations 0.46 0.16 Net investment income (0.25) (0.21) Return of capital — — Total distributions (0.25) (0.21) — 0.03 Total capital share transactions — 0.03 Other, net 0.01 — $ 9.61 $ 9.06 Per common share market value at beginning of period $ 9.64 $ 8.49 Per common share market value at end of period 10.70 9.62 13.74 % 15.77 % 43,508,897 35,814,602 Statement of Assets and Liabilities Data: Net assets at end of period $ 417,928 $ 324,326 412,965 326,934 Senior Securities Data: Borrowings under line of credit, at cost 85,000 108,400 Notes payable 257,000 200,000 Ratios/Supplemental Data: 10.93 % 12.93 % 11.56 % 10.68 % accordance with the terms of our dividend reinvestment plan. Total return does not take into account distributions that may be characterized as a return of capital. For further information on the estimated character of our distributions to common stockholders, refer to Note 9—Distributions to Common Stockholders.(G)Computed using the average of the balance of net assets at the end of each month of the reporting period.(H)Ratio of net expenses to average net assets is computed using total expenses, net of credits from the Adviser, to the base management, loan servicing and incentive fees.(I)Had we not received any voluntary, unconditional and irrevocable credits of the incentive fee due to the Adviser, the ratio of net expenses to average net assets would have been 9.53% and 8.98% for the quarters ended December 31, 2017 and 2016.(J)Had we not received any voluntary, unconditional and irrevocable credits of the incentive fee due to the Adviser, the ratio of net investment income to average net assets would have been 9.76% and 9.66% for the quarters ended December 31, 2017 and 2016.37NOTE 12. UNCONSOLIDATED SIGNIFICANT SUBSIDIARIESIn accordance with the SEC’s RegulationS-X, we doterms of our dividend reinvestment plan. Total return does not consolidate portfolio company investments. Further, in accordance with ASC 946, we are precludedtake into account distributions that may be characterized as a return of capital. For further information on the estimated character of our distributions to common stockholders, refer to Note 9—Distributions to Common Stockholders.consolidating any entity other than another investment company, except that ASC 946 provides for the consolidation of a controlled operating company that provides substantially all of its servicesAdviser, to the investment company or its consolidated subsidiaries.We had three unconsolidated subsidiaries, Defiance Integrated Technologies, Inc., PIC 360, LLCbase management, loan servicing and Sunshine Media Holdings, that met at least oneincentive fees.significance conditions under Rule1-02(w)Adviser, the ratio of the SEC’s RegulationS-X as of or during at least one of the three month periods ended December 31, 2017net expenses to average net assets would have been 14.57% and 2016. Accordingly, summarized, comparative financial information, in aggregate, is presented below15.79% for the three months ended December 31, 20172023 and 20162022, respectively.our unconsolidated significant subsidiaries. Three Months Ended
December 31, 2017 2016 $ 8,822 $ 8,648 1,877 2,172 40 (702 )
securities, consisting of common stock, preferred stock, subscription rights, debt securities and warrants to purchase common stock or preferred stock.
In
Record Date | Payment Date | Distribution per Common Share | Distribution per Series 2024 Term Preferred Share | |||||||
January 22, 2018 | January 31, 2018 | $ | 0.07 | $ | 0.125 | |||||
February 16, 2018 | February 28, 2018 | 0.07 | 0.125 | |||||||
March 20, 2018 | March 30, 2018 | 0.07 | 0.125 | |||||||
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| Total for the Quarter: | $ | 0.21 | $ | 0.375 | ||||||
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38
| Record Date | Payment Date | Distribution per Common Share | ||||||||||||
| January 23, 2024 | January 31, 2024 | $ | 0.0825 | |||||||||||
| February 21, 2024 | February 29, 2024 | 0.0825 | ||||||||||||
| March 21, 2024 | March 29, 2024 | 0.0825 | ||||||||||||
| Total for the Quarter: | $ | 0.2475 | ||||||||||||
| Record Date | Payment Date | Distribution per Series A Preferred Stock(A) | ||||||||||||
| January 25, 2024 | February 5, 2024 | $ | 0.130208 | |||||||||||
| February 27, 2024 | March 5, 2024 | 0.130208 | ||||||||||||
| March 26, 2024 | April 5, 2024 | 0.130208 | ||||||||||||
| Total for the Quarter: | $ | 0.390624 | ||||||||||||
The forward-looking statements contained in this Quarterly Report on Form 10-Q are excluded from the safe harbor protection provided by the Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933, as amended. collateral, experienced management teams with a significant ownership interest in the borrower, reasonable capitalization of the borrower, including an ample equity contribution or cushion based on prevailing enterprise valuation multiples and, to a lesser extent, the potential to realize appreciation and gain liquidity in our equity position, if any. We lend to borrowers that need funds for growth capital or to finance acquisitions or recapitalize or refinance their existing debt facilities. We seek to avoid investing in high-risk, early-stage enterprises. Our targeted portfolio companies are generally considered too small for the larger capital marketplace.include, but are not limited to:include: (1) the recurrence or impact of adverse eventschanges in the economy and the capital markets, including stock price volatility;volatility, inflation, rising interest rates and risks of recession; (2) risks associated with negotiation and consummation of pending and future transactions; (3) the loss of one or more of our executive officers, in particular David Gladstone, Terry Lee Brubaker or Robert L. Marcotte; (4) changes in our investment objectives and strategy; (5) availability, terms (including the possibility of interest rate volatility) and deployment of capital; (6) changes in our industry, interest rates, exchange rates or the general economy; (7) our business prospects and the prospects of our portfolio companies; (8) the degree and nature of our competition; (8)(9) changes in governmental regulation, tax rates and similar matters; (10) our ability to exit investments in a timely manner; (11) our ability to maintain our qualification as a RICregulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), and as a business development company;company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”); and (9)(12) those factors described herein, including Item 1A. “Risk Factors” of this Quarterly Report on Form 10-Q and in the “Risk Factors” sectionssection of our Annual Report on Form10-K (our “Annual Report”) for the fiscal year ended September 30, 2023, filed with the U.S. Securities and Exchange Commission (“SEC”) on November 20, 2017.13, 2023. We caution readers not to place undue reliance on any such forward-looking statements. Actual results could differ materially from those anticipated in our forward-looking statements and future results could differ materially from historical performance. We have based forward-looking statements on information available to us on the date of this report. Except as required by the federal securities laws, we undertake no obligation to publicly update or revise or any forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this Quarterly Report on Form10-Q. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the SEC from time to time, including annual reports on Form10-K, quarterly reports on Form10-Q and current reports on Form8-K.business development company (“BDC”)BDC under the Investment Company Act of 1940 as amended (the “1940 Act”).Act. In addition, for federal income tax purposes we have elected to be treated as a regulated investment company (“RIC”)RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).Code. To continue to qualify as a RIC for federal income tax purposes and obtain favorable RIC tax treatment, we must meet certain requirements, including certain minimum distribution requirements.businesseslower middle market companies in the U.S. that we believe will provide stable earnings and cash flow to pay expenses, make principal and interest payments on our outstanding indebtedness and make distributions to stockholders that grow over time; and (2) provide our stockholders with long-term capital appreciation in the value of our assets by investing in equity securities, of established businessesin connection with our debt investments, that we believe can grow over time to permit us to sell our equity investments for capital gains. To achieve our investment objectives, our primary investment strategy is to invest in several categories of debt and equity securities, with each investment generally ranging from $8 million to $30$40 million, although investment size may vary, depending upon our total assets or available capital at the time of investment. We expect that our investment portfolio over time will consist of approximately 90.0% debt investments and 10.0% equity investments, at cost. As of December 31, 2017,2023, our investment portfolio was made up of approximately 90.6% debt investments and 9.4% equity investments, at cost.$15$25 million) in the U.S. that meet certain criteria, including but not limited to, the following: the sustainability of the business’ free cash flow and its ability to grow it over time, adequate assets for loan39opportunity and have opportunistically made severalco-investmentsopportunity. In July 2012, the SEC granted us an exemptive order (the “Co-Investment Order”) that expanded our ability to co-invest, under certain circumstances, with certain of our affiliateaffiliates, including Gladstone Investment Corporation, a BDC also managed by our Advisor,the Adviser, and any future BDC or registered closed-end management investment company that is advised (or sub-advised if it controls the fund) by the Adviser, or any combination of the foregoing, subject to the conditions in the Co-Investment Order. Since 2012, we have opportunistically made several co-investments with Gladstone Investment Corporation pursuant to an exemptive order granted by the SEC.Co-Investment Order. We believe this ability toco-investthe Co-Investment Order has enhanced and will continue to enhance our ability to further our investment objectives and strategies. If we are participating in an investment with one or moreco-investors, our investment is likely to be smaller than if we were investing alone.Gladstone Management Corporation (the “Adviser”),the Adviser, an investment adviser registered with the SEC and an affiliate of ours, pursuant to an investment advisory and management agreement (the “Advisory Agreement”).agreement. The Adviser manages our investment activities. We have also entered into an administration agreement (the “Administration Agreement”) with Gladstone Administration, LLC (the “Administrator”), an affiliate of ours and the Adviser, whereby we pay separately for administrative services.theone-month LIBOR) Term Secured Overnight Financing Rate (“SOFR”) and, to a lesser extent, at fixed rates. We seek debt instruments that pay interest monthly or, at a minimum, quarterly, may have a success fee or deferred interest provision and are primarily interest only, with all principal and any accrued but unpaid interest due at maturity. Generally, success fees accrue at a set rate and are contractually due upon a change of control of a portfolio company, typically from an exit or sale. Some debt securities have deferred interest whereby some portion of the interest payment is added to the principal balance so that the interest is paid, together with the principal, at maturity. This form of deferred interest is often called PIKpaid-in-kind (“PIK”) interest.2017,2023, we invested $56.3$11.0 million in sevenone new portfolio companiescompany and extended $1.6$47.0 million ofin investments to existing portfolio companies. In addition, we exited oneportfolio company during the three months ended December 31, 2017, we exited three portfolio companies through sales and early payoffs.2023. We received a total of $19.8$22.1 million in combined net proceeds and principal repayments from the aforementioned portfolio company exitsexit, as well as principal repayments by existing portfolio companies, during the three months ended December 31, 2017. This activity resulted in a net increase in our2023. Our overall portfolio by fourconsists of 51 portfolio companies to 51as of December 31, 2023 and a net increase of $38.7increased by $37.4 million in our portfolio at cost since September 30, 2017.2023. From our initial public offering in August 2001 through December 31, 2017,2023, we have made 481646 different loans to, or investments in, 224274 companies for a total of approximately $1.7$2.7 billion, before giving effect to principal repayments on investments and divestitures.2017,2023, the following significant transactions occurred:October 2017, we sold our investment in Flight Fit N Fun LLC for a realized gain of $0.6 million. In connection with the sale, we received net cash proceeds of approximately $9.4 million, including the repayment of our debt investment of $7.8 million at par.
40
Refer
Salt & Straw, LLC by $2.9 million.
discussion.
$9.61.
Portfolio and Investment Activity
In January 2018, we invested $8.1 million in XMedius Solutions Inc. through secured first lien debt.
Record Date | Payment Date | Distribution per Common Share | Distribution per Series 2024 Term Preferred Share | |||||||
January 22, 2018 | January 31, 2018 | $ | 0.07 | $ | 0.125 | |||||
February 16, 2018 | February 28, 2018 | 0.07 | 0.125 | |||||||
March 20, 2018 | March 30, 2018 | 0.07 | 0.125 | |||||||
|
|
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| |||||||
| Total for the Quarter | $ | 0.21 | $ | 0.375 | ||||||
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41
| Record Date | Payment Date | Distribution per Common Share | ||||||||||||
| January 23, 2024 | January 31, 2024 | $ | 0.0825 | |||||||||||
| February 21, 2024 | February 29, 2024 | 0.0825 | ||||||||||||
| March 21, 2024 | March 29, 2024 | 0.0825 | ||||||||||||
| Total for the Quarter: | $ | 0.2475 | ||||||||||||
| Record Date | Payment Date | Distribution per Series A Preferred Stock(A) | ||||||||||||
| January 25, 2024 | February 5, 2024 | $ | 0.130208 | |||||||||||
| February 27, 2024 | March 5, 2024 | 0.130208 | ||||||||||||
| March 26, 2024 | April 5, 2024 | 0.130208 | ||||||||||||
| Total for the Quarter: | $ | 0.390624 | ||||||||||||
INVESTMENT INCOME Interest income Other income Total investment income EXPENSES Base management fee Loan servicing fee Incentive fee Administration fee Interest expense on borrowings Dividend expense on mandatorily redeemable preferred stock Amortization of deferred financing fees Other expenses Expenses, before credits from Adviser Credit to base management fee – loan servicing fee Credits to fees from Adviser - other Total expenses, net of credits NET INVESTMENT INCOME NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on investments and other Net unrealized appreciation (depreciation) of investments Net unrealized (appreciation) depreciation of other Net gain (loss) from investments and other NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 2022 driven mainly by increases in interest rates. Company NetFortris Corp. IA Tech, LLC TapRoot Partners, Inc. Impact! Chemical Technologies, Inc. (A) WadeCo Specialties, Inc. Subtotal—five largest investments Other portfolio companies Total Investment Portfolio Company IA Tech, LLC WadeCo Specialties, Inc. United Flexible, Inc. Lignetics, Inc. AG Transportation Holdings, LLC Subtotal—five largest investments Other portfolio companies Total Investment Portfolio value. base management fee. Average total assets subject to base management fee(A) Multiplied by prorated annual base management fee of 1.75% Base management fee(B) Portfolio company fee credit Senior syndicated loan fee credit Net Base Management Fee Loan servicing fee(B) Credit to base management fee - loan servicing fee(B) Net Loan Servicing Fee Incentive fee(B) Incentive fee credit Net Incentive Fee Portfolio company fee credit Senior syndicated loan fee credit Incentive fee credit Credits to Fees From Adviser - other(B) Operations November 2023. Leeds Novamark Capital I, L.P. in November 2022. Portfolio Company Francis Drilling Fluids, Ltd. LWO Acquisitions Company LLC Edge Adhesives Holdings, Inc. NetFortris Corp. WadeCo Specialties, Inc. United Flexible, Inc. Vision Government Solutions, Inc. Canopy Safety Brands, LLC TapRoot Partners, Inc. Alloy Die Casting, Co. Flight Fit N Fun LLC Lignetics, Inc. Defiance Integrated Technologies, Inc. Targus Cayman HoldCo, Ltd. Vacation Rental Pros Meridian Rack & Pinion, Inc. Sunshine Media Holdings L Discovery New Trident Holdcorp, Inc. Other, net (<$250) Total: our other portfolio companies. Portfolio Company Funko, LLC Edge Adhesives Holdings, Inc. Meridian Rack & Pinion, Inc. Mikawaya New Trident Holdcorp, Inc. Sunshine Media Holdings Vertellus Specialties Inc. Behrens Manufacturing, LLC Defiance Integrated Technologies, Inc. Lignetics, Inc. RBC Acquisition Corp. Francis Drilling Fluids, Ltd. Other, net (<$250) Total: 2022. Beginning investment portfolio, at fair value New investments Disbursements to existing portfolio companies Scheduled principal repayments on investments Unscheduled principal repayments on investments Net proceeds from sale of investments Net unrealized appreciation (depreciation) of investments Reversal of prior period (appreciation) depreciation of investments on realization Net realized gain (loss) on investments or other Increase in investments due to PIK(A) Net change in premiums, discounts and amortization Investment Portfolio, at Fair Value 2022: For the remaining nine months ending September 30: For the fiscal years ending March 31: Total contractual repayments Investments held as of December 31, 2017 at Cost: 2023: shareholders. 2024. From inception through December 31, 2023, we have paid distributions to common stockholders totaling approximately $469.8 million or $23.02 per share. the reinvested distribution. The additional shares will have a new holding period commencing on the day following the date on which the shares are credited to the common stockholder’s account. Computershare purchases shares in the open market in connection with the obligations under the plan. registration statement.2017,2023 to the Three Months Ended December 31, 2016 Three Months Ended December 31, 2017 2016 $ Change % Change $ 10,670 $ 8,633 $ 2,037 23.6 % 189 1,341 (1,152 ) (85.9 ) 10,859 9,974 885 8.9 1,676 1,378 298 21.6 1,186 983 203 20.7 1,373 1,293 80 6.2 272 300 (28 ) (9.3 ) 1,231 556 675 121.4 776 1,029 (253 ) (24.6 ) 248 273 (25 ) (9.2 ) 547 637 (90 ) (14.1 ) 7,309 6,449 860 13.3 (1,186 ) (983 ) (203 ) (20.7 ) (841 ) (699 ) (142 ) (20.3 ) 5,282 4,767 515 10.8 5,577 5,207 370 7.1 441 (3,448 ) 3,889 112.8 1,360 (1,055 ) 2,415 228.9 (218 ) 212 (430 ) (202.8 ) 1,583 (4,291 ) 5,874 136.9 % $ 7,160 $ 916 $ 6,244 681.7 % NM = Not MeaningfulThree Months Ended December 31, 2023 2022 $ Change % Change INVESTMENT INCOME Interest income $ 22,996 $ 18,367 $ 4,629 25.2 % Success fee, dividend, and other income 225 927 (702) (75.7) Total investment income 23,221 19,294 3,927 20.4 EXPENSES Base management fee 3,245 2,829 416 14.7 Loan servicing fee 2,128 1,874 254 13.6 Incentive fee 2,984 2,181 803 36.8 Administration fee 454 403 51 12.7 Interest expense on line of credit and notes payable 5,032 4,629 403 8.7 Amortization of deferred financing costs 429 378 51 13.5 Other expenses 725 585 140 23.9 Expenses, before credits from Adviser 14,997 12,879 2,118 16.4 Credit to base management fee – loan servicing fee (2,128) (1,874) (254) 13.6 Credits to fees from Adviser – other (1,582) (436) (1,146) 262.8 Total expenses, net of credits 11,287 10,569 718 6.8 NET INVESTMENT INCOME 11,934 8,725 3,209 36.8 NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on investments 259 9,319 (9,060) (97.2) Net realized gain (loss) on other 3 253 (250) (98.8) Net unrealized appreciation (depreciation) of investments 7,805 (12,599) 20,404 (161.9) Net gain (loss) from investments and other 8,067 (3,027) 11,094 (366.5) NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 20,001 $ 5,698 $ 14,303 251.0 % 23.6%25.2% for the three months ended December 31, 2017,2023, as compared to the prior year. This increase was due primarilyyear period. Generally, the level of interest income from investments is directly related to an increase in the weighted average yield on and an increase inprincipal 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 portfolio.interest-bearing investment portfolio for the three months ended December 31, 2023 was $657.6 million, compared to $589.6 million for the three months ended December 31, 2022, an increase of $68.0 million, or 11.5%. The weighted average yield on our interest-bearing investments is based on the current stated interest rate on interest-bearing investments, which increased to 12.0%13.9% for the three months ended December 31, 2017,2023, compared to 11.3%12.3% for the three months ended December 31, 2016, 2022, inclusive of any allowances on interest receivables made during those periods. The increase in the weighted average principal balance of our interest-bearing investment portfolio during the three months ended December 31, 2017,yield was $353.4 million, compared to $298.8 million for the prior year, an increase of $54.6 million, or 18.3%.2017, two portfolio companies, Sunshine Media2023, our loan to Edge Adhesives Holdings, (“Sunshine”) and Alloy Die Casting Co. were either fully or partiallyInc. was onnon-accrual status with an aggregate debt cost basis of approximately $27.9$6.1 million, or 6.8%0.9% of the cost basis of all debt investments in our portfolio, and an aggregate fair value of $2.8 million, or 0.4% of the fair value of all debt investments in our portfolio. As of December 31, 2016, one portfolio company, Sunshine,September 30, 2023, our loan to Edge Adhesives Holdings, Inc. was partially onnon-accrual status with an aggregate debt cost basis of approximately $19.1$6.1 million, or 6.1%0.9% of the cost basis of all debt investments in our portfolio, and an aggregate fair value of $2.9 million, or 0.5% of the fair value of all debt investments in our portfolio.85.9%75.7% during the three months ended December 31, 2017,2023, as compared to the prior year. This decrease wasyear period, primarily due to a $1.5 million decrease in success fees recognizeddividend income period over period. For the three months ended2017, other income consisted primarily 2023 and September 30, 2023, no single investment represented greater than 10%of prepayment fees received. For the three months ended December 31, 2016, other income consisted primarily of success fees recognized.42The following tables list thetotal investment income for our five largest portfolio company investments at fair value during the respective periods: As of December 31, 2017 Three Months Ended December 31, 2017 Fair Value % of Portfolio Investment Income % of Total
Income $ 24,795 6.3 % $ 663 6.1 % 23,690 6.0 722 6.7 22,220 5.7 649 6.0 20,336 5.2 45 0.4 20,005 5.1 500 4.6 111,046 28.3 2,579 23.8 281,384 71.7 8,268 76.2 $ 392,430 100.0 % $ 10,847 100.0 % (A)New investment during applicable period. As of December 31, 2016 Three Months Ended December 31, 2016 Fair Value % of Portfolio Investment Income % of Total
Income $ 23,345 8.1 % $ 705 7.1 % 18,443 6.4 477 4.8 18,196 6.3 568 5.7 13,809 4.8 429 4.3 13,130 4.6 440 4.4 86,923 30.2 2,619 26.3 201,323 69.8 7,351 73.7 $ 288,246 100.0 % $ 9,970 100.0 % by 10.8%$0.7 million, or 6.8%, for the three months ended December 31, 20172023, as compared to the prior year.year period. This increase was primarily due to a $0.7$0.8 million increase in the incentive fee earned by the Adviser and a $0.4 million increase in interest expense, and a $0.2 million increase in our net base management and incentive fees to the Advisor, partially offset by a $0.3$0.7 million decrease in dividendthe net base management fee earned by the Adviser.mandatorily redeemable preferred stock.Interest expenseborrowings and notes payable increased by 121.4%$0.4 million, or 8.7%, during the three months ended December 31, 2017, as compared2023 driven by a shift in the composition of our debt outstanding and changes in interest rates. Interest expense on notes payable increased by $1.1 million period over period with the issuance of our 2028 notes in August 2023. Interest expense on our Credit Facility decreased by $0.7 million due primarily to the prior year, due to an increasea significant decrease in the weighted average balance outstanding on our Credit Facility. The weighted average balance outstandingwhich was $48.6 million during the three months ended December 31, 2017, was $98.2 million,2023, as compared to $39.3$129.1 million in the prior year period, an increasea decrease of 149.9%62.4%. The effective interest rate on our Credit Facility, including unused commitment fees incurred, but excluding the impact of deferred financing costs, was 5.0%12.7% during the three months ended December 31, 2017,2023, compared to 5.7%6.9% during the prior year period. The decreaseincrease in the effective interest rate was driven primarily by the decreasea $0.3 million increase in unused commitment fees paid induring the currentthree months ended December 31, 2023 as compared to the prior year period due to the greater weighted average balance outstanding on our Credit Facility.Netas well as an increase in interest rates.increaseddecreased by $0.2$0.7 million, or 12.0%30.5%, duringfor the three months ended December 31, 2017,2023, as compared to the prior year period, resulting from an increase in total assets year over year.Our Board of Directors acceptednon-contractual, unconditional and irrevocable credits to the base management fee from the Adviser to reduce the income-based incentive feefor new deal origination fees period over period, partially offset by an increase in average total assets subject to the extent net investment income did not cover 100.0% of our distributions to common stockholders during the three months ended December 31, 2017 and 2016, which credits totaled $0.1 million and $37, respectively.43accompanyingNotes toConsolidated Financial Statements and are summarized in the following table: Three Months Ended
December 31, 2017 2016 $ 383,086 $ 315,000 0.4375 % 0.4375 % $ 1,676 $ 1,378 (664 ) (649 ) (92 ) (13 ) $ 920 $ 716 1,186 983 (1,186 ) (983 ) $ — $ — 1,373 1,293 (85 ) (37 ) $ 1,288 $ 1,256 (664 ) (649 ) (92 ) (13 ) (85 ) (37 ) $ (841 ) $ (699 ) (A)Three Months Ended
December 31,2023 2022 $ 741,714 $ 646,629 Multiplied by prorated annual base management fee of 1.75% 0.4375 % 0.4375 % $ 3,245 $ 2,829 Portfolio company fee credit (1,551) (404) Syndicated loan fee credit (31) (32) Net Base Management Fee $ 1,663 $ 2,393 2,128 1,874 (2,128) (1,874) Net Loan Servicing Fee $ — $ — 2,984 2,181 Incentive fee credit — — Net Incentive Fee $ 2,984 $ 2,181 Portfolio company fee credit (1,551) (404) Syndicated loan fee credit (31) (32) Incentive fee credit — — $ (1,582) $ (436) 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)Reflected, on a gross basis, as a line item on our accompanyingConsolidated Statements of Operations.Dividend expense on mandatorily redeemable preferred stock decreased by $0.3 million, or 24.6%, due to the redemptionbase management fee is defined as total assets, including investments made with proceeds of allborrowings, 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.$61.0 million 6.75% Series 2021 Term Preferred Stock and the issuanceConsolidated Statements of $51.8 million 6.00% Series 2024 Term Preferred Stock in September 2017.2017,2023, we recorded a net realized gain on investments of $0.6$0.3 million, which resulted primarily from a $0.3 million realized gain recognized on the sale of our investment in Flight Fit N FunPIC 360, LLC in October 2017 for a $0.6 million realized gain.2016,2022, we recorded a net realized lossgain on investments of $3.4$9.3 million, which resulted primarily from the sale of substantially all the assets of RBC Acquisition Corp (“RBC”) for a $2.3$5.9 million realized loss andgain recognized on thewrite-off of $5.0 million sale of our investment in Sunshine, partially offset by the sale of Behrens Manufacturing, LLC (“Behrens”) forTargus Cayman HoldCo, Ltd. in October 2022 and a $2.5$4.4 million realized gain and a $1.3 million realized gain related to an additionalearn-out from Funko, LLC, which was exitedrecognized on our investment in the prior year.442017,2023, we recorded net unrealized appreciation of investments in the aggregate amount of $1.4$7.8 million. The net realized gain (loss) and unrealized appreciation (depreciation) across our investments for the three months ended December 31, 2017,2023 were as follows: Three Months Ended December 31, 2017 Realized
Gain
(Loss) Unrealized
Appreciation
(Depreciation) Reversal of
Unrealized
(Appreciation)
Depreciation Net
Gain
(Loss) $ — $ 2,429 $ — $ 2,429 — 1,012 — 1,012 — 482 — 482 — 430 — 430 — 227 — 227 — 186 — 186 — 178 — 178 — 147 — 147 — 110 — 110 — 86 — 86 582 — (725 ) (143 ) — (206 ) — (206 ) — (212 ) — (212 ) — (249 ) — (249 ) — (252 ) — (252 ) — (303 ) — (303 ) — (318 ) — (318 ) — (555 ) — (555 ) — (1,221 ) — (1,221 ) (8 ) 201 (87 ) 106 $ 574 $ 2,172 $ (812 ) $ 1,934 Three Months Ended December 31, 2023 Portfolio Company Realized Gain
(Loss)Unrealized
Appreciation
(Depreciation)Antenna Research Associates, Inc. $ — $ 6,769 $ — $ 6,769 MCG Energy Solutions, LLC — 2,105 — 2,105 Engineering Manufacturing Technologies, LLC — 1,916 — 1,916 Lonestar EMS, LLC — 1,131 — 1,131 Eegee's LLC — 899 — 899 OCI, LLC — 590 — 590 TNCP Intermediate HoldCo, LLC — 559 — 559 Ohio Armor Holdings, LLC — 519 — 519 Café Zupas — 472 — 472 ENET Holdings, LLC — 470 — 470 Canopy Safety Brands, LLC — 416 — 416 8th Avenue Food & Provisions, Inc. — 415 — 415 Sokol & Company Holdings, LLC — 408 — 408 Viva Railings, LLC — 407 — 407 Springfield, Inc. — (516) — (516) Giving Home Health Care, LLC — (536) — (536) HH-Inspire Acquisition, Inc. — (693) — (693) WB Xcel Holdings, LLC — (805) — (805) NeoGraf Solutions, LLC — (1,017) — (1,017) B+T Group Acquisition Inc. — (2,062) — (2,062) FES Resources Holdings LLC — (3,717) — (3,717) Other, net (<$500) 259 358 (283) 334 Total: $ 259 $ 8,088 $ (283) $ 8,064 20172023 was improvementthecertainseveral of our portfolio companies, most notably Francis Drilling Fluids, Ltd. (“FDF”) of $2.4 million and LWO Acquisitions Company LLC of $1.0 million. This appreciation was partially offset by the decrease in comparable transaction multiples used to estimate the fair value of certain of our other portfolio companies, and the decline in the financial and operational performance of New Trident Holdcorp, Inc.certain of $1.2 million.2016,2022, we recorded net unrealized depreciation of investments in the aggregate amount of $1.1$12.6 million. The net realized gain (loss) and unrealized appreciation (depreciation) across our investments for the three months ended December 31, 2016,2022 were as follows: Three Months Ended December 31, 2016 Realized
Gain
(Loss) Unrealized
Appreciation
(Depreciation) Reversal of
Unrealized
(Appreciation)
Depreciation Net
Gain
(Loss) $ 1,251 $ 53 $ — $ 1,304 — 666 — 666 — 605 — 605 — 276 — 276 — (281 ) — (281 ) (5,000 ) 983 3,613 (404 ) 109 (574 ) — (465 ) 2,505 — (3,211 ) (706 ) — (710 ) — (710 ) — (1,011 ) — (1,011 ) (2,330 ) — 1,119 (1,211 ) — (3,797 ) — (3,797 ) 17 1,148 66 1,231 $ (3,448 ) $ (2,642 ) $ 1,587 $ (4,503 ) Three Months Ended December 31, 2022 Portfolio Company Realized Gain
(Loss)Unrealized
Appreciation
(Depreciation)Encore Dredging Holdings, LLC $ — $ 2,277 $ — $ 2,277 ENET Holdings, LLC — 446 103 549 Circuitronics EMS Holdings LLC (921) — 921 — Targus Cayman HoldCo, Ltd. 5,916 — (5,916) — Antenna Research Associates, Inc. — (545) — (545) Leeds Novamark Capital I, L.P. 4,406 — (5,018) (612) 8th Avenue Food & Provisions, Inc. — (1,022) — (1,022) Defiance Integrated Technologies, Inc. — (1,076) — (1,076) Salvo Technologies, Inc. — (1,479) — (1,479) B+T Group Acquisition Inc. — (1,858) — (1,858) Other, net (<$500) (82) 473 95 486 Total: $ 9,319 $ (2,784) $ (9,815) $ (3,280) 20162022 was athe reversal of unrealized appreciation associated with the exit of our investment in Targus Cayman HoldCo, Ltd. and the sale of underlying assets within Leeds Novamark Capital I, L.P as well as the decrease in comparable transaction multiples used to estimate the fair value of certain of our other portfolio companies, and the decline in the financial and operational performance of certain of our other portfolio companies, most notably FDF of $3.8 million, Lignetics, Inc. of $1.0 million, the reversal of previously recorded depreciation on our investment in Sunshine upon partialwrite-off and the reversal of previously recorded unrealized appreciation on our investment in Behrens upon exit. This depreciation was partially offset by the reversal of previously recorded unrealized depreciation on RBC upon exit and an additionalearn-out receivable earned and included in the realized gain on the sale of Funko, LLC.45Net Unrealized (Appreciation) Depreciation of OtherDuring the three months ended December 31, 2017, we recorded $0.2 million of unrealized appreciation on our Credit Facility at fair value. During the three months ended December 31, 2016, we recorded $0.2 million of unrealized depreciation on our Credit Facility at fair value.4620172023 was $36.9$26.2 million, as compared to net cash provided by operating activities of $31.5$34.5 million for the three months ended December 31, 2016.2022. The change was primarily due to an increase in purchases of investments and a decrease in principal repayments, on investments and net proceeds from sale of investments period over period. Purchases of investments were $56.9$58.0 million during the three months ended December 31, 20172023, compared to $19.8$13.4 million during the three months ended December 31, 2016.2022. Repayments and net proceeds from sales were $19.8$22.1 million during the three months ended December 31, 20172023 compared to $50.5$39.4 million during the three months ended December 31, 2016.2017,2023, we had loans to, syndicated participations in or equity investments in 51 private companies, with an aggregate cost basis of approximately $450.1$759.6 million. As of December 31, 2016,September 30, 2023, we had loans to, syndicated participations in or equity investments in 44 private51 companies, with an aggregate cost basis of approximately $349.0$722.3 million.20172023 and 2016: Three Months Ended
December 31, 2017 2016 $ 352,373 $ 322,114 56,336 17,240 602 2,807 (2,529 ) (1,683 ) (16,040 ) (40,551 ) (1,274 ) (8,219 ) 2,172 (2,642 ) (812 ) 1,587 574 (3,448 ) 983 1,095 45 (54 ) $ 392,430 $ 288,246 (A)Paid-in-kind (“PIK”) interest is anon-cash source of income and is calculated at the contractual rate stated in a loan agreement and added to the principal balance of a loan.Three Months Ended December 31, 2023 2022 Beginning investment portfolio, at fair value $ 704,815 $ 649,615 New investments 11,000 2,416 Disbursements to existing portfolio companies 46,998 10,963 Scheduled principal repayments on investments (2,460) (2,048) Unscheduled principal repayments on investments (19,346) (23,515) Net proceeds from sale of investments (260) (13,620) Net unrealized appreciation (depreciation) of investments 8,088 (2,784) Reversal of prior period depreciation (appreciation) of investments on realization (283) (9,815) Net realized gain (loss) on investments 259 9,319 1,211 1,194 Net change in premiums, discounts and amortization (37) 14 Investment Portfolio, at Fair Value $ 749,985 $ 621,739 2017: Amount(A) 2018 $ 33,643 2019 53,920 2020 82,103 2021 81,813 2022 45,022 Thereafter 117,154 $ 413,655 Adjustments to cost basis of debt investments (5,750 ) Investments in equity securities 42,227 $ 450,132 Amount For the remaining nine months ending September 30: $ 21,950 For the fiscal years ending September 30: 2025 42,960 2026 140,846 2027 253,699 2028 185,178 Thereafter 44,847 Total contractual repayments $ 689,480 Adjustments to cost basis of debt investments (1,288) Investments in equity securities 71,442 Investments held as of December 31, 2023 at cost: $ 759,634 20172023 was $36.4$26.4 million, which consisted primarily of $37.5$37.2 million in net borrowings on our Credit Facility, and $5.6partially offset by $10.8 million in distributions to our common stockholders, partially offset by $4.5 million in proceeds from the issuance of common stock, net of underwriting costs.20162022 was $31.8$30.4 million, which consisted primarily of $43.1$33.4 million in net repayments on our Credit Facility and $5.2$7.4 million in distributions to our common stockholders,shareholders, partially offset by $16.4$10.7 million in gross proceeds from the issuance of common stock netunder our equity distribution agreement with Jefferies LLC. and Dividends to Stockholdersinvestment company taxable income.Investment Company Taxable Income. Additionally, our Credit Facility has a covenant that generally restricts the amount of distributions to stockholders that we can pay out to be no greater than our aggregate net investment income, net capital gains and amounts elected to have been paid during the prior year in accordance with Section 855(a) of the Code. In accordance with these requirements, we paid monthly cash distributions of $0.0825 per common share for each month for the three months ended December 31, 2023, and $0.07 per common share for each month duringfor the three months ended December 31, 2017 and 2016, which2022. These distributions totaled an aggregate of $5.6$10.8 million and $5.2$7.4 million for the three months ended December 31, 2023 and 2022, respectively. In January 2018,2024, our Board of Directors declared a monthly distribution of $0.07$0.0825 per common share for each of January, February, and March 2018.2024. Our Board of Directors declared these distributions to our stockholders based on our estimates of our investment company taxable incomeInvestment Company Taxable Income for the fiscal year ending September 30, 2018.2017,2023, our current and accumulated earnings and profits (after taking into account mandatorily redeemable preferredexceeded common stock dividends) exceeded $0.3$5.0 million of the 2017 as having been paid in the respective prior year.20182024 will be determined at fiscalyear-end year end, based upon our investment company taxable income for the full fiscal year and distributions paid during the full fiscal year. Such a characterization made on a quarterly basis may not be representative of the actual full fiscal year characterization.Preferred Stock DividendsIn October 2017,Boardtransfer agent, Computershare, Inc. (“Computershare”), have the option to participate in a dividend reinvestment plan offered by Computershare, as the plan agent. This is an “opt in” dividend reinvestment plan, meaning that common stockholders may elect to have their cash distributions automatically reinvested in additional shares of Directors declared a combined dividend forour common stock. Common stockholders who do make such election will receive their distributions in cash. Common stockholders who receive distributions in thepro-rated period from and including the issuance date, September 27, 2017, to and including September 30, 2017 and the full month form of October 2017, which totaled $0.141667 per share,stock will be subject to the holders of our Series 2024 Term Preferred Stocksame federal, state and monthly cash dividends of $0.125 per sharelocal tax consequences as stockholders who elect to holders of our Series 2024 Term Preferred Stock for each of November and December 2017. Thesereceive their distributions totaledin cash. The common stockholder will have an aggregate of $0.8 million. Our Board of Directors declared and we paid monthly cash dividends of $0.140625 per share to holders of our Series 2021 Term Preferred Stock for each month duringadjusted basis in the three months ended December 31, 2016, which totaled an aggregate of $1.0 million. In January 2018, our Board of Directors declared monthly cash dividends of $0.125 per share to holders of our Series 2024 Term Preferred Stock for each of January, February, and March 2018.In accordance with GAAP, we treat these monthly dividends as an operating expense. For federal income tax purposes,additional common shares purchased through the dividends paid by us to preferred stockholders generally constitute ordinary incomeplan equal to the extentamount of our current and accumulated earnings and profits.We filed Post-Effective Amendment No. 2 to our current universal on FormN-2 (our “Registration Statement”) (FileNo. 333-208637) with the SEC on December 19, 2017, which was declared effective by the SEC on February 1, 2018. Our Registration Statement permits us to issue, through one or more transactions, up to an aggregate of $300.0 million in securities, consisting of common stock, preferred stock, subscription rights, debt securities and warrants to purchase common stock, preferred stock or debt securities. As of December 31, 2017,2023, we havehad the ability to issue up to $220.0an additional $151.1 million in securities under the Registration Statement.In February 2015, we entered into equity distribution agreements (commonly referred to as“at-the-market agreements” or the “Sales Agreements”) with KeyBanc Capital Markets Inc. and Cantor Fitzgerald & Co., each a “Sales Agent,” under which we had the ability to issue and sell, from time to time, through the Sales Agents, up to an aggregate offering price of $50.0 million shares of our common stock. In May 2017, we terminated the Sales Agreement with KeyBanc Capital Markets Inc. and amended the Sales Agreement with Cantor Fitzgerald & Co. to reference our current registration statement. All other material terms of the Sales Agreement remained unchanged. During the three months ended December 31, 2017, we sold 471,498 shares of our common stock under the Sales Agreement with Cantor Fitzgerald & Co., at a weighted-average price of $9.69 per share and raised $4.6 million of gross proceeds. Net proceeds, after deducting commissions and offering costs borne by us, were approximately $4.5 million. As of December 31, 2017, we had a remaining capacity to sell up to $37.9 million of common stock under the Sales Agreement with Cantor Fitzgerald & Co. We did not sell any shares under the Sales Agreements during the three months ended December 31, 2016.48Pursuant to our prior registration statement, in October 2016, we completed a public offering of 2.0 million shares of our common stock at a public offering price of $7.98 per share, which was below our then current NAV per share. In November 2016, the underwriters partially exercised their overallotment option to purchase an additional 173,444 shares of our common stock. Gross proceeds totaled $17.3 million and net proceeds, after deducting underwriting discounts and offering costs borne by us, were approximately $16.4 million. The net proceeds of this offering were used to repay borrowings under our Credit Facility. We did not request that our stockholders approve the Company’s ability to issue sharesFebruary 2, 2018,December 31, 2023, the closing market price of our common stock was $9.09 a 7.2%$10.70 per share, an 11.3% premium to our December 31, 20172023 NAV per share of $8.48.Term Preferred StockPursuant to our Registration Statement, in September 2017, we completed a public offering$9.61.approximately 2.1 million shares of our Series 2024 Term Preferred Stock at a public offering price of $25.00 per share. Gross proceeds totaled $51.8 million and net proceeds, after deducting underwriting discounts, commissions and offering expenses borne by us, were approximately $49.8 million. We incurred approximately $1.9 million in total underwriting discounts and offering costs related to the issuance of the Series 2024 Term Preferred Stock, which have been recorded as discounts to the liquidation value on our accompanyingConsolidated Statements of Assets and Liabilities and are being amortized over the period from issuance through September 30, 2024, the mandatory redemption date. The proceeds plus borrowings under our Credit Facility were used to voluntarily redeem all 2.4 million outstanding shares of our then existing 6.75% Series 2021 Term Preferred Stock, par value $0.001 per share. In connection with the voluntary redemption of our Series 2021 Term Preferred Stock, we incurred a loss on extinguishment of debt of $1.3 million, which has been reflected in Realized loss on other in our accompanying Consolidated Statement of Operations and which is primarily comprised of the unamortized deferred issuance costs at the time of redemption.The shares of our Series 2024 Term Preferred Stock are traded under the ticker symbol “GLADN” on the Nasdaq. Our Series 2024 Term Preferred Stock is not convertible into our common stock or any other security and provides for a fixed dividend equal to 6.00% per year, payable monthly (which equates in total to approximately $3.1 million per year). We are required to redeem all of the outstanding Series 2024 Term Preferred Stock on September 30, 2024 for cash at a redemption price equal to $25.00 per share plus an amount equal to all unpaid dividends and distributions on such share accumulated to (but excluding) the date of redemption (the “Redemption Price”). We may additionally be required to mandatorily redeem some or all of the shares of our Series 2024 Term Preferred Stock early, at the Redemption Price, in the event of the following: (1) upon the occurrence of certain events that would constitute a change in control, and (2) if we fail to maintain an asset coverage of at least 200% on our “senior securities that are stock” (which is currently only our Series 2024 Term Preferred Stock) and the failure remains for a period of 30 days following the filing date of our next SEC quarterly or annual report. The asset coverage on our “senior securities that are stock” as of September 30, 2017 was 249.6%, calculated in accordance with Sections 18 and 61 of the 1940 Act.We may also voluntarily redeem all or a portion of the Series 2024 Term Preferred Stock at our option at the Redemption Price at any time after September 30, 2019. If we fail to redeem our Series 2024 Term Preferred Stock pursuant to the mandatory redemption required on September 30, 2024, or in any other circumstance in which we are required to mandatorily redeem our Series 2024 Term Preferred Stock, then the fixed dividend rate will increase by 4.0% for so long as such failure continues. As of December 31, 2017, we have not redeemed, nor have we been required to redeem, any shares of our outstanding Series 2024 Term Preferred Stock.Revolving Credit Facility1, 2015,13, 2021, we, through Business Loan, entered into a Fifth Amendedsixth amended and Restated Credit Agreementrestated credit agreement with KeyBank National Association (“KeyBank”) as administrative agent, lead arranger, managing agent and lender, the Adviser, as servicer, and certain other lenders party thereto (the “Credit Facility”).lender, which increased thetotal commitment amount of our$233.7 million with an “accordion” feature that permits us to increase the size of the facility to $350.0 million. The Credit Facility from $137.0 million to $140.0 million, extended thehas a revolving period end date by three years to January 19, 2019, decreased the marginal interest rate added to30-day LIBOR from 3.75% to 3.25% per annum, set the unused commitment fee at 0.50% on all undrawn amounts, expanded the scope of eligible collateral,October 31, 2025, and amended other terms and conditions to among other items. If our Credit Facility is not renewed or extended by January 19, 2019,a final maturity date of October 31, 2027 (at which time all principal and interest will be due and payable on or before April 19, 2020. Subject to certain terms and conditions, ourif the Credit Facility may be expanded up to a total of $250.0 million through additional commitments of new or existing lenders. We incurred fees of approximately $1.1 million in connection with this amendment, which are being amortized through our Credit Facility’sis not extended by the revolving period end date of January 19, 2019. date). The interest rate margin is 3.00% during the revolving period and 3.50% thereafter (in each case plus a 10 basis point SOFR credit spread adjustment).June 19, 2015,December 12, 2023, we, through Business Loan, entered into certain joinder and assignment agreements with three new lendersAmendment No. 5 to the Credit Facility to increase borrowing capacity on our Credit Facility by $30.0the commitment amount from $223.7 million to $170.0$233.7 million. We incurred fees of approximately $0.6 million in connection with this expansion, which are being amortized through our Credit Facility’s revolving period end date of January 19, 2019.49On October 9, 2015, August 18, 2016, and August 24, 2017, we entered into Amendments No. 1, 2 and 3 to our Credit Facility, respectively, each of which clarified or modified various constraints on available borrowings.consents.consent. Our Credit Facility also generally limits distributions to our stockholders on a fiscal year basis to the sum of our net investment income, net capital gains and amounts elected to have been paid during the prior year in accordance with Section 855(a) of the Code. Business Loan is also subject to certain limitations on the type of loan investments it can apply as collateral towards the borrowing base to receive additional borrowing availability under our Credit Facility, including restrictions on geographic concentrations, sector concentrations, loan size, payment frequency and status, average life, portfolio company leverage and lien property. Our Credit Facility further requires Business Loan to comply with other financial and operational covenants, which obligate Business Loan to, among other things, maintain certain financial ratios, including asset and interest coverage and a minimum number of 25 obligors required in the borrowing base.subject to a performance guaranty that requires usrequired to maintain (i) a minimum net worth (defined in our Credit Facility to include ourany outstanding mandatorily redeemable preferred stock) of $205.0$325.0 million plus 50%50.0% of all equity and subordinated debt raised after May 1, 201513, 2021 less 50% of any equity and subordinated debt retired or redeemed after May 1, 2015,13, 2021, which equates to $224.1$408.9 million as of December 31, 2017,2023, (ii) asset coverage with respect to “senior securities representing indebtedness” of at least 200%,150% (or such percentage as may be set forth in accordance with SectionsSection 18 andof the 1940 Act, as modified by Section 61 of the 1940 ActAct), and (iii) our status as a BDC under the 1940 Act and as a RIC under the Code.2017,2023, and as defined in the performance guaranty of our Credit Facility, we had a net worth of $274.9$670.1 million, asset coverage on our “senior securities representing indebtedness” of 310.4%219.3%, calculated in accordance with the requirements of Section 18 and 61 of the 1940 Act, and an active status as a BDC and RIC. In addition, we had 3536 obligors in our Credit Facility’s borrowing base as of December 31, 2017.2023. As of December 31, 2017,2023, we were in compliance with all of our Credit Facility covenants. Refer to Note 5—Borrowings of the notes to our accompanyingConsolidated Financial Statementsincluded elsewhere in this quarterly reportQuarterly Report for additional information regarding our Credit Facility.20172023 and September 30, 2017,2023, we hadoff-balance sheet success fee receivables on our accruing debt investments of $5.6$4.5 million and $4.6$4.0 million (or approximately $0.21$0.10 per common share and $0.18$0.09 per common share), respectively, that would be owed to us, based on our currentgenerally upon a change of control of the portfolio if fully paid off.companies. Consistent with GAAP, we generally have not recognized our success fee receivables and related income in ourConsolidated Financial Statements until earned. Due to the contingent nature of our success fees, there are no guarantees that we will be able to collect all of these success fees or know the timing of such collections.50
Contractual Obligations(A) Credit Facility(B) Mandatorily Redeemable Preferred Stock Interest expense on debt obligations(C) Total Estimates As of December 31, As of September 30, Rating Highest Average Weighted Average Lowest As of December 31, As of September 30, Rating Highest Average Weighted Average Lowest As of December 31, As of September 30, Rating Highest Average Weighted Average Lowest20172023 and September 30, 20172023 to be immaterial.2017,2023, at cost: Payments Due by Period Less than
1 Year 1-3 Years 3-5 Years More than 5
Years Total $ — $ 130,500 $ — $ — $ 130,500 — — — 51,750 51,750 7,258 11,506 6,210 3,105 28,079 $ 7,258 $ 142,006 $ 6,210 $ 54,855 $ 210,329 (A)Excludes our unused line of credit commitments, an unused delayed draw term loan and uncalled capital commitments to our portfolio companies in an aggregate amount of $24.3 million, at cost, as of December 31, 2017.(B)Principal balance of borrowings outstanding under our Credit Facility, based on the current contractual revolver period end date to the revolving nature of the facility.(C)Includes estimated interest payments on our Credit Facility and dividend obligations on our Series 2024 Term Preferred Stock. The amount of interest expense calculated for purposes of this table was based upon rates and balances as of December 31, 2017. Dividend payments on our Series 2024 Term Preferred Stock assume quarterly dividend declarations and monthly dividend distributions through the date of mandatory redemption.Payments Due by Period 1-3 Years 3-5 Years More than 5
YearsTotal $ — $ — $ 85,000 $ — $ 85,000 Notes Payable — 150,000 107,000 — 257,000 22,406 37,766 17,510 — 77,682 Total $ 22,406 $ 187,766 $ 209,510 $ — $ 419,682 PoliciesNotes notes to our Consolidated Financial Statements included elsewhere in this Quarterly Report.Additionally, refer to Note 3—Investments in theour accompanyingNotes toConsolidated Financial Statements included elsewhere in this Quarterly Report for additional information regarding fair value measurements and our application of Financial Accounting Standards Board Accounting Standards Codification Topic 820, “Fair Value Measurements and Disclosures.” We have also identified our revenue recognition policy as a critical accounting policy, which is described in Note 2— Summary of Significant Accounting Policies in theour accompanyingNotes to Consolidated Financial Statements included elsewhere in this Quarterly Report.51atas of December 31, 20172023 and September 30, 2017,2023, representing approximately 91.6%98.3% and 91.9%98.2%, respectively, of the principal balance of all debt investments in our portfolio at the end of each period: 2017 2017 9.0 9.0 5.8 5.7 6.0 5.8 1.0 1.0 Rating Highest 10.0 10.0 Average 7.2 7.1 Weighted Average 7.6 7.5 Lowest 3.0 3.0 atas of December 31, 20172023 and September 30, 2017,2023, representing approximately 7.3%1.3% and 6.9%1.3%, respectively, of the principal balance of all debt investments in our portfolio at the end of each period: 2017 2017 6.0 6.0 3.8 4.4 4.2 4.6 1.0 3.0 Rating Highest 5.0 5.0 Average 3.5 3.5 Weighted Average 4.2 4.2 Lowest 3.0 3.0 atas of December 31, 20172023 and September 30, 2017,2023, representing approximately 1.1%0.4% and 1.2%0.5%, respectively, of the principal balance of all debt investments in our portfolio at the end of each period: 2017 2017 3.0 3.0 2.5 3.0 2.3 3.0 2.0 3.0 Rating Highest 5.0 5.0 Average 5.0 5.0 Weighted Average 5.0 5.0 Lowest 5.0 5.0 purposespurposes. As a RIC, we generally are not subject to federal income tax on the portion of our taxable income and alsogains distributed to limitour stockholders. To maintain our qualification as a RIC, we must maintain our status as a BDC and meet certain source-of-income and asset diversification requirements. In addition, in order to qualify to be taxed as a RIC, we must distribute to stockholders at least 90% of our Investment Company Taxable Income, determined without regard to the dividends paid deduction. Our policy generally is to make distributions to our stockholders in an amount up to 100% of our Investment Company Taxable Income. We may retain some or all of our net long-term capital gains, if any, and designate them as deemed distributions, or distribute such gains to stockholders in cash.taxestax on undistributed amounts of income, we must distribute to stockholders, during each calendar year, an amount at least equal to the sum of: (1) 98% of our ordinary income for the calendar year, (2) 98.2% of our capital gain net income (both long-term and short-term) for the one-year period ending on October 31 of the calendar year, and (3) any income realized, but not distributed, in the preceding year (to the extent that income tax was not imposed on RICs. such amounts) less certain over-distributions in prior years. Under the RIC Modernization Act, we are permitted to9—Distributions to Common Stockholders2—Summary of Significant Accounting Policies in the notes to our accompanyingConsolidated Financial Statements included elsewhere in this report for additional information regarding our tax status.Recent Accounting PronouncementsRefer to Note 2—Summary of Significant Accounting Policies in the notes to our accompanyingConsolidated Financial Statements included elsewhere in this reportQuarterly Report for a description and our application of recent accounting pronouncements.52
pronouncements, if any.ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
| Variable rates | 88.3 | % | |||||
| 11.7 | % | |||||
| 100.0 | ||||||
| % | ||||||
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ITEM 1.LEGAL PROCEEDINGS.
The recently enacted legislation informally titled the Tax Cuts and Jobs Act and other legislative, regulatory and administrative developments may adversely affect the Company or its stockholders.
On December 22, 2017, President Trump signed into law P.L.115-97, informally titled the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes major changes to the Code, including a number of provisions of the Code that affect the taxation of RICs and their stockholders. Certain provisions of the Tax Act that may impact us and our stockholders include:
The individual and collective impact of these provisions and other provisions of the Tax Act on the Company and its stockholders is uncertain, and may not become evident for some period of time. In addition, other legislative, regulatory or administrative changes may be enacted or promulgated, either prospectively or with retroactive effect, and may adversely affect the Company or its stockholders. The Company’s stockholders should consult their individual tax advisors regarding the implications of the Tax Act and other potential legislative, regulatory or administrative changes on their investment in GLAD’s securities.
ITEM 3.DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
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| 101.INS | XBRL Instance Document | ||||||||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | ||||||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | ||||||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | ||||||||||
| 101.DEF | XBRL Definition Linkbase | ||||||||||
| 104 | Cover Page Interactive Data File (formatted in iXBRL and contained in Exhibit 101) | ||||||||||
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GLADSTONE CAPITAL CORPORATIONBy: Nicole Schaltenbrand By:/s/ Nicole SchaltenbrandNicole SchaltenbrandDate: February 5, 201856