In accordance with ASC 820, we determine the fair value of our investments to be the price that would be received for an investment in a current sale, which assumes an orderly transaction between willing market participants on the measurement date. This fair value 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.

•Level 2 — inputs to the valuation methodology include quoted prices for similar financial instruments in active or inactive markets, and inputs that are observable for the financial instrument, either directly or indirectly, for substantially the full term of the financial instrument. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists, or instances where prices vary substantially over time or among brokered market makers; and

•Level 3 — inputs to the valuation methodology are unobservable and significant to the fair value measurement. Unobservable inputs are those inputs that reflect assumptions that market participants would use when pricing the financial instrument and can include the Valuation Team’s assumptions based upon the best available information.

When a determination is made to classify our investments within Level 3 of the valuation hierarchy, such determination is based upon the significance of the unobservable factors to the overall fair value measurement. However, Level 3 financial instruments typically include, in addition to the unobservable, or Level 3, inputs, observable inputs (or components that are actively quoted and can be validated to external sources). The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement.

We transfer investments in and out of Level 1, 2 and 3 of the valuation hierarchy as of the beginning balance sheet date, based on changes in the use of observable and unobservable inputs utilized to perform the valuation for the period. There were no transfers in or out of Level 1, 2 and 3 during the three months ended June 30, 2023 and 2022, respectively.


			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 June 30, 2023:
Secured first lien debt	$	452,215	$	—	$	—		$	452,215
Secured second lien debt	104,794		—		—			104,794
Preferred equity	214,258		—		—			214,258
Common equity/equivalents	28,811		—		31		(A)	28,780
Total Investments as of June 30, 2023	$	800,078	$	—	$	31		$	800,047


			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 March 31, 2023:
Secured first lien debt	$	437,517	$	—	$	—		$	437,517
Secured second lien debt	75,734		—		—			75,734
Preferred equity	222,585		—		—			222,585
Common equity/equivalents	17,707		—		27		(A)	17,680
Total Investments as of March 31, 2023	$	753,543	$	—	$	27		$	753,516

(A)Fair value was determined based on the closing market price of shares of Funko, Inc. (our units in Funko can be converted into common shares of Funko, Inc.) at the reporting date less a discount for lack of marketability, as our investment was subject to certain restrictions.

The following table presents our investments, valued using Level 3 inputs within the ASC 820 fair value hierarchy, and carried at fair value as of June 30, 2023 and March 31, 2023, by caption on our accompanying Consolidated Statements of Assets and Liabilities, and by security type:


	Total Recurring Fair Value Measurements Reported in Consolidated Statements of Assets and Liabilities Valued Using Level 3 Inputs
	June 30, 2023		March 31, 2023
Non-Control/Non-Affiliate Investments
Secured first lien debt	$	292,700	$	279,748
Secured second lien debt	54,340		50,842
Preferred equity	167,220		164,534
Common equity/equivalents(A)	1,487		1,724
Total Non-Control/Non-Affiliate Investments	515,747		496,848

Affiliate Investments
Secured first lien debt	159,515		157,769
Secured second lien debt	50,454		24,892
Preferred equity	47,038		58,051
Common equity/equivalents	27,293		15,243
Total Affiliate Investments	284,300		255,955

Control Investments
Secured first lien debt	—		—
Secured second lien debt	—		—
Preferred equity	—		—
Common equity/equivalents	—		713
Total Control Investments	—		713

Total investments at fair value using Level 3 inputs	$	800,047	$	753,516

In accordance with ASC 820, the following table provides quantitative information about our investments valued using Level 3 fair value measurements as of June 30, 2023 and March 31, 2023. The table below is not intended to be all-inclusive, but rather provides information on the significant Level 3 inputs as they relate to our fair value measurements. The weighted-average calculations in the table below are based on the principal balances for all debt-related calculations and on the cost basis for all equity-related calculations for the particular input.

Quantitative Information about Level 3 Fair Value Measurements

Fair Value as of

Valuation
Technique/
Methodology

Unobservable
Input

Range / Weighted-Average as of

June 30,
2023

March 31,
2023

June 30,
2023

March 31,
2023

Secured first
lien debt

452,215

432,126

TEV

EBITDA multiple

4.8x – 7.8x /

6.5x

4.4x – 7.7x /

6.4x

EBITDA

$1,319–$19,886 /

$9,876

$4,251 - $19,083/$10,764

Revenue multiple

0.3x – 0.6x /

0.3x

0.3x – 0.6x /

0.3x

Revenue

$15,375 – $103,488 /

$89,768

$15,483 – $109,615/$94,957

—

5,391

Yield Analysis

Discount Rate

N/A

19.4% – 19.9% / 19.7%

Secured second
lien debt

104,794

62,750

TEV

EBITDA multiple

5.3x – 9.0x /

6.3x

5.4x – 6.6x /

6.2x

EBITDA

$6,411 – $37,766 /

$14,617

$4,112 – $6,379 / $5,501

—

12,984

Yield Analysis

Discount Rate

N/A

14.0% – 14.0% / 14.0%

Preferred
equity

214,258

222,585

TEV

EBITDA multiple

5.1x – 7.8x /

6.1x

4.4x – 7.7x /

5.9x

EBITDA

$2,940 – $19,886 /

$9,148

$4,251 – $19,083 / $9,486

Revenue multiple

0.3x – 0.6x /

0.4x

0.3x – 0.6x /

0.4x

Revenue

$15,375 – $103,488 /

$65,701

$15,483 – $109,615 / $69,247

Common equity/

equivalents(A)

28,780

17,680

TEV

EBITDA multiple

4.8x – 9.0x /

5.7x

4.7x – 7.2x /

6.4x

EBITDA

$1,319 – $37,766 /

$15,785

$1,105 – $30,833 / $6,273

Total

800,047

753,516

Fair value measurements can be sensitive to changes in one or more of the valuation inputs. Changes in discount rates, EBITDA or EBITDA multiples (or revenue or revenue multiples), each in isolation, may change the fair value of certain of our investments. Generally, an increase/(decrease) in discount rates or a (decrease)/increase in EBITDA or EBITDA multiples (or revenue or revenue multiples) may result in a (decrease)/increase in the fair value of certain of our investments.


	Secured First Lien Debt		Secured Second Lien Debt		Preferred Equity		Common Equity/ Equivalents		Total
Three Months ended June 30, 2023:
Fair value as of March 31, 2023	$	437,517	$	75,734	$	222,585	$	17,680	$	753,516
Total gain (loss):
Net realized gain (loss)(A)	—		—		273		882		1,155
Net unrealized appreciation (depreciation)(B)	(2)		4,060		(11,602)		6,813		(731)
Reversal of previously recorded (appreciation) depreciation upon realization(B)	—		—		—		(93)		(93)
New investments, repayments and settlements(C):
Issuances / originations	14,700		25,000		3,275		5,000		47,975
Settlements / repayments	—		—		—		—		—
Sales(D)	—		—		(273)		(1,502)		(1,775)
Transfers	—		—		—		—		—
Fair value as of June 30, 2023	$	452,215	$	104,794	$	214,258	$	28,780	$	800,047

(C)Includes increases in the cost basis of investments resulting from new portfolio investments, the amortization of discounts and other non-cash disbursements to portfolio companies, as well as decreases in the cost basis of investments resulting from principal repayments or sales, the amortization of premiums and acquisition costs, and other cost-basis adjustments.

•In May 2023, we invested $15.3 million in a new portfolio company, Home Concepts Acquisition, Inc. ("Home Concepts"), in the form of $12.0 million of secured first lien debt and $3.3 million of preferred equity. Home Concepts, headquartered in Santa Barbara, California, is a leading home improvement advertising publication focusing on connecting homeowners to high-quality residential repair and remodeling businesses.

•In June 2023, we recapitalized our investment in Old World and invested an additional $2.5 million in the form of secured first lien debt. In connection with this investment, we received proceeds of $2.2 million, of which $1.9 million was recognized as dividend income and $0.3 million was recognized as a realized gain.

•In June 2023, we received a $1.5 million escrow settlement in connection with our December 2021 exit of SOG Specialty Knives & Tools, LLC, of which $0.6 million was recognized as a return of cost basis and $0.9 million as a realized gain. As a result of the escrow release, there are no remaining assets held by Gladstone SOG Investments, Inc.

As of June 30, 2023, our investment portfolio consisted of investments in 25 portfolio companies located in 19 states across 15 different industries with an aggregate fair value of $800.1 million. Our investments in Old World, Horizon Facilities Services, Inc., Nocturne Luxury Villas, Inc. ("Nocturne"), Brunswick Bowling Products, Inc. and Dema/Mai Holdings, Inc. represented our five largest portfolio investments at fair value and collectively comprised $321.1 million, or 40.1%, of our total investment portfolio at fair value as of June 30, 2023.


	June 30, 2023								March 31, 2023
	Cost				Fair Value				Cost				Fair Value
Secured first lien debt	$	486,139	63.3	%	$	452,215	56.5	%	$	471,439	65.4	%	$	437,517	58.1	%
Secured second lien debt	109,158		14.2	%	104,794		13.1	%	84,158		11.7	%	75,734		10.1	%
Total debt	595,297		77.5	%	557,009		69.6	%	555,597		77.1	%	513,251		68.2	%

Preferred equity	152,374		19.8	%	214,258		26.8	%	149,099		20.7	%	222,585		29.5	%
Common equity/equivalents	20,314		2.7	%	28,811		3.6	%	15,934		2.2	%	17,707		2.3	%
Total equity/equivalents	172,688		22.5	%	243,069		30.4	%	165,033		22.9	%	240,292		31.8	%
Total investments	$	767,985	100.0	%	$	800,078	100.0	%	$	720,630	100.0	%	$	753,543	100.0	%


	June 30, 2023				March 31, 2023
	Fair Value		Percentage of Total Investments		Fair Value		Percentage of Total Investments
Diversified/Conglomerate Services	$	296,479	37.1	%	$	268,954	35.7	%
Home and Office Furnishings, Housewares, and Durable Consumer Products	147,007		18.4	%	143,685		19.1	%
Hotels, Motels, Inns, and Gaming	61,185		7.6	%	58,713		7.8	%
Buildings and Real Estate	59,822		7.5	%	60,571		8.0	%
Leisure, Amusement, Motion Pictures, and Entertainment	39,948		5.0	%	47,616		6.3	%
Healthcare, Education, and Childcare	38,465		4.8	%	37,445		5.0	%
Mining, Steel, Iron and Non-Precious Metals	26,277		3.3	%	25,998		3.5	%
Aerospace and Defense	25,696		3.2	%	22,215		2.8	%
Chemicals, Plastics, and Rubber	25,454		3.1	%	24,891		3.3	%
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic)	23,075		2.9	%	20,088		2.7	%
Telecommunications	16,800		2.1	%	18,987		2.5	%
Printing and Publishing	15,275		1.9	%	—		—	%
Cargo Transport	14,487		1.8	%	14,707		2.0	%
Diversified/Conglomerate Manufacturing	10,077		1.3	%	9,646		1.3	%
Other < 2.0%	31		0.0	%	27		0.0	%
Total investments	$	800,078	100.0	%	$	753,543	100.0	%


	June 30, 2023				March 31, 2023
Location	Fair Value		Percentage of Total Investments		Fair Value		Percentage of Total Investments
Northeast	$	258,179	32.3	%	$	266,612	35.4	%
West	215,362		26.9	%	197,989		26.3	%
South	200,067		25.0	%	171,056		22.7	%
Midwest	126,470		15.8	%	117,886		15.6	%
Total investments	$	800,078	100.0	%	$	753,543	100.0	%


		Amount
For the remaining nine months ending March 31, 2024		$	81,418
For the fiscal years ending March 31:
	2025	89,614
	2026	204,919
	2027	144,096
	2028	38,250
	Thereafter	37,000
	Total contractual repayments	$	595,297
	Investments in equity securities	172,688
	Total cost basis of investments held as of June 30, 2023:	$	767,985

Receivables from portfolio companies represent non-recurring costs that we incurred on behalf of portfolio companies. Such receivables, net of any allowance for uncollectible receivables, are included in Other assets, net on our accompanying Consolidated Statements of Assets and Liabilities. We generally maintain an allowance for uncollectible receivables from portfolio companies when the receivable balance becomes 90 days or more past due or if it is determined, based upon management’s judgment, that the portfolio company is unable to pay its obligations. We write off accounts receivable when we have exhausted collection efforts and have deemed the receivables uncollectible. As of June 30, 2023 and March 31, 2023, we had gross receivables from portfolio companies of $2.3 million and $2.2 million, respectively. As of both June 30, 2023 and March 31, 2023, the allowance for uncollectible receivables was $1.6 million.