Gladstone Investment Corporation is a publicly traded Business Development Company that invests primarily in debt and equity securities of established U.S. private companies to achieve income growth and capital appreciation.

# Company Summary - Gladstone Investment Corporation

## Overview
- **Type of Company:** External management, closed-end, non-diversified management investment company regulated as a Business Development Company (BDC)
- **Incorporation Date:** February 18, 2005 (Delaware)
- **Initial Public Offering:** Completed on June 22, 2005
- **Tax Status:** Elects to be treated as a Regulated Investment Company (RIC) under the Internal Revenue Code

## Business Focus
- **Primary Investment Strategy:** Invests in debt and equity securities of established private U.S. businesses
- **Investment Objectives:**
  - Achieve and grow current income through debt investments
  - Provide long-term capital appreciation through equity investments
- **Target Portfolio Composition:**
  - Approximately 75% in debt investments
  - Approximately 25% in equity investments
- **Investment Size per Portfolio Company:** Typically up to $75 million
- **Portfolio Composition (as of March 31, 2025):** 
  - 73.3% debt investments
  - 26.7% equity investments

## Market and Portfolio
- **Number of Portfolio Companies:** 25 as of March 31, 2025
- **Largest Investments:** SFEG Holdings, Ricardo Defense, Brunswick Bowling Products, Nielsen-Kellerman, E3
  - These five investments amount to $401.7 million, representing 41.0% of total portfolio fair value
- **Total Investment Portfolio:** Fair value of $979.3 million
- **Industry Diversification:** 
  - Significant sectors include Diversified/Conglomerate Services (17.4%), Home and Office Furnishings (16.3%), Aerospace and Defense (10.9%), Machinery (10.8%), and others

## Geographic Focus
- **Primary Regions (as of March 31, 2025):**
  - U.S. regions: South, Midwest, West, Northeast
  - Canada (represented as of 2025)
- **Distribution of investments:** 
  - U.S. (South: 32.4%, Midwest: 23.2%, West: 22.7%, Northeast: 18.7%)
  - Canada: 3.0%

## Employees and Management
- **Total Employees (as of March 31, 2025):** 74 full-time employees
- **Operational Departments:**
  - Executive Management: 12
  - Accounting, Compliance, Legal, HR, Treasury: 23
  - Investment Management, Portfolio Management, Due Diligence: 39

## Revenue & Income
- **Annual Revenue:** Not explicitly specified
- **Net Investment Income (as of fiscal year ended March 31, 2025):** Not explicitly specified
- **Distributions and Fees:** The company makes distributions to shareholders, with incentive fees paid to the adviser based on performance. Specific amounts for revenue or income are not detailed.

## Management & Advisory
- **Adviser:** Gladstone Management Corporation, an SEC-registered adviser
- **Affiliated Funds:** Provides investment and administrative services to:
  - Gladstone Commercial Corporation
  - Gladstone Capital Corporation
  - Gladstone Land Corporation
  - Gladstone Alternative Income Fund
- **Key Management:** 
  - David Gladstone (Chairman & CEO)
  - David Dullum (President & EVP of private equity)
  - Michael LiCalsi (General Counsel & Secretary)

## Summary
Gladstone Investment Corporation primarily invests in debt and equity securities of established, lower middle market private U.S. companies. It focuses on providing stable income and long-term capital appreciation through targeted investments, with a portfolio concentrated in select industries and regions across the U.S. It is managed externally by Gladstone Management Corporation, with a team of 74 employees overseeing a portfolio of 25 companies as of March 31, 2025, with a total fair value of nearly $979 million. The company is publicly traded on Nasdaq under the symbols GAIN (common stock), GAINN, GAINZ, GAINL, and GAINI (noted debt securities).

A Delaware-incorporated Business Development Company primarily investing in debt and equity securities of lower middle-market private businesses in the U.S.


# Company Overview

## Business Structure
- **Incorporation**: Incorporated under the General Corporation Law of the State of Delaware on February 18, 2005.
- **Initial Public Offering**: Completed on June 22, 2005.
- **Type**: Externally managed, closed-end, non-diversified management investment company. 
- **Regulatory Designation**: Elected to be treated as a Business Development Company (BDC) under the Investment Company Act of 1940 and as a Regulated Investment Company (RIC) under the Internal Revenue Code.

## Investment Strategy and Objectives
- **Investment Focus**: Primarily invests in debt and equity securities of established private businesses, specifically lower middle-market companies in the U.S. Typically defined as companies with annual earnings before interest, taxes, depreciation, and amortization (EBITDA) of $4 million to $15 million.
- **Investment Portfolio Composition**: 
  - Approximately 75% in debt securities and 25% in equity securities. As of March 31, 2024, the composition was 77.0% in debt securities and 23.0% in equity securities.
- **Investment Categories**:
  - Secured First Lien Debt Securities
  - Secured Second Lien Debt Securities
  - Preferred and Common Equity/Equivalents

## Customer and Employee Information
- **Customers**: Serves investments in 24 portfolio companies across 16 industries located in 18 states.
- **Employees**: 
  - The Adviser and Administrator collectively employ 70 full-time employees, of which:
    - 36 in Investment management, portfolio management, and due diligence.
    - 21 in Accounting, administration, compliance, human resources, legal, and treasury.
    - 13 in Executive management.

## Financial Metrics
- **Investment Portfolio Value**: As of March 31, 2024, the fair value of the investment portfolio amounted to **$920.5 million**.
- **Key Investments**: Five largest portfolio investments (SFEG Holdings, Inc., Nocturne Luxury Villas, Inc., Nth Degree Investment Group, LLC, Old World Christmas, Inc., and Brunswick Bowling Products, Inc.) collectively represent 42.7% of the total investment portfolio.
- **Debt Investments**: 100% of the loan portfolio consists of variable-rate loans as of March 31, 2024.

## Revenue and Income
- **Earnings Model**: Aims to achieve and grow current income through debt investments that yield stable revenues while providing long-term capital appreciation through equity investments. 
- **Income Generation**: Generates income through interest from debt securities and capital gains from equity positions. Management fees and incentive fees structure could influence net investment income.

## Distribution Policy
- **Distributions**: Intends to distribute at least 90% of taxable income to qualify as a RIC and avoid corporate-level taxes. The ability to make distributions is influenced by investment performance and compliance with regulatory requirements.

## Challenges and Risks
- **Investment Risks**: Engages with lower middle-market companies that are often riskier and less liquid. Investments in these companies could lead to significant capital losses and less predictable income.
- **Market Volatility**: Changes in economic conditions, interest rates, and competitive landscape may impact the company’s ability to achieve its investment objectives.

## Summary
The company operates as an investment vehicle targeting lower middle-market private businesses, focusing on generating current income while seeking long-term capital appreciation. With a diverse portfolio primarily composed of debt securities, it serves a variety of customers across multiple industries through a manageable workforce.


GLADSTONE INVESTMENT CORPORATION\DE

10-K / May 13, 2025

10-K / May 8, 2024

10-K / May 13, 2025

Company Summary - Gladstone Investment Corporation

Overview

Business Focus

Market and Portfolio

Geographic Focus

Employees and Management

Revenue & Income

Management & Advisory

Summary