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INVESTMENTS
 3 Months Ended
Dec. 31, 2024
Investments, Debt and Equity Securities [Abstract]  
INVESTMENTS INVESTMENTS
Fair Value
In accordance with ASC 820, the fair value of each investment is determined 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 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical financial instruments in active markets;
•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 in those 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. Investments in funds measured using NAV as a practical expedient are not categorized within the fair value hierarchy.
As of December 31, 2024, all of our investments were valued using Level 3 inputs within the ASC 820 fair value hierarchy, except for our investments in Gladstone Alternative Income Fund (“Gladstone Alternative”) and Leeds Novamark Capital I, L.P. (“Leeds”), which were valued using NAV as a practical expedient. As of September 30, 2024, all of our investments were valued using Level 3 inputs within the ASC 820 fair value hierarchy, except for our investment in Leeds, which was valued using NAV as a practical expedient.
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. During the three months ended December 31, 2024 and 2023, there were no investments transferred into or out of Levels 1, 2 or 3 of the valuation hierarchy.
As of December 31, 2024 and September 30, 2024, our investments, by security type, at fair value were categorized as follows within the ASC 820 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, 2024:
Secured first lien debt
$586,409 $— $— $586,409 
Secured second lien debt
127,234 — — 127,234 
Unsecured debt
359 — — 

359 
Preferred equity
31,294 — — 

31,294 
Common equity/equivalents
49,164 
(A)
— — 49,164 
Total Investments as of December 31, 2024
$794,460 $— $— $794,460 
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, 2024:
Secured first lien debt
$554,937 $— $— $554,937 
Secured second lien debt
113,716 — — 113,716 
Unsecured debt
32 — — 

32 
Preferred equity
31,346 — — 

31,346 
Common equity/equivalents
96,191 
(A)
— 

— 96,191 
Total Investments as of September 30, 2024
$796,222 $— $— $796,222 
(A)Excludes our investments in Gladstone Alternative and Leeds with fair values of $5.0 million and $37 thousand, respectively, as of December 31, 2024. Excludes our investment in Leeds with a fair value of $38 thousand as of September 30, 2024. Gladstone Alternative and Leeds were valued using NAV as a practical expedient.
The following table presents our portfolio investments, valued using Level 3 inputs within the ASC 820 fair value hierarchy and carried at fair value as of December 31, 2024 and September 30, 2024, 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
Using Significant Unobservable Inputs (Level 3)
December 31, 2024September 30, 2024
Non-Control/Non-Affiliate Investments
Secured first lien debt$574,861 $540,661 
Secured second lien debt118,767 105,169 
Unsecured debt359 32 
Preferred equity27,158 27,247 
Common equity/equivalents28,780 
(A)
77,757 
(B)
Total Non-Control/Non-Affiliate Investments
$749,925 $750,866 
Affiliate Investments
Secured first lien debt$336 $380 
Preferred equity4,136 4,099 
Common equity/equivalents2,933 2,959 
Total Affiliate Investments$7,405 $7,438 
Control Investments
Secured first lien debt$11,212 $13,896 
Secured second lien debt8,467 8,547 
Common equity/equivalents17,451 15,475 
Total Control Investments
$37,130 $37,918 
Total Investments at Fair Value Using Level 3 Inputs$794,460 $796,222 

(A)Excludes our investments in Gladstone Alternative and Leeds with fair values of $5.0 million and $37 thousand, respectively, as of December 31, 2024, which were valued using NAV as a practical expedient.
(B)Excludes our investment in Leeds with a fair value of $38 thousand as of September 30, 2024, which was valued using NAV as a practical expedient.
In accordance with ASC 820, the following table provides quantitative information about our Level 3 fair value measurements of our investments as of December 31, 2024 and September 30, 2024. 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

Range / Weighted Average as of

December 31,
2024		September 30,
2024
Valuation
Techniques/
Methodologies
Unobservable
Input
December 31,
2024		September 30,
2024


Secured first lien debt
$514,928 $464,090 
Yield Analysis
Discount Rate
10.5% - 14.9%
/ 11.8%
10.8% - 17.3%
/ 12.6%

71,481 90,847 
TEV
EBITDA multiple
4.3x – 5.7x
/ 5.2x
4.1x – 13.9x
/ 10.0x


EBITDA
$3,228 - $16,491
/ $7,049
$3,020 - $16,211
/ $10,309


Revenue multiple
0.2x – 0.7x
/ 0.6x
0.2x – 4.6x
/ 2.1x


Revenue
$6,141 - $20,173
/ $11,724
$6,336 - $21,118
/ $13,981


Secured second lien debt
115,397 101,928 
Yield Analysis
Discount Rate
11.7% - 15.4%
/ 13.4%
12.2% - 16.0%
/ 14.1%

3,370 3,241 
Market Quote
IBP
91.5% - 91.5%
/ 91.5%
88.0% - 88.0%
/ 88.0%

8,467 8,547 
TEV
EBITDA multiple
5.4x – 5.4x
/ 5.4x
5.4x – 5.4x
/ 5.4x


EBITDA
$2,805 - $2,805
/ $2,805
$3,343 - $3,343
/ $3,343


Unsecured debt
326 — 
Yield Analysis
Discount Rate
14.3% - 14.3%
/ 14.3%
—% - —%
/ —%
33 32 
TEV
Revenue multiple
1.0x – 1.0x
/ 1.0x
1.0x – 1.0x
/ 1.0x


Revenue
$7,994 - $7,994
/ $7,994
$7,834 - $7,834
/ $7,834


Preferred and common equity / equivalents(A)
80,458 127,537 
TEV
EBITDA multiple
4.4x – 13.5x
/ 7.5x
4.1x – 13.9x
/ 8.0x


EBITDA
$1,220 -$144,351
/ $9,747
$1,182 -$144,458
/ $10,847


Revenue multiple
0.2x – 4.3x
/ 1.9x
0.2x– 4.6x
/ 2.0x


Revenue
$5,502 -$20,173
/ $12,042
$4,672 -$21,118
/ $12,587
Total Level 3 Investments, at Fair Value
$794,460 $796,222 
(A)Fair value as of December 31, 2024 excludes our investments in Gladstone Alternative and Leeds with fair values of $5.0 million and $37 thousand, respectively, as of December 31, 2024, which were valued using NAV as a practical expedient. Fair value as of September 30, 2024 excludes our investment in Leeds with a fair value of $38 thousand, which was valued using NAV as a practical expedient.

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 market yields, discount rates, or a (decrease)/increase in EBITDA or EBITDA multiples (or revenue or revenue multiples) may result in a (decrease)/increase, respectively, in the fair value of certain of our investments.
Changes in Level 3 Fair Value Measurements of Investments
The following tables provide the changes in fair value, broken out by security type, during the three months ended December 31, 2024 and 2023 for all investments for which we determine fair value using unobservable (Level 3) inputs.

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Three months ended December 31, 2024Secured
First Lien
Debt		Secured
Second Lien
Debt		Unsecured
Debt		Preferred
Equity		Common
Equity/
Equivalents		Total
Fair Value as of September 30, 2024
$554,937 $113,716 $32 $31,346 $96,191 $796,222 
Total gains (losses):
Net realized gain (loss)(A)
(4,074)— — 2,450 59,348 57,724 
Net unrealized appreciation (depreciation)(B)
(3,534)115 5 3,136 12,396 12,118 
Reversal of prior period net depreciation (appreciation) on realization(B)
3,581 — — (2,450)(55,140)(54,009)
New investments, repayments and settlements: (C)
Issuances/originations
111,754 29,244 322 6,262 — 147,582 
Settlements/repayments
(76,255)(15,841)— — — (92,096)
Net proceeds from sales
— — — (9,450)(63,631)(73,081)
Transfers
— — — — — — 
Fair Value as of December 31, 2024
$586,409 $127,234 $359 $31,294 $49,164 $794,460 

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Three Months Ended December 31, 2023Secured
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 
(A)Included in net realized gain (loss) on investments on our accompanying Consolidated Statements of Operations for the corresponding period.
(B)Included in net unrealized appreciation (depreciation) on investments on our accompanying Consolidated Statements of Operations for the corresponding period.
(C)Includes increases in the cost basis of investments resulting from new portfolio investments, accretion of discounts, PIK, 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.
Investment Activity
Proprietary Investments
As of December 31, 2024 and September 30, 2024, we held 49 and 47 proprietary investments with an aggregate fair value of $796.0 million and $792.9 million, or 99.6% and 99.6% of the total investment portfolio at fair value, respectively. The following significant proprietary investment transactions occurred during the three months ended December 31, 2024:

•In October 2024, our $15.0 million debt investment in Perimeter Solutions Group paid off at par. We also received a $0.5 million prepayment penalty in conjunction with the payoff.
•In October 2024, our investment in Antenna Research Associates, Inc. was sold, which resulted in a net realized gain on our common equity of approximately $59.3 million and the repayment of our debt investment of $31.3 million at par.
•In November 2024, we invested an additional $28.9 million in Giving Home Healthcare, LLC, an existing portfolio company, through secured first lien debt.
•In November 2024, we invested $10.5 million in Wings ‘N More Restaurants, LLC (“Wings”) through secured first lien debt. We also extended Wings a $1.5 million secured first lien line of credit commitment and a $5.0 million secured first lien delayed draw term loan commitment, both of which were unfunded as of December 31, 2024.
•In November 2024, our $22.3 million debt investment in ENET Holdings, LLC paid off at par.
•In December 2024, we invested $42.8 million in Vet’s Choice Radiology, LLC through secured first lien debt.
•In December 2024, we invested $28.9 million in Pan-Am Dental, LLC through secured second lien debt and preferred equity.
•In December 2024, we invested $15.0 million in Freedom Dental Management, Inc. through secured first lien debt.
•In December 2024, we invested $5.0 million in Tube Bending Technology, LLC through secured second lien debt.
•In December 2024, we invested $5.0 million in Gladstone Alternative, one of our affiliated funds, through common equity.
•In December 2024, our investment in Salt and Straw, LLC, paid off which resulted in a realized gain of approximately $2.5 million on our preferred equity and the repayment of our debt investment of $10.9 million at par. We also received a $0.1 million prepayment penalty in conjunction with the payoff. We continue to hold warrants for common equity in Salt and Straw, LLC.
•In December 2024, we sold our debt investments in DKI Ventures, LLC, which resulted in a net realized loss on our debt of approximately $4.1 million.
Syndicated Investments
As of December 31, 2024 and September 30, 2024, we held two syndicated investments with an aggregate fair value of $3.5 million and $3.3 million, or 0.4% and 0.4% of the total investment portfolio at fair value, respectively.
Investment Concentrations
As of December 31, 2024, our investment portfolio consisted of investments in 51 portfolio companies located in 23 states in 14 different industries, with an aggregate fair value of $799.5 million. The five largest investments at fair value as of December 31, 2024 totaled $190.6 million, or 23.8% of our total investment portfolio, as compared to the five largest investments at fair value as of September 30, 2024 totaling $232.7 million, or 29.2% of our total investment portfolio. As of December 31, 2024 and September 30, 2024, our average investment by obligor was $16.0 million and $15.7 million at cost, respectively.
The following table outlines our investments by security type as of December 31, 2024 and September 30, 2024:
December 31, 2024September 30, 2024
CostFair ValueCostFair Value
Secured first lien debt$612,161 75.0 %$586,409 73.4 %$580,736 75.3 %$554,937 69.7 %
Secured second lien debt127,094 15.6 127,234 15.9 113,691 14.8 113,716 14.3 
Unsecured debt520 0.0 359 0.0 198 0.0 32 0.0 
Total debt investments739,775 90.6 714,002 89.3 694,625 90.1 668,685 84.0 
Preferred equity44,279 5.4 31,294 3.9 45,017 5.8 31,346 3.9 
Common equity/equivalents32,086 4.0 54,201 6.8 31,369 4.1 96,229 12.1 
Total equity investments
76,365 9.4 85,495 10.7 76,386 9.9 127,575 16.0 
Total Investments
$816,140 100.0 %$799,497 100.0 %$771,011 100.0 %$796,260 100.0 %
Our investments at fair value consisted of the following industry classifications as of December 31, 2024 and September 30, 2024:
December 31, 2024September 30, 2024
Industry ClassificationFair ValuePercentage of
Total
Investments		Fair ValuePercentage of
Total
Investments
Healthcare, Education, and Childcare$219,831 27.5 %$101,707 12.8 %
Diversified/Conglomerate Manufacturing168,992 21.1 160,264 20.1 
Diversified/Conglomerate Service145,704 18.2 179,032 22.5 
Beverage, Food, and Tobacco85,303 10.7 88,327 11.1 
Aerospace and Defense62,359 7.8 153,096 19.2 
Automobile27,652 3.5 28,286 3.6 
Machinery23,404 2.9 21,816 2.7 
Cargo Transportation20,200 2.5 20,200 2.5 
Oil and Gas20,007 2.5 20,554 2.6 
Personal and Non-Durable Consumer Products10,895 1.4 13,586 1.7 
Other, < 2.0%
15,150 1.9 9,392 1.2 
Total Investments$799,497 100.0 %$796,260 100.0 %
Our investments at fair value were included in the following U.S. geographic regions as of December 31, 2024 and September 30, 2024:
December 31, 2024September 30, 2024
Location
Fair Value
Percentage of
Total
Investments
Fair Value
Percentage of
Total Investments
West$269,153 33.7 %$249,082 31.3 %
South255,493 31.9 314,010 39.4 
Midwest237,470 29.7 192,897 24.2 
Northeast37,381 4.7 40,271 5.1 
Total Investments$799,497 100.0 %$796,260 100.0 %
The geographic composition indicates the location of the headquarters for our portfolio companies. A portfolio company may have additional locations in other geographic regions.
Investment Principal Repayments
The following table summarizes the contractual principal repayment and maturity of our investment portfolio by fiscal year, assuming no voluntary prepayments, as of December 31, 2024:
Amount
For the remaining nine months ending September 30:
2025(A)
$12,470 
For the fiscal years ending September 30:
2026161,593 

2027187,614 

2028218,630 

202992,945 

Thereafter67,778 

Total contractual repayments
$741,030 

Adjustments to cost basis of debt investments(1,255)

Investments in equity securities76,365 

Investments held as of December 31, 2024 at cost:
$816,140 
(A)Includes debt investments with contractual principal amounts totaling $0.5 million for which the maturity date has passed as of December 31, 2024.
Receivables from Portfolio Companies
Receivables from portfolio companies represent non-recurring costs incurred on behalf of such portfolio companies and are included in other assets 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 December 31, 2024 and September 30, 2024, we had gross receivables from portfolio companies of $2.2 million and $1.7 million, respectively. The allowance for uncollectible receivables was $59 thousand and $75 thousand as of December 31, 2024 and September 30, 2024, respectively.