Quarterly report pursuant to Section 13 or 15(d)

INVESTMENTS (Tables)

v3.25.0.1
INVESTMENTS (Tables)
 3 Months Ended
Dec. 31, 2024
Investments, Debt and Equity Securities [Abstract]  
Schedule of Fair Value, Assets Measured on Recurring Basis
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, 2024 September 30, 2024
Non-Control/Non-Affiliate Investments
Secured first lien debt $ 574,861  $ 540,661 
Secured second lien debt 118,767  105,169 
Unsecured debt 359  32 
Preferred equity 27,158  27,247 
Common equity/equivalents 28,780 
(A)
 77,757 
(B)
Total Non-Control/Non-Affiliate Investments
 $ 749,925  $ 750,866 
Affiliate Investments
Secured first lien debt $ 336  $ 380 
Preferred equity 4,136  4,099 
Common equity/equivalents 2,933  2,959 
Total Affiliate Investments $ 7,405  $ 7,438 
Control Investments
Secured first lien debt $ 11,212  $ 13,896 
Secured second lien debt 8,467  8,547 
Common equity/equivalents 17,451  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.
Schedule of Fair Value Measurement Inputs and Valuation Techniques 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.
Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation
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, 2024 Secured
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, 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 
(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.
Schedule of Investment Holdings
The following table outlines our investments by security type as of December 31, 2024 and September 30, 2024:
December 31, 2024 September 30, 2024
Cost Fair Value Cost Fair Value
Secured first lien debt $ 612,161  75.0  % $ 586,409  73.4  % $ 580,736  75.3  % $ 554,937  69.7  %
Secured second lien debt 127,094  15.6  127,234  15.9  113,691  14.8  113,716  14.3 
Unsecured debt 520  0.0  359  0.0  198  0.0  32  0.0 
Total debt investments 739,775  90.6  714,002  89.3  694,625  90.1  668,685  84.0 
Preferred equity 44,279  5.4  31,294  3.9  45,017  5.8  31,346  3.9 
Common equity/equivalents 32,086  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, 2024 September 30, 2024
Industry Classification Fair Value Percentage of
Total
Investments		 Fair Value Percentage of
Total
Investments
Healthcare, Education, and Childcare $ 219,831  27.5  % $ 101,707  12.8  %
Diversified/Conglomerate Manufacturing 168,992  21.1  160,264  20.1 
Diversified/Conglomerate Service 145,704  18.2  179,032  22.5 
Beverage, Food, and Tobacco 85,303  10.7  88,327  11.1 
Aerospace and Defense 62,359  7.8  153,096  19.2 
Automobile 27,652  3.5  28,286  3.6 
Machinery 23,404  2.9  21,816  2.7 
Cargo Transportation 20,200  2.5  20,200  2.5 
Oil and Gas 20,007  2.5  20,554  2.6 
Personal and Non-Durable Consumer Products 10,895  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, 2024 September 30, 2024
Location
Fair Value
Percentage of
Total
Investments
Fair Value
Percentage of
Total Investments
West $ 269,153  33.7  % $ 249,082  31.3  %
South 255,493  31.9  314,010  39.4 
Midwest 237,470  29.7  192,897  24.2 
Northeast 37,381  4.7  40,271  5.1 
Total Investments $ 799,497  100.0  % $ 796,260  100.0  %
Schedule of Investments Classified by Contractual Maturity Date
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:
 2026 161,593 

2027 187,614 

2028 218,630 

2029 92,945 

Thereafter 67,778 

Total contractual repayments
 $ 741,030 

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

Investments in equity securities 76,365 

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.