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MCLEAN, VA, August 3, 2022: Gladstone Investment Corporation (Nasdaq:GAIN) (the "Company") today announced earnings for its first quarter ended June 30, 2022. Please read the Company's Quarterly Report on Form 10-Q, filed today with the U.S. Securities and Exchange Commission (the "SEC"), which is available on the SEC's website at www.sec.gov or the investors section of the Company's website at www.gladstoneinvestment.com.


	June 30, 2022			March 31, 2022			$ Change			% Change
For the quarter ended:
Total investment income	$	19,297		$	19,246		$	51		0.3	%
Total expenses, net(A)	11,926			12,516			(590)			(4.7)	%
Net investment income(A)	7,371			6,730			641			9.5	%
Net realized gain (loss)	4,452			(10,000)			14,452			NM
Net unrealized (depreciation) appreciation	212			19,966			(19,754)			(98.9)	%
Net increase in net assets resulting from operations(A)	$	12,035		$	16,696		$	(4,661)		(27.9)	%
Net investment income per weighted-average common share(A)	$	0.22		$	0.20		$	0.02		10.0	%
Adjusted net investment income per weighted-average common share(B)	$	0.25		$	0.26		$	(0.01)		(3.9)	%
Net increase in net assets resulting from operations per weighted-average common share(A)	$	0.36		$	0.50		$	(0.14)		(28.0)	%
Cash distribution per common share from net investment income	$	0.10		$	0.32		$	(0.22)		(68.8)	%
Cash distribution per common share from net realized gains(C)	$	0.25		$	0.02		$	0.23		NM
Weighted-average yield on interest-bearing investments	11.9		%	14.9		%	(3.0)		%	(20.1)	%
Total dollars invested	$	27,800		$	8,188		$	19,612		239.5	%
Total dollars repaid and collected from sales	$	57,352		$	4,500		$	52,852		NM
Weighted-average shares of common stock outstanding - basic and diluted	33,205,023			33,205,023			—			—	%

As of:
Total investments, at fair value	$	689,513		$	714,396		$	(24,883)		(3.5)	%
Fair value, as a percent of cost	107.0		%	106.7		%	0.3		%	0.3	%
Net assets	$	446,409		$	445,830		$	579		0.1	%
Net asset value per common share	$	13.44		$	13.43		$	0.01		0.1	%
Number of portfolio companies	26			26			—			—	%

(A)Inclusive of $0.9 million, or $0.03 per weighted-average common share, and $2.0 million, or $0.06 per weighted-average common share, of capital gains-based incentive fees accrued during the three months ended June 30, 2022 and March 31, 2022, respectively. These fees were accrued in accordance with United States generally accepted accounting principles (“U.S. GAAP”), where such amounts were not contractually due under the terms of the investment advisory agreement for the respective periods. Also see discussion under Non-GAAP Financial Measure – Adjusted Net Investment Income below.

(B)See Non-GAAP Financial Measure - Adjusted Net Investment Income, below, for a description of this non-GAAP measure and a reconciliation from Net investment income to Adjusted net investment income, including on a weighted-average per share basis. The Company uses this non-GAAP financial measure internally in analyzing financial results and believes it is useful to investors as an additional tool to evaluate ongoing results and trends for the Company.

◦Invested $21.0 million in a new portfolio company, Dema/Mai Holdings, Inc. (“Dema/Mai”), in the form of preferred equity to acquire Mai Mechanical, LLC, a leading provider of plumbing and mechanical services focused on multi-family residential construction headquartered in Denver, Colorado, from J.R. Hobbs Co. - Atlanta, LLC, an existing portfolio company; and

First Quarter Results: Net investment income for the quarter ended June 30, 2022 was $7.4 million, or $0.22 per weighted-average common share, compared to net investment income for the quarter ended March 31, 2022 of $6.7 million, or $0.20 per weighted-average common share. This change resulted from a decrease in total expenses, net of credits, quarter over quarter, coupled with an increase in total investment income.

Total investment income during the quarters ended June 30, 2022 and March 31, 2022 was $19.3 million and $19.2 million, respectively. The quarter over quarter increase was primarily due to a $3.3 million increase in dividend and success fee income, the timing of which can be variable. This increase was partially offset by the collection of $3.2 million of past due interest in the prior quarter from certain loans that were previously on non-accrual status, compared to no such collection in the current quarter.

Total expenses, net of credits, during the quarters ended June 30, 2022 and March 31, 2022 was $11.9 million and $12.5 million, respectively. The quarter over quarter decrease was primarily due to a $1.1 million decrease in the capital gains-based incentive fees in the current quarter, as a result of the net impact of realized and unrealized gains and losses, partially offset by a $0.8 million increase in other expenses, primarily as a result of estimated excise taxes.

Net asset value per common share as of June 30, 2022 was $13.44, compared to $13.43 as of March 31, 2022. The quarter over quarter increase was primarily due to $7.4 million, or $0.22 per common share, of net investment income, $4.5 million, or $0.13 per common share, of realized gains on investments, and $0.2 million, or $0.01 per common share, of net unrealized appreciation of investments, of which $12.5 million was due to unrealized appreciation of investments and $12.3 million was due to the reversal of unrealized appreciation on exits. These amounts were offset by $11.5 million, or $0.35 per common share, of distributions paid to common shareholders.

◦In July 2022, we recapitalized our investment in Horizon Facilities Services, Inc. and invested an additional $30.0 million in the form of secured first lien debt. In connection with this investment, we received equity proceeds of $12.3 million, which were recognized as a $10.1 million return of preferred equity cost basis and a realized gain of $2.2 million, as well as dividend income of $3.1 million and success fee income of $1.7 million.

Non-GAAP Financial Measure - Adjusted Net Investment Income: On a supplemental basis, the Company discloses Adjusted net investment income, including on a per share basis, which is a financial measure that is calculated and presented on a basis of methodology other than in accordance with GAAP. Adjusted net investment income represents net investment income, excluding capital gains-based incentive fees. The Company uses this non-GAAP financial measure internally in analyzing financial results and believes that this non-GAAP financial measure is useful to investors as an additional tool to evaluate ongoing results and trends for the Company. The Company's investment advisory agreement provides that a capital gains-based incentive fee is determined and paid annually with respect to realized capital gains (but not unrealized appreciation) to the extent such realized capital gains exceed realized capital losses and unrealized depreciation on investments for such year. However, under GAAP, a capital gains-based incentive fee is accrued if realized capital gains and unrealized appreciation of investments exceed realized capital losses and unrealized depreciation of investments. Refer to Note 4 - Related Party Transactions in our Quarterly Report on Form 10-Q for further discussion. The Company believes that Adjusted net investment income is a useful indicator of operations exclusive of any capital gains-based incentive fees, as net investment income does not include realized or unrealized investment activity associated with the capital gains-based incentive fee.


	For the quarter ended
	June 30, 2022				March 31, 2022
	Amount		Per Share Amount		Amount		Per Share Amount
Net investment income	$	7,371	$	0.22	$	6,730	$	0.20
Capital gains-based incentive fee	933		0.03		1,993		0.06
Adjusted net investment income	$	8,304	$	0.25	$	8,723	$	0.26
Weighted-average shares of common stock outstanding - basic and diluted			33,205,023				33,205,023

Adjusted net investment income may not be comparable to similar measures presented by other companies, as it is a non-GAAP financial measure that is not based on a comprehensive set of accounting rules or principles and therefore may be defined differently by other companies. In addition, Adjusted net investment income should be considered in addition to, not as a substitute for, or superior to, financial measures determined in accordance with GAAP.

Conference Call: The Company will hold its earnings release conference call on Thursday, August 4, 2022, at 8:30 a.m. EDT. Please call (866) 373-3416 to enter the conference call. An operator will monitor the call and set a queue for any questions. A replay of the conference call will be available through August 11, 2022. To hear the replay, please dial (877) 660-6853 and use the playback conference number 13730112. The replay will be available beginning approximately one hour after the call concludes. The live audio broadcast of the Company's quarterly conference call will also be available online at www.gladstoneinvestment.com. The event will be archived and available for replay on the Company's website.

About Gladstone Investment Corporation: Gladstone Investment Corporation is a publicly traded business development company that seeks to make secured debt and equity investments in lower middle market businesses in the United States in connection with acquisitions, changes in control and recapitalizations. Information on the business activities of all the Gladstone funds can be found at www.gladstonecompanies.com.

To obtain a paper copy of our Quarterly Report on Form 10-Q, filed today with the SEC, please contact the Company at 1521 Westbranch Drive, Suite 100, McLean, VA 22102, ATTN: Investor Relations. The financial information above is not comprehensive and is without notes, so readers should obtain and carefully review the Company's Form 10-Q for the quarter ended June 30, 2022, including the notes to the consolidated financial statements contained therein.

The statements in this press release regarding potential future distributions, earnings and operations of the Company are “forward-looking statements.” These forward-looking statements inherently involve certain risks and uncertainties in predicting future results and conditions. Although these statements are based on the Company’s current plans that are believed to be reasonable as of the date of this press release, a number of factors could cause actual results and conditions to differ materially from these forward-looking statements, including those factors described from time to time in the Company’s filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or otherwise, except as required by law.