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INVESTMENTS (Tables)

9 Months Ended

Dec. 31, 2022

Investments, Debt and Equity Securities [Abstract]

Fair Value, Assets Measured on Recurring Basis

As of December 31, 2022 and March 31, 2022, 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, 2022:
Secured first lien debt			$	447,491					$	—					$	—					$	447,491
Secured second lien debt			76,169						—						—						76,169
Preferred equity			221,774						—						—						221,774
Common equity/equivalents			15,029						—						31			(A)			14,998
Total Investments as of December 31, 2022			$	760,463					$	—					$	31					$	760,432

									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, 2022:
Secured first lien debt			$	425,087					$	—					$	—					$	425,087
Secured second lien debt			67,958						—						—						67,958
Preferred equity			217,599						—						—						217,599
Common equity/equivalents			3,752						—						74			(A)			3,678
Total Investments as of March 31, 2022			$	714,396					$	—					$	74					$	714,322

(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 December 31, 2022 and March 31, 2022, 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
			December 31, 2022						March 31, 2022
Non-Control/Non-Affiliate Investments
Secured first lien debt			$	283,344					$	233,673
Secured second lien debt			49,551						66,917
Preferred equity			166,168						139,927
Common equity/equivalents(A)			2,249						1,533
Total Non-Control/Non-Affiliate Investments			501,312						442,050
Affiliate Investments
Secured first lien debt			164,147						191,414
Secured second lien debt			26,618						1,041
Preferred equity			55,606						77,672
Common equity/equivalents			12,036						1,432
Total Affiliate Investments			258,407						271,559
Control Investments
Secured first lien debt			—						—
Secured second lien debt			—						—
Preferred equity			—						—
Common equity/equivalents			713						713
Total Control Investments			713						713
Total investments at fair value using Level 3 inputs			$	760,432					$	714,322

(A)Excludes our investment in Funko with a fair value of $31 thousand and $74 thousand as of December 31, 2022 and March 31, 2022, respectively, which was valued using Level 2 inputs.

Fair Value Measurement Inputs and Valuation Techniques

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

December 31, 2022

March 31, 2022

December 31, 2022

March 31, 2022

Secured first lien debt

$

442,028

$

411,023

TEV

EBITDA multiple

3.1x – 7.9x / 6.2x

3.4x – 9.3x / 7.0x

EBITDA

$3,973–$18,548 / $10,962

$3,990 - $13,707/$8,221

Revenue multiple

0.3x – 0.6x / 0.3x

0.7x – 0.7x / 0.7x

Revenue

$12,461 – $107,907 / $88,029

$14,072 – $14,072/$14,072

5,463

14,064

Yield Analysis

Discount Rate

15.1% – 18.9% / 17.2%

11.3% – 15.2% / 14.6%

Secured second lien debt

63,153

39,637

TEV

EBITDA multiple

5.6x – 7.8x /  6.7x

5.6x – 6.8x / 6.0x

EBITDA

$3,221 – $6,669 / $5,113

$3,953 – $5,488 / $4,959

Revenue multiple

0.5x –0.5x / 0.5x

0.7x – 0.7x /0.7x

Revenue

$12,461 – $12,461 / $12,461

$14,072 – $14,072 / $14,072

13,016

28,321

Yield Analysis

Discount Rate

13.3% – 13.3% / 13.3%

10.0% – 12.2% / 11.6%

Preferred equity

221,774

217,599

TEV

EBITDA multiple

3.1x – 7.9x / 5.9x

3.4x – 9.3x / 6.8x

EBITDA

$3,973 – $18,548 / $9,640

$1,210 – $13,707 / $6,926

Revenue multiple

0.3x – 0.6x / 0.4x

0.7x – 0.7x / 0.7x

Revenue

$12,461 – $107,907 / $53,486

$14,072 – $14,072 / $14,072

Common equity/ equivalents(A)

14,998

3,678

TEV

EBITDA multiple

4.3x – 7.8x / 7.2x

4.8x – 8.4x / 5.8x

EBITDA

$969 – $27,118 / $5,302

$829 – $13,707 / $5,709

Revenue multiple

0.5x – 0.5x / 0.5x

0.7x – 0.7x /  0.7x

Revenue

$12,461 – $12,461 / $12,461

$14,072 – $14,072 / $14,072

Total

$

760,432

$

714,322

(A)Fair value as of both December 31, 2022 and March 31, 2022 excludes our investment in Funko with a fair value of $31 thousand and $74 thousand, respectively, which was valued using Level 2 inputs.

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The following tables provide our portfolio’s changes in fair value, broken out by security type, during the three and nine months ended December 31, 2022 and 2021 for all investments for which the Adviser determines fair value using unobservable (Level 3) inputs.

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

			Secured First Lien Debt						Secured Second Lien Debt						Preferred Equity						Common Equity/ Equivalents						Total
Three Months ended December 31, 2022:
Fair value as of September 30, 2022			$	420,907					$	76,751					$	229,430					$	10,789					$	737,877
Total gain (loss):
Net realized gain (loss)(A)			—						(10,000)						13,372						—						3,372
Net unrealized appreciation (depreciation)(B)			(2,516)						(266)						(7,656)						3,829						(6,609)
Reversal of previously recorded (appreciation) depreciation upon realization(B)			—						10,001						—						—						10,001
New investments, repayments and settlements(C):
Issuances / originations			29,900						1,183						—						380						31,463
Settlements / repayments			(800)						(1,500)						—						—						(2,300)
Sales(D)			—						—						(13,372)						—						(13,372)
Transfers(E)			—						—						—						—						—
Fair value as of December 31, 2022			$	447,491					$	76,169					$	221,774					$	14,998					$	760,432

			Secured First Lien Debt						Secured Second Lien Debt						Preferred Equity						Common Equity/ Equivalents						Total
Nine Months Ended December 31, 2022
Fair value as of March 31, 2022			$	425,087					$	67,958					$	217,599					$	3,678					$	714,322
Total gain (loss):
Net realized gain (loss)(A)			—						(10,000)						20,318						—						10,318
Net unrealized appreciation (depreciation)(B)			(21,328)						(4,800)						10,405						10,940						(4,783)
Reversal of previously recorded (appreciation) depreciation upon realization(B)			—						10,001						(12,250)						—						(2,249)
New investments, repayments and settlements(C):
Issuances / originations			106,950						5,188						21,000						380						133,518
Settlements / repayments			(48,800)						(6,596)						—						—						(55,396)
Sales(D)			—						—						(35,298)						—						(35,298)
Transfers(E)			(14,418)						14,418						—						—						—
Fair value as of December 31, 2022			$	447,491					$	76,169					$	221,774					$	14,998					$	760,432

			Secured First Lien Debt						Secured Second Lien Debt						Preferred Equity						Common Equity/ Equivalents						Total
Three Months ended December 31, 2021:
Fair value as of September 30, 2021			$	431,413					$	68,489					$	228,931					$	7,592					$	736,425
Total gain (loss):
Net realized gain (loss)(A)			—						—						21,939						—						21,939
Net unrealized appreciation (depreciation)(B)			(1,741)						(200)						12,427						(5,166)						5,320
Reversal of previously recorded (appreciation) depreciation upon realization(B)			—						—						(25,425)						—						(25,425)
New investments, repayments and settlements(C):
Issuances / originations			37,000						5						—						—						37,005
Settlements / repayments			(32,838)						—						—						—						(32,838)
Sales			—						—						(41,768)						—						(41,768)
Transfers(E)			—						—						—						—						—
Fair value as of December 31, 2021			$	433,834					$	68,294					$	196,104					$	2,426					$	700,658

			Secured First Lien Debt						Secured Second Lien Debt						Preferred Equity						Common Equity/ Equivalents						Total
Nine Months Ended December 31, 2021:
Fair value as of March 31, 2021			$	368,688					$	102,897					$	159,478					$	2,671					$	633,734
Total gain (loss):
Net realized gain (loss)(A)			—						—						23,725						—						23,725
Net unrealized appreciation (depreciation)(B)			1,491						3,925						91,782						(16,279)						80,919
Reversal of previously recorded (appreciation) depreciation upon realization(B)			60						—						(26,053)						—						(25,993)
New investments, repayments and settlements(C):
Issuances / originations			65,450						6,515						12,600						—						84,565
Settlements / repayments			(46,898)						—						—						—						(46,898)
Sales			—						—						(49,394)						—						(49,394)
Transfers(E)			45,043						(45,043)						(16,034)						16,034						—
Fair value as of December 31, 2021			$	433,834					$	68,294					$	196,104					$	2,426					$	700,658

(A)Included in net realized gain (loss) on investments on our accompanying Consolidated Statements of Operations for the respective periods ended December 31, 2022 and 2021.

(B)Included in net unrealized appreciation (depreciation) of investments on our accompanying Consolidated Statements of Operations for the respective periods ended December 31, 2022 and 2021.

(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.

(D)The three and nine months ended December 31, 2022, includes $13.4 million of proceeds from the recapitalization of Old World Christmas, Inc. ("Old World"). The nine months ended December 31, 2022 also includes $12.3 million of proceeds from the recapitalization of Horizon Facilities Services, Inc.

(E)There were no transfers in the three months ended December 31, 2022. For the nine months ended December 31, 2022, transfers include (1) secured second lien debt of Ginsey with a total cost basis and fair value of $12.2 million, which was converted into secured first lien debt in August 2022 and (2) secured first lien debt of PSI Molded Plastics, Inc. with a total cost basis and fair value of $26.6 million, which was converted into secured second lien debt in September 2022.

For the three and nine months ended December 31, 2021, transfers include preferred equity of SOG Specialty Knives & Tools, LLC with a total cost and fair value of $0.6 million and $0.0 million, respectively, which was converted into common equity of Gladstone SOG Investments, Inc. in December 2021.

For the nine months ended December 31, 2021, transfers also include (1) secured second lien debt of J.R. Hobbs with a total cost basis and fair value of $52.5 million and $52.4 million, respectively, which was converted into secured first lien debt in June 2021, (2) secured first lien debt of D.P.M.S., Inc. with a total cost basis and fair value of $12.3 million and $7.3 million, respectively, which was converted into secured second lien debt of Galaxy Technologies Holdings, Inc. (“Galaxy Technologies Holdings”) in September 2021, and (3) preferred equity of Galaxy Technologies, Inc. with a total cost basis and fair value of $11.5 million and $16.0 million, respectively, which was converted into common equity of Galaxy Technologies Holdings in September 2021.

Summary Investment Holdings

The following table summarizes our investments by security type as of December 31, 2022 and March 31, 2022:

			December 31, 2022																		March 31, 2022
			Cost									Fair Value									Cost									Fair Value
Secured first lien debt			$	473,189		65.5		%				$	447,491		58.8		%				$	429,457		64.2		%				$	425,087		59.5		%
Secured second lien debt			84,158			11.7		%				76,169			10.0		%				81,147			12.1		%				67,958			9.5		%
Total debt			557,347			77.2		%				523,660			68.8		%				510,604			76.3		%				493,045			69.0		%
Preferred equity			149,099			20.6		%				221,774			29.2		%				143,079			21.4		%				217,599			30.5		%
Common equity/equivalents			15,934			2.2		%				15,029			2.0		%				15,565			2.3		%				3,752			0.5		%
Total equity/equivalents			165,033			22.8		%				236,803			31.2		%				158,644			23.7		%				221,351			31.0		%
Total investments			$	722,380		100.0		%				$	760,463		100.0		%				$	669,248		100.0		%				$	714,396		100.0		%

Investments at fair value consisted of the following industry classifications as of December 31, 2022 and March 31, 2022:

			December 31, 2022												March 31, 2022
			Fair Value						Percentage of Total Investments						Fair Value						Percentage of Total Investments
Diversified/Conglomerate Services			$	269,749					35.5		%				$	307,403					43.0		%
Home and Office Furnishings, Housewares, and Durable Consumer Products			147,533						19.4		%				125,440						17.6		%
Buildings and Real Estate			63,127						8.3		%				—						—		%
Hotels, Motels, Inns, and Gaming			59,308						7.8		%				37,923						5.3		%
Leisure, Amusement, Motion Pictures, and Entertainment			48,146						6.3		%				46,514						6.5		%
Healthcare, Education, and Childcare			37,638						5.0		%				39,252						5.5		%
Chemicals, Plastics, and Rubber			26,618						3.5		%				26,618						3.7		%
Mining, Steel, Iron and Non-Precious Metals			23,044						3.0		%				24,250						3.4		%
Aerospace and Defense			20,891						2.7		%				25,296						3.5		%
Telecommunications			19,453						2.6		%				32,467						4.6		%
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic)			18,109						2.4		%				13,823						1.9		%
Cargo Transport			15,265						2.0		%				14,533						2.0		%
Diversified/Conglomerate Manufacturing			9,140						1.2		%				14,064						2.0		%
Other < 2.0%			2,442						0.3		%				6,813						1.0		%
Total investments			$	760,463					100.0		%				$	714,396					100.0		%

Investments at fair value were included in the following geographic regions of the U.S. as of December 31, 2022 and March 31, 2022:

			December 31, 2022												March 31, 2022
Location			Fair Value						Percentage of Total Investments						Fair Value						Percentage of Total Investments
Northeast			$	273,897					36.0		%				$	194,100					27.2		%
West			198,589						26.1		%				158,607						22.2		%
South			173,259						22.8		%				188,978						26.4		%
Midwest			114,718						15.1		%				172,711						24.2		%
Total investments			$	760,463					100.0		%				$	714,396					100.0		%

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, 2022:

									Amount
For the remaining three months ending March 31, 2023									$	27,500
For the fiscal years ending March 31:
			2024						55,468
			2025						89,614
			2026						202,419
			2027						144,096
			Thereafter						38,250
			Total contractual repayments						$	557,347
			Investments in equity securities						165,033
			Total cost basis of investments held as of December 31, 2022:						$	722,380

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