Company: GAINI
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001321741-25-000022
Chunk: 151

Company: GLADSTONE INVESTMENT CORPORATION\DE
Filing Date: 2025-11-04
Form: 10-Q
Item: Part I, Item 8
Chunk 151
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 has demonstrated the ability and intent to pay contractual amounts due. However, we remain contractually entitled to this interest. Interest payments received on non-accrual loans may be recognized as income or applied to the cost basis, depending upon management’s judgment. Generally, non-accrual loans are restored to accrual status when past-due principal and interest are paid and, in management’s judgment, are likely to remain current, or, due to a restructuring, the interest income is deemed to be collectible. As of September 30, 2025, our loans to B+T Group Acquisition, Inc. ("B+T"), Diligent Delivery Systems ("Diligent") and Edge Adhesives Holdings, Inc. ("Edge") were on non-accrual status, with an aggregate debt cost basis of $40.3 million, or 5.5% of the cost basis of all debt investments in our portfolio, and an aggregate fair value of $18.7 million, or 2.7% of the fair value of all debt investments in our portfolio. As of March 31, 2025, our loans to B+T, Diligent, Edge and J.R. Hobbs Co. – Atlanta, LLC (“J.R. Hobbs”) were on non-accrual status, with an aggregate debt cost basis of $90.2 million, or 13.1% of the cost basis of all debt investments in our portfolio, and an aggregate fair value of $50.9 million, or 8.2% of the fair value of all debt investments in our portfolio.Paid-in-kind (“PIK”) interest, computed at the contractual rate specified in the loan agreement, is added to the principal balance of the loan and recorded as interest income. Thus, the actual collection of PIK income may be deferred until the time of debt principal repayment. As of September 30, 2025 and March 31, 2025, we did not have any loans with a PIK interest component.Success Fee Income RecognitionWe record success fees as income when earned, which often occurs upon receipt of cash. Success fees are generally contractually due upon a change of control in a portfolio company, typically resulting from an exit or sale, and are non-recurring.Dividend Income RecognitionWe accrue dividend income on preferred and common equity securities to the extent that such amounts are expected to be collected and if we have the option to collect such amounts in cash or other consideration.