Gladstone Capital : Investor Presentation – June 30, 2023

Investor Presentation for the Fiscal Quarter Ended

June 30, 2023

FINANCING FOR LOWER MIDDLE MARKET COMPANIES

Legal Disclaimer

Forward-LookingStatements:This presentation may include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may include comments with respect to our objectives and strategies, and the results of our operations and our business.

These forward-looking statements inherently involve numerous risks, assumptions, and uncertainties, both general and specific. The risk exists that these statements may not be fulfilled. Although these statements are based on information available to us as of the date of this presentation, which we believe is reasonable, we caution readers of this presentation not to place undue reliance on these forward-looking statements as a number of known and unknown factors could cause future results to differ materially from these statements, including those factors listed under the caption "Risk Factors" in our Form 10-K and Form 10-Q filings, our registration statement, and other filings we may make with the Securities and Exchange Commission, all of which can be found on the investors section of our web site at www.GladstoneCapital.comor the SEC's web site, www.SEC.gov.

Forward-looking statements may be influenced in particular by factors such as the overall impact of public health emergencies, fluctuations in interest rates and stock indices, the effects of competition in the areas in which we operate, and changes in economic, political, regulatory and technological conditions. We caution that the foregoing list is not exhaustive. When considering forward-looking statements when making decisions, investors should carefully consider the aforementioned factors as well as other uncertainties and events.

Past or Present Performance Disclaimer:This presentation includes information regarding our past or present performance. Please note, past or present performance is not a guarantee of future performance or future results. We undertake no obligation to update the information contained herein to reflect subsequently occurring events or circumstances, except as required by applicable securities laws and regulations.

**Amounts in tables and charts in thousands, except for share and per share amounts and as otherwise stated.

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Gladstone Capital Overview

Background:

• Gladstone Capital was founded in 2001 as one of the first business development companies (BDC) focused on making loans to lower middle market U.S. businesses ($3-15MM of EBITDA) and today the investment team remains dedicated to the BDC's activities
• Gladstone Capital is funded through publicly traded common stock (Nasdaq: GLAD) and is leveraged via various senior unsecured note issues and a bank revolving credit facility
• Managed by Gladstone Management Corporation, an SEC registered investment adviser that manages in excess of $4.0 billion in assets across four publicly traded yield-oriented funds with significant insider equity holdings and a history of shareholder friendly actions in support of investor fund distributions

Investment Strategy:

• Target current yield investments in growth-oriented companies with revenue visibility and proven cashflows where capital flexibility is highly valued to support the achievement of the company's growth plan
• Growth equity valuations support greater equity contributions reducing the debt risk profile (lower LTV) and near term growth provides visibility to organic deleveraging and multiple repayment options
• Majority of investments are backed by private equity sponsors, which provide institutional governance, strategic sector insight, experience managing leveraged capital structures and additional investment capacity support
• Leverage seasoned origination team to source, structure and pro-actively manage investments to mitigate losses

Investment Profile (as of June 30, 2023):

• $715 million portfolio at fair value diversified across 52 companies and 12 different industries
• Conservative asset mix with 91% of investments in secured loans, 75% in lower risk 1st lien loans and weighted average leverage across core proprietary loan portfolio of ~3.5x EBITDA while generating an attractive weighted average portfolio yield of 13.6%
• Modestly leveraged capital base (1.04:1.00 debt/equity) has generated net investment income (NII) yield on net asset value of 11.2% for the last four quarters and currently supports annual cash distribution of $0.99/share

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Why Invest in a BDC?

BDCs are regulated by the SEC, which mandates asset diversity, investor transparency via quarterly SEC filings including fair value adjustments of all assets and limits financial leverage to a maximum of 2:1 debt to equity leverage.

BDCs typically operate as regulated investment companies for tax purposes and pay no corporate income taxes, provided they distribute at least 90% of taxable income and all earnings and gains are passed through to investors.

Investment Profile

• Competitive returns - BDC equity distributions typically exceed other yield-oriented investment alternatives
• Limited interest rate risk - Distributions backed by floating rate loans which have supported increased distributions with the recent increase in interest rates
• Credit protection - Equity is supported by a diversified portfolio of directly originated secured loans with lender friendly credit protections
• Investment liquidity - Established public equity market for common stock
• Experienced credit managers - Team experience, ongoing oversight and modestly leveraged capital base structured to manage loan portfolio through various business cycles to minimize credit losses

(1)	PowerShares Exchange-Traded Fund Trust II - Senior Loan Portfolio (BKLN) - Yield 6/30/2023	(4)	Raymond James 7/13/2023 BDC Industry Investment Banking Weekly Newsletter
(2)	S&P MLP Index Dividend Yield - 6/30/2023	(5)	GLAD's stock price as of 6/30/2023
(3)	BAML US High Yield Master II Index - Effective Yield 6/30/2023	(6)	Reported in GLAD's 6/30/2023 10-Q

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Gladstone Capital Strategy and Risk Management

Investment Strategy:

• Originate secured debt investments in established lower middle market companies with sustainable margins/cash flows to support a leveraged capital structure and favorable growth characteristics to deleverage risk profile
• Target companies with operating cash flow (EBITDA) of $3-15 million and investments of $7-30 million
• Maintain industry and borrower diversity across added value businesses with revenue visibility or competitive barriers including specialty manufacturing, industrial or business services, or healthcare services, while avoiding financial services, early stage or high-tech companies, most consumer, commodity or cyclical businesses

Deal Sourcing:

• Origination team provides regional coverage of middle market PE firms, investment banks and other deal sources
• Leverage seasoned investment team and lower middle market focus to deliver an elevated level of expertise to win investor-oriented financing solutions and provide active portfolio monitoring to mitigate credit losses
• Highly selective screening process where under 5% of deals reviewed ultimately close and the bulk of investments are backed by private equity (~77% of the portfolio at 6/30/23)

Due Diligence:

• Thorough multi-disciplinary "equity like" underwriting approach - blending internal industry experience, onsite visits and management assessments, supplemented with third party financial reviews, industry or market assessments, management background checks, legal and insurance investigations, etc.

Risk Management:

• Gladstone Capital requires board level participation in portfolio companies to monitor operating performance and outlook to proactively manage risk profile
• Ongoing senior management reviews, quarterly third-party expert investment valuations which are subject to quarterly oversight by Gladstone Capital's audit committee and independent board members

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