Gladstone Investment : Investor Presentation as of December 31, 2023

GLADSTONE INVESTMENT

Quarterly Overview

December 31, 2023

Legal Disclaimer

This presentation may include forward-looking statements. These forward-looking statements may involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to: (1) changes in the economy and the capital markets, including stock price volatility, inflation, rising interest rates and risks of recessions; (2) risks associated with negotiation and consummation of pending and future transactions; (3) the loss of one or more of our executive officers, in particular David Gladstone, David Dullum, or Terry Lee Brubaker; (4) changes in our investment objectives and strategy; (5) availability, terms (including the possibility of interest rate volatility) and deployment of capital; (6) changes in our industry, interest rates, exchange rates, regulation, or the general economy, including inflation; (7) our business prospects and the prospects of our portfolio companies; (8) the degree and nature of our competition; (9) changes in governmental regulation, tax rates and similar matters; (10) our ability to exit investments in a timely manner; (11) our ability to maintain our qualification as a regulated investment company and as a business development company; and (12) those factors listed under the caption "Risk Factors" in our Form 10-K, Form 10-Q, registration statements and related prospectus supplements, and other documents we may file with the Securities and Exchange Commission ("SEC") from time to time.

We caution readers not to place undue reliance on any such forward-looking statements. Actual results could differ materially from those anticipated in our forward-looking statements and future results could differ materially from historical performance. We have based forward-looking statements on information available to us on the date of this presentation. Except as required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this presentation. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the SEC, including subsequent annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

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.

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Gladstone Investment | Overview(1)

GAIN is differentiated from other BDCs through its buyout investment strategy

Differentiated buyout structure

• Primary equity investor - Lead majority of prospective transactions, often partnering with existing management teams
• Differentiated approach - turnkey provider of equity & secured debt to effect change of control buyouts
• • Typically provides most, if not all, of the debt capital along with a majority of the equity capital
  • Target mix of total invested dollars per transaction is 25% equity & 75% debt (at cost)
  • Traditional BDCs typically have equity exposure of 5 - 10%
• Turnkey approach greatly increases certainty and speed of closing, providing business owners and intermediaries with confidence in GAIN's ability to execute a transaction

Dedicated lower middle market focus on niche market leaders

• Target lower middle market companies (EBITDA of $4 - $15 million) domiciled in the United States
• Focused on businesses with leading market positions, positive cash flow generation, and strong management teams
• Industry agnostic with investments in manufacturing, business/consumer services, and consumer products

Evergreen fund structure creates alignment with management

• Investment decisions not guided by fundraising or end-of-fund deadlines versus a traditional buy-out fund
• Provides flexibility to portfolio company boards and management in terms of strategy and timing
• Allows all stakeholders to focus on sustainable, long-term value creation

Active portfolio management

• Active leadership on portfolio company boards to drive alignment and accountability with management teams
• Leverage knowledge and experience from past deals to identify revenue and cost opportunities
• Current portfolio is diversified across 25 companies, 18 states, and 16 industries

(1) All information in this presentation is as of 12/31/2023, except as noted.

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Gladstone Investment | Overview

Delivering to investors consistent and increasing distributions

Investment structure creates attractive risk-reward profile

Strong and growing distributions

Outperformance and outsized upside potential compared to industry peers(1)

• Senior secured debt provides downside protection, along with the upside potential of GAIN's equity investments
• No third-party sponsor risk as GAIN is the sponsor
• Greater ability to influence decision making or enact changes to drive shareholder value, due to GAIN's significant economic ownership position in its portfolio companies
• Consistently raised regular monthly distributions to shareholders, as a result of growing debt portfolio, and has never missed a monthly distribution since its IPO in 2005
• GAIN's equity ownership provides further upside to shareholders through prospective capital gains from successful exits, which supports supplemental distributions
• • Since inception, average buyout exit cash-on-cash equity return of 4.0x
• Dividend yield of 7.0% as of March 4, 2024 (2)
• Excellent long-term historical performance compared to industry peers in total return and return of equity ("ROE"):
• • GAIN's 1, 3 and 5-year total return is 31%, 97% and 154% vs. industry peers of 28%, 59% and 86%
  • GAIN's 1, 3 and 5-year average ROE is 15%, 17% and 12% vs. industry peers of 11%, 11% and 9%

1. See slide 18 for detail.
2. Assumes a full year of the $0.08 per share regular monthly distributions, including amounts not yet paid in March 2024, and excludes the supplemental distributions of $0.12 paid in June, September and November 2023, and $0.88 paid in December 2023.

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Investment Focus and Process

Driving performance with a focused and diligent approach to investment selections

Investment Focus

Investment Structures

Deal Sourcing

Due Diligence

• Target stable lower middle market companies with EBITDA of $4 - $15 million
• Investment size (debt & equity) generally up to $75 million (typically 25% equity & 75% debt)
• Lead or co-lead prospective transactions
• Focused on cash-flow positive businesses with proven competitive advantages and strong management teams
• Sector agnostic with interest in manufacturing, business services/distribution, and consumer products
• Preferred equity is typically participating with a stated dividend of around 8%
• Secured 1st or 2nd lien term debt with current interest rates in the low- to mid-teens, generally with a success fee due upon a change of control and 5-year term without amortization
• Revolver may be provided with the expectation of refinancing shortly after close
• Portfolio company management option pool range of 10 - 25%
• Source opportunities from investment banks, M&A advisory firms, and industry executives
• Regionally focused sourcing strategy, spearheaded by every member of the investment team
• Debt & equity from single investor provides competitive advantage by improving the certainty of close and decreasing deal complexity
• • Typical due diligence period of 45 to 60 days after executing letter of intent
  • Thorough multi-disciplinary approach - blending internal industry experience, onsite visits and management assessments, supplemented with third party quality of earnings reports, industry studies, management assessments, and customary legal and insurance investigations

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Risk Management and Value Creation

GAIN takes a long-term approach with a strategy to deploy debt & equity

designed to streamline post-close value creation

1 Certainty and Speed to Close

No third-partycapital requiredto close transactions, as GAIN provides substantially all the debt & equity.

4	Value Creation

Streamlined post-closevalue creation, as GAIN is the primary third-partyterm debt & equity investor.

2 Investment Horizon

Long term investment horizonas a publicly-tradedfund, GAIN has no fund life constraints.

3	Board Participation

GAIN participates on boardsof its portfolio companies and regularly engages with management.

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Value Creation Across the Portfolio

Equity ownership allows GAIN to effect change with its investments

GAIN helps to establish an effective board governance structure at the onset of each investment

• Enables GAIN to influence company strategy
• GAIN supports board members with relevant value-added industry expertise
• GAIN has ability to replace and enhance management

When appropriate, GAIN develops add-on and roll-up strategies to build value

• GAIN has executed two roll-up strategies as well as 9 add-on acquisitions in the last 5 years

Experienced

Governance

Structure

Add-on and

Roll-up

Strategies

Strategic

Planning

Sales and

Operational

Initiatives

At the outset of its investment, GAIN, along with company management, develop a strategic plan

• Builds buy-in with management on what we plan to do and when
• Creates a framework for alignment and accountability at the Board level

Proactive interaction with company management to drive long term value creation

• Leverage knowledge and experience from past deals to identify revenue and cost opportunities
• Significant experience in professionalizing sales management, investing in personnel and equipment, and negotiating costs

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Upside Potential Driven by Focus on Equity Securities

• GAIN's equity ownership provides further upside to shareholders through prospective capital gains and other income from successful exits which supports supplemental distributions from time to time
• Since inception, GAIN has generated approximately $368 million in net realized gains and dividends on the exit of the equity portion of buyout portfolio companies

Meaningful Equity Component in GAIN Portfolio(1)

Secured Second Lien

Debt

15%

Secured First Lien

Debt

53%

Preferred & Common

Equity

32%

Approximately 32% of GAIN's portfolio, at fair value, is comprised of equity securities (typically preferred equity with common equity participation)

1. At fair value as of 12/31/2023.

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Growing Portfolio

From 4/1/2019 to 12/31/2023, we have:

• Made investments in 9 new companies, deploying approximately $277 million of new capital(1)
• Exited 14 companies for a return of proceeds of $431.9 million(1)(2)

FYE March 31

$1,000.0

$900.0

$800.0

$700.0

$600.0

$500.0

$400.0

$300.0

$200.0

$100.0

$-

$902.8

$753.5

$714.4

$633.8

$565.9

.1	$437.5	$476.1

FY20	FY21				FY22	FY23	Q3 FY24
			1st Lien		2nd Lien		Preferred & Common Equity

1. Excludes line of credit commitments.
2. Includes return of capital, realized gains and dividends received from initial investment date through exit, net of losses on debt/equity and cost balances written-off or restructured.

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Continuous NAV Growth

• Continuous growth in overall NAV, driven by diligent growth and value creation in investment portfolio
• Significant NAV per share growth to $13.01 at 12/31/2023 from $11.17 at 3/31/2020

FYE March 31

	$1,000.0
	$900.0
	$800.0
	$700.0
$MM	$600.0
$500.0
					$902.8
	$400.0
			$714.4	$753.5
			$633.8
	$300.0	$565.9
					$459.9
	$200.0	$369.0	$382.4	$445.8	$439.7
	$100.0
	$-

FY 2020		FY 2021	FY 2022	FY 2023	Q3 FY 2024
		Investment Portfolio, at Fair Value			Net Asset Value

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