#1GLADSTONE CAPITAL Investor Presentation for the Fiscal Quarter Ended June 30, 2023 FINANCING FOR LOWER MIDDLE MARKET COMPANIES#2Legal Disclaimer Forward-Looking Statements: 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.com or 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. ← GLADSTONE Page 2#3Gladstone 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 GLADSTONE Page 3#4Why 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 16.0% 14.0% 12.0% 10.0% 8.0% Alternative Investment Yields 13.6% 6.0% 11.2% 10.1% 4.0% 8.3% 8.4% 7.2% 20% 0.0% BKIN-EIFLoan Fund (1) S&P MLP Index - Distribution Yield (2) High Yield - BAML US BDC Median Distribution GLAD Distribution Yield GLAD Portfolio Effective HY MII Index (3) Yield (4) (5) Yield (6) (1) (2) S&P MLP Index Dividend Yield 6/30/2023 (3) BAML US High Yield Master II Index - Effective Yield 6/30/2023 PowerShares Exchange-Traded Fund Trust II - Senior Loan Portfolio (BKLN) - Yield 6/30/2023 (4) (5) Raymond James 7/13/2023 BDC Industry Investment Banking Weekly Newsletter GLAD's stock price as of 6/30/2023 (6) Reported in GLAD's 6/30/2023 10-Q ← GLADSTONE Page 4#5Gladstone 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 ← GLADSTONE Page 5#6Attractive Lower Middle Market Dynamics Why we target lower middle market ("LMM") companies ◉ ☐ Greater industry diversity and more consistent flow of growth-oriented investment opportunities LMM companies typically sell for lower cash flow multiples, which translates into reduced financial leverage, better asset collateral coverage and ability to structure and control entire debt financing solution Smaller investment size attracts less competition from larger private debt funds or commercial banks which supports more attractive investment returns at lower relative leverage levels More receptive to equity co-investments, providing an opportunity to selectively participate in anticipated growth and equity appreciation Trends Enhancing Opportunity for Non-Bank/Private Credit Lenders ☐ PE Sponsor's ability to scale LMM platform investments and achieve their targeted equity returns often require the financing be structured to accommodate the growth needs of the business which require a more experienced and responsive lender able to flex to the circumstances even if at a slightly higher financing cost The ability to provide simplified and expedient "one-stop" financing solutions serves to expedite transaction closing and reduce execution risk while simplifying the funding of future growth or facility modifications Shifting capital market conditions and leverage constraints are expected to reduce regional bank participation in LMM loan market and few large banks have coverage platforms able to originate or manage LMM investments Bulk of private debt funds raised exceed $1B and are managed by multi-billion firms focused on larger borrowers (>$25 million EBITDA) with higher minimum investment thresholds needed to achieve cost efficiencies and capital deployment objectives LMM is a less competitive segment of the leverage finance market which provides a more attractive risk reward profile and matches up well with the investment flexibilities of Gladstone Capital's non-bank investment platform ← GLADSTONE Page 6#7Gladstone Capital 6/30/2023 Quarter Summary Originations/Portfolio Activity: Invested $53.5 million in three new portfolio companies and $17.1 million in existing portfolio companies. Repayments and net proceeds totaled $35.2 million, resulting in strong net originations of $35.4 million for the quarter and lifted the net portfolio growth to over $125 million (22%) for the past year. Portfolio Yield / Net Investment Income (NII): Interest income for the quarter rose 11.4% to $21.8 million as average earning assets rose 6.6% and the weighted average yield rose 50 basis points from the prior quarter to 13.6%. Other income was largely unchanged at $1.0 million and total investment income rose $2.3 million to $22.8 million for the quarter. Total expenses increased $0.2 million compared to the prior quarter with higher borrowing costs; however, net management fees declined $0.5 million as closing and advisory fee credits more than offset higher incentive fees. Net investment income for the quarter rose 21.2% to $11.7 million or $0.31 per share, covering approximately 125% of the recently increased common stock distributions. Portfolio Performance and Valuation: ☐ ☐ ☐ Our portfolio continues to perform well with generally modest leverage metrics and favorable liquidity, and we ended the quarter with only one non-earning debt investment representing 0.4% of debt investments at fair value. 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 Appreciation for the quarter of $0.2 million was primarily related to the net move in several equity positions as net depreciation of the debt investment portfolio was nominal. ← GLADSTONE Page 7#8Gladstone Capital Origination Activity Net originations of $35.4 million for the June 30, 2023 quarter continue to demonstrate healthy LMM momentum over the past year and market demand for one-stop 1st lien financing solutions. Origination Activity 300,000 250,000 200,000 150,000 100,000 50,000 16.0% 15.0% 14.0% 13.0% 12.0% 11.0% 10.0% 9.0% 8.0% FY-2012 FY-2013 FY-2014 FY-2015 FY-2016 FY-2017 FY-2018 FY-2019 FY-2020 FY-2021 1st Lien 2nd Lien Preferred Equity / Unsecured Common Equity / Other FY-2022 LTM 3Q-23 -*->Weighted Average Yield New Investments at Cost Disbursements to Existing Portfolio Companies Sales, Repayments, Other Exits at Cost Net New Investments at Cost Number of New Portfolio Company Investments Number of Portfolio Company Exits Total Portfolio Companies Gladstone Capital Quarterly Net Investment 6/30/2021 9/30/2021 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 $ 37,992 $ $ 48,717 $ 59,619 $ 2,416 $ 48,000 $ 53,500 15,200 (54,428) $ 106,918 $ 27,551 3,876 10,775 (2,791) (96,799) (50,858) 18,565 26,428 10,963 16,090 17,115 (6,292) (21,801) (39,183) (9,761) (35,230) $ (1,236) $ 24,760 $13,995 $ (40,083) $ 60,990 $ 64,246 $ (25,804) $ 54,329 $ 35,385 3 0 6 0 4 4 0 2 3 3 1 5 2 0 1 2 1 2 47 46 47 45 49 52 50 51 52 ← GLADSTONE Page 8#9☐ Gladstone Capital Portfolio Trends $700,000 Originations have exceeded portfolio exits and refinancings for the past several quarters lifting portfolio net asset growth by over $125 million over the past twelve months. $800,000 Total Investments - Fair Value by Security $678,759 $715,324 62,051 PE sponsor demand for unitranche financings has lifted 1st lien investments to 75% of the portfolio. $586,462 $649,615 69,829 62,374 $600,000 120,036 69,510 117,438 115,928 $500,000 83,846 $400,000 Approximately 91.6% of our loan portfolio is subject to floating rates with minimum SOFR floors. We continue to make equity co-investments in approximately half of our new originations to reseed the equity portfolio after the realized gains of the past year. The current portfolio valuation of $715.3 million represents 97.3% of cost 6/30/2023. ← GLADSTONE $300,000 533,237 498,947 463,858 433,106 $200,000 $100,000 $0 6/30/22 9/30/22 3/31/23 6/30/23 ■■■1st Lien ■■2nd Lien ■Preferred & Common Equity / Other 3/31/22 6/30/22 9/30/22 12/31/22 3/31/23 6/30/23 as of First Lien Debt 70.3% 73.9% 68.7% 72.4% 73.5% 74.5% Second Lien Debt 25.0% 14.3% 17.8% 17.2% 17.3% 16.8% Equity / Other 13.8% 11.9% 10.7% 10.3% 11.8% 8.7% Page 9#10Portfolio Metrics Consistent with GLAD's LMM focus, the core loan portfolio continues to represent companies with an average EBITDA of approx. $11.5 million and an average leverage attachment point of ~3.5x EBITDA $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 Portfolio Company EBITDA and Leverage Statistics 6.00x 5.00x 4.00x 3.00x 2.00x 1.00x S- 6/30/2022 9/30/2022 12/31/2022 3/31/2023 Weighted Average EBITDA Total Weighted Average Leverage 6/30/2023 2nd Lien WA Leverage 0.00x *For the purposes of this presentation, certain investments have been excluded from the data used to develop the above analysis. Those exclusions include investments: (i) originated as Syndications; (ii) co-investments with GAIN; (iii) investments under $5 million; (iv) equity only investments; (v) two oil and gas investments that saw outsized impacts from COVID-19; (vi) investments with outsized TTM EBITDA that skew weighted average EBITDA; and (vii) one investment with a de minimis TTM EBITDA relative to total debt skewing weighted average leverage. Additionally, investment EBITDA and Leverage are weighted based on the size of the principal outstanding. ← GLADSTONE Page 10#11Industry and Deal Sources Are Diversified Portfolio Diversification Across 13 Industries - At 6/30/2023 Fair Value Personal and Non-Durable Consumer Products (2.1%) Machinery (0.9%) Other (1.6%) Deal Source Composition - At 6/30/2023 Fair Value 1.4% 1.2% 1.4% Automobile (3.1%) Oil and Gas (3.8%) Beverage, Food, and Tobacco (10.4%) Diversified/Conglomerate Service (23.0%) Aerospace and Defense (12.3%) Healthcare, Education, and Childcare (20.3%) ← GLADSTONE Diversified/Conglomerate Manufacturing (22.5%) 19.0% 77.0% Sponsor Backed (77%) Syndication (1.4%) ■ GLAD Controlled (1.4%) ■ Non-Sponsor Backed (19%) ■ Affiliated Sponsor (GAIN) (1.2%) Page 11#12Portfolio Composition Portfolio Characteristics As Of: September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023 Total Portfolio - FV $ 649,615 $ 621,739 $ 678,759 $ 715,324 # of Portfolio Companies 52 50 51 52 Average Investment Size - FV $ 12,493 $ 12,435 $ 13,309 $ 13,756 Top 5 Investments % FV 26.9% 28.2% 26.3% 24.0% WAVG Investment Yield** 11.2% 12.3% 13.1% 13.6% 1st Lien FV $ 463,858 $ 450,243 $ 498,947 $ 533,237 2nd Lien FV 115,928 107,170 117,438 120,036 Equity/Other FV 69,829 64,326 62,374 62,051 Proprietary % of FV 97.1% 98.4% 98.5% 98.5% Syndicated % of FV 2.9% 1.6% 1.5% 1.5% Fixed Rate Debt % of Principal 11.5% 8.6% 8.5% 8.4% Variable Rate Debt % of Principal 88.5% 91.4% 91.5% 91.6% Performing % FV (Debt) 100.0% 99.6% 99.5% 99.6% Non-Performing % FV (Debt) 0.0% 0.4% 0.5% 0.4% Accrued Potential Success Fees $ 4,700 $ 4,000 $ 3,600 $ 3,600 **Weighted average yield on interest bearing debt investments (excludes non-accruals and reserves on interest receivables) Note: $'s are in (000's) ← GLADSTONE Page 12#13Representative Portfolio Investments CLARA Antenna Research AXIOS Industrial Group CAFÉ ZUPAS Early Learning Academies EMT METALS ANTENNA RESEARCH ASSOCIATES, INC. designs and manufactures radio frequency based antenna sub-systems and integrated antenna systems for military and commercial customers. AXIOS INDUSTRIAL GROUP is a provider of scaffolding, insulation, coatings, surface preparation and specialty solutions for a broad range of industrial customers in support of turnaround, maintenance and capital projects. CAFÉ ZUPAS is a healthy fast casual restaurant brand that serves house-made soups, salads and sandwiches from over 200 fresh ingredients. EL ACADEMIES, INC. owns and operates early childhood education centers in the United States. ENGINEERING MANUFACTURING TECHNOLOGIES, LLC is a precision manufacturer of close tolerance metal components used in defense, industrial, and other end markets and applications. ENCORE premier DREDGING PARTNERS ENCORE DREDGING PARTNERS, LLC is a mid-sized cutter suction and mechanical dredging services provider focusing on navigable waterways throughout the United States...... Fix-it 24/7 FIX-IT GROUP LLC is a provider of residential Heating Air Electric Plumbing INSPIRE AESTHETICS HH-INSPIRE ACQUISITION, INC. is a plastic surgery and aesthetic center offering a comprehensive range of cosmetic surgeries and aesthetics treatments ITEN DEFENSE, LLC is a leading provider of advanced composites and armor solutions used ITEN DEFENSE in personal protective equipment, aircraft, tactical vehicles, and maritime vessels. PERFORMANCE UND KARMAN MISSIE & SPACE SYSTEMS mcg KARMAN MISSILE & SPACE SYSTEMS is a premier manufacturer of flight-critical and high temperature assemblies and components for space and defense end-markets with significant content on the industry's most coveted platforms.... MCG ENERGY SOLUTIONS, LLC is a provider of SaaS-based energy trading, asset and risk management workflow automation software MCG ENERGY SOLUTIONS, LLC products to the energy sector. GRAYMATTER SALNO TECHNOLOGIES GRAYMATTER is a leading provider of operational technologies and Industrial IoT consulting services to the manufacturing, water and energy industries in North America. SALVO TECHNOLOGIES, INC. provides an integrated suite of technologies to serve the security and defense, medical, industrial, semiconductor, commercial, and science and technology markets....... WORKFORCEQA LLC is a leading tech-enabled ("TPA") of WORKFORCEQA Third-Party maintenance, repair, and replacement services. Your COMPLIANCE All Administrator employee compliance solutions focused on regulated and safety-sensitive industries. ← GLADSTONE Page 13#14Quarterly Financial Summary In Thousands, except per share data Income: Interest Income Other Investment Income Total Investment Income Expenses: Fees to Advisor & Admin Interest Expense Operating Expense Total Expenses Net Investment Income (NII) Weighted Average Shares* NII Per WAVG Share Realized/Unrealized Gains (Loss) per Share Dividend Per WAVG Share NAV Per Share Return on Equity (NII)** $ Three Months Ended June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023 12,593 $ 1,191 13,784 15,567 $ 372 15,939 18,367 927 $ 19,294 19,578 $ 983 20,561 21,816 1,007 22,823 2,916 3,837 4,977 5,003 4,516 3,150 3,789 4,629 4,909 5,553 771 836 963 1,017 1,078 6,837 8,462 10,569 10,929 11,147 EA SSSSA $ 6,947 $ 7,477 $ 8,725 $ 9,632 $ 11,676 34,304 34,492 35,207 36,604 37,680 0.203 $ (0.366) $ $ 0.203 $ 9.12 $ SASS SA 0.217 $ 0.248 $ 0.263 (0.069) $ (0.086) $ 0.064 $ SA SA $ 0.310 0.006 0.203 0.210 $ 0.225 $ 9.08 $ 9.06 $ 9.19 $ S959 0.240 9.27 9.9% 10.1% 10.0% 10.1% 11.2% 586,462 649,615 621,739 678,759 715,324 277,456 339,407 306,064 350,253 361,686 312,921 315,487 324,326 341,811 357,946 90.9% 109.5% 97.2% 104.7% 104.0% Portfolio at Fair Value Debt*** Net Asset Value Debt-to-Equity *Total Shares outstanding at 6/30/2023 was 38,600,686 **Return on Equity (NII) defined as: LTM net investment income divided by LTM average net assets ***Debt includes Line of Credit and Long Term Debt Note: The financial information above is not comprehensive and is without notes, so readers should obtain and carefully review GLAD's Forms 10-K and 10-Q for the corresponding reporting periods as filed with the SEC. ← GLADSTONE Page 14#15Gladstone Capital 6/30/2023 Quarter Summary Capital Base and Liquidity Total Assets increased to $730 million as of June 30, 2023, consisting of $715 million in investments at fair value and $15 million in cash and other assets. Leverage as of June 30, 2023 decreased slightly with new investment activity to 104% of Net Assets which is well below the BDC industry average of 127%. In June 2023, the revolving credit facility was renewed, extending the revolving period and final maturity to October 2025 and October 2027, respectively. Current line of credit borrowings totaled $164 million with availability in excess of $53 million as of June 30, 2023. ROE Performance The portfolio generated an average ROE Yield (NII) of 11.2% for the twelve months ended June 2023. Based on the increases in NII with prevailing interest rates, the annual dividend was increased to $0.99 per share and NII earnings for the quarter covered dividends by 129%. With floating rate investments exceeding floating rate liabilities by ~$450 million and current market rates on pace to be up again this quarter, we expect net interest income to continue to rise through the quarter ended September 30, 2023. (1) BDC ROE Source: Raymond James BDC Industry Weekly Newsletters (7/13/2023) GLADSTONE LTM Weighted Average Yield 13.6% 14.0% 12.5% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% Debt/Equity 140.0% 126.7% 123.9% 12.0% 120.0% 104.0% 100.0% 80.0% 60.0% 0.0% GLAD BDC Me an BDC Median 40.0% 20.0% 0.0% GLAD BDC Mean BDC Median ROE (NII) 11.2% 11.5% 10.8% 10.7% 11.0% 10.5% 10.0% 9.5% 9.0% 8.5% 8.0% 7.5% 7.0% GLAD BDC Mean BDC Median Page 15#16Corporate Data Executive Officers David Gladstone Chairman & CEO Terry Lee Brubaker COO Bob Marcotte President Nicole Schaltenbrand CFO & Treasurer Other Officers Michael LiCalsi General Counsel and Secretary Jack Dellafiora Chief Compliance Officer Research Coverage Janney Montgonery Scott LLC John Rowan Jefferies Kyle Joseph Ladenburg Thalmann Mickey Schleien Oppenheimer & Co. Mitchel Penn Raymond James Robert Dodd Investor Relations 1521 Westbranch Drive, Suite 100 McLean, VA 22102 (703) 287-5893 [email protected] Websites Gladstone Capital: www.gladstonecapital.com Investment Adviser: www.gladstonemanagement.com Information on all Funds: www.gladstonecompanies.com Other Corporate Counsel: Kirkland & Ellis LLP Transfer Agent: Computershare Inc. Auditors: PricewaterhouseCoopers LLP Nasdaq Listings Common Stock Ticker: GLAD Corporate Headquarters 1521 Westbranch Drive, Ste. 100 McLean, VA 22102 (703) 287-5800 Other Locations: Dallas, Los Angeles & New York ← GLADSTONE Page 16