Greetings, and welcome to the Gladstone Capital first quarter 2010 earnings conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) It is now my pleasure to introduce your host Mr. David Gladstone, Chief Executive Officer for Gladstone Capital. Mr. Gladstone, you may now begin.

All right Jackie, thank you for that nice introduction, and hello and good morning to all of you out there. I’m David Gladstone, Chairman. This is the quarterly conference call for shareholders and analysts for Gladstone Capital, traded on NASDAQ under the symbol GLAD. Again, we thank you all for calling in. We’re always happy to talk to shareholders about the company and I wish we could do this more often. We hope you have the opportunity to visit our website, its www.gladstonecapital.com, where you can sign in for e-mail notices, so you receive the information, and please remember that if you’re in the Washington DC area, you all have an invitation to visit us here in McLean, Virginia, and stop by and say hello. I do need to read the statement that we always read. This conference call may include statements that may constitute forward-looking statements within the meaning of the Securities Act of 1933, and the Securities Exchange Act of 1934, including statements with regard to future performance of the company. These forward looking statements inherently involve certain risks and uncertainties, even though they’re based on our current plans, and we do believe those plans to be reasonable. There are many factors that may cause the actual results to be materially different from any future results that are expressed or implied by these forward-looking statements, including those factors listed under the caption ‘risk factors’ in our 10-K and 10-Q filings and in our prospectus as filed with the Securities Exchange Commission. Those can be found on our website at www.gladstonecapital.com and also at the SEC website. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. As usual, we’ll start off with our President, Chip Stelljes. Chip is the Chief Investment Officer of all the Gladstone companies. He’ll cover a lot of ground; then we’ll go to Gresford, the Chief Financial Officer. Chip, go ahead.

Thank you, David. As most of you know, the difficult economic climate continues and is compounded by a still difficult lending environment, but we are seeing some new investments being made with some investors in the marketplace, believing that the worst is behind us, but the continued instability of the financial and lending markets, combined with the absence of real signs of a recovery in the economy continues to make us cautious. We did not close any new investments during the quarter, but invested $2 million in the existing portfolio of companies, in the form of additional investments or draws on revolver facilities. We also took back the $200,000 note from the sale of some portfolio company assets for an aggregate $2.2 million invested. During the quarter we received repayments of approximately $18.2 million due to loan sales, pay offs, normal amortization and pay down of revolvers. This included the full pay off of the Tulsa Welding Investment of $12.1 million, a partial pay-off of the BAS senior term loan of about $1 million and the sale of Kinetek and Wesco syndicated loans for $2.8 million. So in total we had a net production decrease in the portfolio of about $16 million for the quarter. The net proceeds were used to pay down our line of credit. Since the end of the quarter we made about $2.7 million in additional investments in existing portfolio of companies. Additionally, after the ended the quarter we received $6.8 million in repayments, which included a $4 million repayment from one company, ActiveStyle. Additionally, after the end of the quarter we sold one syndicated loan that was held in our portfolio of investments at December 31. That syndicated loan had a fair value of about $300,000, and we expect to receive the proceeds within the…

Thank you, Chip. That’s a very good report. Now let’s turn to the financials and for that we’ll hear from Gresford Gray, our Chief Financial Officer. Gresford.

Thanks David. We’ll begin with our balance sheet which continues to remain strong. At the end of the December quarter we had about $329 million in assets, consisting of $307 million in investments at fair value and $12 million in cash and other assets. We borrowed about $74 million in our line of credit and had about $251 million in net assets. Therefore we are less than one-to-one leverage and this is a very conservative balance sheet for a finance companies which are usually leveraged much higher, we believe that our overall risk profile as low. During the quarter we reduced the size of the credit facility by $25 million from $127 million to $102 million. We’re in good standing with our line of credit from KeyBanc and BB&T. Turning to our income statement, for the December quarter net investment income was about $4.4 million, versus $5.9 million for the same quarter last year, a decrease of about 25%. The decrease was primarily due to a decline in investment income resulting from the sale and repayment of loans during the quarter and lower transaction fees paid by the portfolio companies. Please note that LIBOR has fallen and remained low which has negatively impacted the earnings from our syndicated loans. However, since we have sold many of our syndicated loans, even if rates go back up, we do not expect that our income will increase materially. On a per share basis net investment income for the quarter was $0.21 per share, as compared to $0.28 per share for the same quarter last year. This was a per share decrease of about 25% which again was caused by the changes in our balance sheet. As many of you may be aware, net investment income is the most important number to us, because…

Okay, thank you Gresford. That was an excellent report and presentation, and I hope all of our readers out there and our listeners will read the press release, and also obtain a copy of the quarterly report called the 10-Q which we filed with the SEC yesterday. You can access the press release and the 10-Q on our website at www.gladstonecapital.com, and also on the SEC website at www.sec.gov. I think the big news for this quarter is that we continue to make progress with our portfolio of companies and our desire to pay down our short term banker, one with KeyBanc and BB&T. They’re great lenders, but as you know they replaced our primary lender, Deutsche Bank, and they are short term revolving lines of credit. So as part of the new agreement as Gresford mentioned, we were required to reduce the commitment to KeyBanc to $75 million, down by $25 million. We did that by December 31 and during the quarter as we reduced that down, we kept going, and so our line is at $102 million, but currently as of about February 1, 2010 we had only $32 million borrowed on the line of credit. So you can see we performed well in getting that short term line of credit down to something that makes a lot more sense. Many of the loans that we sold off or paid off were lower yielding loans, and so our portfolio is performing a little bit better in terms of yield, and our line of credit has to be reduced by another $25 million in May, and we are already in a position to honor that, because we are only borrowing $32 million today. So we are in great shape in terms of the balance sheet now. We feel very…

(Operator Instructions) Your first question comes from Vernon Plack - BB&T Capital Markets. Vernon Plack - BB&T Capital Markets: David, I’m trying to get a better understanding of interest income on controlled investments. I know that number has bounced around the last several quarters. This most recent quarter was $693,000; the quarter before I think was only $57,000; the prior quarter was actually higher, $700,000 and $480,000, but then it goes back to $20,000. I’m just trying to understand why that number has bounced around like it has, and what we can expect going forward.

Do you want to answer that one, Gresford?

Yes. Vernon, that’s a factor of us having more control investments as of December 31. If you recall from December of ‘08 we had much fewer investments. So that’s the primary factor.

What happens Vernon is that sometimes when we don’t like what’s going on with regard to the ownership, some of these funds, these LBO funds just want to walk away from their investment. So we take control and have turned these companies around. Vernon Plack - BB&T Capital Markets: I’m looking at this past quarter, it was $693,000, the quarter before was only $57,000. I know you didn’t have that much change in your control investment portfolio overall and the quarter before that was $754,000. So it went $754,000 to $57,000 to $693,000. I don’t think that necessarily reflects overall changes in the amount of control investments that you have. I’m just trying to understand it better, probably more importantly how should I look at that number going forward? Is it more of a $60,000 number; is it more of a $700,000 number?

We’re not going to be able to research that now. Why don’t we research it and we’ll put it on our Q&A on the website. Vernon Plack - BB&T Capital Markets: Okay, and just to confirm, I believe you had one new non-accrual SCI?

That’s correct. Vernon Plack - BB&T Capital Markets: Okay, and one other just quick question. You mentioned that your borrowings now are around $32 million, which means well from today until the end of the quarter it looks like you sold roughly $40 million in additional investments to bring that number down?

Yes, we’ve sold a number of investments, and the number keeps bouncing around. It’s probably closer to $57 million today. I got the number wrong at $32 million, so about $57 million today. Vernon Plack - BB&T Capital Markets: Okay, so you have $57 million in debt outstanding right now?

Right. We draw down, and Vernon it’s a revolting line of credit. So if some of our portfolio companies need money they call us up, and we pull down on our revolver and they’re asking us under their revolver, so it goes up and down.

(Operator Instructions) Your next question comes from Greg Mason - Stifel Nicolaus & Co. Greg Mason - Stifel Nicolaus & Co.: David, last quarter I think you mentioned you were in discussions about an SBIC facility. Could you give us any updates on progress there?

Not much progress, don’t know what’s holding us up, but we’re submitting an application document this week, the final next round of that. So we shall see. I don’t know what; they are just back logged back there. We’ve met with them several times. So we’ll just have to see what happens. Greg Mason - Stifel Nicolaus & Co.: Now that you’ve been through this several times, what’s kind of the process after you do this kind of final submission? What’s typically the process that you have to do?

Quite frankly I don’t know, because this is a new administration and new people and they have their own methodology of going about it. So Greg, we’re not sitting still hoping the SBIC will come into place. We’re working with the several long term lenders and hopefully we’ll get something out of that before the summer-time. Greg Mason - Stifel Nicolaus & Co.: I was looking through the income statement and typically you reimburse the incentive fee, the full amount, and it looks like this quarter you reimbursed $22,000 of the $370,000 in incentive fees. Can you talk about what was going on with that reimbursement this quarter?

Yes, we said to ourselves that now that we’re all changed and everything is no longer the way it was before, that we would just live by the contracts. So what we’ve done is taken that incentive fee and said to ourselves, let’s put that aside and see if we need that fore pay to the employees, as opposed to the shareholders. So, we’re probably moving away from the old credit of all the incentive fee, into a period of time in which we actually take the incentive fee into the management company and pay it out as bonuses. Greg Mason - Stifel Nicolaus & Co.: Can you tell us the logic behind reimbursing $22,000. I think it was the actual number we saw in the Q?

I can’t remember the actual reason, but I think it’s based on the fact that we needed a few dollars in order to make the $0.07 per share paid per month in dividends. So it was a minor amount that needed to make that dividend payment.

(Operator Instructions) Mr. Gladstone, there are no further questions at this time.

All right, thank you all for tuning in and we’ll catch you next quarter. That’s the end of this conference call.

Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you all for your participation.