Good morning and welcome to the Gladstone Capital Corporations fourth quarter and year ending September 30, 2010 shareholders conference call. [Operator instructions.] I would now like to turn the conference over to Mr. David Gladstone. Sir, please go ahead.

All right. Thank you, Amy for that introduction, and hello and good morning to all of you out there. This is the quarterly conference call for shareholders and analysts for Gladstone Capital, NASDAQ trading symbol GLAD. Again thank you all for calling in. We love these times we have together and we’re so happy to talk to shareholders about the company. We wish we could do it monthly but quarterly is probably enough. We hope all of you take the opportunity to visit our website, www.GladstoneCapital.com, where you can sign up for email notices and you can receive current information about us in a timely fashion and we promise not to send you out junk email and just send you out stuff about our company. Please remember that if you’re in the Washington DC area and you have a little time to spare you can come by here in McLean, Virginia, our suburb and come by and say hello to all of us here. You’ll see some of the finest people in the business. Now, let me read the statement about forward-looking statements. This conference call may include statements that may constitute forward-looking statements within the meaning of the Securities Act of 1933 and Securities Exchange Act of 1934, including statements with regard to the future performance of the company. These forward-looking statements inherently involve certain risks and uncertainties, even though they are based on our current plans and we believe those plans to be reasonable. There are many factors that may cause our 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 our prospectus that’s filed with the Securities & Exchange Commission and…

Thanks David, and good morning. We'll still finding economic and small business lending climate to be difficult but it is getting better. We're seeing some new investment opportunities, and have a number of proposals out to companies. We hope to be telling you about more new investments soon. We closed one new investment during the quarter ended September 30 of 10 million. In addition, we funded $4 million to the existing portfolio companies in the form of additional investments or draws on their revolver facilities. During the same quarter we received repayments of approximately $26 million as a result of loan sales, payoffs, normal amortization, and pay downs of revolvers, including two payoffs of $14 million in total. So in total we had a net decrease of our portfolio of about $12 million for the quarter. We used the net proceeds to pay down our line of credit. Since the end of the quarter we closed three new investments totaling $7 million and made about $1.4 million in additional investments in existing portfolio companies. Additionally, after the end of the quarter we received $1.8 million in additional repayments. Currently, the amount we owe on our line of credit is $19.6 million. We continue to see new opportunities. We have availability on our line of credit and are actively seeking to make new investments. We also continue to explore ways to increase the yield on our existing investment portfolio by refinancing lower yielding senior loans with third-party lenders while trying to maintain a higher yield in junior debt. At the end of the September quarter our investment portfolio was valued at approximately $257 million versus a cost basis of $298 million. So approximately 86% of cost. At the end of the quarter we had loans with six companies on non-accrual and…

Okay, thank you Chip. That's a 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, and good morning. Before I go through the financials, I’d like to highlight a few key points for the quarter. First, as of September 30 we had investments in 39 companies, which decreased from 40 as of June 30. During the quarter we had one new investment and exited from two investments. Second, on the statement of operations we reclassified the excess fees from interest income to other income and updated the prior period amounts for comparison purposes. Third, at the time of this call, we have about $19.6 million borrowed on our line, so the availability on the line gives us the ability and flexibility to deploy more capital for the right opportunities. And fourth, yesterday on November 22, we amended our credit facility and, as of that amendment date, advances under the credit facility bear interest at LIBOR, subject to a minimum rate of 1.5% plus 3.75% per year with a commitment fee of 1.5% per year on undrawn amounts when the facility has drawn more than 50%, and 1% per year on undrawn amounts when the facility has drawn less than 50%. In addition, we are no longer obligated to pay an annual minimum earnings shortfall fee to the committed lenders and as of the amendment date the company paid $665,000 in fees. Now for the details. I’ll start with the balance sheet. As of September 30, we had about $271 million in assets, consisting of $257 million in investments at fair value, and $14 million in cash and other assets. We borrowed about $17 million, cost basis, on our line of credit, and had about $249 million in net assets. As such, we are less than one-to-one leverage, and this continues to be a very conservative balance sheet for finance companies like ours, which…

All right. Thank you, Gresford. For more details on our financials, all the listeners please should read our press release. And also obtain a copy of our annual report called the 10-K, which we filed with the SEC yesterday. You can access the press release and the 10-Ks on our Web site at www.Gladstonecapital.com and also on the SEC's Web site, www.sec.gov. I think the big news this quarter continues to be that we're now away from the destructive action of the recession and we’re actively looking for new investments. Starting to get a lot more letters out and we now feel confident enough to put some new investments on the books and build our incomes so that we can look forward to increasing our dividends somewhere down the road. We have plenty of room on our line of credit to make new loans and with these three lenders that we have that are supporting us we feel confident that they are behind us in terms of the line of credit. Also, we continue to make progress with our existing portfolio companies as they continue to work their way out of the difficult recession. Some of them are exploding in terms of growth and others are just bumping along and making good progress but at a slower pace. I want everyone to know that this is probably the most optimistic I've been about the company in the past two years. Our goal for this fiscal year will be and that's the one that's ending September 30, 2011, is to have a good increase in the income and hopefully some dividend increase. That's our goal for this year. Even though we have a nice new line of credit today, that line is of course short-term and we eventually need to change…

Thank you. We will now begin the question-and-answer session. (Operator instructions) Our first question is from Troy Ward with Stifel Nicolaus. Please go ahead.

Great. Thank you. Good morning, gentlemen.

Morning.

Just a couple of quick questions on Gladstone portfolio, movement’s maybe we can expect in the fourth quarter? Looking through the portfolio, it looks like there's $8 to $10 million worth of cost value of loans that probably have matured at this point today? Can you just talk on whether or not those have been repaid and how that impact portfolio growth for the December quarter?

Chip, why don't you take that?

Yeah. We have a number of maturities that are coming up. We're in discussions with companies about either renewing the facilities. I would say we're not seeing a wave of refinancing coming at us. A number of these are good companies that are performing well and so we're interested in sticking with those credits but we're certainly not, I'm certainly not forecasting the wave of repayment that we saw through the quarter in December 30. I think most of those will be extended and hopefully on better terms than we had originally.

Then specifically on the precision investment which matured in October, do you anticipate that will stay on the books for the, you're going to redo that one?

Yeah, so we expect that one has as we have negotiated an agreement with them and are in the process of documenting that now.

That's great. On the liability side what are you seeing David, from the CLO market. I know we saw another CLO get done earlier this year that had kind of focused more on senior assets because that's kind of what's available from the CLO structure right now, which seems to fit your business model, maybe more than some other BDCs? How do you look at the liability side of the balance sheet beyond the credit facility?

Yeah. We haven't explored it to a high degree. Most of those CLO's that we've seen gone out have been very special CLO's. They've not been anything close to what we do. I think the one that you may be referring to was very similar to us and they went through a lot of pain and suffering to get that done. I don't think the marketplace has come back the way it was two years ago but I don't rule it out. I think in the next year you may see a lot more traction in that marketplace and if there is, we certainly will take a look at that and see if we can offload some of our loans to a cheaper borrowing base or CLO.

Okay and then finally, just a couple of quick questions on the credit facility? Are there any limitations to your credit facility regarding borrowing base or such, or today would you have full access to that facility?

Gresford, do you want to talk about that?

Yes. We have full access to the credit facility. It is based on our borrowing base so there are no limitations right now, Troy.

Okay and then one final one. What about the fees? Did you pay any upfront fees on this facility that will be amortized over the life of the facility? And if so, how much was that?

No, we paid the 655,000 that we paid in fees. That just rpresented one times fees that will not be amoritzed.

Those had already been accrued and so that was already in the P&L and unpaid so when we changed our line of credit, we paid what we had accrued. So you already had those in your histoircal numbers.

Thanks. You won't be accruing any new ones on the new facility?

No, that's correct.

Thanks, guys.

Next question, please.

Our next question is from Vernon Plack with BB&T Capital Markets. Please go ahead.

Thanks very much and Gresford, just a few other quick questions. Were there any non-recurring expenses from the quarter?

No, the most recent that I can think of would be the compensation expense that we recorded a couple of quarters ago, the 255,000 but during this quarter we did not have any non-recurring expenses like that.

Okay and just a point of clarification. Once you borrow more than 50% or $63.5 million your unused fee on the total amount drops to 0.5%? Is that correct?

That's correct. If it's under 50% drawn it's 1%.

Okay. All right. Great. Thanks very much.

Okay. Next question.

(Operator instructions) Mr. Gladstone, I'm showing no questions in the queue at this time.

All right. Thank you all for calling in. We certainly appreciate it and again we'll see you next quarter. That's the end of this call.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.