Good morning, and welcome to the Gladstone Capital First Quarter ended December 31, 2012 Conference Call. All participants will be in a listen-only mode. (Operator Instructions) After today’s presentation there will be an opportunity to ask questions. (Operator Instructions) Please note this event is being recorded. And now, I would like to turn the conference over to David Gladstone. Please go ahead.

Well, thank you Emily, and thank you all for joining us this morning. This is David Gladstone, the Chairman, and this is our quarterly earnings call for shareholders and analysts of Gladstone Capital Common stock trading under the symbol, GLAD, and our Preferred stock trading under the symbol, GLADP for preferred. Thank you all for calling in. We love these moments when we are able to talk to shareholders about the company, and we still have many more of these calls. Hope you will take an opportunity to visit our website, www.GladstoneCapital.com, where you can sign up your e-mail notifications, so that you can receive information and timely information about what’s going on at the company. And please remember that, if you happen to be in the Washington D.C. area, we are here in McLean, Virginia and you have an open invitation to come by and see us and say, hello. You will see the finest people in the business. And remember that we are holding our Annual Shareholders Meeting on Thursday February 14, at the Hilton, McLean Tysons Corner at 7920 Jones Branch Drive, in McLean, Virginia. So please remember to vote your shares for your proxy proposals that are coming up for approval, we need to get the votes in. Now, I need to read a 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 the 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 and other factors even though they’re based on our current plans and we believe those plans to be reasonable. Many of these forward-looking statements can be identified by the use of…

Sure, good morning. During our last our first fiscal quarter ended December 31, 2012, we had a lot of new investment activity, which we are excited about. We also experienced several early payoffs at par which provided additional liquidity to pay down our line of credit and invest in new portfolio, also providing $1.1 million in success fees and $0.5 million in prepayment fees this quarter. Overall, net production was slightly down this quarter as compared to the quarter in September 30. We invested in aggregate of $50.2 million in six new portfolio companies, and an aggregate of $1.6 million through existing portfolio companies through existing revolver draws. Net revenue portfolio company’s payoff early at par for an aggregate of $47.7 million. Our two proprietary investments are in the quarter were the following; $14 million in combined senior, subordinated debt and equity securities and AG Transportation Holdings, which is a regional food-grade liquid and dry bulk carrier providing a variety of bulk transportation services, and $19.5 million senior subordinated debt Allen Edmonds Shoe Corporation, which is a premier women footwear and accessories manufacturer. In addition, we sold one non-accrual investment for net proceeds of $5.9 million, which was $4.3 million above the prior quarter valuation and we’re off another non-accrual investments valued at zero during the quarter and combined cost basis of these two investments was $9.2 million. During the quarter, we continue to manage our current portfolio by working on our pipeline for new deals that fit within our current investment strategies and objectives to one, achieve and grow current income by investing in debt securities of established businesses that we believe will provide stable earnings and cash flow to pay expenses, make principal and interest payments on our outstanding indebtedness and make distributions to stockholders that grow over…

Thank you, Chip. That was a good report. Now, let’s turn to the financials for the quarter ending December 31, 2012 and our first quarter for the fiscal year 2013 and for that, we hear from David Watson, Chief Financial Officer and Treasurer of the company.

Hi, good morning everyone. Yesterday, we released our first fiscal quarter earnings press release and filed our Form 10-Q which I hope you’ve had a chance to review. On this call, I will provide a financial overview of the quarter and I’ll start with the income statement. For our first quarter ended December 31, 2012, net investment income was $4.9 million or $0.23 per share as compared to the prior quarter ended September 30, 2012 a $4.5 million or $0.22 per share. The 7% increase in net investment income was primarily due to a decrease in total operating expenses of $500,000 offset by decrease in total investment income of $200,000. Operating expenses decreased in the three months ended December 31, 2012 as compared to the prior quarter primarily due to a decrease in interest expense resulting from decreased borrowings on our line of credit. Interest income on investments decreased $600,000 quarter-over-quarter due to several early pay offs at par occurring during the fourth quarter of fiscal year 2012 and the first quarter of fiscal year 2013. Other incomes increased by $400,000 quarter-over-quarter due to an increase in success of prepayment fees resulting from the early pay offs during the quarter in December 31, 2012. Please keep in mind that other income is relatively high for both quarters when compared to historical norms and that this type of income can be very uneven and unpredictable. 100% of common and preferred stock distributions paid in the three months ended December 31, 2012 and frankly over the last two years were covered by net investment income which highlights our commitment to prudent growth and building shareholder value. Let’s turn to realized and unrealized changes in our portfolio. Realized gains and losses come from actual sales or disposals of investments. Recoding unrealized appreciation and…

All right, David Watson, thank you. I hope all of our listeners read our press releases and review our quarter with reports, that’s the Form 10-Q, which we just filed with the SEC. So you can access the press release and the 10-Q on our website www.GladstoneCapital.com and also on the SEC website. The big news this quarter obviously was we had good production this quarter. However, we also had a lot of good loans to payoff and also we exited two non-performing loans that enabled our team to focus on the remaining portfolio and we well as new investments. We had growth in net investment income by about 7% over the last quarter and maintained our interest bearing portfolio, pretty good rate at this time about 11.5% given the interest rate environment. Also noted on the earlier call, as the quarter end, we were able to amend our line of credit and remove the LIBOR Floor, so all of those were nice big event for us this quarter. Still the biggest challenge today is accessing long-term capital marketplace for debt and equity. We have a line of credit and supported lenders on the line of credit. But we also make long-term loans and investment. So we need long-term debt and long-term equity. In order to make those new long-term loans and long-term debt, we’ll have to look into raising long-term capital such as our November 11 issuance of Term Preferred Stock. For our portfolio companies, we worried too that they’re not going to be able to get long-term senior loans as they needed from some other banks out there. There are a spare number of regional banks that are making new loans based on primarily on the assets of the business. These asset-based lenders are more plentiful than they’ve…

We will now begin the question-and-answer-session. (Operator Instruction) And our first question will come from Greg Mason of Stifel Nicolaus. Please go ahead. Greg Mason – Stifel, Nicolaus & Company: Great. Good morning. Thank you, David. Can you talk a little bit about the Viapack? I was impressed by, I believe you had it marked around $1.6 million last quarter and sold it for $5.9 million, as you mentioned $4 million above where you had it marked. Could you talk about that process? Did somebody come in and bid much more than you were thinking it was worth, last on September 30? Can you just talk about that extra…

Sure. This is a problem of valuation as opposed to sort of realistic values. And it’s very hard to say on the one hand that our valuation process wasn’t correct. I think it was correct at the time. We started looking into this and found that our biggest problem was the purchase of raw materials. Raw materials were a very large percent of the cost basis of getting the product to marketplace. And we ended up selling the company to someone that uses huge amounts of the resins that are used in the process and they have a much lower cost base, because they’re buying in huge volume. So the value to them was much greater than the value it would be to someone like us in a small business situation. And that was really the difference of being able to add that to the profit of the company based on the lower cost. And it’s an in-place company producing and for those people who want to buy something that’s a good little company with a problem with cost basis, it was just a good bid. So that was a big difference. Greg Mason – Stifel, Nicolaus & Company: And then can you talk about, I know for the industry, there’s kind of a flurry of year end activity due to potential tax considerations. You said you closed $6 million so far this year. Can you talk about the pipeline that you’re seeing now for deal activity, as well as the potential for repayment activity as you’re seeing it today?

HI, sure, this is Chip. Yeah, we are seeing a wider pipeline than we saw coming into the fourth calendar quarter, but not measurably lighter. So we still feel pretty good about the ability to both new investments going forward. The prepayment activity, we just typically don’t know a number of the ones that sold in the fourth quarter. And we sort of getting call on Thursday and by Monday, it’s been repaid. We don’t see that level of prepayment, so that we’ve also said that before. So we just doesn’t’ feel pretty good about those repayments and new investment activity. But you just don’t know and it’s been lumpy. And I will tell you that most of what we close, almost everything we closed in this past quarter was not really tax related and so we’ll see what happens going forward. Greg Mason – Stifel, Nicolaus & Company: Great, thank you. And then one final question. Yesterday on GAIN’s conference call, you talked about GAIN issuing equity and you don’t like to do that below. Can you talk about from GLAD’s standpoint how you’re viewing the equity issuance here and is that something on a table for GLAD as well?

We don’t have any dire need for it. We were a little bit against the wall in GAIN, but not much and we just needed some equity. We really don’t need a lot of equity here and surprised we’re trading at net asset value. So we sort of moved up until we’re comfortable with that. But again, there’s no plan, no immediate plan to sell stock. I’m sure someplace down the road, we’ll need to sell stock as we grow, because we pay out as you know all of our net investment income. Greg Mason – Stifel, Nicolaus & Company: Great. Thank you, Dave and Chip.

And our next question comes from Bob Brown, Private Investor. Please go ahead.

Yes, thank you, just a long-term investor, thank you guys. Just three quick questions; first of all, Chip you mentioned, I thought you said that after the post-January one, we have a contact still – I thought you said a non-accrual company that sell through close in the second quarter. Assuming it goes through as, for whatever in terms of the contract, give a sense of where it is relative to the March, have we been carrying it out?

Yeah, I really can’t address that at this point. We think it’s a fair price for the asset and it’s within the realm of words mark. But at this point, I don’t have any clarity that it’s even going to close. Do you think it’s going to close? I really can’t comment on that at this point.

Okay. Second question, I was just wondering if you could give us a sense in terms of on some of the equity that we have. So remember, I think we did in April or July quarter last year, you talked about one particular company where you thought we had a pretty sizable appreciation in there. And obviously didn’t know when it would be realized. But just wondering if you could give us a sense of some of what we have?

Well, it varies dramatically by company, I mean we have some assets that we get regular calls on that are strategic and much like the one that David discussed and that we think would sell substantially higher than where we may have at March. We don’t have any contracts to sell those companies. We have another company or two that we’ve done the equity for a while, the equity may move up and down. But we feel like we’re in the money on that equity and at some point when it’s the right time to sell, we’ll make a return, a nice return on our equity investments there, but it varies dramatically.

Okay. And the last question, any sense in terms of this year being the year where we might just see an increase in the dividend?

We get that question just about every day and I just can’t comment on it. The goal obviously is to build up the net investment income and if you do that, you have to pay it out. So I can just say, we’re working hard towards that goal.

All right, okay.

Next question please.

The next question comes from Casey Alexander of Gilford Securities. Please go ahead. Casey J. Alexander – Gilford Securities, Inc.:

We do. Do you have another question while we look it up? Casey J. Alexander – Gilford Securities, Inc.: Yeah, the second question is, according to your schedule of investments, it looks like $91 million or a third of your portfolio is going to invest this year. Can you kind of discuss the challenges of getting that money back to work given the fact that you said deals which you’re seeing are of a more risky nature with tighter spreads now. What’s the challenge of getting that money back to work?

I think you’re talking about contractual repayments at which we typically will, obviously report this. In a number of those situations, we’re already in discussions and especially in the ones that we’ve enjoyed a good relationship, profitable for both parties to extend those. So I don’t personally foresee that everything maturing is going to be we paid, so we’ll have certain extensions and we’ll have some renewals within that. We are seeing increased competition. We said that last quarter two and we’re still able to put that $50 million. So it’s very likely that we just have to work hard to find good investments that we can meet our objectives, and provide a good return within a pretty competitive marketplace. The year 2012 was not banner year of the yield. But I think most of our industry expected. So for all we know 2013 could be a better year for everyone. But we’re cautiously optimistic that even the contractual payments that do come back to us and the companies are so that we will be able to put that to work.

Casey, this is David. The fixed rate versus variable rates is located in the back of the 10-Q in item 3. We’ve had about 11% of our portfolio in fixed rate and then we have the remainder in variable rates and other ones that are in variable rates approximately 84% of them have towards associated with them. Casey J. Alexander – Gilford Securities, Inc.: Okay, great. Thank you very much.

(Operator Instructions) I’m showing no further questions. This concludes our question-and-answer session. I’d like to turn the conference back over to Mr. Gladstone for any closing remarks.

Well, thank you all for calling in and we look for you next quarter. That’s the end of this conference call.

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