McLean, VA: Gladstone Capital Corp. (NASDAQ: GLAD) announced today that its first quarter financial results for Net Operating Income were $1,196,980 or $0.12 per share. Total assets were $132,870,002. The company was started in May 2001 and had its initial public offering in August 2001. It’s fiscal year ends on September 30.

“Net Operating Income for the quarter ending in December was lower than anticipated at the time of the initial public offering due to fewer investments being originated than initially projected and closings occurring at the end of the quarter,” said a spokesperson for the company. “The lower than projected net income was due to the fact that we have been evaluating the impact of the recession on new requests. We had expected to complete more investments but given the current economic climate it seemed prudent to proceed carefully. While the number of investment opportunities has not diminished, the poor economy has caused us to exercise added caution.”

“We paid a quarterly cash dividend of $0.18 per share on January 15, 2002. We believe that we will make up the difference between the $0.12 earned in the first quarter and the $0.18 paid in the first quarter during the remaining months of the fiscal year.”

“We provide managerial assistance to our portfolio companies through our wholly-owned subsidiary, Gladstone Advisers, Inc. Our subsidiary is consolidated in the company’s financial statements. These managerial assistance fees are an integral part of the relationships we have with our portfolio companies. As stated in our prospectus last summer we expect these managerial assistance fees to offset a portion of the operating expenses of the company but they are nonrecurring and usually are charged when we are working on new financing arrangements.”

“The attached financial statements are without footnotes. We have filed a Form 10-Q for the December quarter with the Securities and Exchange Commission (‘SEC’) and that form can be retrieved by going to the SEC website at www.SEC.gov or to the company’s web site at www.GladstoneCapital.com. A paper copy can be obtained by writing to the us at 1616 Anderson Road, McLean, VA 22102.”

For further information please contact Harry Brill or David Gladstone at (703) 286-7000.

The company will have a conference call at 11:30 am EST, Friday, February 15, 2002 to answer questions. Please call 1-800-521-5439 and use the ID# 155-25-86 and you will be placed on hold until the conference starts. An operator will monitor the call and set a queue for the questions. The conference call will be recorded and available for replay until March 17th by calling 1-800-625-5288.

This press release may include statements that may constitute "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, including statements with regard to the future performance of the Company. Words such as "believes" and "future" or similar expressions are intended to identify forward-looking statements. These forward-looking statements inherently involve certain risks and uncertainties, although they are based on the Company's current plans that are believed to be reasonable as of the date of this press release. Factors that may cause the Company's 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 include, among others, those factors listed under the caption "Risk factors" of the Company's prospectus dated August 23, 2001, as filed with the Securities and Exchange Commission on August 24, 2001. 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.