Filed Pursuant to Rule 497
Registration Statement No.

 

The information in this prospectus supplement is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus supplement is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

 

Exhibit 2.s.8

PROSPECTUS SUPPLEMENT

(To Prospectus dated             , 201     )

            Shares

 

 

LOGO

    % Series [        ] Preferred Stock

Liquidation Preference $        per share

 

 

We are offering for sale              shares of our Series         Preferred Stock. Our common stock is traded on The Nasdaq Global Select Market under the symbol “GLAD.” The last reported sale price for our common stock on             ,             was $        per share. The net asset value per share of our common stock at the close of business on             , 201     was $        per share. There currently is no market for the Series                 Preferred Stock. We applied to list the Series         Preferred Stock on [        ]. The expected trading symbol for the Series         Preferred Stock is [        ].

 

     Per Share      Total(1)  

Public offering price

   $                    $                

Underwriting discounts and commissions

   $                    $                

Proceeds, before expenses, to us

   $                    $                

 

(1) 

The aggregate expenses of the offering are estimated to be $        , which represents approximately $        per share.

The Underwriters are expected to deliver the Series         Preferred Stock in book-entry form through the Depositary Trust Company on or about        .

You should read this prospectus supplement and the accompanying prospectus before deciding whether to invest in our preferred stock and you should retain them for future reference. Additional information about us, including our annual, quarterly and current reports, has been filed with the Securities and Exchange Commission. This information is available free of charge on our corporate website at www.gladstonecapital.com.

 

 

An investment in our preferred stock involves certain risks, including, among other things, risks relating to investments in securities of small, private and developing businesses. We describe some of these risks in the section entitled “Risk Factors,” which begins on page P-6 of this prospectus supplement and page 13 of the accompanying prospectus. Shares of closed-end investment companies frequently trade at a discount to their net asset value and this may increase the risk of loss to purchasers of our preferred stock. You should carefully consider these risks together with all of the other information contained in this prospectus supplement and the accompanying prospectus before making a decision to purchase our preferred stock.

The preferred stock being offered has not been approved or disapproved by the Securities and Exchange Commission or any state securities commission nor has the Securities and Exchange Commission or any state securities commission passed upon the accuracy or adequacy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense.

 


We have not authorized any dealer, salesman or other person to give any information or to make any representation other than those contained in this prospectus supplement or the accompanying prospectus. You must not rely upon any information or representation not contained in this prospectus supplement or the accompanying prospectus as if we had authorized it. This prospectus supplement and the accompanying prospectus do not constitute an offer to sell or a solicitation of any offer to buy any security other than the registered securities to which they relate, nor do they constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction to any person to whom it is unlawful to make such an offer or solicitation in such jurisdiction. The information contained in this prospectus supplement and any accompanying prospectus is accurate as of the dates on their respective covers only. Our business, financial condition, results of operations and prospects may have changed since such dates.

TABLE OF CONTENTS

Prospectus Supplement

 

     Page  

Terms of the Series [             ] Preferred Stock

     P-5  

Risk Factors

     P-6  

Use of Proceeds

     P-6  

Capitalization

     P-6  

Asset Coverage Ratio

     P-6  

Special Characteristics and Risks of the Series [             ] Preferred Stock

     P-6  

Description of the Series [             ] Preferred Stock

     P-6  

Taxation

     P-6  

Underwriting

     P-6  

Legal Matters

     P-6  

Prospectus

 

     Page  

Prospectus Summary

     1  

The Offering

     5  

Fees and Expenses

     8  

Additional Information

     12  

Risk Factors

     13  

Special Note Regarding Forward-Looking Statements

     39  

Use of Proceeds

     40  

Price Range of Common Stock and Distributions

     40  

Common Share Price Data

     41  

Ratio of Earnings to Combined Fixed Charges and Mandatorily Redeemable Preferred Distributions

     42  

Consolidated Selected Financial Data

     43  

Selected Quarterly Data (unaudited)

     45  

Management’s Discussion and Analysis of Financial Condition and Results of Operations

     46  

Senior Securities

     72  

Business

     74  

Portfolio Companies

     91  

Management

     99  

Control Persons and Principal Stockholders

     115  

Dividend Reinvestment Plan

     118  

Material U.S. Federal Income Tax Considerations

     120  

Regulation as a Business Development Company

     123  

 

P-2


     Page  

Description of Our Securities

     126  

Certain Provisions of Maryland Law and of Our Charter and Bylaws

     133  

Share Repurchases

     137  

Plan of Distribution

     138  

Custodian, Transfer and Dividend Paying Agent and Registrar

     140  

Brokerage Allocation and Other Practices

     141  

Proxy Voting Policies and Procedures

     142  

Legal Matters

     143  

Experts

     143  

Financial Statements

     F-1  

 

P-3


SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

All statements contained or incorporated by reference in this prospectus supplement or the accompanying prospectus, other than historical facts, may constitute “forward-looking statements.” These statements may relate to, among other things, future events or our future operating results, our business prospects and the prospects of our portfolio companies, actual and potential conflicts of interest with Gladstone Management Corporation and its affiliates, the use of borrowed money to finance our investments, the adequacy of our financing sources and working capital, and our ability to co-invest, among other factors. In some cases, you can identify forward-looking statements by terminology such as “estimate,” “may,” “might,” “believe,” “will,” “provided,” “anticipate,” “future,” “could,” “growth,” “plan,” “project,” “intend,” “expect,” “should,” “would,” “if,” “seek,” “possible,” “potential,” “likely” or the negative or other variations of such terms or comparable terminology. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our 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. Such factors include but are not limited to:

 

   

the recurrence of adverse changes in the economy and the capital markets;

 

   

risks associated with negotiation and consummation of pending and future transactions;

 

   

the loss of one or more of our executive officers, in particular David Gladstone, Robert L. Marcotte or Terry Lee Brubaker;

 

   

changes in our investment objectives and strategy;

 

   

availability, terms (including the possibility of interest rate volatility) and deployment of capital;

 

   

changes in our industry, interest rates, exchange rates, regulation or the general economy;

 

   

our business prospects and the prospects of our portfolio companies;

 

   

the degree and nature of our competition;

 

   

changes in governmental regulations, tax rates and similar matters;

 

   

our ability to exit an investment in a timely manner;

 

   

our ability to maintain our qualification as a RIC and as a BDC; and

 

   

those factors described in the “Risk Factors” section of this prospectus supplement and the accompanying prospectus.

We caution readers not to place undue reliance on any such forward-looking statement, which speak only as of the date made. Actual results could differ materially from those anticipated in our forward-looking statements and future results could differ materially from our historical performance. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this prospectus supplement. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events, or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports we have filed, or in the future may file with the SEC, including subsequent annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. The forward-looking statements contained or incorporated by reference in this prospectus supplement or accompanying prospectus are excluded from the safe harbor protection provided by the Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”).

 

P-4


TERMS OF THE SERIES [        ] PREFERRED STOCK

 

Dividend Rate

The dividend rate will be     %.

 

Dividend Payment Rate    

[Dividends will be paid when, as and if declared on         ,         ,         , and         , commencing        .] The payment date for the initial dividend period will be        .]

 

Regular Dividend Period

Regular dividend periods will be         days.

 

Liquidation Preference    

$        per share

 

Non-Call Period                

The shares may not be called for redemption at the option of the Company prior to         .

Stock Exchange Listing

 

P-5


RISK FACTORS

[To be provided.]

USE OF PROCEEDS

We intend to use the net proceeds from this offering first to pay down existing short-term debt, then to make investments in lower middle market businesses in accordance with our investment objectives, with any remaining proceeds to be used for other general corporate purposes. Indebtedness under our credit line facility currently accrues interest at the rate of approximately [    ]% and matures on                     ,         . We anticipate that substantially all of the net proceeds of this offering will be utilized in the manner described above within three months of the completion of the offering. Pending such utilization, we intend to invest the net proceeds of this offering primarily in cash, cash equivalents, U.S. government securities, and other high-quality debt investments that mature in one year or less from the date of investment, consistent with the requirements for continued qualification as a RIC for federal income tax purposes.

CAPITALIZATION

[To be provided.]

ASSET COVERAGE RATIO

[To be provided.]

SPECIAL CHARACTERISTICS AND RISKS OF THE SERIES [        ] PREFERRED STOCK

[To be provided.]

DESCRIPTION OF THE SERIES [        ] PREFERRED STOCK

[To be provided.]

TAXATION

[To be provided.]

UNDERWRITING

[To be provided.]

LEGAL MATTERS

Certain legal matters will be passed upon for us by Bass, Berry & Sims PLC, Nashville, Tennessee. Venable LLP, Baltimore, Maryland, will pass upon the legality of certain of the securities offered by us and certain other matters of Maryland law. [Certain legal matters will be passed upon for the underwriters by                .]

 

P-6


 

 

            Shares

 

 

LOGO

Gladstone Capital Corporation

    % Series [        ] Preferred Stock

(Liquidation Preference $        per share)

 

  

 

PROSPECTUS SUPPLEMENT

 

 

            , 201