UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-17f-2
Certificate of Accounting of Securities and Similar Investments in the Custody
of Management Investment Companies
Pursuant to Rule 17f-2 [17 CFR 270.17f-2]
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1. Investment Company Act File Number: Date examination completed:
814-00237 September 26, 2002
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2. State Identification Number:
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AL AK AZ AR CA CO
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CT DE DC FL GA HI
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ID IL IN IA KS KY
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LA ME MD MA MI MN
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MS MO MT NE NV NH
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NJ NM NY NC ND OH
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OK OR PA RI SC SD
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TN TX UT VT VA WA
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WV WI WY PUERTO RICO
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Other (specify):
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3. Exact name of investment company as specified in registration statement:
Gladstone Capital Corporation
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4. Address of principal executive office:(number, street, city, state, zip code)
1616 Anderson Road, Suite 208, McLean, Virginia 22102
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INSTRUCTIONS
This Form must be completed by the investment companies that have custody of
securities or similar investments.
Investment Company
1. All items must be completed by the investment company.
2. Give this Form to the independent public accountant who, in compliance with
Rule 17f-2 under the Act and applicable state law, examines securities and
similar investments in the custody of the investment company.
Accountant
3. Submit this Form to the Securities and Exchange Commission and appropriate
state securities administrators when filing the certificate of accounting
required by Rule 17f-2 under the Act and applicable state law. File the original
and one copy with the Securities and Exchange Commission's principal
office in Washington, D.C., one copy with the regional office for the region in
which the investment company's principal business operations are conducted, and
one copy with the appropriate state administrator(s), if applicable.
THIS FORM MUST BE GIVEN TO YOUR INDEPENDENT PUBLIC ACCOUNTANT
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Gladstone Capital Corporation
We have examined management's assertion, included in the accompanying "Report of
Management on Compliance with Rule 17f-2 of the Investment Company Act of 1940,"
that Gladstone Capital Corporation (the "Company") complied with the
requirements of subsections (b) and (c) of Rule 17f-2 of the Investment Company
Act of 1940 (the "Act") as of September 26, 2002 with respect to securities and
similar investments reflected in the investment account of the Company.
Management is responsible for the Company's compliance with those requirements.
Our responsibility is to express an opinion on management's assertion about the
Company's compliance based on our examination.
Our examination was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants and,
accordingly, included examining, on a test basis, evidence about the Company's
compliance with those requirements and performing such other procedures as we
considered necessary in the circumstances. Included among our procedures were
the following tests performed as of September 26, 2002, and with respect to
agreement of security and similar investments purchases and sales, for the
period from August 15, 2002 (the date of our last examination), through
September 26, 2002:
o Count and inspection of all securities located in the vault of Wachovia
Bank, N.A. (the "Custodian") at 740 15th Street, Washington, D.C.
without prior notice to management.
o Reconciliation of all such securities to the books and records of the
Company and the Custodian.
o Agreement of a sample of security purchases and a sample of security
sales or maturities during the period from August 15, 2002 through
September 26, 2002 from the books and records of the Company to broker
confirmations.
We believe that our examination provides a reasonable basis for our opinion. Our
examination does not provide a legal determination on the Company's compliance
with specified requirements.
In our opinion, management's assertion that Gladstone Capital Corporation
complied with the requirements of subsections (b) and (c) of Rule 17f-2 of the
Investment Company Act of 1940 as of September 26, 2002, with respect to
securities reflected in the investment account of the Company is fairly stated,
in all material respects.
This report is intended solely for the information and use of management and the
Board of Directors of Gladstone Capital Corporation and the Securities and
Exchange Commission and is not intended to be and should not be used by anyone
other than these specified parties.
/s/ Ernst & Young LLP
September 26, 2002
REPORT OF MANAGEMENT ON COMPLIANCE WITH RULE 17f-2 OF THE
INVESTMENT COMPANY ACT OF 1940
September 26, 2002
Ernst & Young, LLP
8484 Westpark Drive
McLean, VA 22102
To Whom it May Concern:
We, as members of management of Gladstone Capital Corporation (the Company), are
responsible for complying with the requirements of subsections (b) and (c) of
Rule 17f-2, "Custody of Investments by Registered Management Investment
Companies," of the Investment Company Act of 1940. We also are responsible for
establishing and maintaining effective internal control over compliance with
those requirements. We have performed an evaluation of the Company's compliance
with the requirements of subsections (b) and (c) of Rule 17f-2 as of
September 26, 2002, and from August 15, 2002 through September 26, 2002.
Based on this evaluation, we assert that the Company was in compliance with
the requirements of subsections (b) and (c) of Rule 17f-2 of the Investment
Company Act of 1940 as of September 26, 2002, and from August 15, 2002
through September 26, 2002, with respect to securities and similar
investments reflected in the investment account of the Company.
Gladstone Capital Corporation
By:
/s/ DAVID GLADSTONE
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David Gladstone
Chairman and Chief Executive Officer
/s/ TERRY BRUBAKER
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Terry Brubaker
President and Director
/s/ HARRY BRILL
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Harry Brill
Chief Financial Officer