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 CRF 270.17f-2]
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1. Investment Company Act File Number: Date examination completed:
814-00237 July 17, 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
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Gladstone Capital Corporation
We have examined management's assertion, included in the accompanying
Management Statement Regarding Compliance With Certain Provisions 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 under the Investment Company Act of 1940 (the Act) as of July 17, 2002.
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 July 17, 2002, and
with respect to agreement of security purchases and sales, for the period
from September 30, 2001 through July 17, 2002:
- Count and inspection of all securities located in the vault of First
Union (the "Custodian") at 740 15th Street, Washington, D.C. without
prior notice to management.
- Reconciliation of all such securities to the books and records of the
Company and the Custodian.
- Agreement of a sample of security purchases and a sample of security
sales or maturities during the period from September 30, 2001 through
July 17, 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 July 17, 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
July 17, 2002
Management Statement Regarding Compliance with
Certain Provisions of the Investment Company Act of 1940
July 17, 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 are also
responsible for establishing and maintaining effective internal controls 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 July 17, 2002, and from September 30, 2001 through July 17, 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 July 17, 2002, and from September 30, 2001, through
July 17, 2002, with respect to securities 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