EX-2.S.11 18 d668320dex2s11.htm EX-2.S.11

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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.11

PROSPECTUS SUPPLEMENT

(To Prospectus dated , 201 )

% Notes due ,

We are offering promissory notes in an aggregate principal amount of $ , which we refer to as the Notes in this prospectus supplement. 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.

You should read this prospectus supplement and the accompanying prospectus before deciding whether to invest in our Notes 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 Notes 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 N-5 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 Notes. 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 Notes.

The Notes do not represent a deposit or obligation of, and are not guaranteed or endorsed by, any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency.

|  | Per Note |  |  | Total |
Public offering price |  | $ |  |  |  | $ |  |
Sales load |  | $ |  |  |  | $ |  |
Proceeds to us (before expenses)(1) |  | $ |  |  |  | $ |  |

(1) | Does not include offering expenses payable to us estimated to be $ .

The Notes will be ready for delivery on or about , 201 .

, 201

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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 Notes |  |  | N-4 |
Risk Factors |  |  | N-5 |
Use of Proceeds |  |  | N-5 |
Capitalization |  |  | N-5 |
Asset Coverage Ratio |  |  | N-5 |
Taxation |  |  | N-5 |
Underwriting |  |  | N-5 |
Legal Matters |  |  | N-5 |

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 |
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 |

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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”).

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TERMS OF THE NOTES

Principal Amount | The principal amount of the Notes is $ in the aggregate.

Maturity | The principal amount of the Notes will become due and payable on , .

Interest Rate | The interest rate will be %.

Frequency of payment | Interest will be paid commencing .

Prepayment Protections | [To be provided.]

Conversion | [To be provided.]

[Stock Exchange Listing] | [To be provided.]

Rating | It is a condition of issuance that the notes be rated [ ] by [ ].

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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.]

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 .]

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Gladstone Capital Corporation

% Notes due ,

PROSPECTUS SUPPLEMENT

, 201