Gladstone Investment Corp. (NASDAQ:GAIN) (the “Company”)
announced today that its Board of Directors has approved and set a
record date of March 31, 2008 (the “Record Date”)
for a transferable rights offering to purchase additional common stock
of the Company (the “Offering”).
The Offering will be made to stockholders of record as of the record
date (“Record Date Stockholders”).
PURPOSE OF THE RIGHTS OFFERING: The purpose of the Offering is to
increase the assets of the Company available for investment by paying
down the Company’s existing line of credit,
thereby allowing the Company to more fully take advantage of available
investment opportunities and to reduce the relative significance of
certain large positions in its portfolio.
NUMBER OF RIGHTS OFFERED: Under the terms of the Offering, the Company
will grant rights to subscribe for up to an aggregate of 5,520,033
shares of its common stock. On the Record Date, the Company will
distribute to Record Date Stockholders one transferable right to
purchase one share of its common stock for every three shares of common
stock held (the “Allotment”).
The Offering will permit Record Date Stockholders to acquire one new
share of common stock of the Company for every right held, upon payment
of the subscription price described below. Each Record Date Stockholder
will be entitled to 0.333 transferable rights for each share of common
stock held on the record date. No fractional shares will be issued, thus
Record Date Stockholders holding less than three shares will not receive
a full right, and will not be able to purchase any shares in the
Offering unless they acquire additional rights. Record Date Stockholders
who do not subscribe for the full amount of their Allotment may
experience a dilution to their economic ownership of, and voting rights
in, the Company.
DATE FOR STOCKHOLDERS ENTITLED TO RECEIVE RIGHTS: In order to purchase
shares in the Offering, investors must be a record holder of shares of
the Company’s common stock on March 31, 2008.
EXPIRATION DATE: The offer will expire at 5:00 p.m., Eastern time, on
April 21, 2008 (the “Expiration Date”).
The Company may extend the Expiration Date, but in no event will the
Expiration Date be extended beyond May 5, 2008. Rights that are not
exercised prior to the Expiration Date will expire and have no further
value.
LISTING OF TRANSFERABLE RIGHTS: The rights will be transferable and are
expected to be admitted for trading on the NASDAQ Global Select Market
under the symbol “GAINR,”
and to begin trading on or about April 2, 2008. There is no guarantee
that an active market will develop for the rights.
SUBSCRIPTION PRICE: The subscription price per share will not be
determined until the Expiration Date. The subscription price will be
calculated as 93% of the volume-weighted average of the sales prices of
the Company’s common stock on the NASDAQ
Global Select Market for the five consecutive trading days ending on the
Expiration Date. The subscription price may represent a discount from
the Company’s net asset value per share and
may cause the Company’s net asset value per
share to decrease.
OVER-SUBSCRIPTIONS OF RIGHTS: An over-subscription privilege has been
included in the Offering, allowing Record Date Stockholders and
purchasers of rights to subscribe for additional shares, subject to
availability, proration and allocation preferences.
DIVIDENDS AND DISTRIBUTIONS: The Offering is not expected to affect the
Company's payment of monthly distributions. The Company's Board has
declared monthly distributions for March of $0.08 per share and is
expected to meet in April to declare the distributions for April, May
and June 2008 and will continue to review the distributions on a
quarterly basis. Holders of newly issued shares of common stock acquired
through the Offering will receive distributions for their shares for
record dates subsequent to the issuance of the newly issued shares, but
will not receive a distribution for their new shares for the record date
prior to the issuance of the newly issued shares. The latest date for
extension of the Offering will be May 5, 2008, thus all stockholders
purchasing shares in the Offering will be entitled to the May 2008
dividend on those shares.
PROSPECTUS AND SUBSCRIPTION DOCUMENTS: Subscription certificates
evidencing the transferable rights and a copy of the prospectus dated
January 14, 2008, as supplemented by prospectus supplements
(collectively, the “Prospectus”)
will be mailed to Record Date Stockholders as soon as practicable after
the Record Date. The rights and the underlying shares will be offered
only by means of the Prospectus. Investors should consider the
investment objectives, risks, charges and expenses of the Company
carefully before investing. The Prospectus contains this and other
information about the Company. When available, the Prospectus may be
obtained from the Company’s web site at
GladstoneInvestment.com, and will also be available on the Securities
and Exchange Commission’s website at sec.gov.
Investors should read the Prospectus carefully before investing.
INFORMATION REGARDING THE OFFERING: Georgeson Inc. (“Georgeson”)
will act as information agent for the Offering. Banks and brokers should
call Georgeson directly at (212) 440-9800 with questions regarding the
Offering, and all others may call Georgeson toll-free at (866) 828-4303.
Stockholders may also call the Company toll-free at (866) 366-5745.
Stockholders who own their shares through their brokerage accounts
should contact their respective broker-dealers for information on how to
participate in the Offering.
INFORMATIONAL CALL: The Company will have an informational call
regarding the rights being offered on Wednesday, March 26th
at 8:30 a.m. Eastern time. The call-in number is (877) -407-8031. The
call will be recorded and available for replay until April 20, 2008 by
calling (877)-660-6853 (Account # 286 and Conference ID# 279654).
SUBSCRIPTION AGENT: The Bank of New York Mellon will act as the
subscription agent for the Offering.
SOLICITATION FEE: The Company will pay to certain broker-dealers
soliciting the exercise of rights a solicitation fee equal to 1.5% of
the subscription price for each share issued as a result of their
soliciting efforts. This fee will be paid from the proceeds of the
Offering, and could act to increase any dilution of the Company’s
net asset value per share.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy the securities in this offering, nor
shall there be any sale of these securities in any state or other
jurisdiction in which such an offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities
laws of any such state or other jurisdiction.
Gladstone Investment Corporation is an investment company that seeks to
make debt and equity investments in small and mid-sized private
businesses in the U.S. in connection with acquisitions, changes in
control and recapitalizations. For more information please visit our
website at GladstoneInvestment.com
For further information contact Investor Relations at 703-287-5835.
This press release may include statements that may constitute “forward-looking
statements,” including statements with regard
to the future performance of the Company. Words such as “believes,”
“expects,” “anticipates,”
“estimated,” “approximately”
“projects” 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 January 14, 2008, as filed with the Securities and
Exchange Commission on March 24, 2008. These forward-looking statements
also include unknown risks and uncertainties, including the completion
of the Offering, the development of an active trading market for the
rights, the amount of proceeds of the Offering, the availability
of attractive investment opportunities, management’s
ability to identify investment opportunities that will balance the
significance of other investments in the Company’s
portfolio, and the effect of the Offering on future distributions by the
Company. 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.
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