GAIN Gladstone Investment Corporation

Gladstone Investment Corporation (NASDAQ:GAIN) ("Gladstone") today announced that it has recently learned that an unrelated company using the name "Gladstone Investments Corp." ("GIC") and purportedly located in Clearwater, Florida appears to be engaging in several fraudulent loan schemes. Gladstone is also informed that some victims of these schemes are being referred to a website located at www.GladstoneCorp.net, which appears to be operated by GIC. Please be advised that neither Gladstone nor its affiliates are in any way associated with GIC or with the website referenced above. Gladstone does not contact individuals by telephone to solicit or offer personal loans, nor does it extend personal loans to individuals. Further, Gladstone never collects personal information over the telephone. Anyone receiving an e-mail or telephone call regarding loan services allegedly being offered by "Gladstone" can and should verify the authenticity of such communication by calling Gladstone directly at (703) 287-5800. If you feel that you have been a victim of the fraud referenced above, or believe that you have been contacted by GIC or its employees, please contact your state's financial services regulator or Attorney General's office to report the same. Additionally, as the GIC website referenced above can be traced to an individual or entity located in Canada, you should also contact the Royal Canadian Mounted Police to report any suspected fraud relating to this matter at (888) 495-8501. We have been informed that the State of Florida is aware of GIC. You may wish to report any suspected fraud relating to this matter to the Florida Department of Financial Services at (850) 413-3089. 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 http://www.GladstoneInvestment.com. For further information contact our Investor Relations Manager, Kelly Sargent at 703-287-5835. This press release may include statements that may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, 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 June 22, 2005, as filed with the Securities and Exchange Commission on June 23, 2005. 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.