Gladstone Investment Corporation Invests in Schylling, Inc.

Gladstone Investment Corporation GAIN ("Gladstone Investment") announced today that on August 8, 2013, it invested debt and the majority of the equity required to conduct the buyout of Schylling, Inc. ("Schylling"), a premier provider of high quality specialty toys. Gladstone Investment partnered with Crofton Capital LLC (www.croftoncap.com), industry executive Frank O'Connell, and the Schylling management team, in support of the acquisition from the sellers. Schylling, founded in 1975 and based in Rowley, MA, designs its own proprietary line of toys, designs toys for other brands under license agreements, and acts as a distributor for other toy brands by leveraging its unique distribution channel. "Gladstone Investment is excited about partnering with Crofton, Frank, and the talented and experienced management team at Schylling. We look forward to the continued growth of the business and building on the success that this management team has already achieved," said Kyle Largent, Managing Director at Gladstone Investment. Gladstone Investment Corporation is a publicly traded business development company that seeks to make debt and equity investments in small and mid-sized businesses in the United States in connection with acquisitions, changes in control and recapitalizations. Gladstone Investment has paid 97 consecutive monthly cash distributions on its common stock. Additional information on this transaction can be found at www.gladstonecompanies.com. For Investor Relations inquiries related to any of the monthly dividend paying Gladstone funds, please visit www.gladstone.com.