~~Indicate by check mark~~Former name, former address and former fiscal year, if ~~the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒~~

~~Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒~~



Large accelerated filer	☐o	Accelerated filer ☐	o
Non-accelerated filer	x	Smaller reporting company	o

~~Non-accelerated filer~~Emerging growth company	~~☒ (Do not check if a smaller reporting company)~~	~~Smaller reporting company ☐~~o



		Page
	~~Part I.~~Forward-Looking Statements	1
PART I
	~~Statement Regarding Forward Looking Information~~	1
Item 1.	Business	1
Item 1A.	Risk Factors	16 22
Item 1B.	Unresolved Staff Comments	36 50
Item 2.	Properties	36 50
Item 3.	Legal Proceedings	37 50
Item 4.	Mine Safety Disclosures	37 50
PART II
~~Part II.~~
Item 5.	Market for Registrant’s Common Equity, Related ~~Shareholder~~Stockholder Matters and Issuer Purchases of Equity Securities	38 50
Item 6.	Selected Financial Data	43 58
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	44 60
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	62 80
Item 8.	Financial Statements and Supplementary Data	63 81
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	88 128
Item 9A.	Controls and Procedures	88 128
Item 9B.	Other Information	89 128
PART III
~~Part III.~~
Item 10.	Directors, Executive Officers and Corporate Governance	89 128
Item 11.	Executive Compensation	89 129
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related ~~Shareholder~~Stockholder Matters	89 129
Item 13.	Certain Relationships and Related Transactions, and Director Independence	89 129
Item 14.	Principal Accountant Fees and Services	89 129
PART IV
Item 15.	Exhibits, Financial Statement Schedules	129

~~Part IV.~~
~~Item 15.~~	~~Exhibits, Financial Statement Schedules~~	90

Signatures		92 131

~~PART I~~

~~STATEMENT REGARDING FORWARD LOOKING INFORMATION~~

~~The following information contains~~

Forward-Looking Statements

Some of the statements ~~that~~in this annual report on Form 10-K constitute forward-looking statements, ~~within~~which relate to future events or our performance or financial condition. The forward-looking statements contained in this annual report on Form 10-K involve risks and uncertainties, including, but not limited to, statements as to:

our future operating results;

our business prospects and the ~~meaning~~prospects of ~~Section 27A~~our portfolio companies;

changes in the economy;

risk associated with possible disruptions in our operations or the economy generally;

the effect of investments that we expect to make;

our contractual arrangements and relationships with third parties;

actual and potential conflicts of interest with Prospect Flexible Income Management, LLC and its affiliates;

the ~~Securities Act~~dependence of ~~1933, as amended,~~our future success on the general economy and ~~Section 21E~~its effect on the industries in which we invest;

the ability of ~~the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements generally are characterized by~~ our portfolio companies to achieve their objectives;

the use of ~~terms~~borrowed money to finance a portion of our investments;

the adequacy of our financing sources and working capital;

the timing of cash flows, if any, from the operations of our portfolio companies;

the ability of Prospect Flexible Income Management, LLC to locate suitable investments for us and to monitor and administer our investments;

the ability of Prospect Flexible Income Management, LLC and its affiliates to attract and retain highly talented professionals;

our ability to qualify and maintain our qualification as a RIC and as a BDC; and

the effect of changes in laws or regulations affecting our operations or to tax legislation and our tax position.

Such forward-looking statements may include statements preceded by, followed by or that otherwise include the words “trend,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “potential,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as ~~“may,~~“will,” “would,” “should,” ~~“plan,~~“could,” ~~“anticipate,~~“may,” ~~“estimate,” “intend,” “predict,” “believe”~~or similar expressions. The forward looking statements contained in this annual report involve risks and “expect” or the negative of these terms or other comparable terminology. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, ouruncertainties. Our actual results could differ materially from those ~~set forth~~implied or expressed in the forward-looking ~~statements. Some~~statements for any reason, including the factors ~~that might cause such a difference include~~set forth as “Risk Factors” in this report and in our last pre-effective, amended registration statement filed with the ~~following:~~SEC on September 26, 2019 and declared effective on September 26, 2019.

We have based the ~~current global economic downturn, increased direct competition, changes~~forward-looking statements included in ~~government regulations or accounting rules, changes in local, national and global capital market conditions, our ability~~this report on information available to ~~obtain credit lines or credit facilities~~us on satisfactory terms, changes in interest rates, availability of proceeds from our offering of shares, our ability to identify suitable investments, our ability to close on identified investments, inaccuracies of our accounting estimates, our ability to locate suitable borrowers for our loans and the ability of such borrowers to make payments under their respective loans. Given these uncertainties, we caution you not to place undue reliance on such statements, which apply only as of the date ~~hereof. We~~of this report, and we assume no obligation to update any such forward-looking statements. Actual results could differ materially from those anticipated in our forward-looking statements, and future results could differ materially from historical performance. Although we undertake no obligation to ~~publicly release~~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 that we have filed or in the ~~results~~future may file with the SEC, including quarterly reports on Form 10-Q, annual reports on Form 10-K, and current reports on Form 8-K.

As a result of ~~any revisions to these~~Pathway Capital Opportunity Fund, Inc. (“PWAY”) being the accounting survivor of the Merger (as defined herein), certain financial information and performance of operations regarding PWAY is discussed below. The information in this section contains forward-looking statements that ~~may be made to reflect future events or circumstances or to reflect the occurrence of unanticipated events. The forward-looking statements should be read in light~~involve risks and uncertainties. Please see “Risk Factors” and “Forward Looking Statements” for a discussion of the ~~risk factors identified~~uncertainties, risks and assumptions associated with these statements. You should read the following discussion in conjunction with the ~~“Risk Factors” section of~~financial statements and related notes and other financial information appearing elsewhere in this ~~report.~~

annual report on Form 10-K.

Item 1. Business

~~General~~

In this report, the terms “FLEX,” “we,” “us” and “our” mean TP Flexible Income Fund, Inc. and all entities included in our consolidated financial statements, unless the context specifically requires otherwise.

We ~~are a publicly registered, non-traded fund focused on private equity, structured~~were formed as a business development company that primarily makes equity, structured equity and debt investments in small to mid-sized private U.S. companies. Our investment objectives are to maximize our portfolio’s total return by generating long-term capital appreciation from our private equity investments and current income from our debt investments.Maryland corporation on April 29, 2011. We are an externally managed, closed-end, non-diversified management investment company that has elected to be ~~treated~~regulated as a business development company, or BDC, under the Investment ~~Company~~ Act of 1940, as ~~amended. Triton Pacific Adviser, LLC, our registered investment adviser, (“Triton Pacific Adviser”~~amended (the "1940 Act")~~, serves as our investment adviser and has engaged ZAIS Group, LLC, or ZAIS,~~. We are therefore required to ~~act as our investment sub-adviser. TFA Associates, LLC serves as our administrator. Each of these companies is affiliated~~comply with Triton Pacific Group, Inc., a private equity investment management firm, and its subsidiary, Triton Pacific Capital Partners, LLC (“TPCP”), a private equity investment fund management company, each focused on debt and equity investments in small to mid-sized private companies.

Structured equity refers to derivative investment products, including convertible notes and warrants, designed to facilitate highly customized risk-return objectives. Our private equity investments will generally take the form of direct investments in common and preferred equity as well as structured equity investments such as convertible notes and warrants.certain regulatory requirements. We will invest only after we conduct a thorough evaluation of the risks and strategic opportunities of an investment and a price (or interest rate in the case of debt investments) has been established that reflects the intrinsic value of the investment opportunity. We will endeavor to identify the best exit strategy for each private equity investment, including methodology (for example, a sale, company redemption, or public offering) and an appropriate time horizon. We will then attempt to influence the growth and development of each portfolio company accordingly to maximize our potential return on investment using such exit strategy or another strategy that may become preferable due to changing market conditions. We anticipate that the holding period for most of our private equity investments will range from four to six years, but we will be flexible in order to take advantage of market opportunities or to overcome unfavorable market conditions. For our debt investments, we intend to invest in senior secured loans, second lien loans and, to a lesser extent, subordinated loans of small to mid-sized private U.S. companies. The senior secured and second lien secured loans in which we invest generally will have stated terms of three to seven years and any subordinated investments that we make generally will have stated terms of up to ten years. However, there is no limit on the maturity or duration of any security we may hold in our portfolio. The loans in which we intend to invest are often rated by a nationally recognized ratings organization, and generally carry a rating below investment grade (rated lower than “Baa3” by Moody’s Investors Service or lower than “BBB-” by Standard & Poor’s Corporation – also known as “junk bonds”). However, we may also invest in non-rated debt securities.

We intend to primarily make debt investments likely to generate current income and equity investments in small to mid-sized private U.S. companies either alone or together with other private equity sponsors. Our investment objective is to generate current income and long term capital appreciation.

Triton Pacific Adviser is responsible for sourcing potential investments, conducting due diligence on prospective investments, analyzing investment opportunities, structuring investments and monitoring our portfolio on an ongoing basis. In addition, we intend to elect and qualifyelected to be ~~treated,~~taxed for U.S. federal income tax purposes, and intend to qualify annually as a regulated investment company, ~~(“RIC”),~~or RIC, under ~~subchapter~~Subchapter M of the Internal Revenue Code of 1986, as amended (the ~~“Code”~~"Code").

~~We are currently offering for sale a maximum of $300,000,000 of our shares of common stock on a “best efforts” basis pursuant to a registration statement on Form N-2 filed~~ Prospect Flexible Income Management, LLC (the "Adviser") is registered as an investment adviser with the Securities and Exchange Commission, or SEC,

under the ~~Securities~~Investment Advisers Act of ~~1933, as amended~~1940 (the ~~“Offering”~~"Advisers Act"). Our ~~initial~~Adviser manages our portfolio and makes all investment decisions for us, subject to supervision by our board of directors. On June 25, 2014, we satisfied our minimum offering requirement of selling at least $2.5 million in common stock and on October 1, 2014, we commenced our investment operations.

On August 10, 2018, we (in our capacity as Triton Pacific Investment Corporation, Inc., which we refer to as TPIC) entered into an agreement and plan of merger with PWAY pursuant to which PWAY merged with and into TPIC and, as the combined surviving company, we were renamed as TP Flexible Income Fund, Inc. (we were formerly known as Triton Pacific Investment Corporation, Inc.). The agreement and plan of merger was amended and restated effective February 12, 2019. In this annual report on ~~September 4, 2012~~Form 10-K, we refer to the merger of PWAY into TPIC as the “Merger” and ~~expired~~the agreement and plan of merger (as amended and restated) between PWAY and us (in our capacity as TPIC) relating to the Merger as the “Merger Agreement.” TPIC’s board of directors and PWAY’s board of directors each approved the Merger and the Merger Agreement. The Merger and the Merger Agreement were also approved by TPIC’s stockholders at their annual meeting of stockholders held on March ~~1, 2016~~15, 2019 (the “2019 Annual Meeting”), and ~~in that initial offering, we sold~~by PWAY’s stockholders at a special meeting of stockholders held on March 15, 2019. The Merger was completed on March 31, 2019. In connection with the Merger, a total of ~~672,670.79~~775,193 shares of our Class A common stock for the gross proceeds of $9,893,780. On March 17, 2016, we commenced the follow-on offering of our common stock when our registration statement was declared effective by the SEC. We filed a post-effective amendment(“Class A Shares”) were issued to the ~~registration for~~former stockholders of PWAY. PWAY’s merger costs were approximately $709,000 and its repositioning costs were approximately $13,000. TPIC’s merger costs were approximately $636,000. Although PWAY and TPIC are bearing such costs, these costs will be indirectly borne by their respective stockholders.

The Merger resulted in significant changes, including the following:

New Investment Adviser. Prospect Flexible Income Management, LLC, who we refer to as the Adviser, now serves as our ~~follow-on offering~~investment adviser. The Adviser is an affiliate of PWAY and the investment professionals of PWAY’s investment adviser have investment discretion at the Adviser.

Increased Leverage. Following the Merger, our asset coverage ratio requirement was reduced from 200% to 150%, which allows us to incur double the maximum amount of leverage that was previously permitted. As a result, we are able to borrow substantially more money and take on ~~May 11, 2016, which amendment was declared effective by~~substantially more debt than we had previously been able to. Leverage may increase the ~~SEC the same day.~~

~~Effective March 2, 2016, our shares~~risk of ~~common stock were divided into two classes, Class A~~loss to investors and ~~Class T. We are currently offering only Class A shares and intend to offer Class T shares in the future, subject to obtaining~~is generally considered a satisfactory exemption relief order from the SEC, with each class having its own different upfront sales load and fee and expense structure. We may offer additional classes of shares in the future. We intend to apply for exemptive relief from the SEC with respect to this multiple share class structure, including our distribution fee and contingent deferred sales charge arrangements.speculative investment technique.

Special Repurchase Offer. As a condition ~~of such relief,~~to being able to increase our leverage, we will offer to repurchase certain of our outstanding shares ("Special Repurchase Offer"). In connection with this Special Repurchase Offer, stockholders should be required to comply with provisions that would not otherwise be applicable to us. The exemptive relief order from the SEC may require us to supplement or amend the terms set forth in this prospectus, including the termsaware that:

◦

Only former stockholders of TPIC as of March 15, 2019, the date of TPIC’s 2019 annual stockholder meeting (the “Eligible Stockholders”), are allowed to participate in the Special Repurchase Offer, and they may have up to 100% of their shares repurchased. Former stockholders of PWAY and stockholders who purchase shares in our continuous public offering were not be able to participate in the Special Repurchase Offer.


◦	If a substantial number of the Eligible Stockholders take advantage of this opportunity, it could minimize or eliminate the expected benefits of the Merger and it could:


▪	significantly decrease our asset size;


▪	require us to sell our investments earlier than the Adviser would have otherwise desired, which may result in selling investments at inopportune times or significantly depressed prices and/or at losses; or


▪	cause us to incur additional leverage solely to meet repurchase requests.


◦	The first of our four quarterly Special Repurchase Offers expired on June 24, 2019, and in that offer we repurchased 49,900 shares of our Class A common stock for the gross proceeds of $495,506. We commenced our second Special Repurchase Offer on September 6, 2019 and that offer is currently expected to close on October 4, 2019.

New Board of Directors. As a result of the ~~Class A shares currently being offered. There can be no assurance that~~Merger, the ~~SEC will issue an order permitting such relief.~~

composition of our board of directors changed and now consists of Craig J. Faggen, TPIC’s former President and Chief Executive Officer, M. Grier Eliasek, PWAY’s former President and Chief Executive Officer, Andrew Cooper, William Gremp and Eugene Stark. Messrs. Cooper, Gremp and Stark are all former independent directors of PWAY.

Investment Objectives and Strategy

Our investment objective is to ~~maximize our portfolio’s total return by generating~~generate current income ~~from our debt investments~~ and, ~~long term~~as a secondary objective, capital appreciation ~~from our equity investments.~~by targeting investment opportunities with favorable risk-adjusted returns. We ~~will seek~~intend to meet our investment ~~objectives by:~~

Focusing primarily on private equity investments and debt investments likely to generate current income in small and mid-sized private U.S. companies, which we define as companies with annual revenue of from $10 million to $250 million at the time of investment;

~~Leveraging the experience and expertise of our Adviser, its Sub-Adviser and its affiliates in sourcing, evaluating and structuring transactions;~~

~~Employing disciplined underwriting policies and rigorous portfolio management;~~

~~Developing our equity portfolio through our Adviser’s Value Enhancement Program, more fully discussed below in “Investment Objectives and Policies – Investment Process”; and~~

~~Maintaining a well-balanced portfolio consisting of both debt and equity investments with variable risk-reward profiles.~~

~~We intend~~objective by primarily lending to ~~be active in both debt~~ and equity investing. We will seek to provide current income to our investors through our debt investments while seeking to enhance our investors’ overall returns through long term capital appreciation of our equity investments. We intend to be opportunistic in our investment approach, allocating our investments between debt and equity, depending on:

~~Investment opportunities~~

~~Market conditions~~

~~Perceived Risk~~

~~Depending on the amount of capital we raise~~investing in the ~~Offering~~debt of privately-owned U.S. middle market companies, which we define as companies with annual revenue between $50 million and ~~subject to subsequent changes~~$2.5 billion. We may on occasion invest in ~~our capital base, we expect that our investments will generally range between $250,000 and $25 million per portfolio company, although this range may change~~smaller or larger companies if an attractive opportunity presents itself, especially when there are dislocations in the ~~discretion of our Adviser, subject~~capital markets. We expect to ~~oversight by our board of directors. Prior to raising sufficient capital to finance~~focus primarily on making investments in this range and as a strategy to manage excess cash, we may make smaller and differing types of investments in, for example, high quality debt securities, and other public and private yield-oriented debt and equity securities, directly and through our Sub-Adviser.

Our Adviser has engaged ZAIS Group, LLC to act as our investment sub-adviser. ZAIS will assist our Adviser with identifying, evaluating, negotiating and structuring debt investments and will make investment recommendations for approval by our Adviser. ZAIS is a registered investment adviser under the Advisers Act and had approximately $3.949 billion in assets under management as of June 30, 2016. ZAIS is not an affiliate of us or our Adviser and does not own any of our shares. The appointment of ZAIS as our sub-adviser was approved by our stockholders at a special meeting held on September 16, 2014.

~~We will generally source our private equity investments through third party intermediaries and our~~ syndicated debt investments primarily through our Sub-Adviser. We will invest only after we conduct a thorough evaluation of the risks and strategic opportunity of an investment and a price (or interest rate in the case of debt investments) has been established that reflects the intrinsic value of the opportunity. We will endeavor to identify the best exit strategy for each private equity investment, including methodology (for example, a sale, company redemption or public offering) and an appropriate time horizon. We will then attempt to build each portfolio company accordingly to maximize our potential return on investment using such exit strategy or another strategy that may become preferable due to changing market conditions. We anticipate that the holding period for most of our private equity investments will range from four to six years, but we will be flexible in order to take advantage of market opportunities or to wait out unfavorable market conditions.

~~We intend to generate the majority of our current income by investing in~~ senior secured first lien loans, syndicated senior secured second lien ~~secured~~ loans, and to a lesser extent, subordinated debt, of middle market companies in a broad range of industries. We expect our target credit investments will typically have initial maturities between three and ten years and generally range in size between $1 million and $100 million, although the investment size will vary with the size of our capital base. We expect that the majority of our debt investments will bear interest at floating interest rates, but our portfolio may also include fixed-rate investments. We expect to make our investments directly through the primary issuance by the borrower or in the secondary market.

Our principal focus is to invest primarily in syndicated senior secured first lien loans, syndicated senior secured second lien loans, and to a lesser extent, subordinated debt of private middle market U.S. ~~companies.~~companies in a broad range of industries. In addition, we expect to invest up to 30% of our portfolio of investments in other securities, including private equity (both common and preferred), dividend-paying equity, royalties, and the equity and junior debt tranches of a type of pools of broadly syndicated laons know as collateralized loan obligations, or "CLOs" which we referred to as "Subordinated Structured Notes" or "SSNs". The senior secured loans underlying our SSN investments are expected typically to be BB or B rated (non-investment grade, which are often referred to as “high yield” or “junk”) and in limited circumstances, unrated, senior secured loans.

When identifying prospective portfolio companies, we expect to focus primarily on the attributes set forth below, which we believe should help us generate attractive total returns with an acceptable level of risk. While these criteria provide general guidelines for our investment decisions, we caution investors that, if we believe the benefits of investing are sufficiently strong, not all of these criteria necessarily will be met by each prospective portfolio company in which we chooses to invest. These attributes are:

Defensible market positions. We seek to invest in companies that have developed strong positions within their respective markets and exhibit the potential to maintain sufficient cash flows and profitability to service our debt in a range of economic environments. We seek companies that can protect their competitive advantages through scale, scope, customer loyalty, product pricing or product quality versus their competitors, thereby minimizing business risk and protecting profitability.

Proven management teams. We expect to focus on companies that have experienced management teams with an established track record of success.

Allocation among various issuers and industries. We seek to allocate our portfolio broadly among issuers and industries, thereby attempting to reduce the risk of a downturn in any one company or industry having a disproportionate adverse impact on the value of our portfolio.

Viable exit strategy. We will attempt to invest a majority of our assets in securities that may ~~purchase interests~~be sold in ~~loans through~~a privately negotiated over-the-counter market or public market, providing us a means by which we may exit our positions. We expect that a large portion of our portfolio may be sold on this secondary market for the foreseeable future, depending on market conditions. For investments that are not able to be sold within this market, we intend to focus primarily on investing in companies whose business models and growth prospects offer attractive exit possibilities, including repayment of our investments, an initial public offering of equity securities, a merger, a sale or a recapitalization, in each case with the potential for capital gains.

Investing in stable companies with positive cash flow. We seek to invest in established, stable companies with strong profitability and cash flows. Such companies, we believe, are well-positioned to maintain consistent cash flow to service and repay our loans and maintain growth in their businesses or market share. We do not intend to invest to any significant degree in start-up companies, turnaround situations or companies with speculative business plans.

Private equity sponsorship. Often, we will seek to participate in transactions sponsored by what we believe to be sophisticated and seasoned private equity firms. Our Adviser’s management team believes that a private equity sponsor’s willingness to invest significant sums of equity capital into a company is an endorsement of the quality of the investment. Further, by co-investing with such experienced private equity firms which commit significant sums of equity capital ranking junior in ~~the “over-the-counter” market for institutional loans or directly from our target companies as primary market investments. In connection with~~priority of payment to our debt investments, we may ~~on occasion receive~~benefit from the due diligence review performed by the private equity ~~interests such as warrants~~firm, in addition to our own due diligence review. Further, strong private equity sponsors with

significant investments at risk have the ability and a strong incentive to contribute additional capital in difficult economic times should operational or ~~options as~~financial issues arise, which could provide additional consideration. The senior secured and second lien secured loans in which we invest generally will have stated terms of three to seven years and any subordinated investments that we make generally will have stated terms of up to ten years. However, there is no limit on the maturity or duration of any security we may hold inprotections for our portfolio. The loans in which we intend to invest are often rated by a nationally recognized ratings organization, and generally carry a rating below investment grade (rated lower than “Baa3” by Moody’s Investors Service or lower than “BBB-” by Standard & Poor’s Corporation). However, we may also invest in non-rated debt securities.

~~As a BDC, we~~investments.

We will be subject to certain regulatory restrictions in making our investments. ~~For example, we generally will not be permitted to co-invest alongside~~The parent company of our Adviser ~~and its affiliates unless we obtain~~has received an exemptive order from the SEC granting the ability to negotiate terms, other than price and quantity, of co-investment transactions with other funds managed by our Adviser or ~~the transaction is otherwise permitted under~~certain affiliates, including us, Prospect Capital Corporation and Priority Income Fund, Inc. We may only co-invest with certain entities affiliated with our Adviser in negotiated transactions originated by our Adviser or our affiliates in accordance with such Order and existing regulatory ~~guidance,~~guidance. None of our investment policies are fundamental and all may be changed without prior notice and without stockholder approval.

Post-Merger Business Growth

We may grow our business and attempt to increase assets under management by pursuing growth through acquisitions of other BDCs or registered investment companies, acquisitions of critical business partners or other strategic initiatives. We intend to pursue acquisitions of other businesses or financial products complementary to our business when we believe such ~~as syndicated~~acquisitions can add substantial value or generate substantial returns. Over the past several years, we have been in contact with various potential merger partners and have recently had some conversations with other funds about possible merger transactions ~~where price is~~involving us. However, to date, we have not entered into any commitments relating to any acquisitions or other strategic transactions (other than the ~~only negotiated term,~~Merger) and ~~with approval from our independent directors. We are seeking exemptive orders for investments, though~~ there iscan be no assurance that any such ~~exemptions~~complimentary business opportunities will be ~~granted,~~identified or that any such acquisitions will be completed.

Potential Market Opportunity

We believe that there are and will continue to be significant investment opportunities in ~~either instance, conflicts of interests with affiliates of our Adviser might exist. Should such conflicts of interest arise, we~~the senior secured first lien loan and the Adviser have developed policies and procedures for dealing with such conflicts which require the Adviser to (i) execute such transactions for all of the participating investment accounts, including the Company’s, on a fair and equitable basis, taking into account such factors as the relative amounts of capital available for new investments and the investment programs and portfolio positions of the Company, the clients for which participation is appropriate and any other factors deemed appropriate and (ii) endeavor to obtain the advice of Adviser personnel not directly involved with the investment giving rise to the conflict as to such appropriateness and other factorssenior secured second lien loan asset classes, as well as ~~the fairness to all parties of the investment and its terms. We intend to make all of our~~ investments in ~~compliance with the 1940 Act and in a manner that will not jeopardize our status as a BDC or RIC.~~

As a BDC, we are permitted under the Company Act to borrow funds to finance portfolio investments. To enhance our opportunity for gain, we intend to employ leverage as market conditions permit, but, as required under the Company Act, in no event will our leverage exceed 50% of the value of our assets. While we have not yet determined the amount of leverage we will use, we do not currently anticipate that we would approach the 50% maximum level frequently or at all. The use of leverage, although it may increase returns, may also increase the risk of loss to our investors, particularly if the level of our leverage is high and the value of our investments declines.

~~Status of Our Continuous Public Offering~~

Since commencing our continuous public offering and through March 27, 2017, we have sold 1,062,855.98 shares of our common stock for gross proceeds of approximately $15,840,699, including $200,003 of seed capital contributed by our Advisor.

~~About our Adviser~~

Our Adviser is registered as an investment adviser under the Adviser Act. Our Adviser and Triton Pacific Group, Inc. are under the common control of Craig Faggen, who is also our Chairman and Chief Executive Officer. Triton Pacific Group, Inc. is an investment management firm that focuses primarily on private equity investments through its subsidiary, Triton Pacific Capital Partners and affiliated investment funds. Since 2001, TPCP has focused on debt and equity ~~investments in small to mid-sized private companies generally with revenues~~securities of less than $250 million. Since its inception, affiliates of TPCP have invested in the aggregate about $160 million in private companies with an estimated aggregate enterprise value at the time of investment of more than $600 million.

Craig J. Faggen, Ivan Faggen, Joseph Davis and Thomas Scott currently make up the investment committee of our Adviser. Each of them has extensive investment, operational and advisory experience, primarily working with small to mid-sized companies. Members of this team have been working together sourcing, structuring, investing and managing investments in small to middle market ~~companies~~companies.

Potential Opportunity in Middle Market Private Companies

We believe the middle market lending environment provides opportunities for ~~over ten years.~~

~~Our board~~us to meet our objective of ~~directors includes~~making investments that generate attractive risk-adjusted returns as a ~~majority~~result of independent directors and oversees and monitors the activities of our Adviser and our Sub-Adviser, as well as our investment portfolio and performance and annually reviews the compensation paid to our Adviser and Sub-Adviser. See “Investment Adviser Agreement”, below. In addition to managing our portfolio, our Adviser provides on our behalf managerial assistance to those of our portfolio companies to which we are required to provide such assistance. We have the right to terminate the investment adviser agreement upon 60 days’ written notice to the Adviser and our Adviser has the right to terminate the investment adviser agreement upon 120 days’ written notice to us. Both our Adviser and Sub-Adviser have the right to terminate the sub-advisory agreement without penalty upon 60 days’ written notice to the other party.

~~About our Sub-adviser~~

Our Adviser has engaged ZAIS Group, LLC to act as our investment sub-adviser. ZAIS assists our Adviser with identifying, evaluating, negotiating and structuring debt investments and makes investment recommendations for approval by our Adviser. ZAIS is a registered investment adviser under the Advisers Act and had approximately $3.949 billion in assets under management as of June 30, 2016. ZAIS is not an affiliate of us or our Adviser and does not own any of our shares. The appointment of ZAIS as our sub-adviser was approved by our stockholders at a special meeting held on September 16, 2014. Vincent Ingato will be initially responsible for the day-to-day managementcombination of the ~~debt investments managed by our Sub-Adviser. Mr. Ingato has more than 20 years of investment experience, primarily investing in debt and other credit oriented securities.~~

following factors:

~~Our Market Opportunity~~Large Addressable Market.

Our target market for private equity investments is typically referred to as the lower middle market, which we define as U.S. companies with revenues from $10 million to $250 million and earnings before income, taxes, depreciation, and amortization, or EBITDA, between $1 million and $25 million. This lower middle market represents a large majority of the private businesses in the United States, accounting for 30.7% of the US work force (representing 35 million working Americans).^δ* In particular, we believe that this market offers significant investment opportunities for alternative providers of capital such as us due to the demographic trend of “baby boom” generation entrepreneurs reaching retirement age. According to ~~PricewaterhouseCoopers’ April 7, 2010~~~~Private Company Trendsetter Barometer~~, 38% of business owners plan to sell or otherwise dispose of their business within the next five years. Small business owners (those with less than $100 million in revenue) represent 60% of those owners planning to do so by sale and of these, 43% are driven by a desire to retire.

We find that companies in the lower middle market have historically been poorly and inefficiently served by the capital markets. Many U.S. financial institutions are ill-suited to lend to such companies because such lending (i) is more labor intensive than lending to large companies due to the smaller size of each investment and the fragmented nature of information available about them, (ii) requires enhanced due diligence and underwriting practices, including greater and more sustained interaction with management and financial analysis tailored to the lower middle market, and (iii) may require more extensive on-going monitoring.

The recent banking and financial crisis has further limited access to credit throughout the economy and particularly affected lower middle market companies, which have become even more constrained in their ability to access either debt or equity from what few sources were previously available. Many significant participants in the debt markets over the past five years, such as hedge funds and managers of collateralizedThomson Reuters LPC, institutional leveraged loan obligations, have contracted or eliminated their origination activities as investor credit concerns have reduced their available funding. Moreover, many regional banks have failed and many that have not continue to face significant balance sheet constraints and increased regulatory scrutiny, which we believe restricts their ability to provideissuance (senior secured loans to lower middle market companies, We believe that this relative decline in competition has created a compelling opportunity for well-capitalized specialty financial services companies with experience in investing in small to mid-size companies and will drive higher quality deals to companies such as ours and allow us to be more selective in our investment process. The members of the investment committee of our Adviser have demonstrated their ability to source and invest in these companies on attractive terms based on the historical above-average risk-adjusted total returns of their prior investments.

~~For our debt investments, we believe that opportunities in senior secured~~ and second lien secured loans) reached a record high in 2017 at approximately $919 billion. We believe that there exists a large number of prospective lending opportunities for lenders, which should allow us to generate substantial investment opportunities and build an attractive portfolio of investments.

Strong Demand for Debt Capital. We expect that private equity firms will continue to be active investors in middle market companies. These private equity funds generally seek to leverage their investments by combining their capital with loans ~~are attractive not only because~~provided by other sources, and we believe that our investment strategy positions us well to invest alongside such private equity investors. In addition, we believe the large amount of uninvested capital held by funds of private equity firms, estimated by Preqin Ltd., an alternative assets industry data and research company, to be $954 billion as of September 2017, will continue to drive deal activity.

Attractive Market Segment. We believe that the underserved nature of such a large segment of the ~~potential returns available, but also because~~market can at times create a significant opportunity for investment. In many environments, we believe that middle market companies are more likely to offer attractive economics in terms of transaction pricing, up-front and ongoing fees, prepayment penalties and security features in the form of stricter covenants and quality collateral than loans to larger companies. In addition, as compared to larger companies, middle market companies often have simpler capital structures and carry less leverage, thus aiding the structuring and negotiation process and allowing us greater flexibility in structuring favorable transactions.

Attractive Deal Structure and Terms

We believe senior secured debt provides strong defensive ~~characteristics of~~characteristics. Because this ~~investment class. Because these loans have~~debt has priority in payment among an issuer’s security holders (i.e., ~~they~~holders are due to receive payment before ~~bondholders~~junior creditors and ~~equity holders)~~equityholders), they carry ~~the least~~less potential risk ~~among~~than other investments in the issuer’s capital structure. Further, these investments are secured by the issuer’s assets, ~~and~~which may be seized in the event of a default, if necessary. They generally ~~will~~also carry restrictive covenants aimed at ensuring repayment before junior creditors, such as most types of unsecured ~~creditors. In addition, most~~bondholders, and other security holders and preserving collateral to protect against credit deterioration.

The chart below illustrates examples of the collateral used to secure senior secured first lien debt ~~issues carry variable~~and senior secured second lien debt.

Investments in Floating Rate Debt

A large portion of the investments we expect to make in middle market companies are expected to be in the form of floating rate debt instruments. These floating rate debt instruments are expected to be below investment grade rated (which are often referred to as “high yield” or “junk”). Floating rate loans have a base rate that adjusts periodically plus a spread over the base rate. The base rate is typically the three-month London Interbank Offered Rate (“LIBOR”), and resets every 30-90 days. As LIBOR increases, the income stream from these floating rate instruments will also increase. Syndicated floating rate debt offers certain benefits:

Adjustable coupon payment. Floating rate loans are structured so that interest rates reset on a predetermined schedule. As a result, when interest rates rise, coupon payments increase, and vice versa, with little lag time (typically 90 days or less). This feature greatly reduces the interest rate ~~structures, meaning~~risk, or duration risk, inherent in high yield bonds, as the ~~securities are generally less susceptible to declines~~value of high yields bonds may decline in an increasing interest rate environment because their interest rates do not reset. For example, as short-term rates rise, the value ~~experienced by fixed-rate securities~~of a high yield bond typically will decline while the value of a floating rate loan typically will remain stable because its interest rate will reset.

Priority in event of default. In the event of a default, floating rate loans typically have a higher position in a ~~rising interest~~company’s capital structure, have first claim to assets and greater covenant protection than high yield bonds. As a result, floating rate ~~environment. However, in declining interest~~loans have generally recovered a greater percentage of value than high yield bonds. Also, the default rate ~~environments, variable interest~~for floating rate ~~structures decrease the income we would otherwise receive from our debt securities. In many cases, the loan documents governing these securities provide for an interest~~loans has historically been lower than defaults of high yield bonds.

Reduced volatility. The return of floating rate ~~floor.~~

~~Business Strategy and Competitive Advantage~~

~~Focus on ‘Basic’ Businesses within the Lower Middle Market.~~For our private equity investments, we will primarily invest in small and mid-sized private companies as described above. We believe that these companies are often overlooked by larger private equity investors and have less accessloans has historically had a low correlation to the capital markets than their larger competitors due to the fact that they are small and, accordingly, more difficult to source and, in some case, manage. This creates an opportunity to invest in these companies at lower valuations and on more attractive terms than are typically present in larger market transactions. We generally will invest in entrepreneurial, but established, companies with positive cash flow. We will focus on businesses in what we call ‘basic’ industries—that is, industries in which growth is not dependent on a continuous cycle of new technological development—including healthcare services, business services, consumer products, specialty finance, light manufacturing, logistics and value-added distribution. We may also invest in certain industries that are dependent to some degree on technological development and innovation, such as information technology and computer software.

^δ*~~Source: Statistics of U.S. Businesses Employment and Payroll Summary: 2012, by Anthony Caruso and published by the US Census Bureau, released February 2015~~

~~Extensive Underwriting and Portfolio Management.~~Our Adviser will employ an extensive underwriting and due diligence process for equity investments which will include an initial review of all prospective portfolio companies, their competitive position, financial performance and the dynamics of the industry in which they compete. We will seek to invest with management teams or other private equity sponsors who have a demonstrated track record building value. Through our Adviser, we will offer managerial assistance to our portfolio companies, giving them access to our Adviser’s investment experience, direct industry expertise and contacts, and allowing us to continually monitor their progress. As part of the monitoring process, our Adviser will analyze monthly and quarterly financial statements versus the previous periods and year, review financial projections, meet with management, attend board meetings, review all compliance certificates and covenants and maintain our awareness of critical industry developments and trends

~~Untapped Opportunities.~~For equity investments, we will seek to identify companies with strong management and untapped potential that would benefit from a combination of new capital and strategic relationships and our operating expertise and guidance. While the founders of such companies have built successful enterprises, they often need additional capital and management resourcesmost asset classes and a ~~more sophisticated perspective~~negative correlation with some asset classes. Therefore, adding floating rate loans to take the company to the next level. We believe that these companies, led by appropriately motivated management teams, can be vehicles for creating substantial value through accelerated growth and operational improvements.

~~Value-Added Management.~~~~For equity investments, we will seek to negotiate terms that will provide us with significant influence or control of~~ a portfolio ~~company. When making an investment, we will attempt~~should reduce volatility and risk.

Investment Types

Our portfolio is expected to ~~leverage our Adviser’s operational and financial expertise to strengthen portfolio company management teams and assist them~~be comprised primarily of investments in achieving their full potential. To do so, we will employ our Adviser’s Value Enhancement Program, to change the corporate infrastructure of portfolio companies with a view to accelerating and enhancing their “exit readiness”. This strategy has often resulted in a short-term reduction in portfolio company earnings and cash flow while the company’s sales catch up with the more robust infrastructure required for rapid growth that we help put in place. The intended result, however, is a larger, more professional organization, which can either be used as a platform for future expansion or be built into a potential add-on to a larger player in its market; in either instance an attractive target for a larger private equity fund or a strategic corporate buyer.

~~Debt Investment.~~~~We will seek to invest in~~syndicated senior secured first lien loans, syndicated senior secured second lien ~~secured~~ loans, and to a lesser extent, subordinated ~~loans~~debt of private middle market U.S. companies. In addition, a portion of our portfolio may be comprised of other securities, including private equity (both common and ~~corporate bonds~~preferred), dividend-paying equity, royalties, and the equity and junior debt tranches of ~~established companies.~~SSNs. Our Adviser will seek to tailor our investment focus as market conditions evolve. Depending on market conditions, we may increase or decrease our exposure to less senior portions of the capital structure, where returns tend to be stronger in a more stable or growing economy, but less secure in weak economic environments. Below is a diagram illustrating where these investments lie in a typical portfolio company’s capital structure. Senior secured first lien debt is situated at the top of the capital structure and typically has the first claim on the assets and cash flows of the company, followed by senior secured second lien debt, subordinated debt, preferred equity and, finally, common equity. Due to this priority of cash flows, an investment’s risk increases as it moves further down the capital structure. Investors are usually compensated for this risk associated with junior status in the form of higher returns, either through higher interest payments or potentially higher capital appreciation. We will rely on our Adviser’s experience to structure investments, possibly using all levels of the capital structure, which we believe will perform in a broad range of economic environments.

Typical Leveraged Capital Structure Diagram

Senior Secured First Lien Loans

Senior secured first lien loans are situated at the top of the capital structure. Because these loans generally have priority in payment, they carry the least risk among all investments in a firm. Generally, our senior secured first lien loans are expected to have initial maturities of three to seven years, offer some form of amortization, and have first priority security interests in the assets of the borrower. Generally, we expect that the interest rate on our senior secured first lien loans typically will have variable rates ranging between 3.0% and 8.0% over a standard benchmark, such as the prime rate or LIBOR.

Senior Secured Second Lien Loans

Senior secured second lien ~~secured~~ loans are immediately junior to senior secured first lien loans and have substantially the same ~~maturities,~~ collateral and covenant structures as senior secured first lien loans. ~~Second~~Generally, our senior secured second lien loans are expected to have initial maturities of three to eight years. Senior secured second lien loans, however, are granted a second priority security interest in the assets of the ~~borrower.~~borrower, which means that any realization of collateral will generally be applied to pay senior secured first lien loans in full before senior secured second lien loans are paid and the value of the collateral may not be sufficient to repay in full both senior secured first lien loans and senior secured second lien loans. In return for this junior ranking, senior secured second lien ~~secured~~ loans generally offer higher returns compared to senior secured first lien debt. These higher returns come in the form of higher interest. Generally, we expect that the interest rate on our senior secured second lien loans typically will have variable rates ranging between 6.0% and 11.0% over a standard benchmark, such as the prime rate or LIBOR.

Senior Secured Bonds

Senior secured bonds are generally secured by collateral on a senior, pari passu or junior basis with other debt instruments in an issuer’s capital structure and have similar covenant structures as senior secured loans. Generally, we expect these investments to carry a fixed rate of 6.0% to 12.0% and have initial maturities of three to ten years.

Subordinated Debt

In addition to syndicated senior secured first lien loans, syndicated senior secured second lien loans and senior secured bonds, we may invest a portion of our assets in subordinated debt. Subordinated debt investments usually rank junior in priority of payment to senior ~~secured loans and second lien secured loans~~debt and are often unsecured, but are situated above preferred equity and common ~~stock~~equity in the capital structure. In return for their junior status compared to ~~first lien and second lien secured loans,~~senior debt, subordinated debt investments typically offer higher returns through both higher interest rates and possible equity ownership in the form of ~~warrants.~~

~~Well Established Firm~~warrants, enabling the lender to participate in the capital appreciation of the borrower. These warrants typically require only a nominal cost to exercise. We generally will target subordinated debt with interest-only payments throughout the life of the security, with the principal due at maturity. Typically, subordinated debt investments have maturities of five to ten years. Generally, we expect these securities to carry a fixed rate, or a floating current yield of 8.0% to 18.0% over a standard benchmark. In addition, we may receive additional returns from any warrants we may receive in connection with these investments. In some cases, a portion of the total interest may accrue or be PIK.

Equity and ~~Experienced Investment Committee.~~~~Our Adviser’s management team is primarily~~Equity-Related Securities

While we intends to maintain our focus on investments in debt securities, from ~~TPCP,~~time to time, when We sees the potential for extraordinary gain, or in connection with securing particularly favorable terms in a debt investment, We may enter into investments in preferred or common equity, typically in conjunction with a private equity sponsor we believe to be sophisticated and seasoned. With respect to any preferred or common equity investments, we expect to target an annual investment return of at least 15%.

Non-U.S. Securities

We may invest in non-U.S. securities, which ~~was founded~~may include securities denominated in ~~2001 to provide access to capital and management/operational expertise~~U.S. dollars or in non-U.S. currencies, to the ~~underserved lower middle market. TPCP has since expanded to include multiple affiliates and~~extent permitted by the ~~management~~1940 Act. For example, the SSNs in which we may invest generally consist of ~~numerous investment funds that specialize in providing specialty investment opportunities~~a special purpose vehicle (typically formed in the ~~lower middle~~Cayman Islands or another similar foreign jurisdiction) formed to purchase the senior secured loans and issue rated debt securities and equity tranches and/or unrated debt securities (generally treated as equity interests).

Subordinated Structured Notes

We may invest in subordinated structured notes or SSNs, which are a form of securitization where payments from multiple loans are pooled together. Investors may purchase one or more tranches of an SSN and each tranche typically reflects a different level of seniority in payment from the SSN.

Other Securities

We may also invest from time to time in royalties, derivatives, including total return swaps and credit default swaps, that seek to modify or replace the investment performance of a particular reference security or other asset. These transactions are typically individually negotiated, non-standardized agreements between two parties to exchange payments, with payments generally calculated by reference to a notional amount or quantity. Swap contracts and similar derivative contracts are not traded on exchanges; rather, banks and dealers act as principals in these markets. We anticipate that any use of derivatives would primarily be as a substitute for investing in conventional securities.

Cash and Cash Equivalents

We may maintain a certain level of cash or equivalent instruments, including money market ~~for institutional~~funds, to make follow-on investments, if necessary, in existing portfolio companies or to take advantage of new opportunities.

Sources of Income

The primary means through which our stockholders will receive a return of value is through interest income, dividends and ~~individual investors and a broad array~~capital gains generated by our investments. In addition to these sources of ~~capital resources to mature lower middle market companies. Triton Pacific Capital Partners, LLC has to date invested in 18~~income, we may receive fees paid by our portfolio companies, ~~with an estimated aggregate enterprise value~~including one-time closing fees paid at the time each investment is made. Closing fees typically range from 1.0% to 2.0% of ~~acquisition~~the purchase price of ~~approximately $500 million.~~^*an investment. In addition, we may generate revenues in the form of non-recurring commitment, origination, structuring or diligence fees, fees for providing managerial assistance, consulting fees and performance-based fees.

Risk Management

We ~~believe~~seek to limit the downside potential of our investment portfolio by:

applying our investment strategy guidelines for portfolio investments;

requiring a total return on investments (including both interest and potential appreciation) that adequately compensates us for credit risk;

allocating our portfolio among various issuers and industries, size permitting, with an adequate number of companies, across different industries, with different types of collateral; and

negotiating or seeking debt investments with covenants or features that protect us while affording portfolio companies flexibility in managing their businesses consistent with preservation of capital, which may include affirmative and negative covenants, default penalties, lien protection, change of control provisions and board rights.

We may also enter into interest rate hedging transactions at the sole discretion of our Adviser. Such transactions will enable us to selectively modify interest rate exposure as market conditions dictate.

Affirmative Covenants

Affirmative covenants require borrowers to take actions that are meant to ensure the solvency of the company, facilitate the lender’s monitoring of the borrower, and ensure payment of interest and loan principal due to lenders. Examples of affirmative covenants include covenants requiring the borrower to maintain adequate insurance, accounting and tax records, and to produce frequent financial reports for the benefit of the lender.

Negative Covenants

Negative covenants impose restrictions on the borrower and are meant to protect lenders from actions that the borrower may take that could harm the credit quality of the lenders’ investments. Examples of negative covenants include restrictions on the payment of dividends and restrictions on the issuance of additional debt or making capital expenditures without the lenders’ approval. In

addition, certain covenants may restrict a borrower’s activities by requiring it to meet certain earnings interest coverage ratio and leverage ratio requirements. These covenants are also referred to as financial or maintenance covenants.

Investment Process

The investment ~~committee~~professionals utlized by our Adviser have spent their careers developing the resources necessary to invest in private companies. Our transaction process is highlighted below.

Our Transaction Process

Sourcing

In order to source transactions, our Adviser will generate investment opportunities through syndicate and club deals and, subject to regulatory constraints, through the proprietary origination channels of the investment team at our Adviser and its affiliates. In club deals, we along with other investors (including our affiliates) pool assets together to purchase securities collectively. With respect to syndicate and club deals, the investment professionals of our Adviser ~~has developed~~have built a network of relationships with and a specialty in dealing with, the lower middle market, as well as a reputation for its expertise, fair dealing, flexibility and ability to handle transactions beyond the reach of others in this market space.

~~Industry Experts.~~We may call upon a select group of operating partners who have expertise in specific industries that we find attractive and the wherewithal to play an active role in creating value for our private equity investments that fall within their areas of expertise.

~~Strong Deal Flow.~~We believe that our Adviser will have strong private equity deal flow as a result of the strong market reputation of the Adviser and its principals as investors and their network of relationships with numerous transaction brokers and small financial intermediaries. We believe that their industry relationships with other private equity sponsors, investment banks, business brokers, merger and acquisition advisers, financial services companies and commercial ~~banks are a significant source for new investment opportunities. We believe our Adviser is well known in the financial sponsor community,~~ and that its experience and reputation provide a competitive advantage in originating new investments. From time to time, we may receive referrals for new prospective investments for which we may pay a referral fee or a finder’s fee.

For debt investments, our Adviser has engaged ZAIS to serve as our sub-adviser. ZAIS has access to the syndicated loan market, a primary source of debt investment opportunities for us, as well as syndicate and club deals. ZAIS also has strong relationships with investment banks, finance companies and other investment funds ~~that are active~~as a result of the long track record of its investment professionals in the leveraged finance marketplace.

~~Diversification.~~ With respect to our Adviser’s proprietary origination channel, our Adviser will seek to leverage the relationships with private equity sponsors and financial intermediaries. We ~~recognize~~believe that the broad networks of our Adviser and its affiliates will produce a significant pipeline of investment opportunities for us.

Evaluation

Initial review. In its initial review of an ~~over concentration~~investment opportunity, our Adviser’s professionals will examine information furnished by the target company and external sources, such as rating agencies, if applicable, to determine whether the investment meets our basic investment criteria and other guidelines specified by our Adviser, within the context of proper portfolio diversification, and offers an acceptable probability of attractive returns with identifiable downside risk. For the majority of securities available on the secondary market, a comprehensive analysis will be conducted and continuously maintained by a dedicated research analyst, the results of which are available for the investment team to review. In the case of a primary or secondary transaction, our Adviser will conduct detailed due diligence investigations as necessary.

Credit analysis/due diligence. Before undertaking an investment, the transaction team expects to conduct a thorough due diligence review of the opportunity to ensure the company fits our investment strategy, which may include:

a full operational analysis to identify the key risks and opportunities of the company’s business, including a detailed review of historical and projected financial results;

a detailed analysis of industry dynamics, competitive position, regulatory, tax and legal matters;

on-site visits, if deemed necessary;

background checks to further evaluate management and other key personnel;

a review by legal and accounting professionals, environmental or other industry consultants, if necessary;

financial sponsor due diligence, including portfolio company and lender reference checks, if necessary; and

a review of management’s experience and track record.

Execution

Recommendation. The professionals of our Adviser will recommend investment opportunities for its approval. Our Adviser seeks to maintain a defensive approach toward its investment recommendations by emphasizing risk control in its investment process, which includes (i) the pre-review of each opportunity by one of its investment professionals to assess the general quality, value and fit relative to our portfolio and (ii) where possible, transaction structuring with a focus on preservation of capital in varying economic environments.

Approval. After completing its internal transaction process, our Adviser will make formal recommendations for review and approval by our Adviser’s investment committee. In connection with its recommendation, it will transmit any relevant underwriting material

and other information pertinent to the decision-making process. The consummation of a transaction will require unanimous approval of the members of our Adviser’s investment committee.

Post-Investment Monitoring

Portfolio Monitoring. Our Adviser intends to monitor our portfolio with a focus toward anticipating negative credit events. To maintain portfolio company performance and help to ensure a successful exit, our Adviser expects to work closely with, as applicable, the lead equity sponsor, loan syndicator or agent bank, portfolio company management, consultants, advisers and other security holders to discuss financial position, compliance with covenants, financial requirements and execution of the company’s business plan. In addition, depending on the size, nature and performance of the transaction, we may occupy a ~~limited number~~seat or serve as an observer on a portfolio company’s board of ~~positions~~directors or similar governing body.

Typically, our Adviser will receive financial reports detailing operating performance, sales volumes, margins, cash flows, financial position and other key operating metrics on a quarterly basis from our portfolio companies. Our Adviser intends to use this data, combined with due diligence gained through contact with the company’s customers, suppliers, competitors, market research, and/or other methods, to conduct an ongoing, rigorous assessment of the company’s operating performance and prospects.

Valuation Process. Each quarter, we will value investments in our portfolio, ~~would increase~~and such values will be disclosed each quarter in reports filed with the ~~risk~~SEC. Investments for which market quotations are readily available will be recorded at such market quotations. With respect to investments for which market quotations are not readily available, our board of ~~exposure~~directors will determine the fair value of such investments in good faith, utilizing the input of our valuation committee, our Adviser and any other professionals or materials that our board of directors deems worthy and relevant, including independent third-party pricing services and independent third-party valuation services, if applicable.

Managerial Assistance. As a BDC, we must offer, and provide upon request, managerial assistance to ~~adverse changes in a single investment. We will endeavor to construct and maintain~~certain of our portfolio to reduce such risks, including through investments throughout a company’s capital structures and among companies in a multitude of different industries and geographic markets, thereby reducing the concentration of risk in any one type of investment, company or sector of the economy. We cannot guarantee that we will be successful in this effort.

~~Investment Objectives and Policies~~

Our investment objective is to generate both current income and long term capital appreciation primarily through debt and equity investments in small to mid-size private businesses. We are managed by our Adviser. Our Adviser is controlled by Craig Faggen, our Chairman and Chief Executive Officer. We have entered into an administration agreement with our Administrator. Pursuant to the administration agreement, the Administrator furnishes us with office facilities, equipment, clerical, bookkeeping and record keeping services. Our Administrator performs, assists us in performing or oversees the performance of our required administrative services, which include,companies. This assistance could involve, among other things, ~~maintaining required financial records; preparing, printing and disseminating reports to our stockholders; assist us in publishing our net asset value per share; oversee~~monitoring the ~~preparation and filing~~operations of our ~~tax returns;~~portfolio companies, participating in board and ~~generally, oversee~~management meetings, consulting with and advising officers of portfolio companies and providing other organizational and financial guidance. Depending on the ~~payment~~nature of the assistance required, our ~~expenses and~~Adviser will provide such managerial assistance on our behalf to portfolio companies that request this assistance. To the ~~performance of administrative and professional~~extent fees are paid for these services, ~~rendered~~we, rather than our Adviser, will retain any fees paid for such assistance.

Exit

We will attempt to us by others. We have also contracted with Gemini Fund Services, LLC (“Gemini”) to act as our transfer agent, plan administrator, distribution paying agent and registrar. In February, 2017, we engaged Phoenix American to replace Gemini as transfer agent. This transition shouldinvest in securities that may be ~~completed~~sold in the ~~second quarter of 2017. Our Administrator has also contracted with Bank of New York Mellon and affiliated entities to provide additional administrative services, while~~privately negotiated over-the-counter market, providing us a means by which we ~~have directly engaged Bank of New York Mellon and affiliated entities to act as~~may exit our ~~custodian.~~

~~We anticipate making private equity investments from the proceeds of our offering predominately in lower middle market companies.~~positions. We expect that each investment will range between $250,000 and $25 million, although this investment size will vary with the size of our capital base. We define lower middle market companies as those with annual revenues of between $10 million and $250 million, and EBITDA approximately between $1 million and $25 million. We anticipate that our investments will take the form of newly-originated loans and equity investments as well as investments in secondary market transactions, including equity purchased from current owners and loans acquired from banks, other specialty finance companies, private equity sponsors, loan syndications and other investors.

^* ~~Data regarding TPCP’s investments excludes two early stage venture capital investments made it which are not consistent with our investment objectives.~~

Our Adviser has engaged ZAIS Group, LLC. ZAIS assists our Adviser with identifying, evaluating, negotiating and structuring debt investments and makes investment recommendations for approval by our Adviser. We anticipate our debt investments will primarily consist of investments in senior secured loans, second lien secured loans and, to a lesser extent, subordinated loans and corporate bonds of private U.S. companies. We may purchase interests in loans through secondary market transactions in the “over-the-counter” market for institutional loans or directly from our target companies as primary market investments. In connection with our debt investments, we may on occasion receive equity interests such as warrants or options as additional consideration. The majority of our debt investments are expected to be made in small and middle-market companies, which we define as companies with annual revenue of $10 million to $2.5 billion at the time of investment. In many environments, we believe such a focus offers an opportunity for superior risk adjusted returns.

The structure of our investments is likely to vary and we expect to invest throughout a portfolio company’s capital structure, including, but not limited to, senior secured and unsecured debt, mezzanine debt, preferred equity, common equity, warrants and other instruments, many of which generate current yield. In addition, in order to diversify our investment portfolio and to the extent allowed by the Company Act and consistent with our continued qualification as a RIC, we may also invest in loans to larger companies which should be more liquid than the debt securities of smaller companies.

~~So that we continue to qualify as a BDC, we intend to make investments so that at least 70% of our assets are “qualifying assets” for purposes of the Company Act. We may invest the balance~~large portion of our portfolio ~~in opportunistic “non-qualifying assets”~~may be sold on this secondary market for the foreseeable future, depending on market conditions. For any investments in order to seek enhanced returns for our stockholders. Such investments may include investments in the debt and equity instruments of broadly traded public companies. We expect that these investments generally will be in debt securities that are ~~non-investment grade. Within this 30% basket, we may also invest in debt and equity securities of companies located outside of the United States. All such investments are intended~~not able to be ~~made in compliance with the Company Act and in a manner that will not jeopardize our status as a RIC.~~

~~Investment Philosophy~~

Wesold within this market, we will focus ~~on the following key elements when evaluating an equity investment opportunity:~~

~~Attractive Industries:~~ We will identify industries that we believe exhibit strong growth characteristics or consolidation attributes, are experiencing rapid rates of change or are beginning to transform their business models.

~~Strong Management:~~Management is critically important in any company. However, making significant changes in strategy or operations or driving towards rapid expansion places additional demands on leadership. Therefore, we are only interestedprimarily in investing in companies whose business models and growth prospects offer attractive exit possibilities, including repayment of our investments, an initial public offering of equity securities, a merger, a sale or a recapitalization.

Potential Competitive Strengths

We believe that we offer investors the following potential competitive strengths:

Established platform with seasoned investment professionals. We believe ~~have strong management teams~~that we will benefit from the wide resources of our Adviser through the personnel it utilizes from Prospect Capital Management, which is focused on sourcing, structuring, executing, monitoring and exiting a broad range of investments. We believe these personnel possess market knowledge, experience and industry relationships that enable them to identify potentially attractive investment opportunities in ~~place, based on their expertise and prior performance, or where there is a clear and achievable strategy of attracting the right people~~companies pursuant to ~~the team. In all cases, we firmly believe it is essential for management to be committed to agreed-upon strategic objectives for the company prior to making an investment.~~our investment strategy.

~~Positive Cash Flow:~~ ~~We will identify companies with a sufficient history or what~~Long-term investment horizon. Our long-term investment horizon gives us greater flexibility, which we believe will ~~be a prospect of positive cash flow~~allow us to ~~allow for distributions, while retaining sufficient cash~~maximize returns on our investments. Unlike private equity and venture capital funds, we are not subject to ~~grow the company.~~

~~Operating Inefficiencies/Modernization:~~ ~~Many small businesses have not taken advantage of the tools~~standard periodic capital return requirements. Such requirements typically stipulate that ~~have become available to their industry to drive operational efficiencies and support more rapid growth. We will look to invest~~capital invested in ~~companies that have potential because they have not yet benefited from new production techniques, new technologies, or other promising industry trends that have benefited their larger competitors.~~

~~Ability to Add Value:~~~~Our Adviser’s experienced executives~~these funds, together with any capital gains on such investment, can be ~~valuable~~invested only once and must be returned to ~~any management team, particularly those attempting to grow their company aggressively.~~investors after a pre-determined time period. We ~~will evaluate each prospective investment to understand~~believe that our ability ~~through our~~to make investments with a longer-term view and without the capital return requirements of traditional private investment vehicles will provide us with greater flexibility to seek investments that can generate attractive returns on invested capital.

Disciplined, income-oriented investment philosophy. Our Adviser is expected to beemploy an investment approach focused on current income and long-term investment performance. This investment approach involves a ~~value-added partner, either~~multi-stage selection process for each investment opportunity, as ~~a member~~well as ongoing monitoring of ~~the board or as a more active advisor.~~

~~For debt investments, we will focus~~each investment made, with particular emphasis on ~~long term~~early detection of deteriorating credit ~~performance and principal protection.~~conditions at portfolio companies, which could result in adverse portfolio developments. This ~~defensive oriented~~ strategy is

designed to ~~generate attractive levels of~~maximize current income ~~while minimizing~~and minimize the risk of capital ~~loss. We~~loss while maintaining potential for long-term capital appreciation.

Investment expertise across all levels of the corporate capital structure. Our Adviser believes that its broad expertise and experience investing at all levels of a company’s capital structure will enable us to manage risk while affording us the opportunity for significant returns on our investments. Our Adviser will attempt to capitalize on ~~our Adviser’s~~this expertise in an effort to produce and ~~Sub-Adviser’s expertise to create a debt~~maintain an investment portfolio that will perform in a broad range of economic conditions.

~~Investment Principles~~

We ~~have established~~generally will not be required to pay corporate-level U.S. federal income taxes on income and capital gains distributed to stockholders. As a RIC, we generally will not be required to pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that we receive from our investments and timely distribute to our stockholders as dividends. Furthermore, tax-exempt investors in our shares who do not finance their acquisition of our shares with indebtedness should not be required to recognize unrelated business taxable income, or “UBTI,” unlike certain direct investors in master limited partnerships (“MLPs”). We expect to form wholly owned taxable subsidiaries to make or hold certain investments in non-traded limited partnerships or other entities classified as partnership for U.S. federal tax purposes. Although, as a RIC, dividends received by us from taxable entities and distributed to our stockholders will not be subject to corporate-level U.S. federal income taxes, any taxable entities we own will generally be subject to federal and state income taxes on their income. As a result, the ~~following principles, which we believe, when consistently followed and properly executed, will result in successful private equity investments:~~

~~Each investment will be premised~~net return to us on ~~a specific strategic opportunity.~~

We will conduct extensive due diligence to obtain an in-depth understanding of the business and its industry in order to identify and evaluate the strategic and financial opportunities associated with the investment and the risks associated with those opportunities.

The purchase price or loan terms must be determined from an assessment of the overall investment opportunity and associated risks, not solely the competitive environment. We will not pay the “market price” for an investment should we believe the inherent value of the investment will not sustain such ~~a price. The result may be “missed” opportunities. However, we believe that investment discipline will better serve our investors in the long run.~~

~~The pricing and structuring of the transaction will be determined by the requirements and objectives of the strategic plan, not vice versa.~~

~~Management must understand, agree with, and be committed to the goals of a strategic plan and must have the proper incentives to achieve such goals.~~

~~We will invest on terms that will provide us with relatively significant influence or control over the companies.~~

~~Investment Process~~

~~Private equity~~ investments that are ~~expected to be made in well-managed privately-owned companies. Investment opportunities~~held by such subsidiaries will be ~~generated by our Adviser from its relationships with private equity sponsors, bankers, executives and its extensive deal network.~~

For private equity investments, we will employ our Adviser’s Value Enhancement Program to further develop the corporate infrastructure of portfolio companies with a view to accelerating and enhancing their “exit readiness.” Our Adviser’s Value Enhancement Program takes a company through a four-step process of development towards a targeted exit strategy. Specifically, when pursuing a private equity investment opportunity, each stage of the investment process presents an opportunity to create value in the prospective investment.

~~Stage I - Sourcing:~~Equity transactions are sourced primarily from intermediaries, including national, regional and local investment banks as well as local business brokers. Although some private equity groups prefer to source “proprietary” deals (~~i.e.,~~ ~~non-marketed deals, without an intermediary), our Adviser has found that intermediaries play a valuable role in educating sellers in the lower middle market as~~reduced to the ~~pricing realities of the market and the structural requirements of investors. Our private equity debt investments will be primarily sourced through other private equity sponsors.~~

Our Adviser employs an extensive underwriting and due diligence process for private equity investments which includes an initial review of all prospective portfolio companies, their competitive position, financial performance and the dynamics of the industry in which they compete. We will seek to invest with management teams or other private equity sponsors who have a demonstrated track record building value. Through our Adviser, we will offer managerial assistance to our portfolio companies, giving them access to our Adviser’s investment experience, direct industry expertise and contacts, and allowing us to continually monitor their progress. As part of the monitoring process, our Adviser will analyze monthly and quarterly financial statements versus the previous periods and year, review financial projections, meet with management, attend board meetings, review all compliance certificates and covenants and maintain our awareness of critical industry developments and trends.

In addition, members of our Adviser have built relationships with executives in industries we believe to be attractive. These executives may become a source for proprietary opportunities and may be available as industry partners to help evaluate, invest and subsequently grow the companies.

~~Stage II - Due Diligence:~~ A thorough understanding and evaluation of the strategic opportunity offered by a potential investment and the risks and opportunities unique to a company and its marketplace is crucial to properly evaluate any portfolio company. This can only be achieved through an extensive due diligence process and comprehensive financial and operational analysis of the business. We believeextent that the due diligence process is not just a financial review, but rather a comprehensive industry, operational, management, marketing, technical and legal assessment. In conducting its due diligence, our Adviser may capitalize on industry partners’ expertise and relationships when relevant.

~~During the initial screening, our Adviser will evaluate the company, assesses its management and look~~subsidiaries are subject to identify the primary risks and opportunities. During the due diligence process, our Adviser will employ an extensive checklist of potential areas that could pose problems for a portfolio company business as well as questions specific to the business and industry that have been derived from industry standards and modified by experience and the initial screening process. As part of this process, they will conduct an operational due diligence review. This may include site visits to gain an accurate impression of the business and management’s capabilities.

The decision to invest is reached by consensus among the members of the investment committee of our Adviser. Our Adviser believes that its focus on effective internal communication and its team-based compensation structure has created an environment for a collaborative, open and complete process, and ultimately leads to better investment decisions.

~~Stage III – Structuring Transactions:~~ We believe that the members of the investment committee of our Adviser have developed complex structuring expertise and mergers and acquisitions experience which we will be able to leverage when making a portfolio company investment. The intent is to structure transactions in a manner that is fair to the existing shareholders and yet minimizes the downside risk to us. Because of the inefficiencies in the lower middle market, we believe we will be able to obtain structures that offer significant risk mitigation for investors.income taxes.

~~Stage IV - Building Companies:~~ Our overall objective is to generate returns from our investment portfolio that provide attractive risk-reward characteristics for our investors. To meet this objective, we will focus a portion of our Adviser’s efforts on building our investments into larger, more efficient, and more valuable businesses. We are not in the business of running companies, but our Adviser has an investment committee with extensive portfolio management experience that is dedicated to, and experienced in working with companies to build and enhance their operations. For equity and equity-like investments, our Adviser utilizes a unique Value Enhancement Program to help companies achieve this goal. See “Investment Objectives and Policies – Investment Principles.”

In evaluating debt opportunities, our Adviser and our Sub-Adviser will examine information provided by the target company and external sources such as rating agencies (if applicable) to determine if the opportunity meets our investment criteria and guidelines. For most loans that are purchased on the secondary market, a comprehensive credit analysis is conducted and maintained by a research analyst to allow the investment team to make informed buy/ sell decisions and assessment of credit quality. Much of this information will be derived from financial reports detailing the financial performance along with key metrics on a quarterly basis.

~~Regulation~~

We have elected to be regulated as a BDC under the Company Act. The Company Act contains prohibitions and restrictions relating to transactions between business development companies and their affiliates, principal underwriters and affiliates of those affiliates or underwriters. The Company Act requires that a majority of the directors be persons other than “interested persons,” as that term is defined in the Company Act. In addition, the Company Act provides that we may not change the nature of our business so as to cease to be, or to withdraw our election as, a business development company unless approved by a majority of our outstanding voting securities.

The Company Act defines “a majority of the outstanding voting securities” as the lesser of (i) 67% or more of the voting securities present at a meeting if the holders of more than 50% of our outstanding voting securities are present or represented by proxy or (ii) 50% of our voting securities.

We will generally not be able to issue and sell our common stock at a price below net asset value per share. See “Risk Factors—Risks Related to Business Development Companies”. Regulations governing our operation as a business development company and RIC will affect our ability to raise, and the way in which we raise additional capital or borrow for investment purposes, which may have a negative effect on our growth. We may, however, sell our common stock, or warrants, options or rights to acquire our common stock, at a price below the then-current net asset value per share of our common stock if our board of directors determines that such sale is in our best interests and the best interests of our stockholders, and our stockholders approve such sale. In addition, we may generally issue new shares of our common stock at a price below net asset value per share in rights offerings to existing stockholders, in payment of dividends and in certain other limited circumstances.

Qualifying Assets

We may invest 100% of our assets in securities or obligations acquired directly from issuers in privately-negotiated transactions. With respect to such securities, we may, for the purpose of public resale, be deemed an “underwriter” for purposes of the Securities Act. We may acquire warrants to purchase common stock of our portfolio companies in connection with acquisition financings or other investments and we may acquire rights to require our portfolio companies to repurchase the securities we acquire from them in certain circumstances. We do not intend to acquire securities issued by any investment company that exceeds the limits imposed by the Company Act. Under these limits, except for registered money market funds, we generally cannot acquire more than 3% of the voting stock of any investment company, invest more than 5% of the value of our total assets in the securities or obligations of one investment company or invest more than 10% of our total assets in the securities or obligations of more than one investment company. None of our investment policies are fundamental and may be changed without stockholder approval.

To the extent permitted by the Company Act and SEC staff interpretations, our Adviser may determine it is appropriate for us and one or more other investment accounts managed by our Adviser or any of their respective affiliates to participate in the same investment opportunity. We have applied for exemptive relief from the SEC to engage in co-investment opportunities with our Adviser or its affiliates. There can be no assurance, however, that an order providing exemptive relief will be granted. While we have not yet determined whether or not we will, in fact, participate in investments with other affiliates of our Adviser, such co-investment opportunities might give rise to actual or perceived conflicts of interest among us and other participating accounts. To mitigate these conflicts we and the Adviser have developed policies and procedures which require the Adviser to (i) execute such transactions for all of the participating investment accounts, including us, on a fair and equitable basis, taking into account such factors as the appropriateness of an investment for each party concerned, the relative amounts of capital available from each such party for new investments, the then current investment programs and objectives and portfolio positions of each party and any other factors deemed appropriate, and (ii) obtain the advice of Adviser personnel not directly involved with the investment giving rise to the conflict as to such appropriateness and other factors as well as the fairness to all parties of the investment and its terms.

~~Qualifying Assets~~

Under the ~~Company~~1940 Act, a business development company may not acquire any asset other than assets of the type listed in Section 55(a) of the ~~Company~~1940 Act, which are referred to as “qualifying ~~assets”,~~assets,” unless, at the time the acquisition is made, qualifying assets represent at least 70% of the company’s total assets. The principal categories of qualifying assets relevant to our business are the following:

Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an eligible portfolio company, or from any person who is, or has been during the preceding 13 months, an affiliated person of an eligible portfolio company, or from any other person, subject to such rules as may be prescribed by the SEC. An eligible portfolio company is defined in the ~~Company~~1940 Act as any issuer which:


a.	is organized under the laws of, and has its principal place of business in, the United States;


b.	is not an investment company (other than a small business investment company wholly owned by the business development company) or a company that would be an investment company but for certain exclusions under the ~~Company~~1940 Act; and


c.	satisfies any of the following:

i.
i.	does not have any class of securities that is traded on a national securities exchange;

~~ii.~~
ii.	has a class of securities listed on a national securities exchange, but has an aggregate market value of outstanding voting and non-voting common equity of less than $250 million;

~~iii.~~
iii.	is controlled by a business development company or a group of companies including a business development company and the business development company has an affiliated person who is a director of the eligible portfolio company; or

~~iv.~~
iv.	is a small and solvent company having total assets of not more than $4.0 million and capital and surplus of not less than $2.0 million.


2.	Securities of any eligible portfolio company that we control.

Securities purchased in a private transaction from a U.S. issuer that is not an investment company or from an affiliated person of the issuer, or in transactions incident thereto, if the issuer is in bankruptcy and subject to reorganization or if the issuer, immediately prior to the purchase of its securities was unable to meet its obligations as they came due without material assistance other than conventional lending or financing arrangements.


4.	Securities of an eligible portfolio company purchased from any person in a private transaction if there is no ready market for such securities and we already own 60% of the outstanding equity of the eligible portfolio company.


5.	Securities received in exchange for or distributed on or with respect to securities described in (1) through (4) above, or pursuant to the exercise of warrants or rights relating to such securities.


6.	Cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment.

In addition, a ~~business development company~~BDC must have been organized and have its principal place of business in the United States and must be operated for the purpose of making investments in the types of securities described in (1), (2) or (3) above.

Managerial Assistance

In order to count portfolio securities as qualifying assets for the purpose of the 70% test, we must either control the issuer of the securities or must offer to make available to the issuer of the securities (other than small and solvent companies described above) significant managerial assistance; except that, where we purchase such securities in conjunction with one or more other persons acting together, one of the other persons in the group may make available such managerial assistance. Making available managerial assistance means, among other things, any arrangement whereby the business development company, through its directors, officers or employees, offers to provide, and, if accepted, does so provide, significant guidance and counsel concerning the management, operations or business objectives and policies of a company.

Temporary Investments

Pending investment in other types of “qualifying assets,” as described above, our investments may consist of cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment, which we refer to, collectively, as temporary investments, so that 70% of our assets are qualifying assets. Typically, we will invest in U.S. Treasury bills or in repurchase agreements, provided that such agreements are fully collateralized by cash or securities issued by the U.S. government or its agencies. A repurchase agreement involves the purchase by an investor, such as us, of a specified security and the simultaneous agreement by the seller to repurchase it at an agreed-upon future date and at a price that is greater than the purchase price by an amount that reflects an agreed-upon interest rate. There is no percentage restriction on the proportion of our assets that may be invested in such repurchase agreements. However, if more than 25% of our total assets constitute repurchase agreements from a single counterparty, we would not meet the Diversification Tests in order to qualify as a RIC for U.S. federal income tax purposes. Thus, we do not intend to enter into repurchase agreements with a single counterparty in excess of this limit. Our Adviser will monitor the creditworthiness of the counterparties with which we enter into repurchase agreement transactions.

Senior Securities

We are permitted, under specified conditions, to issue multiple classes of debt and one class of stock senior to our ~~common stock~~Class A Shares if our asset coverage, as defined in the ~~Company~~1940 Act, is at least equal to 200% immediately after each such issuance. However, recent legislation has modified the 1940 Act by allowing a BDC to increase the maximum amount of leverage it may incur from an asset coverage ratio of 200% to an asset coverage ratio of 150%, if certain requirements are met. Under the legislation, we are allowed to increase our leverage capacity if stockholders representing at least a majority of the votes cast, when quorum is met, approve a proposal to do so.

At the 2019 Annual Meeting, TPIC’s stockholders approved a proposal allowing us to modify our asset coverage ratio requirement from 200% to 150%. As a result, and subject to certain additional disclosure requirements as well as the repurchase obligations, both as described above, the 150% minimum asset coverage ratio will apply to the Company effective as of March 16, 2019, the day immediately after the 2019 Annual Meeting. As a result, we would be required to make certain disclosures on our website and in SEC filings regarding, among other things, the receipt of approval to increase our leverage, our leverage capacity and usage, and risks related to leverage. As a non-traded BDC, we are also required to offer to repurchase our outstanding shares at the rate of 25% per quarter over four calendar quarters.

In addition, while any senior securities remain outstanding, we must make provisions to prohibit any distribution to our stockholders or the repurchase of such securities or shares unless we meet the applicable asset coverage ratios at the time of the distribution or repurchase. We may also borrow amounts up to 5% of the value of our total assets for temporary or emergency purposes without regard to asset coverage. For a discussion of the risks associated with leverage, see “Risk Factors—Risks Related to Business Development Companies”. Regulations governing our operation as a business development company and RIC will affect our ability to raise, and the way in which we raise additional capital or borrow for investment purposes, which may have a negative effect on our growth.Companies.”

Code of Ethics

We have adopted a code of ethics in accordance with Rule 17j-1 under the ~~Company~~1940 Act that establishes procedures for personal investments and restricts certain personal securities transactions. Personnel subject to the code may invest in securities for their personal investment accounts, including securities that may be purchased or held by us, so long as such investments are made in

accordance with the code’s requirements. ~~We have attached our~~At a meeting held on April 22, 2019, the Company’s board of directors unanimously agreed to amend and restate the Company’s Code of Ethics in its entirety. The Code of Ethics was amended and restated in connection with the Merger to reflect current best practices. Specifically, the amendments included clarifications and enhancements to the description of the duties and responsibilities of the Company’s Chief Compliance Officer, increased reporting and certification requirements, and an enhanced description of the restrictions on the outside business activities of the directors and officers of the Company and its investment adviser. The code of ethics is attached as ~~an exhibit~~Exhibit 14.1 to the registration statement of which this prospectus is a part. You may also read and copy the code of ethics at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by callingCompany's Form 8-K filed with the SEC ~~at 1-800-SEC-0330. In addition, the code of ethics~~on April 26, 2019, and is also available on the EDGAR Database on the SEC’s Internet siteat ~~www.sec.gov.~~www.sec.gov

Compliance Policies and Procedures

We have adopted and implemented written policies and procedures reasonably designed to prevent violation of the federal securities laws and are required to review these compliance policies and procedures annually for their adequacy and the effectiveness of their implementation. The Company’s chief compliance officer, with whom we contract services, is responsible for administering these policies and procedures.

Proxy Voting Policies and Procedures

We anticipate delegating our proxy voting responsibility to our Adviser. The proxy voting policies and procedures that we anticipate that our Adviser will follow are set forth below. The guidelines will be reviewed periodically by our Adviser and our non-interested directors, and, accordingly, are subject to change.

~~Introduction~~

As an investment adviser registered under the Advisers Act, our Adviser has a fiduciary duty to act solely in the best interests of its clients. As part of this duty, it recognizes that it must vote client securities in a timely manner free of conflicts of interest and in the best interests of its clients. These policies and procedures for voting proxies for the investment advisory clients of our Adviser are intended to comply with Section 206 of the Advisers Act and Rule 206(4)-6 thereunder.

Proxy Policies

Our Adviser will vote proxies relating to portfolio securities in the best interest of its clients’ stockholders. It will review on a case-by-case basis each proposal submitted for a stockholder vote to determine its impact on the portfolio securities held by its clients. Although our Adviser will generally vote against proposals that may have a negative impact on its clients’ portfolio securities, it may vote for such a proposal if ~~there exist~~ compelling long-term reasons to do ~~so.~~

so exist.

The proxy voting decisions of our Adviser are made by the senior officers who are responsible for monitoring each of its clients’ investments. To ensure that its vote is not the product of a conflict of interest, it will require that: (a) anyone involved in the decision-making process disclose to its chief compliance officer any potential conflict that he or she is aware of and any contact that he or she has had with any interested party regarding a proxy vote; and (b) employees involved in the decision making process or vote administration are prohibited from revealing how our Adviser intends to vote on a proposal in order to reduce any attempted influence from interested parties.

Proxy Voting Records

You may obtain information, without charge, regarding how our Adviser ~~votes~~voted proxies with respect to our portfolio securities by making a written request for proxy voting information to our Chief Compliance Officer, ~~6701 Center Drive West, Suite 1450, Los Angeles, CA 90045.~~

Kristin Van Dask or by calling us at (212) 448-0702. The SEC also maintains a website at that contains such information.

Other Matters

We will be periodically examined by the SEC for compliance with the ~~Company~~1940 Act.

We are required to provide and maintain a bond issued by a reputable fidelity insurance company to protect us against larceny and embezzlement. Further, as a business development company, we are prohibited from protecting any director or officer against any liability to us or our stockholders arising from willful misconduct, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such person’s office.

The SEC takes the position that indemnification against liabilities arising under the Securities Act is against public policy and is unenforceable.

Securities Exchange Act and Sarbanes-Oxley Act Compliance

We ~~are~~will be subject to the reporting and disclosure requirements of the Exchange Act, including the filing of quarterly, annual and current reports, proxy statements and other required items. In addition, we will be subject to the Sarbanes-Oxley Act, which imposes a wide variety of regulatory requirements on publicly-held companies and their insiders. Many of these requirements will affect us. For example:

~~pursuant to Rule 13a-14 of the Exchange Act, our chief executive officer and chief financial officer are required to certify the accuracy of the financial statements contained in our periodic reports;~~

~~pursuant to Item 307 of Regulation S-K, our periodic reports are required to disclose our conclusions about the effectiveness of our disclosure controls and procedures;~~

pursuant to Rule 13a-15 of the Exchange Act, our management are required to prepare a report regarding its assessment of our internal control over financial reporting. This report must be audited by our independent registered public accounting firm; and

pursuant to Item 308 of Regulation S-K and Rule 12a-15 under the Exchange Act, our periodic reports must disclose whether there were significant changes in our internal controls over financial reporting or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

pursuant to Rule 13a-14 of the Exchange Act, our chief executive officer and chief financial officer will be required to certify the accuracy of the financial statements contained in our periodic reports;

pursuant to Item 307 of Regulation S-K, our periodic reports will be required to disclose our conclusions about the effectiveness of our disclosure controls and procedures;

pursuant to Rule 13a-15 of the Exchange Act, our management will be required to prepare a report regarding its assessment of our internal control over financial reporting. This report must be audited by our independent registered public accounting firm; and

The Sarbanes-Oxley Act requires us to review our current policies and procedures to determine whether we comply with the Sarbanes-Oxley Act and the regulations promulgated thereunder. We intend to monitor our compliance with all regulations that are adopted under the Sarbanes-Oxley Act and will take actions necessary to ensure that we are in compliance therewith.

~~Jumpstart~~

Plan of Distribution

Through our Dealer Manager, we are conducting a continuous offering of our Class A Shares on a "best efforts" basis, as permitted by the federal securities laws. Our ~~Business Startups Act (the “JOBS Act”).~~

Dealer Manager is Triton Pacific Securities, LLC, which is a member of FINRA, and the Securities Investor Protection Corporation, or SIPC. Triton Pacific Securities, LLC is an affiliated entity of our former investment adviser and is partially owned by one of our directors, Craig Faggen.

The ~~Jumpstart Our Business Startups Act (the “JOBS Act”) became law~~Dealer Manager is not required to sell any specific number or dollar amount of shares but will use its best efforts to sell the shares offered. We are currently selling our Class A Shares on ~~April 5, 2012. The JOBS Act substantially reduces~~a continuous basis at a price of $11.38 per share. To the ~~regulatory burdens on “emerging growth companies” (“EGCs”), which are companies with less than $1 billion in annual revenue and of which~~extent that our net asset value increases, we will ~~qualify during~~sell at a price necessary to ensure that shares are not sold at a price per share, after deduction of selling commissions and dealer manager fees, that is below our net asset value per share. The minimum permitted purchase is $5,000. Promptly following any such adjustment to the offering price per share, we will file a prospectus supplement with the SEC disclosing the adjusted offering price, and we will appropriately publish the updated information.

Compensation of the Dealer Manager and Selected Broker-Dealers

Except as otherwise described herein, the Dealer Manager will receive an ~~IPO, and also substantially relaxes restrictions~~upfront sales load of up to 6% of the gross proceeds received on ~~communications with potential investors~~Class A Shares sold in ~~the context~~this offering all or a portion of ~~both public and private offerings. Relevant for our purposes EGCs:~~

~~are exempts from Section 404(b) of the Sarbanes-Oxley Act which requires public companies to obtain an auditor attestation report on internal controls; and~~

are exempt from any new accounting standards issued after April 5, 2012 (unless we choose to avail ourselves of such new standards in whole—meaning should we choose any new accounting standards we will be subject to them all), until such time as any new accounting standards become mandatory for private companies.

~~Certain other provisions,~~ which may be ~~relevant, including~~paid to selected broker-dealers and financial representatives. The upfront sales load consists of upfront selling commissions of up to 3.0% of the ~~elimination~~gross proceeds of ~~restrictions on publicity~~Class A Shares sold in our offering and a dealer manager fee of up to 3.0% of the gross offering proceeds of Class A Shares sold in our offering. The upfront selling commissions and dealer manager fees will not be paid in connection with purchases of shares pursuant to our distribution reinvestment plan. In addition to the upfront selling commissions and dealer manager fees, the Adviser may pay our Dealer Manager a fee (the "Additional Selling Commissions") equal to no more than 1.0% of the net asset value per share per year. Our Dealer Manager will reallow all or a portion of the Additional Selling Commissions to participating broker-dealers. The Additional Selling Commissions will not be paid by our shareholders. The Adviser will cease making these payments to our Dealer Manager with respect to each share upon the earliest to occur of the following: (i) the date when the aggregate underwriting compensation would exceed that permitted under Conduct Rule 2310 of FINRA over the life of the offering, which equals 10% of the gross offering proceeds from the sale of shares in our offering (excluding shares purchased through our distribution reinvestment plan); (ii) the date of a liquidity event; (iii) the date that such share is redeemed or is no longer outstanding; (iv) the date when the aggregate upfront selling commission, dealer manager fees, and payments from the Adviser together equal 8% (or such other amount, as determined by the Adviser) of the actual price paid for such share; or (v) the date when Prospect Flexible Income Management, LLC no longer serves as our investment adviser.

All or a portion of the upfront selling commissions and dealer manager fees, as applicable, may be paid to selected broker-dealers and financial representatives. In addition, the upfront sales load, may be reduced or waived in connection with certain ~~private offerings,~~categories of sales, such as sales for which a volume discount applies, sales through investment advisers or banks acting as trustees or

fiduciaries and sales to our affiliates. The Dealer Manager will not ~~become effective~~directly or indirectly pay or award any fees or commissions or other compensation to any person or entity engaged to sell our shares or give investment advice to a potential stockholder except to a registered broker-dealer or other properly licensed agent for selling or distributing our shares.

FINRA Rule 2310 provides that the maximum compensation payable from any source to FINRA members participating in an offering may not exceed 10% of gross offering proceeds, excluding proceeds received in connection with the issuance of shares through a distribution reinvestment plan. Payments collected by us in connection with the distribution fee, in addition to any upfront sales load, will be considered underwriting compensation for purposes of FINRA Rule 2310. The maximum aggregate underwriting compensation collected from payments of distribution fees, upfront selling commissions and contingent deferred sales charges, if any, and any other sources will not exceed 10% of the gross offering proceeds from the sale of shares in our offering.

Status of Our Continuous Public Offering

Since commencing our continuous public offering and through September 27, 2019, we have sold 1,596,574shares of our common stock for gross proceeds of approximately $23,204,964.

Administration

We have entered into an administration agreement with our Administrator (as amended and restated, the “Administration Agreement”) pursuant to which our Administrator performs certain administrative functions on our behalf.

We compensate our Administrator by payment of service fees approved by our independent directors which will reimburse the Administrator for our allocable portion of its overhead and other expenses incurred in performing its obligations under the Administration Agreement, including rent and our allocable portion of the cost of our chief executive officer, chief compliance officer and chief financial officer and their respective staffs. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

About Our Adviser

Prior to the Merger, Triton Pacific Adviser, LLC served as our investment adviser (the “Former Adviser”). Following the Merger, Prospect Flexible Income Management, LLC serves as our investment adviser. Our Adviser is registered as an investment adviser under the Advisers Act and provides services to us pursuant to the terms of an investment advisory agreement between us and our Adviser, or the Investment Advisory Agreement. Our Adviser’s investment activities are led by a team of investment professionals from the investment and operations team of Prospect Capital Management. Our Adviser’s investment professionals have significant experience and an extensive track record of investing in companies, managing high-yielding debt and equity investments in infrastructure companies and have developed an expertise in using all levels of a firm’s capital structure to produce income-generating investments, while focusing on risk management. Such parties also have extensive knowledge of the managerial, operational and regulatory requirements of publicly traded investment companies. Our Adviser does not currently have employees, but has access to certain investment, finance, accounting, legal and administrative personnel of Prospect Capital Management and Prospect Administration and may retain additional personnel as our activities expand. In particular, certain personnel of Prospect Capital Management will be made available to our Adviser to assist it in managing our portfolio and operations, provided that they are supervised at all times by our Adviser’s management team.

M. Grier Eliasek, the current President and Chief Operating Officer of our Adviser, also serves as our Chairman, Chief Executive Officer and President. Mr. Eliasek has substantial investment and portfolio management experience. Mr. Eliasek served as the Chairman, Chief Executive Officer and President of PWAY until its merger with us and is the current President, Co-Founder and Chief Operating Officer of Prospect Capital Corporation, a BDC that is listed for trading on the Nasdaq Stock Market that had total assets of approximately $5.8 billion as of June 30, 2019. Mr. Eliasek is also the current Chief Executive Officer and President of Priority Income Fund, Inc., an externally managed, non-diversified, closed-end management investment company that invests primarily in senior secured loans, including via SSN investments, of companies whose debt is rated below investment grade or, in limited circumstances, unrated.

Our board of directors includes a majority of independent directors and oversees and monitors the activities of our Adviser as well as our investment portfolio and performance, and annually reviews the compensation paid to our Adviser. See “—Management’s Discussion and Analysis of Financial Condition and Results of Operations” below. In addition to managing our portfolio, our Adviser provides on our behalf managerial assistance to those of our portfolio companies to which we are required to provide

such assistance. We have the right to terminate the Investment Advisory Agreement upon 60 days’ written notice to our Adviser, and our Adviser has the right to terminate the Investment Advisory Agreement upon 120 days’ written notice to us.

Employees

We do not currently have any employees. The services necessary for the operation of our business will be provided to us by investment professionals and personnel made available to our Adviser from Prospect Capital Management and by the officers and the employees of the Administrator pursuant to the terms of the Investment Advisory Agreement and the Administration Agreement, respectively. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Corporate Information

Our executive offices are located at 10 East 40th Street, 42nd Floor, New York, NY 10016 and our telephone number is (212) 448-0702.

Available Information

As required because of our election of BDC status, we will file annual, quarterly and current reports on Forms 10-K, 10-Q and 8-K, respectively, proxy statements and other reports required by the federal securities laws with the SEC ~~adopts implementing rules.~~

via the SEC’s EDGAR filing system. These reports will be available upon filing on the SEC’s website at www.sec.gov. These reports will also be available on our website at www.flexbdc.com. You may access and print all documents provided through this service.

Material U.S. Federal Income Tax ~~Status~~

Considerations

The following discussion is a general summary of the material U.S. federal income tax considerations applicable to us and to an investment in our shares. This summary does not purport to be a complete description of the income tax considerations applicable to us or our investors on such an investment. For example, we have not described tax consequences that we assume to be generally known by investors or certain considerations that may be relevant to certain types of holders subject to special treatment under U.S. federal income tax laws, including stockholders subject to the alternative minimum tax, tax-exempt organizations, insurance companies, dealers in securities, pension plans and trusts, financial institutions, U.S. stockholders (as defined below) whose functional currency is not the U.S. dollar, persons who mark-to-market our shares and persons who hold our shares as part of a “straddle,” “hedge” or “conversion” transaction. This summary assumes that investors hold our common stock as capital assets (within the meaning of the Code). The discussion is based upon the Code, Treasury regulations, and administrative and judicial interpretations, each as of the date of this annual report on Form 10-K and all of which are subject to change, possibly retroactively, which could affect the continuing validity of this discussion. We have ~~elected to be~~not sought and will not seek any ruling from the Internal Revenue Service, or the IRS, regarding this offering. This summary does not discuss any aspects of U.S. estate or gift tax or foreign, state or local tax. It does not discuss the special treatment under U.S. federal income tax laws that could result if we invested in tax-exempt securities or certain other investment assets.

For purposes of our discussion, a “U.S. stockholder” means a beneficial owner of shares of our common stock that is for U.S. federal income tax purposes:

a citizen or individual resident of the United States;

a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any state thereof or the District of Columbia;

an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

a trust if (1) a U.S. court is able to exercise primary supervision over the administration of such trust and ~~intend~~one or more U.S. persons have the authority to ~~qualify annually thereafter,~~control all substantial decisions of the trust or (2) it has a valid election in place to be treated as a U.S. person.

For purposes of our discussion, a “Non-U.S. stockholder” means a beneficial owner of shares of our common stock that is neither a U.S. stockholder nor a partnership (including an entity treated as a partnership for U.S. federal income tax purposes).

If a partnership (including an entity treated as a partnership for U.S. federal income tax purposes) holds shares of our common stock, the tax treatment of a partner or member of the partnership will generally depend upon the status of the partner and the activities of the partnership. A prospective stockholder that is a partner in a partnership holding shares of our common stock should consult his, her or its tax advisors with respect to the purchase, ownership and disposition of shares of our common stock.

Tax matters are very complicated and the tax consequences to an investor of an investment in our shares will depend on the facts of his, her or its particular situation. We encourage investors to consult their own tax advisors regarding the specific consequences of such an investment, including tax reporting requirements, the applicability of U.S. Federal, state, local and foreign tax laws, eligibility for the benefits of any applicable tax treaty and the effect of any possible changes in the tax laws.

Election to be Taxed as a RIC

We have elected to be taxed as a RIC under Subchapter M of the Code. As a RIC, we generally will not have to pay corporate-level U.S. federal income taxes on any ~~ordinary~~ income ~~or capital gain~~ that we distribute to our stockholders from our tax earnings and profits. To continue to qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements (as described below). In addition, in order to obtain RIC tax treatment, we must distribute to our stockholders, for each taxable year, at least 90% of our “investment company taxable income,” which is generally our net ordinary income plus the excess, if any, of realized net short-term capital gain over realized net longterm capital loss, or the Annual Distribution Requirement. Even if we qualify as a RIC, we generally will be subject to corporate-level U.S. federal income tax on our undistributed taxable income and could be subject to U.S. federal excise, state, local and foreign taxes. ~~To obtain~~

Taxation as a RIC

Provided that we continue to qualify as a RIC and ~~maintain our RIC~~satisfy the Annual Distribution Requirement, we will not be subject to U.S. federal income tax ~~treatment, we must meet specified source-of-income and asset diversification requirements and distribute annually at least 90%~~on the portion of our ~~ordinary~~investment company taxable income and net ~~short-term~~capital gain (which we define as net long-term capital gain in excess of net ~~long-term~~short-term capital ~~loss, if any. See “Material~~loss) that we timely distribute to stockholders. We will be subject to U.S. ~~Federal Income Tax Considerations.”~~

~~License Agreement~~

federal income tax at the regular corporate rates on any income or capital gain not distributed (or deemed distributed) to our

stockholders.

We ~~have entered into~~will be subject to a ~~license agreement with Triton Pacific Group, Inc. pursuant~~4% nondeductible U.S. federal excise tax on certain undistributed income of RICs unless we distribute in a timely manner an amount at least equal to the sum of (1) 98% of our ordinary income for each calendar year, (2) 98.2% of our capital gain net income for the one-year period ending October 31 in that calendar year and (3) any income recognized, but not distributed, in preceding years and on which ~~it has agreed~~we paid no U.S. federal income tax. We generally will endeavor in each taxable year to ~~grant us~~avoid any U.S. federal excise tax on our earnings.

In order to qualify as a ~~non-exclusive, royalty-free license~~RIC for U.S. federal income tax purposes, we must, among other things:

qualify to ~~use~~be regulated as a BDC or be registered as a management investment company under the ~~name and brand “Triton Pacific”, its related trademarks and other proprietary property. Under this agreement, we will have a right to use~~1940 Act;

meet the ~~“Triton Pacific” name and brand, for so long as~~Annual Distribution Requirement;

derive in each taxable year at least 90% of our ~~Adviser or one of its affiliates remains our investment adviser. Other than~~gross income from dividends, interest, payments with respect to ~~this limited license, we will have no legal right~~certain securities loans, gains from the sale or other disposition of stock or other securities or currencies or other income derived with respect to our business of investing in such stock, securities or currencies and net

income derived from an interest in a “gqualified publicly-traded partnership”h (as defined in the ~~“Triton Pacific” name~~Code), or the 90% Income Test; and ~~brand. Triton Pacific Group, Inc. is controlled by Craig Faggen, its president and~~

diversify our ~~chairman of the board and chief executive officer.~~

~~Employees~~

We do not currently have any employees. Each of our executive officers is a principal, officer or employee of Triton Pacific Adviser (or an affiliate), which manages and oversees our investment operations.

~~Corporate Information~~

~~Our executive offices are located at 6701 Center Drive West, Suite 1450, Los Angeles, CA 90045 and our telephone number is (310) 943-4990.~~

~~Both our quarterly reports on Form 10-Q and our annual reports on Form 10-K will be made available on our website at~~~~www.tritonpacificpe.com~~holdings so that at the end of each ~~fiscal~~ quarter of the taxable year:

◦

at least 50% of the value of our assets consists of cash, cash equivalents, U.S. Government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer (which for these purposes includes the equity securities of a “qualified publicly-traded partnership”); and

◦

no more than 25% of the value of our assets is invested in the securities, other than U.S. Government securities or securities of other RICs, (i) of one issuer (ii) of two or more issuers that are controlled, as determined under applicable tax rules, by us and that are engaged in the same or similar or related trades or businesses or (iii) of one or more “qualified publicly-traded partnerships,” or the Diversification Tests.

To the extent that we invest in entities treated as partnerships for U.S. federal income tax purposes (other than a “qualified publicly-traded partnership”h), we generally must include the items of gross income derived by the partnerships for purposes of the 90% Income Test, and ~~fiscal~~the income that is derived from a partnership (other than a “qualified publicly-traded partnership”h) will be treated as qualifying income for purposes of the 90% Income Test only to the extent that such income is attributable to items of income of the partnership which would be qualifying income if realized by us directly.

In order to meet the 90% Income Test, we may establish one or more special purpose corporations to hold assets from which we do not anticipate earning dividend, interest or other qualifying income under the 90% Income Test. Any investments held through a special purpose corporation would generally be subject to U.S. federal income and other taxes, and therefore we can expect to achieve a reduced after-tax yield on such investments.

We may be required to recognize taxable income in circumstances in which we do not receive a corresponding payment in cash. For example, if we hold debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments with payment-in-kind interest, or issued with warrants, or, in certain cases, with increasing interest rates), we must include in income each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. We may also have to include in income other amounts that we have not yet received in cash, such as deferred loan origination fees that are paid after origination of the loan or are paid in non-cash compensation such as warrants or stock. We anticipate that a portion of our income may constitute original issue discount or other income required to be included in taxable income prior to receipt of cash.

Because any original issue discount or other amounts accrued will be included in our investment company taxable income for the year of the accrual, we may be required to make a distribution to our stockholders in order to satisfy the Annual Distribution Requirement, even though we will not have received any corresponding cash amount. As a result, we may have difficulty meeting the annual distribution requirement necessary to obtain and maintain RIC tax treatment under the Code. We may have to sell some of our investments at times and/or at prices we would not consider advantageous, raise additional debt or equity capital or forgo new investment opportunities for this purpose. If we are not able to obtain cash from other sources, we may fail to qualify for RIC tax treatment and thus become subject to corporate-level U.S. federal income tax.

Furthermore, a company may face financial difficulty that requires us to work-out, modify or otherwise restructure our investment in the company. Any such restructuring may result in unusable capital losses and future non-cash income. Any restructuring may also result in our recognition of a substantial amount of non-qualifying income for purposes of the 90% Income Test.

Gain or loss realized by us from warrants acquired by us as well as any loss attributable to the lapse of such warrants generally will be treated as capital gain or loss. Such gain or loss generally will be long-term or short-term, depending on how long we held a particular warrant.

Our investment in non-U.S. securities may be subject to non-U.S. income, withholding and other taxes. In that case, our yield on those securities would be decreased. Stockholders will generally not be entitled to claim a credit or deduction with respect to non-U.S. taxes paid by us.

We anticipate that the SSN vehicles in which we invest may constitute PFICs. Because we acquire shares in PFICs (including equity tranche investments in SSN vehicles that are PFICs), we may be subject to U.S. federal income tax on a portion of any “excess distribution” or gain from the disposition of such shares even if such income is distributed as a taxable dividend by us to our stockholders. Additional charges in the nature of interest may be imposed on us in respect of deferred taxes arising from such distributions or gains. If we invest in a PFIC and elect to treat the PFIC as a “qualified electing fund” under the code, or QEF, in lieu of the foregoing requirements, we will be required to include in income each year a portion of the original earnings and net capital gain of the QEF, even if such income is not distributed to it. Alternatively, we can elect to mark-to-market at the end of each taxable year our shares in a PFIC; in this case, we will recognize as ordinary income any increase in the value of such shares and as ordinary loss any decrease in such value to the extent it does not exceed prior increases included in income. Under either election, we may be required to recognize in a year income in excess of our distributions from PFICs and our proceeds from dispositions of PFIC stock during that year, and such income will nevertheless be subject to the Annual Distribution Requirement and will be taken into account for purposes of the 4% excise tax.

If we hold more than 10% of the shares in a foreign corporation that is treated as a controlled foreign corporation, or “CFC,” (including equity tranche investments in a SSN vehicle treated as CFC) we may be treated as receiving a deemed distribution (taxable as ordinary income) each year from such foreign corporation in an amount equal to our pro rata share of the corporation’s income for the tax year (including both ordinary earnings and capital gains), whether or not the corporation makes an actual distribution during such year. This deemed distribution is required to be included in the income of a U.S. Shareholder of a CFC regardless of whether the shareholder has made a QEF election with respect to such CFC. In general, a foreign corporation will be classified as a CFC if more than 50% of the shares of the corporation, measured by reference to combined voting power or value, is owned (directly, indirectly or by attribution) by U.S. Shareholders. A “U.S. Shareholder,” for this purpose, is any U.S. person that possesses (actually or constructively) 10% or more of the combined voting power of all classes of shares of a corporation. If we are treated as receiving a deemed distribution from a CFC, we will be required to include such distribution in our investment company taxable income regardless of whether we receive any actual distributions from such CFC, and we must distribute such income to satisfy the Annual Distribution Requirement and the Excise Tax Avoidance Requirement.

Although the Code generally provides that the income inclusions from a QEF or a CFC will be “good income” for purposes of the 90% Income Test to the extent that the QEF or the CFC distribute such income to us in the same taxable year to which the income is included in our income, the Code does not specifically provide whether these income inclusions would be “good income”

for this 90% Income Test if we do not receive distributions from the QEF or CFC during such taxable year. As a result, if the SSNs in which we invest do not distribute all of their earnings and profits in the current year, we may have difficulty qualify as a RIC. The IRS has issued a series of private rulings in which it has concluded that all income inclusions from a QEF or a CFC included in a RIC’s gross income would constitute “good income” for purposes of the 90% Income Test whether or not distributed currently. Although such rulings are not binding on the IRS except with respect to the taxpayers to whom such rulings were issued, under current law, we believe that the income inclusions from an SSN that is a QEF or a CFC would be “good income” for purposes of the 90% Income Test whether or not we receive a cash distribution from such SSNs in the same year as the required income inclusion. However, no guarantee can be made that the IRS would not assert that such income does not constitute “good income” for purposes of the 90% Income Test to the extent that we do not receive timely distributions of such income from the SSN. If such income were not considered “good income” for purposes of the 90% Income Test, we may have difficulty qualifying as a RIC.

The IRS and U.S. Treasury Department have issued proposed regulations that provide that the income inclusions from a QEF or a CFC would not be good income for purposes of the 90% Income Test unless we receive a cash distribution from such entity in the same year attributable to the included income. If these regulations are finalized, we will carefully monitor our investments in SSNs to avoid disqualification as a RIC.

FATCA generally imposes a withholding tax of 30% on payments of U.S. source interest and dividends to certain non-U.S. entities, including certain non-U.S. financial institutions and investment funds, unless such non-U.S. entity complies with certain reporting requirements regarding its United States account holders and its United States owners. While existing U.S. Treasury regulations would also require withholding on payments of the gross proceeds from the sale of any property that could produce U.S. source interest and dividends, the U.S. Treasury Department has indicated in subsequent proposed regulations its intent to eliminate this requirement. Most SSN vehicles in which we invest will be treated as non-U.S. financial entities for this purpose, and therefore will be required to comply with these reporting requirements to avoid the 30% withholding. If an SSN vehicle in which we invest fails to properly comply with these reporting requirements, it could reduce the amounts available to distribute to equity and junior debt holders in such SSN vehicle, which could materially and adversely affect our operating results and cash flows.

Under Section 988 of the Code, gain or loss attributable to fluctuations in exchange rates between the time we accrue income, expenses, or other liabilities denominated in a foreign currency and the time we actually collect such income or pay such expenses or liabilities are generally treated as ordinary income or loss. Similarly, gain or loss on foreign currency forward contracts and the disposition of debt denominated in a foreign currency, to the extent attributable to fluctuations in exchange rates between the acquisition and disposition dates, are also treated as ordinary income or loss.

Although we do not presently expect to do so, we are authorized to borrow funds and to sell assets in order to satisfy distribution requirements. However, under the 1940 Act, we are not permitted to make distributions to our stockholders while our debt obligations and other senior securities are outstanding unless certain “asset coverage” tests are met. See “Regulation-Senior Securities.” Moreover, our ability to dispose of assets to meet our distribution requirements may be limited by (1) the illiquid nature of our portfolio and/or (2) other requirements relating to our status as a RIC, including the Diversification Tests. If we dispose of assets in order to meet the Annual Distribution Requirement or to avoid the excise tax, we may make such dispositions at times that, from an investment standpoint, are not advantageous.

If we fail to satisfy the Annual Distribution Requirement or otherwise fail to qualify as a RIC in any taxable year, we will be subject to tax in that year on all of our taxable income, regardless of whether we make any distributions to our stockholders. In that case, all of such income will be subject to corporate-level U.S. federal income tax, reducing the amount available to be distributed to our stockholders. See “-Failure To Obtain RIC Tax Treatment.”

As a RIC, we are not allowed to carry forward or carry back a net operating loss for purposes of computing our investment company taxable income in other taxable years. U.S. federal income tax law generally permits RICs to carry forward net capital losses indefinitely. However, future transactions we engage in may cause our ability to use any capital loss carryforwards, and unrealized losses once realized, to be limited under Section 382 of the Code.

Certain of our investment practices may be subject to special and complex U.S. federal income tax provisions that may, among other things, (i) disallow, suspend or otherwise limit the allowance of certain losses or deductions, (ii) convert lower taxed long-term capital gain and qualified dividend income into higher taxed short-term capital gain or ordinary income, (iii) convert an ordinary loss or a deduction into a capital loss (the deductibility of which is more limited), (iv) cause us to recognize income or gain without a corresponding receipt of cash, (v) adversely affect the time as to when a purchase or sale of stock or securities is deemed to occur, (vi) adversely alter the characterization of certain complex financial transactions, and (vii) produce income that will not be qualifying income for purposes of the 90% Income Test. We will monitor our transactions and may make certain tax elections in order to mitigate the effect of these provisions.

We may invest in preferred securities or other securities the U.S. federal income tax treatment of which may not be clear or may be subject to recharacterization by the IRS. To the extent the U.S. federal income tax treatment of such securities or the income from such securities differs from the expected tax treatment, it could affect the timing or character of income recognized, requiring

us to purchase or sell securities, or otherwise change our portfolio, in order to comply with the tax rules applicable to RICs under the Code.

Taxation of U.S. Stockholders

Whether an investment in shares of our common stock is appropriate for a U.S. stockholder will depend upon that person’s particular circumstances. An investment in shares of our common stock by a U.S. stockholder may have adverse tax consequences. The following summary generally describes certain U.S. federal income tax consequences of an investment in shares of our common stock by taxable U.S. stockholders and not by U.S. stockholders that are generally exempt from U.S. federal income taxation. U.S. stockholders should consult their own tax advisors before making an investment in our common stock.

Distributions by us generally are taxable to U.S. stockholders as ordinary income or capital gains. Distributions of our “investment company taxable income” (which is generally our net ordinary income plus realized net short-term capital gains in excess of realized net long-term capital losses) will be taxable as ordinary income to U.S. stockholders to the extent of our current or accumulated earnings and profits, whether paid in cash or reinvested in additional common stock. To the extent such distributions paid by us to non-corporate stockholders (including individuals) are attributable to dividends from U.S. corporations and certain qualified foreign corporations, such distributions, or, Qualifying Dividends, may be eligible for a maximum tax rate of 20%. In this regard, it is anticipated that distributions paid by us will generally not be attributable to dividends and, therefore, generally will not qualify for the preferential maximum rate applicable to Qualifying Dividends or for the corporate dividends received deduction. Distributions of our net capital gains (which is generally our realized net long-term capital gains in excess of realized net short-term capital losses) properly designated by us as “capital gain dividends” will be taxable to a U.S. stockholder as long-term capital gains that are currently generally taxable at a maximum rate of 20% in the case of individuals, trusts or estates, regardless of a U.S. stockholder’s holding period for his, her or its common stock and regardless of whether paid in cash or reinvested in additional common stock. Distributions in excess of our earnings and profits first will reduce a U.S. stockholder’s adjusted tax basis in such stockholder’s common stock and, after the adjusted basis is reduced to zero, will constitute capital gains to such U.S. stockholder.

We may decide to retain some or all of our long-term capital gain, but designate the retained amount as a “deemed distribution.” In that case, among other consequences, we will pay tax on the retained amount, each U.S. stockholder will be required to include his, her or its proportionate share of the deemed distribution in income as if it had been actually distributed to the U.S. stockholder, and the U.S. stockholder will be entitled to claim a credit equal to his, her or its allocable share of the tax paid thereon by us. The amount of the deemed distribution net of such tax will be added to the U.S. stockholder’s tax basis for his, her or its common stock. If the amount of tax that individual stockholders will be treated as having paid and for which they will receive a credit exceeds the tax they owe on the retained net capital gain, such excess generally may be claimed as a credit against the U.S. stockholder’s other U.S. federal income tax obligations or may be refunded to the extent it exceeds a U.S. stockholder’s liability for U.S. federal income tax. A U.S. stockholder that is not subject to U.S. federal income tax or otherwise required to file a U.S. federal income tax return would be required to file a U.S. federal income tax return on the appropriate form in order to claim a refund for the taxes we paid. In order to utilize the deemed distribution approach, we must provide written notice to our stockholders prior to the expiration of 60 days after the close of the relevant taxable year. We cannot treat any of our investment company taxable income as a “deemed distribution.”

For purposes of determining (1) whether the Annual Distribution Requirement is satisfied for any year and (2) the amount of capital gain dividends paid for that year, we may, under certain circumstances, elect to treat a distribution that is paid during the following taxable year as if it had been paid during the taxable year in question. If we make such an election, the U.S. stockholder will still be treated as receiving the distribution in the taxable year in which the distribution is made. However, any distribution declared by us in October, November or December of any calendar year, payable to U.S. stockholders of record on a specified date in any such month and actually paid during January of the following year, will be treated as if it had been received by our U.S. stockholders on December 31 of the year in which the distribution was declared.

We may distribute taxable distributions that are payable in cash or shares of our common stock at the election of each U.S. stockholder. Under certain applicable IRS guidance, distributions by publicly offered RICs that are payable in cash or in shares of stock at the election of stockholders are treated as taxable distributions. The IRS has published a ruling indicating that this rule will apply where the total amount of cash to be distributed is not less than 20% of the total distribution. Under this ruling, if too many stockholders elect to receive their distributions in cash, the cash available for distribution must be allocated among the stockholders electing to receive cash (with the balance of the distribution paid in stock). In no event will any ~~interim reports~~stockholder electing to receive cash, receive less than the lesser of (a) the portion of the distribution such stockholder has elected to receive in cash or (b) an amount equal to his, her or its entire distribution times the percentage limitation on ~~Form 8-K~~cash available for distribution. If we decide to make any distributions consistent with this ruling that are payable in part in our stock, taxable U.S. stockholders receiving such distributions will be required to include the full amount of the distribution (whether received in cash, our stock, or a combination thereof) as ordinary income (or as long-term capital gain to the extent such distribution is properly reported as a capital gain distribution) to the extent of our current and accumulated earnings and profits for U.S. federal income tax purposes. As a result, a U.S. stockholder may be required to pay tax with respect to such distributions in excess of any cash received. If a U.S. stockholder

sells the stock it receives as a distribution in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the distribution, depending on the market price of our stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such distributions, including in respect of all or a portion of such distribution that is payable in stock. In addition, if a significant number of our stockholders determine to sell shares of our stock in order to pay taxes owed on distributions, it may put downward pressure on the trading price of our stock.

If an investor purchases shares of our common stock shortly before the record date of a distribution, the price of the shares will include the value of the distribution and the investor will be subject to U.S. federal income tax on the distribution even though it represents a return of his, her or its investment.

A U.S. stockholder generally will recognize taxable gain or loss if the stockholder sells or otherwise disposes of his, her or its shares of our common stock. The amount of gain or loss will be measured by the difference between such stockholder’s adjusted tax basis in the common stock sold and the amount of the proceeds received in exchange. Any gain arising from such sale or disposition generally will be treated as long-term capital gain or loss if the stockholder has held his, her or its shares for more than one year. Otherwise, it will be classified as short-term capital gain or loss. However, any capital loss arising from the sale or disposition of shares of our common stock held for six months or less will be treated as long-term capital loss to the extent of the amount of capital gain dividends received, or undistributed capital gain deemed received, with respect to such shares. In addition, all or a portion of any loss recognized upon a disposition of shares of our common stock may be disallowed if other substantially identical shares are purchased (whether through reinvestment of distributions or otherwise) within 30 days before or after the disposition. The ability to otherwise deduct capital loss may be subject to other limitations under the Code.

In general, individual U.S. stockholders currently are generally subject to a maximum U.S. federal income tax rate of 20% on their net capital gain (i.e., the excess of realized net long-term capital gains over realized net short-term capital losses), including any long-term capital gain derived from an investment in our shares. Such rate is lower than the maximum rate on ordinary income currently payable by individuals. An additional 3.8% Medicare tax is imposed on certain net investment income (including ordinary dividends and capital gain distributions received from us and net gains from redemptions or other taxable dispositions of our common stock) of U.S. individuals, estates and trusts to the extent that such person’s “modified adjusted gross income” (in the case of an individual) or “adjusted gross income” (in the case of an estate or trust) exceeds certain threshold amounts. Corporate U.S. stockholders currently are subject to U.S. federal income tax on net capital gain at the maximum 21% rate also applied to ordinary income. Non-corporate U.S. stockholders with net capital losses for a year (i.e., capital losses in excess of capital gains) generally may deduct up to $3,000 of such losses against their ordinary income each year; any net capital losses of a non-corporate U.S. stockholder in excess of $3,000 generally may be carried forward and used in subsequent tax years as provided in the Code. Corporate U.S. stockholders generally may not deduct any net capital losses for a year, but may carry back such losses for three years or carry forward such losses for five years.

A “publicly offered regulated investment company” is a regulated investment company whose shares are either (i) continuously offered pursuant to a public offering, (ii) regularly traded on an established securities market or (iii) held by at least 500 persons at all times during the taxable year. If we are not a publicly offered regulated investment company for any period, a non-corporate stockholder’s pro rata portion of our affected expenses, including our management fees, will be treated as an additional distribution to the U.S. stockholder and will be deductible by such stockholder only to the extent permitted under the limitations described below. For non-corporate U.S. stockholders, including individuals, trusts, and estates, significant limitations generally apply to the deductibility of certain expenses of a non-publicly-offered regulated investment company, including advisory fees. In particular, these expenses, referred to as miscellaneous itemized deductions, are deductible only to individuals to the extent they exceed 2% of such a stockholder’s adjusted gross income, and are not deductible for AMT purposes. While we anticipate that we ~~file~~will constitute a publicly offered regulated investment company for our current taxable year, there can be no assurance that we will in fact so qualify for any of our taxable years.

We or the applicable withholding agent will send to each of our U.S. stockholders, as promptly as possible after the end of each calendar year (but no later than 75 days after the end of each calendar year), a notice detailing, on a per share and per distribution basis, the amounts includible in such U.S. stockholder’s taxable income for such year as ordinary income and as long-term capital gain as well as such other information about us necessary for the preparation of our U.S. stockholders’ federal income tax returns. In addition, the U.S. federal tax status of each year’s distributions generally will be reported to the IRS. Distributions paid by us generally will not be eligible for the dividends-received deduction or the preferential tax rate applicable to qualifying dividends. Distributions may also be subject to additional state, local and foreign taxes depending on a U.S. stockholder’s particular situation.

We may be required to withhold U.S. federal income tax, or backup withholding, from ~~time~~all taxable distributions to ~~time~~any noncorporate U.S. stockholder (1) who fails to furnish us with a correct taxpayer identification number or a certificate that such stockholder is exempt from backup withholding or (2) with respect to whom the IRS notifies us that such stockholder has failed to properly report certain interest and distribution income to the IRS and to respond to notices to that effect. An individual’s taxpayer identification number is his or her social security number. Backup withholding tax is not an additional tax, and any amount withheld

may be refunded or credited against the U.S. stockholder’s U.S. federal income tax liability, provided that proper information is timely provided to the IRS.

Under U.S. Treasury regulations, if a U.S. stockholder recognizes a loss with respect to shares of our stock of $2 million or more for a non-corporate U.S. stockholder or $10 million or more for a corporate stockholder in any single taxable year (or a greater loss over a combination of years), the stockholder must file with the ~~SEC. These reports~~IRS a disclosure statement on IRS Form 8886 (or successor form). Direct stockholders of portfolio securities in many cases are exempted from this reporting requirement, but under current guidance, stockholders of a RIC are not exempted. Future guidance may extend the current exception from this reporting requirement to stockholders of most or all RICs. The fact that a loss is reportable under these regulations does not affect the legal determination of whether the taxpayer’s treatment of the loss is proper. Significant monetary penalties apply to a failure to comply with this reporting requirement. States may also have a similar reporting requirement. U.S. stockholders should consult their own tax advisors to determine the applicability of these regulations in light of their individual circumstances.

Taxation of Non-U.S. Stockholders

This subsection applies to non-U.S. stockholders, only. If you are not a non-U.S. stockholder, this subsection does not apply to you and you should refer to “Taxation of U.S. Stockholders,” above.

Whether an investment in our shares is appropriate for a Non-U.S. stockholder will depend upon that person’s particular circumstances. An investment in our shares by a Non-U.S. stockholder may have adverse tax consequences. Non-U.S. stockholders should consult their tax advisors before investing in our common stock.

Distributions of our investment company taxable income to Non-U.S. stockholders (including interest income and realized net short-term capital gains in excess of realized long-term capital losses, which generally would be free of withholding if paid to Non-U.S. stockholders directly) will be subject to withholding of U.S. federal tax at a 30% rate (or lower rate provided by an applicable treaty) to the extent of our current and accumulated earnings and profits unless an applicable exception applies. No withholding is required and the distributions generally are not subject to U.S. federal income tax if (i) the distributions are properly reported to our stockholders as “interest-related dividends” or “short-term capital gain dividends,” (ii) the distributions were derived from sources specified in the Code for such dividends and (iii) certain other requirements were satisfied. No assurance can be given as to whether any of our distributions will be reported as eligible for this exemption from withholding.

If the distributions are effectively connected with a U.S. trade or business of the Non-U.S. stockholder, we will not be required to withhold U.S. federal tax if the Non-U.S. stockholder complies with applicable certification and disclosure requirements, although the distributions will be subject to U.S. federal income tax at the rates applicable to U.S. persons. (Special certification requirements apply to a Non-U.S. stockholder that is a foreign partnership or a foreign trust, and such entities are urged to consult their own tax advisors.)

Actual or deemed distributions of our net capital gains to a Non-U.S. stockholder, and gains realized by a Non-U.S. stockholder upon the sale or other disposition of our common stock, will not be subject to U.S. federal withholding tax and generally will not be subject to U.S. federal income tax unless (i) the distributions or gains, as the case may be, are effectively connected with a U.S. trade or business of the Non-U.S. stockholder and, if an income tax treaty applies, are attributable to a permanent establishment maintained by the Non-U.S. stockholder in the United States or (ii) in the case of an Non-U.S. individual stockholder, the stockholder is present in the United States for a period or periods aggregating 183 days or more during the year of the sale or the receipt of the distributions or gains and certain other conditions are met.

If we distribute our net capital gains in the form of deemed rather than actual distributions, a Non-U.S. stockholder will be entitled to a U.S. federal income tax credit or tax refund equal to the stockholder’s allocable share of the tax we pay on the capital gains deemed to have been distributed. In order to obtain the refund, the Non-U.S. stockholder must obtain a U.S. taxpayer identification number and file a U.S. federal income tax return even if the Non-U.S. stockholder would not otherwise be required to obtain a U.S. taxpayer identification number or file a U.S. federal income tax return. For a corporate Non-U.S. stockholder, distributions (both actual and deemed), and gains realized upon the sale of our common stock that are effectively connected to a U.S. trade or business may, under certain circumstances, be subject to an additional “branch profits tax” at a 30% rate (or at a lower rate if provided for by an applicable treaty). Accordingly, investment in the shares may not be appropriate for a Non-U.S. stockholder.

A Non-U.S. stockholder who is a non-resident alien individual, and who is otherwise subject to U.S. federal withholding tax, may be subject to information reporting and backup withholding of U.S. federal income tax on dividends unless the Non-U.S. stockholder provides us or the dividend paying agent with a U.S. nonresident withholding tax certificate (e.g. an IRS Form W-8BEN, IRS Form W-8BEN-E or an acceptable substitute form) or otherwise meets documentary evidence requirements for establishing that it is a Non-U.S. stockholder or otherwise establishes an exemption from backup withholding.

Legislation commonly referred to as the “Foreign Account Tax Compliance Act,” or “FATCA,” generally imposes a 30% withholding tax on payments of certain types of income to foreign financial institutions, or “FFIs” unless such FFIs either (i) enter into an agreement with the U.S. Treasury to report certain required information with respect to accounts held by U.S. persons (or held by foreign entities that have U.S. persons as substantial owners) or (ii) reside in a jurisdiction that has entered into an intergovernmental agreement, or “IGA” with the United States to collect and share such information and are in compliance with the terms of such IGA and any enabling legislation or regulations. The types of income subject to the tax include U.S. source interest and dividends. While existing U.S. Treasury regulations would also require withholding on payments of the gross proceeds from the sale of any property that could produce U.S. source interest and dividends, the U.S. Treasury Department has indicated in subsequent proposed regulations its intent to eliminate this requirement. The information required to be reported includes the identity and taxpayer identification number of each account holder that is a U.S. person and transaction activity within the holder’s account. In addition, subject to certain exceptions, this legislation also imposes a 30% withholding on payments to foreign entities that are not FFIs unless the foreign entity certifies that it does not have a greater than 10% U.S. owner or provides the withholding agent with identifying information on each greater than 10% U.S. owner. Depending on the status of a Non-U.S. stockholder and the status of the intermediaries through which they hold their shares, Non-U.S. stockholders could be subject to this 30% withholding tax with respect to distributions on their shares and potentially proceeds from the sale of their shares. Under certain circumstances, a Non-U.S. stockholder might be eligible for refunds or credits of such taxes. Non-U.S. stockholders may also be ~~available~~subject to U.S. estate tax with respect to their investment in our common stock. Non-U.S. persons should consult their own tax advisors with respect to the U.S. federal income tax and withholding tax, and state, local and foreign tax consequences of an investment in the shares.

Failure to Maintain RIC Tax Treatment

If we were unable to maintain tax treatment as a RIC, we would be subject to corporate-level U.S. federal income tax on all of our taxable income at regular corporate rates. We would not be able to deduct distributions to stockholders, nor would they be required to be made. Distributions, including distributions of net long term capital gain, would generally be taxable to our stockholders as ordinary dividend income to the ~~SEC’s website~~extent of our current and accumulated earnings and profits. Subject to certain limitations under the Code, corporate distributees would be eligible for the dividends-received deduction. Distributions in excess of our current and accumulated earnings and profits would be treated first as a return of capital to the extent of a stockholder’s tax basis, and any remaining distributions would be treated as a capital gain.

If we fail to meet the RIC requirements for more than two consecutive years and then seek to re-qualify as a RIC, we would be required to recognize gain to the extent of any unrealized appreciation in our assets unless we made a special election to pay corporate-level U.S. federal income tax on any such unrealized appreciation during the succeeding 5-year period.

Possible Legislative or Other Actions Affecting Tax Considerations

Prospective investors should recognize that the present U.S. federal income tax treatment of an investment in our stock may be modified by legislative, judicial or administrative action at~~www.sec.gov~~.

any time, and that any such action may affect investments and commitments previously made. The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process any by the IRS and the U.S. Treasury Department, resulting in revisions of regulations and revised interpretations of established concepts as well as statutory changes. Revisions in U.S. federal tax laws and interpretations thereof could adversely affect the tax consequences of an investment in our stock.

The discussion set forth herein does not constitute tax advice, and potential investors should consult their own tax advisors concerning the tax considerations relevant to their particular situation.

Item 1A. Risk Factors

Investing in our common stock involves a number of significant risks. In addition to the other information contained in this ~~prospectus,~~annual report on Form 10-K, you should consider carefully the following information before making an investment in us. The following should not be considered a complete summary of all the risks associated with an investment, but if any of the following events occur, our business, financial condition and results of operations could be materially and adversely affected. In such case, the net asset value per share of our common stock could decline, and you may lose all or part of your investment.

Risks Relating to Our Business and Structure

~~We have not generated significant income from our investments since our inception.~~

We have only generated minimal income from our investments and are profitable at this time only as a result of our Adviser’s willingness to reimburse a portion of our expenses pursuant to an expense support and conditional reimbursement agreement. To date, we have only invested in a limited number of portfolio companies and have incurred costs incurred in the development and formation of our business. We do not know whether or when we will generate income from our investments and become profitable. We anticipate that we will continue to incur costs in excess of our income until and unless our investments in portfolio companies are successful. If these investments are not successful, we may never achieve or sustain profitability on a quarterly or annual basis. Our failure to become and remain profitable could impair our ability to raise capital, expand our business, diversify our investments or continue our operations.

Except for the investments described in this annual report on Form 10-K, we have not identified specific investments that we will make with the proceeds of our offering, and you will not have the opportunity to evaluate our future investments prior to purchasing shares of our common stock.

Except for the investments described in this annual report on Form 10-K, neither we nor our Adviser ~~or our Sub-Adviser~~ has identified, made or contracted to make any investments. As a result, you will not be able to evaluate the economic merits, transaction terms or other

financial or operational data concerning our future investments prior to purchasing shares of our common stock. You must rely on our Adviser and our board of directors to implement our investment policies, evaluate our investment opportunities and structure the terms of our investments. Because investors are not able to evaluate our future investments in advance of purchasing shares of our common stock, other than those investments described in this annual report on Form 10-K, our offering may entail more risk than other types of offerings. This may hinder your ability to achieve your own personal investment objectives related to portfolio diversification, risk-adjusted investment returns and other objectives.

We have not established any limit on the amount of funds we may use from available sources, such as borrowings, if any, or proceeds from our offering, to fund distributions (which may reduce the amount of capital we ultimately invest in assets).

For a significant time after the commencement of our offering, a substantial portion of our distributions, if any, will result from expense ~~reimbursements~~waivers from our Adviser, which are subject to repayment by us, ~~within three years. The purpose~~and may also consist, in whole or in part, of ~~this arrangement is to reduce~~a return of capital. In addition, we may fund our ~~operating expenses; to avoid such distributions being characterized as returns of capital for tax purposes and to attempt to ensure that no portionof our~~cash distributions to stockholders from any sources of funds legally available to us, including offering proceeds, and borrowings. If we borrow money to fund cash distributions, the costs of such borrowings will be ~~paid from~~borne by us and, indirectly, by our ~~offering proceeds. Despite this, we may still have distributions which could be characterized as a return of capital for GAAP purposes. Shareholders~~stockholders. Stockholders should understand that any such distributions are not based on our investment performance, and can only be sustained if we achieve positive investment performance in future periods and/or our Adviser continues to make such expense ~~reimbursements. Shareholders~~waivers. Stockholders should also understand that our future repayments ~~will~~may reduce the distributions that ~~they~~stockholders would otherwise receive. There can be no assurance that we will achieve such performance in order to sustain these distributions, or be able to pay distributions at all.

~~Our ability to enter into transactions with our affiliates is restricted.~~

We are prohibited under the Company Act from participating in certain transactions with certain of our affiliates without the prior approval of our independent directors and, in some cases, the SEC. Any person that owns, directly or indirectly, 5% or more of our outstanding voting securities will be deemed to be our affiliate for purposes of the Company Act and we will generally be prohibited from buying or selling any securities (other than our securities) from or to such affiliate, absent the prior approval of our disinterested directors. The Company Act also prohibits certain “joint” transactions with certain of our affiliates, which could include investments in the same companies (whether at the same or different times), without prior approval of our disinterested directors and, in some cases, the SEC. Except under certain circumstances, if a person acquires more than 25% of our voting securities, we are prohibited from buying or selling any security (other than any security of which we are the issuer) from or to such person or certain of that person’s affiliates, or entering into prohibited joint transactions with such persons. Similar restrictions limit our ability to transact business with our officers or directors or their affiliates. As a result of these restrictions, we may be prohibited from buying or selling any security (other than any security of which we are the issuer) from or to any company owned, in whole or in significant part, by a private equity fund managed by our Adviser or its affiliates, which may limit the scope of investment opportunities that would otherwise be available to us without obtaining an exemptive relief order from the SEC. There is no assurance that a satisfactory exemptive relief order from the SEC will be obtained.

A failure on our part to maintain our qualification as a business development company would significantly reduce our operating flexibility.

If we fail to continuously qualify as a business development company, we might become subject to regulation as a registered closed-end investment company under the ~~Company~~1940 Act, which would significantly decrease our operating flexibility. In addition, failure to comply with the requirements imposed on business development companies by the ~~Company~~1940 Act could cause the SEC to bring an enforcement action against us.

For additional information on the qualification requirements of a business development company, see “Business”.

Regulations governing our operation as a business development company and RIC will affect our ability to raise, and the way in which we raise, additional capital or borrow for investment purposes, which may have a negative effect on our growth.

In order to qualify as a RIC for U.S. federal income tax purposes, we must, among other things, satisfy an annual distribution requirement. As a result, in order to fund new investments, we may need to periodically access the capital markets to raise cash. We may do so by issuing “senior securities,” including borrowing money from banks or other financial institutions and issuing preferred stock, up to the maximum amount allowed under the ~~Company~~1940 Act—which allows us to borrow only in amounts such that our asset coverage, as defined in the ~~Company~~1940 Act, equals at least ~~200%~~150% of our gross assets less all of our liabilities not represented by senior securities, immediately after each issuance of senior securities. Our ability to issue different types of securities is also limited. Compliance with these requirements may unfavorably limit our investment opportunities and reduce our ability, in comparison to other companies, to profit from favorable spreads between the rates at which we can borrow and the rates at which we can lend. As a BDC, therefore, we may need to issue equity more frequently than our privately-owned competitors, which may lead to greater stockholder dilution.

If the value of our assets declines, we may be unable to satisfy the asset coverage test, which would prohibit us from making distributions and could prevent us from qualifying as a RIC. If we cannot satisfy the asset coverage test, we may be required to sell a portion of our investments and, depending on the nature of our debt financing, repay a portion of our indebtedness at a time when such sales may be disadvantageous.

If we issue preferred stock, it would rank senior to our common stock in our capital structure and preferred stockholders would have separate voting rights on certain matters and might have other rights, preferences (including as to distributions) and privileges more favorable than those of our common stockholders. The presence of preferred stock could have the effect of delaying or preventing a change in control or other transaction that might provide a premium price of our common stockholders or otherwise be in your best interest. Holders of our common stock would directly or indirectly bear all of the costs associated with offering and servicing any preferred stock that we issue.

We currently do not intend to issue any preferred stock.

We generally are not able to issue or sell our common stock at a price below net asset value per share, which may be a disadvantage as compared with other public companies. We may, however, sell our common stock, or warrants, options or rights to acquire our common stock, at a price below the current net asset value per share of the common stock if our board of directors and independent directors determine that such sale is in our best interests and the best interests of our stockholders, and our stockholders (as well

as those stockholders that are not affiliated with us) approve such sale. In any such case, the price at which our securities are to be issued and sold may not be less than a price that, in the determination of our board of directors, closely approximates the market value of such securities (less any underwriting commission or discount). If our common stock trades at a discount to our net asset value per share, this restriction could adversely affect our ability to raise capital.

We also may make rights offerings to our stockholders at prices less than net asset value per share, subject to applicable requirements of the ~~Company~~1940 Act. If we raise additional funds by issuing more shares of our common stock or issuing senior securities convertible into, or exchangeable for, our common stock, the percentage ownership of our stockholders may decline at that time and our stockholders may experience dilution. Moreover, we can offer no assurance that we will be able to issue and sell additional equity securities in the future on terms favorable to us or at all.

In addition, we may in the future seek to securitize our portfolio securities to generate cash for funding new investments. To securitize loans, we would likely create a wholly-owned subsidiary and contribute a pool of loans to the subsidiary. We would then sell interests in the subsidiary on a non-recourse basis to purchasers and we would retain all or a portion of the equity in the subsidiary. An inability to successfully securitize our loan portfolio could limit our ability to grow our business or fully execute our business strategy and may decrease our earnings, if any. The securitization market is subject to changing market conditions and we may not be able to access this market when we would otherwise deem appropriate. Moreover, the successful securitization of our portfolio might expose us to losses as the residual investments in which we do not sell interests will tend to be those that are riskier and more apt to generate losses. The ~~Company~~1940 Act also may impose restrictions on the structure of any securitization.

A significant portion of our investment portfolio will be recorded at fair value as determined in good faith by our board of directors and, as a result, there could be uncertainty as to the actual market value of our portfolio investments.

Under the ~~Company~~1940 Act, we are required to carry our portfolio investments at market value or, if there is no readily available market value, at fair value, as determined by our board of directors. Since most of our investments will not be publicly-traded or actively traded on a secondary market, our board of directors will determine their fair value quarterly in good faith.

Factors that may be considered in determining the fair value of our investments include: dealer quotes for securities traded on the secondary market for institutional investors, the nature and realizable value of any related collateral, the earnings of the portfolio company and its ability to make payments on its indebtedness, the markets in which the portfolio company does business, comparison to comparable publicly-traded companies, discounted cash flow and other relevant factors. Because such valuations, and particularly valuations of private securities and private companies, are inherently uncertain, may fluctuate over short periods of time and may be based on estimates, our determinations of fair value may differ materially from the values that would have been used if a ready market for these securities existed. Due to this uncertainty, our fair value determinations may cause our net asset value per share on a given date to materially understate or overstate the value that we may ultimately realize upon the sale of one or more of our investments.

Because our business model depends to a significant extent upon the business relationships of our Adviser, the inability of our Adviser to maintain or develop these relationships, or the failure of these relationships to generate investment opportunities, could adversely affect our business.

We expect that our Adviser ~~and Sub-Adviser~~ will depend on ~~their~~its relationships and those of its affiliates with private ~~equity~~ sponsors, investment banks and commercial banks, and we may rely to a significant extent upon these relationships to provide us with potential investment opportunities. If our Adviser ~~and Sub-Adviser~~or its affiliates fail to maintain their existing relationships or develop new relationships with other sponsors or sources of investment opportunities, we may not be able to grow our investment portfolio. In addition, individuals with whom our Adviser’s and ~~Sub-Adviser’s~~its affiliates’ professionals have relationships are not obligated to provide us with investment opportunities, and, therefore, there is no assurance that such relationships will generate investment opportunities for us.

The amount and timing of distributions are uncertain and distributions may be funded from the proceeds of our offering and may represent a return of capital.

The amount of any distributions we pay is uncertain. We cannot assure you that we will achieve investment results that will allow us to make a specified level of cash distributions or year-to-year increases in cash distributions. Our distributions to our stockholders may exceed our earnings, particularly during the period before we have substantially invested the net proceeds from our offering. We may fund distributions from the uninvested proceeds of our public offering and borrowings, and we have not established limits on the amount of funds we may use from net offering proceeds or borrowings to make any such distributions. Therefore, portions of the distributions that we pay may represent a return of your capital rather than a return on your investment, which will lower your tax basis in your shares and reduce the amount of funds we have for investment in targeted assets.Further, the per share amount of distributions on Class A and Class T shares will likely differ because of different allocations of class-specific expenses. For example, distributions on Class T shares will likely be lower than on Class A shares because Class T shares are subject to an annual distribution fee.

We may not be able to pay you distributions, and our distributions may not grow over time. Our ability to pay distributions might be adversely affected by, among other things, the effect of one or more of the risk factors described in this ~~prospectus.~~annual report on Form 10-K. In addition, the inability to satisfy the asset coverage test applicable to us as a BDC can limit our ability to pay distributions.

We will be subject to corporate-level U.S. federal income tax if we are unable to qualify as a RIC under Subchapter M of the Code or do not satisfy the annual distribution requirement.

To ~~obtain and~~ maintain RIC status and be relieved of U.S. federal taxes on the income and gains we distribute to our stockholders, we must meet the following annual distribution, income source and asset diversification requirements.

●

The annual distribution requirement for a RIC will be satisfied if we distribute to our stockholders on an annual basis at least 90% of our net ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any. We will be subject to a 4% nondeductible federal excise tax, however, to the extent that we do not satisfy certain additional minimum distribution requirements on a calendar-year basis. See “Material U.S. Federal Income Tax Considerations.” Because we may use debt financing, we are subject to an asset coverage ratio requirement under the Company Act and we may be subject to certain financial covenants under our debt arrangements that could, under certain circumstances, restrict us from making distributions necessary to satisfy the distribution requirement. If we are unable to obtain cash from other sources, we could fail to qualify for RIC tax treatment and thus become subject to corporate-level income tax.

●

~~The income source requirement will be satisfied if we obtain at least 90% of our gross income for each year from distributions, interest, gains from the sale of stock or securities or similar sources.~~

●

The asset diversification requirement will be satisfied if we meet certain asset diversification requirements at the end of each quarter of our taxable year. To satisfy this requirement, at least 50% of the value of our assets must consist of cash, cash equivalents, U.S. government securities, securities of other RICs, and other acceptable securities; and no more than 25% of the value of our assets can be invested in the securities, other than U.S. government securities or securities of other RICs, of one issuer, of two or more issuers that are controlled, as determined under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses or of certain “qualified publicly-traded partnerships.” Failure to meet these requirements may result in our having to dispose of certain investments quickly in order to prevent the loss of RIC status. Because most of our investments will be in private companies, and therefore will be relatively illiquid, any such dispositions could be made at disadvantageous prices and could result in substantial losses.

The annual distribution requirement for a RIC will be satisfied if we distribute to our stockholders with respect to each taxable year at least 90% of our net ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any. See “Business - Material U.S. Federal Income Tax Considerations.” Because we may use debt financing, we are subject to an asset coverage ratio requirement under the 1940 Act and we may be subject to certain financial covenants under our debt arrangements that could, under certain circumstances, restrict us from making distributions necessary to satisfy the distribution requirement. If we are unable to obtain cash from other sources, we could fail to qualify for RIC tax treatment and thus become subject to corporate-level U.S. federal income tax. See “Risks Related to Debt Financing.”

The income source requirement will be satisfied if we obtain at least 90% of our gross income for each year from dividends, interest, gains from the sale of stock or securities or similar sources.

If we fail to qualify for or maintain RIC status or to meet the annual distribution requirement for any reason and are subject to ~~corporate~~corporate-level U.S. federal income tax, the resulting corporate taxes could substantially reduce our net assets, the amount of income available for distribution and the amount of our distributions.

Our board of directors may change our operating policies and strategies without prior notice or stockholder approval, the effects of which may be adverse.

Our board of directors has the authority to modify or waive our current operating policies, investment criteria and strategies without prior notice and without stockholder approval. We cannot predict the effect any changes to our current operating policies, investment criteria and strategies would have on our business, net asset value per share, operating results and value of our stock. However, the effects might be adverse, which could negatively impact our ability to pay you distributions and cause you to lose all or part of your investment.

Our board of directors has substantial discretion over the use of the proceeds of our offering.

Our board of directors will have significant flexibility in investing the net proceeds of our offering and may use the net proceeds from our offering in ways with which investors may not agree or for purposes other than those contemplated at the time of our offering.

If we internalize our management functions, your interest in us could be diluted, and we could incur other significant costs and face other significant risks associated with being self-managed.

Our board of directors may decide in the future to internalize our management functions. If we do so, we may elect to negotiate to acquire our Adviser’s assets, investment personnel and ~~personnel.~~personnel of its affiliates. At this time, we cannot anticipate the form or amount of consideration or other terms relating to any such internalization transaction. Such consideration could take many forms, including cash payments, promissory notes and shares of our common stock. The payment of such consideration could result in dilution of your interests as a stockholder and could reduce the earnings per share attributable to your investment.

In addition, while we would no longer bear the costs of the various fees and expenses we expect to pay to our Adviser under the Investment ~~Adviser~~Advisory Agreement, we would incur the compensation and benefits costs of our officers and other employees and consultants that we now expect will be paid by our Adviser or its affiliates. In addition, we may issue equity awards to officers, employees and consultants, which awards would decrease net income and may further dilute your investment. We cannot reasonably estimate the amount of fees we would save or the costs we would incur if we became self-managed. If the expenses we assume as a result of internalization are higher than the expenses we avoid paying to our Adviser, our earnings per share would be lower as a result of the internalization than they otherwise would have been, potentially decreasing the amount of funds available to distribute to our stockholders and the value of our shares. As currently organized, we will not have any employees. If we elect to internalize our operations, we would employ personnel and would be subject to potential liabilities commonly faced by employers, such as workers disability and compensation claims, potential labor disputes and other employee-related liabilities and grievances, all of which could result in substantially higher litigation costs to us.

If we internalize our management functions, we could have difficulty integrating these functions as a stand-alone entity. In addition, we could have difficulty retaining the management personnel wewould employ. Currently, individuals ~~employed~~utilized by our Adviser and its affiliates perform asset management and general and administrative functions, including accounting and financial reporting, for multiple entities. These personnel have a great deal of know-how and experience. We may fail to properly identify the appropriate mix of personnel and capital needs to operate as a stand-alone entity. An inability to manage an internalization transaction effectively could result in our incurring excess costs and/or suffering deficiencies in our disclosure controls and procedures or our internal control over financial reporting. Such deficiencies could cause us to incur additional costs, and our management’s attention could be diverted from most effectively managing our investments.

If we borrow money, the potential for gain or loss on amounts invested in us will be magnified and may increase the risk of investing in us.

Borrowings, also known as leverage, magnify the potential for gain or loss on invested equity capital. The use of leverage to partially finance our investments, through borrowings from banks and other lenders, will increase the risk of investing in our common stock. If the value of our assets decreases, leveraging would cause our net asset value per share to decline more sharply than it otherwise would have had we not leveraged. Similarly, any decrease in our income would cause net income to decline more sharply than it would have had we not borrowed. Such a decline could negatively affect our ability to make distributions. Leverage is generally considered a speculative investment technique.

Because we intend to distribute substantially all of our income to our stockholders in connection with our election to be treated as a RIC, we will continue to need additional capital to finance our growth. If additional funds are unavailable or not available on favorable terms, our ability to grow will be impaired.

In order to qualify for the tax benefits available to RICs and to ~~avoid payment of~~eliminate our liability for U.S. federal income and excise taxes, we intend to distribute to our stockholders substantially all of our annual taxable income, except that we may retain certain net capital gains for investment, and treat such amounts as deemed distributions to our stockholders. If we elect to treat any amounts as deemed distributions, we must pay income taxes at the corporate rate on such deemed distributions on behalf of our stockholders. As a result of these requirements, we will likely need to raise capital from other sources to grow our business. As a business development company, we generally are required to meet a coverage ratio of total assets, less liabilities and indebtedness not represented by senior securities, to total senior securities, which includes all of our borrowings and any outstanding preferred stock, of at least 150%. At the 2019 Annual Meeting, TPIC’s stockholders approved a proposal allowing us to modify our asset coverage ratio requirement from 200% to 150%. These requirements limit the amounts we may borrow. Because we will continue to need capital to grow our investment portfolio, these limitations may prevent us from incurring debt and require us to raise additional equity at a time when it may be disadvantageous to do so.

While we expect to be able to borrow and to issue additional debt and equity securities, we cannot assure you that debt and equity financing will be available to us on favorable terms or at all. Also, as a business development company, we generally will not be permitted to issue equity securities at a price below net asset value per share without stockholder approval. If additional funds are not available to us, we could be forced to curtail or cease new investment activities, and our net asset value per share and share price could decline. Lastly, any additional equity raised will dilute the interest of current investors.

In selecting and structuring investments appropriate for us, our Adviser ~~and Sub-Adviser~~ will consider the investment and tax objectives of the Company and our stockholders as a whole, not the investment, tax or other objectives of any stockholder individually.

Our stockholders may have conflicting investment, tax and other objectives with respect to their investments in us. The conflicting interests of individual stockholders may relate to or arise from, among other things, the nature of our investments, the structure or the acquisition of our investments, and the timing of disposition of our investments. As a consequence, conflicts of interest may

arise in connection with decisions made by our Adviser, ~~and Sub-Adviser,~~ including with respect to the nature or structuring of our investments that may be more beneficial for one stockholder than for another stockholder, especially with respect to stockholders’ individual tax situations.

We may pursue strategic acquisitions.

We may pursue growth through acquisitions of other BDCs or registered investment companies, acquisitions of critical business partners or other strategic initiatives. Attempts to expand our business involve a number of special risks, including some or all of the following:

the required investment of capital and other resources;

the assumption of liabilities in any acquired business;

the disruption of our ongoing business; and

increasing demands on our operational and management systems and controls.

If we are unable to consummate or successfully integrate development opportunities, acquisitions or joint ventures, we may not be able to implement our growth strategy successfully.

Our growth strategy may include the selective development or acquisition of other BDCs, funds, asset management businesses, advisory businesses or other businesses or financial products complementary to our business where we think it can add substantial value or generate substantial returns. The success of this strategy will depend on, among other things: (a) the availability of suitable opportunities, (b) the level of competition from other companies that may have greater financial resources, (c) our ability to value potential development or acquisition opportunities accurately and negotiate acceptable terms for those opportunities, (d) our ability to identify and enter into mutually beneficial relationships with venture partners and (e) our ability to properly manage conflicts of interest. Moreover, even if we are able to identify and successfully complete an acquisition, we may encounter unexpected difficulties or incur unexpected costs associated with integrating and overseeing the operations of the new business or activities. If we are not successful in implementing our growth strategy, our business and results of operations may be adversely affected.

Risks Related to our Adviser and Its Affiliates

We will rely in our Adviser and its investment personnel for the selection of our assets and the monitoring of our investments.

We will have no internal employees. We will depend on the ability, diligence, skill and network of business contacts of our Adviser ~~our Sub-Adviser~~ and ~~their~~its investment committee to identify potential investments, to negotiate such acquisitions, to oversee the management of the investments, and to arrange their timely disposition. ~~We are the first business development company or registered investment company sponsored by our Adviser.~~ The departure of any of the members of our Adviser ~~or Sub-Adviser~~ could have a material adverse effect on our ability to achieve our investment objectives. There can be no assurances that the individuals ~~currently employed by~~affiliated with the Adviser ~~or Sub-Adviser~~ who will manage our portfolio will continue to be ~~employed by~~affiliated with Prospect Capital Management or the Adviser, or ~~Sub-Adviser~~that Prospect Capital Management or ~~that~~ the Adviser ~~or Sub-Adviser~~ will be able to obtain suitable replacements if they leave. In addition, we can offer no assurance that our Adviser will remain our investment adviser, ~~that our Sub-Adviser will remain our sub-adviser~~ or that we will continue to have access to ~~their~~its investment professionals or their information and deal flow.

There are significant potential conflicts of interest which could adversely impact our investment returns.

Our executive officers and directors, and the principals of our Adviser, ~~and Sub-Adviser,~~ serve or may serve as officers, directors or principals of entities that operate in the same or a related line of business as we do or of investment funds managed by their affiliates. Accordingly, they may have obligations to investors in those entities, the fulfillment of which might not be in the best interests of us or our stockholders. For example, Mr. Faggen, our president and chief executive officer, and the president of our Adviser, as well as other members of TPCP and its affiliates who may also be members of the investment committee of our Adviser, manage and, following our offering, will continue to manage other funds which are currently in their investment phase or, though fully invested, are continuing to be actively managed. In addition, ~~in the future,~~ the principals of our Adviser ~~or Sub-Adviser~~ may manage other funds which may from time to time have overlapping investment objectives with ours and, accordingly, may invest in asset classes similar to those targeted by us. If this should occur, the principals of our Adviser ~~and Sub-Adviser~~ may face conflicts of interest in the allocation of investment opportunities to us and such other funds. Although our Adviser’s ~~and Sub-Adviser’s~~ investment professionals may endeavor to create independent teams to represent conflicting parties and to allocate investment opportunities in a fair and equitable manner, it is possible that we may not be given the opportunity to participate in certain investments made by such other funds. Finally, our Adviser and its respective affiliates, including our officers and certain of our directors, face conflicts of interest as a result of compensation arrangements between us and certain of our portfolio companies, which could result in actions that are not in the best interests of our stockholders. In light of such potential conflicts, and as required under the Advisers Act, our Adviser has adopted a Code of Ethics that, among other things, is intended to provide a framework of principles and procedures for resolving conflicts of interest in a manner consistent with our Adviser’s fiduciary obligations to its clients.

~~The incentive fee we pay to our Adviser in respect of capital gains may be effectively greater than 20%.~~

As a result of the operation of the cumulative method of calculating the incentive fees on capital gains we pay to our Adviser, the cumulative aggregate incentive fee received by our Adviser could be effectively greater than 20%, depending on the timing and extent of subsequent net realized capital losses or net unrealized depreciation. For additional information on this calculation, see the disclosure in footnote 2 to Example 2 under the caption “Investment Adviser Agreement — Overview of Our Investment Adviser — Incentive Fee.” We cannot predict whether, or to what extent, this payment calculation would affect your investment in our stock.

The involvement of our Adviser’s investment professionals in our valuation process may create conflicts of interest.

Our portfolio investments will generally not be in publicly-traded securities. As a result, the value of these securities will not be readily available. We will value these securities at fair value as determined in good faith by our board of directors. In connection with that determination, investment professionals from our Adviser will prepare valuations based upon the most recent financial statements and projected financial results available from our investments. The participation of our Adviser’s investment professionals in our valuation process could result in a conflict of interest as our Adviser’s management fee is based, in part, on our gross assets.

Our fee structure may induce our Adviser to cause us to borrow and make speculative investments.

We will pay management and incentive fees to our Adviser based on our total assets, including indebtedness. As a result, investors in our common stock will invest on a “gross” basis and receive distributions on a “net” basis after payment of such fees and other expenses resulting in a lower rate of return than one might achieve through direct investments. Our base management fee will be payable based upon our ~~gross~~average total assets, which would include any borrowings. This may encourage our Adviser to use leverage to make additional investments and grow our asset base, which would involve the risks attendant to leverage discussed elsewhere in this ~~prospectus.~~annual report on Form 10-K. In addition, the incentive fee payable by us to our Adviser may create an incentive for it to use leverage and make investments on our behalf that are riskier or more speculative than would be the case in the absence of such compensation arrangement, which could result in higher investment losses, particularly during cyclical economic downturns.

The incentive fee payable by us to our Adviser also may create an incentive for our Adviser to favor investments that have a deferred interest feature or no interest income, but higher potential total returns. As our Adviser has agreed to waive any incentive fee on current income which it could have received in accordance with the Advisers Act, it could potentially be incentivized to seek riskier investments with greater capital gains, while eschewing investments with an increased current income feature.

In view of these factors, among other things, our board of directors is charged with protecting our interests by monitoring how our Adviser addresses these and other potential conflicts of interests associated with its services and compensation. While our board of directors will not review or approve each investment, our independent directors will periodically review our Adviser’s services and portfolio decisions and performance, as well as the appropriateness of its compensation in light of such factors.

Risks Relating to Our Investments

Our investments in prospective portfolio companies may be risky, and we could lose all or part of our investment.

Our investments in syndicated senior secured first lien loans, syndicated senior secured second lien loans, senior secured bonds, subordinated debt and equity of private U.S. companies, including middle market companies, may be risky and there is no limit on the amount of any such investments in which we may invest.

Syndicated Senior Secured First Lien Loans, Syndicated Senior Secured Second Lien Loans and Senior Secured Bonds

. There is a risk that any collateral pledged by portfolio companies in which we have taken a security interest may decrease in value over time or lose its entire value, may be difficult to sell in a timely manner, may be difficult to appraise and may fluctuate in value based upon the success of the business and market conditions, including as a result of the inability of the portfolio company to raise additional capital. To the extent our debt investment is collateralized by the securities of a portfolio company’s subsidiaries, such securities may lose some or all of their value in the event of the bankruptcy or insolvency of the portfolio company. Also, in some circumstances, our security interest may be contractually or structurally subordinated to claims of other creditors. In addition, deterioration in a portfolio company’s financial condition and prospects, including its inability to raise additional capital, may be accompanied by deterioration in the value of the collateral for the debt. Secured debt that is under-collateralized involves a greater risk of loss. In addition, second lien secured debt is granted a second priority security interest in collateral, which means that any realization of collateral will generally be applied to pay senior secured debt in full before second lien secured debt is paid. Consequently, the fact that debt is secured does not guarantee that we will receive principal and interest payments according to the debt’s terms, or at all, or that we will be able to collect on the debt should we be forced to enforce its remedies.

Subordinated Debt. Our subordinated debt investments will generally rank junior in priority of payment to senior debt and will generally be unsecured. This may result in a heightened level of risk and volatility or a loss of principal, which could lead to the loss of the entire investment. These investments may involve additional risks that could adversely affect our investment returns. To the extent interest payments associated with such debt are deferred, such debt may be subject to greater fluctuations in valuations, and such debt could subject we and its stockholders to non-cash income. Because we will not receive any principal repayments prior to the maturity of some of its subordinated debt investments, such investments will be of greater risk than amortizing loans.

Equity Investments. We may make select equity investments. In addition, in connection with our debt investments, we may on occasion receive equity interests such as warrants or options as additional consideration. The equity interests we receive may not appreciate in value and, in fact, may decline in value. Accordingly, we may not be able to realize gains from our equity interests, and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we experiences.

Non-U.S. Securities. We may invest in non-U.S. securities, which may include securities denominated in U.S. dollars or in non-U.S. currencies, to the extent permitted by the 1940 Act. For example, the SSNs in which we may invest generally consist of a special purpose vehicle (typically formed in the Cayman Islands or another similar foreign jurisdiction) formed to purchase the senior secured loans and issue rated debt securities and equity tranches and/or unrated debt securities (generally treated as equity interests). Because evidences of ownership of such securities usually are held outside the United States, we would be subject to additional risks if we invested in non-U.S. securities, which include possible adverse political and economic developments, seizure or nationalization of foreign deposits and adoption of governmental restrictions which might adversely affect or restrict the payment of principal and interest on the non-U.S. securities to investors located outside the country of the issuer, whether from currency blockage or otherwise. Because non-U.S. securities may be purchased with and payable in foreign currencies, the value of these assets as measured in U.S. dollars may be affected unfavorably by changes in currency rates and exchange control regulations.

Below Investment Grade Risk. In addition, we may invest in securities that are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated. Below investment grade securities, which are often referred to as “high yield” or “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. They may also be difficult to value and illiquid.

Investing in small and mid-sized companies involves a number of significant risks.

Investing in small and mid-sized companies involves a number of significant risks. Among other things, these companies:

●

May have shorter operating histories, narrower product lines, smaller market shares and/or significant customer concentrations than larger businesses, which tend to render them more vulnerable to competitors’ actions and market conditions, as well as general economic downturns;

●

~~May have limited financial resources and limited access to capital markets and may be unable to meet their obligations under their debt instruments, some of which we may hold or may be senior to us;~~

●

Are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on the company and, in turn, on us. As well, limited resources may make it difficult to attract the necessary talent or invest in the necessary infrastructure to help the company grow;

●

Generally have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position; and

●

Generally have less publicly available information about their businesses, operations and financial condition. If we are unable to uncover all material information about these companies, we may not make a fully informed investment decision, and may lose all or part of our investment.

May have shorter operating histories, narrower product lines, smaller market shares and/or significant customer concentrations than larger businesses, which tend to render them more vulnerable to competitors' actions and market conditions, as well as general economic downturns;

May have limited financial resources and limited access to capital markets and may be unable to meet their obligations under their debt instruments, some of which we may hold or may be senior to us;

In addition, in the course of providing significant managerial assistance to certain of our portfolio companies, certain of our officers and directors may serve as directors on the boards of such companies. To the extent that litigation arises out of our investments in these companies, our officers and directors may be named as defendants in such litigation, which could result in an expenditure of funds (through our indemnification of such officers and directors) and the diversion of management time and resources.

An investment strategy focused primarily on privately-held companies presents certain challenges, including the lack of available information about these companies.

We will invest primarily in privately-held companies. These investments are typically illiquid. As such, we may have difficulty exiting an investment promptly at a desired price or outside of a normal amortization schedule for debt investments. Private companies also have reduced access to the capital markets, resulting in diminished capital resources and ability to withstand financial distress. In addition, little public information generally exists about these companies, which may include a lack of audited financial statements and ratings by third parties. We must therefore rely on the ability of our Adviser to obtain adequate information to evaluate the potential risks of investing in these companies. These companies and their financial information may not be subject to the Sarbanes-Oxley Act and other rules that govern public companies. If we are unable to uncover all material information about these companies, we may not make a fully informed investment decision, and we may lose money on our investments. These factors could affect our investment returns.

Defaults by our portfolio companies will harm our operating results.

The failure of a portfolio company in which we make a debt investment to satisfy financial or operating covenants imposed by it or other lenders could lead to defaults and, potentially, termination of its loans and foreclosure on its secured assets, which could trigger cross-defaults under other agreements and jeopardize the ability of the company to meet its obligations under the debt or equity securities that we holds. We may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting portfolio company, which may include the waiver of certain financial covenants.

Our portfolio companies may incur debt that ranks equally with, or senior to, our debt investments in such companies.

For our debt investments, we intend to invest primarily in first lien, second lien and, to a lesser extent, subordinated debt issued by private U.S. companies, including middle market private U.S. companies. Our portfolio companies may have, or may be permitted to incur, other debt that ranks equally with, or senior to, the debt in which we invest. By their terms, such debt instruments may entitle the holders to receive payment of interest or principal on or before the dates on which we are entitled to receive payments with respect to the debt instruments in which we invest. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company, holders of debt instruments ranking senior to our investment in that portfolio company would typically be entitled to receive payment in full before we receive any proceeds. After repaying such senior creditors, such portfolio company may not have any remaining assets to use for repaying its obligation to us. In the case of debt ranking equally with debt instruments in which we invest, we would have to share on a proportionate basis any distributions with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.

If we make unsecured investments, those investments might not generate sufficient cash flow to service their debt obligations to us.

We may make unsecured debt investments and debt investments that are subordinated to other obligations of the obligor. Unsecured investments often reflect a greater possibility that adverse changes in the financial condition of the obligor or in general economic conditions (including, for example, a substantial period of rising interest rates or declining earnings) or both may impair the ability of the obligor to make payment of principal and interest. If we make an unsecured investment in a company, that company may be highly leveraged, and its relatively high debt-to-equity ratio may create increased risks that its operations might not generate sufficient cash flow to service its debt obligations to us and to more senior lenders.

If we invest in the securities and obligations of distressed and bankrupt issuers, we might not receive interest or other payments.

We are authorized to invest in the securities and obligations of distressed and bankrupt issuers, including debt obligations that are in covenant or payment default. Such investments generally are considered speculative. The repayment of defaulted obligations is subject to significant uncertainties. Defaulted obligations might be repaid only after lengthy workout or bankruptcy proceedings, during which the issuer of those obligations might not make any interest or other payments.

There may be circumstances where our debt investments could be subordinated to claims of other creditors or we could be subject to lender liability claims.

If one of our portfolio companies were to go bankrupt, depending on the facts and circumstances, including the extent to which we actually provided managerial assistance to that portfolio company, a bankruptcy court might recharacterize our debt investment and subordinate all or a portion of our claim to that of other creditors. We may also be subject to lender liability claims for actions taken by us with respect to a borrower’s business or in instances where we exercise control over the borrower or render significant managerial assistance.

We generally will not control ~~our~~the portfolio companies in which we make debt investments.

We do not expect to control our portfolio companies in which we make debt investments, even though we may have board representation or board observation rights, and our debt agreements with such portfolio companies may contain certain restrictive covenants. As a result, we are subject to the risk that a portfolio company in which we make debt investments may make business decisions with which we disagree and the management of such company, as representatives of the holders of their common equity, may take risks or otherwise act in ways that do not serve our interests as debt investors. Due to the lack of liquidity for our debt investments in non-traded companies, we may not be able to dispose of our interests in our portfolio companies as readily as we would like or at an appropriate valuation. As a result, a portfolio company may make decisions that could decrease the value of our portfolio holdings.

~~We may be subject to taxation based on~~

To the extent original issue discount (“OID”) constitutes a portion of our ~~acquisition of instruments that do not generate cash flow.~~

We may make debt investments or finance transactions with debt instruments that may either be issued at a discount to their face value and provide no interest payments over the life of the instrument (also known as original discount bonds or OID), or we may receive warrants in connection with the origination of loans, or we may make debt investments from which we may receive payments in kind, or PIK, interest payments that are capitalized for some portion or over the life of the loan. Each of these types of instruments represent particular kinds of risk as they do not generate cash flow, though for tax purposes and for our status as a RIC they will require us to recognize income, ~~which must be taxed or distributed.~~

~~More specifically, for any warrants received~~ we will be exposed to risks associated with the deferred receipt of cash representing such income.

Our investments may include OID instruments. To the extent OID constitutes a portion of our income, we will be exposed to typical risks associated with such income being required to ~~determine~~be included in taxable and accounting income prior to receipt of cash, including the ~~cost basis~~following:

OID instruments may create heightened credit risks because the inducement to trade higher rates for the deferral of ~~such warrants (or other equity related securities received) based upon their respective fair values~~cash payments typically represents, to some extent, speculation on the ~~date of receipt in proportion to the total fair value~~part of the ~~debt and warrants (or other equity). Any resulting difference between the face amount of the debt and its recorded fair value resulting from the assignment of value~~borrower.

For accounting purposes, cash distributions to ~~the warrant or other equity instruments is treated as~~stockholders representing original issue discount ~~for which we will~~income do not come from paid-in capital, although they may be ~~required~~paid from the offering proceeds. Thus, although a distribution of OID income comes from the cash invested by the stockholders, the 1940 Act does not require that stockholders be given notice of this fact.

OID creates risk of non-refundable cash payments to ~~immediately recognize income.~~our Adviser based on non-cash accruals that may never be realized.

Interest rates payable on OID instruments, including payment-in-kind (“PIK”) loans are higher because the deferred interest payments are discounted to reflect the time-value of money and because PIK ~~loans~~instruments generally represent a significantly higher credit risk than coupon loans.

OID and PIK ~~loans~~instruments may have unreliable valuations because ~~their continuing~~the accruals require judgments about ~~the~~ collectability of the deferred payments and the value of ~~any~~the associated collateral.

An election to defer PIK ~~accruals~~interest payments by adding them to the principal of such instruments increases our total assets, which increases future base management fees, and, because interest payments will then be payable on a larger principal amount, the election also increases our Adviser’s future income incentive fees at a compounding rate.

Market prices of PIK instruments and other zero coupon instruments are affected to a greater extent by interest rate changes, and may ~~create uncertainty about the source of distributions to shareholders (that is, cash distributions might come from offering proceeds or our capital rather~~be more volatile than ~~income). Further, the~~instruments that pay interest periodically in cash. While PIK instruments are usually less volatile than zero coupon debt instruments, PIK instruments are generally more volatile than cash-pay securities.

The deferral of PIK interest ~~has~~on a loan increases its loan-to-value ratio, which is a measure of the ~~effect~~riskiness of ~~increasing assets~~a loan.

Even if the conditions for income accrual under ~~management~~GAAP are satisfied, a borrower could still default when actual payment is due upon the maturity of such loan.

The required recognition of OID, including PIK, interest for U.S. federal income tax purposes may have a negative impact on liquidity, because it represents a non-cash component of our investment company taxable income that must, nevertheless, be distributed in cash to investors to avoid it being subject to corporate-level U.S. federal income and ~~therefore, increasing the base management fee at a compounding rate, which may create the risk of non-refundable cash payments to the adviser based on accruals that may never be realized.~~

excise taxes.

The lack of liquidity in our investments may adversely affect our business.

We will make ~~private equity~~ investments primarily in companies whose securities are not publicly-traded, and whose securities will be subject to legal and other restrictions on resale or will otherwise be less liquid than publicly-traded securities. The illiquidity of these investments may make it difficult for us to sell these investments when desired. In addition, if we are required to liquidate all or a portion of our portfolio quickly, we may realize significantly less than the value at which we had previously recorded these investments. Our investments will usually be subject to contractual or legal restrictions on resale or are otherwise illiquid because there is usually no established trading market for such investments. The illiquidity of most of our investments may make it difficult for us to dispose of them at a favorable price, and, as a result, we may suffer losses.

We may not have the funds or ability to make additional investments in the companies in which we invest.

After our initial investment in a portfolio company, we may be called upon from time to time to provide additional funds to the company or have the opportunity to increase our ~~investment through the exercise of options or warrants to purchase common stock.~~investment. There is no assurance that we will make, or will have sufficient funds to make, follow-on investments. Any decisions not to make a follow-on investment or any inability on our part to make such an investment may have a negative effect on a portfolio company in need of such an investment, may result in a missed opportunity for us to increase our participation in a successful operation, may dilute our interest in the company or may reduce the expected yield on the investment.

The companies in which we invest may incur debt that ranks equally with, or senior to, our investments in such companies.

We will invest in all levels of the capital structure of our portfolio companies. These companies may have, or may be permitted to obtain, additional financing which may rank equally with, or senior to, our investment. By their terms, such financings may entitle the holders to receive payments of interest or principal on or before the dates on which we are entitled to receive such payments. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a company, holders of instruments ranking senior to our investment would typically be entitled to receive payment in full before we receive any distribution. After repaying such senior investors, the portfolio company may not have any remaining assets to use for repaying its obligation

to us. In the case of financing ranking equally with our investments, we would have to share on a proportionate basis any distributions with other investors holding such financing in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the portfolio company.

The disposition of our investments may result in contingent liabilities.

Most of our investments will involve private securities. In connection with their disposition, we may be required to make representations about the business and financial affairs of the portfolio company typical of those made in connection with the sale of a business. We may also be required to indemnify the purchasers of such investment to the extent that our representations turn out to be inaccurate or with respect to certain potential liabilities. These indemnification obligations may require us to pay money to the purchasers of our equity securities as satisfaction of their indemnity claims, which claims must be satisfied through our return of certain distributions previously made to us.

Second priority liens on collateral securing loans that we make to a company may be subject to control by senior creditors with first priority liens. If there is a default, the value of the collateral may not be sufficient to repay in full both the first priority creditors and us.

Certain loans that we make to portfolio companies will be secured on a second priority basis by the same collateral securing such companies’ senior secured debt. The first priority liens on the collateral will secure the obligations of the companies to their senior lenders and may secure certain other future debt that may be permitted to be incurred by the company under the agreements governing the senior loans. The holders of senior secured obligations will generally control the liquidation of the collateral and be entitled to receive proceeds from any realization of the collateral to repay their obligations in full before we receive any funding. In addition, the value of the collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors. There can be no assurance that the proceeds, if any, from the sale or sales of all of the collateral would be sufficient to satisfy the loan obligations secured by second priority liens after payment in full of all senior secured obligations. If such proceeds are not sufficient to repay amounts owed to junior lenders, then we, to the extent we are not repaid from the proceeds of the sale of the collateral, will only have an unsecured claim against the company’s remaining assets, if any.

The rights we may have with respect to the collateral securing the loans we make to a company with outstanding senior debt may also be limited pursuant to the terms of one or more intercreditor agreements that we enter into with the senior lenders. Under such agreements, at any time that senior secured obligations are outstanding, any of the following actions that may be taken in respect of the collateral will be at the direction of the holders of the senior secured obligations:: the ability to cause the commencement of enforcement proceedings against the collateral; the ability to control the conduct of such proceedings; the approval of amendments to collateral documents; releases of liens on the collateral; and waivers of past defaults under collateral documents. We may not have the ability to control or direct such actions, even if our rights are adversely affected.

We generally will not control companies to which we provide debt.

We do not expect to control portfolio companies in which we make debt investments, even though we may have board representation or board observation rights and our debt agreements may contain certain restrictive covenants. As a result, we are subject to the risk that the management of such a portfolio company may make business decisions with which we disagree or, as representative of the holders of their common equity, may take risks or otherwise act in ways that do not serve our interests as debt investors. Due to the lack of liquidity for our investments in non-publicly-traded companies, we may not be able to dispose of our interests in a portfolio company as readily as we would like or at an appropriate valuation. As a result, a company may make decisions that could decrease the value of our holdings.

We may incur lender liability as a result of our lending activities.

In recent years, a number of judicial decisions have upheld the right of borrowers and others to sue lending institutions on the basis of various evolving legal theories generally referred to as “lender liability.” Lender liability is generally based on the idea that a lender has either violated a contractual or implied duty of good faith and fair dealing owed to the borrower or has assumed a degree of control over the borrower resulting in the creation of fiduciary duties owed to the borrower, its stockholders and its other creditors. As a lender, we may be subject to allegations of lender liability, which could be costly to defend and a distraction to our management and could result in significant liability.

~~Defaults by our portfolio companies will harm our operating results.~~

The failure of a portfolio company in which we make a debt investment to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, termination of its loans and foreclosure on its secured assets, which could trigger cross-defaults under other agreements and jeopardize the ability of the company to meet its obligations under the debt or equity securities that we hold. We may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting portfolio company, which may include the waiver of certain financial covenants.

We may not realize gains from our private equity investments.

We ~~will~~may make direct private equity investments in portfolio companies. In addition, when we invest in certain debt investments, we may acquire warrants to purchase equity securities. Our goal in such investments will be primarily to realize gains upon our

disposition of such equity interests. However, our equity interests may not appreciate in value and, in fact, may decline in value. Accordingly, we may not be able to realize gains from our private equity investments, and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we experience. We also may be unable to realize any value if a company does not have a liquidity event, such as a sale of the business, recapitalization or public offering, which would allow us to sell the underlying equity interests.

We will experience fluctuations in our quarterly operating results.

We will experience fluctuations in our quarterly operating results due to a number of factors, including our ability or inability to make investments in companies that meet our investment criteria, the interest rates payable on the debt securities we acquire, the default rate on such securities, the level of our expenses, variations in, and the timing of, our recognition of realized and unrealized gains or losses, the degree to which we encounter competition in our markets and general economic conditions. As a result of these factors, results for any period should not be relied on as being indicative of our performance in future periods.

We may focus our investments in companies in a particular industry or industries.

If we focus our investments in companies in a particular industry or industries, any adverse conditions that disproportionately impact that industry or industries may have a magnified adverse effect on our operating results.

We may from time to time enter into total return swaps or other derivative transactions which exposes it to certain risks, including credit risk, market risk, liquidity risk and other risks similar to those associated with the use of leverage.

We may from time to time enter into total return swaps or other derivative transactions that seek to modify or replace the investment performance of a particular reference security or other asset. These transactions are typically individually negotiated, non-standardized agreements between two parties to exchange payments, with payments generally calculated by reference to a notional amount or quantity. Swap contracts and similar derivative contracts are not traded on exchanges; rather, banks and dealers act as principals in these markets. These investments may present risks in excess of those resulting from the referenced security or other asset. Because these transactions are not an acquisition of the referenced security or other asset itself, the investor has no right directly to enforce compliance with the terms of the referenced security or other asset and has no voting or other consensual rights of ownership with respect to the referenced security or other asset. In the event of insolvency of a counterparty, we will be treated as a general creditor of the counterparty and will have no claim of title with respect to the referenced security or other asset.

A total return swap is a contract in which one party agrees to make periodic payments to another party based on the change in the market value of the referenced security or other assets underlying the total return swap during a specified period, in return for periodic payments based on a fixed or variable interest rate.

A total return swap is subject to market risk, liquidity risk and risk of imperfect correlation between the value of the total return swap and the debt obligations underlying the total return swap. In addition, we may incur certain costs in connection with a total return swap that could in the aggregate be significant.

A derivative transaction is also subject to the risk that a counterparty will default on its payment obligations thereunder or that we will not be able to meet its obligations to the counterparty. In some cases, we may post collateral to secure its obligations to the counterparty, and we may be required to post additional collateral upon the occurrence of certain events such as a decrease in the value of the reference security or other asset. In some cases, the counterparty may not collateralize any of its obligations to us.

Derivative investments effectively add leverage to a portfolio by providing investment exposure to a security or market without owning or taking physical custody of such security or investing directly in such market. In addition to the risks described above, such arrangements are subject to risks similar to those associated with the use of leverage.

Our portfolio companies may be highly leveraged.

Some of our portfolio companies may be highly leveraged, which may have adverse consequences to these companies and to we as an investor. These companies may be subject to restrictive financial and operating covenants and the leverage may impair these companies’ ability to finance their future operations and capital needs. As a result, these companies’ flexibility to respond to changing business and economic conditions and to take advantage of business opportunities may be limited. Further, a leveraged company’s income and net assets will tend to increase or decrease at a greater rate than if borrowed money were not used.

Changes relating to the LIBOR calculation process may adversely affect the value of the LIBOR-indexed, floating-rate debt securities in our portfolio.

In the recent past, concerns have been publicized that some of the member banks surveyed by the British Bankers' Association, or the “BBA”, in connection with the calculation of LIBOR across a range of maturities and currencies may have been under-reporting or otherwise manipulating the inter-bank lending rate applicable to them in order to profit on their derivatives positions or to avoid an appearance of capital insufficiency or adverse reputational or other consequences that may have resulted from reporting inter-bank lending rates higher than those they actually submitted. A number of BBA member banks entered into settlements with their regulators and law enforcement agencies with respect to alleged manipulation of LIBOR, and investigations by regulators and governmental authorities in various jurisdictions are ongoing.

Actions by the BBA, regulators or law enforcement agencies as a result of these or future events, may result in changes to the manner in which LIBOR is determined. Potential changes, or uncertainty related to such potential changes may adversely affect the market for LIBOR-based securities, including our portfolio of LIBOR-indexed, floating-rate debt securities. In addition, any further changes or reforms to the determination or supervision of LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR, which could have an adverse impact on the market for LIBOR-based securities or the value of our portfolio of LIBOR-indexed, floating-rate debt securities. On July 27, 2017, the FCA announced that it will no longer persuade or compel banks to submit rates for the calculation of the LIBOR rates after 2021, or the “FCA Announcement.” Furthermore, in the United States, efforts to identify a set of alternative U.S. dollar reference interest rates include proposals by the Alternative Reference Rates Committee of the Federal Reserve Board and the Federal Reserve Bank of New York. On August 24, 2017, the Federal Reserve Board requested public comment on a proposal by the Federal Reserve Bank of New York, in cooperation with the Office of Financial Research, to produce three new reference rates intended to serve as alternatives to LIBOR. These alternative rates are based on overnight repurchase agreement transactions secured by U.S. Treasury Securities. On December 12, 2017, following consideration of public comments, the Federal Reserve Board concluded that the public would benefit if the Federal Reserve Bank of New York published the three proposed reference rates as alternatives to LIBOR, or the “Federal Reserve Board Notice.” In April 2018, the Federal Reserve System, in conjunction with the Alternative Reference Rate Committee, announced the replacement of LIBOR with a new index, calculated by short term repurchase agreements collateralized by U.S. Treasury securities, called the Secured Overnight Financing Rate, or the “SOFR”. On June 12, 2019, the Staff from the SEC’s Division of Corporate Finance, Division of Investment Management, Division of Trading and Markets, and Office of the Chief Accountant issued a statement about the potentially significant effects on financial markets and market participants when LIBOR is discontinued in 2021 and no longer available as a reference benchmark rate. The Staff encouraged all market participants to identify contracts that reference LIBOR and begin transitions to alternative rates.

At this time, it is not possible to predict the effect of the FCA Announcement or other regulatory changes or announcements, any establishment of alternative reference rates, including SOFR and its market acceptance, or any other reforms to LIBOR that may be enacted in the United Kingdom, the United States or elsewhere. As such, the potential effect of any such event on our net investment income cannot yet be determined. The CLOs we are invested in generally contemplate a scenario where LIBOR is no longer available by requiring the CLO administrator to calculate a replacement rate primarily through dealer polling on the applicable measurement date. However, there is uncertainty regarding the effectiveness of the dealer polling processes, including the willingness of banks to provide such quotations, which could adversely impact our net investment income. Recently, the CLOs we are invested in have included, or have been amended to include, language permitting the CLO investment manager to implement a market replacement rate (like SOFR) upon the occurrence of certain material disruption events. However, we cannot ensure that all CLOs in which we are invested will have such provisions, nor can we ensure the CLO investment managers will undertake the suggested amendments when able. In addition, the effect of a phase out of LIBOR on U.S. senior secured loans, the underlying assets of the CLOs in which we invest, is currently unclear. To the extent that any replacement rate utilized for senior secured loans differs from that utilized for a CLO that holds those loans, the CLO would experience an interest rate mismatch between its assets and liabilities which could have an adverse impact on our net investment income and portfolio returns.

Risks Relating to our Investments in CLOs

Our investments in CLOs may be riskier and less transparent to us and our stockholders than direct investments in the underlying companies.

Under our investment strategy following completion of the Merger, we may invest up to 30% of our investment in CLOs, including private equity (both common and preferred), dividend-paying equity, royalties, and the equity and junior debt tranches of CLOs, which involve a number of significant risks. Generally, there may be less information available to us regarding the underlying debt investments held by CLOs than if we had invested directly in the debt of the underlying companies. As a result, our stockholders will not know the details of the underlying securities of the CLOs in which we will invest. Our investments in the equity and junior debt tranches of CLOs are subject to the risk of leverage associated with the debt issued by such CLOs and the repayment priority

of senior debt holders in such CLOs. Our investments in portfolio companies may be risky, and it could lose all or part of our investment.

Our financial results may be affected adversely if one or more of our significant equity or junior debt investments in a CLO vehicle defaults on our payment obligations or fails to perform as we expect.

Under the new investment strategy following completion of the Merger, we may invest up to 30% of our portfolio in private equity (both common and preferred), dividend-paying equity, royalties, and the equity and junior debt tranches of CLOs, which involve a number of significant risks. CLOs are typically highly levered up to approximately 10 times, and therefore the junior debt and equity tranches that we will invest in are subject to a higher risk of total loss. We will generally have the right to receive payments only from the CLOs, and will generally not have direct rights against the underlying borrowers or the entities that sponsored the CLOs. Although it is difficult to predict whether the prices of indices and securities underlying CLOs will rise or fall, these prices, and, therefore, the prices of the CLOs, will be influenced by the same types of political and economic events that affect issuers of securities and capital markets generally.

The investments we make in CLOs will generally be thinly traded or have only a limited trading market. CLO investments are typically privately offered and sold, in the primary and secondary markets. As a result, investments in CLOs may be characterized as illiquid securities. In addition to the general risks associated with investing in debt securities, CLOs carry additional risks, including, but not limited to: (i) the possibility that distributions from the underlying senior secured loans will not be adequate to make interest or other payments; (ii) the quality of the underlying senior secured loans may decline in value or default; and (iii) the complex structure of the security may not be fully understood at the time of investment and may produce disputes with the CLO or unexpected investment results. Further, our investments in equity and junior debt tranches of CLOs would be subordinate to the senior debt tranches thereof.

Investments in structured vehicles, including equity and junior debt instruments issued by CLOs, involve risks, including credit risk and market risk. Changes in interest rates and credit quality may cause significant price fluctuations. Additionally, changes in the underlying senior secured loans held by a CLO may cause payments on the instruments we hold to be reduced, either temporarily or permanently. Structured investments, particularly the subordinated interests in which we invest, are less liquid than many other types of securities and may be more volatile than the senior secured loans underlying the CLOs in which we invests.

CLOs typically will have no significant assets other than their underlying senior secured loans; payments on CLO investments are and will be payable solely from the cash flows from such senior secured loans.

CLOs typically will have no significant assets other than their underlying senior secured loans. Accordingly, payments on CLO investments are and will be payable solely from the cash flows from such senior secured loans, net of all management fees and other expenses. Payments to us as a holder of CLO junior securities are and will be made only after payments due on the senior secured notes, and, where appropriate, the junior secured notes, have been made in full. This means that relatively small numbers of defaults of senior secured loans may adversely impact our return on our CLO investments.

Our CLO investments will be exposed to leveraged credit risk.

Generally, when we invest in CLOs, it will be in a subordinated position with respect to realized losses on the senior secured loans underlying our investments in the equity and junior debt tranches of CLOs. The leveraged nature of CLOs, in particular, magnifies the adverse impact of senior secured loan defaults. CLO investments represent a leveraged investment with respect to the underlying senior secured loans. Therefore, changes in the market value of the CLO investments could be greater than the change in the market value of the underlying senior secured loans, which are subject to credit, liquidity and interest rate risk.

There is the potential for interruption and deferral of cash flow from CLO investments.

If certain minimum collateral value ratios and/or interest coverage ratios are not met by a CLO, primarily due to senior secured loan defaults, then cash flow that otherwise would have been available to pay distributions to we on our investments in the equity and junior debt tranches of CLOs may instead be used to redeem any senior notes or to purchase additional senior secured loans, until the ratios again exceed the minimum required levels or any senior notes are repaid in full. This could result in an elimination, reduction or deferral in the distribution and/or principal paid to the holders of the CLO investments, which would adversely impact our return on our CLO investments.

Investments in foreign securities may involve significant risks in addition to the risks inherent in U.S. investments.

Our CLO investment strategy will allow investments in foreign CLOs. Investing in foreign entities may expose we to additional risks not typically associated with investing in U.S. issuers. These risks include changes in exchange control regulations, political and social instability, expropriation, imposition of foreign taxes, less liquid markets and less available information than is generally the case in the United States, higher transaction costs, less government supervision of exchanges, brokers and issuers, less developed bankruptcy laws, difficulty in enforcing contractual obligations, lack of uniform accounting and auditing standards and greater price volatility. Further, we, and the CLOs in which it invests, may have difficulty enforcing creditor’s rights in foreign jurisdictions. In addition, the underlying companies of the CLOs in which we invest may be foreign, which may create greater exposure for us to foreign economic developments.

The payment of underlying portfolio manager fees and other charges on CLO investments could adversely impact our return on our CLO investments.

We may invest in CLO investments where the underlying portfolio securities may be subject to management, administration and incentive or performance fees, in addition to those payable by us. Payment of such additional fees could adversely impact the returns we achieve on our CLO investments.

The inability of a CLO collateral manager to reinvest the proceeds of the prepayment of senior secured loans may adversely affect us.

There can be no assurance that for any CLO investment, in the event that any of the senior secured loans of a CLO underlying such investment are prepaid, the CLO collateral manager will be able to reinvest such proceeds in new senior secured loans with equivalent investment returns. If the CLO collateral manager cannot reinvest in new senior secured loans with equivalent investment returns, the interest proceeds available to pay interest on the rated liabilities and investments may be adversely affected, which in turn could affect our return on such investment.

Our CLO investments are subject to prepayments and calls, increasing re-investment risk.

Our CLO investments and/or the underlying senior secured loans may prepay more quickly than expected, which could have an adverse impact on their value. Prepayment rates are influenced by changes in interest rates and a variety of economic, geographic and other factors beyond our control and consequently cannot be predicted with certainty. In addition, for a CLO collateral manager there is often a strong incentive to refinance well performing portfolios once the senior tranches amortize. The yield to maturity of the investments will depend on the amount and timing of payments of principal on the loans and the price paid for the investments. Such yield may be adversely affected by a higher or lower than anticipated rate of prepayments of the debt.

Furthermore, our CLO investments generally will not contain optional call provisions, other than a call at the option of the holders of the equity tranches for the senior notes and the junior secured notes to be paid in full after the expiration of an initial period in the deal (referred to as the “non-call period”).

The exercise of the call option is by the relevant percentage (usually a majority) of the holders of the equity tranches and, therefore, where we does not hold the relevant percentage it will not be able to control the timing of the exercise of the call option. The equity tranches also generally have a call at any time based on certain tax event triggers. In any event, the call can only be exercised by the holders of equity tranches if they can demonstrate (in accordance with the detailed provisions in the transaction) that the senior notes and junior secured notes will be paid in full if the call is exercised.

Early prepayments and/or the exercise of a call option otherwise than at our request may also give rise to increased re-investment risk with respect to certain investments, as we may realize excess cash earlier than expected. If we are unable to reinvest such cash in a new investment with an expected rate of return at least equal to that of the investment repaid, this may reduce our net income and, consequently, could have an adverse impact on our ability to pay dividends.

We will have limited control of the administration and amendment of senior secured loans owned by the CLOs in which we invest.

The terms and conditions of target securities may be amended, modified or waived only by the agreement of the underlying security holders. Generally, any such agreement must include a majority or a super majority (measured by outstanding amounts) or, in certain circumstances, a unanimous vote of the security holders. Consequently, the terms and conditions of the payment obligation arising from the CLOs in which we invest be modified, amended or waived in a manner contrary to our preferences.

Senior secured loans of CLOs may be sold and replaced resulting in a loss to us. The senior secured loans underlying our CLO investments may be sold and replacement collateral purchased within the parameters set out in the relevant CLO indenture between the CLO and the CLO trustee and those parameters may typically only be amended, modified or waived by the agreement of a majority of the holders of the senior notes and/or the junior secured notes and/or the equity tranche once the CLO has been established. If these transactions result in a net loss, the magnitude of the loss from the perspective of the equity tranche would be increased by the leveraged nature of the investment.

In addition, we will not able to directly enforce any rights and remedies in the event of a default of a senior secured loan held by a CLO vehicle. In addition, the terms and conditions of the senior secured loans underlying our CLO investments may be amended, modified or waived only by the agreement of the underlying lenders. Generally, any such agreement must include a majority or a super majority (measured by outstanding loans or commitments) or, in certain circumstances, a unanimous vote of the lenders. Consequently, the terms and conditions of the payment obligations arising from senior secured loans could be modified, amended or waived in a manner contrary to our preferences.

We will have limited control of the administration and amendment of any CLO in which we invest.

The terms and conditions of target securities may be amended, modified or waived only by the agreement of the underlying security holders. Generally, any such agreement must include a majority or a super majority (measured by outstanding amounts) or, in certain circumstances, a unanimous vote of the security holders. Consequently, the terms and conditions of the payment obligation arising from the CLOs in which we invest may be modified, amended or waived in a manner contrary to our preferences.

Non-investment grade debt involves a greater risk of default and higher price volatility than investment grade debt.

The senior secured loans underlying our CLO investments are expected typically to be BB or B rated (non-investment grade, which are often referred to as “high-yield” or “junk”) and in limited circumstances, unrated, senior secured loans. Non-investment grade securities are predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal when due and therefore involve a greater risk of default and higher price volatility than investment grade debt.

We will have no influence on management of underlying investments managed by non-affiliated third party CLO collateral managers.

We are not responsible for and will have no influence over the asset management of the portfolios underlying the CLO investments we hold as those portfolios are managed by non-affiliated third party CLO collateral managers. Similarly, we will not be responsible for and have no influence over the day-to-day management, administration or any other aspect of the issuers of the individual securities. As a result, the values of the portfolios underlying our CLO investments could decrease as a result of decisions made by third party CLO collateral managers.

The application of the risk retention rules under Section 941 of the Dodd-Frank Act to CLOs may have broader effects on the CLO and loan markets in general, potentially resulting in fewer or less desirable investment opportunities for us.

Section 941 of the Dodd-Frank Act added a provision to the Exchange Act, requiring the seller, sponsor or securitizer of a securitization vehicle to retain no less than five percent of the credit risk in assets it sells into a securitization and prohibiting such securitizer from directly or indirectly hedging or otherwise transferring the retained credit risk. The responsible federal agencies adopted final rules implementing these restrictions on October 22, 2014. The risk retention rules became effective with respect to CLOs two years after publication in the Federal Register. Under the final rules, the asset manager of an CLO is considered the sponsor of a securitization vehicle and is required to retain five percent of the credit risk in the CLO, which may be retained horizontally in the equity tranche of the CLO or vertically as a five percent interest in each tranche of the securities issued by the CLO. Although the final rules contain an exemption from such requirements for the asset manager of a CLO if, among other things, the originator or lead arranger of all of the loans acquired by the CLO retain such risk at the asset level and, at origination of such asset, takes a loan tranche of at least 20% of the aggregate principal balance, it is possible that the originators and lead arrangers of loans in this market will not agree to assume this risk or provide such retention at origination of the asset in a manner that would provide meaningful relief from the risk retention requirements for CLO managers.

We believe that the U.S. risk retention requirements imposed for CLO managers under Section 941 of the Dodd-Frank Act has created some uncertainty in the market in regard to future CLO issuance. Given that certain CLO managers may require capital provider partners to satisfy this requirement, we believe that this may create additional risks for us in the future.

On February 9, 2018, a panel of the United States Court of Appeals for the District of Columbia Circuit ruled (the “D.C. Circuit Ruling”) that the federal agencies exceeded their authority under the Dodd-Frank Act in adopting the final rules as applied to asset managers of open-market CLOs. On April 5, 2018, the United States District Court for the District of Columbia entered an order implementing the D.C. Circuit Ruling and thereby vacated the U.S. Risk Retention Rules insofar as they apply to CLO managers of “open market CLOs.”

As of the date of hereof, there has been no petition for writ of certiorari filed requesting the case to be heard by the United States Supreme Court. Since there hasn’t been a successful challenge to the D.C. Circuit Ruling and the United States District Court for the District of Columbia has issued the above described order implementing the D.C. Circuit Ruling, collateral managers of open market CLOs are no longer required to comply with the U.S. Risk Retention Rules at this time. As such, it is possible that some collateral managers of open market CLOs will decide to dispose of the notes constituting the “eligible vertical interest” or “eligible horizontal interest” they were previously required to retain, or decide take other action with respect to such notes that is not otherwise permitted by the U.S. risk retention rules. As a result of this decision, certain CLO managers of “open market CLOs” will no longer be required to comply with the U.S. risk retention rules solely because of their roles as managers of “open market CLOs,” and there may be no “sponsor” of such securitization transactions and no party may be required to acquire and retain an economic interest in the credit risk of the securitized assets of such transactions.

There can be no assurance or representation that any of the transactions, structures or arrangements currently under consideration by or currently used by CLO market participants will comply with the U.S. risk retention rules to the extent such rules are reinstated or otherwise become applicable to open market CLOs. The ultimate impact of the U.S. risk retention rules on the loan securitization market and the leveraged loan market generally remains uncertain, and any negative impact on secondary market liquidity for securities comprising an CLO may be experienced due to the effects of the U.S. risk retention rules on market expectations or uncertainty, the relative appeal of other investments not impacted by the U.S. risk retention rules and other factors.

Risks Relating to Economic Conditions

Future disruptions or instability in capital markets could negatively impact our ability to raise capital and could have a material adverse effect on our business, financial condition and results of operations.

From time to time, the global capital markets may experience periods of disruption and instability, which could materially and adversely impact the broader financial and credit markets and reduce the availability to us of debt and equity capital. For example, between 2008 and 2009, instability in the global capital markets resulted in disruptions in liquidity in the debt capital markets, significant write-offs in the financial services sector, the repricing of credit risk in the broadly syndicated credit market and the failure of major domestic and international financial institutions. In particular, the financial services sector was negatively impacted by significant write-offs as the value of the assets held by financial firms declined, impairing their capital positions and abilities to lend and invest. We believe that such value declines were exacerbated by widespread forced liquidations as leveraged holders of financial assets, faced with declining prices, were compelled to sell to meet margin requirements and maintain compliance with applicable capital standards. Such forced liquidations also impaired or eliminated many investors and investment vehicles, leading to a decline in the supply of capital for investment and depressed pricing levels for many assets. These events significantly diminished overall confidence in the debt and equity markets, engendered unprecedented declines in the values of certain assets, caused extreme economic uncertainty and significantly reduced the availability of debt and equity capital for the market as a whole and financial services firms in particular. While market conditions have experienced relative stability in recent years, there have been continuing periods of volatility and there can be no assurance that adverse market conditions will not repeat themselves in the future.

Future volatility and dislocation in the capital markets could create a challenging environment in which to raise or access capital. For example, the re-appearance of market conditions similar to those experienced from 2008 through 2009 for any substantial length of time could make it difficult to extend the maturity of or refinance our existing indebtedness or obtain new indebtedness with similar terms. Significant changes or volatility in the capital markets may also have a negative effect on the valuations of our investments. While most of our investments will not be publicly traded, applicable accounting standards require us to assume as part of our valuation process that our investments are sold in a principal market to market participants (even if we plan on holding an investment through its maturity) and impairments of the market values or fair market values of our investments, even if unrealized, must be reflected in our financial statements for the applicable period, which could result in significant reductions to our net asset value for the period. With certain limited exceptions, we are only allowed to borrow amounts or issue debt securities

if our asset coverage, as calculated pursuant to the ~~Company~~1940 Act, equals at least 150%. At the 2019 Annual Meeting, TPIC’s stockholders approved a proposal allowing us to modify our asset coverage ratio requirement from 200% ~~immediately after such borrowing.~~ to 150%. For a discussion of the risks involved with the reduction of our asset coverage requirement 150%, see “Risk Factors—Risks Related to Business Development Companies—Recent legislation may allow us to incur additional leverage.”

Equity capital may also be difficult to raise during periods of adverse or volatile market conditions. Subject to some limited exceptions, as a BDC, we are generally not able to issue additional shares of our common stock at a price less than net asset value without first obtaining approval for such issuance from our stockholders and our independent directors. If we are unable to raise capital or refinance existing debt on acceptable terms, then we may be limited in our ability to make new commitments or to fund existing commitments to our portfolio companies. Significant changes in the capital markets may also affect the pace of our investment activity and the potential for liquidity events involving our investments. Thus, the illiquidity of our investments may make it difficult for us to sell such investments to access capital if required, and as a result, we could realize significantly less than the value at which we have recorded our investments if we were required to sell them for liquidity purposes.

Adverse economic conditions or increased competition for investment opportunities could delay deployment of our capital, reduce returns and result in losses.

Adverse economic conditions may make it difficult to find suitable investments promptly, efficiently or effectively in a manner that is most beneficial to our stockholders. Any delay in investment, or inability to find suitable investments, could adversely affect our performance, retard or reduce distributions and reduce our overall return to investors. We will compete for investments with other BDCs and investment funds (including private equity funds and mezzanine funds), as well as commercial banks and other traditional financial services companies and other sources of funding. Moreover, alternative investment vehicles, such as hedge funds, increasingly make investments in small to mid-sized private U.S. companies. As a result, competition for investment opportunities in private U.S. companies is intense and may intensify. Many of our competitors are substantially larger and have considerably greater financial, technical and marketing resources than we do. For example, some competitors may have a lower cost of capital and access to funding sources that are not available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments than we have. These characteristics could allow our competitors to consider a wider variety of investments, establish more relationships and offer better pricing and more flexible structuring for portfolio companies than we are able to do. We may lose investment opportunities if we do not match our competitors’ pricing, terms and structure and, if we do, we may not be able to achieve acceptable returns on our investments or may bear substantial risk of loss of capital. A significant part of our competitive advantage stems from the fact that the market for investments in private U.S. companies is underserved by traditional commercial banks and other financial sources. A significant increase in the number or the size of our competitors in this target market could force us to accept less attractive investment terms. Further, many of our competitors have greater experience operating under, or are not subject to, the regulatory restrictions imposed on us as a BDC.

Economic recessions or downturns could impair a company in which we invest and harm our operating results.

Many of our portfolio companies may be susceptible to economic slowdowns or recessions and may be unable to repay our debt investments during these periods. In that case, our non-performing assets are likely to increase, and the value of our portfolio is likely to decrease during these periods. Adverse economic conditions may also decrease the value of any collateral securing our senior or second lien secured loans. A prolonged recession may further decrease the value of such collateral and result in losses of value in our portfolio and a decrease in our revenues, net income, assets and net worth. Unfavorable economic conditions also could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us on terms we deem acceptable. These events could prevent us from increasing investments and harm our operating results.

Changes in interest rates may affect our cost of capital and net investment income.

Since we intend to use debt to finance investments, our net investment income will depend, in part, upon the difference between the rate at which we borrow funds and the rate at which we invest those funds. We expect that our ~~long term~~long-term fixed rate investments will be financed primarily with equity and long term debt. As a result, we can offer no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income. In periods of rising interest rates when we have debt outstanding, our cost of funds will increase, which could reduce our net investment income. We may occasionally use interest rate risk management techniques, primarily in highly volatile market conditions, in an effort to limit our exposure to interest rate fluctuations, but we will not use such techniques as a means of enhancing our returns. These techniques may include various interest rate hedging activities to the extent permitted by the ~~Company~~1940 Act. These activities may limit our ability to participate in the benefits of lower interest rates with respect to the hedged portfolio. Adverse developments resulting from changes in interest rates or hedging transactions could have a material adverse effect on our business, financial condition and results of operations. Also, we have limited experience in entering into hedging transactions, and we will initially have to purchase or develop such expertise.

~~Changes in financial regulations may have material adverse consequences to us and to our stockholders.~~

On July 21, 2010, the President signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act. The Dodd-Frank institutes a wide range of reforms that will have an impact on all financial institutions. Many of the requirements called for in the Dodd-Frank Act will be implemented over time, most of which will be subject to implementing regulations over the course of several years. Given the uncertainty associated with the manner in which the provisions of the Dodd-Frank Act will be implemented by the various regulatory agencies and through regulations, the full impact such requirements will have on our business, results of operations or financial condition is unclear. While we cannot predict what effect any changes in the laws or regulations or their interpretations would have on us as a result of the Dodd-Frank Act, these changes could be materially adverse to us and our stockholders.

Future changes in laws or regulations governing our operations may adversely affect our business or cause us to alter our business strategy.

We and our portfolio companies will be subject to regulation at the local, state and federal level. New legislation may be enacted or new interpretations, rulings or regulations ~~(including regulations under the Dodd-Frank Act)~~ could be adopted, including those governing the types of investments we are permitted to make, any of which could harm us and our stockholders, potentially with retroactive effect.

Additionally, any changes to the laws and regulations governing our operations relating to permitted investments may cause us to alter our investment strategy to avail ourselves of new or different opportunities. Such changes could result in material differences to the strategies and plans set forth in this ~~prospectus~~annual report on Form 10-K and may result in our investment focus shifting from the areas of expertise of our Adviser to other types of investments in which our Adviser may have less expertise or little or no experience. Thus, any such changes, if they occur, could have a material adverse effect on our results of operations and the value of your investment.

Efforts to comply with the Sarbanes-Oxley Act will involve significant expenditures, and non-compliance with the Sarbanes-Oxley Act may adversely affect us.

We are subject to the Sarbanes-Oxley Act and the related rules and regulations promulgated by the SEC. Under current SEC rules, our management will be required to report on our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act and related rules and regulations of the SEC. We will be required to review on an annual basis our internal control over financial reporting, and on a quarterly and annual basis to evaluate and disclose changes in our internal control over financial reporting. As a result, we expect to incur significant additional expenses in the near term, which may negatively impact our financial performance and our ability to pay distributions. This process also will result in a diversion of management’s time and attention. We cannot be certain as to the timing of completion of our evaluation, testing and remediation actions or the impact of the same on our operations and we may not be able to ensure that the process is effective or that our internal control over financial reporting is or will be effective in a timely manner. In the event that we are unable to maintain or achieve compliance with the Sarbanes-Oxley Act and related rules and regulations, we may be adversely affected.

Terrorist attacks, acts of war or natural disasters may affect any market for our common stock, impact the businesses in which we invest and harm our business, operating results and financial condition.

Terrorist acts, acts of war or natural disasters may disrupt our operations, as well as the operations of the businesses in which we invest. Such acts have created, and continue to create, economic and political uncertainties and have contributed to recent global economic instability. Future terrorist activities, military or security operations, or natural disasters could further weaken the domestic or global economies and create additional uncertainties, which may negatively affect the businesses in which we invest directly or indirectly and, in turn, could have a material adverse impact on our business, operating results and financial condition. Losses from terrorist attacks and natural disasters are generally uninsurable.

~~Risks Related to Business Development Companies~~

The requirement that we invest a sufficient portion of our assets in qualifying assets could preclude us from investing in accordance with our current business strategy; conversely, the failure to invest a sufficient portion of our assets in qualifying assets could result in our failure to maintain our status as a BDC.

As a BDC, we may not acquire any assets other than “qualifying assets” unless, at the time of and after giving effect to such acquisition, at least 70% of our total assets are qualifying assets. Therefore, we may be precluded from investing in what we believe are attractive investments if such investments are not qualifying assets. Conversely, if we fail to invest a sufficient portion of our assets in qualifying assets, we could lose our status as a BDC, which would have a material adverse effect on our business, financial condition and result of operations. Similarly, these rules could prevent us from making additional investments in companies in which we have invested, which could result in the dilution of our position, or could require us to dispose of investments at an inopportune time in order to comply with the Company Act. If we were forced to sell non-qualifying investments in the portfolio for compliance purposes, the proceeds from such sale could be significantly less than the current value of such investments. Further, any failure by us to comply with the requirements imposed on BDCs by the Company Act could cause the SEC to bring an enforcement action against us or expose us to the claims of private litigants. In addition, if approved by a majority of our stockholders, we may elect to withdraw our status as a BDC. If we withdraw our election or otherwise fail to qualify, or maintain our qualification, as a BDC, we may be subject to substantially greater regulation under the Company Act as a closed-end investment company. Compliance with such regulations would significantly decrease our operating flexibility and could significantly increase our operating costs.

Risks Relating to ~~the Ongoing Offering and~~ Our Common Stock

Delays in the application of offering proceeds to our investment program may adversely affect our results.

To the extent that there are significant delays in the application of the initial or subsequent proceeds of ~~this~~our offering to our investment program, from time to time, due to market conditions, the relative lack of suitable investment candidates or the time needed for transaction due diligence and execution, it will be more difficult to achieve our investment objectives and our returns may be adversely affected.

We are conducting “best efforts” offering, and if we are unable to raise substantial funds, we will be limited in the number and type of investments we may make, and the value of your investment in us may be reduced in the event our assets under-perform.

Our offering is being made on a best efforts basis, whereby our Dealer Manager and broker-dealers participating in the offering are only required to use their best efforts to sell our shares and have no firm commitment or obligation to purchase any of the shares. To the extent that less than the maximum number of shares is subscribed for, the opportunity for diversification of our investments may be decreased and the returns achieved on those investments may be reduced as a result of allocating all of our expenses among a smaller capital base.

The shares sold in our offering will not be listed on an exchange or quoted through a quotation system for the foreseeable future, if ever. Therefore, if you purchase shares in our offering, you will have limited liquidity.

The shares offered by us in our offering are illiquid assets for which there is not expected to be any secondary market nor is it expected that any will develop in the foreseeable future. Therefore, if you purchase shares you will likely have limited ability to sell your shares.

We are not obligated to complete a liquidity event by a specified date; therefore, it will be difficult for an investor to sell his or her common shares.

We intend to seek to complete a liquidity event for our stockholders within five to seven years following the completion of our offering period. However, because we may extend our offering indefinitely, the timing of any liquidity event is uncertain and may also be extended indefinitely. Accordingly, stockholders should consider that they may not have access to the money they invest for an indefinite period of time until we complete a liquidity event. We may determine not to pursue a liquidity event if we believe that then-current market conditions are not favorable for a liquidity event, and that such conditions will improve in the future. A liquidity event could include (1) a listing of our common stock on a national securities exchange; (2) a merger or another transaction approved by our board of directors in which our stockholders likely will receive cash or shares of a publicly traded company, including potentially a company that is an affiliate of us or (iii) the sale of all or substantially all of our assets either on a complete portfolio basis or individually followed by a liquidation. While our intention is to seek to complete a liquidity event within five to seven years following the completion of our offering period, there can be no assurance that a suitable transaction will be available or that market conditions for a liquidity event will be favorable during that timeframe. As such, there can be no assurance that we will complete a liquidity event at all.

Should we not be able to complete a liquidity event within seven years following the end of our offering, subject to the authority of the independent directors or the rights of the stockholders to postpone liquidation, we will cease to make investments in new portfolio companies and will begin the orderly liquidation of our assets (which may include allowing our debt securities to mature and disposing of our equity interests to the extent feasible.) However, upon the vote of a majority of stockholders eligible to vote at any stockholder meeting we may suspend the liquidation of the company for such time as the stockholders may agree or we may extend the date upon which we must cease to make investments in new portfolio companies and begin an orderly liquidation of our assets for up to three consecutive periods of 12 months each upon the vote of a majority of our independent directors.

In making a determination of what type of liquidity event is in the best interest of our stockholders, our board of directors, including our independent directors, may consider a variety of criteria, including, but not limited to, market conditions, portfolio diversification, portfolio performance, our financial condition, potential access to capital as a listed company, market conditions for the sale of our assets or listing of our common stock, internal management considerations and the potential for stockholder liquidity. If our shares are listed, we cannot assure you a public trading market will develop. Since a portion of the offering price from the sale of shares in our offering will be used to pay expenses and fees, the full offering price paid by stockholders will not be invested. As a result, even if we do complete a liquidity event, you may not receive a return of all of your invested capital.

Forced liquidation and being publicly listed may have adverse impact on the value of our common stock.

Because we intend to seek a liquidity event not more than seven years after completion of our offering, subject to the authority of the independent directors or the rights of the stockholders to postpone liquidation, we may be forced to seek a listing or a liquidation when market conditions are not favorable which may have an adverse impact on the value of our shares.

The trading price of our common stock, if we become listed, may fluctuate substantially. The price of our common stock that will prevail in the market in the future will depend on many factors, some of which are beyond our control and may not be directly related to our operating performance. In fact, shares of publicly-traded closed-end investment companies frequently trade at a discount to their net asset value per share. If our shares are eventually listed on a national exchange, we would not be able to predict whether our common stock would trade above, at or below net asset value per share. This risk is separate and distinct from the risk that our net asset value per share may decline.

You should also be aware that if a market for our stock is established, the potential volatility of our stock price may make us more susceptible to securities litigation, as other publicly-traded entities have experienced. Securities litigation could result in substantial costs and divert management’s attention and resources from our business.

Our Dealer Manager may be unable to sell a sufficient number of shares for us to achieve our investment objectives.

The success of our offering, and correspondingly our ability to implement our business strategy, is dependent upon the ability of our Dealer Manager to establish and maintain a network of licensed securities brokers-dealers and other agents. There is therefore no assurance that it will be able to sell a sufficient number of shares to allow us to have adequate funds to construct a portfolio of a sufficiently broad array of assets. If our Dealer Manager fails to perform, we may not be able to raise adequate proceeds through our offering to implement our investment strategy. As a result, we may be unable to achieve our investment objectives, and you could lose some or all of the value of your investment.

Although we have offered to repurchase your shares on a quarterly basis through our share repurchase program, ~~though~~ the terms of any such repurchases will be limited. As a result, you will have limited opportunities to sell your shares.

Beginning with the second quarter of 2016, we commenced offers to allow you to submit your shares on a quarterly basis for repurchase pursuant to our share repurchase program at a price equal to thenet offering price ~~for the applicable share class~~ in effect as of the date of such ~~repurchase~~.repurchase. However, the share repurchase program ~~includes~~will include numerous restrictions that limit your ability to sell your shares. We intend to limit the number of shares repurchased pursuant to our proposed share repurchase program as follows: (1) we currently intend to limit the number of shares repurchased during any calendar year to the number of shares we can repurchase with the proceeds we receive from the sale of shares of our common stock under our distribution reinvestment plan (at the discretion of our board of directors, we may also use cash on hand, cash available from borrowings and cash from liquidation of securities investments as of the end of the applicable period to repurchase shares); (2) we do not expect to repurchase shares in any calendar year in excess of 10% of the weighted average number of shares outstanding in the prior calendar year, or 2.5% in any quarter; and (3) to the extent that the number of shares submitted to us for repurchase exceeds the number of shares that we are able to purchase, we will repurchase shares on a pro rata basis, not on a first-come, first-served basis. ~~Further, we~~Our assets may be depleted to fulfill repurchases under our share repurchase program.

We will have no obligation to repurchase shares if the repurchase would violate applicable restrictions on distributions under federal or Maryland law that prohibit distributions that would cause a corporation to fail to meet statutory tests of solvency. These limits may prevent us from accommodating all repurchase requests made in any year. Our board of directors may amend, suspend or terminate the share repurchase program upon 30 days’ notice. We will notify you of such developments (1) in our quarterly reports or (2) by means of a separate mailing to you, accompanied by disclosure in a current or periodic report under the Exchange Act. During our offering, we will also include this information in a prospectus supplement or post-effective amendment to ~~the~~our registration statement, as then required under federal securities laws. In addition, although we have adopted a share repurchase program, we have discretion to not repurchase your shares, to suspend the plan, and to cease repurchases. Further, the plan has many limitations and should not be relied upon as a method to sell shares promptly and at a desired price.

The timing of our share repurchase offers pursuant to our share repurchase program may be at a time that is disadvantageous to our stockholders.

When we make quarterly repurchase offers pursuant to the share repurchase program, we may offer to repurchase shares at a price that is lower than the price you paid for shares ~~of a class~~ in our offering. As a result, to the extent you have the ability to sell your shares to us as part of our share repurchase program, the price at which you may sell your shares, which we expect to be thenet offering price ~~for the applicable share class~~ in effect as of the date of such repurchase,may be lower than what you paid in connection with your purchase of shares in our offering.

In addition, if you choose to participate in our share repurchase program, you will be required to provide us with notice of your intent to participate prior to knowing what the net asset value per share will be on the repurchase date. Although you will have the ability to withdraw your repurchase request prior to the repurchase date, to the extent you seek to sell your shares to us as part of our periodic share repurchase program, you will be required to do so without knowledge of what the repurchase price of our shares will be on the repurchase date.

We may be unable to invest a significant portion of the net proceeds of our offering on acceptable terms in ~~the timeframe contemplated by our prospectus.~~

an acceptable timeframe.

Delays in investing the net proceeds of our offering may impair our performance. We cannot assure you that we will be able to identify any investments that meet our investment objectives or that any investment that we make will produce a positive return. We may be unable to invest the net proceeds of our offering on acceptable terms within the time period that we anticipate or at all, which could harm our financial condition and operating results.

In addition, even if we are able to raise significant proceeds in our offering, we will not be permitted to use such proceeds to co-invest with certain entities affiliated with our Adviser in transactions originated by our Adviser unless we first obtain an exemptive order from the SEC and receive approval from our independent directors. We have applied for an exemptive order, and the SEC has granted exemptive relief for co-investments to other BDCs in the past. However, there can be no assurance that we will obtain such relief.

We anticipate that, depending on market conditions, ~~it may~~generally will take us ~~several months~~between 30-90 days for us to fully invest the initial proceeds ofwe receive in connection with our offering in securities meeting our investment objectives and providing sufficient diversification of our portfolio. During this period, we will invest the net proceeds of our offering primarily in cash, cash equivalents, U.S. government securities, repurchase agreements and high-quality debt instruments maturing in one year or less from the time of investment, which may produce returns that are significantly lower than the returns which we expect to achieve when our portfolio is fully invested in securities meeting our investment objectives. As a result, any distributions that we pay during this period may be substantially lower than the distributions that we may be able to pay when our portfolio is fully invested in securities meeting our investment objectives.

Your interest in us will be diluted if we issue additional shares, which could reduce the overall value of your investment.

~~Potential investors in our offering~~

Our stockholders do not have preemptive rights to any shares we issue in the future. Pursuant to our charter, a majority of our entire board of directors may amend our charter to increase the number of our authorized shares of stock without stockholder approval. ~~After your purchase in our offering, our~~Our board of directors may elect to sell additional shares in this or future public offerings, issue equity interests in private offerings or issue share-based awards to our independent directors or to ~~employees~~members of, or professionals utilized by, of our Adviser or Administrator. To the extent we issue additional equity interests ~~after your purchase in~~ our ~~offering, your~~stockholders percentage ownership interest in us will be diluted. In addition, depending upon the terms and pricing of any additional offerings and the value of our investments, you may also experience dilution in the book value and fair value of your shares.

Our Distribution Reinvestment Plan will dilute the interest of those who do not opt-in.

We currently have a distribution ~~re-investment~~reinvestment plan that requires participants to opt-in to re-invest distributions paid. For those investors who do not ~~opt-in~~opt in to the distribution ~~re-investment~~reinvestment plan their interest in ~~the company~~us will be diluted over time, relative to those investors who do opt-in to have their distributions used to purchase additional shares of our common stock.

We may issue preferred stock as a means to access additional capital, which could adversely affect common ~~shareholders~~stockholders and subject us to specific regulation under the ~~Company~~1940 Act.

We may issue preferred stock as a means to increase flexibility in structuring future financings and acquisitions. However, preferred stock has rights and preferences that would adversely affect the holders of common stock, including preferences as to cash distributions and preferences upon the liquidation or dissolution of the Company. As well, every issuance of preferred stock will be required to comply with the requirements of the ~~Company~~1940 Act. The ~~Company~~1940 Act requires, among other things, that (1) immediately after issuance and before any distribution is made with respect to our common stock and before any purchase of common stock is made, such preferred stock together with all other senior securities must not exceed an amount equal to 50% of our total assets after deducting the amount of such distribution or purchase price, as the case may be, and (2) the holders of shares of preferred stock, if any are issued, must be entitled as a class to elect two directors at all times and to elect a majority of the directors if distributions on such preferred stock are in arrears by two years or more. Certain matters under the ~~Company~~1940 Act require the separate vote of the holders of any issued and outstanding preferred stock.

Certain provisions of our charter and bylaws as well as provisions of the Maryland General Corporation Law could deter takeover attempts and have an adverse impact on the value of our common stock.

Our charter and bylaws, as well as certain statutory and regulatory requirements, contain certain provisions that may have the effect of discouraging a third party from attempting to acquire us. Under the Maryland General Corporation Law, “control shares” acquired in a “control share acquisition” have no voting rights except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter, excluding shares owned by the acquirer, by officers or by employees who are directors of the corporation. Our bylaws contain a provision exempting from the Control Share Acquisition Act under the Maryland General Corporation Law any and all acquisitions by any person of our shares of stock. Our board of directors may amend the bylaws to remove that exemption in whole or in part without stockholder approval if our board of directors determines that removing that exemption is in our best interest and the best interests of our stockholders. The Control Share Acquisition Act (if we amend our bylaws to be subject to that Act) may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer. Under the Maryland General Corporation Law, specified “business combinations,” including certain mergers, consolidations, issuances of equity securities and other transactions, between a Maryland corporation and any person who owns 10% or more of the voting power of the corporation’s outstanding voting stock, and certain other parties, (each an “interested stockholder”), or an affiliate of the interested stockholder, are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. Thereafter any of the specified business combinations must be approved by a super majority vote of the stockholders unless, among other conditions, the corporation’s common stockholders receive a minimum price for their shares. ~~See “Description of Our Securities—Business Combinations.”~~

Under the Maryland General Corporation Law, certain statutory provisions permit a corporation that is subject to the Exchange Act and that has at least three outside directors to be subject to certain corporate governance provisions that may be inconsistent with the corporation’s charter and bylaws. Among other provisions, a board of directors may classify itself without the vote of stockholders. Further, the board of directors, by electing into certain statutory provisions and notwithstanding any contrary provision in the charter or bylaws, may (i) provide that a special meeting of stockholders will be called only at the request of stockholders entitled to cast at least a majority of the votes entitled to be cast at the meeting, (ii) reserve for itself the right to fix the number of directors, and (iii) retain for itself the exclusive power to fill vacancies created by the death, removal or resignation of a director and (iv) require the approval of two-thirds of votes entitled to be cast in the election of the directors in order to remove a director. Our board of directors has already elected to be subject to the statutory provision providing that our board of directors has the sole power to fill any vacancy, and unrelated to these statutory provisions, our charter and bylaws already provide that its board of directors has the sole power to set the size of its board of directors. A corporation may be prohibited by its charter or by resolution of its board of directors from electing any of the provisions of the statute. We ~~are~~is not prohibited from implementing any or all of the remaining provisions of the statute.

Additionally, our board of directors may, without stockholder action, authorize the issuance of shares of stock in one or more classes or series, including preferred stock; and our board of directors may, without stockholder action, amend our charter to increase the aggregate number of shares of stock or the number of shares of stock of any class or series that we have authority to issue. These anti-takeover provisions may inhibit a change of control in circumstances that could give the holders of our common stock the opportunity to realize a premium over the value of our common stock.

Risks Related to Debt Financing

Our use of borrowed money will magnify the potential for gain or loss on amounts invested in our common stock and may increase the risk of investing in our common stock.

Through our wholly-owned financing subsidiary, TP Flexible Fund, Inc. (the “SPV”), we recently established a Credit Facility with RBC which we intend to use to make investments. The SPV is a wholly-owned subsidiary of the Company that was formed to facilitate the transactions under the Credit Facility. Under the terms of the Credit Facility, the SPV holds certain of the securities that would otherwise be owned by the Company to be used as the borrowing base and collateral under the Credit Facility. Income paid on these investments is distributed to the Company pursuant to a waterfall after taxes, fees, expenses, and debt service. The lenders under the Credit Facility have a security interest in the investments held by the SPV. Although these investments are owned by the SPV, because the SPV is a wholly-owned subsidiary of the Company, the Company is subject to all of the benefits and risks associated with the Credit Facility and the investments held by the SPV.

The use of borrowings and other types of financing, also known as leverage, magnify the potential for gain or loss on amounts invested and, therefore, increase the risks associated with investing in our shares. If we use leverage to partially finance our investments, through borrowing from banks and other lenders we, and therefore you, will experience increased risks of investing in our common stock. Any lenders and debt holders would have fixed dollar claims on our assets that are superior to the claims of our stockholders. If the value of our assets increases, then leverage would cause the net asset value attributable to our common stock to increase more sharply than it would have had we not leveraged. Conversely, if the value of our assets decreases, leverage would cause net asset value to decline more sharply than it otherwise would have had we not leveraged. Similarly, any increase in our income in excess of interest payable on the borrowed funds would cause our net investment income to increase more than it would without the leverage, while any decrease in our income would cause net investment income to decline more sharply than it would have had we not borrowed. Such a decline could negatively affect our ability to make distributions to stockholders. Leverage is generally considered a speculative investment technique. In addition, the decision to utilize leverage will increase our assets and, as a result, will increase the amount of base management fees payable to or Adviser.

Our use of borrowed funds to make investments will expose us to risks typically associated with leverage.

We may borrow money or incur debt to leverage our capital structure. As a result:

shares of our common stock would be exposed to incremental risk of loss; therefore, a decrease in the value of our investments would have a greater negative impact on the value of our common stock than if we did not use leverage;

any depreciation in the value of our assets may magnify losses associated with an investment and could totally eliminate the value of an asset to us;

if we do not appropriately match the assets and liabilities of our business and interest or dividend rates on such assets and liabilities, adverse changes in interest rates could reduce or eliminate the incremental income we make with the proceeds of any leverage;

our ability to pay dividends on our common stock may be restricted if our asset coverage ratio, as provided in the 1940 Act, is not at least 150%, and any amounts used to service indebtedness would not be available for such dividends;

any credit facility we may enter into would be subject to periodic renewal by our lenders, whose continued participation cannot be guaranteed;

any credit facility we may enter into may include covenants restricting our operating flexibility or affecting our investment or operating policies, and may require us to pledge assets or provide other security for such indebtedness; and

we, and indirectly our stockholders, will bear the entire cost of issuing and paying interest on any debt.

If we default under our Credit Facility or any subsequent credit facility or are unable to amend, repay or refinance any such facility on commercially reasonable terms, or at all, we may suffer material adverse effects on our business, financial condition, results of operations and cash flows.

In connection with our Credit Facility with RBC, a significant portion of our assets have been assigned to the SPV and pledged as collateral under such credit facility. In the event of a default under such a credit facility or any other future borrowing facility, our business could be adversely affected as we may (through our SPV) be forced to sell all or a portion of our investments quickly and prematurely at what may be disadvantageous prices to us in order to meet our outstanding payment obligations and/or support covenants and working capital requirements under any credit or borrowing facility, any of which would have a material adverse effect on our business, financial condition, results of operations and cash flows.

Following any such default, the agent for the lenders under any such credit or borrowing facility could assume control of the disposition of any or all of our assets, including the selection of such assets to be disposed and the timing of such disposition, which would have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, if the lender exercises our right to sell the assets pledged under a credit facility, such sales may be completed at distressed sale prices, thereby diminishing or potentially eliminating the amount of cash available to us after repayment of our outstanding borrowings. Moreover, such deleveraging of us could significantly impair our ability to effectively operate our business in the manner in which we expect. As a result, we could be forced to curtail or cease new investment activities and lower or eliminate any dividends that it may pay to our stockholders.

Incurring leverage creates conflicts of interests for our investment adviser.

Under the Investment Advisory Agreement, the base management fee payable to the Adviser is based on our average total assets (including amounts borrowed for investment purposes). Consequently, the Adviser may benefit when we incur additional debt or increases the use of leverage to acquire additional assets. This fee structure may encourage the Adviser to cause us to borrow more money to finance additional investments. In addition, under the Investment Advisory Agreement, the Adviser will receive an income incentive fee based on our performance. As a result, the Adviser could be encouraged to use additional leverage or take additional risk to increase the return on our investments.

Risks Related to Business Development Companies

As a BDC, we may not acquire any assets other than “qualifying assets” unless, at the time of and after giving effect to such acquisition, at least 70% of our total assets are qualifying assets. Therefore, we may be precluded from investing in what we believe are attractive investments if such investments are not qualifying assets. Conversely, if we fail to invest a sufficient portion of our assets in qualifying assets, we could lose our status as a BDC, which would have a material adverse effect on our business, financial condition and result of operations. Similarly, these rules could prevent us from making additional investments in companies in which we have invested, which could result in the dilution of our position, or could require us to dispose of investments at an inopportune time in order to comply with the 1940 Act. If we were forced to sell non-qualifying investments in the portfolio for compliance purposes, the proceeds from such sale could be significantly less than the current value of such investments. Further, any failure by us to comply with the requirements imposed on BDCs by the 1940 Act could cause the SEC to bring an enforcement action against us or expose us to the claims of private litigants. In addition, if approved by a majority of our stockholders, we may

elect to withdraw our status as a BDC. If we withdraw our election or otherwise fail to qualify, or maintain our qualification, as a BDC, we may be subject to substantially greater regulation under the 1940 Act as a closed-end investment company. Compliance with such regulations would significantly decrease our operating flexibility and could significantly increase our operating costs.

Recent legislation may allow us to incur additional leverage.

The 1940 Act generally prohibits us from incurring indebtedness unless immediately after such borrowing we have an asset coverage for total borrowings of at least 200% (i.e., the amount of debt may not exceed 50% of the value of our assets). However, recent legislation has modified the 1940 Act by allowing a BDC to increase the maximum amount of leverage it may incur from an asset coverage ratio of 200% to an asset coverage ratio of 150%, if certain requirements are met. Under the legislation, we are allowed to increase our leverage capacity if stockholders representing at least a majority of the votes cast, when quorum is met, approve a proposal to do so.

At the 2019 Annual Meeting, TPIC’s stockholders approved a proposal allowing us to modify our asset coverage ratio requirement from 200% to 150%, which will apply to the Company effective as of March 16, 2019, the day immediately after the 2019 Annual Meeting. As a result, we are required to make certain disclosures on our website and in SEC filings regarding, among other things, the receipt of approval to increase our leverage, our leverage capacity and usage, and risks related to leverage. As a non-traded BDC, we are also required to offer to repurchase our outstanding shares at the rate of 25% per quarter over four calendar quarters. At the discretion of our board of directors, we may use cash on hand, cash available from borrowings, cash available from the issuance of new shares and cash from the sale of our investments to fund the aggregate purchase price payable as a result of the repurchase offer. If a substantial number of Eligible Stockholders elect to participate in the Special Repurchase Offer, our assets could be significantly depleted. In addition, payment for repurchasing shares may require us to liquidate our portfolio holdings earlier than our Adviser would otherwise have caused these holdings to be liquidated. In such an event, we may be forced to sell assets at significantly depressed prices due to market conditions or otherwise, which may result in losses.

Leverage magnifies the potential for loss on investments in our indebtedness and on invested equity capital. As we use leverage to partially finance our investments, you will experience increased risks of investing in our securities. If the value of our assets increases, then leveraging would cause the net asset value attributable to our common stock to increase more sharply than it would have had we not leveraged. Conversely, if the value of our assets decreases, leveraging would cause net asset value to decline more sharply than it otherwise would have had we not leveraged our business. Similarly, any increase in our income in excess of interest payable on the borrowed funds would cause our net investment income to increase more than it would without the leverage, while any decrease in our income would cause net investment income to decline more sharply than it would have had we not borrowed. Such a decline could negatively affect our ability to pay common stock dividends, scheduled debt payments or other payments related to our securities. Leverage is generally considered a speculative investment technique. See “Risks Related to Debt Financing.”

U.S. Federal Income Tax Risks

We cannot predict how tax reform legislation will affect us, our investments, or our stockholders, and any such legislation could adversely affect our business.

Legislative or other actions relating to taxes could have a negative effect on us. The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service and the U.S. Treasury Department. In December 2017, the U.S. House of Representatives and U.S. Senate passed tax reform legislation, which the President signed into law. Such legislation has made many changes to the Code, including significant changes to the taxation of business entities, the deductibility of interest expense, and the tax treatment of capital investment. We cannot predict with certainty how any changes in the tax laws might affect us, our stockholders, or our portfolio investments. New legislation and any U.S. Treasury regulations, administrative interpretations or court decisions interpreting such legislation could significantly and negatively affect our ability to qualify for tax treatment as a RIC or the U.S. federal income tax consequences to us and our stockholders of such qualification, or could have other adverse consequences. Stockholders are urged to consult with their tax advisor regarding tax legislative, regulatory, or administrative developments and proposals and their potential effect on an investment in our securities.

We may be subject to certain corporate-level U.S. federal income taxes regardless of whether we continue to qualify as a ~~RIC~~

RIC.

To obtain and maintain RIC tax treatment under the Code, we must meet the following annual distribution, income source and asset diversification requirements. See ~~“Material~~“Business - Material U.S. Federal Income Tax Considerations.”

●

The annual distribution requirement for a RIC will be satisfied if we distribute to our stockholders on an annual basis at least 90% of our net ordinary income and realized net short-term capital gain in excess of realized net long-term capital loss, if any. We will be subject to corporate-level U.S. federal income tax on any of our undistributed income or gain. Additionally, we will be subject to a 4% nondeductible federal excise tax to the extent that we do not satisfy certain additional minimum distribution requirements on a calendar-year basis. Because we may use debt financing, we are subject to an asset coverage ratio requirement under the Company Act and may in the future become subject to certain financial covenants under loan and credit agreements that could, under certain circumstances, restrict us from making distributions necessary to satisfy the distribution requirement. If we are unable to obtain cash from other sources, we could fail to qualify for RIC tax treatment and thus become subject to corporate-level income tax.

●

The asset diversification requirement will be satisfied if we meet certain asset diversification requirements at the end of each quarter of our taxable year. To satisfy this requirement, at least 50% of the value of our assets must consist of cash, cash equivalents, U.S. Government securities, securities of other RICs, and other securities; if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer, and no more than 25% of the value of our assets can be invested in the securities, other than U.S. government securities or securities of other RICs, of one issuer, of two or more issuers that are controlled, as determined under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses or of certain “qualified publicly-traded partnerships.” Failure to meet these requirements may result in our having to dispose of certain investments quickly in order to prevent the loss of RIC status. Because most of our investments will be in private companies, and therefore will be relatively illiquid, any such dispositions could be made at disadvantageous prices and could result in substantial losses.

long-term capital loss, if any. We will be subject to corporate-level U.S. federal income tax on any of our undistributed income or gain. Because we may use debt financing, we are subject to an asset coverage ratio requirement under the 1940 Act and may in the future become subject to certain financial covenants under loan and credit agreements that could, under certain circumstances, restrict us from making distributions necessary to satisfy the distribution requirement. If we are unable to obtain cash from other sources, we could fail to qualify for RIC tax treatment and thus become subject to corporate-level U.S. federal income tax.

The source-of-income requirement will be satisfied if we obtain at least 90% of our gross income for each year from dividends, interest, gains from the sale of stock or securities or similar sources.

The asset diversification requirement will be satisfied if we meet certain asset diversification requirements at the end of each quarter of our taxable year. To satisfy this requirement, (i) at least 50% of the value of our assets must consist of cash, cash equivalents, U.S. Government securities, securities of other RICs, and other securities, if such other securities of any one issuer do not represent more than 5% of the value of our total assets or we do not hold more than 10% of the outstanding voting securities of the issuer, and (ii) no more than 25% of the value of our assets can be invested in the securities, other than U.S. government securities or securities of other RICs, of any one issuer, of any two or more issuers that are controlled, as determined under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses, or of certain “qualified publicly-traded partnerships.” Failure to meet these requirements may result in our having to dispose of certain investments quickly in order to prevent the loss of RIC status. Because most of our investments will be in private companies, and therefore will be relatively illiquid, any such dispositions could be made at disadvantageous prices and could result in substantial losses.

If we fail to qualify for or maintain RIC tax treatment for any reason and are subject to corporate income tax, the resulting corporate taxes could substantially reduce our net assets, the amount of income available for distribution and the amount of our distributions. We may also be subject to certain U.S. federal excise taxes, as well as state, local and foreign taxes.

We may have difficulty paying our required distributions if we recognize income before or without receiving cash representing such income.

For U.S. federal income tax purposes, we may be required to recognize taxable income in circumstances in which we do not receive a corresponding payment in cash. For example, if we hold debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments with payment-in-kind (“PIK”) interest, or issued with warrants, or, in certain cases, with increasing interest rates), we must include in income each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. We may also have to include in income other amounts that we have not yet received in cash, such as deferred loan origination fees that are paid after origination of the loan or are paid in non-cash compensation such as warrants or stock. We anticipate that a portion of our income may constitute original issue discount or other income required to be included in taxable income prior to receipt of cash. Further, we may elect to amortize market discounts and include such amounts in our taxable income in the current year, instead of upon disposition, as an election not to do so would limit our ability to deduct interest expenses for tax purposes.

Because any original issue discount or other amounts accrued will be included in our investment company taxable income for the year of the accrual, we may be required to make a distribution to our stockholders in order to satisfy the annual distribution requirement, even though we will not have received any corresponding cash amount. As a result, we may have difficulty meeting the annual distribution requirement necessary to obtain and maintain RIC tax treatment under the Code. We may have to sell some of our investments at times and/or at prices we would not consider advantageous, raise additional debt or equity capital or forgo new investment opportunities for this purpose. If we are not able to obtain cash from other sources, we may fail to qualify for RIC tax treatment and thus become subject to corporate-level U.S. federal income tax. For additional discussion regarding the tax implications of a RIC, see ~~“Material~~“Business - Material U.S. Federal Income Tax ~~Considerations—Taxation as a Regulated Investment Company.~~Considerations.”

You may receive shares of our common stock as distributions, which could result in adverse tax consequences to you.

In order to satisfy the annual distribution requirement applicable to RICs, we may have the ability to declare a portion of a distribution in shares of our common stock instead of in cash. As long as a portion of such distribution is paid in cash (which portion can be as low as ~~10% for our taxable years ending on or before December 31)~~20%) and certain requirements are met, the entire distribution to the extent of our current and accumulated earnings and profits would be a dividend for U.S. federal income tax purposes. If the portion of the distribution payable in cash is less than the total amount of cash payable to all stockholders electing to receive the distribution in cash, the amount of cash available for distribution will be pro-rated among all shareholders and the remaining portion of the distribution would be paid in shares of our common stock. As a result, a stockholder would be taxed on the entire distribution in the same manner as a cash distribution, even though all or a portion of the distribution was paid in shares of our common stock.

You may have current tax liability on distributions you elect to reinvest in our common stock but would not receive cash from such distributions to pay such tax liability.

If you participate in our distribution reinvestment plan, you will be deemed to have received, and for U.S. federal income tax purposes will be taxed on, the amount reinvested in our common stock to the extent the amount reinvested was not a tax-free return of capital. As a result, unless you are a tax-exempt entity, you may have to use funds from other sources to pay your tax liability on the value of our common stock received from the distribution.

If we do not qualify as a “publicly offered regulated investment company,” as defined in the Code, you will be taxed as though you received a distribution of some of our expenses.

A “publicly offered regulated investment company” is a regulated investment company whose shares are either (i) continuously offered pursuant to a public offering, (ii) regularly traded on an established securities market or (iii) held by at least 500 persons at all times during the taxable year. If we are not a publicly offered regulated investment company for any period, a non-corporate ~~shareholder’s~~stockholder’s pro rata portion of our affected expenses, including our management fees, will be treated as an additional distribution to the ~~shareholder~~stockholder and will be deductible by such ~~shareholder~~stockholder only to the extent permitted under the limitations described below. For non-corporate ~~shareholders,~~stockholders, including individuals, trusts, and estates, significant limitations generally apply to the deductibility of certain expenses of a non-publicly offered regulated investment company, including advisory fees. In particular, these expenses, referred to as miscellaneous itemized deductions, are deductible to an individual only to the extent they exceed 2% of such a ~~shareholder’s~~stockholder’s adjusted gross income, and are not deductible for alternative minimum tax purposes. While we anticipate that we will constitute a publicly offered regulated investment company ~~after~~for our ~~first tax~~current taxable year, there can be no assurance that we will in fact so qualify for any of our taxable years.

I~~tem~~~~1B.~~

~~Unresolved Staff Comments~~

~~There~~

Our investments in CLO vehicles may be subject to special anti-deferral provisions that could result in us incurring tax or recognizing income prior to receiving cash distributions related to such income.

The CLO vehicles in which we will invest generally will constitute PFICs. Because we will acquire investments in PFICs (including equity tranche investments in CLO vehicles that are ~~no unresolved comments~~PFICs), we may be subject to U.S. federal income tax on a portion of any “excess distribution” or gain from the disposition of such investments even if such income is distributed as a taxable dividend by us to our stockholders. Certain elections may be available to mitigate or eliminate such tax on excess distributions, but such elections (if available) will generally require us to recognize our share of the PFIC’s income for each year regardless of whether we receive any distributions from such PFIC. We must nonetheless distribute such income to maintain our status as a RIC. If we hold more than 10% of the shares in a foreign corporation that is treated as a controlled foreign corporation (“CFC”) (including equity tranche investments in a CLO vehicle treated as a CFC), we may be treated as receiving a deemed distribution (taxable as ordinary income) each year from such foreign corporation in an amount equal to our pro rata share of the corporation’s income for the tax year (including both ordinary earnings and capital gains). If we are required to include such deemed distributions from a CFC in our income, it will be required to distribute such income to maintain our RIC tax treatment regardless of whether or not the CFC makes an actual distribution during such year.

If we are required to include amounts in income prior to receiving distributions representing such income, we may have to sell some of our investments at times and/or at prices it would not consider advantageous, raise additional debt or equity capital or forgo new investment opportunities for this ~~time.~~

purpose. If we are not able to obtain cash from other sources, we may fail to qualify for RIC tax treatment and thus become subject to corporate-level U.S. federal income tax. For additional discussion regarding the tax implications of a RIC, see “Business - Material U.S. Federal Income Tax Considerations.”

If a CLO vehicle in which we invest fails to comply with certain U.S. tax disclosure requirements, such CLO may be subject to withholding requirements that could materially and adversely affect our operating results and cash flows.

Legislation commonly referred to as the “Foreign Account Tax Compliance Act,” or “FATCA,” imposes a withholding tax of 30% on payments of U.S. source interest and dividends, or gross proceeds from the disposition of an instrument that produces U.S. source interest or dividends paid after December 31, 2018, to certain non-U.S. entities, including certain non-U.S. financial institutions and investment funds, unless such non-U.S. entity complies with certain reporting requirements regarding our United States account holders and our United States owners. Most CLO vehicles in which we invest will be treated as non-U.S. financial entities for this purpose, and therefore will be required to comply with these reporting requirements to avoid the 30% withholding. If a CLO vehicle in which we invest fails to properly comply with these reporting requirements, it could reduce the amounts available to distribute to equity and junior debt holders in such CLO vehicle, which could materially and adversely affect our operating results and cash flows.

If we do not receive timely distributions from our CLO investments, we could have difficulty qualifying as a RIC.

As discussed above, we are required to include in our taxable income our proportionate share of the income of certain CLO investments to the extent that such CLOs are PFICs for which we have made a qualifying electing fund, or “QEF” election, or are CFCs. To the extent that such CLOs fail to distribute their earnings and profits each year, we may have difficulty qualifying as a RIC. To qualify as a RIC, we must, among other thing, derive in each taxable year at least 90% of our gross income from certain sources specified in the Code, or the “90% Income Test.” Although the Code generally provides that the income inclusions from a QEF or a CFC will be “good income” for purposes of this 90% Income Test to the extent that the QEF or the CFC distribute such income to we in the same taxable year to which the income is included in our income, the Code does not specifically provide whether these income inclusions would be “good income” for this 90% Income Test if we do not receive distributions from the QEF or CFC during such taxable year. The IRS has issued a series of private rulings in which it has concluded that all income inclusions from a QEF or a CFC included in a RIC’s gross income would constitute “good income” for purposes of the 90% Income Test. Such rulings are not binding on the IRS except with respect to the taxpayers to whom such rulings were issued.

Recently, the IRS and U.S. Treasury Department issued proposed regulations that provide that the income inclusions from a QEF or a CFC would not be good income for purposes of the 90% Income Test unless we receive a cash distribution from such entity in the same year attributable to the included income. As a result, the income inclusions from a CLO that is a QEF or a CFC may not be “good income” for purposes of the 90% Income Test unless we receive a cash distribution from such entity in the same year attributable to the included income. If such income were not considered “good income” for purposes of the 90% Income Test, we may have difficulty qualifying as a RIC if the CLOs in which we invest do not distribute such income each year.

Item 1B. Unresolved Staff Comments

Not applicable.

~~Item 2.~~

~~Properties~~

Item 2. Properties

We do not own any real estate or other physical properties materially important to our operation. Our principal executive offices are located at 10 East 40th Street, New York, New York 10016, where we occupy our office space pursuant to our Administration Agreement with Prospect Administration. The office facilities, which are shared with the Investment Adviser and Administrator, consist of approximately 32,500 square feet, with various leases expiring up to and through 2023. We believe that ~~the~~our office facilities ~~of the Advisor~~ are suitable and adequate for our business as ~~it is contemplated to be~~currently conducted.

~~Item 3.~~

~~Legal Proceedings~~

None of us, our Advisors or our Administrator, is currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us, or against our Advisors or Administrator.

Item 3. Legal Proceedings

From time to time, we ~~our Advisors or Administrator~~ may ~~be a party to certain~~become involved in various investigations, claims and legal proceedings that arise in the ordinary course of our business. These matters may relate to intellectual property, employment, tax, regulation, contract or ~~incidental~~other matters. The resolution of such matters as may arise will be subject to various uncertainties and, even if such claims are without merit, could result in the ~~normal course~~expenditure of ~~our business, including the enforcement~~significant financial and managerial resources. We are not aware of ~~our rights under contracts with our portfolio companies. While we cannot predict the outcome of these~~any material legal proceedings ~~with certainty, we do not expect that these proceedings will have a material adverse effect on our results~~as of ~~operations or financial condition.~~

June 30, 2019.

~~Item 4.~~

~~Mine Safety Disclosures~~

Item 4. Mine Safety Disclosures

Not applicable.

PART II

~~Item 5.~~

~~Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities~~

Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities

Market Information

There is no established public trading market for our common stock, and we do not expect one to develop. Therefore, there is a risk that a shareholder may not be able to sell our stock at a time or price acceptable to the shareholder, or at all.

Continuous Public Offering of Common Stock

Through our Dealer Manager, we are ~~currently selling~~conducting a continuous public offering of our shares of our common stock on a ~~continuous~~"best efforts" basis. On June 14, 2011, our company filed our Registration Statement with the SEC to register our ~~Offering.~~offering. The Registration Statement was declared effective by the SEC on September 4, 2012 and our company commenced its initial Offering. Our initial offering terminated on March 1, 2016 and we commenced the follow-on offering of our shares on March 17, 2016.

In our ongoing follow-on offering, we are currently offering at an offering price of ~~$15.06~~$11.38 per share. However, if our net asset value increases, our offering price will be adjusted to ensure that shares are not sold at a price per share, after deduction of selling commissions and dealer manager fees, that is below our net asset value per share. Therefore, persons who subscribe for shares of our common stock in our offering must submit subscriptions for a certain dollar amount, rather than a number of shares of common stock and, as a result, may receive fractional shares of our common stock. In connection with each closing of sales of our shares in our offering, our board of directors or a committee thereof is required within 48 hours of the time of such closing, to make the determination that we are not selling shares of our common stock at a price which, after deducting the sales load, is below our then current net asset value per share. The board of directors or a committee thereof will consider the following factors, among others, in making such determination:

●

~~The net asset value per share of our common stock disclosed in the most recent periodic report we filed with the SEC;~~

●

Our management’s assessment of whether any material change in our net asset value per share has occurred (including through the realization of net gains on the sale of our portfolio investments) from the period beginning on the date of the most recently disclosed net asset value per share to the period ending two days prior to the date of the closing; and

●

The magnitude of the difference between the net asset value per share disclosed in the most recent periodic report we filed with the SEC and our management’s assessment of any material change in the net asset value per share since the date of the most recently disclosed net asset value per share, and the offering price of the shares of our common stock at the date of closing.

The net asset value per share of our common stock disclosed in the most recent periodic report we filed with the SEC;

Importantly, this determination does not require that we calculate net asset value per share in connection with each closing and sale of shares of our common stock, but instead it involves the determination by the board of directors or a committee thereof that,

at the time at which the closing and sale is made, we are not selling shares of our common stock at a price which, after deducting the sales load, is materially below the then current net asset value per share.

Moreover, to the extent that there is even a remote possibility that we may (i) issue shares of our common stock at a price which, after deducting the sales load, is materially below the then current net asset value per share of our common stock at the time at which the closing and sale is made or (ii) trigger the undertaking (which we provided to the SEC in ~~the~~our registration statement ~~to which this prospectus is a part)~~ to suspend the offering of shares of our common stock pursuant to ~~this prospectus~~our registration statement if our net asset value per share fluctuates by certain amounts in certain circumstances until ~~the prospectus~~our registration statement is amended, our board of directors or a committee thereof will elect, in the case of clause (i) above, either to postpone the closing until such time that there is no longer the possibility of the occurrence of such event or to undertake to determine net asset value per share within two days prior to any such sale to ensure that such sale will not be at a price which, after deducting the sales load, is materially below our then current net asset value per share, and, in the case of clause (ii) above, to comply with such undertaking or to undertake to determine net asset value per share to ensure that such undertaking has not been triggered.

As of ~~December 31, 2016, 976,409.17~~June 30, 2019, 2,370,011 shares were outstanding, ~~15,990~~17,730 of which are held by ~~our Adviser, Triton Pacific Adviser. Set forth below is a chart that presents~~Craig Faggen, Director of the ~~use of proceeds from the Offering since we commenced our Offering on September 4, 2012.~~

Year Ended December 31,
2016 2015 2014 2013
Shares Amount Shares Amount Shares Amount Shares Amount
Gross proceeds from Offering 444,847.84 6,683,706 296,713.69 $ 4,404,003 214,659.24 $ 3,144,219 7,315.00 $ 98,753
Reinvestment of Distributions 15,548.74 215,591 6,789.86 96,756 — — — —
Commissions and Dealer Manager Fees (581,515 ) — (398,363 ) — (246,272 ) — —
Net Proceeds to Company from Share Transactions 460,396.58 $ 6,317,782 303,503.55 $ 4,102,396 214,659.24 $ 2,897,947 7,315.00 $ 98,753

Company.

Holders

Set forth below is a chart describing the authorized classes and the single class of our securities outstanding as of ~~March 24, 2017:~~

Title of Class Amount
Authorized Amount Held by Us or
for Our Account Amount Outstanding
Exclusive of Amount
Under Column 3
Class A Common Stock 37,500,000 — 1,062,855.98
Class T Common Stock 37,500,000 — —

September 27, 2019:



(1) Title of Class	(2) Amount Authorized	(3) Amount Held by Us or for Our Account	(4) Amount Outstanding Exclusive of Amount Under Column (3)
Class A Common Stock	37,500,000	—	2,392,140
Class T Common Stock	37,500,000	—	—

As of ~~March~~September 27, ~~2017,~~2019, we had ~~446~~1,029 record holders of our common stock. No shares of our common stock have been authorized for issuance under any equity compensation plan. Effective March 2, 2016, all shares of our common stock issued and outstanding at that time were automatically converted into an equal number of shares of Class A common stock.

Repurchase Program

~~The Company intends to continue to conduct quarterly tender offers pursuant to its~~

As a result of PWAY being the accounting survivor of the Merger, the repurchases of FLEX and PWAY are discussed below.

We commenced our share repurchase ~~program. The Company’s~~program in the second quarter of 2016. Repurchases are made on such terms as may be determined by our board of directors ~~will consider~~in its complete and absolute discretion unless, in the ~~following factors, among others,~~judgment of the independent directors of our board of directors, such repurchases would not be in ~~making~~the best interests of our stockholders or would violate applicable law. Under the Maryland General Corporation Law, a Maryland corporation may not make a distribution to stockholders, including pursuant to our share repurchase program, if, after giving effect to the distribution, (i) the corporation would not be able to pay its ~~determination regarding whether~~indebtedness in the ordinary course or (ii) the corporation’s total assets would be less than its total liabilities plus preferential amounts payable on dissolution with respect to ~~cause~~preferred stock. We anticipate conducting such repurchase offers in accordance with the ~~Company to offer to~~requirements of Rule 13e-4 of the Exchange Act and the 1940 Act. In months in which we repurchase shares, ~~of common stock and under what terms:~~

~~the effect of such~~we expect to conduct repurchases on the ~~Company’s qualification as a RIC (including~~same date that we hold our closings for the ~~consequences~~sale of ~~any necessary asset sales);~~shares in our offering.

~~the liquidity of the Company’s assets (including fees and costs associated with disposing of assets);~~

~~the Company’s investment plans and working capital requirements;~~

~~the relative economies of scale with respect to the Company’s size;~~

~~the Company’s history in repurchasing shares of common stock or portions thereof; and~~

~~the condition of the securities markets.~~

~~The Company~~We currently ~~intends~~intend to limit the number of shares ~~of common stock~~ to be repurchased during any calendar year to the number of shares ~~of common stock it~~we can repurchase with the proceeds ~~it receives~~we receive from the ~~issuance~~sale of shares of our common stock under ~~its~~our distribution reinvestment plan. At the discretion of ~~the Company’s~~our board of directors, ~~the Company~~we may also use cash on hand, cash available from borrowings and cash from ~~the~~ liquidation of securities investments as of the end of the applicable period to repurchase ~~shares of common stock.~~shares. In addition, ~~the Company will limit the number of~~we do not expect to repurchase shares ~~of common stock to be repurchased~~ in any calendar year toin excess of 10% of the weighted average number of shares ~~of common stock~~ outstanding in the prior calendar year, or 2.5% in each ~~calendar~~ quarter though the actual number of shares ~~of common stock~~ that ~~the Company offers~~we offer to repurchase may be less in light of the limitations noted above.

Our board of directors reserves the right, in its sole discretion, to limit the number of shares to be repurchased ~~for each class~~ by applying the limitations on the number of shares to be repurchased, noted ~~above, on a per class basis.~~above. We further anticipate that we will offer to repurchase such shares on each date of repurchase at a price equal to 90% of the current offering price on each date of repurchase. If the amount of repurchase requests exceeds the number of shares we seek to repurchase, we will repurchase shares on a pro-rata basis. As a

result, we may repurchase less than the full amount of shares that ~~shareholders~~you submit for repurchase. If we do not repurchase the full amount of ~~the~~your shares that ~~shareholders~~you have requested to be repurchased, or we determine not to make repurchases of our shares, ~~shareholders~~you may not be able to dispose of ~~their~~your shares. Any periodic repurchase offers will be subject in part to our available cash and compliance with the ~~Company~~1940 Act.

We will not repurchase shares, or fractions thereof, if such repurchase will cause us to be in violation of the securities or other laws of the United States, Maryland or any other relevant jurisdiction.

If any of our Adviser’s affiliates holds shares, any such affiliates may tender shares in connection with any repurchase offer we make on the same basis as any other stockholder. Except for the initial capital contribution of our Adviser, our Adviser will not tender its shares for repurchase as long as our Adviser remains our investment adviser.

FLEX Share Repurchase Program – Post Merger

As of September 27, 2019, we have not repurchased any of our Class A Shares pursuant to our share repurchase program, including for the quarter ended June 30, 2019. Our share repurchase program is separate and apart from the Special Repurchase Offer discussed herein.

PWAY (Accounting Survivor) – Pre-Merger

The following table ~~provides information concerning~~sets forth the ~~Company’s repurchase~~number of common shares that were repurchased by PWAY in each tender offer, which reflect repurchases that occurred prior to the Merger:



Quarterly Offer Date	Repurchase Date	Shares Repurchased	Percentage of Shares Tendered That Were Repurchased		Repurchase Price Per Share		Aggregate Consideration for Repurchased Shares
Year ended June 30, 2017
September 30, 2016	N/A	—	—	%	$	—	$	—
December 31, 2016	January 25, 2017	772	100	%	$	14.00	$	10,803
March 31, 2017	April 27, 2017	359	100	%	$	14.02	$	5,034
Total for year ended June 30, 2017		1,131					$	15,837

Year ended June 30, 2018
June 30, 2017	July 31, 2017	4,801	61	%	$	13.61	$	65,335
September 30, 2017	October 30, 2017	5,246	81	%	$	13.57	$	71,189
December 31, 2017	January 23, 2018	5,689	100	%	$	13.56	$	77,152
March 31, 2018	April 30, 2018	22,245	100	%	$	13.03	$	289,865
Total for year ended June 30, 2018		37,981					$	503,541

Year ended June 30, 2019
June 30, 2018	August 7, 2018	31,715	100	%	Class A:$12.67 Class I: $12.70		$	401,849
September 30, 2018	November 13, 2018	19,180	100	%	Class A:$11.35		$	217,695
December 31, 2018	February 15, 2019	17,749	100	%	Class A:$10.80		$	191,672
Total for year ended June 30, 2019		68,644					$	811,216

Special Repurchase Offer

At the 2019 Annual Meeting, TPIC’s stockholders approved a proposal allowing us to modify our asset coverage ratio requirement from 200% to 150%. Because our securities are not listed on a national securities exchange, pursuant to the requirements of the SBCA we are required to conduct four Special Repurchase Offers that, taken together, will allow all of the Eligible Stockholders (former stockholders of TPIC as of March 15, 2019, the date of the 2019 Annual Meeting) to have those shares that such Eligible Stockholders held as of that date to be repurchased by us. PWAY stockholders who became our stockholders in connection with the Merger are not eligible to participate in these Special Repurchase Offers. In addition, shares of our common stock acquired after the date of the 2019 Annual Meeting are not eligible for repurchase in these Special Repurchase Offers. These Special Repurchase Offer are separate and apart from our share repurchase program discussed above.

The Special Repurchase Offer consists of four quarterly tender offers, the first of which occurred in the second fiscal quarter of 2019 with the remainder occurring in each of the following three fiscal quarters. Each of the four tender offers that is part of the Special Repurchase Offer allows the Eligible Stockholders to tender for repurchase up to 25% of their shares held as of the date of the 2019 Annual Meeting. The repurchase price for any shares tendered during the ~~year ended December 31, 2016 (no repurchases prior~~Special Repurchase Offer is equal to ~~fiscal year 2016):~~

For the Three Months Ended Repurchase Date Shares Repurchased Percentage of Shares Tendered That Were Repurchased Average Price Paid per Share Aggregate Consideration for Repurchased Shares
Fiscal 2016
September 30, 2016 July 15, 2016 8,482.60 50 % $ 13.80 $ 117,060
December 31, 2016 October 14, 2016 8,482.60 48 % 13.80 117,060
Total 16,965.20 49 % $ 13.80 $ 234,120

the net asset value per share of our common stock as of the date of each such repurchase.

In connection with each tender offer that is part of the Special Repurchase Offer, we plan to provide notice to all Eligible Stockholders describing the terms of the Special Repurchase Offer and other information such Eligible Stockholders should consider in deciding whether to tender their shares to us in the Special Repurchase Offer. These documents are made available on our website at www.flexbdc.com. Each Eligible Stockholder has not less than 20 business days from the date of that notice to elect to tender their shares back to us.

The payment for the eligible shares that are tendered in each Special Repurchase Offer is expected to be paid promptly at the end of the applicable Special Repurchase Offer in accordance with the 1940 Act. At the discretion of our board of directors, we may use cash on hand, cash available from borrowings, cash available from the issuance of new shares of our common stock and cash from the sale of our investments to fund the aggregate purchase price payable as a result of any Special Repurchase Offer. If substantial numbers of the Eligible Stockholders take advantage of this opportunity, it could significantly decrease our asset size, require us to sell our investments earlier than our Adviser would have otherwise desired, which may result in selling investments at inopportune times or significantly depressed prices and/or at losses, or cause us to incur additional leverage solely to meet repurchase requests.

We commenced the first of our Special Repurchase Offers on May 24, 2019 to allow the Eligible Stockholders to tender for repurchase up to 25% of their shares held as of the date of the 2019 Annual Meeting. That Special Repurchase Offer expired at 4:00 P.M., Eastern Time, on June 24, 2019, and a total of 49,988.8838 shares of our Class A common stock were validly tendered and not withdrawn pursuant to the Special Repurchase Offer as of such date. In accordance with the terms of the Special Repurchase Offer, we purchased all of the shares of our Class A common stock validly tendered and not withdrawn at a price equal to $9.93 per share for an aggregate purchase price of approximately $495,506.

We commenced our second Special Repurchase Offer on September 6, 2019 and that offer is currently expected to close on October 4, 2019.

Recent Sales of Unregistered Securities

There were no sales of unregistered securities in the year ended ~~December 31, 2016.~~

June 30, 2019.

Distributions

~~On January 15, 2015, our board~~

As a result of ~~directors declared a quarterly cash distribution for~~PWAY being the ~~fourth quarter~~accounting survivor of ~~2014~~the Merger, the distributions of $0.07545 per share payable on January 30, 2015, to shareholders of record as of January 20, 2015. In addition, on April 2, 2015, our board of directors declared a cash distribution for the first quarter of 2015 of $0.116 per share payable on April 13, 2015, to shareholders of record as of April 6, 2015. Commencing in April 2015,FLEX and ~~subject~~PWAY are discussed below.

General

Subject to our board of directors’ sole discretion and applicable legal restrictions, our board of directors ~~began to authorize~~authorizes and ~~declare~~declares a monthly distribution amount per share of our common stock, payable in advance. We will then calculate each stockholder’s specific distribution amount for the month using record and declaration dates, and your distributions will begin to accrue on the date we accept your subscription for shares of our common stock. ~~To date, we have paid monthly distributions as follows (all distributions to date have been to Class A Shares):~~

Distribution
Fiscal 2016 Per Share Amount
January 22, 2016 $ 0.04500 $ 25,244
February 16, 2016 $ 0.04500 $ 26,477
March 23, 2016 $ 0.04500 $ 30,271
April 21, 2016 $ 0.04500 $ 32,832
May 19, 2016 $ 0.04500 $ 34,950
June 23, 2016 $ 0.04500 $ 36,206
July 21, 2016 $ 0.04000 $ 32,318
August 25, 2016 $ 0.04000 $ 33,293
September 22, 2016 $ 0.04000 $ 33,877
October 20, 2016 $ 0.04000 $ 35,164
November 18, 2016 $ 0.04000 $ 37,327
December 20, 2016 $ 0.04000 $ 38,091
Fiscal 2015
January 20, 2015 $ 0.07545 $ 17,314
April 13, 2015 $ 0.11600 $ 28,334
April 29, 2015 $ 0.04000 $ 9,880
May 29, 2015 $ 0.04000 $ 12,634
June 29, 2015 $ 0.04000 $ 13,295
July 30, 2015 $ 0.04000 $ 13,676
August 28, 2015 $ 0.04000 $ 14,511
September 29, 2015 $ 0.04000 $ 16,287
October 22.2015 $ 0.04500 $ 19,484
November 25, 2015 $ 0.04500 $ 21,169
December 24, 2015 $ 0.04500 $ 23,491

~~The per share amount of distributions on Class A and Class Tshares~~ will likely differ because of different allocations of class-specific expenses. For example, distributions on Class T shares will likely be lower than on Class A shares because Class T shares are subject to an annual distribution fee for a period of time. From time to time, we may also pay ~~special~~ interim distributions ~~in the form of cash or shares of our common stock~~ at the discretion of our board of directors. For example, our board of directors may periodically declare stock distributions in order to reduce the net asset value per share of a share class if necessary to ensure that we do not sell shares of the applicable class at a price per share, after deducting upfront selling commissions, if any, that is below the net asset value per share of the applicable class. The timing and amount of any future distributions to stockholders will be subject to applicable legal restrictions and the sole discretion of our board of directors.

We may fund our cash distributions to stockholders from any sources of funds legally available to us, including offering proceeds, borrowings, net investment income from operations, capital gains proceeds from the sale of assets, non-capital gains proceeds from the sale of assets, dividends or other distributions paid to us on account of preferred and common equity investments in

portfolio companies and expense reimbursements from our Adviser. We have not established limits on the amount of funds we may use from available sources to make distributions. ~~To date, all distributions have been funded solely from net investment income from operations and capital gains proceeds from the sale of assets.~~

It is possible that a portion of the distributions we make will represent a return of capital. A return of capital generally is a return of stockholders’ investment rather than a return of earnings or gains derived from our investment activities and will be made after deducting the fees and expenses payable in connection with our continuous public offering, including any fees payable to our Adviser. Moreover, a return of capital will generally not be taxable, but will reduce each stockholder’s cost basis in our common stock, and will result in a higher reported capital gain or lower reported capital loss when the common stock on which such return of capital was received is sold. Stockholders will be notified of the sources of our distributions (i.e., paid from ordinary income, paid from net capital gains on the sale of securities, and/or a return of capital). See “Material U.S. Federal Income Tax Considerations.”

We intend to make our regular distributions in the form of cash, out of assets legally available for distribution, unless stockholders elect to receive their distributions in additional shares of our common stock under our distribution reinvestment plan. Although distributions paid in the form of additional shares of common stock will generally be subject to U.S. federal, state and local taxes in the same manner as cash distributions, stockholders who elect to participate in our distribution reinvestment plan will not receive any corresponding cash distributions with which to pay any such applicable taxes. Stockholders receiving distributions in the form of additional shares of common stock will be treated as receiving a distribution in the amount of the fair market value of our shares of common stock. If stockholders hold shares in the name of a broker or financial intermediary, they should contact such broker or financial intermediary regarding their option to elect to receive distributions in additional shares of our common stock under our distribution reinvestment plan in lieu of cash.

To obtain and maintain RIC tax treatment, we must, among other things, distribute at least 90% of our net ordinary income and realized net short-term capital gain in excess of realized net long-term capital loss, if any. In order to avoid certain excise taxes imposed on RICs, we currently intend to distribute, or be deemed to distribute, during each calendar year an amount at least equal to the sum of (1) 98% of our net ordinary income for the calendar year, (2) 98% of our capital gain in excess of capital loss for the one-year period ending on October 31 of the calendar year and (3) any net ordinary income and net capital gain for preceding years that were not distributed during such years and on which we paid no U.S. federal ~~excise~~income tax. We can offer no assurance that we will achieve results that will permit the payment of any distributions and, if we issue senior securities, we will be prohibited from paying distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the ~~Company~~1940 Act or if distributions are limited by the terms of any of our borrowings.

See “Regulation” and “Business - Material U.S. Federal Income Tax Considerations.”

We have adopted an “opt in” distribution reinvestment plan for our common stockholders. As a result, if we make a distribution, then stockholders will receive distributions in cash unless they specifically “opt in” to the distribution reinvestment plan so as to have their cash distributions reinvested in additional shares of our common stock.

~~We intend~~ See “Distribution Reinvestment Plan.”

FLEX – Post Merger

On April 5, 2019, the Company’s board of directors declared distributions for the months of April 2019 and May 2019, which reflected an annualized distribution rate of 6.0%. The distributions have weekly record dates as of the close of business of each week in April 2019 and May 2019 and equal a weekly amount of $0.01315 per share of common stock. The distributions will be payable monthly to ~~use newly issued shares~~stockholders of record as of the weekly record dates set forth below.



Record Date	Per Share		Distribution Amount
April 5, 12, 19 and 26, 2019	$	0.0526	$	126,413
May 3, 10, 17, 24 and 31, 2019	$	0.06575	$	158,426
June 7, 14, 21, and 28, 2019	$	0.0524	$	126,128

The following FLEX distributions were declared on May 13, 2019:



Record Date	Payment date	Amount per FLEX Class A Common Shares
July 5, 12, 19 and 26, 2019	July 29, 2019	$	0.05240
August 2, 9, 16, 23 and 30, 2019	September 2, 2019	$	0.06550

PWAY (Accounting Survivor) – Pre-Merger

The following tables reflect the distributions per share that PWAY declared and paid or were payable to ~~implement~~its stockholders during the ~~plan. The number~~nine months period ended March 31, 2019. Stockholders of ~~shares we will issue~~record as of each respective record date were entitled to ~~you is determined by dividing~~receive the distribution.



For the Year Ended	Per Class A Share^(a)		PWAY Class A Common Shares, Amount		Per Class I Share^(a)		PWAY Class I Common Shares, Amount
Fiscal 2019
July 5, 12, 19 and 26, 2018	$	0.06392	$	40,009	$	0.06404	$	2,115
August 2, 9, 16, 23 and 30, 2018	$	0.06405	$	38,180	$	0.06415	$	2,098
September 6, 13, 20 and 27, 2018	$	0.06076	$	36,312	$	0.06092	$	1,994
October 4, 11, 19 and 26, 2018	$	0.05960	$	35,707	$	0.05976	$	1,957
November 1, 8, 15, 23 and 29, 2018	$	0.05925	$	34,900	$	0.05940	$	1,946
December 6, 14, 21 and 28, 2018	$	0.05460	$	31,826	$	0.05476	$	1,794
January 3, 10, 17, 24 and 31, 2019	$	0.05035	$	29,431	$	0.05048	$	1,655
February 1, 8, 15 and 22, 2019	$	0.05300	$	30,573	$	0.05314	$	1,744
March 1, 8, 15, 22 and 28, 2019	$	0.05385	$	30,658	$	0.05400	$	1,772

(a)Total amount per share represents the total ~~dollar amount of~~distribution rate for the ~~distribution~~record dates indicated.

The following tables reflect the distributions per share that PWAY declared and paid or were payable to ~~you by a price equal to 95%~~its stockholders during the fiscal years ended June 30, 2018, 2017, 2016. Stockholders of ~~the price that the shares are sold in the offering on such monthly closing~~record as of each respective record date ~~or such price as is otherwise determined as provided above.~~

There will be no sales load or other sales charges to you if you elect to participate in the distribution reinvestment plan. We will pay our Administrator’s fees for its services with respect to the plan.

~~If you receive distributions in the form of stock, you generally are subject to the same federal, state and local tax consequences as you would be had you elected~~were entitled to receive ~~your distributions in cash. Your basis for determining gain or loss upon~~ the sale of stock received in a distribution from us will be equal to the total dollar amount of the distribution payable in cash. Any stock received in a distribution will have a holding period for tax purposes commencing on the day following the day on which the shares are credited to your account.

The company’s net investment income on a tax basis for the years ended December 31, 2016, 2015 and 2014 was $335,572, $174,880, and $16,211, respectively. As of December 31, 2016, 2015 and 2014, the Company had $32,116, $11,376, and $18,086, respectively, of undistributed net investment income and realized gains on a tax basis.

distribution.



For the Year Ended	Per Class A Share^(a)		Per Class I Share^(a)		Distribution Amount
Fiscal 2018
July 7, 14, 21 and 28, 2017	$	0.07088	$	0.07088	$	44,525
August 4, 11, 18 and 25, 2017	$	0.07088	$	0.07088	44,974
September 1, 8, 15, 22 and 29, 2017 (b)	$	0.08860	$	0.08860	56,963
October 6, 13, 20 and 27, 2017	$	0.07088	$	0.07088	46,861
November 2, 9, 16 and 25, 2017	$	0.07088	$	0.07088	46,902
November 30, 2017, December 7, 14, 21 and 28, 2017(b)	$	0.07825	$	0.07825	52,121
January 4, 11, 18 and 25, 2018	$	0.06224	$	0.06224	41,850
February 1, 8, 15 and 22, 2018	$	0.06880	$	0.06880	45,786
March 1, 8, 15, 22 and 29, 2018	$	0.08365	$	0.08370	56,049
April 5, 12, 19 and 26, 2018	$	0.06580	$	0.06585	44,514
May 3, 10, 17 and 24, 2018	$	0.06500	$	0.06510	42,632
May 31, 2018, June 7, 14, 21 and 28, 2018	$	0.06475	$	0.06485	42,568
Total declared and distributed for the year ended June 30, 2018					$	565,745



Fiscal 2017	Per Class A Share^(a)		Per Class I Share^(a)		Distribution Amount
July 1, 8, 15, 22 and 29, 2016	$	0.08630	$	0.08630	$	41,416
August 5, 12, 19 and 26, 2016	$	0.06904	$	0.06904	33,895
September 2, 9, 16, 23 and 30, 2016	$	0.08630	$	0.08630	43,735
October 7, 14, 21 and 28, 2016	$	0.06904	$	0.06904	35,973
November 4, 11, 18 and 25, 2016	$	0.06904	$	0.06904	36,668
December 2, 9, 16, 23 and 30, 2016	$	0.08630	$	0.08630	46,827
January 6, 13, 20 and 27, 2017	$	0.06904	$	0.06904	38,087
February 3, 10, 17 and 24, 2017	$	0.06904	$	0.06904	38,694
March 3, 10, 17, 24 and 31, 2017	$	0.08860	$	0.08860	50,827
April 7, 13, 21 and 28, 2017	$	0.07088	$	0.07088	41,355
May 5, 12, 19 and 26, 2017	$	0.07088	$	0.07088	42,523
June 2, 9, 16, 23 and 30, 2017	$	0.08860	$	0.08860	54,515
Total declared and distributed for the year ended June 30, 2017					$	504,515



Fiscal 2016	Per Class A Share^(a)		Per Class I Share^(a)		Distribution Amount
October 2, 2015	$	0.10000	$	0.10000	$	25,464
October 6, 16, 23, and 30, 2015	$	0.06904	$	0.06904	19,320
November 6, 13, 20, and 27, 2015	$	0.06904	$	0.06904	21,701
December 4, 11, 18, and 28, 2015	$	0.06904	$	0.06904	24,756
January 4, 8, 15, 22, and 29, 2016	$	0.08630	$	0.08630	32,022
February 5, 12, 19 and 26, 2016	$	0.06904	$	0.06904	27,338
March 4, 11, 18 and 28, 2016	$	0.06904	$	0.06904	28,793
April 1, 8, 15, 22, and 29, 2016	$	0.08630	$	0.08630	37,652
May 6, 13, 20, and 27, 2016	$	0.06904	$	0.06904	30,950
June 3, 10, 17 and 24, 2016	$	0.06904	$	0.06904	31,854
Total declared and distributed for the year ended June 30, 2016					$	279,850

The following table ~~sets forth a reconciliation between GAAP-basis net investment income~~reflects the post-merger cash distributions per share that FLEX declared and ~~tax-basis net investment income~~paid on its common stock during the year ended June 30, 2019:



	Distributions
For the Year Ended	Per Class A Share		Amount per Class A
Fiscal 2019
April 5, 12, 19 and 26, 2019	$	0.0526	$	126,413
May 3, 10, 17, 24 and 31, 2019	$	0.06575	$	158,426
June 7, 14, 21, and 28, 2019	$	0.0524	$	126,128

The following distributions were previously declared and have record dates subsequent to June 30, 2019:



Record Date	Payment date	Amount per FLEX Class A Common Shares
July 5, 12, 19 and 26, 2019	July 29, 2019	$	0.05240
August 2, 9, 16, 23 and 30, 2019	September 2, 2019	$	0.06550

The tax character of PWAY’s distributions declared and paid to its stockholders during the nine months ended March 31, 2019 and fiscal years ended ~~December 31,~~June 30, 2018, 2017 and 2016 ~~2015 and 2014:~~

Year Ended December 31,
2016 2015 2014
GAAP basis net investment income $ 370,788 $ 140,492 $ 16,211
Reversal of incentive fee accrual on unrealized gains (35,216 ) 35,550 —
Other book-tax differences — (1,162 ) —
Tax-basis net investment income $ 335,572 $ 174,880 $ 16,211

The determination of the tax attributes of the Company’s distributions is made annually as of the end of the Company’s fiscal year based upon the Company’s taxable income for the full year and distributions paid for the full year. The actual tax characteristics of distributions to stockholders are reported to stockholders annually on Form 1099-DIV.

~~As of December 31, 2016, 2015 and 2014, the components of accumulated earnings on a tax basis~~ were as follows:

Year Ended December 31,
2016 2015 2014
Distributable realized gains (long-term capital gains) $ 21,925 $ 2,192 $ 1,875
Distributable ordinary income (income and short-term capital gains) 8,525 9,184 16,211
Net unrealized appreciation (depreciation) on investments 1,666 177,748 (788 )
Total $ 32,116 $ 189,124 $ 17,298

~~There is no material difference between the aggregate book cost and tax costs of the Company’s investments for federal income tax purposes.~~



	Nine Month Ended March 31, 2019				Year Ended June 30, 2018				Year Ended June 30, 2017				Year Ended June 30, 2016
Source of Distribution	Distribution Amount		Percentage		Distribution Amount		Percentage		Distribution Amount		Percentage		Distribution Amount		Percentage
Ordinary income	$	23,732	7	%	$	—	—	%	$	—	—	%	$	—	—	%
Capital gain	—		—	%	161,753		28.6	%	—		—	%	—		—	%
Return of capital	300,907		93	%	403,766		71.4	%	504,515		100	%	279,850		100	%
	$	324,639	100	%	$	565,519	100	%	$	504,515	100	%	$	279,850	100	%

~~Item 6.~~

~~Selected Financial Data~~

Item 6. Selected Financial Data

The following selected financial data for the year ended ~~December 31, 2016, 2015~~June 30, 2019 reflects nine month's of PWAY's financial data and ~~2014 is derived from our~~three months of FLEX financial ~~statements.~~data. The following selected financial data for ~~Triton Pacific Investment Company, Inc.~~the years ended June 30, 2018, 2017, 2016 and 2015 is all derived from PWAY’s financial statements. PWAY has omitted selected financial data for the period from September 2, 2014 (date of effectiveness) to June 30, 2015 because PWAY had not met its minimum offering requirement and had not commenced investment operations during such period. PWAY is the accounting survivor in connection with the Merger and its historical financial statements will be included in the reports that FLEX files with the SEC following the Merger. PWAY’s fiscal year end was June 30 and as a result of it being the accounting survivor, FLEX’s fiscal year end is also June 30 following the Merger. The following selected financial data should be read in conjunction with “Item 7.—Management’s Discussion and Analysis of Financial Condition and Results of Operations” and financial statements and notes thereto contained in “Item 8. ~~—Financial~~Financial Statements and Supplementary Data” ~~included elsewhere~~of this report. Historical data is not necessarily indicative of the results to be expected for any future period.

The selected financial data and other financial information regarding PWAY contained in this ~~report.~~

Period from
April 29, 2011
Year Ended December 31, (Inception) to
2016 2015 2014 2013 December 31, 2012⁽¹⁾
Statements of operations data:
Total investment income $ 440,748 $ 176,042 $ 16,319 $ — $ —
Operating expenses
Total operating expenses 741,022 620,548 249,465 311,507 79,733
Less: Expense reimbursement from sponsor (671,062 ) (584,998 ) (249,357 ) (391,240 ) —
Net operating expenses 69,960 35,550 108 (79,733 ) 79,733
Net investment income (loss) 370,788 140,492 16,211 79,733 (79,733 )
Total net realized and unrealized gain (loss) on investments (156,351 ) 185,858 1,087 — —
Net increase (decrease) in net assets resulting from operations $ 214,437 $ 326,350 $ 17,298 $ 79,733 $ (79,733 )
Per share data:
Net investment income (loss)—basic⁽²⁾ $ 0.48 $ 0.41 $ 0.14 $ 7.47 $ (26.88 )
Net investment income (loss)—diluted⁽²⁾ 0.48 0.41 0.14 6.81 (26.88 )
Net increase (decrease) in net assets resulting from operations—basic⁽²⁾ $ 0.28 $ 0.96 $ 0.15 $ 7.47 (26.88 )
Net increase (decrease) in net assets resulting from operations—diluted⁽²⁾ 0.28 0.96 0.15 6.81 (26.88 )
Distributions declared⁽³⁾ $ 0.51 $ 0.57 $ — $ — $ —
Balance sheet data:
Total assets $ 14,565,014 $ 7,611,888 $ 3,667,097 $ 1,328,628 $ 532,425
Total liabilities 1,336,312 285,235 569,193 1,128,625 510,908
Total net assets $ 13,228,702 $ 7,326,653 $ 1,916,867 $ 200,003 $ 21,517
Other data:
Total return⁽⁴⁾ 2.2 % 7.0 % 0.0 % 0.0 % 0.0 %
Number of portfolio company investments at period end 35 22 10 0 0
Total portfolio investments for the period $ 6,285,875 $ 4,270,750 $ 1,725,001 $ — $ —
Proceeds from sales and prepayments of investments $ 1,110,406 $ 414,971 $ 255,663 $ — $ —

Weighted average common shares outstanding - basic and diluted 777,680 339,304 114,991 11,713

~~(1)~~	We formally commenced operations in 2014. Prior to such date, we had no operations except for matters relating to our organization and registration as a non-diversified, closed-end management investment company.
~~(2)~~	~~The per share data was derived by using the weighted average shares outstanding during the years ended December 31, 2016, 2015, 2014 and 2013, respectively.~~
~~(3)~~	~~The per share data for distributions reflects the actual amount of distributions paid per share during the applicable period.~~

annual report on Form 10-K reflect PWAY’s status as an interval fund and not as a business development company. Because of this and other factors discussed in this annual report on Form 10-K, the historical financial information of PWAY is not necessarily indicative or predictive of the future financial results of FLEX following the Merger.

~~(4)~~

The total return for each year presented was calculated by taking the net asset value per share as of the end of the applicable year, adding the cash distributions per share which were declared during the applicable year.

~~Item 7.~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations Statement Regarding Forward-Looking Information~~



	Year Ended June 30,
Statements of operations data:	2019			2018			2017			2016			2015
Total investment income	$	1,410,726		$	1,298,317		$	1,179,924		$	536,609		$	—
Total operating expenses	2,943,931			1,984,880			1,655,397			1,318,664			1,333,766
Less: Expense reimbursement from sponsor	(309,881		)	(1,205,356		)	(865,348		)	(1,196,002		)	(1,321,822		)
Waiver of organization costs paid by the Adviser	(1,492,252		)	—			—			—			(11,944		)
Net operating expenses	1,141,798			779,524			790,049			122,662			—
Net investment income (loss)	$	268,928		$	518,793		$	389,875		$	413,947		$	—
Total net realized and unrealized gain (loss) on investments	$	(1,052,816	)	$	(523,918	)	$	375,807		$	(9,428	)	$	—
Net increase (decrease) in net assets resulting from operations	$	(783,888	)	$	(5,125	)	$	765,682		$	404,519		$	—

Per share data (PWAY Class R, Class RIA and Class I)(5):
NAV (at period end)	N/A			N/A			$	13.53		$	12.81		$	(9.05	)
Net investment income (loss)(1)	N/A			N/A			$	0.71		$	1.21		$	—
Net realized and unrealized (loss) gain (1)	N/A			N/A			$	0.68		$	(0.03	)	$	—
Net increase in net assets resulting from operations (1)	N/A			N/A			$	1.39		$	1.18		$	—
Return of capital distributions to stockholders(2)	N/A			N/A			$	(0.92	)	$	(0.75	)	$	—
Offering costs(1)	N/A			N/A			$	0.03		$	(0.62	)	$	—
Other(3)	N/A			N/A			$	0.22		$	(0.8	)	$	—

Per share data (PWAY Class A)(5)(6):
NAV (at period end)	N/A			$	12.71		N/A			N/A			N/A
Net investment income (loss)(1)	N/A			$	0.79		N/A			N/A			N/A
Net realized and unrealized (loss) gain (1)	N/A			$	(0.80	)	N/A			N/A			N/A



Net increase in net assets resulting from operations (1)	N/A			$	(0.01	)	N/A		N/A			N/A
Return of capital distributions to stockholders(2)	N/A			$	(0.86	)	N/A		N/A			N/A
Offering costs(1)	N/A			N/A			N/A		N/A			N/A
Other(3)	N/A			$	0.05		N/A		N/A			N/A

Per share data (PWAY Class I)(5)(6):
NAV (at period end)	N/A			$	12.73		N/A		N/A			N/A
Net investment income (loss)(1)	N/A			$	0.81		N/A		N/A			N/A
Net realized and unrealized (loss) gain (1)	N/A			$	(0.79	)	N/A		N/A			N/A
Net increase in net assets resulting from operations (1)	N/A			$	0.02		N/A		N/A			N/A
Return of capital distributions to stockholders(2)	N/A			$	(0.86	)	N/A		N/A			N/A
Offering costs(1)	N/A			N/A			N/A		N/A			N/A
Other(3)	N/A			$	0.04		N/A		N/A			N/A

Per share data (FLEX Class A)(8):
NAV (at period end)	$	9.88		N/A			N/A		N/A			N/A
Net investment income (loss)(1)	$	0.91		N/A			N/A		N/A			N/A
Net realized and unrealized (loss) gain (1)	$	(1.11	)	N/A			N/A		N/A			N/A
Net increase in net assets resulting from operations (1)	$	(0.20	)	N/A			N/A		N/A			N/A
Return of capital distributions to stockholders(2)	$	(0.54	)	N/A			N/A		N/A			N/A
Dividends from net investment income(2)	$	(0.03	)
Offering costs(1)	$	0.61		N/A			N/A		N/A			N/A
Other(3)	$	0.15		N/A			N/A		N/A			N/A

Statements of Assets and Liabilities data:
Total investment portfolio	$	24,019,563		$	10,940,179		$	12,060,436	$	8,378,866		$	—
Total assets	33,058,837			11,921,182			13,074,666		8,865,053			1,760,207
Credit Facility payable	5,500,000			1,350,000			2,625,000		1,250,000			—
Total liabilities	9,648,122			3,568,018			4,668,922		2,888,698			1,907,173
Total net assets	$	23,410,715		$	8,353,164		$	8,405,744	$	5,976,355		$	(146,966	)

Other data:
Total return for PWAY Class R, RIA and I(4)(7)	N/A			N/A			13.2%		(1.75		)%	N/A
Total return for PWAY Class A(4)(5)(6)	N/A			0.18%			N/A		N/A			N/A
Total return for PWAY Class I(4)(5)(6)	N/A			0.33%			N/A		N/A			N/A
Total return for FLEX Class A(8)	7.52		%	N/A			N/A		N/A			N/A

(1) Calculated based on weighted average shares outstanding.

(2) The per share data for distributions is the actual amount of distributions paid or payable per share of common stock outstanding during the last twelve months. Distributions per share are rounded to the nearest $0.01.

(3) The amount shown represents the balancing figure derived from the other figures in the schedule and is primarily attributable to the accretive effects from the sales of PWAY’s shares and the effects of share repurchases during the last twelve months.

(4) Total return is based upon the change in net asset value per share between the opening and ending net asset values per share during the period and assumes that distributions are reinvested in accordance with PWAY’s distribution reinvestment plan. The computation does not reflect the sales load for any class of shares. Total return based on market value is not presented since PWAY’s shares are not publicly traded.

(5) On October 31, 2017, PWAY converted to an interval fund. As such, all Class R shares were converted to PWAY Class A Shares and all Class I and Class RIA shares were converted to PWAY Class I Shares.

(6) The per share data and total return include the shareholder activity prior to PWAY’s conversion to an interval fund. PWAY Class A Shares include the activity for Class R shares prior to such conversion and PWAY Class I Shares include activity for PWAY Class I Shares and Class RIA shares prior to such conversion.

(7) PWAY has omitted the financial highlights for the period from September 2, 2014 (date of effectiveness) to June 30, 2015 since PWAY had not met its minimum offering requirement and had not commenced investment operations during such period.

(8) Data presented includes the shareholder activity of PWAY Class A and Class I shares prior to the merger and conversion into shares of the Company.

Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion ~~and analysis~~ should be read in conjunction with our consolidated financial statements and related notes and other financial information appearing elsewhere in this annual report on Form 10-K.

In addition to historical information, the following discussion and other parts of this annual report on Form 10-K contain forward-looking information that involves risks and uncertainties. Our actual results may differ significantly from any results expressed or implied by these forward-looking statements due to the factors discussed in Part I, “Item 1A. Risk Factors” and “Forward-Looking Statements” appearing elsewhere herein.

Except as otherwise specified, references to “we,” “us,” “our,” or the “Company,” refer to ~~Triton Pacific Investment Corporation,~~TP Flexible Income Fund, Inc.

~~Forward-Looking Statements~~

Some of the statements in this annual report on Form 10-K constitute forward-looking statements, which relate to future events or our performance or financial condition. The forward-looking statements contained in this annual report on Form 10-K involve risks and uncertainties, including, but not limited to, statements as to:

~~our future operating results;~~

~~our business prospects and the prospects of our portfolio companies;~~

~~changes in the economy;~~

~~risk associated with possible disruptions in our operations or the economy generally;~~

~~the effect of investments that we expect to make;~~

~~our contractual arrangements and relationships with third parties;~~

~~actual and potential conflicts of interest with Triton Pacific Adviser, LLC and its affiliates;~~

~~the dependence of our future success on the general economy and its effect on the industries in which we invest;~~

~~the ability of our portfolio companies to achieve their objectives;~~

~~the use of borrowed money to finance a portion of our investments;~~

~~the adequacy of our financing sources and working capital;~~

~~the timing of cash flows, if any, from the operations of our portfolio companies;~~

~~the ability of Triton Pacific Adviser, LLC and its Sub-Adviser to locate suitable investments for us and to monitor and administer our investments;~~

~~the ability of Triton Pacific Adviser, LLC, its Sub-Adviser and its affiliates to attract and retain highly talented professionals;~~

~~our ability to qualify and maintain our qualification as a RIC and as a BDC; and~~

~~the effect of changes in laws or regulations affecting our operations or to tax legislation and our tax position.~~

Such forward-looking statements may include statements preceded by, followed by or that otherwise include the words “trend,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “potential,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may,” or similar expressions. The forward looking statements contained in this annual report involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth as “Risk Factors” in this annual report on Form 10-K and in our last post-effective, amended registration statement filed on form N-2 dated May 11, 2016, filed with the Securities and Exchange Commission (the “SEC”) on May 11, 2016.

We have based the forward-looking statements included in this report on information available to us on the date of this report, and we assume no obligation to update any such forward-looking statements. Actual results could differ materially from those anticipated in our forward-looking statements, and future results could differ materially from historical performance. 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 that we have filed or in the future may file with the SEC, including quarterly reports on Form 10-Q, annual reports on Form 10-K, and current reports on Form 8-K.

Overview

We are a publicly registered, non-traded fund focused on private equity, structured as a business development company that primarily makes equity, structured equity, and debt investments in small to mid-sized private U.S. companies. Structured equity refers to derivative investment products, including convertible notes and warrants, designed to facilitate highly customized risk-return objectives. Our private equity investments will generally take the form of direct investments in common and preferred equity, as well as structured equity investments such as convertible notes and warrants.

We are an externally managed, non-diversified, closed-end ~~non-diversified~~ management investment company that has elected to be ~~treated~~regulated as a business development company ~~under the Company Act. Triton Pacific Adviser, LLC~~ (“~~Triton Pacific Adviser”~~BDC”)~~, which is a registered investment adviser~~ under the Investment ~~Advisers~~Company Act of 1940, as amended (the ~~“Advisers~~“1940 Act”) serves as our investment adviser and TFA Associates, LLC serves as our administrator. Each of these companies is affiliated with Triton Pacific Group, Inc., a private equity investment management firm, and its subsidiary, Triton Pacific Capital Partners, LLC (“TPCP”), a private equity investment fund management company, each focused on debt and equity investments in small to mid-sized private companies.

~~We primarily make debt investments likely to generate current income and equity investments in small to mid-sized private U.S. companies either alone or together with other private equity sponsors.~~. Our investment objective is to generate current income and, ~~long term~~as a secondary objective, capital ~~appreciation.~~

~~Triton Pacific Adviser is responsible for sourcing potential investments, conducting due diligence on prospective investments, analyzing~~appreciation by targeting investment opportunities ~~structuring investments~~with favorable risk-adjusted returns. We intend to meet our investment objective by primarily lending to and ~~monitoring our portfolio on an ongoing basis. In addition,~~investing in the debt of privately-owned U.S. middle market companies, which we define as companies with annual revenue between $50 million and $2.5 billion. We have elected and intend to continue to qualify annually ~~qualify~~ to be ~~treated,~~taxed for U.S. federal income tax purposes as a ~~regulated investment~~RIC under the Code.

On August 10, 2018, we (in our capacity as TPIC) entered into an agreement and plan of merger with PWAY (which was amended and restated effective February 12, 2019) pursuant to which PWAY merged with and into TPIC and, as the combined surviving company, ~~(“RIC”~~we were renamed as TP Flexible Income Fund, Inc. (we were formerly known as Triton Pacific Investment Corporation, Inc.)~~, under subchapter M~~. TPIC’s board of directors and PWAY’s board of directors each approved the transaction. Completion of the ~~Internal Revenue Code~~Merger was subject to a number of ~~1986,~~conditions, including, among other things, the approval by TPIC’s stockholders and PWAY’s stockholders of the Merger and the Merger Agreement. The Merger was approved by TPIC’s stockholders at the 2019 Annual Meeting and by PWAY’s stockholders at a special meeting of stockholders held on March 15, 2019. The Merger was completed on March 31, 2019. We will refer to the surviving merged accounting entity as ~~amended (the “Code”)~~"FLEX" throughout Management's Discussion and Analysis herein and in the accompanying consolidated financial statements.

As a result of the Merger several significant changes occurred:

New Investment Adviser.

~~Our investment objectives are to maximize~~ Prospect Flexible Income Management, LLC now serves as our investment ~~portfolio’s total return~~adviser, replacing our former investment adviser, Triton Pacific Adviser, LLC (the “Former Adviser”). The Adviser is an affiliate of PWAY and the investment professionals of PWAY’s investment adviser have investment discretion at the Adviser.

Increased Leverage. Following the Merger, our asset coverage ratio requirement was reduced from 200% to 150%, which allows us to incur double the maximum amount of leverage that was previously permitted. As a result, we are now able to borrow substantially more money and take on substantially more debt than we previously were able to. Leverage may increase the risk of loss to investors and is generally considered a speculative investment technique.

Special Repurchase Offer. As a condition to being able to increase our leverage, we will offer to repurchase certain of our outstanding shares. In connection with this Special Repurchase Offer, stockholders should be aware that:

◦

Only former stockholders of TPIC as of March 15, 2019, the date of TPIC’s 2019 annual stockholder meeting (the “Eligible Stockholders”), will be allowed to participate in the Special Repurchase Offer, and they may have up to 100% of their shares repurchased. Former stockholders of PWAY and stockholders who purchase shares in our continuous public offering were not be able to participate in the Special Repurchase Offer.


◦	If a substantial number of the Eligible Stockholders take advantage of this opportunity, it could minimize or eliminate the expected benefits of the Merger and it could:


▪	significantly decrease our asset size;


▪	require us to sell our investments earlier than the Adviser would have otherwise desired, which may result in selling investments at inopportune times or significantly depressed prices and/or at losses; or


▪	cause us to incur additional leverage solely to meet repurchase requests.


◦	The first of our four quarterly Special Repurchase Offers expired on June 24, 2019, and in that offer we repurchased 49,900 shares of our Class A common stock for the gross proceeds of $495,506. We commenced our second Special Repurchase Offer on September 6, 2019 and that offer is currently expected to close on October 4, 2019.

New Board of Directors. Following the Merger, the composition of our board of directors changed and now consists of Craig J. Faggen, TPIC’s former President and Chief Executive Officer, M. Grier Eliasek, PWAY’s Former President and Chief Executive Officer, Andrew Cooper, William Gremp and Eugene Stark. Messrs. Cooper, Gremp and Stark are our independent directors and were formally independent directors of PWAY.

Prospect Flexible Income Management, LLC serves as our investment adviser. The engagement of the Adviser was approved by ~~generating long-term capital appreciation from~~TPIC’s stockholders at the 2019 Annual Meeting, concurrently with the approval of the Merger and the Merger Agreement. Prospect Administration LLC, an affiliate of our ~~private equity investments~~Adviser, serves as our administrator and ~~current income from~~TFA Associates, LLC serves as our ~~debt investments.~~sub-administrator. We ~~intend~~have engaged Triton Pacific Securities, LLC to ~~make both~~serve as the dealer manager of our ~~debt and private equity investments in small~~offering. The dealer manager is not required to ~~mid-sized private U.S. companies either alone~~sell any specific number or ~~together with other private equity sponsors.~~

dollar amount of shares but will use its best efforts to sell the shares offered.

We are offering for sale a maximum amount of $300,000,000 our shares of common stock on a "best efforts" basis. We are currently offering to sell our ~~common stock.We commenced our initial continuous public~~Class A Shares up to the maximum offering amount, at an offering price of shares through our initial registration statement (File No. 333-174873) that was declared effective by the SEC on September 4, 2012. Rule 415 promulgated under the Securities Act requires that a registration statement not be used for more than three years from its effective date, subject to a 180-day grace period. On September 2, 2015, we filed a registration statement with the SEC (File No. 333-206730) in order to continue our continuous public offering of shares for an additional three years or until all of the shares registered herein are sold. The registration statement for our follow-on offering was declared effective by the SEC on March 17, 2016 and our most-recent post-effective amendment to our registration was declared effective by the SEC on May 11, 2016.$11.38 per Class A Share. As of ~~March 24, 2017,~~September 27, we have sold a total of ~~1,062,855.98~~2,392,140 shares of common stock, ~~for gross proceeds of approximately $15,840,699,~~ including 116,226 shares issued pursuant to our distribution reinvestment plan, ~~in the amount~~for gross proceeds of ~~$355,643~~approximately $31,633,600, including the reduction due to ~~$351,773~~$(1,099,523) in shares repurchased pursuant to the Company’s ~~Repurchase Program,~~share repurchase program and 14,815 shares of common stock sold to ~~Triton Pacific~~our Former Adviser in exchange for gross proceeds of $200,003.

Our investment objective is to maximize our portfolio’s total return by generating current income from our debt investments and long term capital appreciation from our equity investments. We will seek to meet our investment objectives by:

Focusing primarily on debt and equity investments in small and mid-sized private U.S. companies, which we define as companies with annual revenue of from $10 million to $ 250 million at the time of investment;

~~Leveraging the experience and expertise of our Adviser, its Sub-Adviser and its affiliates in sourcing, evaluating and structuring transactions;~~

~~Employing disciplined underwriting policies and rigorous portfolio management;~~

~~Developing our equity portfolio through our Adviser’s Value Enhancement Program, more fully discussed below in “Investment Objectives and Policies – Investment Process”; and~~

~~Maintaining a well-balanced portfolio.~~

We intend to be active in both debt and equity investing. We will seek to provide current income to our investors through our debt investments while seeking to enhance our investors’ overall returns through long term capital appreciation As a result of ~~our equity investments. We intend to be opportunistic in our investment approach, allocating our investments between debt and equity, depending on:~~

~~Investment opportunities~~

~~Market conditions~~

~~Perceived Risk~~

~~Depending on~~ the ~~amount of capital we raise in~~merger, the Offering and subject to subsequent changes in our capital base, we expect that our investments will generally range between $250,000 and $25 million per portfolio company, although this range may change in the discretion of our Adviser, subject to oversight by our board of directors. Prior to raising sufficient capital to finance investments in this range and as a strategy to manage excess cash, we may make smaller and differing types of investments in, for example, high quality debt securities, and other public and private yield-oriented debt and equity securities, directly and through our Sub-Adviser.

Company issued 775,193 shares.

Our Adviser ~~has engaged ZAIS to act as our investment sub-adviser. ZAIS assists our~~

Our Adviser ~~with identifying, evaluating, negotiating and structuring syndicated debt investments and makes investment recommendations for approval by our Adviser. ZAIS~~ is a Delaware limited liability company and is a registered as an investment adviser under the Advisers ~~Act and had approximately $3.949 billion in assets under management as~~Act. Our Adviser is controlled by Prospect Capital Management, who owns a majority of ~~June 30, 2016. ZAIS~~its voting units. Mr. Eliasek is ~~not an affiliate of us or our Adviser and does not own any of our shares.~~

We will generally source our private equity investments through third party intermediaries and our debt investments primarily through our Adviser and Sub-Adviser. We will invest only after we conduct a thorough evaluationthe principal officer of the risks and strategic opportunities of an investment and a price (or interest rate in the case of debt investments) has been established that reflects the intrinsic value of the investment opportunity. We will endeavor to identify the best exit strategy for each private equity investment, including methodology (for example, a sale, company redemption, or public offering) and an appropriate time horizon. We will then attempt to influence the growth and development of each portfolio company accordingly to maximize our potential return on investment using such exit strategy or another strategy that may become preferable due to changing market conditions. We anticipate that the holding period for most of our private equity investments will range from four to six years, but we will be flexible in order to take advantage of market opportunities or to overcome unfavorable market conditions.

Adviser.

Investments

We intend to ~~generate~~primarily lend to and invest in the ~~majority~~debt of ~~our current income by investing~~privately-owned U.S. middle market companies. We may on occasion invest in smaller or larger companies if an attractive opportunity presents itself, especially when there are dislocations in the capital markets. We expect to focus primarily on making investments in syndicated senior secured first lien loans, syndicated senior secured second lien ~~secured~~ loans, and to a lesser extent, subordinated debt, of middle market companies in a broad range of industries. Syndicated secured loans refer to commercial loans provided by a group of ~~small~~lenders that are structured, arranged, and administered by one or several commercial or investment banks, known as arrangers. These loans are then sold (or syndicated) to ~~mid-sized private U.S. companies.~~other banks or institutional investors. Syndicated secured loans may have a first priority lien on a borrower’s assets (i.e., senior secured first lien loans), a second priority lien on a borrower’s assets (i.e., senior secured second lien loans), or a lower lien or unsecured position on the borrower’s assets (i.e., subordinated debt). We ~~may purchase interests in loans through secondary market transactions in the “over-the-counter” market for institutional loans or directly from~~expect our target ~~companies as primary market investments. In connection~~credit investments will typically have initial maturities between three and ten years and generally range in size between $1 million and $100 million, although the investment size will vary with the size of our capital base. We expect that the majority of our debt investments wewill bear interest at floating interest rates, but our portfolio may also include fixed-rate investments. We also expect to make our investments directly through the primary issuance by the borrower or in the secondary market.

We will generally source our investments primarily through our Adviser. We believe the investment management team of our Adviser has a significant amount of experience in the credit business, including originating, underwriting, principal investing and loan structuring. Our Adviser, through Prospect Capital Management, has access to over 106 professionals, including over 51 investments, origination and credit management professionals, and over 55 operations, marketing and distribution professionals, each with extensive experience in their respective disciplines.

We expect to dynamically allocate our assets in varying types of investments based on ~~occasion receive equity interests such~~our analysis of the credit markets, which may result in our portfolio becoming more concentrated in particular types of credit instruments (such as ~~warrants or options as additional consideration. The~~ senior secured loans) and ~~second lien secured loans~~less invested in ~~which we invest generally will have stated terms~~other types of three to seven years and any subordinated investments that we make generally will have stated terms of up to ten years. However, there is no limit on the maturity or duration of any security we may hold in our portfolio.credit instruments. The loans in which we intend to invest are often rated by a nationally recognized ratings organization, and generally carry a rating below investment grade (rated lower than “Baa3” by Moody’s Investors Service or lower than “BBB-” by Standard & Poor’s Corporation –- also known as “high yield” or “junk bonds”). However, we may also invest in non-rated debt securities.

To seek to enhance our returns, we may employ leverage as market conditions permit and at the discretion of our Adviser, but in no event will leverage employed exceed the maximum amount permitted by the 1940 Act.

As part of our investment objective to generate current income, we expect that at least 70% of our investments will consist primarily of syndicated senior secured first lien loans, syndicated senior secured second lien loans, and to a lesser extent, subordinated debt. We expect that up to 30% of our investments will consist of other securities, including private equity (both common and preferred), dividend-paying equity, royalties, and the equity and junior debt tranches of CLOs. The senior secured loans underlying our CLO investments are expected typically to be BB or B rated (non-investment grade, which are often referred to as “high yield” or “junk”) and in limited circumstances, unrated, senior secured loans.

As a BDC, we are subject to certain regulatory restrictions in making our investments. For example, we ~~generally will not be permitted~~have in the past and expect in the future to co-invest ~~alongside~~on a concurrent basis with certain affiliates, consistent with applicable regulations and our allocation procedures. The parent company of our Adviser ~~including TPCP and certain of its affiliates, unless we obtain~~has received an exemptive order from the SEC granting the ability to negotiate terms, other than price and quantity, of co-investment transactions with other funds managed by our Adviser or certain affiliates, including us, Prospect Capital Corporation and Priority Income Fund, Inc., subject to certain conditions included therein. Under the terms of the Order permitting us to co-invest with other funds managed by our Adviser or its affiliates, a majority of our independent directors who have no financial interest in the transaction must make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the proposed transaction, including the consideration to be paid, are reasonable and fair to us and our stockholders and do not involve overreaching of us or our stockholders on the part of any person concerned and (2) the transaction is ~~otherwise permitted under~~consistent with the interests of our stockholders and is consistent with our investment objective and strategies. The Order also imposes reporting and record keeping requirements and limitations on transactional fees. We may only co-invest with certain entities affiliated with our Adviser in negotiated transactions originated by our Adviser or its affiliates in accordance with such Order and existing regulatory ~~guidance, such as syndicated~~guidance. See Note 4 of the Consolidated Financial Statements. These co-investment transactions where price is the only negotiated term, and approval from our independent directors. We have applied for an exemptive relief order for co-investments, though there is no assurance that such exemptions will be granted, and in either instance, conflicts of interests with affiliates of our Adviser might exist. Should suchmay give rise to conflicts of interest ~~arise, we~~or perceived conflicts of interest among us and the other participating accounts. To mitigate these conflicts, our Adviser ~~have developed policies~~ and ~~procedures for dealing with such conflicts which require the Adviser~~its affiliates will seek to ~~(i) execute such~~allocate portfolio transactions for all of the participating investment accounts, including ~~ours,~~us, on a fair and equitable basis, taking into account such factors as the relative amounts of capital available for new investments, the ~~then-current~~applicable investment ~~objectives~~programs and portfolio positions, ~~of each party,~~the clients for which participation is appropriate and any other factors deemed appropriate and (ii) endeavor to obtain the advice of Adviser personnel not directly involved with the investment giving rise to the conflict as to such appropriateness and other factors as well as the fairness to all parties of the investment and its terms.appropriate. We intend to make all of our investments in compliance with the ~~Company~~1940 Act and in a manner that will not jeopardize our status as a BDC or RIC.

As a BDC, we are permitted under the ~~Company~~1940 Act to borrow funds to finance portfolio investments. To enhance our opportunity for gain, we intend to employ leverage as market conditions ~~permit, but, as required under~~permit. At the ~~Company Act, in no event will~~2019 Annual Meeting, TPIC’s stockholders approved a proposal allowing us to modify our asset coverage ratio requirement from 200% to 150%. As a result, we are allowed to increase our leverage exceed 50% of the value of our assets. While we have not yet determined the amount of leverage we will use, we do not currently anticipate that we would approach the 50% maximum level frequently or at all.capacity. The use of leverage, although it may increase returns, may also increase the risk of loss to our investors, particularly if the level of our leverage is high and the value of our investments declines.

Effective March 31, 2019, TPIC and PWAY entered into a tax free business combination. Concurrent with the merger, TPIC, the legal acquirer was renamed TP Flexible Income Fund, Inc. As a result of the merger the Company issued 775,193 shares of the Company’s common stock to the former shareholders of PWAY and all shares of PWAY were retired.

After a review of available strategic alternatives, PWAY and TPIC’s board of directors believed the Merger to be in the best interests of the respective companies and their respective stockholders because of FLEX’s expected economies of scale, investment objectives and strategy, investment portfolio, capital structure and increased market capitalization, and the experience and expertise of the FLEX’s new investment adviser.

For financial reporting purposes, the Merger was treated as a recapitalization of PWAY followed by the reverse acquisition of TPIC by PWAY for a purchase price equivalent to the fair value of TPIC’s net assets.

Consistent with tax free business combinations of investment companies, for financial reporting purposes, the reverse merger accounting was recorded at fair value; however, the cost basis of the investments received from TPIC was carried forward to align ongoing financial reporting of the Company’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes. Further, the components of net assets of the Company reflect the combined components of net assets of both PWAY and TPIC.

In accordance with the accounting and presentation for reverse acquisitions, the historical financial statements of the Company, prior to the date of the Merger reflect the financial positions and results of operations of PWAY, with the results of operations of TPIC being included commencing on April 1, 2019. Effective with the completion of the Merger, TPIC, changed its fiscal year end to be the last day of June consistent with PWAY’s fiscal year.In the Merger, common shareholders of PWAY received newly-issued common shares in the Company having an aggregate net asset value equal to the aggregate net asset value of their holdings of PWAY Class A and/or PWAY Class I common shares, as applicable, as determined at the close of business on March 27, 2019, as permitted by the Merger agreement. The differences in net asset value between March 27, 2019 and March 31, 2019 were not material. Relevant details pertaining to the mergers are as follows:

NAV/Share
($)
Conversion Ratio
Triton Pacific Investment Corporation, Inc. $ 10.48

N/A
Pathway Capital Opportunity Fund, Inc.: Class A $ 13.46

1.2848
Pathway Capital Opportunity Fund, Inc.: Class I $ 13.50

1.2884

Investments

The cost, fair value and net unrealized appreciation (depreciation) of the investments of TPIC as of the date of the merger, was as follows:

TPIC
Cost of investments $ 12,106,879

Fair value of investments 11,431,241

Net unrealized appreciation (depreciation) on investments $ (675,638 )

Common Shares

The common shares outstanding, net assets applicable to common shares and NAV per common share outstanding immediately before and after the mergers were as follows

Accounting Acquirer - Prior to Merger PWAY
Class A
PWAY
Class I
Common shares outstanding 570,431

32,834
Net assets applicable to common shares $ 7,679,839

$ 443,296
NAV per common share $ 13.46

$ 13.50
Legal Acquiring Fund - Prior to Merger TPIC

Common shares outstanding 1,614,221

Net assets applicable to common shares $ 16,915,592

NAV per common share $ 10.48

Legal Acquiring Fund - Post Merger FLEX

Common shares outstanding 2,403,349

Net assets applicable to common shares $ 25,086,682

NAV per common share $ 10.44

Cost and Expenses

In connection with the Merger, PWAY incurred certain associated costs and expenses of approximately $709,000. These costs and expenses were expensed by PWAY.

Purchase Price Allocation

PWAY as the accounting acquirer acquired 32% of the voting interests of TPIC. The below summarized the purchase price allocation from TPIC

PWAY as acquirer
Value of Common Stock Issued $ 17,052,546

Assets acquired:

Investments 11,431,241

Cash and cash equivalents 5,055,456

Other assets 607,163

Total assets acquired 17,093,860

Total liabilities assumed 41,314

Net assets acquired 17,052,546

Total purchase price $ 17,052,546

Pro Forma Results of Operations

For the year ended June 30, 2019, the results of operations of TPIC, are as follows:



Legal Acquiring Fund - Results from Operations (unaudited)	TPIC Twelve months ended
Net investment income (loss)	$	(1,576,708	)
Net realized and unrealized gains (losses)	(752,709		)
Change in net assets resulting from operations	$	(2,329,417	)

On March 31, 2019, TPIC ceased to generate standalone results from operations and all income was generated by FLEX. Assuming the acquisition had been completed on July 1, 2018, the beginning of the fiscal reporting period of PWAY, the accounting survivor, the pro forma results of operations for the year ended June 30, 2019, are as follows:

The Company - Pro Forma Results Operations (unaudited) FLEX
Twelve months
ended
Net investment income (loss) $ (598,485 )
Net realized and unrealized gains (losses) (1,567,359 )
Change in net assets resulting from operations $ (2,165,844 )

Revenues

We generate revenue in the form of dividends, interest and capital gains on the debt securities, ~~and~~ equity interests and CLOs that we hold. In addition, we may generate revenue from our portfolio companies in the form of commitment, origination, structuring or diligence fees, monitoring fees, fees for providing managerial assistance and possibly consulting fees and performance-based fees. Any such fees will be recognized as earned.

Expenses

Our primary operating expenses will be the payment of advisory fees and other expenses under the ~~investment adviser agreement.~~Investment Advisory Agreement. The advisory fees will compensate our Adviser for its work in identifying, evaluating, negotiating, executing, monitoring and servicing our investments.

We will bear all other expenses of our operations and transactions, including (without limitation) fees and expenses relating to:

~~corporate and organizational expenses relating to offerings of our common stock, subject to limitations included in the investment advisory and management services agreement;~~

~~the cost of calculating our net asset value, including the cost of any third-party valuation services;~~

~~the cost of effecting sales and repurchase of shares of our common stock and other securities;~~

~~investment advisory fees;~~

fees payable to third parties relating to, or associated with, making investments and valuing investments, including fees and expenses associated with performing due diligence reviews of prospective investments;

~~transfer agent and custodial fees;~~

corporate and organizational expenses relating to offerings of our common stock, subject to limitations included in the investment advisory and management services agreement;

the cost of calculating our net asset value, including the cost of any third-party valuation services;

the cost of effecting sales and repurchase of shares of our common stock and other securities;

investment advisory fees;

transfer agent and custodial fees;

fees and expenses associated with marketing efforts;

federal and state registration fees;

federal, state and local taxes;

independent directors’ fees and expenses;

costs of proxy statements, stockholders’ reports and notices;

~~fees and expenses associated with marketing efforts;~~

~~federal and state registration fees;~~

~~federal, state and local taxes;~~

~~independent directors’ fees and expenses;~~

~~costs of proxy statements, stockholders’ reports and notices;~~

~~fidelity bond, directors and officers/errors and omissions liability insurance and other insurance premiums;~~

~~direct costs such as printing, mailing, long distance telephone, and staff;~~

~~fees and expenses associated with independent audits and outside legal costs, including compliance with the Sarbanes-Oxley Act;~~

~~costs associated with our reporting and compliance obligations under the Company Act and applicable federal and state securities laws;~~

~~brokerage commissions for our investments;~~

~~legal, accounting and other costs associated with structuring, negotiating, documenting and completing our investment transactions;~~

~~all other expenses incurred by our Adviser, in performing its obligations, subject to the limitations included in the investment adviser agreement; and~~

all other expenses incurred by either our Administrator or us in connection with administering our business, including payments to our Administrator under the administration agreement that will be based upon our allocable portion of its overhead and other expenses incurred in performing its obligations under the administration agreement, including rent and our allocable portion of the costs of compensation and related expenses of our chief executive officer, chief compliance officer and chief financial officer and their respective staffs.

fidelity bond, directors and officers/errors and omissions liability insurance and other insurance premiums;

direct costs such as printing, mailing, long distance telephone, and staff;

fees and expenses associated with independent audits and outside legal costs, including compliance with the Sarbanes-Oxley Act;

costs associated with our reporting and compliance obligations under the 1940 Act and applicable federal and state securities laws;

brokerage commissions for our investments;

legal, accounting and other costs associated with structuring, negotiating, documenting and completing our investment transactions;

all other expenses incurred by our Adviser, in performing its obligations, subject to the limitations included in the Investment Advisory Agreement; and

all other expenses incurred by either our Administrator or us in connection with administering our business, including payments to our Administrator under the Administration Agreement that will be based upon our allocable portion of its overhead and other expenses incurred in performing its obligations under the Administration Agreement, including rent and our allocable portion of the costs of compensation and related expenses of our chief executive officer, chief compliance officer and chief financial officer and their respective staffs.

Reimbursement of ~~TFA Associates, LLC~~our Administrator for Administrative Services

We will reimburse ~~TFA Associates~~our Administrator for the administrative expenses necessary for its performance of services to us. Such costs will be reasonably allocated to us on the basis of assets, revenues, time records or other reasonable methods. However, such reimbursement is made in an amount equal to the lower of the Administrator’s actual costs or the amount that we would be required to pay for comparable administrative services in the same geographic location. We will not reimburse our Administrator for any services for which it receives a separate fee or for rent, depreciation, utilities, capital equipment or other administrative items allocated to a controlling person of ~~TFA Associates.~~

our Administrator.

Portfolio and Investment Activity

During the year ended ~~December 31, 2016, we made investments in portfolio companies totaling $6,285,875.~~June 30, 2019, purchases of investment securities (excluding short-term securities) were $12,454,720. During the same period, ~~we sold investments for proceeds~~sales and redemptions of ~~$982,335 and received principal repayments of $128,071.~~investment securities (excluding short-term securities) were $9,854,278. As of ~~December 31, 2016,~~June 30, 2019, our investment portfolio, with a total fair value of ~~$10,604,173,~~$24,019,563, consisted of interests in ~~35 portfolio~~53 investment companies ~~(63.7%~~(76% in ~~first lien~~ senior secured ~~loans, 18.6%~~bonds, 2% in senior unsecured bonds, 2% in equity/other and 20% in CLO - subordinated notes).

During the year ended June 30, 2018, purchases of investment securities (excluding short-term securities) were $4,551,898. During the same period, sales and redemptions of investment securities (excluding short-term securities) were $5,230,764. As of June 30, 2018, our investment portfolio, with a total fair value of $10,940,179, consisted of interests in 28 investment companies (5% in senior secured bonds, 67% in senior unsecured bonds, and 28% in CLO - subordinated notes).

During the year ended June 30, 2017, purchases of investment securities (excluding short-term securities) were $5,967,933. During the same period, sales and redemptions of investment securities (excluding short-term securities) were $2,829,360. As of June 30, 2017, our investment portfolio, with a total fair value of $12,060,436, consisted of interests in 28 investment companies (8% in second lien term loans, 7% in senior secured ~~loans, 6.1%~~bonds, 71% in senior unsecured bonds, and 14% in CLO - subordinated ~~convertible debt~~notes).

Portfolio Holdings and ~~11.6% in equity). The portfolio companies that comprised our portfolio as of such date had an average annual EBITDA of approximately $114.6 million.~~ Investment Activity

As of ~~December 31, 2016, the investments in~~June 30, 2019, our investment portfolio, ~~were purchased at~~with a ~~weighted average price of 97.6% of par or stated value, the weighted average credit rating of the investments in our portfolio that were rated (constituting 82.32% of our portfolio based on the~~total fair value of ~~our investments) was B2 based upon the Moody’s scale. Our estimated gross annual~~$24,019,563, consisted of interests in 36 portfolio ~~yield was 6.72% based upon the amortized cost of our investments~~companies and was 7.61% on the debt portfolio alone. Our gross annual portfolio yield represents the expected yield to be generated by us on our investment portfolio based on the composition of our portfolio as of December 31, 2016. The portfolio yield does not represent an actual investment return to stockholders.

~~Total Portfolio Activity~~

17 Structured subordinated notes. The following ~~tables present~~table presents certain selected information regarding our portfolio ~~investment activity for the years ended December 31, 2016~~composition and ~~2015:~~

~~The following table presents the composition of the total purchases for the years ended December 31, 2016, 2015 and 2014.~~

December 31, 2016 December 31, 2015 December 31, 2014
Percentage Percentage Percentage
Purchases of Portfolio Purchases of Portfolio Purchases of Portfolio
Senior Secured Loans—First Lien $ 5,083,375 81 % $ 1,477,625 35 % $ 1,605,001 93 %
Senior Secured Loans—Second Lien 1,202,500 19 % 943,125 22 % 120,000 7 %
Subordinated Debt — 0 % 600,000 14 % — 0 %
Equity/Other — 0 % 1,250,000 29 % — 0 %
Total $ 6,285,875 100 % $ 4,270,750 100 % $ 1,725,001 100 %

Year Ended December 31,
Net Investment Activity 2016 2015 2014
Purchases $ 6,285,875 $ 4,270,750 $ 1,725,001.00
Sales and Redemptions (1,110,406 ) (414,971 ) (255,663 )
Net Portfolio Activity $ 5,175,469 $ 3,855,779 $ 1,469,338

~~The following tables summarize the composition of our investment portfolio at amortized cost and fair value~~weighted average yields as of ~~December 31, 2016, 2015~~June 30, 2019, and ~~2014:~~

December 31, 2016 December 31, 2015 December 31, 2014
Investments
at Amortized Cost⁽¹⁾ Investments
at Fair Value Fair Value Percentage of Total
Portfolio Investments
at Amortized Cost⁽¹⁾ Investments
at Fair Value Fair Value Percentage of Total
Portfolio Investments
at Amortized Cost⁽¹⁾ Investments
at Fair Value Fair Value Percentage of Total
Portfolio
Senior Secured Loans—First Lien $ 6,680,615 6,761,313 64 % $ 2,426,089 $ 2,389,377 43 % $ 1,351,927 $ 1,351,932 92 %
Senior Secured Loans—Second Lien 2,024,991 1,967,658 19 % 1,065,681 1,041,875 19 % 120,167 119,375 8 %
Subordinated Debt 646,901 646,901 6 % 609,219 609,219 11 % — — 0 %
Equity/Other 1,250,000 1,228,301 12 % 1,250,000 1,488,266 27 % — — 0 %
Total $ 10,602,507 $ 10,604,173 100 % $ 5,350,989 $ 5,528,737 100 % $ 1,472,094 $ 1,471,307 100 %

~~(1)~~

~~Amortized cost represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, on investments.~~

June 30, 2018:



	As of June 30, 2019					As of June 30, 2018
	Fair Value			As Percent of Total Fair Value		Fair Value			As Percent of Total Fair Value
Senior Secured Loans-First Lien	$	15,825,870		66	%	$	—		—	%
Senior Secured Loans-Second Lien	2,505,227			10	%	—			—	%
Equity/Other	570,816			2	%	—			5	%
Senior Unsecured Bonds	402,163			2	%	7,296,245			67	%
Senior Secured Bonds	—			—	%	516,038			—	%
Structured subordinated notes	4,715,487			20	%	3,127,896			28	%
Total	$	24,019,563		100	%	$	10,940,179		100	%

Number of portfolio companies	36					14
Number of Structured subordinated notes	17					14

% Variable Rate (based on fair value)⁽¹⁾	98		%			—		%
% Fixed Rate (based on fair value)⁽¹⁾	2		%			100		%
% Weighted Average Yield Variable Rate (based on fair value)⁽¹⁾	8		%			—		%
% Weighted Average Yield Fixed Rate (based on fair value)⁽¹⁾	12		%			8		%


(1) The interest rate by type information is calculated using the Company’s debt portfolio and excludes equity and Structured subordinated notes

December 31, 2016 December 31, 2015 December 31, 2014
Number of Portfolio Companies 35 22 10
% Variable Rate (based on fair value) 82.3% 62.1% 100.0%
% Fixed Rate (based on fair value) 6.1% 11.0% 0.0%
% Non-Income Producing Equity or Other Investments (based on fair value) 11.6% 26.9% 0.0%
Average Annual EBITDA of Portfolio Companies 114.6MM $101.6MM $96.0 MM
Weighted Average Credit Rating of Investments that were Rated B2 B2 B2
% of Investments on Non-Accrual — — —
Gross Portfolio Yield Prior to Leverage (based on amortized cost) 6.7% 5.4% 6.0%

The table below describes investments by industry classification and enumerates the percentage, by fair value, of the total portfolio assets in such industries as of ~~December 31, 2016, 2015~~June 30, 2019 and ~~2014:~~

December 31, 2016 December 31, 2015 December 31, 2014
Fair Percentage of Fair Percentage of Fair Percentage of
Industry Classification Value Portfolio Value Portfolio Value Portfolio
Automotive Repair, Services, and Parking $ 122,459 1.2 % $ 122,458 2.2 % $ 124,738 8.5 %
Beverage, Food & Tobacco 1,162,891 11.0 % 470,860 8.5 % 237,566 16.1 %
Business Services 2,793,526 26.2 % 633,547 11.5 % — 0.0 %
Construction Special Trade Contractors — 0.0 % — 0.0 % 246,258 16.8 %
Consumer Services 955,659 9.0 % — 0.0 % — 0.0 %
Energy: Oil & Gas 346,500 3.3 % — 0.0 % — 0.0 %
Healthcare & Pharmaceuticals 1,403,008 13.2 % 1,445,024 26.1 % 124,063 8.4 %
High Tech Industries 1,016,921 9.6 % 697,895 12.6 % 121,563 8.3 %
Media: Diversified and Production 347,375 3.3 % — 0.0 % — 0.0 %
Metals & Mining 245,625 2.3 % 210,521 3.8 % — 0.0 %
Paper and Allied Products 115,294 1.1 % 118,972 2.2 % 124,221 8.4 %
Retail 712,500 6.7 % — 0.0 % — 0.0 %
Specialty Finance 1,184,130 11.3 % 1,359,219 24.6 % — 0.0 %
Transportation: Cargo — 0.0 % 121,371 2.2 % 123,075 8.4 %
Wholesale Trade-Durable Goods — 0.0 % 122,874 2.2 % 124,219 8.4 %
Wholesale Trade-Nondurable Goods 198,285 1.8 % 225,996 4.1 % 245,604 16.7 %
Total $ 10,604,173 100.0 % $ 5,528,737 100.0 % $ 1,471,307 100.0 %

June 30, 2018:



	June 30, 2019
Industry	Investments at Fair Value		Percentage of Portfolio
Structured Finance	$	4,715,487	20	%
High Tech Industries	3,960,671		15	%
Healthcare & Pharmaceuticals	2,975,996		12	%
Services: Business	2,780,788		12	%
Media: Broadcasting & Subscription	1,675,694		7	%
Hotel, Gaming & Leisure	1,138,341		5	%
Services: Consumer	1,100,093		5	%
Media: Advertising, Printing & Publishing	947,142		4	%
Retail	905,020		4	%
Beverage, Food & Tobacco	498,688		2	%
Transportation: Cargo	497,181		2	%
Automotive	496,226		2	%
Consumer	496,134		2	%
Media: Diversified & Production	489,685		2	%
Telecommunications	479,004		2	%
Energy: Oil & Gas	461,250		2	%
Financial	402,163		2	%
Total	$	24,019,563	100	%

	June 30, 2018
Industry	Investments at Fair Value		Percentage of Portfolio
Energy	$	6,750,495	62	%
Structured Finance	3,127,896		28	%
Financial	545,750		5	%
Chemicals	516,038		5	%
Total	$	10,940,179	100	%

We do not “control” any of our portfolio companies, each as defined in the ~~Company~~1940 Act. We are an affiliate of ~~two portfolio companies, Javlin Capital, LLC (held through TPJ Holdings, Inc. and a convertible note) and~~ Injured Workers Pharmacy, LLC (held through ACON IWP Investors I, L.L.C.). In general, under the ~~Company~~1940 Act, we would be presumed to “control” a portfolio company if we owned 25% or more of its voting securities and would be an “affiliate” of a portfolio company if we owned 5% or more of its voting securities.

~~Portfolio Asset Quality~~

In addition to various risk management and monitoring tools, our Subadviser uses an investment rating system to characterize and monitor the expected level of returns on each investment in our debt portfolio. All of the investments included in our Subadviser’s rating systems refer to non-rated debt securities or rated debt securities that carry a rating below investment grade (rated lower than “Baa3” by Moody’s Investors Service or lower than “BBB-” by Standard & Poor’s Corporation also known as “junk bonds”). These ratings are on a scale of 1 to 8 as follows:

~~Highest quality obligors, minimal medium term default risk; possibly moving towards investment grade status.~~

~~High quality obligors, but not likely to move towards investment grade in the medium term; performing at or in excess of expected levels; solid liquidity; conservative credit statistics.~~

Credits of with a history of performing with leverage (repeat issuers); moderate credit statistics currently performing at or in excess of expected levels; solid liquidity; no expectation of covenant defaults or third party ratings downgrades.

~~Credits new to the leveraged loan universe; currently performing within a range of expected performance; moderate to aggressive credit statistics.~~

~~Credits new to the leveraged loan universe; currently performing within a range of expected performance; aggressive credit statistics or weak industry characteristics.~~

~~Credits placed in this category are experiencing potential liquidity problems but the issues are not imminent (more than 12 months).~~

~~Credits placed in this category are experiencing nearer-term liquidity problems (within 12 months).~~

~~Credits placed in this category have experienced either a technical or actual payment default which may require a write-down within our respective portfolios.~~

~~Categories 1 through 5 are performing in line with expectation, while categories 6-8 are closely watched for or have experienced liquidity problems and/or default.~~

The following table shows the ~~distribution~~composition of our ~~investments on the 1 to 8 scale at fair value~~investment portfolio by level of control as of ~~December 31, 2016, 2015~~June 30, 2019 and ~~2014:~~

December 31, 2016 December 31, 2015 December 31, 2014
Investment Rating Fair Value Percentage Fair Value Percentage Fair Value Percentage
1 $ — 0.0 % $ — 0.0 % $ — 0.0 %
2 — 0.0 % — 0.0 % 124,063 8.4 %
3 2,690,027 30.8 % 243,530 7.1 % 608,043 41.3 %
4 2,689,677 30.8 % 1,681,879 49.0 % 614,463 41.8 %
5 3,010,103 34.5 % 1,505,843 43.9 % 124,738 8.5 %
6 339,164 3.9 % — 0.0 % — 0.0 %
7 — 0.0 % — 0.0 % — 0.0 %
8 — 0.0 % — 0.0 % — 0.0 %
$ 8,728,971 100.0 % $ 3,431,252 100.0 % $ 1,471,307 100.0 %

June 30, 2018:



	June 30, 2019								June 30, 2018
Level of Control	Cost		% of Portfolio		Fair Value		% of Portfolio		Cost		% of Portfolio		Fair Value		% of Portfolio
Affiliate	$	472,357	2	%	$	570,816	2	%	$	—	—	%	$	—	—	%
Non-Control/Non-Affiliate	24,426,013		98	%	23,448,747		98	%	11,296,565		100	%	10,940,179		100	%
Total Investments	$	24,898,370	100	%	$	24,019,563	100	%	$	11,296,565	100	%	$	10,940,179	100	%

The following tables present certain selected information regarding our portfolio investment activity for the year ended June 30, 2019, and 2018:



	Year Ended
	June 30, 2019			June 30, 2018
Purchases	$	12,454,720		$	4,551,898
Sales and Redemptions	(9,854,278		)	(5,230,764		)
Net Portfolio Activity	$	2,600,442		$	(678,866	)

Results of Operations

Investment Income

For the ~~years~~year ended ~~December 31, 2016~~June 30, 2019, 2018, and ~~2015,~~2017, we generated ~~$440,748,~~$1,410,726, $1,298,317 and ~~$176,042,~~$1,179,924 respectively, in investment income in the form of interest and fees earned on ~~senior secured loans.~~our debt portfolio. Such revenues ~~represent $384,234 of~~were entirely cash income and $56,514 in non-cash portions related to the accretion of discounts and paid-in-kind interest for the year ended December 31, 2016. For the year ended December 31, 2015, such revenues represent $159,939 of cash income and $16,103 in non-cash portions related to the accretion of discounts and paid-in-kind interest for the year ended December 31, 2015. For the year ended December 31, 2014 such revenues represent $15,438 of cash income and $881 in non-cash portions related to the accretion of discounts. ~~We expect~~For the ~~dollar amount of~~year ended June 30, 2019, PIK interest ~~that we earn to continue to increase as~~included in interest income totaled $166 and $0, respectively. There was no PIK interest for the ~~size of our investment portfolio increases.~~

years ended June 30, 2018 and 2017.

Operating Expenses

Total operating expenses before ~~reimbursement from the sponsor~~expense limitation support and waiver of offering costs totaled ~~$741,022~~$2,943,931, $1,984,880 and $1,655,397 for the ~~year~~years ended ~~December 31, 2016,~~June 30, 2019, 2018, and 2017, respectively, and consisted primarily of amortization of offering costs, base management fees, administrator costs, legal expense, audit and tax expense, and adviser ~~and administrator reimbursements, professional fees, insurance expense, directors’ fees and other general and administrative fees.~~shared service expense. The base management fees for the ~~year~~years ended June 30, 2019, 2018, and 2017, respectively, were ~~$225,492~~$281,078, $264,101 and ~~the incentive fees~~$213,802. The amortization of offering costs for the ~~year~~years ended June 30, 2019, 2018, and 2017, respectively, were ~~($35,216).~~$165,517, $358,608 and $215,610. The adviser shared service expense for the years ended June 30, 2019, 2018, and 2017, respectively, were $19,028, $216,184 and $192,345. The legal expenses for the years ended June 30, 2019, 2018, and 2017, respectively, were $833,849, $49,565 and $28,182. Pursuant to the ~~Expense Reimbursement Agreement~~expense limitation support payment (discussed below), the sponsor reimbursed the Company ~~$671,062 for the year ended December 31, 2016.~~

~~Total operating expenses before reimbursement from the sponsor totaled $620,548 for the year ended December 31, 2015,~~$(309,881), $(1,205,356) and consisted of base management fees, adviser and administrator reimbursements, professional fees, insurance expense, directors’ fees and other general and administrative fees. The base management fees for the year were $101,336 and the incentive fees for the year were $37,014. Pursuant to the Expense Reimbursement Agreement (discussed below), the sponsor reimbursed the Company $584,998 for the year ended December 31, 2015.

Total operating expenses before reimbursement from the sponsor totaled $249,465 for the year ended December 31, 2014, and consisted of base management fees, adviser and administrator reimbursements, professional fees, insurance expense, directors’ fees and other general and administrative fees. The base management fees for the year were $57,432 and the incentive fees for the year were $217. Pursuant to the Expense Reimbursement Agreement (discussed below), the sponsor reimbursed the Company $249,357 for the year ended December 31, 2014.

~~Our other general and administrative expenses totaled $17,718, $19,861, and $13,516~~$(865,348) for the years ended ~~December 31, 2016, 2015,~~June 30, 2019, 2018, and ~~2014, respectively, and consisted~~2017, respectively. As part of the ~~following:~~

Year Ended December 31,
2016 2015 2014
Licenses and permits $ — $ 338 $ 238
Taxes 1,363 1,731 1,114
Printing fees 8,747 4,381 5,269
Travel expenses 6,150 12,416 1,217
Other 1,458 995 5,678
Total $ 17,718 $ 19,861 $ 13,516

Merger $(1,492,252) of offering costs was waived.

Net Investment Income

Our net investment income totaled ~~$370,788, $140,492, $16,211 ($0.48, $0.41,~~$268,928, $518,793 and ~~$0.14 per share based on weighted average shares outstanding, respectively)~~$389,875 for the years ended ~~December 31, 2016, 2015~~June 30, 2019, 2018, and ~~2014,~~2017, respectively.

Net Realized Gains/Losses from Investments

We measure realized gains or losses by the difference between the net proceeds from the disposition and the amortized cost basis of investment, without regard to unrealized gains or losses previously recognized.

For the ~~year~~years ended ~~December 31, 2016,~~June 30, 2019, 2018, and 2017, respectively, we received proceeds from sales and repayments on unaffiliated investments of ~~$1,110,406,~~$9,854,278, $5,230,764 and $2,892,360, from which we realized a net ~~gain~~loss of ~~$19,731. For the year ended December 31, 2015, we received proceeds from sales~~$(1,202,885), $181,008 and repayments of $414,971, from which we realized a net gain of $7,321. For the year ended December 31, 2014, we received proceeds from sales and repayments of $255,663, from which we realized a net gain of $1,875.

$17,839.

Net Unrealized Appreciation/Depreciation on Investments

Net change in unrealized appreciation (depreciation) on investments reflects the net change in the fair value of our investment portfolio. For the years ended ~~December 31, 2016, 2015~~June 30, 2019, 2018, and ~~2014,~~2017, respectively, net unrealized appreciation (depreciation) totaled ~~($176,082), $178,537,~~$150,069, $(704,926) and ~~($788),~~$357,968, respectively.

The Company has recorded a reduction in unrealized value for TPJ Holdings, Inc., a wholly-owned subsidiary of the Company. The reduction was a result in part due to a deterioration in the financial results of Javlin Capital LLC as the company refocuses its efforts on the consumer segment of its business and sheds assets in areas that are no longer a core focus.

~~Changes in Net Assets from Operations~~

For the year ended December 31, 2016, we recorded a net income of $214,437 versus net income of $326,350 for the year ended December 31, 2015 and net income of $17,298 for the year ended December 31, 2014.

Based on 777,680 weighted average common shares outstanding for the year ended December 31, 2016, basic and diluted, our per share net increase in net assets resulting from operations was $0.28 for the year ended December 31, 2016.

Based on 339,304 weighted average common shares outstanding for the year ended December 31, 2015, basic and diluted, our per share net increase in net assets resulting from operations was $0.96 for the year ended December 31, 2015.

Based on 114,991 weighted average common shares outstanding for the year ended December 31, 2014, basic and diluted, our per share net increase in net assets resulting from operations was $0.15 for the year ended December 31, 2014.

Financial Condition, Liquidity and Capital Resources



Record Date	Payment Date	Distribution Amount
9/6/2019	10/4/2019	$	0.01310
9/13/2019	10/4/2019	$	0.01310
9/20/2019	10/4/2019	$	0.01310
9/27/2019	10/4/2019	$	0.01310

~~Commencing in~~Our board of directors has authorized, and has declared, cash distributions on our common stock on a monthly basis since the second quarter of ~~2015, and~~2015. The amount of each such distribution is subject to our board of directors’ discretion and applicable legal restrictions ~~our board~~related to the payment of ~~directors intends to authorize and declare a monthly distribution amount per share of our common stock.~~distributions. We ~~will then~~ calculate each stockholder’s specific distribution amount for the month using record and declaration dates, and distributions will begin to accrue on the date we accept subscriptions for shares of our common stock. From time to time, we may also pay interim distributions at the discretion of our ~~board.~~board of directors. Each year a statement on Internal Revenue Service Form 1099-DIV (or any successor form) identifying the source of the distribution (i.e., paid from ordinary income, paid from net capital gain on the sale of securities, and/or a return of paid-in capital surplus which is a nontaxable distribution) will be mailed to our stockholders. Our distributions may exceed our earnings, especially during the period before we have substantially invested the proceeds from our offering. As a result, a portion of the distributions we make may represent a return of capital for tax purposes.

The Company may fund its cash distributions to stockholders from any sources of funds legally available to it, including offering proceeds, borrowings, net investment income from operations, capital gains proceeds from the sale of assets, non-capital gains proceeds from the sale of assets, dividends or other distributions paid to the Company on account of preferred and common equity investments in portfolio companies and expense reimbursements from the Adviser. The Company has not established limits on the amount of funds it may use from available sources to make distributions.

The following table reflects the sources of the cash distributions on a tax basis that the Company paid on its common stock during the years ended December 31, 2016 and 2015 (no distributions were paid prior to 2015):

We have entered into an investment and advisory agreement with Triton Pacific Adviser in which our senior management holds equity interest. Members of our senior management also serve as principals of other investment managers affiliated with Triton Pacific Adviser that do and may in the future manage investment funds, accounts or other investment vehicles with investment objectives similar to ours.

~~The Expense Reimbursement Agreement is, by its terms, effective retroactively~~



LIBOR Basis Point Change	Interest Income	Interest Expense	Net Investment Income
Up 300 basis points	$567,604	$377,843	$189,761
Up 200 basis points	$378,403	$322,843	$55,560
Up 100 basis points	$189,201	$267,843	$(78,642)
Down 25 basis points	$(47,300)	$199,093	$(246,393)

~~Item 8.~~
	~~Financial Statements and Supplementary Data.~~

~~Index to Financial Statements~~

	Page
Report of Independent Registered Public Accounting Firm	64 82
Consolidated ~~Statement~~Statements of ~~Financial Position~~Assets and Liabilities as of ~~December 31, 2016~~June 30, 2019 and ~~2015~~June 30, 2018	65 83
Consolidated Statements of Operations for the years ended ~~December 31, 2016, 2015~~June 30, 2019, 2018 and ~~2014~~2017	66 84
Consolidated Statements of Changes in Net Assets for the years ended ~~December 31, 2016, 2015~~June 30, 2019, 2018 and ~~2014~~2017	67 85
Consolidated Statements of Cash Flows for the years ended ~~December 31, 2016, 2015~~June 30, 2019, 2018 and ~~2014~~2017	68 88
Consolidated ~~Schedule~~Schedules of Investments ~~for the years ended December 31, 2016, and 2015~~as of June 30, 2019	69 89
Consolidated Schedules of Investments as of June 30, 2018	92
Notes to Consolidated Financial Statements	71 94

ASSETS
June 30, 2019
June 30, 2018 (1)
Investments at fair value:
Affiliate investments at fair value (cost of $472,357 and $0, respectively)
$ 570,816

$ —

Non-control/non-affiliate investments at fair value (cost of $24,426,013 and $11,296,565, respectively)
23,448,747

10,940,179

Total investments at fair value (cost of $24,898,370 and $11,296,565, respectively)
24,019,563

10,940,179

Cash
6,730,743

587,722

Receivable for investments sold 952,631
—

Prepaid expenses and other assets 427,944
24,899

Deferred financing costs (Note 11) 457,651
—

Deferred offering costs 292,429
64,500

Due from Adviser (Note 4) 128,852
118,109

Interest receivable 46,887
173,755

Due from Affiliate (Note 4) 2,137
12,018

Total assets
33,058,837

11,921,182

LIABILITIES

Revolving Credit Facility (Note 11)
5,500,000

1,350,000

Payable for investments purchased
1,961,399

—

Payable for shares repurchased
495,506

—

Accrued legal fees 486,537
—

Accrued audit fees 369,762
—

Due to Administrator (Note 4)
341,235

45,833

Accrued expenses
157,873

128,323

Due to Adviser (Note 4)
127,414

1,975,233

Dividends payable
126,128

42,568

Due to Affiliates (Note 4) 54,205
20,953

Interest payable 28,063
5,108

Total liabilities
9,648,122

3,568,018

Commitments and contingencies (Note 10)
—

—

Net assets
$ 23,410,715

$ 8,353,164

COMPONENTS OF NET ASSETS

Common Stock, par value $0.001 per share (75,000,000 shares authorized; 2,370,011 shares issued and outstanding at June 30, 2019) (Note 3)
$ 2,370

$ —

Common Stock of PWAY, par value $0.01 per share (200,000,000 shares authorized; 844,708 shares issued and outstanding at June 30, 2018)⁽²⁾(Note 3)

—

6,574

Paid-in capital in excess of par (Note 3)
30,105,995

8,859,427

Total distributable earnings (loss) (Note 6)
(6,697,650 )
(512,837 )
Net assets
$ 23,410,715

$ 8,353,164

Net asset value per share (Note 12)
$ 9.88

$ 9.89
(2)

⁽¹⁾See Notes 1,3 and 9.

⁽²⁾Net asset value per share and June 30, 2018 shares for Pathway Capital Opportunity Fund, Inc. (“PWAY”) have been adjusted by the exchange ratio used in the merger.

See notes ~~are an integral part of these statements.~~

to consolidated financial statements

Year Ended June 30,
2019 2018 (1) 2017 (1)
INVESTMENT INCOME
Interest Income from non-control/non-affiliate investments $ 808,522

$ 823,444

$ 842,124

Interest income from structured credit securities 602,204
474,873
337,800

Total investment income 1,410,726

1,298,317

1,179,924

OPERATING EXPENSES

Amortization of offering costs (Note 4) 165,517

358,608

215,610

Administrator costs (Note 4) 442,047

357,995

427,885

Base management fees (Note 4) 281,078

264,101

213,802

Adviser shared service expense (Note 4) 19,028

216,184

192,345

Valuation services 155,788

145,457

149,434

Audit and tax expense 599,126

178,947

169,000

Transfer agent’s fees and expenses 96,630

132,577

49,058

Insurance expense 103,804

111,403

111,447

Interest expense and credit facility expenses 58,638

67,195

39,529

Report and notice to shareholders 5,333

56,160

36,328

Legal expense 833,849

49,565

28,182

General and administrative 155,450

27,620

14,958

Miscellaneous expense 27,643
—
—

Due diligence expense —

16,463

11,925

Shareholder fees —

11,382

—

Excise taxes —

(8,777 )
(4,106 )
Total operating expenses 2,943,931

1,984,880

1,655,397

Waiver of offering costs (Note 4)⁽²⁾
(1,492,252 )
—

—

Expense support reimbursement (Note 4)⁽²⁾
—

(456,660 )
(865,348 )
Expense limitation payment (Note 4)⁽³⁾
(309,881 )
(748,696 )
—

Total net operating expenses 1,141,798

779,524

790,049

Net investment income 268,928

518,793

389,875

Net Realized and Change in Unrealized Gains (Losses) from Investments
Net realized (losses) gains:

Non-control/non-affiliate investments (1,202,885 )
181,008

17,839

Net realized (losses) gains (1,202,885 )
181,008

17,839

Net change in unrealized gains (losses) on:

Non-control/non-affiliate investments 87,240

(704,926 )
357,968

Control/affiliate investments 62,829
—
—

Net change in unrealized gains (losses) 150,069

(704,926 )
357,968

Net realized (decrease) increase and change in unrealized (losses) gains on investments (1,052,816 )
(523,918 )
375,807

Increase (decrease) increase in net assets resulting from operations $ (783,888 )
$ (5,125 )
$ 765,682

Increase in net assets resulting from operations per share (Note 12) $ (0.37 )
$ (0.01 )
$ 1.39

⁽¹⁾See Notes 1 and 9.

⁽²⁾The balance relates to organization and offering costs that were no longer reimbursable to the the former investment adviser to PWAY, Pathway Capital Opportunity Fund Management, LLC as a result of the Merger.

(3)This amount relates to fees waived and/or expenses that were paid or absorbed by the former investment adviser to PWAY under the PWAY Expense Limitation Agreement as well as fees waived by the Investment Adviser under the Expense Limitation Agreement. Refer to Note 4.

See notes ~~are an integral part of these statements.~~

to consolidated financial statements

~~TRITON PACIFIC INVESTMENT CORPORATION, INC.~~

TP FLEXIBLE INCOME FUND, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

~~YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014~~

For the Year Ended
December 31,
2016 For the Year Ended
December 31,
2015 For the Year Ended
December 31,
2014
Operations
Net investment income $ 370,788 $ 140,492 $ 16,211
Net realized gain on investments 19,731 7,321 1,875
Net increase (decrease) in unrealized appreciation on investments (176,082 ) 178,537 (788 )
Net increase in net assets resulting from operations 214,437 326,350 17,298
Stockholder distributions (see Note 5)
Distributions from net investment income (396,050 ) (183,073 ) —
Distributions from net realized gain on investments — (7,002 ) —
Net decrease in net assets resulting from stockholder distributions (396,050 ) (190,075 ) —
Capital share transactions
Issuance of common stock (see Note 3) 6,317,782 4,102,396 2,897,947
Less contingently redeemable common stock — — (1,181,037 )
Repurchase of shares of common stock (234,120 ) — —
Offering costs (9,922 ) (17,344 )
Net increase in net assets resulting from capital share transactions 6,083,662 4,092,474 1,699,566

Total increase in net assets 5,902,049 4,228,749 1,716,864
Net assets at beginning of year 7,326,653 1,916,867 200,003
Temporary equity reclassified as permanent equity — 1,181,037 —
Net assets at end of year $ 13,228,702 $ 7,326,653 $ 1,916,867
Accumulated distributions in excess of net investment income $ (51,629 ) $ (26,366 ) $ 16,211
Accumulated undistributed net realized gains $ 21,925 $ 2,192 $ 1,875

~~The accompanying~~

For the Year Ended June 30, 2019:

Common Stock

Shares
Par
Paid-in Capital in
Excess of Par
Distributable
Earnings
(Loss)
Total Net Assets
Balance as of June 30, 2018
657,370

$ 6,574

$ 8,859,427

$ (512,837 )
$ 8,353,164
Net Increase in net assets resulting from operations

Net investment income

268,928

268,928
Net realized (loss) on investments

(1,202,885 )
(1,202,885 )
Net change in unrealized gain on investments

150,069

150,069
Distributions to Shareholders (Note 5)

Distributions from earnings -PWAY Class A

(22,485 )
(22,485 )
Distributions from earnings -PWAY Class I

(1,247 )
(1,247 )
Return of capital distributions -PWAY Class A

(285,101 )

(285,101 )
Return of capital distributions -PWAY Class I

(15,806 )

(15,806 )
Return of capital distributions -FLEX Class A common shares

(410,967 )

(410,967 )
Gross proceeds from shares sold
2,530

3

28,077

28,080
Commissions and fees on shares sold

(1,010 )

(1,010 )
Shares issued through reinvestment of dividends
28,585

159

320,674

320,833
Repurchase of common shares
(118,560 )
(736 )
(1,305,649 )

(1,306,385 )
Offering costs (Note 4)

482,981

482,981
Tax Reclassification of Net Assets

899,819

(899,819 )

Recapitalization and merger (Notes 1, 3 and 9)
1,800,086

(3,630 )
21,533,550

(4,477,374 )
17,052,546
Total Increase (Decrease) for the year ended June 30, 2019
1,712,641

$ (4,204 )
$ 21,246,568

$ (6,184,813 )
$ 15,057,551
Balance as of June 30, 2019
2,370,011

$ 2,370

$ 30,105,995

$ (6,697,650 )
$ 23,410,715

See notes ~~are an integral part of these statements.~~

to consolidated financial statements

~~TRITON PACIFIC INVESTMENT CORPORATION,~~

TP FLEXIBLE INCOME FUND, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS



For the Year Ended June 30, 2018:
	Common Stock
	Shares		Par			Paid-in Capital in Excess of Par			Distributable Earnings (Loss)			Total Net Assets
Balance as of June 30, 2017	621,376		$	6,214		$	8,457,153		$	(57,623	)	$	8,405,744
Net Increase in net assets resulting from operations
Net investment income									518,793			518,793
Net realized gain on investments									181,008			181,008
Net change in unrealized (loss) on investments									(704,926		)	(704,926		)
Distributions to Shareholders (Note 5)												—
Capital gain -Class A (Previously Class R)									(153,615		)	(153,615		)
Capital gain -Class I (Previously Class RIA and I)									(8,138		)	(8,138		)
Return of capital distributions -Class A (Previously Class R)						(383,567		)	—			(383,567		)
Return of capital distributions -Class I (Previously Class RIA and I)						(20,199		)	—			(20,199		)
Shares sold	52,780		528			789,372						789,900
Commissions and fees on shares sold	—		—			(51,969		)				(51,969		)
Shares issued through reinvestment of dividends	21,195		212			283,462						283,674
Repurchase of common shares	(37,981	)	(380		)	(503,161		)				(503,541		)
Tax Reclassification of Net Assets						288,336			(288,336		)	—
Total Increase (Decrease) for the year ended June 30, 2018	35,994		$	360		$	402,274		$	(455,214	)	$	(52,580	)
Balance as of June 30, 2018	657,370		$	6,574		$	8,859,427		$	(512,837	)	$	8,353,164

See notes to consolidated financial statements

TP FLEXIBLE INCOME FUND, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS



For the Year Ended June 30, 2017
	Common Stock
	Shares		Par			Paid-in Capital in Excess of Par			Distributable Earnings (Loss)			Total Net Assets
Balance as of June 30, 2016:	466,710		$	4,667		$	5,282,644		$	689,044		$	5,976,355
Net Increase in net assets resulting from operations
Net investment income (loss)									389,875			389,875
Net realized gain (loss) on investments									17,839			17,839
Net change in unrealized gain (loss) on investments									357,968			357,968
Distributions to Shareholders (Note 5)												—
Return of capital distributions -Class A (Previously Class R)						(477,100		)	—			(477,100		)
Return of capital distributions -Class I (Previously Class RIA and I)						(27,415		)	—			(27,415		)
Shares sold	138,515		1,385			2,101,492						2,102,877
Commissions and fees on shares sold	—		—			(163,700		)				(163,700		)
Shares issued through reinvestment of dividends	17,282		173			229,832						230,005
Repurchase of common shares	(1,131	)	(11		)	(15,826		)				(15,837		)
Offering Costs						14,877						14,877
Tax Reclassification of Net Assets						1,512,349			(1,512,349		)	—
Total Increase (Decrease) for the year ended June 30, 2017	154,666		$	1,547		$	3,174,509		$	(746,667	)	$	2,429,389
Balance as of June 30, 2017	621,376		$	6,214		$	8,457,153		$	(57,623	)	$	8,405,744

See notes to consolidated financial statements

TP FLEXIBLE INCOME FUND, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS



	Year Ended June 30,
	2019			2018			2017
Cash flows from operating activities:
Net increase in net assets resulting from operations	$	(783,888	)	$	(5,125	)	$	765,682
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:
Amortization of offering costs	165,517			358,608			215,610
Purchases of investments	(12,454,720		)	(4,551,898		)	(5,967,933		)
Repayments and sales of portfolio investments	9,854,278			5,230,764			2,829,360
Net change in unrealized loss on investments	(150,069		)	704,926			(357,968		)
Net realized gain/(loss) on investments	1,202,884			(181,008		)	(17,839		)
Amortization of fixed income premium or discounts	—			(82,530		)	—
Waiver of offering costs	(1,975,233		)	—			—
Accretion of purchase discount on investments, net	(100,517		)	—			(167,190		)
Amortization of deferred financing costs	5,704			—			—
Changes in other assets and liabilities:
Receivable for investments sold	(952,631		)	—			—
Interest receivable	166,691			(5,413		)	(17,745		)
Due from Adviser (Note 7)	(10,743		)	(118,109		)	81,012
Deferred offering costs (Note 7)	—			(227,362		)	(328,286		)
Prepaid expenses	(42,950		)	4,473			(7,714		)
Due from Affiliate (Note 7)	12,017			(12,018		)	—
Due to Adviser (Note 7)	126,874			119,558			381,435
Accrued expenses	845,074			39,323			(32,750		)
Due to Administrator (Note 7)	295,402			13,302			2,383
Payable for investments purchased	1,961,399			—			—
Due to Affiliates (Note 7)	33,253			13,744			7,209
Interest payable	22,955			116			4,864
Taxes payable				—			(12,432		)
Net cash used in operating activities	(1,778,703		)	1,301,351			(2,622,302		)
Cash flows from investing activities:
Cash acquired in connection with merger (Note 9)	5,055,456			—			—
Net cash provided by investing activities	5,055,456			—			—
Cash flows from financing activities:
Gross proceeds from shares sold (Note 5)	28,080			809,900			2,082,877
Commissions and fees on shares sold (Note 7)	(1,010		)	(52,366		)	(163,300		)
Distributions paid to stockholders	(331,213		)	(293,792		)	(219,995		)
Repurchase of common shares	(810,879		)	(503,541		)	(15,837		)
Financing costs paid and deferred	(463,355		)	—			—
Borrowings under Revolving Credit Facility	5,500,000			325,000			2,375,000
Repayments under Revolving Credit Facility	(1,350,000		)	(1,600,000		)	(1,000,000		)
Offering costs	482,981			—			—
Offering costs paid and deferred	(188,336		)	—			14,877
Net cash provided by financing activities	2,866,268			(1,314,799		)	3,073,622
Net increase in cash	6,143,021			(13,448		)	451,320
Cash at beginning of year	587,722			601,170			149,850
Cash at end of year	$	6,730,743		$	587,722		$	601,170
Supplemental disclosure of cash flow financing activities:
Net assets (exclusive of cash) of $11,997,090 acquired as a result of recapitalization and merger (Note 9)	$	11,997,090		$	—		$	—
Value of shares issued through reinvestment of dividends	$	320,833		$	283,674		$	230,005
Supplemental disclosures:
Cash paid for interest	$	29,979		$	67,079		$	34,665
Taxes paid during the year	$	—		$	—		$	8,326

~~YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014~~

Year Ended
December 31,
2016 Year Ended
December 31,
2015 Year Ended
December 31,
2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in net assets resulting from operations $ 214,437 $ 326,350 $ 17,298
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities
Purchases of investments (6,285,875 ) (4,270,750 ) (1,471,214 )
Proceeds from sales and repayments of investments 1,110,406 414,971 —
Net realized gain from investments (19,731 ) (7,321 ) —
Net change in unrealized appreciation (depreciation) on investments 176,082 (178,537 ) 788
Accretion of discount (18,636 ) (6,574 ) (881 )
Net increase in paid-in-kind interest (37,682 ) (9,219 ) —
Change in assets and liabilities
Principal and interest receivable (7,598 ) (10,807 ) (900 )
Receivable for investments sold and repaid — 249,375 (249,375 )
Prepaid expenses (12,446 ) 4,438 (36,599 )
Reimbursement due from Adviser 118,914 27,482 138,261
Payable for investments purchased 1,061,625 (246,250 ) 246,250
Accounts payable and accrued liabilities — (79,643 ) 60,168
Deferred offering costs — — 775,858
Due to related parties (14,644 ) 29,457 (705,850 )
NET CASH PROVIDED BY (USED BY) OPERATING ACTIVITIES (3,715,148 ) (3,757,028 ) (1,226,196 )

CASH FLOWS FROM INVESTING ACTIVITIES
Net change in restricted cash held in escrow — — 160,000
NET CASH PROVIDED BY INVESTING ACTIVITIES — — 160,000

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 6,317,782 4,005,640 1,556,910
Issuance of temporary common stock 1,181,037
Payments on repurchases of shares of common stock (234,120 ) — —
Stockholder distributions (396,050 ) (93,319 ) —
Increases in distributions payable 4,096 12,478 —
Offering costs — (9,922 ) (17,344 )
NET CASH PROVIDED BY (USED BY) FINANCING ACTIVITIES 5,691,708 3,914,877 2,720,603

NET CHANGE IN CASH 1,976,560 157,849 1,654,407

CASH - BEGINNING OF YEAR $ 1,812,341 $ 1,654,492 $ 85

CASH - END OF YEAR $ 3,788,901 $ 1,812,341 $ 1,654,492

~~The accompanying~~See notes ~~are an integral part of these statements.~~to consolidated financial statements

~~TRITON PACIFIC INVESTMENT CORPORATION, INC.~~

TP FLEXIBLE INCOME FUND, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2019

~~DECEMBER 31, 2016~~

Portfolio Company Footnotes Industry Rate^(b) Floor Maturity Principal
Amount/ Number
of Shares Amortized
Cost^(f) Fair Value^(c)
Senior Secured Loans—First Lien—51.11%
California Pizza Kitchen, Inc. Beverage, Food & Tobacco L+6.00% (7.00%) 1.0% 8/19/2022 $ 349,125 $ 345,842 $ 348,326
CareCentrix, Inc. Healthcare & Pharmaceuticals L+5.00% (6.00%) 1.0% 7/8/2021 197,500 193,575 196,266
CRCI Holdings, Inc. Business Services L+5.50% (6.50%) 1.0% 8/31/2023 349,125 345,794 349,851
Curo Health Services Holdings, Inc. Healthcare & Pharmaceuticals L+5.50% (6.50%) 1.0% 2/7/2022 122,813 121,909 123,785
Deluxe Entertainment Services Group, Inc. Media: Diversified and Production L+6.00% (7.00%) 1.0% 2/28/2020 350,000 340,080 347,375
FHC Health Systems, Inc. Healthcare & Pharmaceuticals L+4.00% (5.00%) 1.0% 12/23/2021 122,812 121,970 119,742
Flavors Holdings, Inc. Tranche B Beverage, Food & Tobacco L+5.75% (6.75%) 1.0% 4/3/2020 110,938 107,998 90,414
GK Holdings, Inc. Business Services L+5.50% (6.50%) 1.0% 1/20/2021 122,500 121,847 121,888
Global Healthcare Exchange, LLC Healthcare & Pharmaceuticals L+4.25% (5.25%) 1.0% 8/15/2022 148,132 148,140 149,583
GTCR Valor Companies, Inc. Business Services L+6.00% (7.00%) 1.0% 6/16/2023 348,250 335,050 345,856
IG Investments Holdings, LLC Business Services L+5.00% (6.00%) 1.0% 10/29/2021 348,187 346,539 351,146
Imagine Print Solutions, LLC Business Services L+6.00% (7.00%) 1.0% 3/30/2022 248,125 244,986 252,467
Jackson Hewitt, Inc. Business Services L+7.00% (8.00%) 1.0% 7/30/2020 196,000 193,020 189,385
Mister Car Wash, Inc. Automotive Repair, Services, and Parking L+4.25% (5.25%) 1.0% 8/20/2021 121,875 121,036 122,459
Moran Foods, LLC Beverage, Food & Tobacco L+6.00% (7.00%) 1.0% 12/5/2023 350,000 339,619 350,000
Paradigm Acquisition Corp. Healthcare & Pharmaceuticals L+5.00% (6.00%) 1.0% 6/2/2022 123,125 121,537 122,560
Polycom, Inc. High Tech Industries L+6.50% (7.50%) 1.0% 9/27/2023 338,479 324,979 341,441
Pre-Paid Legal Services, Inc Consumer Services L+5.25% (6.25%) 1.0% 7/1/2019 350,000 349,125 351,750
Raley’s Beverage, Food & Tobacco L+6.25% (7.25%) 1.0% 5/18/2022 295,823 295,823 299,151
Ranpak Corp. Paper and Allied Products L+3.25% (4.25%) 1.0% 10/1/2021 114,506 114,297 115,294
SITEL Worldwide Corporation Business Services L+5.50% (6.50%) 1.0% 9/20/2021 197,500 196,488 197,994
SiteOne Landscape Supply LLC Business Services L+4.50% (5.50%) 1.0% 9/20/2021 347,379 344,506 350,094
SolarWinds, Inc. High Tech Industries L+4.50% (5.50%) 1.0% 2/3/2023 248,750 236,913 252,237
Strike, LLC Energy: Oil & Gas L+3.75% (10.75%) 7.0% 11/30/2022 350,000 339,692 346,500
TIBCO Software, Inc. High Tech Industries L+5.50% (6.50%) 1.0% 12/4/2020 122,813 121,067 123,555
TruGreen Limited Partnership Consumer Services L+5.50% (6.50%) 1.0% 4/13/2023 348,250 343,532 353,909
Verdesian Life Sciences LLC Wholesale Trade-Nondurable Goods L+5.00% (6.00%) 1.0% 7/1/2020 221,546 220,054 198,285
Vivid Seats Ltd. Consumer Services L+5.75% (6.75%) 1.0% 10/12/2022 250,000 245,197 250,000
Total Senior Secured Loans—First Lien $ 6,793,553 $ 6,680,615 $ 6,761,313

Senior Secured Loans—Second Lien—14.87%
Cheddar’s Casual Café, Inc. Retail L+9.75% (10.75%) 1.0% 1/4/2023 750,000 712,500 712,500
Flavors Holdings, Inc. Beverage, Food & Tobacco L+10.00% (11.00%) 1.0% 10/7/2021 125,000 121,619 75,000
FullBeauty Brands Holding High Tech Industries L+9.00% (10.00%) 1.0% 10/13/2023 250,000 218,269 173,750
GK Holdings, Inc. Business Services L+9.50% (10.50%) 1.0% 1/21/2022 125,000 123,197 126,250
Oxbow Carbon LLC Metals & Mining L+7.00 (8.00%) 1.0% 1/19/2020 250,000 237,142 245,625
Rocket Software, Inc. Business Services L+9.50% (10.50%) 1.0% 10/14/2024 500,000 490,281 508,595
SCS Holdings I Inc. High Tech Industries L+9.50% (10.50%) 1.0% 10/13/2023 125,000 121,983 125,938
Total Senior Secured Loans—Second Lien $ 2,125,000 $ 2,024,991 $ 1,967,658

Subordinated Convertible Debt—4.89%
Javlin Capital LLC Subordinated Convertible Note (a) (e) Specialty Finance 6.00% 3/31/2020 646,901 646,901 646,901
Total Subordinated Convertible Debt $ 646,901 $ 646,901 $ 646,901

Equity/Other—9.29%
ACON IWP Investors I, L.L.C. (a) Healthcare & Pharmaceuticals 500,000 500,000 691,072
Javlin Capital LLC Class C-2 Preferred Units (a) (d) (e) Specialty Finance 214,286 750,000 537,229
Total Equity/Other 714,286 $ 1,250,000 $ 1,228,301

TOTAL INVESTMENTS—80.16% $ 10,602,507 $ 10,604,173
OTHER ASSETS IN EXCESS OF LIABILITIES—19.84% $ 2,624,529
NET ASSETS - 100.00% $ 13,228,702



Portfolio Company / Security Type	Industry	Acquisition Date	Coupon/Yield (b)	Floor	Legal Maturity	Principal/ Quantity		Amortized Cost (d)		Fair Value (c)		% of Net Assets
Senior Secured Loans-First Lien^(k)
LSF9 Atlantis Holdings, LLC ^(g)	Retail	4/21/2017	1ML+6.00% (8.42%)	1.00	5/1/2023	$	475,000	$	470,292	$	446,597	1.91	%
California Pizza Kitchen, Inc. ^(g)	Hotel, Gaming & Leisure	8/19/2016	6ML+6.00% (8.53%)	1.00	8/23/2022	340,375		337,013		333,568		1.42	%
CareerBuilder ^(g)	Services: Consumer	7/27/2017	3ML+6.75% (9.08%)	1.00	7/31/2023	356,625		346,152		355,734		1.52	%
Correct Care Solutions Group Holdings, LLC ^(g)	Healthcare & Pharmaceuticals	4/2/2019	1ML+5.50% (7.94%)	—	10/1/2025	1,246,867		1,203,024		1,206,500		5.15	%
Deluxe Entertainment Services Group, Inc.	Services: Business	10/24/2016	3ML+5.50% (8.08%)	1.00	2/28/2020	326,662		317,103		292,362		1.25	%
Digital Room Holdings, Inc	Media: Broadcasting & Subscription	5/14/2019	1ML+5.00% (7.40%)	—	5/21/2026	1,500,000		1,477,879		1,477,350		6.31	%
GK Holdings, Inc.	Media: Broadcasting & Subscription	1/30/2015	3ML+6.00% (8.33%)	1.00	1/20/2021	119,375		118,197		101,469		0.43	%
Global Tel*Link Corporation ^(g)	Telecommunications	4/5/2019	1ML+4.25% (6.65%)	—	11/29/2025	498,747		497,513		479,004		2.05	%
GoWireless Holdings, Inc. ^(g)	Retail	12/21/2017	1ML+6.50% (8.94%)	1.00	12/22/2024	462,500		457,874		450,746		1.93	%
Help/Systems Holdings, Inc. ^(g)	High Tech Industries	4/2/2019	3ML+3.75% (6.08%)	—	3/28/2025	997,481		983,926		991,247		4.23	%
InfoGroup Inc. ^(g)	Media: Advertising, Printing & Publishing	3/28/2017	3ML+5.00% (7.33%)	1.00	4/3/2023	488,750		483,922		477,142		2.04	%
J.D Power and Associates ^(g)	Automotive	4/2/2019	1ML+3.75% (6.19%)	1.00	9/7/2023	498,719		493,911		496,226		2.12	%
Keystone Acquisition Corp. ^(g)	Healthcare & Pharmaceuticals	4/10/2019	3ML+5.25% (7.58%)	1.00	5/1/2024	748,096		737,058		731,264		3.12	%
McAfee LLC ^(g)	High Tech Industries	9/27/2017	1ML+3.75% (6.15%)	1.00	9/30/2024	242,892		240,488		242,930		1.04	%
PGX Holdings, Inc. ^(g)	Services: Consumer	4/2/2019	1ML+5.25% (7.66%)	1.00	9/29/2020	744,359		733,789		744,359		3.18	%
Prospect Medical Holdings, Inc. ^(g)	Healthcare & Pharmaceuticals	2/16/2018	1ML+5.50% (7.94%)	1.00	2/22/2024	493,750		483,992		467,416		2.00	%
Quidditch Acquisition, Inc. ^(g)	Beverage, Food & Tobacco	3/16/2018	1ML+7.00% (9.40%)	1.00	3/21/2025	493,750		483,971		498,688		2.13	%
SCS Holdings I Inc. ^(g)	Services: Business	5/22/2019	3ML+4.25% (6.57%)	—	7/1/2026	1,250,000		1,246,875		1,250,256		5.34	%
Research Now Group, Inc. ^(g)	Services: Business	4/2/2019	3ML+5.50% (8.08%)	1.00	12/20/2024	748,101		748,101		748,101		3.20	%
Rocket Software, Inc. ^(g)	High Tech Industries	4/2/2019	1ML+4.25% (6.69%)	—	11/28/2025	1,246,875		1,240,028		1,221,938		5.22	%
SESAC Holdco II LLC ^(g)	Media: Diversified & Production	4/16/2019	1ML+3.25% (5.40%)	1.00	2/23/2024	498,724		489,513		489,685		2.09	%
Sorenson Communications, LLC	Consumer	4/26/2019	3ML+6.50% (8.83%)	1.00	4/29/2024	500,000		500,000		496,134		2.12	%
Transplace Holdings, Inc. ^(g)	Transportation: Cargo	4/10/2019	1ML+3.75% (6.15%)	1.00	10/5/2024	498,737		496,276		497,181		2.12	%
Travel Leaders Group, LLC ^(g)	Hotel, Gaming & Leisure	1/19/2017	1ML+4.00% (6.38%)	1.00	1/25/2024	495,000		495,029		496,648		2.12	%
Vero Parent Inc. (Sahara) ^(g)	High Tech Industries	8/11/2017	1ML+4.50% (6.90%)	1.00	8/16/2024	343,901		340,497		343,256		1.47	%
Wirepath LLC ^(g)	Services: Business	7/31/2017	1ML+4.00% (6.44%)	1.00	8/5/2024	491,297		488,866		490,069		2.09	%
Total Senior Secured Loans-First Lien								$	15,911,289	$	15,825,870	67.6	%

Senior Secured Loans-Second Lien^(k)
Encino Acquisition Partners Holdings, LLC ^(g)	Energy: Oil & Gas	9/25/2018	1ML+6.75% (9.19%)	1.00	10/29/2025	$	500,000	$	495,061	$	461,250	1.97	%
FullBeauty Brands Holding^(l)	Retail	2/7/2019	7.00%	—	1/31/2025	11,127		9,457		7,677		0.03	%
GK Holdings, Inc.	Media: Broadcasting & Subscription	1/30/2015	3ML+10.25% (12.58%)	1.00	1/21/2022	125,000		122,533		96,875		0.41	%
Inmar ^(g)	Media: Advertising, Printing & Publishing	4/25/2017	3ML+8.00% (10.60%)	1.00	5/1/2025	500,000		492,587		470,000		2.01	%
McAfee LLC ^(g)	High Tech Industries	9/27/2017	1ML+8.50% (10.90%)	1.00	9/29/2025	437,500		434,677		444,154		1.90	%
Neustar, Inc. ^(g)	High Tech Industries	3/2/2017	1ML+8.00% (10.44%)	1.00	8/8/2025	749,792		738,678		717,146		3.06	%

TP FLEXIBLE INCOME FUND, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2019



Portfolio Company / Security Type	Industry	Acquisition Date	Coupon/Yield (b)		Floor	Legal Maturity	Principal/ Quantity		Amortized Cost (d)		Fair Value (c)		% of Net Assets
NPC International, Inc. ^(g)	Hotel, Gaming & Leisure	3/30/2017	1ML+7.50% (9.94%)		1.00	4/18/2025	500,000		497,584		308,125		1.32	%
Total Senior Secured Loans-Second Lien									$	2,790,577	$	2,505,227	10.7	%

Senior Unsecured Bonds ^(a)(j)(k)(m)
Ace Cash Express, Inc.	Financial	12/15/2017	0.12		N/A	12/15/2022	$	450,000	$	444,957	$	402,163	1.72	%
Total Senior Unsecured Bonds									$	444,957	$	402,163	1.72	%

Structured subordinated notes ^{(a)(e)(f)(k)(m)}
Apidos CLO XXIV	Structured Finance	5/17/2019	23.23	%	N/A	10/20/2030	$	250,000	$	156,400	$	162,383	0.69	%
Carlyle Global Market Strategies CLO 2014-4-R, Ltd.	Structured Finance	4/12/2017	21.64	%	N/A	7/15/2030	250,000		170,233		179,108		0.77	%
Carlyle Global Market Strategies CLO 2017-5, Ltd.	Structured Finance	1/30/2018	17.03	%	N/A	1/22/2030	500,000		493,001		466,165		1.99	%
Galaxy XIX CLO, Ltd.	Structured Finance	12/8/2016	14.11	%	N/A	7/24/2030	250,000		170,747		128,700		0.55	%
GoldenTree Loan Opportunities IX, Ltd.	Structured Finance	7/27/2017	15.39	%	N/A	10/29/2029	250,000		188,924		154,057		0.66	%
Madison Park Funding XIII, Ltd.	Structured Finance	11/12/2015	22.24	%	N/A	4/22/2030	250,000		178,423		182,950		0.78	%
Madison Park Funding XIV, Ltd.	Structured Finance	11/19/2015	16.25	%	N/A	10/22/2030	250,000		188,558		180,119		0.77	%
Octagon Investment Partners XIV, Ltd.	Structured Finance	12/6/2017	18.01	%	N/A	7/16/2029	850,000		556,194		479,186		2.05	%
Octagon Investment Partners XV, Ltd.	Structured Finance	5/23/2019	22.82	%	N/A	7/19/2030	500,000		270,348		297,326		1.27	%
Octagon Investment Partners XXI, Ltd.	Structured Finance	1/13/2016	16.05	%	N/A	2/14/2031	387,538		223,038		206,601		0.88	%
Octagon Investment Partners 30, Ltd.	Structured Finance	11/21/2017	16.18	%	N/A	3/17/2030	475,000		456,377		405,248		1.73	%
OZLM XII, Ltd.	Structured Finance	1/20/2017	10.59	%	N/A	4/30/2027	275,000		219,453		171,524		0.73	%
Sound Point CLO II, Ltd.	Structured Finance	5/16/2019	20.73	%	N/A	1/26/2031	1,500,000		902,022		881,608		3.77	%
Sound Point CLO XVIII, Ltd.	Structured Finance	5/16/2019	19.05	%	N/A	1/21/2031	250,000		245,476		246,338		1.05	%
Voya IM CLO 2013-1, Ltd.	Structured Finance	6/14/2016	14.81	%	N/A	10/15/2030	278,312		188,161		159,683		0.68	%
Voya CLO 2016-1, Ltd.	Structured Finance	2/25/2016	20.38	%	N/A	1/21/2031	250,000		217,902		221,741		0.95	%
THL Credit Wind River 2013-1 CLO, Ltd.	Structured Finance	11/3/2017	12.4	%	N/A	7/30/2030	325,000		245,179		192,750		0.82	%
Total Structured subordinated notes^(e)(f)									$	5,070,436	$	4,715,487	20.14	%

Equity/Other^(k)(m)
ACON IWP Investors I, L.L.C. ^(h)(i)	Healthcare & Pharmaceuticals	N/A	N/A		N/A	N/A	$	472,357	$	472,357	$	570,816	2.44	%
FullBeauty Brands Holding, Common Stock⁽ⁱ⁾	Retail	N/A	N/A		N/A	N/A	72		208,754		—		—	%
Total Equity/Other									$	681,111	$	570,816	2.44	%

Total Portfolio Investments									$	24,898,370	$	24,019,563	102.6	%


(a)	Indicates assets that the Company believes do not represent “qualifying assets” under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”). Of the Company’s total investments as of June 30, 2019, 17% are non-qualifying assets as a percentage of assets.

(b)

The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”) or which reset monthly, quarterly, or semiannually. For each such investment, the Company has provided the spread over LIBOR or Prime and the current contractual interest rate in effect at June 30, 2019. Certain investments are subject to a LIBOR or Prime interest rate floor. As of June 30, 2019, the one-month ("1ML"), two-month ("2ML"), three-month ("3ML"), and six-month ("6ML") LIBOR rates were 2.40%, 2.33%, 2.32%, and 2.20%, respectively.


(c)	Fair value and market value are determined by the Company’s board of directors (see Note 2).


(d)	See Note 6 for a discussion of the tax cost of the portfolio.

See notes to consolidated financial statements

TP FLEXIBLE INCOME FUND, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2019

(e) The structured subordinated notes and preference/preferred shares are considered equity positions in the Collateralized Loan Obligations (“CLOs”). The CLO equity investments are entitled to recurring distributions which are generally equal to the excess cash flow generated from the underlying investments after payment of the contractual payments to debt holders and fund expenses. The current estimated yield is based on the current projections of this excess cash flow taking into account assumptions which have been made regarding expected prepayments, losses and future reinvestment rates. These assumptions are periodically reviewed and adjusted. Ultimately, the actual yield may be higher or lower than the estimated yield if actual results differ from those used for the assumptions.


(f)	All structured subordinated notes are co-investments with other entities managed by an affiliate of the Adviser (see Note 4).


(g)	The senior structured loan is held as collateral at the SPV, TP Flexible Funding, LLC as of June 30, 2019.

(h)

Affiliated investment as defined by the 1940 Act, whereby the Company owns between 5% and 25% of the portfolio company’s outstanding voting securities and the investments are not classified as controlled investments. Affiliated funds that are managed by an affiliate of Triton Pacific Adviser, LLC also hold investments in this security. The aggregate fair value of non-controlled, affiliated investments at ~~December 31, 2016~~June 30, 2019 represented ~~14.23%~~2.59% of the Company’s net assets. Fair value as of ~~December 31, 2016~~June 30, 2019 along with transactions during the period ended ~~December 31, 2015~~June 30, 2019 in affiliated investments were as follows:

Year Ended December 31, 2016
Fair Value at Gross Additions Gross Reductions Fair Value at Net Realized Interest & Dividends
Non-controlled, Affiliated Investments December 31, 2015 (Cost)* (Cost)** December 31, 2016 Gain (Loss) Credited to Income
ACON IWP Investors I, L.L.C. $ 738,266 $ — $ — $ 691,072 $ — $ —
Javlin Capital, LLC, Convertible Note 609,219 37,682 — 646,901 — 37,682
Javlin Capital, LLC, C-2 Preferred Units 750,000 — — 537,229 — —
Total $ 2,097,485 $ 37,682 $ — $ 1,875,202 $ — $ 37,682

* Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest, the amortization of unearned income, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category.

** Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.

~~(b)~~

Certain variable rate securities in the Company’s portfolio bear interest at a rate determined by a publicly disclosed base rate spread. As of December 31, 2016, the three-month London Interbank Offered Rate, or LIBOR, was 0.99789%.

~~(c)~~

~~Fair value and market value are determined by the Company’s board of directors (see Note 7.)~~

~~(d)~~

~~Security held within TPJ Holdings, Inc., a wholly-owned subsidiary of the Company. See Note 2 for a discussion on the basis of consolidation.~~

~~(e)~~

The investment is not a qualifying asset under the Investment Company Act of 1940, as amended. A business development company may not acquire any asset other than a qualifying asset, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the business development company’s total assets. As of December 31, 2016, 91.87% of the Company’s total assets represented qualifying assets.

~~(f)~~

~~See Note 5 for a discussion of the tax cost of the portfolio.~~

~~The accompanying notes are an integral part of these statements.~~



Non-controlled, Affiliated Investments	Number of Shares	Fair Value at March 31, 2019		Gross Additions (Cost)*		Gross Reductions (Cost)**		Unrealized Change in FMV		Net Realized Gain (Loss)		Fair Value at June 30, 2019		Interest & Dividends Credited to Income
ACON IWP Investors I, L.L.C.	472,357	$	507,988	$	—	$	—	$	62,828	—		$	570,816	$	—
Total		$	507,988	$	—	$	—	$	62,828	$	—	$	570,816	$	—

~~TRITON PACIFIC INVESTMENT CORPORATION, INC.~~
~~CONSOLIDATED SCHEDULE OF INVESTMENTS~~
~~DECEMBER 31, 2015~~

Portfolio Company Footnotes Industry Rate^(b) Floor Maturity Principal
Amount/ Number
of Shares Amortized
Cost^(f) Fair Value^(c)
Senior Secured Loans—First Lien—32.46%
CareCentrix, Inc. Healthcare & Pharmaceuticals L+5.00% (6.00%) 1.0% 7/8/2021 $ 199,500 $ 194,849 $ 194,346
Curo Health Services Holdings, Inc. Healthcare & Pharmaceuticals L+5.50% (6.50%) 1.0% 2/7/2022 124,063 122,977 123,054
FHC Health Systems, Inc. Healthcare & Pharmaceuticals L+4.00% (5.00%) 1.0% 12/23/2021 124,062 123,038 118,479
Flavors Holdings, Inc. Tranche B Beverage, Food & Tobacco L+5.75% (6.75%) 1.0% 4/7/2020 117,188 113,324 104,297
GK Holdings, Inc. Business Services L+5.50% (6.50%) 1.0% 1/20/2021 123,750 122,667 122,513
Global Healthcare Exchange Healthcare & Pharmaceuticals L+4.50% (5.50%) 1.0% 8/15/2022 149,625 149,155 148,784
Jackson Hewitt Business Services L+7.00% (8.00%) 1.0% 7/30/2020 200,000 196,294 192,500
Jeld-Wen, Inc. Wholesale Trade-Durable Goods L+4.25% (5.25%) 1.0% 10/15/2021 123,750 122,730 122,874
Mister Car Wash, Inc. Automotive Repair, Services, and Parking L+4.00% (5.00%) 1.0% 8/20/2021 123,125 122,105 122,458
Natel Engineering High Tech Industries L+5.75% (6.75%) 1.0% 4/10/2020 121,875 120,758 120,656
Omnitracs, LLC Transportation: Cargo L+3.75% (4.75%) 1.0% 11/25/2020 123,428 122,688 121,371
Paradigm Outcomes Healthcare & Pharmaceuticals L+5.00% (6.00%) 1.0% 6/2/2022 124,375 122,605 122,095
Ranpak Corp. Paper and Allied Products L+3.25% (4.25%) 1.0% 10/1/2021 119,972 119,718 118,972
SCS Holdings I High Tech Industries L+5.00% (6.00%) 1.0% 10/31/2022 123,596 121,207 121,896
SITEL Worldwide Business Services L+5.50% (6.50%) 1.0% 9/20/2021 199,500 197,762 196,034
TIBCO Software High Tech Industries L+5.50% (6.50%) 1.0% 12/4/2020 124,063 121,954 113,052
Verdesian Life Sciences LLC Wholesale Trade-Nondurable Goods L+5.00% (6.00%) 1.0% 7/1/2020 234,193 232,258 225,996
Total Senior Secured Loans—First Lien $ 2,456,065 $ 2,426,089 $ 2,389,377

Senior Secured Loans—Second Lien—14.15%
Flavors Holdings, Inc. Beverage, Food & Tobacco L+10.00% (11.00%) 1.0% 10/7/2021 125,000 120,893 118,125
FullBeauty Brands Holding High Tech Industries L+9.00% (10.00%) 1.0% 10/13/2023 250,000 217,634 220,416
GK Holdings, Inc. Business Services L+9.50% (10.50%) 1.0% 1/21/2022 125,000 122,834 122,500
Hostess Brands Beverage, Food & Tobacco L+7.50% (8.50%) 1.0% 8/3/2023 250,000 249,048 248,438
Oxbow Carbon LLC Metals & Mining L+7.00 (8.00%) 1.0% 1/19/2020 250,000 233,925 210,521
SCS Holdings I High Tech Industries L+9.50% (10.50%) 1.0% 10/13/2023 125,000 121,347 121,875
Total Senior Secured Loans—Second Lien $ 1,125,000 $ 1,065,681 $ 1,041,875

Subordinated Convertible Debt—8.27%
Javlin Capital LLC Subordinated Convertible Note (a) (e) Specialty Finance 6.00% 3/31/2020 609,219 609,219 609,219
Total Subordinated Convertible Debt $ 609,219 $ 609,219 $ 609,219

Equity/Other—20.22%
ACON IWP Investors I, L.L.C. (a) Healthcare & Pharmaceuticals 500,000 500,000 738,266
Javlin Capital LLC Class C-2 Preferred Units (a) (d) (e) Specialty Finance 214,286 750,000 750,000
Total Equity/Other 714,286 $ 1,250,000 $ 1,488,266

TOTAL INVESTMENTS—75.10% $ 5,350,989 $ 5,528,737
OTHER ASSETS IN EXCESS OF LIABILITIES—24.90% $ 1,797,916
NET ASSETS - 100.00% $ 7,326,653

~~(a)~~

Affiliated investment as defined by the 1940 Act, whereby the Company owns between 5% and 25% of the portfolio company’s outstanding voting securities and the investments are not classified as controlled investments. Affiliated funds that are managed by an affiliate of Triton Pacific Adviser, LLC also hold investments in this security. The aggregate fair value of non-controlled, affiliated investments at December 31, 2015 represented 28.49% of the Company’s net assets. Fair value as of December 31, 2015 along with transactions during the period ended December 31, 2015 in affiliated investments were as follows:

Year Ended December 31, 2015
Non-controlled, Affiliated Investments Fair Value at
December 31, 2014 Gross Additions
(Cost)* Gross Reductions
(Cost)** Fair Value at
December 31, 2015 Net Realized
Gain (Loss)
ACON IWP Investors I, L.L.C. $ — $ 500,000 $ — $ 738,266 $ —
Javlin Capital, LLC, Convertible Note — 600,000 — 609,219 —
Javlin Capital, LLC, C-2 Preferred Units — 750,000 — 750,000 —
Total $ — $ 1,850,000 $ — $ 2,097,485 $ —

*Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest, the amortization of unearned income, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category.

**Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.

(i) Represents non-income producing security that has not paid a dividend in the year preceding the reporting date.

~~(b)~~

(j)

~~Certain variable rate securities~~All investments in this category are categorized as Level 2 investments in accordance with ASC 820. See Note 2 within the ~~Company’s portfolio bear interest at a rate determined by a publicly disclosed base rate spread. As of December 31, 2015,~~accompanying notes to the ~~three-month London Interbank Offered Rate, or LIBOR, was 0.61220%.~~consolidated financial statements.

(k) All investments in this category are valued using significant unobservable inputs and are categorized as Level 3 investments in accordance with ASC 820. See Notes 2 and 7 within the accompanying notes to the consolidated financial statements.

(l) This investment has contractual payment-in-kind (“PIK”) interest. PIK income computed at the contractual rate is accrued into income and reflected as receivable up to the capitalization date.

(m) Investment has been designated as an investment not “qualifying” under Section 55(a) of the Investment Company Act of 1940 (the “1940 Act”). Under the 1940 Act, we may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of our total assets

See notes to consolidated financial statements

TP FLEXIBLE INCOME FUND, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2018 ^(g)



Portfolio Company / Security Type	Industry	Acquisition Date	Interest Rate/Yield	Floor	Maturity	Principal / Quantity		Amortized Cost (b)		Fair Value (a)		% of Net Assets
Senior Unsecured Bonds ^(f)
Ace Cash Express, Inc.	Financial	12/15/2017	12.00	N/A	12/15/2022	$	500,000	$	493,110	$	545,750	6.50	%
Archrock Partners, LP	Energy	12/22/2016	6.00	N/A	4/1/2021	500,000		497,145		499,027		6.00	%
Brand Energy & Infrastructure Services, Inc.	Energy	6/21/2017	8.50	N/A	7/15/2025	1,000,000		1,000,000		1,017,427		12.20	%
Calumet Specialty Products	Energy	10/16/2015	7.75	N/A	4/15/2023	550,000		523,838		551,287		6.60	%
Carrizo Oil and Gas, Inc.	Energy	9/3/2015	7.50	N/A	9/15/2020	191,000		193,012		192,074		2.30	%
CSI Compressco LP	Energy	9/17/2015	7.25	N/A	8/15/2022	750,000		675,537		687,188		8.20	%
Ferrellgas Partners LP	Energy	9/9/2015	8.63	N/A	6/15/2020	750,000		750,000		727,500		8.70	%
Global Partners LP	Energy	10/2/2015	7.00	N/A	6/15/2023	350,000		330,947		349,540		4.20	%
Jonah Energy LLC	Energy	10/3/2017	7.25	N/A	10/15/2025	1,000,000		1,000,000		811,964		9.70	%
Martin Midstream Partners LP	Energy	9/10/2015	7.25	N/A	2/15/2021	500,000		484,935		495,000		5.90	%
NGL Energy Partners LP	Energy	9/2/2015	6.88	N/A	10/15/2021	750,000		745,753		763,327		9.10	%
RSP Permian, Inc.	Energy	9/10/2015	6.63	N/A	10/1/2022	300,000		292,376		315,397		3.80	%
Weatherford Bermuda	Energy	11/24/2015	9.88	N/A	3/1/2039	350,000		322,886		340,764		4.10	%
Total Senior Unsecured Bonds								$	7,309,539	$	7,296,245	87.3	%

Senior Secured Bonds^(f)
Hexion Inc.	Chemicals	9/8/2015	6.63	N/A	4/15/2020	$	550,000	$	524,156	$	516,038	6.20	%
Total Senior Secured Bonds								$	524,156	$	516,038	6.2	%

Structured subordinated notes^(c)(d)(h)
Carlyle Global Market Strategies CLO 2014-4-R, Ltd.	Structured Finance	4/12/2017	20.67	N/A	7/15/2030	$	250,000	$	174,970	$	184,133	2.20	%
Carlyle Global Market Strategies CLO 2017-5, Ltd.	Structured Finance	1/30/2018	15.86	N/A	1/22/2030	500,000		506,401		457,386		5.50	%
Galaxy XIX CLO, Ltd.	Structured Finance	12/8/2016	12.13	N/A	7/24/2030	250,000		166,384		139,761		1.70	%
GoldenTree 2013-7A, Ltd.^(e)	Structured Finance	5/24/2016	—	N/A	10/29/2026	250,000		73,064		55,357		0.70	%
GoldenTree Loan Opportunities IX, Ltd.	Structured Finance	7/27/2017	12.84	N/A	10/29/2026	250,000		180,520		168,922		2.00	%
Madison Park Funding XIII, Ltd.	Structured Finance	11/12/2015	18.76	N/A	4/22/2030	250,000		176,111		166,338		2.00	%
Madison Park Funding XIV, Ltd.	Structured Finance	11/19/2015	17.32	N/A	7/20/2026	250,000		194,188		190,356		2.30	%
Octagon Investment Partners XIV, Ltd.	Structured Finance	12/6/2017	18.07	N/A	7/16/2029	850,000		506,864		431,794		5.20	%
Octagon Investment Partners XXI, Ltd.	Structured Finance	1/13/2016	19.37	N/A	11/14/2026	300,000		181,468		190,379		2.30	%
Octagon Investment Partners 30, Ltd.	Structured Finance	11/21/2017	15.73	N/A	3/17/2030	475,000		454,309		398,348		4.80	%
OZLM XII, Ltd.	Structured Finance	1/20/2017	10.53	N/A	4/30/2027	275,000		216,577		166,721		2.00	%
Voya IM CLO 2013-1, Ltd.	Structured Finance	6/14/2016	16.2	N/A	10/15/2030	278,312		179,813		163,625		1.90	%
Voya CLO 2016-1, Ltd.	Structured Finance	2/25/2016	20.9	N/A	1/21/2031	250,000		208,899		212,472		2.50	%
THL Credit Wind River 2013-1 CLO, Ltd.	Structured Finance	11/3/2017	16.13	N/A	7/30/2030	325,000		243,302		202,304		2.40	%
Total Structured subordinated notes ^(c)(d)								$	3,462,870	$	3,127,896	37.5	%

Total Portfolio Investments								$	11,296,565	$	10,940,179	131	%

	~~(c)~~
(a)	Fair value and market value are determined by the Company’s board of directors (see Note ~~7.)~~2).

~~(d)~~

~~Security held within TPJ Holdings, Inc., a wholly-owned subsidiary of the Company. See Note 2 for a discussion on the basis of consolidation.~~

~~(e)~~

The investment is not a qualifying asset under the Investment Company Act of 1940, as amended. A business development company may not acquire any asset other than a qualifying asset, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the business development company’s total assets. As of December 31, 2015, 81.45% of the Company’s total assets represented qualifying assets.

~~(f)~~(b)

See Note 56 for a discussion of the tax cost of the portfolio.

~~The accompanying~~

See notes ~~are an integral part of these statements.~~to consolidated financial statements

TP FLEXIBLE INCOME FUND, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2018

^(g)

~~TRITON PACIFIC INVESTMENT CORPORATION,~~

(c)

The structured subordinated notes and preference/preferred shares are considered equity positions in the Collateralized Loan Obligations (“CLOs”). The CLO equity investments are entitled to recurring distributions which are generally equal to the excess cash flow generated from the underlying investments after payment of the contractual payments to debt holders and fund expenses. The current estimated yield is based on the current projections of this excess cash flow taking into account assumptions which have been made regarding expected prepayments, losses and future reinvestment rates. These assumptions are periodically reviewed and adjusted. Ultimately, the actual yield may be higher or lower than the estimated yield if actual results differ from those used for the assumptions.


(d)	All structured subordinated notes are co-investments with other entities managed by an affiliate of the Adviser (see Note 4).


(e)	Security was called for redemption and the liquidation of the underlying loan portfolio is ongoing


(f)	All Level 2 securities are pledged as collateral supporting the amounts outstanding under a revolving credit facility with BNP Paribas Prime Brokerage International, Ltd.


(g)	Reflects the balances of Pathway Capital Opportunity Fund, Inc. as of June 30, 2018 as filed on form N-CSR with the SEC.


(h)	All investments in this category are valued using significant unobservable inputs and are categorized as Level 3 investments per ASC 820. See Notes 2 & 3.

See notes to consolidated financial statements

TP FLEXIBLE INCOME FUND, INC.

NOTES TO ~~THE~~CONSOLIDATED FINANCIAL STATEMENTS

- JUNE 30, 2019

NOTE 1 ~~– DESCRIPTION~~- NATURE OF ~~BUSINESS~~

OPERATIONS

TP Flexible Income Fund, Inc. (f/k/a Triton Pacific Investment Corporation, Inc.) (the “Company”, “our”, “us”, “we”), incorporated in Maryland on April 29, 2011, is ~~publicly registered, non-traded fund focused on private equity, structured~~an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). Our investment objective is to generate current income and, as a secondary objective, capital appreciation by targeting investment opportunities with favorable risk-adjusted returns. We intend to meet our investment objective by primarily lending to and investing in the debt of privately-owned U.S. middle market companies, which we define as companies with annual revenue between $50 million and $2.5 billion. We expect that at least 70% of our portfolio of investments will consist primarily ~~makes structured~~of syndicated senior secured first lien loans, syndicated senior secured second lien loans, and to a lesser extent, subordinated debt, and that up to 30% of our portfolio of investments will consist of other securities, including private equity (both common and preferred), dividend-paying equity, royalties, and the equity and junior debt investments in small to mid-sized private U.S. companies. Structured equity refers to derivative investment products, including convertible notes and warrants, designed to facilitate highly customized risk-return objectives.tranches of a type of pools of broadly syndicated loans known as collateralized loan obligations (“CLOs”). Pursuant to ~~the~~our Articles of Incorporation, as amended, restated and supplemented, the Company is authorized to issue 75,000,000 shares of common stock with a par value of $0.001 per share. Additionally, the Company is authorized to issue 25,000,000 shares of preferred stock with a par value of $0.001 per share. The Company is currently offering for sale a maximum of $300,000,000 of shares of common stock on a “best efforts” basis pursuant to a registration statement on Form N-2 filed with the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933, as amended (the “Offering”). On June 25, 2014, the Company met its minimum offering requirement of $2,500,000 and released all shares held in escrow.

On August 10, 2018, we (in our capacity as Triton Pacific Investment Corporation, Inc., which we refer to as "TPIC") entered into an agreement and plan of merger with Pathway Capital Opportunity Fund, Inc. (“PWAY”) pursuant to which PWAY agreed to merge with and into TPIC (the “Merger”), and, as the combined legal surviving company, we were renamed as TP Flexible Income Fund, Inc. (we were formerly known as Triton Pacific Investment Corporation, Inc.). The ~~Company invests either alone or together~~agreement and plan of merger was amended and restated effective February 12, 2019. On March 15, 2019 the Merger was approved by the stockholders of TPIC and PWAY and was consummated effective as of March 31, 2019 at 11:59 p.m. eastern time (the “Effective Time”). As part of the Merger each outstanding Class A and Class I share of PWAY common stock was canceled and retired in exchange for 1.2848 and 1.2884 shares, respectively, of TPIC Class A common stock as consideration for the Merger. From and after the Effective Time, shares of PWAY common stock are no longer outstanding and cease to exist.

Although PWAY merged into TPIC in connection with ~~other private equity sponsors. The Company~~the Merger, PWAY is ~~an externally managed, non-diversified closed-end investment company that has elected to be treated as a business development company, or BDC, under~~considered the ~~Investment Company Act~~accounting survivor of ~~1940, or~~the Merger and its historical financial statements are included and discussed in this report and the Company ~~Act. As a BDC,~~adopted PWAY’s fiscal year end of June 30. We will refer to the ~~Company is required to comply with certain regulatory requirements. The Company has elected to be treated for U.S. federal income tax purposes, and intends to annually qualify~~surviving merged accounting entity as a regulated investment company, or RIC, under Subchapter M of the Internal Revenue code of 1986, as amended, or the Code. As of September 30, 2016, the Company has one wholly-owned subsidiary through which it holds interest in a non-controlled, affiliated portfolio company. The"FLEX" within these footnotes that accompany our consolidated financial statements include both the Company’s accounts and the accounts of its wholly-owned subsidiary as of December 31, 2016. All significant intercompany transactions have been eliminated in consolidation. The Company’s consolidated subsidiary is subject to U.S. federal and state income taxes. No taxes were accrued or paid by the wholly-owned subsidiary for the year ended December 31, 2016 and 2015.

Triton Pacific Adviser, LLC (“Adviser”) serves as the Investment Adviser and TFA Associates, LLC (“TFA”) serves as the Administrator. Each of these entities are affiliated with Triton Pacific Group, Inc., a private equity investment management firm, and its subsidiary Triton Pacific Capital Partners, LLC, a private equity investment fund management company, each focused on debt and equity investments for small to mid-sized private companies.

statements.

The Adviser was formed in Delaware as a private investment management firm and is registered as an investment adviser with the ~~Securities and Exchange Commission (“SEC”)~~SEC under the Investment Advisers Act of 1940, or the Advisers Act. The Adviser oversees the management of the Company’s activities and is responsible for making the investment decisions for the portfolio.

Prospect Administration LLC, an affiliate of the Adviser, serves as our administrator. Prospect Administration has entered into a sub-administration agreement with SS&C Technologies, Inc.

As a result of the Merger several significant changes occurred:

New Investment Adviser. Prospect Flexible Income Management, LLC, who we refer to as the Adviser, now serves as our investment adviser. The Adviser is an affiliate of PWAY and the investment professionals of PWAY’s investment adviser have investment discretion at the Adviser.

Increased Leverage. Following the Merger, our asset coverage ratio requirement was reduced from 200% to 150%, which allows us to incur double the maximum amount of leverage that was previously permitted. As a result, we are able to borrow substantially more money and take on substantially more debt than we had previously been able to. Leverage may increase the risk of loss to investors and is generally considered a speculative investment technique.

◦

TP FLEXIBLE INCOME FUND, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - JUNE 30, 2019


◦	If a substantial number of the Eligible Stockholders take advantage of this opportunity, it could minimize or eliminate the expected benefits of the Merger and it could:


▪	significantly decrease our asset size;


▪	require us to sell our investments earlier than the Adviser would have otherwise desired, which may result in selling investments at inopportune times or significantly depressed prices and/or at losses; or


▪	cause us to incur additional leverage solely to meet repurchase requests.

New Board of Directors. As a result of the Merger, the composition of our board of directors changed and now consists of Craig J. Faggen, TPIC’s former President and Chief Executive Officer, M. Grier Eliasek, PWAY’s former President and Chief Executive Officer, Andrew Cooper, William Gremp and Eugene Stark. Messrs. Cooper, Gremp and Stark are all former independent directors of PWAY.

On May 16, 2019, we formed a wholly-owned subsidiary TP Flexible Funding, LLC (the “SPV”), a Delaware limited liability company and a bankruptcy remote special purpose entity, which holds certain of our portfolio loan investments that are used as collateral for the revolving credit facility at the SPV. This subsidiary has been consolidated since operations commenced.

NOTE 2 ~~– SUMMARY OF~~- SIGNIFICANT ACCOUNTING POLICIES

Basis of ~~Presentation.~~~~These~~Presentation and Consolidation. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company is considered an investment company under ~~GAAP~~the 1940 Act and follows the accounting and reporting guidance applicable to investment companies under Accounting Standards ~~Update Nov. 2013-08,~~ Codification (“ASC”) 946, Financial Services –- Investment ~~Companies.~~Companies ("ASC 946") and Articles 3, 6 and 12 of Regulation S-X. Under the 1940 Act, ASC 946, and the regulations pursuant to Article 6 of Regulation S-X, we are precluded from consolidating any entity other than another investment company or an operating company which provides substantially all of its services to benefit us. Our consolidated financial statements include the accounts of the FLEX and the SPV. All intercompany balances and transactions have been eliminated in consolidation.

Reclassifications. Certain reclassifications have been made in the presentation of prior consolidated financial statements and accompanying notes to conform to the presentation as of and for the year ended June 30, 2019.

Management Estimates and Assumptions. The ~~Company has evaluated the impact~~preparation of ~~subsequent events through the date~~ the consolidated financial statements ~~were issued and filed with the Securities and Exchange Commission.~~

~~Management Estimates and Assumptions.~~~~The preparation of audited, consolidated financial statements~~ in ~~conformity~~accordance with GAAP requires ~~management~~us to make estimates and assumptions that affect the reported amounts of ~~assets and liabilities, and disclosure of contingent~~ assets and liabilities at the date of the consolidated financial statements and the reported amounts of ~~revenues~~income, expenses, and ~~expenses~~gains and losses during the ~~reporting~~reported period. ~~Actual~~Changes in the economic environment, financial markets, creditworthiness of the issuers of our investment portfolio and any other parameters used in determining these estimates could cause actual results to differ, and these differences could ~~differ from those estimates.~~

be material.

Cash.All cash balances are maintained with high credit quality financial institutions which are members of the Federal Deposit Insurance Corporation. The Company maintains cash balances that may exceed federally insured limits.

~~No Director’s fees were accrued for~~such expense. During the years ended ~~December 31, 2016 or 2015. For~~June 30, 2019, 2018 and 2017, the ~~year ended December 31, 2014, each~~Company incurred $11,058, $23,603 and $0, respectively, in expenses related to the portfolio management software that is attributable to PSEC. PSEC reimburses the Company for these expenses and included them as part of general and administrative expenses on the Statement of Operations. As of June 30, 2019 and June 30, 2018, $0 and $12,018 of expense is due from PSEC, respectively, which is presented as due from affiliate on the Statement of Assets and Liabilities.



Maryland		45-2460782
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

10 East 40^th Street, 42^nd Floor New York, NY		10016
(Address of principal executive offices)		(Zip Code)

~~Title of each class~~		~~Name of exchange on which registered~~
~~None~~		~~Not applicable~~

Quarter Ended	Amount of Expense Payment Obligation	Amount of Offering Cost Payment Obligation	Operating Expense Ratio as of the Date Expense Payment Obligation Incurred⁽¹⁾	Annualized Distribution Rate as of the Date Expense Payment Obligation Incurred⁽²⁾	Eligible for Reimbursement Through
September 30, 2012	$21,826		432.69%	—	September 30, 2015
December 31, 2012	$26,111		531.09%	—	December 31, 2015
March 31, 2013	$30,819		N/A	—	March 31, 2016
June 30, 2013	$59,062		N/A	—	June 30, 2016
September 30, 2013	$65,161		N/A	—	September 30, 2016
December 31, 2013	$91,378		455.09%	—	December 31, 2016
March 31, 2014	$68,293		148.96%	—	March 31, 2017
June 30, 2014	$70,027	$898,518	23.17%	—	June 30, 2017
September 30, 2014	$92,143	$71,060	20.39%	—	September 30, 2017
December 31, 2014	$115,777	$90,860	11.15%	—	December 31, 2017
March 31, 2015	$134,301	$106,217	13.75%	2.01%	March 31, 2018
June 30, 2015	$166,549	$167,113	14.10%	3.20%	June 30, 2018
September 30, 2015	$147,747	$240,848	10.45%	3.20%	September 30, 2018
December 31, 2015	$136,401	$280,376	7.41%	3.60%	December 31, 2018
March 31, 2016	$157,996	$232,895	6.00%	3.52%	March 31, 2019
June 30, 2016	$206,933	$285,878	4.95%	3.52%	June 30, 2019
September 30, 2016	$201,573	$223,020	4.52%	3.13%	September 30, 2019
December 31, 2016	$104,561	$168,876	4.45%	3.11%	December 31, 2019

	December 31,			December 31,			December 31,
	2016			2015			2014
Operating Expenses	$	1,896,657		$	1,225,595		$	640,597
Offering Costs		2,765,662			1,854,993			1,060,438
Due to related party offset		(4,213,469	)		(2,512,824	)		(1,105,341	)
Reimbursements received from Adviser		(342,715	)		(342,715	)		(342,715	)
Other amounts due to affiliates		448			448			—
Total Reimbursement due from Adviser	$	106,583		$	225,497		$	252,979

~~LIBOR Basis Point Change~~	~~Percentage Change in Net Interest Income~~
~~Down 25 basis points~~	~~0.00~~	%
~~Current LIBOR~~	~~0.00~~	%
~~Up 100 basis points~~	~~13.22~~	%
~~Up 200 basis points~~	~~26.47~~	%
~~Up 300 basis points~~	~~39.72~~	%

☒
x	ANNUAL REPORT PURSUANT TO SECTION 13 OR ~~15 (d)~~15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR ~~15 (d)~~15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	Year Ended December 31,
	2016					2015					2014					2013
	Shares		Amount			Shares		Amount			Shares		Amount			Shares		Amount
Gross proceeds from Offering		444,847.84		6,683,706			296,713.69	$	4,404,003			214,659.24	$	3,144,219			7,315.00	$	98,753
Reinvestment of Distributions		15,548.74		215,591			6,789.86		96,756			—		—			—		—
Commissions and Dealer Manager Fees				(581,515	)		—		(398,363	)		—		(246,272	)		—		—
Net Proceeds to Company from Share Transactions		460,396.58	$	6,317,782			303,503.55	$	4,102,396			214,659.24	$	2,897,947			7,315.00	$	98,753


Title of Class	Amount Authorized	Amount Held by Us or for Our Account	Amount Outstanding Exclusive of Amount Under Column 3
Class A Common Stock	37,500,000	—	1,062,855.98
Class T Common Stock	37,500,000	—		—

For the Three Months Ended	Repurchase Date	Shares Repurchased		Percentage of Shares Tendered That Were Repurchased			Average Price Paid per Share		Aggregate Consideration for Repurchased Shares
Fiscal 2016
September 30, 2016	July 15, 2016		8,482.60		50	%	$	13.80	$	117,060
December 31, 2016	October 14, 2016		8,482.60		48	%		13.80		117,060
Total			16,965.20		49	%	$	13.80	$	234,120

	Distribution
Fiscal 2016	Per Share		Amount
January 22, 2016	$	0.04500	$	25,244
February 16, 2016	$	0.04500	$	26,477
March 23, 2016	$	0.04500	$	30,271
April 21, 2016	$	0.04500	$	32,832
May 19, 2016	$	0.04500	$	34,950
June 23, 2016	$	0.04500	$	36,206
July 21, 2016	$	0.04000	$	32,318
August 25, 2016	$	0.04000	$	33,293
September 22, 2016	$	0.04000	$	33,877
October 20, 2016	$	0.04000	$	35,164
November 18, 2016	$	0.04000	$	37,327
December 20, 2016	$	0.04000	$	38,091
Fiscal 2015
January 20, 2015	$	0.07545	$	17,314
April 13, 2015	$	0.11600	$	28,334
April 29, 2015	$	0.04000	$	9,880
May 29, 2015	$	0.04000	$	12,634
June 29, 2015	$	0.04000	$	13,295
July 30, 2015	$	0.04000	$	13,676
August 28, 2015	$	0.04000	$	14,511
September 29, 2015	$	0.04000	$	16,287
October 22.2015	$	0.04500	$	19,484
November 25, 2015	$	0.04500	$	21,169
December 24, 2015	$	0.04500	$	23,491

													Period from
													April 29, 2011
	Year Ended December 31,												(Inception) to
	2016			2015			2014			2013			December 31, 2012⁽¹⁾
Statements of operations data:
Total investment income	$	440,748		$	176,042		$	16,319		$	—		$	—
Operating expenses
Total operating expenses		741,022			620,548			249,465			311,507			79,733
Less: Expense reimbursement from sponsor		(671,062	)		(584,998	)		(249,357	)		(391,240	)		—
Net operating expenses		69,960			35,550			108			(79,733	)		79,733
Net investment income (loss)		370,788			140,492			16,211			79,733			(79,733	)
Total net realized and unrealized gain (loss) on investments		(156,351	)		185,858			1,087			—			—
Net increase (decrease) in net assets resulting from operations	$	214,437		$	326,350		$	17,298		$	79,733		$	(79,733	)
Per share data:
Net investment income (loss)—basic⁽²⁾	$	0.48		$	0.41		$	0.14		$	7.47		$	(26.88	)
Net investment income (loss)—diluted⁽²⁾		0.48			0.41			0.14			6.81			(26.88	)
Net increase (decrease) in net assets resulting from operations—basic⁽²⁾	$	0.28		$	0.96		$	0.15		$	7.47			(26.88	)
Net increase (decrease) in net assets resulting from operations—diluted⁽²⁾		0.28			0.96			0.15			6.81			(26.88	)
Distributions declared⁽³⁾	$	0.51		$	0.57		$	—		$	—		$	—
Balance sheet data:
Total assets	$	14,565,014		$	7,611,888		$	3,667,097		$	1,328,628		$	532,425
Total liabilities		1,336,312			285,235			569,193			1,128,625			510,908
Total net assets	$	13,228,702		$	7,326,653		$	1,916,867		$	200,003		$	21,517
Other data:
Total return⁽⁴⁾		2.2	%		7.0	%		0.0	%		0.0	%		0.0	%
Number of portfolio company investments at period end		35			22			10			0			0
Total portfolio investments for the period	$	6,285,875		$	4,270,750		$	1,725,001		$	—		$	—
Proceeds from sales and prepayments of investments	$	1,110,406		$	414,971		$	255,663		$	—		$	—

Weighted average common shares outstanding - basic and diluted		777,680			339,304			114,991			11,713



	NAV/Share ($)		Conversion Ratio
Triton Pacific Investment Corporation, Inc.	$	10.48	N/A
Pathway Capital Opportunity Fund, Inc.: Class A	$	13.46	1.2848
Pathway Capital Opportunity Fund, Inc.: Class I	$	13.50	1.2884



	TPIC
Cost of investments	$	12,106,879
Fair value of investments	11,431,241
Net unrealized appreciation (depreciation) on investments	$	(675,638	)



Accounting Acquirer - Prior to Merger	PWAY Class A		PWAY Class I
Common shares outstanding	570,431		32,834
Net assets applicable to common shares	$	7,679,839	$	443,296
NAV per common share	$	13.46	$	13.50
Legal Acquiring Fund - Prior to Merger	TPIC
Common shares outstanding	1,614,221
Net assets applicable to common shares	$	16,915,592
NAV per common share	$	10.48
Legal Acquiring Fund - Post Merger	FLEX
Common shares outstanding	2,403,349
Net assets applicable to common shares	$	25,086,682
NAV per common share	$	10.44



	PWAY as acquirer
Value of Common Stock Issued	$	17,052,546
Assets acquired:
Investments	11,431,241
Cash and cash equivalents	5,055,456
Other assets	607,163
Total assets acquired	17,093,860
Total liabilities assumed	41,314
Net assets acquired	17,052,546
Total purchase price	$	17,052,546



The Company - Pro Forma Results Operations (unaudited)	FLEX Twelve months ended
Net investment income (loss)	$	(598,485	)
Net realized and unrealized gains (losses)	(1,567,359		)
Change in net assets resulting from operations	$	(2,165,844	)

	Year Ended December 31,
Net Investment Activity	2016			2015			2014
Purchases	$	6,285,875		$	4,270,750		$	1,725,001.00
Sales and Redemptions		(1,110,406	)		(414,971	)		(255,663	)
Net Portfolio Activity	$	5,175,469		$	3,855,779		$	1,469,338

~~(1)~~	~~Reflects the period from inception (April 29, 2011) through December 31, 2013~~
~~(2)~~	~~“Operating Expense Ratio” includes all expenses borne by us, except for organizational and offering expenses, base management and incentive fees owed to our Adviser,financing fees and costs, interest expense, brokerage commissions and extraordinary expenses.~~ The Company did not achieve its minimum offering amount until June 25, 2014 and as a result, did not invest the proceeds from the offering and realize any income from investments prior to the end of its fiscal quarter.
~~(3)~~	“Annualized Distribution Rate” equals the annualized rate of distributions paid to stockholders based on the amount of the regular cash distribution paid immediately prior to the date the expense support payment obligation was incurred by our Adviser. “Annualized Distribution Rate” does not include special cash or stock distributions paid to stockholders. The Company did not achieve its minimum offering amount until June 25, 2014 and as a result, did not have an opportunity to invest the proceeds from the offering and realize any income from investments or pay any distributions to stockholders prior to the end of its fiscal quarter.


1.	Each portfolio company or investment is reviewed by investment professionals of the Adviser with the independent valuation firms engaged by our board of directors.


2.	The independent valuation firms prepare independent valuations based on their own independent assessments and issue their reports.


3.	The audit committee of our board of directors (the “Audit Committee”) reviews and discusses with the independent valuation firms the valuation reports, and then makes a recommendation to our board of directors of the value for each investment.


4.	Our board of directors discusses valuations and determines the fair value of such investments in our portfolio in good faith based on the input of the Adviser, the respective independent valuation firms and the Audit Committee.


	December 31, 2016			December 31, 2015
ASSETS

Affiliate investments, at fair value (amortized cost - $1,896,901 and $1,859,219, respectively)	$	1,875,202		$	2,097,485
Non-affiliate investments, at fair value (amortized cost - $8,705,606 and $3,491,770, respectively)		8,728,971			3,431,252
Cash		3,788,901			1,812,341
Principal and interest receivable		19,305			11,707
Prepaid expenses		46,052			33,606
Reimbursement due from adviser (see Note 4)		106,583			225,497
TOTAL ASSETS	$	14,565,014		$	7,611,888

LIABILITIES AND NET ASSETS

LIABILITIES
Payable for investments purchased	$	1,061,625		$	—
Accounts payable and accrued liabilities		225,000			225,000
Stockholder distributions payable		16,574			12,478
Due to related parties (see Note 4)		33,113			47,757
TOTAL LIABILITIES		1,336,312			285,235

COMMITMENTS AND CONTINGENCIES (see Note 9)

NET ASSETS
Common stock, $0.001 par value, 75,000,000 shares authorized, 976,409.17 and 532,977.79 shares issued and outstanding, respectively		976			532
Capital in excess of par value		13,255,764			7,172,547
Accumulated undistributed net realized gains		21,925			2,192
Accumulated distributions in excess of net investment income		(51,629	)		(26,366	)
Accumulated unrealized appreciation on investments		1,666			177,748
TOTAL NET ASSETS		13,228,702			7,326,653

TOTAL LIABILITIES AND NET ASSETS	$	14,565,014		$	7,611,888

Net asset value per share of common stock at year end	$	13.55		$	13.75


	Year Ended December 31, 2016			Year Ended December 31, 2015			Year Ended December 31, 2014

INVESTMENT INCOME
Interest from affiliate investments	$	37,682		$	9,219		$	—
Interest from non-control/ non-affiliate investments		399,999			165,841			16,319
Fee income from non-control/ non-affiliate investments		3,067			982			—

Total investment income		440,748			176,042			16,319

OPERATING EXPENSES
Management fees		225,492			101,336			57,432
Capital gains incentive fees (see Notes 2 and 4)		(35,216	)		37,014			217
Board fees		—			—			(76,000	)
Administrator expense		298,864			257,576			147,906
Professional fees		167,664			145,493			81,150
Insurance expense		66,500			59,268			25,244
Organizational expense		—			—			—
Other operating expenses		17,718			19,861			13,516

Total operating expenses		741,022			620,548			249,465

Expense reimbursement from sponsor		(671,062	)		(584,998	)		(249,357	)

Net operating expenses		69,960			35,550			108

Net investment income		370,788			140,492			16,211

REALIZED AND UNREALIZED GAIN/(LOSS)
Net realized gain on unaffiliated investments		19,731			7,321			1,875
Net increase (decrease) in unrealized appreciation on unaffiliated investments		83,883			(59,729	)		—
Net increase (decrease) in unrealized appreciation on affiliated investments		(259,965	)		238,266			(788	)

Total net realized and unrealized gain (loss) on investments		(156,351	)		185,858			1,087

NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS	$	214,437		$	326,350		$	17,298

PER SHARE INFORMATION - Basic and Diluted
Net increase (decrease) in net assets resulting from operations per share	$	0.28		$	0.96		$	0.15

Weighted average common shares outstanding - basic and diluted		777,680			339,304			114,991


	For the Year Ended December 31, 2016			For the Year Ended December 31, 2015			For the Year Ended December 31, 2014
Operations
Net investment income	$	370,788		$	140,492		$	16,211
Net realized gain on investments		19,731			7,321			1,875
Net increase (decrease) in unrealized appreciation on investments		(176,082	)		178,537			(788	)
Net increase in net assets resulting from operations		214,437			326,350			17,298
Stockholder distributions (see Note 5)
Distributions from net investment income		(396,050	)		(183,073	)		—
Distributions from net realized gain on investments		—			(7,002	)		—
Net decrease in net assets resulting from stockholder distributions		(396,050	)		(190,075	)		—
Capital share transactions
Issuance of common stock (see Note 3)		6,317,782			4,102,396			2,897,947
Less contingently redeemable common stock		—			—			(1,181,037	)
Repurchase of shares of common stock		(234,120	)		—			—
Offering costs					(9,922	)		(17,344	)
Net increase in net assets resulting from capital share transactions		6,083,662			4,092,474			1,699,566

Total increase in net assets		5,902,049			4,228,749			1,716,864
Net assets at beginning of year		7,326,653			1,916,867			200,003
Temporary equity reclassified as permanent equity		—			1,181,037			—
Net assets at end of year	$	13,228,702		$	7,326,653		$	1,916,867
Accumulated distributions in excess of net investment income	$	(51,629	)	$	(26,366	)	$	16,211
Accumulated undistributed net realized gains	$	21,925		$	2,192		$	1,875



For the Year Ended June 30, 2019:
	Common Stock
	Shares		Par			Paid-in Capital in Excess of Par			Distributable Earnings (Loss)			Total Net Assets
Balance as of June 30, 2018	657,370		$	6,574		$	8,859,427		$	(512,837	)	$	8,353,164
Net Increase in net assets resulting from operations
Net investment income									268,928			268,928
Net realized (loss) on investments									(1,202,885		)	(1,202,885		)
Net change in unrealized gain on investments									150,069			150,069
Distributions to Shareholders (Note 5)
Distributions from earnings -PWAY Class A									(22,485		)	(22,485		)
Distributions from earnings -PWAY Class I									(1,247		)	(1,247		)
Return of capital distributions -PWAY Class A						(285,101		)				(285,101		)
Return of capital distributions -PWAY Class I						(15,806		)				(15,806		)
Return of capital distributions -FLEX Class A common shares						(410,967		)				(410,967		)
Gross proceeds from shares sold	2,530		3			28,077						28,080
Commissions and fees on shares sold						(1,010		)				(1,010		)
Shares issued through reinvestment of dividends	28,585		159			320,674						320,833
Repurchase of common shares	(118,560	)	(736		)	(1,305,649		)				(1,306,385		)
Offering costs (Note 4)						482,981						482,981
Tax Reclassification of Net Assets						899,819			(899,819		)
Recapitalization and merger (Notes 1, 3 and 9)	1,800,086		(3,630		)	21,533,550			(4,477,374		)	17,052,546
Total Increase (Decrease) for the year ended June 30, 2019	1,712,641		$	(4,204	)	$	21,246,568		$	(6,184,813	)	$	15,057,551
Balance as of June 30, 2019	2,370,011		$	2,370		$	30,105,995		$	(6,697,650	)	$	23,410,715

Portfolio Company	Footnotes	Industry	Rate^(b)	Floor	Maturity	Principal Amount/ Number of Shares		Amortized Cost^(f)		Fair Value^(c)
Senior Secured Loans—First Lien—51.11%
California Pizza Kitchen, Inc.		Beverage, Food & Tobacco	L+6.00% (7.00%)	1.0%	8/19/2022	$	349,125	$	345,842	$	348,326
CareCentrix, Inc.		Healthcare & Pharmaceuticals	L+5.00% (6.00%)	1.0%	7/8/2021		197,500		193,575		196,266
CRCI Holdings, Inc.		Business Services	L+5.50% (6.50%)	1.0%	8/31/2023		349,125		345,794		349,851
Curo Health Services Holdings, Inc.		Healthcare & Pharmaceuticals	L+5.50% (6.50%)	1.0%	2/7/2022		122,813		121,909		123,785
Deluxe Entertainment Services Group, Inc.		Media: Diversified and Production	L+6.00% (7.00%)	1.0%	2/28/2020		350,000		340,080		347,375
FHC Health Systems, Inc.		Healthcare & Pharmaceuticals	L+4.00% (5.00%)	1.0%	12/23/2021		122,812		121,970		119,742
Flavors Holdings, Inc. Tranche B		Beverage, Food & Tobacco	L+5.75% (6.75%)	1.0%	4/3/2020		110,938		107,998		90,414
GK Holdings, Inc.		Business Services	L+5.50% (6.50%)	1.0%	1/20/2021		122,500		121,847		121,888
Global Healthcare Exchange, LLC		Healthcare & Pharmaceuticals	L+4.25% (5.25%)	1.0%	8/15/2022		148,132		148,140		149,583
GTCR Valor Companies, Inc.		Business Services	L+6.00% (7.00%)	1.0%	6/16/2023		348,250		335,050		345,856
IG Investments Holdings, LLC		Business Services	L+5.00% (6.00%)	1.0%	10/29/2021		348,187		346,539		351,146
Imagine Print Solutions, LLC		Business Services	L+6.00% (7.00%)	1.0%	3/30/2022		248,125		244,986		252,467
Jackson Hewitt, Inc.		Business Services	L+7.00% (8.00%)	1.0%	7/30/2020		196,000		193,020		189,385
Mister Car Wash, Inc.		Automotive Repair, Services, and Parking	L+4.25% (5.25%)	1.0%	8/20/2021		121,875		121,036		122,459
Moran Foods, LLC		Beverage, Food & Tobacco	L+6.00% (7.00%)	1.0%	12/5/2023		350,000		339,619		350,000
Paradigm Acquisition Corp.		Healthcare & Pharmaceuticals	L+5.00% (6.00%)	1.0%	6/2/2022		123,125		121,537		122,560
Polycom, Inc.		High Tech Industries	L+6.50% (7.50%)	1.0%	9/27/2023		338,479		324,979		341,441
Pre-Paid Legal Services, Inc		Consumer Services	L+5.25% (6.25%)	1.0%	7/1/2019		350,000		349,125		351,750
Raley’s		Beverage, Food & Tobacco	L+6.25% (7.25%)	1.0%	5/18/2022		295,823		295,823		299,151
Ranpak Corp.		Paper and Allied Products	L+3.25% (4.25%)	1.0%	10/1/2021		114,506		114,297		115,294
SITEL Worldwide Corporation		Business Services	L+5.50% (6.50%)	1.0%	9/20/2021		197,500		196,488		197,994
SiteOne Landscape Supply LLC		Business Services	L+4.50% (5.50%)	1.0%	9/20/2021		347,379		344,506		350,094
SolarWinds, Inc.		High Tech Industries	L+4.50% (5.50%)	1.0%	2/3/2023		248,750		236,913		252,237
Strike, LLC		Energy: Oil & Gas	L+3.75% (10.75%)	7.0%	11/30/2022		350,000		339,692		346,500
TIBCO Software, Inc.		High Tech Industries	L+5.50% (6.50%)	1.0%	12/4/2020		122,813		121,067		123,555
TruGreen Limited Partnership		Consumer Services	L+5.50% (6.50%)	1.0%	4/13/2023		348,250		343,532		353,909
Verdesian Life Sciences LLC		Wholesale Trade-Nondurable Goods	L+5.00% (6.00%)	1.0%	7/1/2020		221,546		220,054		198,285
Vivid Seats Ltd.		Consumer Services	L+5.75% (6.75%)	1.0%	10/12/2022		250,000		245,197		250,000
Total Senior Secured Loans—First Lien						$	6,793,553	$	6,680,615	$	6,761,313

Senior Secured Loans—Second Lien—14.87%
Cheddar’s Casual Café, Inc.		Retail	L+9.75% (10.75%)	1.0%	1/4/2023		750,000		712,500		712,500
Flavors Holdings, Inc.		Beverage, Food & Tobacco	L+10.00% (11.00%)	1.0%	10/7/2021		125,000		121,619		75,000
FullBeauty Brands Holding		High Tech Industries	L+9.00% (10.00%)	1.0%	10/13/2023		250,000		218,269		173,750
GK Holdings, Inc.		Business Services	L+9.50% (10.50%)	1.0%	1/21/2022		125,000		123,197		126,250
Oxbow Carbon LLC		Metals & Mining	L+7.00 (8.00%)	1.0%	1/19/2020		250,000		237,142		245,625
Rocket Software, Inc.		Business Services	L+9.50% (10.50%)	1.0%	10/14/2024		500,000		490,281		508,595
SCS Holdings I Inc.		High Tech Industries	L+9.50% (10.50%)	1.0%	10/13/2023		125,000		121,983		125,938
Total Senior Secured Loans—Second Lien						$	2,125,000	$	2,024,991	$	1,967,658

Subordinated Convertible Debt—4.89%
Javlin Capital LLC Subordinated Convertible Note	(a) (e)	Specialty Finance	6.00%		3/31/2020		646,901		646,901		646,901
Total Subordinated Convertible Debt						$	646,901	$	646,901	$	646,901

Equity/Other—9.29%
ACON IWP Investors I, L.L.C.	(a)	Healthcare & Pharmaceuticals					500,000		500,000		691,072
Javlin Capital LLC Class C-2 Preferred Units	(a) (d) (e)	Specialty Finance					214,286		750,000		537,229
Total Equity/Other							714,286	$	1,250,000	$	1,228,301

TOTAL INVESTMENTS—80.16%								$	10,602,507	$	10,604,173
OTHER ASSETS IN EXCESS OF LIABILITIES—19.84%										$	2,624,529
NET ASSETS - 100.00%										$	13,228,702

			Year Ended December 31, 2016
	Fair Value at		Gross Additions		Gross Reductions		Fair Value at		Net Realized		Interest & Dividends
Non-controlled, Affiliated Investments	December 31, 2015		(Cost)*		(Cost)**		December 31, 2016		Gain (Loss)		Credited to Income
ACON IWP Investors I, L.L.C.	$	738,266	$	—	$	—	$	691,072	$	—	$	—
Javlin Capital, LLC, Convertible Note		609,219		37,682		—		646,901		—		37,682
Javlin Capital, LLC, C-2 Preferred Units		750,000		—		—		537,229		—		—
Total	$	2,097,485	$	37,682	$	—	$	1,875,202	$	—	$	37,682


			Year Ended December 31, 2015
Non-controlled, Affiliated Investments	Fair Value at December 31, 2014		Gross Additions (Cost)*		Gross Reductions (Cost)**		Fair Value at December 31, 2015		Net Realized Gain (Loss)
ACON IWP Investors I, L.L.C.	$	—	$	500,000	$	—	$	738,266	$	—
Javlin Capital, LLC, Convertible Note		—		600,000		—		609,219		—
Javlin Capital, LLC, C-2 Preferred Units		—		750,000		—		750,000		—
Total	$	—	$	1,850,000	$	—	$	2,097,485	$	—



	FLEX Class A Common Shares					PWAY Class A Shares⁽¹⁾					PWAY Class I Shares⁽¹⁾					Total
Year Ended June 30, 2019	Shares		Amount			Shares		Amount			Shares		Amount			Shares		Amount
Shares sold	2,530		$	28,080		—		$	—		—		$	—		2,530		$	28,080
Shares issued from reinvestment of distributions	14,048		150,562			14,376		168,381			161		1,890			28,585		320,833
Repurchase of common shares	(49,916	)	(495,169		)	(68,301	)	(806,866		)	(343	)	(4,350		)	(118,560	)	(1,306,385		)
Recapitalization and merger ⁽¹⁾	775,193		8,123,135			(570,431	)	(7,679,839		)	(32,834	)	(443,296		)	171,928		—
Net increase (decrease) from capital transactions	741,855		$	7,806,608		(624,356	)	$	(8,318,324	)	(33,016	)	$	(445,756	)	84,483		$	(957,472	)


(1)	As part of the Merger each outstanding Class A and Class I share of PWAY common stock was canceled and retired in exchange for 1.2848 and 1.2884 shares, respectively, of TPIC Class A common stock as consideration for the Merger. From and after the Merger date of March 31, 2019 (Effective Time), shares of PWAY common stock are no longer outstanding and cease to exist (Refer to Note 9).



	Class R Shares					Class RIA Shares					Class A Shares					Class I Shares					Total
Year Ended June 30, 2018	Shares		Amount			Shares		Amount			Shares		Amount			Shares		Amount			Shares		Amount
Shares sold	41,068		$	629,900		—		$	—		11,712		$	160,000		—		$	—		52,780		$	789,900
Shares issued from reinvestment of distributions	9,224		124,160			94		1,264			11,752		156,592			125		1,658			21,195		283,674
Repurchase of common shares	(10,046	)	(136,524		)	—		—			(27,935	)	(367,017		)	—		—			(37,981	)	(503,541		)
Transfer of shares (out)⁽¹⁾	(628,825	)	(8,501,714		)	(6,454	)	(87,258		)						(26,437	)	(357,428		)	(661,716	)	(8,946,400		)
Transfer of shares in⁽¹⁾	—		—			—		—			628,825		8,501,714			32,891		444,686			661,716		8,946,400
Net increase/(decrease) from capital transactions	(588,579	)	$	(7,884,178	)	(6,360	)	$	(85,994	)	624,354		$	8,451,289		6,579		$	88,916		35,994		$	570,033


(1)	This represents the transfer of shares that occurred as part of the conversion to an interval fund.

Title of each class

Trading Symbol(s)

Name of each exchange on which registered