What changed in this filing

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Item 1A. Risk Factors

2022-12-16 compared with 2021-12-20 · 1482 added, 1325 removed, 62 unchanged (98% of the section changed)

you invest in our securities, you should be aware of various risks, including those described below.

You should carefully consider these

risk factors, together with all of the other information included in this Form 10-K, before you decide whether to make an investment

in our securities.

The risks set out below are not the only risks we face.

The risks described below, as well as additional risks and

uncertainties presently unknown by us or currently not deemed significant could negatively affect our business, financial condition and

results of operations.

In such case, our NAV and the trading price of our common stock or other securities could decline, and you may

lose all or part of your investment.

RISK RELATING

TO OUR BUSINESS AND STRUCTURE

Risks in the Current Environment

are currently operating in a period of capital markets disruptions and economic uncertainty.

Such market conditions may materially and

adversely affect debt and equity capital markets, which may have a negative impact on our business, financial condition and operations.

time to time, capital markets may experience periods of disruption and instability.

capital markets have experienced extreme

volatility and disruption following the global outbreak of coronavirus (“COVID-19”) that began in December 2019.

Some economists

and major investment banks have expressed concern that the continued spread of the COVID-19 globally could lead to a world-wide economic

Even after the COVID-19 pandemic subsides, the U.S.

economy, as well as most other major economies, may continue to experience

a recession, and we anticipate our businesses would be materially and adversely affected by a prolonged recession in the United States

and other major markets.

Disruptions in the capital markets have increased the spread between the yields realized on risk-free and higher

risk securities, resulting in illiquidity in parts of the capital markets.

The COVID-19 outbreak continues to have, and any future outbreaks

could have, an adverse impact on the ability of lenders to originate loans, the volume and type of loans originated, the ability of borrowers

to make payments and the volume and type of amendments and waivers granted to borrowers and remedial actions taken in the event of a

borrower default, each of which could negatively impact the amount and quality of loans available for investment by the Company and returns

to the Company, among other things.

Before you invest in our securities, you should

be aware of various risks, including those described below.

You should carefully consider these risk factors, together with all of the

other information included in this Form 10-K, before you decide whether to make an investment in our securities.

The risks set out below

are not the only risks we face.

The risks described below, as well as additional risks and uncertainties presently unknown by us or currently

not deemed significant could negatively affect our business, financial condition and results of operations.

In such case, our NAV and

the trading price of our common stock or other securities could decline, and you may lose all or part of your investment.

RISK RELATING TO OUR BUSINESS AND STRUCTURE

Certain Risks in the Current Environment

We are currently operating in a period

of capital markets disruptions and economic uncertainty.

Such market conditions may materially and adversely affect debt and equity capital

markets, which may have a negative impact on our business, financial condition and operations.

From time to time, capital markets may experience

periods of disruption and instability.

capital markets have experienced extreme volatility and disruption following the global

outbreak of coronavirus (“COVID-19”) that began in December 2019.

Some economists and major investment banks have expressed

concern that the continued spread of the COVID-19 globally could lead to a world-wide economic downturn.

Even after the COVID-19 pandemic

subsides, the U.S.

economy, as well as most other major economies, may continue to experience a recession, and we anticipate our businesses

would be materially and adversely affected by a prolonged recession in the United States and other major markets.

Disruptions in the

capital markets have increased the spread between the yields realized on risk-free and higher risk securities, resulting in illiquidity

in parts of the capital markets.

The COVID-19 outbreak continues to have, and any future outbreaks could have, an adverse impact on the

ability of lenders to originate loans, the volume and type of loans originated, the ability of borrowers to make payments and the volume

and type of amendments and waivers granted to borrowers and remedial actions taken in the event of a borrower default, each of which

could negatively impact the amount and quality of loans available for investment by the Company and returns to the Company, among other

With respect to the U.S.

credit markets, the COVID-19 outbreak has resulted in, and until fully resolved

is likely to continue to result in, the following among other things:

(i) increased draws by borrowers on revolving lines of credit and

other financing instruments;

(ii) increased requests by borrowers for amendments and waivers of their credit agreements to avoid default,

increased defaults by such borrowers and/or increased difficulty in obtaining refinancing at the maturity dates of their loans;

greater volatility in pricing and spreads and difficulty in valuing loans during periods of increased volatility;

and rapidly evolving

proposals and/or actions by state and federal governments to address problems being experienced by the markets and by businesses and

the economy in general which will not necessarily adequately address the problems facing the loan market and businesses.

These and future

market disruptions and/or illiquidity could have an adverse effect on our business, financial condition, results of operations and cash

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.

These events could limit our investment originations, limit our ability to grow and have

a material negative impact on our operating results and the fair values of our debt and equity investments.

We may have to access, if

available, alternative markets for debt and equity capital, and a severe disruption in the global financial markets, deterioration in

credit and financing conditions or uncertainty regarding U.S.

government spending and deficit levels or other global economic conditions

could have a material adverse effect on our business, financial condition and results of operations.

example, between 2008 and 2009, the U.S.

and global capital markets were unstable as evidenced by periodic disruptions in liquidity in

the debt capital markets, significant write-offs in the financial services sector, the re-pricing of credit risk in the broadly syndicated

credit market and the failure of major financial institutions.

credit markets, the COVID-19 outbreak has resulted in, and until fully resolved is likely to continue

to result in, the following among other things:

(i) increased draws by borrowers on revolving lines of credit and other financing instruments;

(ii) increased requests by borrowers for amendments and waivers of their credit agreements to avoid default, increased defaults by such

borrowers and/or increased difficulty in obtaining refinancing at the maturity dates of their loans;

(iii) greater volatility in pricing

and spreads and difficulty in valuing loans during periods of increased volatility;

and rapidly evolving proposals and/or actions by

state and federal governments to address problems being experienced by the markets and by businesses and the economy in general which

will not necessarily adequately address the problems facing the loan market and businesses.

These and future market disruptions and/or

illiquidity could have an adverse effect on our business, financial condition, results of operations and cash flows.

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.

These events could limit our investment originations, limit our ability to grow and have a material negative impact on

our operating results and the fair values of our debt and equity investments.

We may have to access, if available, alternative markets

for debt and equity capital, and a severe disruption in the global financial markets, deterioration in credit and financing conditions

or uncertainty regarding U.S.

government spending and deficit levels or other global economic conditions could have a material adverse

effect on our business, financial condition and results of operations.

For example, between 2008 and 2009, the U.S.

and global capital markets were unstable as evidenced by periodic disruptions in liquidity in the debt capital markets, significant write-offs

in the financial services sector, the re-pricing of credit risk in the broadly syndicated credit market and the failure of major financial

institutions.

Despite actions of the U.S.

federal government and foreign governments,

these events contributed to worsening general economic conditions that materially and adversely impacted the broader financial and credit

markets and reduced the availability of debt and equity capital for the market as a whole and financial services firms in particular.

capital may be difficult to raise during periods of adverse or volatile market conditions because, 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 NAV without first obtaining approval

for such issuance from our stockholders and our independent directors.

Volatility and dislocation in the capital markets can also create

a challenging environment in which to raise or access debt capital.

The current market and future 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 and any failure to do so could have a material adverse effect

on our business.

The debt capital that will be available to us in the future, if at all, may be at a higher cost and on less favorable

terms and conditions than what we currently experience, including being at a higher cost in a rising interest rate environment.

of these conditions appear, they may have an adverse effect on our business, financial condition, and results of operations.

could limit our investment originations, limit our ability to increase returns to equity holders through the effective use of leverage,

and negatively impact our operating results.

addition, 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 are not 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).

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 our 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.

An inability to raise or access capital could have a material adverse effect on

our business, financial condition or results of operations.

authorities worldwide have taken increased measures to stabilize the markets and support economic growth.

The success of these measures

is unknown and they may not be sufficient to address the market dislocations or avert severe and prolonged reductions in economic activity.

also face an increased risk of investor, creditor or portfolio company disputes, litigation and governmental and regulatory scrutiny

as a result of the effects of COVID-19 on economic and market conditions.

outside of our control, including public health crises, could negatively affect our portfolio companies and our results of our operations.

of market volatility have occurred and could continue to occur in response to pandemics or other events outside of our control.

types of events have adversely affected and could continue to adversely affect operating results for us and for our portfolio companies.

In December 2019, COVID-19 surfaced in China and has since spread and continues to spread to other countries, including the United States.

COVID-19 spread quickly and has been identified as a global pandemic by the World Health Organization.

The COVID-19 pandemic continues

to adversely impact global commercial activity and has contributed to significant volatility in financial markets.

In response, beginning

in March 2020, in affected jurisdictions including the United States, unprecedented actions were and continue to be taken by governmental

authorities and businesses, including quarantines, “stay at home”

orders, travel and hospitality restrictions and bans, and

the temporary closures and limited operations of many businesses (including corporate offices, retail stores, restaurants, fitness clubs,

manufacturing facilities and factories, and other businesses).

The actions to contain the COVID-19 pandemic vary by country and by state

in the United States.

COVID-19 has caused the effective cessation of all business activity deemed non-essential by such governmental

While certain state and local governments across the United States have taken steps to re-open their economies by lifting

“stay at home”

orders and re-opening businesses, a number of states and local governments have needed to pause or slow the

re-opening or impose new shut-down orders as the number of cases of COVID-19 has continued to rise.

COVID-19 and the resulting economic

dislocations have had and continue to have adverse consequences for the business operations and financial performance of some of our

portfolio companies, which may in turn impact the valuation of our investments and have adversely affected, and threaten to continue

to adversely affect, our operations.

Local, state and federal and numerous non-U.S.

governmental authorities have imposed travel and

hospitality restrictions and bans, business closures or limited business operations and other quarantine measures on businesses and individuals

that remain in effect on the date of this Annual Report on Form 10-K.

We cannot predict the full impact of COVID-19, including the duration

and the impact of the closures and restrictions described above.

As a result, we are unable to predict the duration of these business

and supply-chain disruptions, the extent to which COVID-19 will negatively affect our portfolio companies’

operating results or

the impact that such disruptions may have on our results of operations and financial condition.

federal government and foreign governments, these events contributed to worsening general economic

conditions that materially and adversely impacted the broader financial and credit markets and reduced the availability of debt and equity

capital for the market as a whole and financial services firms in particular.

Equity capital may be difficult to raise during

periods of adverse or volatile market conditions because, 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 NAV without first obtaining approval for such issuance from our stockholders

and our independent directors.

Volatility and dislocation in the capital markets can also create a challenging environment in which to

raise or access debt capital.

The current market and future 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 and any failure to do so could have a material adverse effect on our business.

The debt capital that

will be available to us in the future, if at all, may be at a higher cost and on less favorable terms and conditions than what we currently

experience, including being at a higher cost in a rising interest rate environment.

If any of these conditions appear, they may have

an adverse effect on our business, financial condition, and results of operations.

These events could limit our investment originations,

limit our ability to increase returns to equity holders through the effective use of leverage, and negatively impact our operating results.

In addition, 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 are not 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).

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 our 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.

An inability to raise or access capital could have a material adverse effect on our business, financial condition or results of operations.

Governmental authorities worldwide have taken

increased measures to stabilize the markets and support economic growth.

The success of these measures is unknown and they may not be

sufficient to address the market dislocations or avert severe and prolonged reductions in economic activity.

We also face an increased risk of investor, creditor

or portfolio company disputes, litigation and governmental and regulatory scrutiny as a result of the effects of COVID-19 on economic

and market conditions.

Events outside of our control, including

terrorist attacks, acts of war, natural disasters or public health crises, could negatively affect our portfolio companies and our results

of our operations.

Periods of market volatility have occurred and

could continue to occur in response to pandemics or other events outside of our control, including terrorist attacks, acts of war, natural

disasters, public health crises or similar events.

These types of events have adversely affected and could continue to adversely affect

operating results for us and for our portfolio companies.

COVID-19 and variants thereof continue to adversely

impact global commercial activity and has contributed to significant volatility in financial markets.

Local, state and federal and numerous

governmental authorities have imposed travel and hospitality restrictions and bans, business closures or limited business operations

and other quarantine measures on businesses and individuals.

We cannot predict the full impact of COVID-19, including the duration and

the impact of the closures and restrictions described above.

As a result, we are unable to predict the duration of these business and

supply-chain disruptions, the extent to which COVID-19 will negatively affect our portfolio companies’

operating results or the

impact that such disruptions may have on our results of operations and financial condition.

With respect to loans to portfolio companies,

7 unchanged sentences

to the business operations of our portfolio companies, we expect some portfolio companies, particularly those in vulnerable industries,

such as travel and hospitality, to experience financial distress and possibly to default on their financial obligations to us and/or

their other capital providers.

In addition, if such portfolio companies are subjected to prolonged and severe financial distress, we

expect some of them to substantially curtail their operations, defer capital expenditures and lay off workers.

These developments would

be likely to permanently impair their businesses and result in a reduction in the value of our investments in them.

Company will also be negatively affected if the operations and effectiveness of our portfolio companies (or any of the key personnel

or service providers of the foregoing) are compromised or if necessary or beneficial systems and processes are disrupted as a result

of stay-at-home orders or other related interruptions to business operations.

social and economic uncertainty, including uncertainty related to the COVID-19 pandemic, creates and exacerbates risks.

political, economic and other conditions and events (such as natural disasters, epidemics and pandemics, terrorism, conflicts and social

unrest) will occur that create uncertainty and have significant impacts on issuers, industries, governments and other systems, including

the financial markets, to which companies and their investments are exposed.

As global systems, economies and financial markets are increasingly

interconnected, events that once had only local impact are now more likely to have regional or even global effects.

Events that occur

in one country, region or financial market will, more frequently, adversely impact issuers in other countries, regions or markets, including

in established markets such as the U.S.

These impacts can be exacerbated by failures of governments and societies to adequately respond

to an emerging event or threat.

can result in or coincide with, among other things:

increased volatility in the financial markets for securities, derivatives, loans,

credit and currency;

a decrease in the reliability of market prices and difficulty in valuing assets (including portfolio company assets);

greater fluctuations in spreads on debt investments and currency exchange rates;

increased risk of default (by both government and private

obligors and issuers);

further social, economic, and political instability;

to experience financial distress and possibly to default on their financial obligations to us and/or their other capital providers.

addition, if such portfolio companies are subjected to prolonged and severe financial distress, we expect some of them to substantially

curtail their operations, defer capital expenditures and lay off workers.

These developments would be likely to permanently impair their

businesses and result in a reduction in the value of our investments in them.

The Company will also be negatively affected

if the operations and effectiveness of our portfolio companies (or any of the key personnel or service providers of the foregoing) are

compromised or if necessary or beneficial systems and processes are disrupted as a result of stay-at-home orders or other related interruptions

to business operations.

In February 2022, Russia launched a large-scale

invasion of Ukraine.

The extent and duration of Russian military action in the Ukraine, resulting sanctions and resulting future

market disruptions, including declines in stock markets in Russia and elsewhere and the value of the ruble against the U.S.

impossible to predict, but have been and could continue to be significant.

Any such disruptions caused by Russian military or other actions

(including cyberattacks and espionage) or resulting from actual or threatened responses to such actions have caused and could continue

to cause disruptions to portfolio companies located in Europe or that have substantial business relationships with European or Russian

The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but

have been and could continue to be substantial.

Any such market disruptions could affect our portfolio companies’

operations and,

as a result, could have a material adverse effect on our business, financial condition and results of operations.

Political, social and economic uncertainty,

including uncertainty related to the COVID-19 pandemic, creates and exacerbates risks.

Social, political, economic and other conditions

and events (such as natural disasters, epidemics and pandemics, terrorism, conflicts and social unrest) will occur that create uncertainty

and have significant impacts on issuers, industries, governments and other systems, including the financial markets, to which companies

and their investments are exposed.

As global systems, economies and financial markets are increasingly interconnected, events that once

had only local impact are now more likely to have regional or even global effects.

Events that occur in one country, region or financial

market will, more frequently, adversely impact issuers in other countries, regions or markets, including in established markets such

These impacts can be exacerbated by failures of governments and societies to adequately respond to an emerging event or threat.

Uncertainty can result in or coincide with, among

other things:

increased volatility in the financial markets for securities, derivatives, loans, credit and currency;

a decrease in the

reliability of market prices and difficulty in valuing assets (including portfolio company assets);

greater fluctuations in spreads on

debt investments and currency exchange rates;

increased risk of default (by both government and private obligors and issuers);

social, economic, and political instability;

nationalization of private enterprise;

greater governmental

involvement in the economy or in social factors that impact the economy;

changes to governmental regulation and supervision of the loan,

securities, derivatives and currency markets and market participants and decreased or revised monitoring of such markets by governments

or self-regulatory organizations and reduced enforcement of regulations;

greater governmental involvement in the economy or

in social factors that impact the economy;

changes to governmental regulation and supervision of the loan, securities, derivatives and

currency markets and market participants and decreased or revised monitoring of such markets by governments or self-regulatory organizations

and reduced enforcement of regulations;

limitations on the activities of investors in such markets;

controls or restrictions on foreign investment, capital controls and limitations on repatriation of invested capital;

the significant

loss of liquidity and the inability to purchase, sell and otherwise fund investments or settle transactions (including, but not limited

to, a market freeze);

unavailability of currency hedging techniques;

substantial, and in some periods extremely high, rates of inflation,

which can last many years and have substantial negative effects on credit and securities markets as well as the economy as a whole;

and difficulties in obtaining and/or enforcing legal judgments.

example, the COVID-19 pandemic outbreak has led and for an unknown period of time will continue to lead to disruptions in local, regional,

national and global markets and economies affected thereby.

The COVID-19 pandemic has impacted the U.S.

controls or restrictions on foreign

investment, capital controls and limitations on repatriation of invested capital;

the significant loss of liquidity and the inability

to purchase, sell and otherwise fund investments or settle transactions (including, but not limited to, a market freeze);

unavailability

of currency hedging techniques;

substantial, and in some periods extremely high, rates of inflation, which can last many years and have

substantial negative effects on credit and securities markets as well as the economy as a whole;

and difficulties in obtaining

and/or enforcing legal judgments.

For example, the COVID-19 pandemic outbreak and

the Russian invasion of Ukraine have led and for an unknown period of time will continue to lead to disruptions in local, regional, national

and global markets and economies affected thereby.

These events have impacted the U.S.

credit markets.

See “We

are currently operating in a period of capital markets disruptions and economic uncertainty.

Such market conditions may materially and

adversely affect debt and equity capital markets, which may have a negative impact on our business, financial condition and operations”

and “Events outside of our control, including public health crises, could negatively affect our portfolio companies and our results

of our operations.”

it is impossible to predict the precise nature and consequences of these events, or of any political or policy decisions and regulatory

changes occasioned by emerging events or uncertainty on applicable laws or regulations that impact us, our portfolio companies and our

investments, it is clear that these types of events are impacting and will, for at least some time, continue to impact us and our portfolio

companies and, in many instances, the impact will be adverse and profound.

The effects of the COVID-19 pandemic may materially and adversely

impact (i) the value and performance of us and our portfolio companies, (ii) the ability of our borrowers to continue to meet loan covenants

or repay loans provided by us on a timely basis or at all, which may require us to restructure our investments or write down the value

of our investments, (iii) our ability to repay debt obligations, on a timely basis or at all, or (iv) our ability to source, manage and

divest investments and achieve our investment objectives, all of which could result in significant losses to us.

downgrades of the U.S.

credit rating, automatic spending cuts, or another government shutdown could negatively impact our liquidity,

financial condition and earnings.

debt ceiling and budget deficit concerns have increased the possibility of additional credit-rating downgrades and economic slowdowns,

or a recession in the United States.

Although U.S.

lawmakers passed legislation to raise the federal debt ceiling on multiple occasions,

ratings agencies have lowered or threatened to lower the long-term sovereign credit rating on the United States.

The impact of this or

any further downgrades to the U.S.

government’s sovereign credit rating or its perceived creditworthiness could adversely affect

See “We are currently operating

in a period of capital markets disruptions and economic uncertainty.

Such market conditions may materially and adversely affect debt

and equity capital markets, which may have a negative impact on our business, financial condition and operations”

and “Events

outside of our control, including public health crises, could negatively affect our portfolio companies and our results of our operations.”

Although it is impossible to predict the precise

nature and consequences of these events, or of any political or policy decisions and regulatory changes occasioned by emerging events

or uncertainty on applicable laws or regulations that impact us, our portfolio companies and our investments, it is clear that these

types of events are impacting and will, for at least some time, continue to impact us and our portfolio companies and, in many instances,

the impact will be adverse and profound.

The effects of the COVID-19 pandemic may materially and adversely impact (i) the value and performance

of us and our portfolio companies, (ii) the ability of our borrowers to continue to meet loan covenants or repay loans provided by us

on a timely basis or at all, which may require us to restructure our investments or write down the value of our investments, (iii) our

ability to repay debt obligations, on a timely basis or at all, or (iv) our ability to source, manage and divest investments and achieve

our investment objectives, all of which could result in significant losses to us.

Further downgrades of the U.S.

credit rating,

automatic spending cuts, or another government shutdown could negatively impact our liquidity, financial condition and earnings.

debt ceiling and budget deficit concerns

have increased the possibility of additional credit-rating downgrades and economic slowdowns, or a recession in the United States.

lawmakers passed legislation to raise the federal debt ceiling on multiple occasions, ratings agencies have lowered or threatened

to lower the long-term sovereign credit rating on the United States.

The impact of this or any further downgrades to the U.S.

government’s

sovereign credit rating or its perceived creditworthiness could adversely affect the U.S.

and global financial markets and economic conditions.

Absent further quantitative easing by the Federal Reserve, these developments

could cause interest rates and borrowing costs to rise, which may negatively impact our ability to access the debt markets on favorable

In addition, disagreement over the federal budget has caused the U.S.

Absent further quantitative easing by the Federal Reserve, these developments could cause interest rates and borrowing costs to rise,

which may negatively impact our ability to access the debt markets on favorable terms.

In addition, disagreement over the federal budget

has caused the U.S.

federal government to shut down for periods of time.

adverse political and economic conditions could have a material adverse effect on our business, financial condition and results of operations.

recessions or downturns could impair our portfolio companies and harm our operating results.

of our portfolio companies may be susceptible to economic slowdowns or recessions and may be unable to repay our debt investments during

these periods.

The global outbreak of COVID-19 has disrupted economic markets, and the prolonged economic impact remains uncertain.

manufacturers of goods have seen a downturn in production due to the suspension of business and temporary closure of factories in an

attempt to curb the spread of the illness..

In the past, 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 re-pricing of credit risk in the broadly syndicated

credit market and the failure of major domestic and international financial institutions.

In particular, in past periods of instability,

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.

In addition, continued uncertainty between the United States and

other countries, including China, with respect to trade policies, treaties, and tariffs, among other factors, have caused disruption

in the global markets.

Continued adverse political and economic conditions could have

a material adverse effect on our business, financial condition and results of operations.

Economic recessions or downturns could impair our portfolio

companies 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.

The global outbreak of COVID-19

and the Russian invasion of Ukraine have disrupted economic markets, and the prolonged economic impact remains uncertain.

Many manufacturers

of goods have seen a downturn in production due to the suspension of business and temporary closure of factories in an attempt to curb

the spread of the illness.

In the past, 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 re-pricing of credit risk in the broadly syndicated credit market

and the failure of major domestic and international financial institutions.

In particular, in past periods of instability, 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.

In addition, continued uncertainty between the United States and other countries,

including China and Russia, with respect to trade policies, treaties, and tariffs, among other factors, have caused disruption in the

global markets.

There can be no assurance that market conditions will not worsen in the future.

an economic downturn, we may have non-performing assets or non-performing assets may 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 loans.

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.

occurrence of recessionary conditions and/or negative developments in the domestic and international credit markets may significantly

affect the markets in which we do business, the value of our investments, and our ongoing operations, costs and profitability.

unfavorable economic conditions, including rising interest rates, may also increase our funding costs, limit our access to capital markets

or negatively impact our ability to obtain financing, particularly from the debt markets.

In addition, any future financial market uncertainty

could lead to financial market disruptions and could further impact our ability to obtain financing.

These events could limit our investment

originations, limit our ability to grow and negatively impact our operating results and financial condition.

Related to Our Business

have internalized our operating structure, including our management and investment functions, with the expectation that we will be able

to operate more efficiently with lower costs, but this may not be the case.

November 18, 2020, the board of directors approved adoption of an internalized management structure, which we have operated under effective

January 1, 2021.

There can be no assurances that internalizing our management structure will be and remain beneficial to us and our stockholders,

as we may incur the costs and experience the risks discussed below, and we may not be able to effectively replicate the services previously

provided to us by our former investment adviser and administrator.

we no longer bear the costs of the various fees and expenses we previously paid under the investment management and administration agreements

with our previous adviser and administrator, we have other significant direct expenses.

These include general and administrative costs,

legal, accounting and other governance expenses and costs and expenses related to managing our portfolio.

Certain of these costs may

be greater during the early stages of the transition process.

We also incur the compensation and benefits costs of our officers and other

employees and consultants.

In addition, we may 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.

may also experience operational disruptions resulting from the transition from external to internal management, and we could fail to

effectively manage our internalization over the longer term, all of which could adversely affect our performance.

the expenses we incur as an internally-managed company are higher than the expenses we would have paid and/or reimbursed under the externally-managed

structure, our earnings per share may be lower, potentially decreasing the funds available for distribution, and our share value could

an internally managed BDC, we are dependent upon our management team and other professionals, and if we are not able to hire and retain

qualified personnel, we will not realize the anticipated benefits of the internalization.

ability to achieve our investment objectives and to make distributions to our stockholders depends upon the performance of our management

team and professionals.

We may experience difficulty identifying, engaging and retaining management, investment and general and administrative

personnel with the necessary expertise and credit-related investment experience.

As an internally managed BDC, our ability to offer more

competitive and flexible compensation structures, such as offering both a profit-sharing plan and an equity incentive plan, is subject

to the limitations imposed by the 1940 Act, which could limit our ability to attract and retain talented investment management professionals.

unable to attract and retain highly talented professionals for the internal management our Company, we will not realize the anticipated

benefits of the internalization, and the results of our operation could deteriorate.

may suffer credit and capital losses.

debt in the form of secured loans to corporate and asset-based borrowers is highly speculative and involves a high degree of risk of

credit loss, and therefore an investment in our securities may not be suitable for someone with a low tolerance for risk.

are likely to increase during an economic recession, such as the economic recession or downturn that the United States and many other

countries have recently experienced or are experiencing.

we use borrowed funds to make investments or fund our business operations, we are exposed to risks typically associated with leverage

which increase the risk of investing in us.

have borrowed funds, including through the issuance of $77.8 million in aggregate principal amount of 6.125% unsecured notes due March

30, 2023 (the “Notes”) to leverage our capital structure, which is generally considered a speculative investment technique.

In addition, although we voluntarily satisfied and terminated our Revolving Credit Facility in September 2018, we may replace the facility

with another revolving or other credit facility.

common stock may be exposed to an increased risk of loss because a decrease in the value

of our investments may have a greater negative impact on the value of our common stock than

if we did not use leverage;

we do not appropriately match the assets and liabilities of our business, adverse changes

in interest rates could reduce or eliminate the incremental income we make with the proceeds

of any leverage;

ability to pay distributions on our common stock may be restricted if our asset coverage

ratio with respect to each of our outstanding senior securities representing indebtedness

and our outstanding preferred shares, as defined by the 1940 Act, is not at least 200% and

any amounts used to service indebtedness or preferred stock would not be available for such

distributions;

credit facility to which we became a party may be subject to periodic renewal by our lenders,

whose continued participation cannot be guaranteed;

credit facility to which we became a party may contain covenants restricting our operating

and indirectly our stockholders, bear the cost of issuing and paying interest or dividends

on such securities;

convertible or exchangeable securities that we issue may have rights, preferences and privileges

more favorable than those of our common shares.

the provisions of the 1940 Act, we are permitted, as a BDC, to issue debt securities or preferred stock and/or borrow money from banks

and other financial institutions, which we collectively refer to as “senior securities”, only in amounts such that our asset

coverage ratio equals at least 200% (or 150% if, pursuant to the 1940 Act, certain requirements are met) after each issuance of senior

a discussion of the terms of the Notes, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations

- Financial Condition, Liquidity and Capital Resources.”

of September 30, 2021, the Company’s asset coverage was 285.6% after giving effect to leverage and therefore the Company’s

asset coverage is above 200%, the minimum asset coverage requirement under the 1940 Act.

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

anticipate that our investments generally will be made in private companies.

Substantially all of these securities will be subject to

legal and other restrictions on resale or will be otherwise less liquid than publicly traded securities.

The illiquidity of our investments

may make it difficult for us to sell such investments if the need arises.

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 our investments.

we may face other restrictions on our ability to liquidate an investment in a portfolio company to the extent that we or have material

non-public information regarding such portfolio company.

substantial portion of our portfolio investments will be recorded at fair value as determined in good faith by or under the direction

of our board of directors and, as a result, there may be uncertainty regarding the value of our portfolio investments.

debt and equity securities in which we invest for which market quotations are not readily available will be valued at fair value as determined

in good faith by or under the direction of our board of directors.

Most, if not all, of our investments (other than cash and cash equivalents)

will be classified as Level 3 under Accounting Standards Codification Topic 820 - Fair Value Measurements and Disclosures.

that our portfolio valuations will be based on unobservable inputs and our own assumptions about how market participants would price

the asset or liability in question.

We expect that inputs into the determination of fair value of our portfolio investments will require

significant management judgment or estimation.

Even if observable market data are available, such information may be the result of consensus

pricing information or broker quotes, which include a disclaimer that the broker would not be held to such a price in an actual transaction.

The non-binding nature of consensus pricing and/or quotes accompanied by disclaimers materially reduces the reliability of such information.

We have retained the services of independent valuation firms to review the valuation of various loans and securities.

The types of factors

that our board of directors may take into account in determining the fair value of our investments generally include, as appropriate,

comparison to publicly traded securities including such factors as yield, maturity and measures of credit quality, the enterprise value

of a portfolio company, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and

its earnings and discounted cash flow, the markets in which the portfolio company does business and other relevant factors.

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 loans and securities existed.

Our NAV could be adversely affected if our determinations regarding

the fair value of our investments were materially higher or lower than the values that we ultimately realize upon the disposal of such

loans and securities.

are a non-diversified investment company within the meaning of the 1940 Act, and therefore we are not limited with respect to the proportion

of our assets that may be invested in securities of a single issuer.

are classified as a non-diversified investment company within the meaning of the 1940 Act, which means that we are not limited by the

1940 Act with respect to the proportion of our assets that we may invest in securities of a single issuer.

We also have not adopted any

policy restricting the percentage of our assets that may be invested in a single portfolio company.

To the extent that we assume large

positions in the securities of a small number of issuers, our NAV may fluctuate to a greater extent than that of a diversified investment

company as a result of changes in the financial condition or the market’s assessment of the issuer.

We may also be more susceptible

to any single economic or regulatory occurrence than a diversified investment company.

Beyond our income tax diversification requirements

under Subchapter M of the Code, we do not have fixed guidelines for diversification, and our investments could be concentrated in relatively

few portfolio companies.

ability to enter into transactions with our affiliates will be restricted, which may limit the scope of investments available to us.

are prohibited under the 1940 Act from participating in certain transactions with our affiliates without the prior approval of our independent

directors and, in some cases, of the SEC.

Any person that owns, directly or indirectly, five percent or more of our outstanding voting

securities will be our affiliate for purposes of the 1940 Act, and we are generally prohibited from buying or selling any security from

or to such affiliate, absent the prior approval of our independent directors.

In an economic downturn, we may have non-performing

assets or non-performing assets may 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 loans.

A severe 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.

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

The occurrence of recessionary conditions and/or

negative developments in the domestic and international credit markets may significantly affect the markets in which we do business,

the value of our investments, and our ongoing operations, costs and profitability.

Any such unfavorable economic conditions, including

rising interest rates, may also increase our funding costs, limit our access to capital markets or negatively impact our ability to obtain

financing, particularly from the debt markets.

In addition, any future financial market uncertainty could lead to financial market disruptions

and could further impact our ability to obtain financing.

These events could limit our investment originations, limit our ability to

grow and negatively impact our operating results and financial condition.

Risks Related to Our Business

We have internalized our operating structure,

including our management and investment functions, with the expectation that we will be able to operate more efficiently with lower costs,

but this may not be the case.

On November 18, 2020, the board of directors

approved adoption of an internalized management structure, which we have operated under effective January 1, 2021.

There can be no assurances

that internalizing our management structure will be and remain beneficial to us and our stockholders, as we may incur the costs and experience

the risks discussed below, and we may not be able to effectively replicate the services previously provided to us by our former investment

adviser and administrator.

While we no longer bear the costs of the various

fees and expenses we previously paid under the investment management and administration agreements with our previous adviser and administrator,

we have other significant direct expenses.

These include general and administrative costs, legal, accounting and other governance expenses

and costs and expenses related to managing our portfolio.

Certain of these costs may be greater during the early stages of the transition

We also incur the compensation and benefits costs of our officers and other employees and consultants.

In addition, we may 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.

We may also experience operational disruptions

resulting from the transition from external to internal management, and we could fail to effectively manage our internalization over

the longer term, all of which could adversely affect our performance.

If the expenses we incur as an internally-managed

company are higher than the expenses we would have paid and/or reimbursed under the externally-managed structure, our earnings per share

may be lower, potentially decreasing the funds available for distribution, and our share value could suffer.

As an internally managed BDC, we are dependent

upon our management team and other professionals, and if we are not able to hire and retain qualified personnel, we will not realize

the anticipated benefits of the internalization.

Our ability to achieve our investment objectives

and to make distributions to our stockholders depends upon the performance of our management team and professionals.

We may experience

difficulty identifying, engaging and retaining management, investment and general and administrative personnel with the necessary expertise

and credit-related investment experience.

As an internally managed BDC, our ability to offer more competitive and flexible compensation

structures, such as offering both a profit-sharing plan and an equity incentive plan, is subject to the limitations imposed by the 1940

Act, which could limit our ability to attract and retain talented investment management professionals.

If we are unable to attract and retain highly talented professionals

for the internal management our Company, we will not realize the anticipated benefits of the internalization, and the results of our

operation could deteriorate.

We may suffer credit and capital losses.

Private debt in the form of secured loans to

corporate and asset-based borrowers is highly speculative and involves a high degree of risk of credit loss, and therefore an investment

in our securities may not be suitable for someone with a low tolerance for risk.

These risks are likely to increase during an economic

recession, such as the economic recession or downturn that the United States and many other countries have recently experienced or are

experiencing.

Because we use borrowed funds to make investments or fund our

business operations, we are exposed to risks typically associated with leverage which increase the risk of investing in us.

We have borrowed funds, including through the

issuance of $77.8 million in aggregate principal amount of 6.125% unsecured notes due March 30, 2023 (the “Notes”) to leverage

our capital structure, which is generally considered a speculative investment technique.

In addition, although we voluntarily satisfied

and terminated our Revolving Credit Facility in September 2018, we may replace the facility with another revolving or other credit facility.

our common stock may be exposed to an increased risk of loss because

a decrease in the value of our investments may have a greater negative impact on the value of our common stock than if we did not

use leverage;

if we do not appropriately match the assets and liabilities of our

business, adverse changes in interest rates could reduce or eliminate the incremental income we make with the proceeds of any leverage;

our ability to pay distributions on our common stock may be restricted

if our asset coverage ratio with respect to each of our outstanding senior securities representing indebtedness and our outstanding

preferred shares, as defined by the 1940 Act, is not at least 200% and any amounts used to service indebtedness or preferred stock

would not be available for such distributions;

any credit facility to which we became a party may be subject to periodic

renewal by our lenders, whose continued participation cannot be guaranteed;

any credit facility to which we became a party may contain covenants

restricting our operating flexibility;

we, and indirectly our stockholders, bear the cost of issuing and paying

interest or dividends on such securities;

any convertible or exchangeable securities that we issue may have rights,

preferences and privileges more favorable than those of our common shares.

Under the provisions of the 1940 Act, we are

permitted, as a BDC, to issue debt securities or preferred stock and/or borrow money from banks and other financial institutions, which

we collectively refer to as “senior securities”, only in amounts such that our asset coverage ratio equals at least 200%

(or 150% if, pursuant to the 1940 Act, certain requirements are met) after each issuance of senior securities.

For a discussion of the terms of the Notes, see

“Management’s Discussion and Analysis of Financial Condition and Results of Operations - Financial Condition, Liquidity and

Capital Resources.”

As of September 30, 2022, the Company’s

asset coverage was 255.0% after giving effect to leverage and therefore the Company’s asset coverage is above 200%, the minimum

asset coverage requirement under the 1940 Act.

The lack of liquidity in our investments may adversely affect

our business.

We anticipate that our investments generally

will be made in private companies.

Substantially all of these securities will be subject to legal and other restrictions on resale or

will be otherwise less liquid than publicly traded securities.

The illiquidity of our investments may make it difficult for us to sell

such investments if the need arises.

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 our investments.

In addition, we may face other restrictions on

our ability to liquidate an investment in a portfolio company to the extent that we or have material non-public information regarding

such portfolio company.

A substantial portion of our portfolio

investments will be recorded at fair value as determined in good faith by our valuation designee under the oversight of our board of

directors and, as a result, there may be uncertainty regarding the value of our portfolio investments.

The debt and equity securities in which we invest

for which market quotations are not readily available will be valued at fair value as determined in good faith by our Chief Financial

Officer, the Company’s valuation designee, under the oversight of our board of directors.

Most, if not all, of our investments

(other than cash and cash equivalents) will be classified as Level 3 under Accounting Standards Codification Topic 820 - Fair Value Measurements

and Disclosures.

This means that our portfolio valuations will be based on unobservable inputs and our own assumptions about how market

participants would price the asset or liability in question.

We expect that inputs into the determination of fair value of our portfolio

investments will require significant management judgment or estimation.

Even if observable market data are available, such information

may be the result of consensus pricing information or broker quotes, which include a disclaimer that the broker would not be held to

such a price in an actual transaction.

The non-binding nature of consensus pricing and/or quotes accompanied by disclaimers materially

reduces the reliability of such information.

We have retained the services of independent valuation firms to review the valuation of

various loans and securities.

The types of factors that our board of directors may take into account in determining the fair value of

our investments generally include, as appropriate, comparison to publicly traded securities including such factors as yield, maturity

and measures of credit quality, the enterprise value of a portfolio company, the nature and realizable value of any collateral, the portfolio

company’s ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business

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 loans and securities existed.

Our NAV could be adversely affected

if our determinations regarding the fair value of our investments were materially higher or lower than the values that we ultimately

realize upon the disposal of such loans and securities.

We are a non-diversified investment company

within the meaning of the 1940 Act, and therefore we are not limited with respect to the proportion of our assets that may be invested

in securities of a single issuer.

We are classified as a non-diversified investment

company within the meaning of the 1940 Act, which means that we are not limited by the 1940 Act with respect to the proportion of our

assets that we may invest in securities of a single issuer.

We also have not adopted any policy restricting the percentage of our assets

that may be invested in a single portfolio company.

To the extent that we assume large positions in the securities of a small number

of issuers, our NAV may fluctuate to a greater extent than that of a diversified investment company as a result of changes in the financial

condition or the market’s assessment of the issuer.

We may also be more susceptible to any single economic or regulatory occurrence

than a diversified investment company.

Beyond our income tax diversification requirements under Subchapter M of the Code, we do not have

fixed guidelines for diversification, and our investments could be concentrated in relatively few portfolio companies.

Our ability to enter into transactions

with our affiliates will be restricted, which may limit the scope of investments available to us.

We are prohibited under the 1940 Act from participating

in certain transactions with our affiliates without the prior approval of our independent directors and, in some cases, of the SEC.

person that owns, directly or indirectly, five percent or more of our outstanding voting securities will be our affiliate for purposes

of the 1940 Act, and we are generally prohibited from buying or selling any security from or to such affiliate, absent the prior approval

of our independent directors.

The 1940 Act also prohibits certain “joint”

transactions with certain of our affiliates, which could include investments in the same portfolio company, without prior approval of

our independent directors and, in some cases, of the SEC.

We are prohibited from buying or selling any security from or to any person

who owns more than 25% of our voting securities or certain of that person’s affiliates, or entering into prohibited joint transactions

with such persons, absent the prior approval of the SEC.

will be exposed to risks associated with changes in interest rates.

rate fluctuations may have a substantial negative impact on our investments, the value of our common stock and our rate of return on

invested capital.

A reduction in the interest rates on new investments relative to interest rates on current investments could also have

an adverse impact on our net interest income.

An increase in interest rates could decrease the value of any investments we hold which

earn fixed interest rates and also could increase our interest expense, thereby decreasing our net income.

Also, an increase in interest

rates available to investors could make investment in our common stock less attractive if we are not able to increase our dividend rate,

which could reduce the value of our common stock.

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

July 2017, the head of the United Kingdom Financial Conduct Authority announced the desire to phase out the use of LIBOR by

the end of 2021.

The announcement indicates that the continuation of LIBOR on the current basis cannot and will not be guaranteed after

It is impossible to predict whether and to what extent banks will continue to provide LIBOR submissions to the administrator of

LIBOR or whether any additional reforms to LIBOR may be enacted in the United Kingdom or elsewhere.

Actions by the British Bankers Association,

the United Kingdom Financial Conduct Authority or other 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.

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.

this time, no consensus exists as to what rate or rates will become accepted alternatives to LIBOR, although on July 29, 2021, the Alternative

Reference Rates Committee (“ARRC”), a U.S.-based group convened by the U.S.

Federal Reserve Board and the Federal Reserve

Bank of New York, formally recommended the Secured Overnight Financing Rate (“SOFR”) as its preferred replacement rate for

Given the inherent differences between LIBOR and SOFR, or any other alternative benchmark rate that may be established, there

are many uncertainties regarding a transition from LIBOR, including but not limited to the need to amend all contracts with LIBOR as

the referenced rate and how this will impact the cost of variable rate debt and certain derivative financial instruments, or whether

the COVID-19 pandemic will have further effect on LIBOR transition plans.

In addition, SOFR or other replacement rates may fail to gain

market acceptance.

The elimination of LIBOR or any other changes or reforms to the determination or supervision of LIBOR could have an

adverse impact on the market value of and/or transferability of any LIBOR-linked securities, loans, and other financial obligations or

extensions of credit held by or due to us or on our overall financial condition or results of operations.

we use debt to finance our investments, changes in interest rates will affect our cost of capital and net investment income.

we borrow money to make 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.

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 the event we use our existing debt to finance

our investments.

In periods of rising interest rates, our cost of funds will increase to the extent we access any credit facility with

a floating interest rate, which could reduce our net investment income to the extent any debt investments have fixed interest rates.

We expect that our long-term fixed-rate investments will be financed primarily with issuances of equity and long-term debt securities.

We may use interest rate risk management techniques in an effort to limit our exposure to interest rate fluctuations.

Such techniques

may include various interest rate hedging activities to the extent permitted by the 1940 Act.

should also be aware that a rise in the general level of interest rates typically leads to higher interest rates applicable to our debt

our investments are not managed effectively, we may be unable to achieve our investment objective.

ability to achieve our investment objective will depend on our ability to manage our business, which will depend on the internalized

management team.

Accomplishing this result is largely a function of the internalized management team’s ability to provide quality

and efficient services to us.

They may also be required to provide managerial assistance to our portfolio companies.

These demands on

their time may distract them or slow our rate of investment.

Any failure to manage our business effectively could have a material adverse

effect on our business, financial condition and results of operations.

may experience fluctuations in our periodic operating results.

could experience fluctuations in our periodic operating results due to a number of factors, including the interest rates payable on the

debt securities we acquire, the default rate on such securities, the level of our expenses (including the interest rates payable on our

borrowings), the dividend rates payable on preferred stock we issue, variations in and the timing of the recognition of realized and

unrealized gains or losses, the degree to which we encounter competition in our markets and general economic conditions.

of these factors, results for any period should not be relied upon as being indicative of performance in future periods.

failure on our part to maintain our status as a BDC would reduce our operating flexibility.

we fail to maintain our status as a BDC, we might be regulated as a closed-end investment company under the 1940 Act, which would subject

us to substantially more onerous regulatory restrictions under the 1940 Act and correspondingly decrease our operating flexibility.

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

federal income tax purposes, we may include in income certain amounts that we have not yet received in cash, such as original issue

discount, which may arise if we receive warrants in connection with the making of a loan or possibly in other circumstances, such as

PIK interest, which represents contractual interest added to the loan balance and due at the end of the loan term.

Such original issue

discount, which could be significant relative to our overall investment activities, or increases in loan balances as a result of PIK

arrangements are included in income before we receive any corresponding cash payments.

We also may be required to include in income certain

other amounts that we do not receive in cash.

in certain cases we may recognize income before or without receiving cash representing such income, we may have difficulty meeting the

tax requirement to distribute 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, to maintain our tax treatment as a RIC.

Accordingly, we may have to sell some of our investments

at times we would not consider advantageous, raise additional debt or equity capital or reduce new investment originations to meet these

distribution requirements.

If we are not able to raise cash from other sources, we may fail to qualify and maintain our tax treatment

as a RIC and thus become subject to corporate-level U.S.

transactions with certain of our affiliates, which

could include investments in the same portfolio company, without prior approval of our independent directors and, in some cases, of the

We are prohibited from buying or selling any security from or to any person who owns more than 25% of our voting securities or certain

of that person’s affiliates, or entering into prohibited joint transactions with such persons, absent the prior approval of the

We will be exposed to risks associated with changes in interest

Interest rate fluctuations may have a substantial

negative impact on our investments, the value of our common stock and our rate of return on invested capital.

A reduction in the interest

rates on new investments relative to interest rates on current investments could also have an adverse impact on our net interest income.

An increase in interest rates could decrease the value of any investments we hold which earn fixed interest rates and also could increase

our interest expense, thereby decreasing our net income.

Also, an increase in interest rates available to investors could make investment

in our common stock less attractive if we are not able to increase our dividend rate, which could reduce the value of our common stock.

Changes relating to the LIBOR calculation process may adversely

affect the value of the LIBOR-indexed, floating-rate debt securities in our portfolio

In July 2017, the head of the United Kingdom

Financial Conduct Authority announced the desire to phase out the use of LIBOR by the end of 2021.

The announcement

indicates that the continuation of LIBOR on the current basis cannot and will not be guaranteed after 2021.

It is impossible to predict

whether and to what extent banks will continue to provide LIBOR submissions to the administrator of LIBOR or whether any additional reforms

to LIBOR may be enacted in the United Kingdom or elsewhere.

Actions by the British Bankers Association, the United Kingdom Financial

Conduct Authority or other 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.

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.

At this time, no consensus exists as to what

rate or rates will become accepted alternatives to LIBOR, although on July 29, 2021, the Alternative Reference Rates Committee (“ARRC”),

a U.S.-based group convened by the U.S.

Federal Reserve Board and the Federal Reserve Bank of New York, formally recommended the SOFR

as its preferred replacement rate for LIBOR.

Given the inherent differences between LIBOR and SOFR, or any other alternative benchmark

rate that may be established, there are many uncertainties regarding a transition from LIBOR, including but not limited to the need to

amend all contracts with LIBOR as the referenced rate and how this will impact the cost of variable rate debt and certain derivative

financial instruments, or whether the COVID-19 pandemic will have further effect on LIBOR transition plans.

In addition, SOFR or other

replacement rates may fail to gain market acceptance.

The elimination of LIBOR or any other changes or reforms to the determination or

supervision of LIBOR could have an adverse impact on the market value of and/or transferability of any LIBOR-linked securities, loans,

and other financial obligations or extensions of credit held by or due to us or on our overall financial condition or results of operations.

Because we use debt to finance our investments, changes in interest

rates will affect our cost of capital and net investment income.

Because we borrow money to make 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.

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 the event we use our existing debt to finance our investments.

In periods of rising interest

rates, such as the current period we are in, our cost of funds will increase to the extent we access any credit facility with a floating

interest rate, which could reduce our net investment income to the extent any debt investments have fixed interest rates.

We expect that

our long-term fixed-rate investments will be financed primarily with issuances of equity and long-term debt securities.

We may use interest

rate risk management techniques in an effort to limit our exposure to interest rate fluctuations.

Such techniques may include various

interest rate hedging activities to the extent permitted by the 1940 Act.

You should also be aware that a rise in the general

level of interest rates typically leads to higher interest rates applicable to our debt investments.

If our investments are not managed effectively, we may be unable

to achieve our investment objective.

Our ability to achieve our investment objective

will depend on our ability to manage our business, which will depend on the internalized management team.

Accomplishing this result is

largely a function of the internalized management team’s ability to provide quality and efficient services to us.

They may also

be required to provide managerial assistance to our portfolio companies.

These demands on their time may distract them or slow our rate

of investment.

Any failure to manage our business effectively could have a material adverse effect on our business, financial condition

and results of operations.

We may experience fluctuations in our periodic operating results.

We could experience fluctuations in our periodic

operating results due to a number of factors, including the interest rates payable on the debt securities we acquire, the default rate

on such securities, the level of our expenses (including the interest rates payable on our borrowings), the dividend rates payable on

preferred stock we issue, variations in and the timing of the 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 upon as being indicative of performance in future periods.

Any failure on our part to maintain our status as a BDC would

reduce our operating flexibility.

If we fail to maintain our status as a BDC, we

might be regulated as a closed-end investment company under the 1940 Act, which would subject us to substantially more onerous regulatory

restrictions under the 1940 Act and correspondingly decrease our operating flexibility.

We may have difficulty paying our required distributions if

we recognize income before or without receiving cash representing such income.

federal income tax purposes, we may

include in income certain amounts that we have not yet received in cash, such as original issue discount, which may arise if we receive

warrants in connection with the making of a loan or possibly in other circumstances, such as PIK interest, which represents contractual

interest added to the loan balance and due at the end of the loan term.

Such original issue discount, which could be significant relative

to our overall investment activities, or increases in loan balances as a result of PIK arrangements are included in income before we

receive any corresponding cash payments.

We also may be required to include in income certain other amounts that we do not receive in

Since in certain cases we may recognize income

before or without receiving cash representing such income, we may have difficulty meeting the tax requirement to distribute 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,

to maintain our tax treatment as a RIC.

Accordingly, we may have to sell some of our investments at times we would not consider advantageous,

raise additional debt or equity capital or reduce new investment originations to meet these distribution requirements.

If we are not

able to raise cash from other sources, we may fail to qualify and maintain our tax treatment as a RIC and thus become subject to corporate-level

federal income tax.

See “Tax Matters - Taxation of the Company”.

may not be able to pay you distributions and our distributions may not grow over time.

possible, we may pay quarterly distributions to our stockholders out of assets legally available for distribution.

We cannot assure you

that we will achieve investment results that will allow us to pay a specified level of cash distributions or year-to-year increases in

cash distributions.

Our ability to pay distributions might be adversely affected by, among other things, the impact of one or more of

the risk factors described herein.

In addition, the inability to satisfy the asset coverage test applicable to us as a BDC could limit

We may not be able to pay you distributions and our distributions

may not grow over time.

When possible, we may pay quarterly distributions

to our stockholders out of assets legally available for distribution.

We cannot assure you that we will achieve investment results that

will allow us to pay a specified level of cash distributions or year-to-year increases in cash distributions.

Our ability to pay distributions

As of September 30, 2021, the Company’s asset coverage was 285.6% after giving effect to leverage

and therefore the Company’s asset coverage is above 200%, the minimum asset coverage requirement under the 1940 Act.

All distributions

will be paid at the discretion of our board of directors and will depend on our earnings, our financial condition, maintenance of our

RIC tax treatment, compliance with applicable BDC regulations, and such other factors as our board of directors may deem relevant from

time to time.

We cannot assure you that we will pay distributions to our stockholders in the future.

highly competitive market in which we operate may limit our investment opportunities.

number of entities compete with us to make the types of investments that we make.

We compete with other BDCs and investment funds (including

public and private funds, commercial and investment banks, commercial financing companies, SBICs and, to the extent they provide an alternative

form of financing, private equity funds).

Additionally, because competition for investment opportunities generally has increased among

alternative investment vehicles, such as hedge funds, those entities have begun to invest in areas in which they have not traditionally

As a result of these new entrants, competition for investment opportunities has intensified in recent years and may intensify

further in the future.

Some of our existing and potential 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 funds 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, which

could allow them to consider a wider variety of investments and establish more relationships than us.

Furthermore, many of our competitors

are not subject to the regulatory restrictions and valuation requirements that the 1940 Act imposes on us as a BDC and the tax consequences

of qualifying as a RIC.

We cannot assure you that the competitive pressures we face will not have a material adverse effect on our business,

financial condition and results of operations.

Also, as a result of this existing and potentially increasing competition, we may not

be able to take advantage of attractive investment opportunities from time to time, and we can offer no assurance that we will be able

to identify and make investments that are consistent with our investment objective.

do not seek to compete primarily based on the interest rates we offer, and we believe that some of our competitors make loans with interest

rates that are comparable to or lower than the rates we offer.

might be adversely affected by, among other things, the impact of one or more of the risk factors described herein.

In addition, the

inability to satisfy the asset coverage test applicable to us as a BDC could limit our ability to pay distributions.

As of September

30, 2022, the Company’s asset coverage was 255.0% after giving effect to leverage and therefore the Company’s asset coverage

is above 200%, the minimum asset coverage requirement under the 1940 Act.

All distributions will be paid at the discretion of our board

of directors and will depend on our earnings, our financial condition, maintenance of our RIC tax treatment, compliance with applicable

BDC regulations, and such other factors as our board of directors may deem relevant from time to time.

We cannot assure you that we will

pay distributions to our stockholders in the future.

The highly competitive market in which we operate may limit

our investment opportunities.

A number of entities compete with us to make

the types of investments that we make.

We compete with other BDCs and investment funds (including public and private funds, commercial

and investment banks, commercial financing companies, SBICs and, to the extent they provide an alternative form of financing, private

equity funds).

Additionally, because competition for investment opportunities generally has increased among alternative investment vehicles,

such as hedge funds, those entities have begun to invest in areas in which they have not traditionally invested.

As a result of these

new entrants, competition for investment opportunities has intensified in recent years and may intensify further in the future.

of our existing and potential competitors are substantially larger and have considerably greater financial, technical and marketing resources

For example, some competitors may have a lower cost of funds 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, which could allow them to consider

a wider variety of investments and establish more relationships than us.

Furthermore, many of our competitors are not subject to the

regulatory restrictions and valuation requirements that the 1940 Act imposes on us as a BDC and the tax consequences of qualifying as

We cannot assure you that the competitive pressures we face will not have a material adverse effect on our business, financial

condition and results of operations.

Also, as a result of this existing and potentially increasing competition, we may not be able to

take advantage of attractive investment opportunities from time to time, and we can offer no assurance that we will be able to identify

and make investments that are consistent with our investment objective.

We do not seek to compete primarily based on

the interest rates we offer, and we believe that some of our competitors make loans with interest rates that are comparable to or lower

than the rates we offer.

We may lose investment opportunities if we do not match our competitors’

1 unchanged sentence

If we match our competitors’

pricing, terms and structure, we may experience decreased net interest

income and increased risk of credit loss.

A significant part of our competitive advantage stems from the fact that the market for investments

in mid-sized companies is underserved by traditional commercial banks and other financial institutions.

A significant increase in the

number and/or size of our competitors in this target market could force us to accept less attractive investment terms.

Furthermore, many

of our competitors have greater experience operating under the regulatory restrictions of the 1940 Act and under an internalized management

we expect to distribute substantially all of our net investment income and net realized capital gains to our stockholders, we will need

additional capital to finance our growth and such capital may not be available on favorable terms or at all.

have elected and intend to qualify annually to be taxed for U.S.

pricing, terms and structure, we may experience decreased net interest income and increased risk of

A significant part of our competitive advantage stems from the fact that the market for investments in mid-sized companies

is underserved by traditional commercial banks and other financial institutions.

A significant increase in the number and/or size of

our competitors in this target market could force us to accept less attractive investment terms.

Furthermore, many of our competitors

have greater experience operating under the regulatory restrictions of the 1940 Act and under an internalized management structure.

Because we expect to distribute substantially

all of our net investment income and net realized capital gains to our stockholders, we will need additional capital to finance our growth

and such capital may not be available on favorable terms or at all.

We have elected and intend to qualify annually

to be taxed for U.S.

federal income tax purposes as a RIC under Subchapter M of the Code.

As a RIC, we must meet certain requirements, including source-of-income, asset diversification and distribution requirements in order

to not have to pay corporate-level U.S.

on income we distribute to our stockholders as distributions, which allows us to substantially

reduce or eliminate our corporate-level U.S.

federal income tax liability.

As a BDC, we are generally required to meet a coverage ratio

of total assets to total senior securities, which includes all of our borrowings and any preferred stock we may issue in the future,

of at least 200% (or 150% if, pursuant to the 1940 Act, certain requirements are met) at the time we issue any debt or preferred stock.

As a RIC, we must meet certain requirements,

including source-of-income, asset diversification and distribution requirements in order to not have to pay corporate-level U.S.

we distribute to our stockholders as distributions, which allows us to substantially reduce or eliminate our corporate-level U.S.

income tax liability.

As a BDC, we are generally required to meet a coverage ratio of total assets to total senior securities, which

includes all of our borrowings and any preferred stock we may issue in the future, of at least 200% (or 150% if, pursuant to the 1940

Act, certain requirements are met) at the time we issue any debt or preferred stock.

This requirement limits the amount of our leverage.

Because we will continue to need capital to grow our investment portfolio, this limitation

may prevent us from incurring debt or issuing preferred stock and require us to raise additional equity at a time when it may be disadvantageous

We cannot assure you that debt and equity financing will be available to us on favorable terms, or at all, and debt financings

may be restricted by the terms of any of our outstanding borrowings.

In addition, as a BDC, we are generally not permitted to issue common

stock priced below NAV without stockholder approval.

If additional funds are not available to us, we could be forced to curtail or cease

new lending and investment activities, and our NAV could decline.

board of directors may change our investment objective, operating policies and strategies without prior notice or stockholder approval.

board of directors has the authority to modify or waive certain of our operating policies and strategies without prior notice and without

Because we will continue to need capital to grow our investment portfolio, this limitation may prevent us from incurring debt or issuing

preferred stock and require us to raise additional equity at a time when it may be disadvantageous to do so.

We cannot assure you that

debt and equity financing will be available to us on favorable terms, or at all, and debt financings may be restricted by the terms of

any of our outstanding borrowings.

In addition, as a BDC, we are generally not permitted to issue common stock priced below NAV without

stockholder approval.

However, absent stockholder approval, we may not change the nature of our business so as to cease to be, or withdraw

our election as, a BDC.

We cannot predict the effect any changes to our current operating policies and strategies would have on our business,

operating results or value of our stock.

Nevertheless, the effects could adversely affect our business and impact our ability to make

distributions and cause you to lose all or part of your investment.

management team may, from time to time, possess material non-public information, limiting our investment discretion.

of our management may serve as directors of, or in a similar capacity with, companies in which we invest, the securities of which are

purchased or sold on our behalf.

In the event that material nonpublic information is obtained with respect to such companies, we could

be prohibited for a period of time from purchasing or selling the securities of such companies by law or otherwise, and this prohibition

may have an adverse effect on us.

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

also known as leverage, magnify the potential for loss on invested equity capital.

If we use leverage to partially finance our investments,

which we have done historically, you will experience increased risks of investing in our securities.

We issued the Notes and may issue

other debt securities or enter into other types of borrowing arrangements in the future.

If the value of our assets decreases, leveraging

would cause our NAV 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 common stock distributions or scheduled debt payments.

Leverage is generally considered a speculative investment technique and

we only intend to use leverage if expected returns will exceed the cost of borrowing.

If additional funds are not available to us, we could be forced to curtail or cease new lending and investment

activities, and our NAV could decline.

Our board of directors may change our investment

objective, operating policies and strategies without prior notice or stockholder approval.

Our board of directors has the authority to modify

or waive certain of our operating policies and strategies without prior notice and without stockholder approval.

However, absent stockholder

approval, we may not change the nature of our business so as to cease to be, or withdraw our election as, a BDC.

We cannot predict the

effect any changes to our current operating policies and strategies would have on our business, operating results or value of our stock.

Nevertheless, the effects could adversely affect our business and impact our ability to make distributions and cause you to lose all

or part of your investment.

Our management team may, from time to time,

possess material non-public information, limiting our investment discretion.

Members of our management may serve as directors

of, or in a similar capacity with, companies in which we invest, the securities of which are purchased or sold on our behalf.

event that material nonpublic information is obtained with respect to such companies, we could be prohibited for a period of time from

purchasing or selling the securities of such companies by law or otherwise, and this prohibition may have an adverse effect on us.

Because we borrow money, the potential

for 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 loss on invested equity capital.

If we use leverage to partially finance our investments, which we have done historically,

you will experience increased risks of investing in our securities.

We issued the Notes and may issue other debt securities or enter

into other types of borrowing arrangements in the future.

If the value of our assets decreases, leveraging would cause our NAV 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 common stock distributions

or scheduled debt payments.

Leverage is generally considered a speculative investment technique and we only intend to use leverage if

expected returns will exceed the cost of borrowing.

As of September 30, 2022, there was $80.0 million

8 unchanged sentences

facility we enter into, the lenders thereunder would likely have a superior claim to our assets over our stockholders.

are highly dependent on information systems and systems failures could significantly disrupt our business, which may, in turn, negatively

affect the market price of our common stock and our ability to pay distributions.

business is highly dependent on our and third parties’

We are highly dependent on information

systems and systems failures could significantly disrupt our business, which may, in turn, negatively affect the market price of our

common stock and our ability to pay distributions.

Our business is highly dependent on our and third

parties’

communications and information systems.

Any failure or interruption of those

systems, including as a result of the termination of an agreement with any third-party service providers, could cause delays or other

problems in our activities.

Our financial, accounting, data processing, backup or other operating systems and facilities may fail to

operate properly or become disabled or damaged as a result of a number of factors including events that are wholly or partially beyond

our control and adversely affect our business.

There could be:

electrical or telecommunications outages;

disasters such as earthquakes, tornadoes and hurricanes;

pandemics (including the COVID-19 outbreak);

arising from local or larger scale political or social matters, including terrorist acts;

Any failure or interruption of those systems, including as a result of the termination

of an agreement with any third-party service providers, could cause delays or other problems in our activities.

Our financial, accounting,

data processing, backup or other operating systems and facilities may fail to operate properly or become disabled or damaged as a result

of a number of factors including events that are wholly or partially beyond our control and adversely affect our business.

sudden electrical or telecommunications outages;

natural disasters such as earthquakes, tornadoes and hurricanes;

disease pandemics (including the COVID-19 outbreak);

events arising from local or larger scale political or social matters,

including terrorist acts;

cyber-attacks.

events, in turn, could have a material adverse effect on our operating results and negatively affect the market price of our common stock

and our ability to pay distributions to our stockholders.

failure of cybersecurity systems, as well as the occurrence of events unanticipated in our disaster recovery systems and management continuity

planning could impair our ability to conduct business effectively.

occurrence of a disaster, such as a cyber-attack against us or against a third-party that has access to our data or networks, a natural

catastrophe, an industrial accident, failure of our disaster recovery systems, or consequential employee error, could have an adverse

effect on our ability to communicate or conduct business, negatively impacting our operations and financial condition.

This adverse effect

can become particularly acute if those events affect our electronic data processing, transmission, storage, and retrieval systems, or

impact the availability, integrity, or confidentiality of our data.

depend heavily upon computer systems to perform necessary business functions.

Despite our implementation of a variety of security measures,

our computer systems, networks, and data, like those of other companies, could be subject to cyber-attacks and unauthorized access, use,

alteration, or destruction, such as from physical and electronic break-ins or unauthorized tampering, malware and computer virus attacks,

or system failures and disruptions.

If one or more of these events occurs, it could potentially jeopardize the confidential, proprietary,

and other information processed, stored in, and transmitted through our computer systems and networks.

Such an attack could cause interruptions

or malfunctions in our operations, which could result in financial losses, litigation, regulatory penalties, client dissatisfaction or

loss, reputational damage, and increased costs associated with mitigation of damages and remediation.

parties with which we do business may also be sources of cybersecurity or other technological risks.

We outsource certain functions and

these relationships allow for the storage and processing of our information, as well as customer, counterparty, employee and borrower

Cybersecurity failures or breaches our service providers (including, but not limited to, accountants, custodians, transfer

agents and administrators), and the issuers of securities in which we invest, also have the ability to cause disruptions and impact business

operations, potentially resulting in financial losses, interference with our ability to calculate its net asset value, impediments to

trading, the inability of our stockholders to transact business, violations of applicable privacy and other laws, regulatory fines, penalties,

reputation damages, reimbursement of other compensation costs, or additional compliance costs.

While we engage in actions to reduce our

exposure resulting from outsourcing, ongoing threats may result in unauthorized access, loss, exposure or destruction of data, or other

cybersecurity incidents, with increased costs and other consequences, including those described above.

In addition, substantial costs

may be incurred in order to prevent any cyber incidents in the future.

and information security laws and regulation changes, and compliance with those changes, may result in cost increases due to system changes

and the development of new administrative processes.

In addition, we may be required to expend significant additional resources to modify

our protective measures and to investigate and remediate vulnerabilities or other exposures arising from operational and security risks.

We currently do not maintain insurance coverage relating to cybersecurity risks, and we may be required to expend significant additional

resources to modify our protective measures or to investigate and remediate vulnerabilities or other exposures, and we may be subject

to litigation and financial losses that are not fully insured.

and our service providers are currently impacted by quarantines and similar measures being enacted by governments in response to COVID-19,

which are obstructing the regular functioning of business work forces (including requiring employees to work from external locations

and their homes).

Accordingly, the risks described above are heightened under current conditions.

business and operations could be negatively affected if we become subject to any securities class actions and derivative lawsuits, which

could cause us to incur significant expense, hinder execution of investment strategy and impact our stock price.

the past, following periods of volatility in the market price of a company’s securities, securities class-action litigation has

often been brought against that company.

Stockholder activism, which could take many forms or arise in a variety of situations, has been

increasing in the BDC space recently.

Securities litigation and stockholder activism, including potential proxy contests, could result

in substantial costs and divert management’s and our board of directors’

These events, in turn, could have a material

adverse effect on our operating results and negatively affect the market price of our common stock and our ability to pay distributions

to our stockholders.

A failure of cybersecurity systems, as

well as the occurrence of events unanticipated in our disaster recovery systems and management continuity planning could impair our ability

to conduct business effectively.

The occurrence of a disaster, such as a cyber-attack

against us or against a third-party that has access to our data or networks, a natural catastrophe, an industrial accident, failure of

our disaster recovery systems, or consequential employee error, could have an adverse effect on our ability to communicate or conduct

business, negatively impacting our operations and financial condition.

This adverse effect can become particularly acute if those events

affect our electronic data processing, transmission, storage, and retrieval systems, or impact the availability, integrity, or confidentiality

We depend heavily upon computer systems to perform

necessary business functions.

Despite our implementation of a variety of security measures, our computer systems, networks, and data,

like those of other companies, could be subject to cyber-attacks and unauthorized access, use, alteration, or destruction, such as from

physical and electronic break-ins or unauthorized tampering, malware and computer virus attacks, or system failures and disruptions.

If one or more of these events occurs, it could potentially jeopardize the confidential, proprietary, and other information processed,

stored in, and transmitted through our computer systems and networks.

Such an attack could cause interruptions or malfunctions in our

operations, which could result in financial losses, litigation, regulatory penalties, client dissatisfaction or loss, reputational damage,

and increased costs associated with mitigation of damages and remediation.

Third parties with which we do business may also

be sources of cybersecurity or other technological risks.

We outsource certain functions and these relationships allow for the storage

and processing of our information, as well as customer, counterparty, employee and borrower information.

Cybersecurity failures or breaches

our service providers (including, but not limited to, accountants, custodians, transfer agents and administrators), and the issuers of

securities in which we invest, also have the ability to cause disruptions and impact business operations, potentially resulting in financial

losses, interference with our ability to calculate its net asset value, impediments to trading, the inability of our stockholders to

transact business, violations of applicable privacy and other laws, regulatory fines, penalties, reputation damages, reimbursement of

other compensation costs, or additional compliance costs.

While we engage in actions to reduce our exposure resulting from outsourcing,

ongoing threats may result in unauthorized access, loss, exposure or destruction of data, or other cybersecurity incidents, with increased

costs and other consequences, including those described above.

In addition, substantial costs may be incurred in order to prevent any

cyber incidents in the future.

Privacy and information security laws and regulation

changes, and compliance with those changes, may result in cost increases due to system changes and the development of new administrative

In addition, we may be required to expend significant additional resources to modify our protective measures and to investigate

and remediate vulnerabilities or other exposures arising from operational and security risks.

We currently do not maintain insurance

coverage relating to cybersecurity risks, and we may be required to expend significant additional resources to modify our protective

measures or to investigate and remediate vulnerabilities or other exposures, and we may be subject to litigation and financial losses

that are not fully insured.

We and our service providers are currently impacted

by quarantines and similar measures being enacted by governments in response to COVID-19, which are obstructing the regular functioning

of business work forces (including requiring employees to work from external locations and their homes).

Accordingly, the risks described

above are heightened under current conditions.

Our business and operations could be negatively

affected if we become subject to any securities class actions and derivative lawsuits, which could cause us to incur significant expense,

hinder execution of investment strategy and impact our stock price.

In the past, following periods of volatility

in the market price of a company’s securities, securities class-action litigation has often been brought against that company.

Stockholder activism, which could take many forms or arise in a variety of situations, has been increasing in the BDC space recently.

Securities litigation and stockholder activism, including potential proxy contests, could result in substantial costs and divert management’s

and our board of directors’

attention and resources from our business.

Additionally,

such securities litigation and stockholder activism could give rise to perceived uncertainties as to our future, adversely affect our

relationships with service providers and make it more difficult to attract and retain qualified personnel.

Also, we may be required to

incur significant legal fees and other expenses related to any securities litigation and activist stockholder matters.

Further, our stock

price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities

litigation and stockholder activism.

Related to Our Investments

may not realize gains from our equity investments.

we make a debt investment, we may acquire warrants or other equity securities as well.

In addition, we may invest directly in the equity

securities of portfolio companies.

Our goal is ultimately to dispose of such equity interests and realize gains upon our disposition

of such interests.

However, the equity interests we receive may not appreciate in value and, in fact, may decline in value.

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 experience.

investments are very risky and highly speculative.

We have invested

primarily in senior secured first lien term loans and senior secured second lien term loans issued by private companies.

Secured Loans There is a risk that the collateral securing our loans may decrease in value over time, 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, and, in some circumstances, our lien could

be 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 loan.

Consequently, the fact that a loan is secured does not guarantee that we will receive principal and interest payments according to the

loan’s terms, or at all, or that we will be able to collect on the loan should we be forced to enforce our remedies.

Investments When we invest in senior secured first lien term loans or senior secured second lien term loans, we may receive warrants

or other equity securities as well.

Additionally, such securities litigation and stockholder

activism could give rise to perceived uncertainties as to our future, adversely affect our relationships with service providers and make

it more difficult to attract and retain qualified personnel.

Also, we may be required to incur significant legal fees and other expenses

related to any securities litigation and activist stockholder matters.

Further, our stock price could be subject to significant fluctuation

or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and stockholder activism.

Risks Related to Our Investments

We may not realize gains from our equity investments.

When we make a debt investment, we may acquire

warrants or other equity securities as well.

In addition, we may invest directly in the equity securities of portfolio companies.

or 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 warrants or equity interests, and any gains that we do realize on the disposition of any warrants or equity interests

may not be sufficient to offset any other losses we experience.

addition, investing in private companies involves a number of significant risks.

See “Our investments in private portfolio companies

may be risky, and you could lose all or part of your investment”

investments in private portfolio companies may be risky, and you could lose all or part of your investment.

in private companies involve a number of significant risks.

Generally, little public information exists about these companies, and we

are required to rely on the ability of our investment professionals to obtain adequate information to evaluate the potential returns

from investing in these 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.

Private companies may have limited financial resources and may

be unable to meet their obligations under their debt securities that we hold, which may be accompanied by a deterioration in the value

of any collateral and a reduction in the likelihood of our realizing any guarantees we may have obtained in connection with our investment.

In addition, they typically have shorter operating histories, narrower product lines and smaller market shares than larger businesses,

which tend to render them more vulnerable to competitors’

goal is ultimately to dispose of such equity interests and realize gains upon our disposition of such interests.

However, 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 experience.

Our investments are very risky and highly speculative.

We have invested primarily in senior secured first lien term loans

and senior secured second lien term loans issued by private companies.

Senior Secured Loans There is a risk that

the collateral securing our loans may decrease in value over time, 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, and, in some circumstances, our lien could be 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 loan.

Consequently, the fact that a loan is secured

does not guarantee that we will receive principal and interest payments according to the loan’s terms, or at all, or that we will

be able to collect on the loan should we be forced to enforce our remedies.

Equity Investments When we invest in senior

secured first lien term loans or senior secured second lien term loans, we may receive warrants or other equity securities as well.

addition, we may invest directly in the equity securities of portfolio companies.

The warrants or 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 warrants or equity

interests, and any gains that we do realize on the disposition of any warrants or equity interests may not be sufficient to offset any

other losses we experience.

In addition, investing in private companies involves

a number of significant risks.

See “Our investments in private portfolio companies may be risky, and you could lose all or part

of your investment”

Our investments in private portfolio companies may be risky,

and you could lose all or part of your investment.

Investments in private companies involve a number

of significant risks.

Generally, little public information exists about these companies, and we are required to rely on the ability of

our investment professionals to obtain adequate information to evaluate the potential returns from investing in these companies.

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.

Private companies may have limited financial resources and may be unable to meet their obligations under

their debt securities that we hold, which may be accompanied by a deterioration in the value of any collateral and a reduction in the

likelihood of our realizing any guarantees we may have obtained in connection with our investment.

In addition, they typically have shorter

operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable

to competitors’

actions and market conditions, as well as general economic downturns.

Additionally, private companies are more likely to depend on the management talents and efforts of a small group of persons;

the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on our portfolio

company and, in turn, on us.

Private companies also 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.

In addition, our

executive officers and directors may, in the ordinary course of business, be named as defendants in litigation arising from our investments

in these types of companies.

have invested primarily in secured debt issued by our portfolio companies.

In the case of our senior secured first lien term loans, the

portfolio companies usually have, or may be permitted to incur, other debt that ranks equally with the debt securities in which we invest.

With respect to our senior secured second lien term loans, the portfolio companies usually have, or may be permitted to incur, other

debt that ranks above or equally with the debt securities in which we invest.

In the case of debt ranking above the senior secured second

lien term loans in which we invest, we would be subordinate to such debt in the event of an insolvency, liquidation, dissolution, reorganization

or bankruptcy of the relevant portfolio company and therefore the 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 distribution.

In the case of debt ranking

equally with debt securities in which we invest, we would have to share any distributions on an equal and ratable basis with other creditors

holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.

Additionally,

certain loans that we make to portfolio companies may be secured on a second priority basis by the same collateral securing senior secured

debt of such companies.

The first priority liens on the collateral will secure the portfolio company’s obligations under any outstanding

senior debt and may secure certain other future debt that may be permitted to be incurred by the portfolio company under the agreements

governing the loans.

The holders of obligations secured by the first priority liens on the collateral will generally control the liquidation

of, and be entitled to receive proceeds from, any realization of the collateral to repay their obligations in full before us.

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 the second priority liens after payment in full of all obligations secured by the first priority

liens on the collateral.

If such proceeds are not sufficient to repay amounts outstanding under the loan obligations secured by the second

priority liens, then we, to the extent not repaid from the proceeds of the sale of the collateral, will only have an unsecured claim

against the portfolio company’s remaining assets, if any.

rights we may have with respect to the collateral securing the loans we make to our portfolio companies with senior debt outstanding

may also be limited pursuant to the terms of one or more intercreditor agreements that we enter into with the holders of senior debt.

Under such an intercreditor agreement, at any time that obligations that have the benefit of the first priority liens 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 obligations

secured by the first priority liens:

(1) the ability to cause the commencement of enforcement proceedings against the collateral;

Additionally, private companies 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 our portfolio company and, in turn, on us.

companies also 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.

In addition, our executive officers and directors may, in

the ordinary course of business, be named as defendants in litigation arising from our investments in these types of companies.

We have invested primarily in secured debt issued

by our portfolio companies.

In the case of our senior secured first lien term loans, the portfolio companies usually have, or may be

permitted to incur, other debt that ranks equally with the debt securities in which we invest.

With respect to our senior secured second

lien term loans, the portfolio companies usually have, or may be permitted to incur, other debt that ranks above or equally with the

debt securities in which we invest.

In the case of debt ranking above the senior secured second lien term loans in which we invest, we

would be subordinate to such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant

portfolio company and therefore the 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 distribution.

In the case of debt ranking equally with debt securities in

which we invest, we would have to share any distributions on an equal and ratable basis with other creditors holding such debt in the

event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.

Additionally, certain loans that we make to portfolio

companies may be secured on a second priority basis by the same collateral securing senior secured debt of such companies.

priority liens on the collateral will secure the portfolio company’s obligations under any outstanding senior debt and may secure

certain other future debt that may be permitted to be incurred by the portfolio company under the agreements governing the loans.

holders of obligations secured by the first priority liens on the collateral will generally control the liquidation of, and be entitled

to receive proceeds from, any realization of the collateral to repay their obligations in full before us.

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.

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 the second priority liens after payment in full of all obligations secured by the first priority liens on the

If such proceeds are not sufficient to repay amounts outstanding under the loan obligations secured by the second priority

liens, then we, to the extent not repaid from the proceeds of the sale of the collateral, will only have an unsecured claim against the

portfolio company’s remaining assets, if any.

The rights we may have with respect to the collateral

securing the loans we make to our portfolio companies with senior debt outstanding may also be limited pursuant to the terms of one or

more intercreditor agreements that we enter into with the holders of senior debt.

Under such an intercreditor agreement, at any time

that obligations that have the benefit of the first priority liens 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 obligations secured by the first priority liens:

(1) the ability

to cause the commencement of enforcement proceedings against the collateral;

(2) the ability to control the conduct of such proceedings;

(3) the approval of amendments to collateral documents;

(4) releases of liens

on the collateral;

and (5) 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.

portfolio companies may prepay loans, which prepayment may reduce stated yields if capital returned cannot be invested in transactions

with equal or greater expected yields.

loans to portfolio companies are prepayable at any time, and most of them at no premium to par.

It is uncertain as to when each loan

may be prepaid.

Whether a loan is prepaid will depend both on the continued positive performance of the portfolio company and the existence

of favorable financing market conditions that allow such company the ability to replace existing financing with less expensive capital.

As market conditions change frequently, it is unknown when, and if, this may be possible for each portfolio company.

In the case of some

of these loans, having the loan prepaid early may reduce the achievable yield for us below the stated yield to maturity contained herein

if the capital returned cannot be invested in transactions with equal or greater expected yields.

may acquire indirect interests in loans rather than direct interests, which would subject us to additional risk.

may make or acquire loans or investments through participation agreements.

A participation agreement typically results in a contractual

relationship only with the counterparty to the participation agreement and not with the borrower.

In investing through participations,

we will generally not have a right to enforce compliance by the borrower with the terms of the loan agreement against the borrower, and

we may not directly benefit from the collateral supporting the debt obligation in which it has purchased the participation.

we will be exposed to the credit risk of both the borrower and the counterparty selling the participation.

In the event of insolvency

of the counterparty, we, by virtue of holding participation interests in the loan, may be treated as its general unsecured creditor.

In addition, although we may have certain contractual rights under the loan participation that require the counterparty to obtain our

consent prior to taking various actions relating to the loan, we cannot guarantee that the counterparty will seek such consent prior

to taking various actions.

Further, in investing through participation agreements, we may not be able to conduct the due diligence on

the borrower or the quality of the loan with respect to which it is buying a participation that we would otherwise conduct if we were

investing directly in the loan, which may result in us being exposed to greater credit or fraud risk with respect to the borrower or

the loan than we expected when initially purchasing the participation.

failure to make follow-on investments in our portfolio companies could impair the value of our portfolio and our ability to make follow-on

investments in certain portfolio companies may be restricted.

an initial investment in a portfolio company, provided that there are no restrictions imposed by the 1940 Act, we may make additional

investments in that portfolio company as “follow-on”

(4) releases of liens on the collateral;

and (5) 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.

Our portfolio companies may prepay loans,

which prepayment may reduce stated yields if capital returned cannot be invested in transactions with equal or greater expected yields.

Our loans to portfolio companies are prepayable

at any time, and most of them at no premium to par.

It is uncertain as to when each loan may be prepaid.

Whether a loan is prepaid will

depend both on the continued positive performance of the portfolio company and the existence of favorable financing market conditions

that allow such company the ability to replace existing financing with less expensive capital.

As market conditions change frequently,

it is unknown when, and if, this may be possible for each portfolio company.

In the case of some of these loans, having the loan prepaid

early may reduce the achievable yield for us below the stated yield to maturity contained herein if the capital returned cannot be invested

in transactions with equal or greater expected yields.

We may acquire indirect interests in loans rather than direct

interests, which would subject us to additional risk.

We may make or acquire loans or investments through

participation agreements.

A participation agreement typically results in a contractual relationship only with the counterparty to the

participation agreement and not with the borrower.

In investing through participations, we will generally not have a right to enforce

compliance by the borrower with the terms of the loan agreement against the borrower, and we may not directly benefit from the collateral

supporting the debt obligation in which it has purchased the participation.

As a result, we will be exposed to the credit risk of both

the borrower and the counterparty selling the participation.

In the event of insolvency of the counterparty, we, by virtue of holding

participation interests in the loan, may be treated as its general unsecured creditor.

In addition, although we may have certain contractual

rights under the loan participation that require the counterparty to obtain our consent prior to taking various actions relating to the

loan, we cannot guarantee that the counterparty will seek such consent prior to taking various actions.

Further, in investing through

participation agreements, we may not be able to conduct the due diligence on the borrower or the quality of the loan with respect to

which it is buying a participation that we would otherwise conduct if we were investing directly in the loan, which may result in us

being exposed to greater credit or fraud risk with respect to the borrower or the loan than we expected when initially purchasing the

participation.

Our failure to make follow-on investments

in our portfolio companies could impair the value of our portfolio and our ability to make follow-on investments in certain portfolio

companies may be restricted.

Following an initial investment in a portfolio

company, provided that there are no restrictions imposed by the 1940 Act, we may make additional investments in that portfolio company

as “follow-on”

investments in order to:

(1) increase or maintain in whole or in part

our equity ownership percentage;

(2) exercise warrants, options or convertible securities that were acquired in the original or subsequent

or (3) attempt to preserve or enhance the value of our initial investment.

have the discretion to make any follow-on investments, subject to the availability of capital resources.

We may elect not to make follow-on

investments or otherwise lack sufficient funds to make those investments.

Our failure to make follow-on investments may, in some circumstances,

jeopardize the continued viability of a portfolio company and our initial investment, or may result in a missed opportunity for us to

increase our participation in a successful operation.

Even if we have sufficient capital to make a desired follow-on investment, we may

elect not to make such follow-on investment because we may not want to increase our concentration of risk, because we prefer other opportunities,

because we are inhibited by compliance with BDC requirements or because we desire to maintain our RIC tax treatment.

We also may be restricted

from making follow-on investments in certain portfolio companies to the extent that affiliates of ours hold interests in such companies.

borrowers, particularly with respect to asset-based lending activities, may lack the operating history, cash flows or balance sheet necessary

to support other financing options and may expose us to additional risk.

portion of our loan portfolio consists, through FlexFIN, of asset-based lending involving gemstones.

Some of these products arise out

of relationships with clients who lack the operating history, cash flows or balance sheet necessary to qualify for other financing options.

(1) increase or maintain in whole or in part our equity ownership percentage;

exercise warrants, options or convertible securities that were acquired in the original or subsequent financing;

or (3) attempt to preserve

or enhance the value of our initial investment.

We have the discretion to make any follow-on

investments, subject to the availability of capital resources.

We may elect not to make follow-on investments or otherwise lack sufficient

funds to make those investments.

Our failure to make follow-on investments may, in some circumstances, jeopardize the continued viability

of a portfolio company and our initial investment, or may result in a missed opportunity for us to increase our participation in a successful

Even if we have sufficient capital to make a desired follow-on investment, we may elect not to make such follow-on investment

because we may not want to increase our concentration of risk, because we prefer other opportunities, because we are inhibited by compliance

with BDC requirements or because we desire to maintain our RIC tax treatment.

We also may be restricted from making follow-on investments

in certain portfolio companies to the extent that affiliates of ours hold interests in such companies.

As of September 30, 2022, 21.5% of our

total assets were invested in FlexFin, our affiliate’s asset-based lending business.

This significant exposure subjects our Company

to various risks associated with such business (which are identified below) to a much greater extent than companies not similarly concentrated.

Client borrowers, particularly with respect

to asset-based lending activities, may lack the operating history, cash flows or balance sheet necessary to support other financing options

and may expose us to additional risk.

A portion of our loan portfolio consists, through

FlexFIN, of asset-based lending involving gemstones.

Some of these products arise out of relationships with clients who lack the operating

history, cash flows or balance sheet necessary to qualify for other financing options.

This could increase our risk of loss.

affiliate’s asset-based lending activities are influenced by volatility in prices of gemstones and jewelry.

affiliate’s asset-based lending business is impacted by volatility in gemstone and jewelry prices.

Among the factors that can impact

the price of gemstones and jewelry are supply and demand of gemstones;

21.5% of the Company’s total assets (as of September 30,

2022) are invested in our affiliate’s asset-based lending business and its activities are influenced by volatility in prices of

gemstones and jewelry.

Our affiliate’s asset-based lending business

is impacted by volatility in gemstone and jewelry prices.

Among the factors that can impact the price of gemstones and jewelry are supply

and demand of gemstones;

political, economic, and global financial events;

movement of the U.S.

dollar versus other currencies;

and the activity of large speculators and other participants.

A significant decline in market

prices of gemstones could result in reduced collateral value and losses, i.e., a lower balance of asset-based loans outstanding for the

Company’s affiliate.

gemstones and jewelry business is subject to the risk of fraud and counterfeiting.

gemstones business is exposed to the risk of loss as a result of fraud in its various forms.

We seek to minimize our exposure to fraud

through a number of means, including third-party authentication and verification and the establishment of procedures designed to detect

However, there can be no assurance that we will be successful in preventing or identifying fraud, or in obtaining redress in the

event such fraud is detected.

may be subject to risks associated with our investments in unitranche loans

loans provide leverage levels comparable to a combination of first lien and second lien or subordinated loans, and may rank junior to

other debt instruments issued by the portfolio company.

Unitranche loans generally allow the borrower to make a large lump sum payment

of principal at the end of the loan term, and there is a heightened risk of loss if the borrower is unable to pay the lump sum or refinance

the amount owed at maturity.

From the perspective of a lender, in addition to making a single loan, a unitranche loan may allow the lender

to choose to participate in the “first out”

tranche, which will generally receive priority with respect to payments of principal,

interest and any other amounts due, or to choose to participate only in the “last out”

tranche, which is generally paid only

after the first out tranche is paid.

activity of large speculators and other participants.

A significant decline in market prices of gemstones could result in reduced collateral

value and losses, i.e., a lower balance of asset-based loans outstanding for the Company’s affiliate.

The gemstones and jewelry business is subject

to the risk of fraud and counterfeiting.

The gemstones business is exposed to the risk

of loss as a result of fraud in its various forms.

We seek to minimize our exposure to fraud through a number of means, including third-party

authentication and verification and the establishment of procedures designed to detect fraud.

However, there can be no assurance that

we will be successful in preventing or identifying fraud, or in obtaining redress in the event such fraud is detected.

We may be subject to risks associated with

our investments in unitranche loans

Unitranche loans provide leverage levels comparable

to a combination of first lien and second lien or subordinated loans, and may rank junior to other debt instruments issued by the portfolio

Unitranche loans generally allow the borrower to make a large lump sum payment of principal at the end of the loan term, and

there is a heightened risk of loss if the borrower is unable to pay the lump sum or refinance the amount owed at maturity.

From the perspective

of a lender, in addition to making a single loan, a unitranche loan may allow the lender to choose to participate in the “first

tranche, which will generally receive priority with respect to payments of principal, interest and any other amounts due,

or to choose to participate only in the “last out”

tranche, which is generally paid only after the first out tranche is paid.

We may participate in “first out”

and “last out”

tranches of unitranche

loans and make single unitranche loans, and we may suffer losses on such loans if the borrower is unable to make required payments when

Covenant-Lite

Loans may expose us to different risks, including with respect to liquidity, price volatility, ability to restructure loans, credit risks

and less protective loan documentation, than is the case with loans that contain financial maintenance covenants.

significant number of high yield loans in the market, may consist of covenant-lite loans, or “Covenant-Lite Loans.”

A significant

portion of the loans in which we may invest or get exposure to through our investments may be deemed to be Covenant-Lite Loans.

loans do not require the borrower to maintain debt service or other financial ratios and do not include terms which allow the lender

to monitor the performance of the borrower and declare a default if certain criteria are breached.

Ownership of Covenant-Lite Loans may

expose us to different risks, including with respect to liquidity, price volatility, ability to restructure loans, credit risks and less

protective loan documentation, than is the case with loans that contain financial maintenance covenants.

ability to invest in public companies may be limited in certain circumstances.

maintain our tax treatment as a BDC, we are not permitted to acquire any assets other than “qualifying assets”

in the 1940 Act unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets (with certain limited

Subject to certain exceptions for follow-on investments and distressed companies, an investment in an issuer that has outstanding

securities listed on a national securities exchange may be treated as qualifying assets only if such issuer has a market capitalization

that is less than $250 million at the time of such investment.

In addition, we may invest up to 30% of our portfolio in opportunistic

investments which will be intended to diversify or complement the remainder of our portfolio and to enhance our returns to stockholders.

These investments may include private equity investments, securities of public companies that are broadly traded and securities of non-U.S.

We expect that these public companies generally will have debt securities that are non-investment grade.

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

investment strategy contemplates that a portion of our investments may be in securities of foreign companies.

Investing in foreign companies

may expose us to additional risks not typically associated with investing in U.S.

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.

it is anticipated that most of our investments will be denominated in U.S.

dollars, our investments that are denominated in a foreign

currency will be subject to the risk that the value of a particular currency may change in relation to the U.S.

Among the factors

that may affect currency values are trade balances, the level of short-term interest rates, differences in relative values of similar

assets in different currencies, long-term opportunities for investment and capital appreciation and political developments.

We may employ

hedging techniques to minimize these risks, but we can offer no assurance that we will, in fact, hedge currency risk or, that if we do,

such strategies will be effective.

tranches of unitranche loans and make single unitranche loans,

and we may suffer losses on such loans if the borrower is unable to make required payments when due.

Covenant-Lite Loans may expose us to different

risks, including with respect to liquidity, price volatility, ability to restructure loans, credit risks and less protective loan documentation,

than is the case with loans that contain financial maintenance covenants.

A significant number of high yield loans in the

market, may consist of covenant-lite loans, or “Covenant-Lite Loans.”

A significant portion of the loans in which we may

invest or get exposure to through our investments may be deemed to be Covenant-Lite Loans.

Such loans do not require the borrower to

maintain debt service or other financial ratios and do not include terms which allow the lender to monitor the performance of the borrower

and declare a default if certain criteria are breached.

Ownership of Covenant-Lite Loans may expose us to different risks, including

with respect to liquidity, price volatility, ability to restructure loans, credit risks and less protective loan documentation, than

is the case with loans that contain financial maintenance covenants.

Our ability to invest in public companies may be limited in

certain circumstances.

To maintain our tax treatment as a BDC, we are

not permitted to acquire any assets other than “qualifying assets”

specified in the 1940 Act unless, at the time the acquisition

is made, at least 70% of our total assets are qualifying assets (with certain limited exceptions).

Subject to certain exceptions for

follow-on investments and distressed companies, an investment in an issuer that has outstanding securities listed on a national securities

exchange may be treated as qualifying assets only if such issuer has a market capitalization that is less than $250 million at the time

of such investment.

In addition, we may invest up to 30% of our portfolio in opportunistic investments which will be intended to diversify

or complement the remainder of our portfolio and to enhance our returns to stockholders.

These investments may include private equity

investments, securities of public companies that are broadly traded and securities of non-U.S.

We expect that these public

companies generally will have debt securities that are non-investment grade.

Our investments in foreign securities may involve significant

risks in addition to the risks inherent in U.S.

Our investment strategy contemplates that a portion

of our investments may be in securities of foreign companies.

Investing in foreign companies may expose us to additional risks not typically

associated with investing in U.S.

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.

Although it is anticipated that most of our investments

will be denominated in U.S.

dollars, our investments that are denominated in a foreign currency will be subject to the risk that the

value of a particular currency may change in relation to the U.S.

Among the factors that may affect currency values are trade

balances, the level of short-term interest rates, differences in relative values of similar assets in different currencies, long-term

opportunities for investment and capital appreciation and political developments.

We may employ hedging techniques to minimize these

risks, but we can offer no assurance that we will, in fact, hedge currency risk or, that if we do, such strategies will be effective.

As a result, a change in currency exchange rates may adversely affect our profitability.

transactions may expose us to additional risks.

may engage in currency or interest rate hedging transactions.

If we engage in hedging transactions, we may expose ourselves to risks

associated with such transactions.

We may utilize instruments such as forward contracts, currency options and interest rate swaps, caps,

collars and floors to seek to hedge against fluctuations in the relative values of our portfolio positions from changes in currency exchange

rates and market interest rates.

Hedging against a decline in the values of our portfolio positions does not eliminate the possibility

of fluctuations in the values of such positions or prevent losses if the values of such positions decline.

However, such hedging can

establish other positions designed to gain from those same developments, thereby offsetting the decline in the value of such portfolio

Such hedging transaction may also limit the opportunity for gain if the values of the underlying portfolio positions should

Moreover, it may not be possible to hedge against an exchange rate or interest rate fluctuation that is so generally anticipated

that we are not able to enter into a hedging transaction at an acceptable price.

we may enter into transactions to seek to reduce currency exchange rate and interest rate risks, unanticipated changes in currency exchange

rates or interest rates may result in poorer overall investment performance than if we had not engaged in any such hedging transactions.

In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the

portfolio positions being hedged may vary.

Moreover, for a variety of reasons, we may not seek or be able to establish a perfect correlation

between such hedging instruments and the portfolio holdings being hedged.

Any such imperfect correlation may prevent us from achieving

the intended hedge and expose us to risk of loss.

In addition, it may not be possible to hedge fully or perfectly against currency fluctuations

affecting the value of securities denominated in non-U.S.

currencies because the value of those securities is likely to fluctuate as

a result of factors not related to currency fluctuations.

disposition of our investments may result in contingent liabilities.

currently expect that a significant portion of our investments will involve lending directly to private companies.

In connection with

the disposition of an investment in private securities, 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 any such representations turn out to be inaccurate or with respect to certain potential liabilities.

These arrangements may result in contingent liabilities that ultimately yield funding obligations that must be satisfied through our

return of certain distributions previously made to us.

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

may invest in the securities and obligations of distressed and bankrupt issuers, including debt obligations that are in covenant or payment

Such investments generally are considered speculative.

Hedging transactions may expose us to additional risks.

We may engage in currency or interest rate hedging

transactions.

If we engage in hedging transactions, we may expose ourselves to risks associated with such transactions.

We may utilize

instruments such as forward contracts, currency options and interest rate swaps, caps, collars and floors to seek to hedge against fluctuations

in the relative values of our portfolio positions from changes in currency exchange rates and market interest rates.

Hedging against

a decline in the values of our portfolio positions does not eliminate the possibility of fluctuations in the values of such positions

or prevent losses if the values of such positions decline.

However, such hedging can establish other positions designed to gain from

those same developments, thereby offsetting the decline in the value of such portfolio positions.

Such hedging transaction may also limit

the opportunity for gain if the values of the underlying portfolio positions should increase.

Moreover, it may not be possible to hedge

against an exchange rate or interest rate fluctuation that is so generally anticipated that we are not able to enter into a hedging transaction

at an acceptable price.

While we may enter into transactions to seek

to reduce currency exchange rate and interest rate risks, unanticipated changes in currency exchange rates or interest rates may result

in poorer overall investment performance than if we had not engaged in any such hedging transactions.

In addition, the degree of correlation

between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions being hedged may

Moreover, for a variety of reasons, we may not seek or be able to establish a perfect correlation between such hedging instruments

and the portfolio holdings being hedged.

Any such imperfect correlation may prevent us from achieving the intended hedge and expose us

to risk of loss.

In addition, it may not be possible to hedge fully or perfectly against currency fluctuations affecting the value of

securities denominated in non-U.S.

currencies because the value of those securities is likely to fluctuate as a result of factors not

related to currency fluctuations.

The disposition of our investments may result in contingent

We currently expect that a significant portion

of our investments will involve lending directly to private companies.

In connection with the disposition of an investment in private

securities, 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 any such representations turn out to be inaccurate or with respect to certain potential liabilities.

These arrangements may result

in contingent liabilities that ultimately yield funding obligations that must be satisfied through our return of certain distributions

previously made to us.

If we invest in the securities and obligations

of distressed and bankrupt issuers, we might not receive interest or other payments.

We may 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.

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.

We may not realize gains from our equity investments.

may be subject to risks associated with significant investments in one or more economic sectors, including the construction and building

times, the Company may have a significant portion of its assets invested in securities of companies conducting business within one or

more economic sectors, including the construction and building sector.

Companies in the same sector may be similarly affected by economic,

regulatory, political or market events or conditions, which may make the Company more vulnerable to unfavorable developments in that

sector than companies that invest more broadly.

Generally, the more broadly the Company invests, the more it spreads risk and potentially

reduces the risks of loss and volatility.

Company presently has significant exposure to the construction and building sector (its investments in such sector comprise 20.8% of

gross assets as of September 30, 2021), which subjects the Company to the particular risks of such sector to a greater degree than others

not similarly concentrated.

These risks include that the construction and building sector is cyclical and is affected by a number of

factors, including the general condition of the economy, market demand and changes in interest rates.

Construction activity is affected

by the ability to finance projects, which may be reduced due to a widespread outbreak of contagious disease, including an epidemic or

pandemic such as the current COVID-19 pandemic.

Residential, commercial and industrial construction could decline if companies and consumers

are unable to finance construction projects or if the economy precipitously declines or stalls, which could result in delays or cancellations

of capital projects.

A downturn in the residential, commercial or industrial construction industries and general economic conditions

may have an adverse effect on the portfolio companies in which the Company invests.

Related to Our Operations as a BDC and a RIC

governing our operation as a BDC may limit our ability to, and the way in which we raise additional capital, which could have a material

adverse impact on our liquidity, financial condition and results of operations.

business requires a substantial amount of capital to operate and grow.

We may acquire additional capital from the issuance of senior

securities (including debt and preferred stock), the issuance of additional shares of our common stock or from securitization transactions.

However, we may not be able to raise additional capital in the future on favorable terms or at all.

Additionally, we may only issue senior

securities up to the maximum amount permitted by the 1940 Act.

The 1940 Act permits us to issue senior securities only in amounts such

that our asset coverage, as defined in the 1940 Act, equals at least 200% (or 150% if, pursuant to the 1940 Act, certain requirements

are met) after such issuance or incurrence.

If our assets decline in value and we fail to satisfy this test, we may be required to liquidate

a portion of our investments and repay a portion of our indebtedness at a time when such sales or repayment may be disadvantageous, which

could have a material adverse impact on our liquidity, financial condition and results of operations.

As of September 30, 2021, the Company’s

asset coverage was 285.6% after giving effect to leverage and therefore the Company’s asset coverage is above 200%, the minimum

asset coverage requirement under the 1940 Act.

in the laws or regulations governing our business, or changes in the interpretations thereof, and any failure by us to comply with these

laws or regulations, could have a material adverse effect on our business, results of operations or financial condition.

in the laws or regulations or the interpretations of the laws and regulations that govern BDCs, RICs or non-depository commercial lenders

could significantly affect our operations and our cost of doing business.

We are subject to federal, state and local laws and regulations

and are subject to judicial and administrative decisions that affect our operations, including our loan originations, maximum interest

rates, fees and other charges, disclosures to portfolio companies, the terms of secured transactions, collection and foreclosure procedures

and other trade practices.

If these laws, regulations or decisions change, or if we expand our business into jurisdictions that have

adopted more stringent requirements than those in which we currently conduct business, we may have to incur significant expenses in order

to comply, or we might have to restrict our operations.

In addition, if we do not comply with applicable laws, regulations and decisions,

we may lose licenses needed for the conduct of our business and may be subject to civil fines and criminal penalties.

an internally managed BDC, we are subject to certain restrictions that may adversely affect our ability to offer certain compensation

an internally managed BDC, our ability to offer more competitive and flexible compensation structures, such as offering both a profit-sharing

plan and an equity incentive plan, is subject to the limitations imposed by the 1940 Act, which limits our ability to attract and retain

talented investment management professionals.

As such, these limitations could inhibit our ability to grow, pursue our business plan

and attract and retain professional talent, any or all of which may have a negative impact on our business, financial condition and results

of operations.

an internally managed BDC, we are dependent upon our management team and investment professionals for their time availability and for

our future success, and if we are not able to hire and retain qualified personnel, or if we lose key members of our senior management

team, our ability to implement our business strategy could be significantly harmed.

an internally managed BDC, our ability to achieve our investment objectives and to make distributions to our stockholders depends upon

the performance of our management team and investment professionals.

We depend upon the members of our management and our investment

professionals for the identification, final selection, structuring, closing and monitoring of our investments.

These employees have critical

industry experience and relationships on which we rely to implement our business plan.

If we lose the services of key members of our

senior management team, we may not be able to operate the business as we expect, and our ability to compete could be harmed, which could

cause our operating results to suffer.

We believe our future success will depend, in part, on our ability to identify, attract and retain

sufficient numbers of highly skilled employees.

If we do not succeed in identifying, attracting and retaining such personnel, we may

not be able to operate our business as we expect.

As an internally managed BDC, our compensation structure is determined and set by our

Board of Directors and its Compensation Committee.

We may be subject to risks associated with

significant investments in one or more economic sectors and/or industries, including the business services sector, which includes our

investment in our affiliate’s asset-based lending business.

At times, the Company may have a significant

portion of its assets invested in securities of companies conducting business within one or more economic sectors and/or industries,

including the Services:

Business sector, which includes our investment in an asset-based lending business.

Companies in the same sector

or industry may be similarly affected by economic, regulatory, political or market events or conditions, which may make the Company more

vulnerable to unfavorable developments in that sector or industry than companies that invest more broadly.

Generally, the more broadly

the Company invests, the more it spreads risk and potentially reduces the risks of loss and volatility.

As of September 30, 2022, investments in our

affiliate’s asset-based lending business constituted 21.5% of our total assets.

See above, under Item 1A for risk factors related

to our investment in that business.

Risks Related to Our Operations as a BDC and a RIC

Regulations governing our operation as

a BDC may limit our ability to, and the way in which we raise additional capital, which could have a material adverse impact on our liquidity,

financial condition and results of operations.

Our business requires a substantial amount of

capital to operate and grow.

We may acquire additional capital from the issuance of senior securities (including debt and preferred stock),

the issuance of additional shares of our common stock or from securitization transactions.

However, we may not be able to raise additional

capital in the future on favorable terms or at all.

Additionally, we may only issue senior securities up to the maximum amount permitted

by the 1940 Act.

The 1940 Act permits us to issue senior securities only in amounts such that our asset coverage, as defined in the 1940

Act, equals at least 200% (or 150% if, pursuant to the 1940 Act, certain requirements are met) after such issuance or incurrence.

our assets decline in value and we fail to satisfy this test, we may be required to liquidate a portion of our investments and repay

a portion of our indebtedness at a time when such sales or repayment may be disadvantageous, which could have a material adverse impact

on our liquidity, financial condition and results of operations.

As of September 30, 2022, the Company’s asset coverage was 255.0%

after giving effect to leverage and therefore the Company’s asset coverage is above 200%, the minimum asset coverage requirement

under the 1940 Act.

Changes in the laws or regulations governing

our business, or changes in the interpretations thereof, and any failure by us to comply with these laws or regulations, could have a

material adverse effect on our business, results of operations or financial condition.

Changes in the laws or regulations or the interpretations

of the laws and regulations that govern BDCs, RICs or non-depository commercial lenders could significantly affect our operations and

our cost of doing business.

We are subject to federal, state and local laws and regulations and are subject to judicial and administrative

decisions that affect our operations, including our loan originations, maximum interest rates, fees and other charges, disclosures to

portfolio companies, the terms of secured transactions, collection and foreclosure procedures and other trade practices.

If these laws,

regulations or decisions change, or if we expand our business into jurisdictions that have adopted more stringent requirements than those

in which we currently conduct business, we may have to incur significant expenses in order to comply, or we might have to restrict our

In addition, if we do not comply with applicable laws, regulations and decisions, we may lose licenses needed for the conduct

of our business and may be subject to civil fines and criminal penalties.

As an internally managed BDC, we are subject

to certain restrictions that may adversely affect our ability to offer certain compensation structures.

As an internally managed BDC, our ability to

offer more competitive and flexible compensation structures, such as offering both a profit-sharing plan and an equity incentive plan,

is subject to the limitations imposed by the 1940 Act, which limits our ability to attract and retain talented investment management

professionals.

As such, these limitations could inhibit our ability to grow, pursue our business plan and attract and retain professional

talent, any or all of which may have a negative impact on our business, financial condition and results of operations.

As an internally managed BDC, we are dependent

upon our management team and investment professionals for their time availability and for our future success, and if we are not able

to hire and retain qualified personnel, or if we lose key members of our senior management team, our ability to implement our business

strategy could be significantly harmed.

As an internally managed BDC, our ability to

achieve our investment objectives and to make distributions to our stockholders depends upon the performance of our management team and

investment professionals.

We depend upon the members of our management and our investment professionals for the identification, final

selection, structuring, closing and monitoring of our investments.

These employees have critical industry experience and relationships

on which we rely to implement our business plan.

If we lose the services of key members of our senior management team, we may not be

able to operate the business as we expect, and our ability to compete could be harmed, which could cause our operating results to suffer.

We believe our future success will depend, in part, on our ability to identify, attract and retain sufficient numbers of highly skilled

If we do not succeed in identifying, attracting and retaining such personnel, we may not be able to operate our business as

As an internally managed BDC, our compensation structure is determined and set by our Board of Directors and its Compensation

This structure currently includes salary, bonus and incentive compensation.

not generally permitted by the 1940 Act to employ an incentive compensation structure that directly ties performance of our investment

portfolio and results of operations to incentive compensation.

Members of our senior management team may receive offers of more flexible

and attractive compensation arrangements from other companies, particularly from investment advisers to externally managed BDCs that

are not subject to the same limitations on incentive-based compensation that we are subject to as an internally managed BDC.

by one or more members of our senior management team could have a negative impact on our business, financial condition and results of

have internalized our operating structure, including our management and investment functions; as a result, we may incur significant

costs and face significant risks associated with being self-managed, including adverse effects on our business and financial condition.

January 1, 2021, we operate under an internalized operating structure, including our management and investment functions.

no assurances that internalizing our operating structure will be beneficial to us and our stockholders, as we may incur the costs and

risks discussed below and may not be able to effectively replicate or improve upon the services previously provided to us by our former

investment adviser and administrator, MCC Advisors.

we will no longer bear the costs of the various fees and expenses we previously paid to MCC Advisors under the Investment Advisory Agreement,

our direct expenses will generally include general and administrative costs, including legal, accounting, and other expenses related

to corporate governance, SEC reporting and compliance, as well as costs and expenses related to making and managing our investments.

We will also now incur the compensation and benefits costs of our officers and other employees and consultants, and, subject to adherence

to applicable law, we may issue equity or other incentive-based awards to our officers, employees and consultants, which awards may decrease

net income and funds from our operations and may dilute our stockholders.

We may also 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

addition, if the expenses we assume as a result of our internalization are higher than the expenses we would have paid and/or reimbursed

to MCC Advisors, our earnings per share may be lower as a result of our 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.

in connection with internalizing our operating structure, we may experience difficulty integrating these functions as a stand-alone entity,

and we could have difficulty retaining our personnel, including those performing management, investment and general and administrative

These personnel have a great deal of know-how and experience.

We may also fail to properly identify the appropriate mix of

personnel and capital needs to operate successfully as a stand-alone entity.

An inability to effectively manage our internalization could

result in our incurring excess costs and operating inefficiencies, and may divert our management’s attention from managing our

Internalization

transactions have also, in some cases, been the subject of litigation.

Even if these claims are without merit, we could be forced to

spend significant amounts of time and money defending claims, which would reduce the amount of funds available for us to make investments

and to pay distributions, and may divert our management’s attention from managing our investments.

of these factors could have a material adverse effect on our results of operations, financial condition, and ability to pay distributions.

impact of financial reform legislation on us is uncertain.

Dodd-Frank Reform Act became effective on July 21, 2010.

Many provisions of the Dodd-Frank Reform Act have delayed effective dates or

have required extensive rulemaking by regulatory authorities.

The recent presidential and congressional elections may cause uncertainty

regarding the implementation of the Dodd-Frank Reform Act and other financial reform rulemaking.

Given the uncertainty associated with

the manner in which and whether the provisions of the Dodd-Frank Act will be implemented, repealed, amended, or replaced, the full impact

such requirements will have on our business, results of operations or financial condition is unclear.

The changes resulting from the

Dodd-Frank Act or any changes to the regulations already implemented thereunder may require us to invest significant management attention

and resources to evaluate and make necessary changes in order to comply with new statutory and regulatory requirements.

Failure to comply

with any such laws, regulations or principles, or changes thereto, may negatively impact our business, results of operations or financial

While we cannot predict what effect any changes in the laws or regulations or their interpretations would have on us as a

result of recent financial reform legislation, these changes could be materially adverse to us and our stockholders.

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

affect our business.

or other actions relating to taxes could have a negative effect on us, our investments or our stockholders.

We are not generally permitted by the 1940 Act

to employ an incentive compensation structure that directly ties performance of our investment portfolio and results of operations to

incentive compensation.

Members of our senior management team may receive offers of more flexible and attractive compensation arrangements

from other companies, particularly from investment advisers to externally managed BDCs that are not subject to the same limitations on

incentive-based compensation that we are subject to as an internally managed BDC.

A departure by one or more members of our senior management

team could have a negative impact on our business, financial condition and results of operations.

We have internalized our operating structure,

including our management and investment functions; as a result, we may incur significant costs and face significant risks associated

with being self-managed, including adverse effects on our business and financial condition.

Effective January 1, 2021, we operate under an

internalized operating structure, including our management and investment functions.

There can be no assurances that internalizing our

operating structure will be beneficial to us and our stockholders, as we may incur the costs and risks discussed below and may not be

able to effectively replicate or improve upon the services previously provided to us by our former investment adviser and administrator,

MCC Advisors.

While we will no longer bear the costs of the

various fees and expenses we previously paid to MCC Advisors under the Investment Advisory Agreement, our direct expenses will generally

include general and administrative costs, including legal, accounting, and other expenses related to corporate governance, SEC reporting

and compliance, as well as costs and expenses related to making and managing our investments.

We will also now incur the compensation

and benefits costs of our officers and other employees and consultants, and, subject to adherence to applicable law, we may issue equity

or other incentive-based awards to our officers, employees and consultants, which awards may decrease net income and funds from our operations

and may dilute our stockholders.

We may also 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.

In addition, if the expenses we assume as a result

of our internalization are higher than the expenses we would have paid and/or reimbursed to MCC Advisors, our earnings per share may

be lower as a result of our 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.

Further, in connection with internalizing our

operating structure, we may experience difficulty integrating these functions as a stand-alone entity, and we could have difficulty retaining

our personnel, including those performing management, investment and general and administrative functions.

These personnel have a great

deal of know-how and experience.

We may also fail to properly identify the appropriate mix of personnel and capital needs to operate

successfully as a stand-alone entity.

An inability to effectively manage our internalization could result in our incurring excess costs

and operating inefficiencies, and may divert our management’s attention from managing our investments.

Internalization transactions have also, in some

cases, been the subject of litigation.

Even if these claims are without merit, we could be forced to spend significant amounts of time

and money defending claims, which would reduce the amount of funds available for us to make investments and to pay distributions, and

may divert our management’s attention from managing our investments.

All of these factors could have a material adverse

effect on our results of operations, financial condition, and ability to pay distributions.

The impact of financial reform legislation on us is uncertain.

The Dodd-Frank Reform Act became effective on

July 21, 2010.

Many provisions of the Dodd-Frank Reform Act have delayed effective dates or have required extensive rulemaking by regulatory

The recent presidential and congressional elections may cause uncertainty regarding the implementation of the Dodd-Frank

Reform Act and other financial reform rulemaking.

Given the uncertainty associated with the manner in which and whether the provisions

of the Dodd-Frank Act will be implemented, repealed, amended, or replaced, the full impact such requirements will have on our business,

results of operations or financial condition is unclear.

The changes resulting from the Dodd-Frank Act or any changes to the regulations

already implemented thereunder may require us to invest significant management attention and resources to evaluate and make necessary

changes in order to comply with new statutory and regulatory requirements.

Failure to comply with any such laws, regulations or principles,

or changes thereto, may negatively impact our business, results of operations or financial condition.

While we cannot predict what effect

any changes in the laws or regulations or their interpretations would have on us as a result of recent financial reform legislation,

these changes could be materially adverse to us and our stockholders.

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, our investments or our stockholders.

The rules dealing with U.S.

federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S.

of the Treasury.

We cannot predict with certainty how any changes in the tax laws might affect us, our stockholders, or our portfolio

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 advisors regarding tax legislative, regulatory, or administrative developments and proposals and their potential effect on an investment

in our securities.

that became effective in 2018 may allow the Company to incur additional leverage, which could increase the risk of investing in the Company.

1940 Act generally prohibits the Company 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, in March 2018,

the SBCA was signed into law, which included various changes to regulations under the federal securities laws that impact BDCs.

included changes to the 1940 Act to allow BDCs to decrease their asset coverage requirement from 200% to 150%, if certain requirements

Under the 1940 Act, the Company is allowed to increase its leverage capacity if our stockholders representing at least a majority

of the votes cast, when a quorum is present, approve a proposal to do so.

If we receive stockholder approval, we would be allowed to

increase our leverage capacity on the first day after such approval.

Alternatively, the 1940 Acts allows the majority of our independent

directors to approve an increase in our leverage capacity, and such approval would become effective after the one-year anniversary of

such proposal.

In either case, 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.

is generally considered a speculative investment technique and increases the risk of investing in our securities.

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, our stockholders will experience increased risks of investing in our securities.

If the value of our assets increases, then

leveraging would cause the NAV attributable to our common stock to increase more sharply than it would have had we not leveraged.

if the value of our assets decreases, leveraging would cause NAV 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 the Company’s ability to pay common

stock dividends, scheduled debt payments or other payments related to our securities.

we do not invest a sufficient portion of our assets in qualifying assets, we could fail to qualify as a BDC, which would have a material

adverse effect on our business, financial condition and results of operations.

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.

federal income taxation are constantly

under review by persons involved in the legislative process and by the IRS and the U.S.

Department of the Treasury.

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

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 advisors regarding tax legislative,

regulatory, or administrative developments and proposals and their potential effect on an investment in our securities.

Legislation that became effective in 2018

may allow the Company to incur additional leverage, which could increase the risk of investing in the Company.

The 1940 Act generally prohibits the Company

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, in March 2018, the SBCA was signed into law, which included

various changes to regulations under the federal securities laws that impact BDCs.

The SBCA included changes to the 1940 Act to allow

BDCs to decrease their asset coverage requirement from 200% to 150%, if certain requirements are met.

Under the 1940 Act, the Company

is allowed to increase its leverage capacity if our stockholders representing at least a majority of the votes cast, when a quorum is

present, approve a proposal to do so.

If we receive stockholder approval, we would be allowed to increase our leverage capacity on the

first day after such approval.

Alternatively, the 1940 Acts allows the majority of our independent directors to approve an increase in

our leverage capacity, and such approval would become effective after the one-year anniversary of such proposal.

In either case, 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.

Leverage is generally considered a speculative

investment technique and increases the risk of investing in our securities.

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, our stockholders will experience

increased risks of investing in our securities.

If the value of our assets increases, then leveraging would cause the NAV 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 NAV 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 the Company’s ability to pay common stock dividends, scheduled debt payments

or other payments related to our securities.

If we do not invest a sufficient portion

of our assets in qualifying assets, we could fail to qualify as a BDC, which would have a material adverse effect on our business, financial

condition and results of operations.

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.

See “Regulation”.

Our intent is that a substantial portion

of the investments that we acquire will constitute qualifying assets.

However, we may be precluded from investing in what we believe

are attractive investments if such investments are not qualifying assets for purposes of the 1940 Act.

If we do not invest a sufficient

portion of our assets in qualifying assets, we could be found to be in violation of the 1940 Act provisions applicable to BDCs and possibly

lose our tax treatment as a BDC, which would have a material adverse effect on our business, financial condition and results of operations.

will become subject to corporate-level U.S.

federal income tax if we are unable to maintain our qualification as a regulated investment

company under Subchapter M of the Code or satisfy regulated investment company distribution requirements.

have elected, and intend to qualify annually, to be treated as a RIC under Subchapter M of the Code.

No assurance can be given that we

will be able to maintain our qualification as a RIC.

To maintain RIC tax treatment under the Code, we must meet the following annual

distribution, income source and asset diversification requirements.

annual distribution requirement for a RIC is satisfied if we timely distribute to our stockholders

on an annual basis at least 90% of our net ordinary income and realized short-term capital

Our intent is that a substantial portion of the investments that we acquire will

constitute qualifying assets.

However, we may be precluded from investing in what we believe are attractive investments if such investments

are not qualifying assets for purposes of the 1940 Act.

If we do not invest a sufficient portion of our assets in qualifying assets,

we could be found to be in violation of the 1940 Act provisions applicable to BDCs and possibly lose our tax treatment as a BDC, which

would have a material adverse effect on our business, financial condition and results of operations.

We will become subject to corporate-level

federal income tax if we are unable to maintain our qualification as a RIC under Subchapter M of the Code or satisfy RIC distribution

requirements.

We have elected, and intend to qualify annually,

to be treated as a RIC under Subchapter M of the Code.

No assurance can be given that we will be able to maintain our qualification as

To maintain RIC tax treatment under the Code, we must meet the following annual distribution, income source and asset diversification

requirements.

The annual distribution requirement for a RIC is satisfied

if we timely distribute to our stockholders on an annual basis at least 90% of our net ordinary income and realized short-term capital

gains in excess of realized net long-term capital losses.

Depending on the level of taxable

income earned in a tax year, we may choose to carry forward taxable income in excess of current

year distributions into the next year and pay a 4% U.S.

federal excise tax on such income.

Any such carryover taxable income must be distributed through a dividend declared prior to

filing the final tax return related to the year that generated such taxable income.

source of income requirement is satisfied if we obtain at least 90% of our gross income for

each taxable year from dividends, interest, payments with respect to certain securities loans,

gains from the sale or other disposition of stock or other securities or foreign 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 “qualified publicly traded

partnership”

Depending on the level of taxable income earned in a tax year, we may choose

to carry forward taxable income in excess of current year distributions into the next year and pay a 4% U.S.

federal excise tax on

Any such carryover taxable income must be distributed through a dividend declared prior to filing the final tax return

related to the year that generated such taxable income.

The source of income requirement is satisfied if we

obtain at least 90% of our gross income for each taxable year from dividends, interest, payments with respect to certain securities

loans, gains from the sale or other disposition of stock or other securities or foreign 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 “qualified

publicly traded partnership”

(as defined in the Code).

asset diversification requirement is 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 (which for these purposes includes the equity securities

of a “qualified publicly traded partnership”).

In addition, 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, (1) of one issuer (2) 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 (3) of one or more “qualified publicly traded partnerships”.

we fail to qualify for RIC tax treatment for any reason or are subject to corporate-level U.S.

federal income tax, the resulting corporate-level

taxes could substantially reduce our net assets, the amount of income available for distribution and the amount of our distributions.

In addition, to the extent we had unrealized gains, we would have to establish deferred tax liabilities for taxes, which would reduce

our NAV accordingly.

In addition, our stockholders would lose the tax credit realized if we, as a RIC, decide to retain the net realized

capital gain and make deemed distributions of net realized capital gains, and pay taxes on behalf of our stockholders at the end of the

The loss of this pass-through tax treatment could have a material adverse effect on the total return of an investment in our

common stock.

Relating to an Investment in Our Securities

in our securities may involve an above average degree of risk.

investments we make in accordance with our investment objective may result in a higher amount of risk than alternative investment options

and a higher risk of volatility or loss of principal.

Our investments in portfolio companies involve higher levels of risk and, therefore,

an investment in our securities may not be suitable for someone with lower risk tolerance.

of closed-end investment companies, including business development companies, may, at times, trade at a discount to their NAV.

of closed-end investment companies, including business development companies, may, at times, trade at a discount from NAV.

This characteristic

of closed-end investment companies and business development companies is separate and distinct from the risk that our NAV per share may

Our common stock has recently traded and currently trades at a discount to NAV, and we cannot predict whether our common stock

will trade at, above or below NAV in the future.

market price of our common stock may fluctuate significantly.

market price and liquidity of the market for shares of our common stock may be significantly affected by numerous factors, some of which

are beyond our control and may not be directly related to our operating performance.

These factors

● significant

volatility in the market price and trading volume of securities of business development companies

or other companies in our sector, which are not necessarily related to the operating performance

of the companies;

in regulatory policies, accounting pronouncements or tax guidelines, particularly with respect

to BDCs or RICs;

of our qualification as a RIC or BDC;

in earnings or variations in operating results;

in the value of our portfolio of investments;

in accounting guidelines governing valuation of our investments;

shortfall in revenue or net income or any increase in losses from levels expected by investors

or securities analysts;

of our key personnel;

performance of companies comparable to us;

economic trends and other external factors;

of a major funding source;

length and duration of the COVID-19 outbreak in the U.S.

as well as worldwide and the magnitude

of the economic impact of that outbreak.

of substantial amounts of our common stock in the public market may have an adverse effect on the market price of our common stock.

of substantial amounts of our common stock, or the availability of such common stock for sale, could adversely affect the prevailing

market prices for our common stock.

If this occurs and continues, it could impair our ability to raise additional capital through the

sale of securities should we desire to do so.

provisions of the Delaware General Corporation Law and our certificate of incorporation and bylaws could deter takeover attempts and

have an adverse impact on the price of our common stock.

Delaware General Corporation Law, our certificate of incorporation and our bylaws contain provisions that may have the effect of discouraging

a third party from making an acquisition proposal for us.

These anti-takeover provisions may inhibit a change in control in circumstances

that could give the holders of our common stock the opportunity to realize a premium over the market price of our common stock.

NAV per share of our common stock may be diluted if we sell shares of our common stock in one or more offerings at prices below the then

current NAV per share of our common stock or securities to subscribe for or convertible into shares of our common stock.

we currently do not have the requisite stockholder approval to sell shares of our common stock at a price or prices below our then current

NAV per share, we may seek such approval in the future.

In addition, at our 2012 Annual Meeting of Stockholders, we received approval

from our stockholders to authorize the Company, with the approval of our board of directors, to issue securities to, subscribe to, convert

to, or purchase shares of the Company’s common stock in one or more offerings, subject to certain conditions as set forth in the

proxy statement.

The asset diversification requirement is 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 (which for these purposes includes the equity securities of a “qualified

publicly traded partnership”).

In addition, 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, (1) of one issuer (2) 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 (3)

of one or more “qualified publicly traded partnerships”.

If we fail to qualify for RIC tax treatment for

any reason or are subject to corporate-level U.S.

federal income tax, the resulting corporate-level taxes could substantially reduce

our net assets, the amount of income available for distribution and the amount of our distributions.

In addition, to the extent we had

unrealized gains, we would have to establish deferred tax liabilities for taxes, which would reduce our NAV accordingly.

our stockholders would lose the tax credit realized if we, as a RIC, decide to retain the net realized capital gain and make deemed distributions

of net realized capital gains, and pay taxes on behalf of our stockholders at the end of the tax year.

The loss of this pass-through

tax treatment could have a material adverse effect on the total return of an investment in our common stock.

Risks Relating to an Investment in Our Securities

Investing in our securities may involve an above average degree

The investments we make in accordance with our

investment objective may result in a higher amount of risk than alternative investment options and a higher risk of volatility or loss

of principal.

Our investments in portfolio companies involve higher levels of risk and, therefore, an investment in our securities may

not be suitable for someone with lower risk tolerance.

Shares of closed-end investment companies,

including business development companies, may, at times, trade at a discount to their NAV.

Shares of closed-end investment companies, including

business development companies, may, at times, trade at a discount from NAV.

This characteristic of closed-end investment companies and

business development companies is separate and distinct from the risk that our NAV per share may decline.

Our common stock has recently

traded and currently trades at a discount to NAV, and we cannot predict whether our common stock will trade at, above or below NAV in

The market price of our common stock may fluctuate significantly.

The market price and liquidity of the market

for shares of our common stock may be significantly affected by numerous factors, some of which are beyond our control and may not be

directly related to our operating performance.

These factors include:

significant volatility in the market price and trading

volume of securities of business development companies or other companies in our sector, which are not necessarily related to the

operating performance of the companies;

changes in regulatory policies, accounting pronouncements

or tax guidelines, particularly with respect to BDCs or RICs;

loss of our qualification as a RIC or BDC;

changes in earnings or variations in operating results;

changes in the value of our portfolio of investments;

changes in accounting guidelines governing valuation of our investments;

any shortfall in revenue or net income or any increase in losses from levels

expected by investors or securities analysts;

departure of our key personnel;

operating performance of companies comparable to us;

general economic trends and other external factors;

loss of a major funding source;

the length and duration of the COVID-19 outbreak in

as well as worldwide and the magnitude of the economic impact of that outbreak.

Sales of substantial amounts of our common

stock in the public market may have an adverse effect on the market price of our common stock.

Sales of substantial amounts of our common stock,

or the availability of such common stock for sale, could adversely affect the prevailing market prices for our common stock.

occurs and continues, it could impair our ability to raise additional capital through the sale of securities should we desire to do so.

Certain provisions of the Delaware General Corporation Law and

our certificate of incorporation and bylaws could deter takeover attempts and have an adverse impact on the price of our common stock.

The Delaware General Corporation Law, our certificate

of incorporation and our bylaws contain provisions that may have the effect of discouraging a third party from making an acquisition

proposal for us.

These anti-takeover provisions may inhibit a change in control in circumstances that could give the holders of our common

stock the opportunity to realize a premium over the market price of our common stock.

The NAV per share of our common stock may

be diluted if we sell shares of our common stock in one or more offerings at prices below the then current NAV per share of our common

stock or securities to subscribe for or convertible into shares of our common stock.

While we currently do not have the requisite

stockholder approval to sell shares of our common stock at a price or prices below our then current NAV per share, we may seek such approval

in the future.

In addition, at our 2012 Annual Meeting of Stockholders, we received approval from our stockholders to authorize the Company,

with the approval of our board of directors, to issue securities to, subscribe to, convert to, or purchase shares of the Company’s

common stock in one or more offerings, subject to certain conditions as set forth in the proxy statement.

Such authorization has no expiration.

decision to sell shares of our common stock below its then current NAV per share or issue securities to subscribe for or convertible

into shares of our common stock would be subject to the determination by our board of directors that such issuance is in our and our

stockholders’

Any decision to sell shares of our common stock

below its then current NAV per share or issue securities to subscribe for or convertible into shares of our common stock would be subject

to the determination by our board of directors that such issuance is in our and our stockholders’

best interests.

we were to sell shares of our common stock below its then current NAV per share, such sales would result in an immediate dilution to

the NAV per share of our common stock.

This dilution would occur as a result of the sale of shares at a price below the then current

NAV per share of our common stock and a proportionately greater decrease in the stockholders’

interest in our earnings and assets

and their voting interest in us than the increase in our assets resulting from such issuance.

Because the number of shares of common

stock that could be so issued and the timing of any issuance is not currently known, the actual dilutive effect cannot be predicted.

we issue warrants or securities to subscribe for or convertible into shares of our common stock, subject to certain limitations, the

exercise or conversion price per share could be less than NAV per share at the time of exercise or conversion (including through the

operation of anti-dilution protections).

Because we would incur expenses in connection with any issuance of such securities, such issuance

could result in a dilution of the NAV per share at the time of exercise or conversion.

This dilution would include reduction in NAV per

share as a result of the proportionately greater decrease in the stockholders’

interest in our earnings and assets and their voting

interest than the increase in our assets resulting from such issuance.

if our current stockholders do not purchase any shares to maintain their percentage interest, regardless of whether such offering is

above or below the then current NAV per share, their voting power will be diluted.

For example, if we sell an additional 10% of our shares

of common stock at a 5% discount from NAV, a stockholder who does not participate in that offering for its proportionate interest will

suffer NAV dilution of up to 0.5% or $5 per $1,000 of NAV.

Notes are unsecured and therefore are effectively subordinated to any secured indebtedness we have currently incurred or may incur in

Notes are not secured by any of our assets or any of the assets of our subsidiaries.

As a result, the Notes are effectively subordinated

to any secured indebtedness we or our subsidiaries have currently incurred and may incur in the future (or any indebtedness that is initially

unsecured to which we subsequently grant security) to the extent of the value of the assets securing such indebtedness.

In any liquidation,

dissolution, bankruptcy or other similar proceeding, the holders of any of our existing or future secured indebtedness and the secured

indebtedness of our subsidiaries may assert rights against the assets pledged to secure that indebtedness in order to receive full payment

of their indebtedness before the assets may be used to pay other creditors, including the holders of the Notes.

Notes are structurally subordinated to the indebtedness and other liabilities of our subsidiaries.

Notes are obligations exclusively of the Company and not of any of our subsidiaries.

None of our subsidiaries is a guarantor of the Notes

and the Notes are not required to be guaranteed by any subsidiary we may acquire or create in the future.

Any assets of our subsidiaries

will not be directly available to satisfy the claims of our creditors, including holders of the Notes.

Except to the extent we are a

creditor with recognized claims against our subsidiaries, all claims of creditors of our subsidiaries will have priority over our equity

interests in such subsidiaries (and therefore the claims of our creditors, including holders of the Notes) with respect to the assets

of such subsidiaries.

Even if we are recognized as a creditor of one or more of our subsidiaries, our claims would still be effectively

subordinated to any security interests in the assets of any such subsidiary and to any indebtedness or other liabilities of any such

subsidiary senior to our claims.

Consequently, the Notes will be structurally subordinated to all indebtedness and other liabilities

of any of our subsidiaries and any subsidiaries that we may in the future acquire or establish.

Although our subsidiaries currently do

not have any indebtedness outstanding, they may incur substantial indebtedness in the future, all of which would be structurally senior

to the Notes.

indenture under which the Notes were issued contains limited protection for holders of the Notes.

indenture under which the Notes were issued offers limited protection to holders of the Notes.

The terms of the indenture and the Notes

do not restrict our or any of our subsidiaries’

ability to engage in, or otherwise be a party to, a variety of corporate transactions,

circumstances or events that could have an adverse impact on your investment in the Notes.

In particular, the terms of the indenture

and the Notes place no restrictions on our or our subsidiaries’

securities or otherwise incur additional indebtedness or other obligations, including (1)

any indebtedness or other obligations that would be equal in right of payment to the Notes,

(2) any indebtedness or other obligations that would be secured and therefore rank effectively

senior in right of payment to the Notes to the extent of the values of the assets securing

such debt, (3) indebtedness of ours that is guaranteed by one or more of our subsidiaries

and which therefore is structurally senior to the Notes and (4) securities, indebtedness

or obligations issued or incurred by our subsidiaries that would be senior to our equity

interests in our subsidiaries and therefore rank structurally senior to the Notes with respect

to the assets of our subsidiaries, in each case other than an incurrence of indebtedness

or other obligation that would cause a violation of Section 18(a)(1)(A) of the 1940 Act,

as modified by Section 61(a)(1) of the 1940 Act, or any successor provisions.

These provisions

generally prohibit us from making additional borrowings, including through the issuance of

additional debt or the sale of additional debt securities, unless our asset coverage, as

defined in the 1940 Act, equals at least 200% after such borrowings.

As of September 30,

2021 the Company’s asset coverage was 285.6% after giving effect to leverage;

dividends on, or purchase or redeem or make any payments in respect of, capital stock or

other securities ranking junior in right of payment to the Notes, in each case other than

dividends, purchases, redemptions or payments that would cause a violation of Section 18(a)(1)(B)

of the 1940 Act, as modified by Section 61(a)(1) of the 1940 Act, or any successor provisions.

These provisions generally prohibit us from declaring any cash dividend or distribution upon

any class of our capital stock, or purchasing any such capital stock if our asset coverage,

as defined in the 1940 Act, is below 200% at the time of the declaration of the dividend

or distribution or the purchase and after deducting the amount of such dividend, distribution

As of September 30, 2021, the Company’s asset coverage was 285.6% after

giving effect to leverage;

assets (other than certain limited restrictions on our ability to consolidate, merge or sell

all or substantially all of our assets);

into transactions with affiliates;

liens (including liens on the shares of our subsidiaries) or enter into sale and leaseback

transactions;

restrictions on the payment of dividends or other amounts to us from our subsidiaries.

the indenture does not require us to offer to purchase the Notes in connection with a change of control or any other event.

the terms of the indenture and the Notes generally do not protect holders of the Notes in the event that we experience changes (including

significant adverse changes) in our financial condition, results of operations or credit ratings, as they do not require that we or our

subsidiaries adhere to any financial tests or ratios or specified levels of net worth, revenues, income, cash flow, or liquidity other

than as described under the indenture.

Any changes, while unlikely, to the financial tests in the 1940 Act could affect the terms of

ability to recapitalize, incur additional debt and take a number of other actions that are not limited by the terms of the Notes may

have important consequences for you as a holder of the Notes, including making it more difficult for us to satisfy our obligations with

respect to the Notes or negatively affecting the trading value of the Notes.

Other debt we issue or incur in the future could contain

more protections for its holders than the indenture and the Notes, including additional covenants and events of default.

or incurrence of any such debt with incremental protections could affect the market for and trading levels and prices of the Notes.

active trading market for the Notes may not develop or be sustained, which could limit the market price of the Notes or your ability

to sell them.

the Notes are listed on the NASDAQ Global Market (“NASDAQ”) under the symbols “PFXNL,”, we cannot provide any assurances

that an active trading market will develop or be sustained for the Notes or that you will be able to sell your Notes.

At various times,

the Notes may trade at a discount from their initial offering price depending on prevailing interest rates, the market for similar securities,

our credit ratings, general economic conditions, our financial condition, performance and prospects and other factors.

To the extent

an active trading market is not sustained, the liquidity and trading price for the Notes may be harmed.

we default on obligations to pay other indebtedness, we may not be able to make payments on the Notes.

default under the agreements governing our indebtedness that we may incur in the future that is not waived by the required lenders, and

the remedies sought by the holders of such indebtedness could make us unable to pay principal, premium, if any, and interest on the Notes

and substantially decrease the market value of the Notes.

If we are unable to generate sufficient cash flow and are otherwise unable

to obtain funds necessary to meet required payments of principal, premium, if any, and interest on our indebtedness, or if we otherwise

fail to comply with the various covenants, including financial and operating covenants, in the instruments governing our indebtedness,

we could be in default under the terms of the agreements governing such indebtedness.

In the event of such default, the holders of such

indebtedness could elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest,

the lenders under the other debt we may incur in the future could elect to terminate their commitments, cease making further loans and

institute foreclosure proceedings against our assets, and we could be forced into bankruptcy or liquidation.

If our operating performance

declines, we may in the future need to seek to obtain waivers from the required lenders under the debt that we may incur in the future

to avoid being in default.

If we breach our covenants under our debt and seek a waiver, we may not be able to obtain a waiver from the

required lenders.

If this occurs, we would be in default under such debt, the lenders could exercise their rights as described above,

and we could be forced into bankruptcy or liquidation.

If we are unable to repay debt, lenders having secured obligations could proceed

against the collateral securing the debt.

Because any future credit facility will likely have customary cross-default provisions, if

the indebtedness under the Notes or under any future credit facility is accelerated, we may be unable to repay or finance the amounts

may choose to redeem the Notes when prevailing interest rates are relatively low.

may choose to redeem the Notes from time to time, especially if prevailing interest rates are lower than the rate borne by the Notes.

If prevailing rates are lower at the time of redemption, and we redeem the Notes, you likely would not be able to reinvest the redemption

proceeds in a comparable security at an effective interest rate as high as the interest rate on the Notes being redeemed.

Our redemption

right also may adversely impact your ability to sell the Notes as the optional redemption date or period approaches.

we issue preferred stock, the NAV and market value of our common stock may become more volatile.

we issue preferred stock, we cannot assure you that such issuance would result in a higher yield or return to the holders of our common

The issuance of preferred stock would likely cause the NAV and market value of our common stock to become more volatile.

dividend rate on the preferred stock were to approach the net rate of return on our investment portfolio, the benefit of leverage to

the holders of our common stock would be reduced.

If the dividend rate on the preferred stock were to exceed the net rate of return on

our portfolio, the leverage would result in a lower rate of return to the holders of our common stock than if we had not issued preferred

Any decline in the NAV of our investments would be borne entirely by the holders of our common stock.

Therefore, if the market

value of our portfolio were to decline, the leverage would result in a greater decrease in NAV to the holders of our common stock than

if we were not leveraged through the issuance of preferred stock.

This greater NAV decrease would also tend to cause a greater decline

in the market price for our common stock.

We might be in danger of failing to maintain the required asset coverage of the preferred stock

or of losing our ratings on the preferred stock or, in an extreme case, our current investment income might not be sufficient to meet

the dividend requirements on the preferred stock.

In order to counteract such an event, we might need to liquidate investments in order

to fund a redemption of some or all of the preferred stock.

In addition, we would pay (and the holders of our common stock would bear)

all costs and expenses relating to the issuance and ongoing maintenance of the preferred stock, including higher advisory fees if our

total return exceeds the dividend rate on the preferred stock.

Holders of preferred stock may have different interests than holders of

our common stock and may at times have disproportionate influence over our affairs.

of any preferred stock we might issue would have the right to elect members of the board of directors and class voting rights on certain

of any preferred stock we might issue, voting separately as a single class, would have the right to elect two members of the board of

directors at all times and in the event dividends become two full years in arrears, would have the right to elect a majority of our directors

until such arrearage is completely eliminated.

In addition, preferred stockholders would have class voting rights on certain matters,

including changes in fundamental investment restrictions and conversion to open-end status, and accordingly would be able to veto any

such changes.

Restrictions imposed on the declarations and payment of dividends or other distributions to the holders of our common stock

and preferred stock, both by the 1940 Act and by requirements imposed by rating agencies or the terms of any credit facility to which

MCC is a party, might impair our ability to maintain our qualification as a RIC for U.S.

If we were to sell shares of our common stock

below its then current NAV per share, such sales would result in an immediate dilution to the NAV per share of our common stock.

dilution would occur as a result of the sale of shares at a price below the then current NAV per share of our common stock and a proportionately

greater decrease in the stockholders’

interest in our earnings and assets and their voting interest in us than the increase in

our assets resulting from such issuance.

Because the number of shares of common stock that could be so issued and the timing of any issuance

is not currently known, the actual dilutive effect cannot be predicted.

If we issue warrants or securities to subscribe

for or convertible into shares of our common stock, subject to certain limitations, the exercise or conversion price per share could

be less than NAV per share at the time of exercise or conversion (including through the operation of anti-dilution protections).

we would incur expenses in connection with any issuance of such securities, such issuance could result in a dilution of the NAV per share

at the time of exercise or conversion.

This dilution would include reduction in NAV per share as a result of the proportionately greater

decrease in the stockholders’

interest in our earnings and assets and their voting interest than the increase in our assets resulting

from such issuance.

Further, if our current stockholders do not purchase

any shares to maintain their percentage interest, regardless of whether such offering is above or below the then current NAV per share,

their voting power will be diluted.

For example, if we sell an additional 10% of our shares of common stock at a 5% discount from NAV,

a stockholder who does not participate in that offering for its proportionate interest will suffer NAV dilution of up to 0.5% or $5 per

$1,000 of NAV.

The Notes are unsecured and therefore are

effectively subordinated to any secured indebtedness we have currently incurred or may incur in the future.

The Notes are not secured by any of our assets

or any of the assets of our subsidiaries.

As a result, the Notes are effectively subordinated to any secured indebtedness we or our subsidiaries

have currently incurred and may incur in the future (or any indebtedness that is initially unsecured to which we subsequently grant security)

to the extent of the value of the assets securing such indebtedness.

In any liquidation, dissolution, bankruptcy or other similar proceeding,

the holders of any of our existing or future secured indebtedness and the secured indebtedness of our subsidiaries may assert rights

against the assets pledged to secure that indebtedness in order to receive full payment of their indebtedness before the assets may be

used to pay other creditors, including the holders of the Notes.

The Notes are structurally subordinated to the indebtedness

and other liabilities of our subsidiaries.

The Notes are obligations exclusively of the

Company and not of any of our subsidiaries.

None of our subsidiaries is a guarantor of the Notes and the Notes are not required to be

guaranteed by any subsidiary we may acquire or create in the future.

Any assets of our subsidiaries will not be directly available to

satisfy the claims of our creditors, including holders of the Notes.

Except to the extent we are a creditor with recognized claims against

our subsidiaries, all claims of creditors of our subsidiaries will have priority over our equity interests in such subsidiaries (and

therefore the claims of our creditors, including holders of the Notes) with respect to the assets of such subsidiaries.

Even if we are

recognized as a creditor of one or more of our subsidiaries, our claims would still be effectively subordinated to any security interests

in the assets of any such subsidiary and to any indebtedness or other liabilities of any such subsidiary senior to our claims.

Consequently,

the Notes will be structurally subordinated to all indebtedness and other liabilities of any of our subsidiaries and any subsidiaries

that we may in the future acquire or establish.

Although our subsidiaries currently do not have any indebtedness outstanding, they may

incur substantial indebtedness in the future, all of which would be structurally senior to the Notes.

The indenture under which the Notes were issued contains limited

protection for holders of the Notes.

The indenture under which the Notes were issued

offers limited protection to holders of the Notes.

The terms of the indenture and the Notes do not restrict our or any of our subsidiaries’

ability to engage in, or otherwise be a party to, a variety of corporate transactions, circumstances or events that could have an adverse

impact on your investment in the Notes.

In particular, the terms of the indenture and the Notes place no restrictions on our or our subsidiaries’

issue securities or otherwise incur additional indebtedness

or other obligations, including (1) any indebtedness or other obligations that would be equal in right of payment to the Notes, (2)

any indebtedness or other obligations that would be secured and therefore rank effectively senior in right of payment to the Notes

to the extent of the values of the assets securing such debt, (3) indebtedness of ours that is guaranteed by one or more of our subsidiaries

and which therefore is structurally senior to the Notes and (4) securities, indebtedness or obligations issued or incurred by our

subsidiaries that would be senior to our equity interests in our subsidiaries and therefore rank structurally senior to the Notes

with respect to the assets of our subsidiaries, in each case other than an incurrence of indebtedness or other obligation that would

cause a violation of Section 18(a)(1)(A) of the 1940 Act, as modified by Section 61(a)(1) of the 1940 Act, or any successor provisions.

These provisions generally prohibit us from making additional borrowings, including through the issuance of additional debt or the

sale of additional debt securities, unless our asset coverage, as defined in the 1940 Act, equals at least 200% after such borrowings.

As of September 30, 2022 the Company’s asset coverage was 255.0% after giving effect to leverage;

pay dividends on, or purchase or redeem or make any

payments in respect of, capital stock or other securities ranking junior in right of payment to the Notes, in each case other than

dividends, purchases, redemptions or payments that would cause a violation of Section 18(a)(1)(B) of the 1940 Act, as modified by

Section 61(a)(1) of the 1940 Act, or any successor provisions.

These provisions generally prohibit us from declaring any cash dividend

or distribution upon any class of our capital stock, or purchasing any such capital stock if our asset coverage, as defined in the

1940 Act, is below 200% at the time of the declaration of the dividend or distribution or the purchase and after deducting the amount

of such dividend, distribution or purchase.

As of September 30, 2022, the Company’s asset coverage was 255.0% after giving

effect to leverage;

sell assets (other than certain limited restrictions

on our ability to consolidate, merge or sell all or substantially all of our assets);

enter into transactions with affiliates;

create liens (including liens on the shares of our subsidiaries) or enter

into sale and leaseback transactions;

make investments;

create restrictions on the payment of dividends or other amounts to us

from our subsidiaries.

In addition, the indenture does not require us

to offer to purchase the Notes in connection with a change of control or any other event.

Furthermore, the terms of the indenture and the

Notes generally do not protect holders of the Notes in the event that we experience changes (including significant adverse changes) in

our financial condition, results of operations or credit ratings, as they do not require that we or our subsidiaries adhere to any financial

tests or ratios or specified levels of net worth, revenues, income, cash flow, or liquidity other than as described under the indenture.

Any changes, while unlikely, to the financial tests in the 1940 Act could affect the terms of the Notes.

Our ability to recapitalize, incur additional

debt and take a number of other actions that are not limited by the terms of the Notes may have important consequences for you as a holder

of the Notes, including making it more difficult for us to satisfy our obligations with respect to the Notes or negatively affecting

the trading value of the Notes.

Other debt we issue or incur in the future could contain more protections for its holders than the indenture

and the Notes, including additional covenants and events of default.

The issuance or incurrence of any such debt with incremental protections

could affect the market for and trading levels and prices of the Notes.

The indentures under which the 2023 Notes

and 2028 Notes are issued place restrictions on our and/or our subsidiaries’

The terms of the indentures under which the 2023

Notes and 2028 Notes were issued place restrictions on our and/or our subsidiaries’

ability to, among other things issue securities

or otherwise incur additional indebtedness or other obligations, including (1) any indebtedness or other obligations that would be equal

in right of payment to the 2023 Notes and 2028 Notes, (2) any indebtedness or other obligations that would be secured and therefore rank

effectively senior in right of payment to the 2023 Notes and 2028 Notes to the extent of the values of the assets securing such debt,

(3) indebtedness of ours that is guaranteed by one or more of our subsidiaries and which therefore is structurally senior to the 2023

Notes or 2028 Notes and (4) securities, indebtedness or obligations issued or incurred by our subsidiaries that would be senior

to our equity interests in our subsidiaries and therefore rank structurally senior to the 2023 Notes with respect to the assets of our

subsidiaries, in each case other than an incurrence of indebtedness or other obligation that would cause a violation of Section 18(a)(1)(A)

of the 1940 Act, as modified by Section 61(a)(1) of the 1940 Act, or any successor provisions and, with respect to the 2028 Notes, except

as would cause our asset coverage to be below 200% as a result of such borrowings and/or issuances, whether or not we continue to be

subject to the regulations of the 1940 Act.

These provisions generally prohibit us from making additional borrowings, including through

the issuance of additional debt or the sale of additional debt securities, unless our asset coverage, as defined in the 1940 Act, equals

at least 200% after such borrowings.

As of September 30, 2022, the Company’s asset coverage was 255.0% after giving effect to leverage.

These provisions generally prohibit us from declaring any cash dividend or distribution upon any class of our capital stock or purchasing

any such capital stock if our asset coverage, as defined in the 1940 Act, is below 200% at the time of the declaration of the dividend

or distribution or the purchase and after deducting the amount of such dividend, distribution or purchase.

An active trading market for the Notes

may not develop or be sustained, which could limit the market price of the Notes or your ability to sell them.

Although the Notes are listed on the NASDAQ Global

Market (“NASDAQ”) under the symbols “PFXNL”, we cannot provide any assurances that an active trading market will

develop or be sustained for the Notes or that you will be able to sell your Notes.

At various times, the Notes may trade at a discount

from their initial offering price depending on prevailing interest rates, the market for similar securities, our credit ratings, general

economic conditions, our financial condition, performance and prospects and other factors.

To the extent an active trading market is

not sustained, the liquidity and trading price for the Notes may be harmed.

If we default on obligations to pay other

indebtedness, we may not be able to make payments on the Notes.

Any default under the agreements governing our

indebtedness that we may incur in the future that is not waived by the required lenders, and the remedies sought by the holders of such

indebtedness could make us unable to pay principal, premium, if any, and interest on the Notes and substantially decrease the market

value of the Notes.

If we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary to meet required

payments of principal, premium, if any, and interest on our indebtedness, or if we otherwise fail to comply with the various covenants,

including financial and operating covenants, in the instruments governing our indebtedness, we could be in default under the terms of

the agreements governing such indebtedness.

In the event of such default, the holders of such indebtedness could elect to declare all

the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest, the lenders under the other debt we may

incur in the future could elect to terminate their commitments, cease making further loans and institute foreclosure proceedings against

our assets, and we could be forced into bankruptcy or liquidation.

If our operating performance declines, we may in the future need to

seek to obtain waivers from the required lenders under the debt that we may incur in the future to avoid being in default.

our covenants under our debt and seek a waiver, we may not be able to obtain a waiver from the required lenders.

If this occurs, we would

be in default under such debt, the lenders could exercise their rights as described above, and we could be forced into bankruptcy or

If we are unable to repay debt, lenders having secured obligations could proceed against the collateral securing the debt.

Because any future credit facility will likely have customary cross-default provisions, if the indebtedness under the Notes or under

any future credit facility is accelerated, we may be unable to repay or finance the amounts due.

We may choose to redeem the Notes when prevailing interest rates

are relatively low.

We may choose to redeem the Notes from time to

time, especially if prevailing interest rates are lower than the rate borne by the Notes.

If prevailing rates are lower at the time of

redemption, and we redeem the Notes, you likely would not be able to reinvest the redemption proceeds in a comparable security at an

effective interest rate as high as the interest rate on the Notes being redeemed.

Our redemption right also may adversely impact your

ability to sell the Notes as the optional redemption date or period approaches.

If we issue preferred stock, the NAV and market value of our

common stock may become more volatile.

If we issue preferred stock, we cannot assure

you that such issuance would result in a higher yield or return to the holders of our common stock.

The issuance of preferred stock would

likely cause the NAV and market value of our common stock to become more volatile.

If the dividend rate on the preferred stock were to

approach the net rate of return on our investment portfolio, the benefit of leverage to the holders of our common stock would be reduced.

If the dividend rate on the preferred stock were to exceed the net rate of return on our portfolio, the leverage would result in a lower

rate of return to the holders of our common stock than if we had not issued preferred stock.

Any decline in the NAV of our investments

would be borne entirely by the holders of our common stock.

Therefore, if the market value of our portfolio were to decline, the leverage

would result in a greater decrease in NAV to the holders of our common stock than if we were not leveraged through the issuance of preferred

This greater NAV decrease would also tend to cause a greater decline in the market price for our common stock.

We might be in

danger of failing to maintain the required asset coverage of the preferred stock or of losing our ratings on the preferred stock or,

in an extreme case, our current investment income might not be sufficient to meet the dividend requirements on the preferred stock.

order to counteract such an event, we might need to liquidate investments in order to fund a redemption of some or all of the preferred

In addition, we would pay (and the holders of our common stock would bear) all costs and expenses relating to the issuance and

ongoing maintenance of the preferred stock, including higher advisory fees if our total return exceeds the dividend rate on the preferred

Holders of preferred stock may have different interests than holders of our common stock and may at times have disproportionate

influence over our affairs.

Holders of any preferred stock we might

issue would have the right to elect members of the board of directors and class voting rights on certain matters.

Holders of any preferred stock we might issue,

voting separately as a single class, would have the right to elect two members of the board of directors at all times and in the event

dividends become two full years in arrears, would have the right to elect a majority of our directors until such arrearage is completely

In addition, preferred stockholders would have class voting rights on certain matters, including changes in fundamental investment

restrictions and conversion to open-end status, and accordingly would be able to veto any such changes.

Restrictions imposed on the declarations

and payment of dividends or other distributions to the holders of our common stock and preferred stock, both by the 1940 Act and by requirements

imposed by rating agencies or the terms of any credit facility to which MCC is a party, might impair our ability to maintain our qualification

as a RIC for U.S.

federal income tax purposes.

While we would

intend to redeem our preferred stock to the extent necessary to enable us to distribute our income as required to maintain our qualification

as a RIC, there can be no assurance that such actions could be effected in time to meet the tax requirements.

While we would intend to redeem our preferred stock to the extent necessary to enable

us to distribute our income as required to maintain our qualification as a RIC, there can be no assurance that such actions could be

effected in time to meet the tax requirements.

Unresolved Staff Comments

do not own any real estate or other physical properties materially important to our operation.

We have entered into a 5-year operating

lease for our headquarters at 445 Park Avenue, 10th Floor, New York, NY 10022.

We do not own any real estate or other physical

properties materially important to our operation.

We have entered into a 5-year operating lease for our headquarters at 445 Park Avenue,

10th Floor, New York, NY 10022.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors