What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-03-11 compared with 2021-03-12 · 2098 added, 923 removed, 382 unchanged (89% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

to Consolidated Financial Statements

of Independent Registered Public Accounting Firm

Statement of Assets and Liabilities as of December 31, 2020 and December 31, 2019

Statement of Operations for the Period January 23, 2020 (Commencement of Operations) through December 31, 2020

Statement of Changes in Net Assets for the Period January 23, 2020 (Commencement of Operations) through December 31, 2020

Statement of Cash Flows for the Period January 23, 2020 (Commencement of Operations) through December 31, 2020

Schedule of Investments as of December 31, 2020

to Consolidated Financial Statements

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Consolidated Statement of Assets and Liabilities as of December 31, 2021 and December 31, 2020

Consolidated Statement of Operations for the year ended December 31, 2021 and the Period January 23, 2020 (Commencement of Operations) through December 31, 2020

Consolidated Statement of Changes in Net Assets for the year ended December 31, 2021 and the Period January 23, 2020 (Commencement of Operations) through December 31, 2020

Consolidated Statement of Cash Flows for the year ended December 31, 2021 and the Period January 23, 2020 (Commencement of Operations) through December 31, 2020

Consolidated Schedule of Investments as of December 31, 2021 and 2020

Notes to Consolidated Financial Statements

of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

of Palmer Square Capital BDC Inc.

To the Board of Directors and Stockholders of

Palmer Square Capital BDC Inc.

Opinion on the Financial Statements

We have audited the accompanying statement

of assets and liabilities, including the schedule of investments, of Palmer Square Capital BDC Inc.

We have audited the accompanying consolidated statements of assets and

liabilities, including the consolidated schedules of investments, of Palmer Square Capital BDC Inc.

and its subsidiaries (the “Company”)

as of December 31, 2020, and the related statements of operations, changes in net assets and cash flows for the period from January

23, 2020 (commencement of operations) to December 31, 2020, including the related notes.

In addition, we have audited the accompanying

statement of assets and liabilities of the Company as of December 31, 2019 (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of

December 31, 2020 and December 31, 2019, and the results of its operations, changes in its net assets and its cash flows for the

period from January 23, 2020 (commencement of operations) to December 31, 2020 in conformity with accounting principles generally

accepted in the United States of America.

as of December 31, 2021 and 2020, and the related consolidated statements of operations, changes in net assets and cash flows for the

year ended December 31, 2021 and for the period from January 23, 2020 (commencement of operations) to December 31, 2020, including the

related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial

statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results

of its operations, changes in its net assets and its cash flows for the year ended December 31, 2021 and for the period from January 23,

2020 (commencement of operations) to December 31, 2020 in conformity with accounting principles generally accepted in the United States

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based

on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial

statements in accordance with the standards of the PCAOB.

These consolidated financial statements are the responsibility of the Company’s

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required

to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations

of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated

financial statements in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures

to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures

in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made

by management, as well as evaluating the overall presentation of the financial statements.

Our procedures included confirmation

of securities owned as of December 31, 2020 by correspondence with the custodian, agent banks and brokers;

when replies were not

received from brokers or agent banks, we performed other auditing procedures.

We believe that our audits provide a reasonable basis

for our opinion.

reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing

an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material

misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as

evaluating the overall presentation of the consolidated financial statements.

Our procedures included confirmation of securities owned

as of December 31, 2021 and 2020 by correspondence with the custodian, brokers and agent banks;

when replies were not received from brokers

or agent banks, we performed other auditing procedures.

We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

1 unchanged sentence

March 11, 2022

We have served as the auditor of Palmer

Square Capital BDC Inc.

Statement of Assets and Liabilities

(Unconsolidated)

Non-controlled, non-affiliated investments, at fair value (amortized cost of $640,100,635)

We have served as the Company’s auditor since 2019.

Palmer Square Capital BDC Inc.

Consolidated Statement of Assets and Liabilities

Non-controlled, non-affiliated investments, at fair value (amortized cost of $1,189,713,653 and $640,100,635, respectively)

$ 1,194,257,584

$ 653,156,200

Cash and cash equivalents

6 unchanged sentences

$ 1,217,286,149

Credit facility, net (Note 6)

$ 667,490,101

Payable to affiliate for organizational costs

Credit facilities, net (Note 6)

$ 649,910,497

$ 393,152,103

Payable for investments purchased

1 unchanged sentence

Management fee payable

Directors fee payable

Accrued other general and administrative expenses

1 unchanged sentence

$ 764,488,561

$ 414,345,130

Commitments and contingencies (Note 8)

6 unchanged sentences

$ 452,797,588

$ 253,144,971

Total Liabilities and Net Assets

$ 1,217,286,149

Net Asset Value Per Common Share

$ 667,490,101

The accompanying notes are an integral part

of these consolidated financial statements.

Square Capital BDC Inc.

Statement of Operations

For the Period January 23, 2020 (Commencement of Operations) through

Net Asset Value Per Common Share

The accompanying notes are an integral part of

these consolidated financial statements.

Palmer Square Capital BDC Inc.

Consolidated Statement of Operations

For the Period

(Commencement of Operations) through

Investment income from non-controlled, non-affiliated investments:

25 unchanged sentences

Basic and diluted net increase in net assets resulting from operations

Weighted Average Common Shares Outstanding - Basic and Diluted

The accompanying notes are an integral part

of these consolidated financial statements.

Square Capital BDC Inc.

Statement of Changes in Net Assets

For the Period January 23, 2020 (Commencement of Operations) through

Weighted Average Common Shares Outstanding –

Basic and Diluted

The accompanying notes are an integral part of

these consolidated financial statements.

Palmer Square Capital BDC Inc.

Consolidated Statement of Changes in Net Assets

For the Period

(Commencement of Operations) through

Increase (Decrease) in Net Assets Resulting from Operations:

6 unchanged sentences

(17,845,775 )

(12,181,659 )

Distributions declared from realized gains

Net Decrease in Net Assets Resulting from Stockholder Distributions

(25,952,493 )

(12,181,659 )

Increase in Net Assets Resulting from Capital Share Transactions

6 unchanged sentences

$ 452,797,588

The accompanying notes are an integral part

of these consolidated financial statements.

Square Capital BDC Inc.

$ 253,144,971

The accompanying notes are an integral part of

these consolidated financial statements.

Palmer Square Capital BDC Inc.

Consolidated Statement of Cash Flows

For the Year Ended

For the Period January 23, 2020 (Commencement of Operations) through

1 unchanged sentence

Net increase (decrease) in net assets resulting from operations

Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash used in operating activities:

Adjustments to reconcile net increase (decrease) in net assets

resulting from operations to net cash used in operating activities:

Net realized (gains)/losses on investments

4 unchanged sentences

(662,604,311 )

(664,542,585 )

Purchases of portfolio investments

(926,351,937 )

(854,515,933 )

Proceeds from sale of short-term investments

7 unchanged sentences

(Increase)/decrease in receivable for paydowns of investments

(Increase)/decrease in prepaid expenses and other assets

Increase/(decrease) in payable for investments purchased

Increase/(decrease) in management fees payable

Increase/(decrease) in directors fee payable

Increase/(decrease) in accrued other general and administrative expenses

1 unchanged sentence

(438,011,310 )

(623,170,895 )

Cash Flows from Financing Activities:

Borrowings on credit facility

Payments on credit facility

Payments of debt issuance costs

10 unchanged sentences

Distributions payable

The accompanying notes are an integral part

of these consolidated financial statements.

Square Capital BDC Inc.

Schedule of Investments

The accompanying notes are an integral part of

these consolidated financial statements.

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2021

Portfolio Company (3)

Interest Rate

of Net Assets

Debt Investments

First Lien Senior Secured (2)

AAdvantage Loyalty IP Ltd.

5.50% (L + 4.75%)

AccentCare, Inc.

Healthcare Providers and Services

4.18% (L + 4.00%)

Acrisure, LLC (7)

3.63% (L + 3.50%)

Acrisure, LLC (7)

4.75% (L + 4.25%)

AHP Health Partners, Inc.

Healthcare Equipment and Supplies

4.00% (L + 3.50%)

AI Aqua Merger Sub, Inc., (5)(7)(8)

Food Products

4.50% (L + 4.00%)

Aimbridge Acquisition Co., Inc.

Hotels, Restaurants and Leisure

3.84% (L + 3.75%)

Air Methods Corporation (7)

Aerospace and Defense

4.50% (L + 3.50%)

Alliant Holdings Intermediate LLC (7)

4.00% (L + 3.50%)

Allied Universal Holdco LLC (7)

Professional Services

4.25% (L + 3.75%)

Alterra Mountain Company (7)

Hotels, Restaurants and Leisure

4.00% (L + 3.50%)

Amentum Government Services Holdings LLC (7)

Aerospace and Defense

3.60% (L + 3.50%)

Amentum Government Services Holdings LLC (7)

Aerospace and Defense

5.50% (L + 4.75%)

American Airlines, Inc.

2.11% (L + 2.00%)

American Airlines, Inc.

1.85% (L + 1.75%)

American Rock Salt Company LLC (7)

Metals and Mining

4.75% (L + 4.00%)

Amynta Agency Borrower, Inc.

4.60% (L + 4.50%)

AP Gaming I, LLC (7)

Hotels, Restaurants and Leisure

4.50% (L + 3.50%)

Applovin Corporation (4)(7)

3.50% (L + 3.00%)

Aptean Inc (5)(7)(8)

4.35% (L + 4.25%)

AQA Acquisition Holding, Inc.

4.75% (L + 4.25%)

ARC Falcon I Inc.

4.25% (L + 3.75%)

Arches Buyer Inc.

Leisure Products

3.75% (L + 3.25%)

Aristocrat International PTY Ltd (4)(5)(7)(8)

Hotels, Restaurants and Leisure

4.75% (L + 3.75%)

Aruba Investments Holdings, LLC (7)

4.75% (L + 4.00%)

Ascend Learning, LLC (5)(7)

Professional Services

4.00% (L + 3.50%)

AssuredPartners, Inc.

4.00% (L + 3.50%)

Athenahealth, Inc.

Healthcare Equipment and Supplies

4.40% (L + 4.25%)

Autokiniton US Holdings, Inc.

Auto Components

5.00% (L + 4.50%)

Diversified Telecommunication Services

4.11% (L + 4.00%)

Diversified Telecommunication Services

4.36% (L + 4.25%)

Aveanna Healthcare LLC (4)(7)

Healthcare Providers and Services

4.25% (L + 3.75%)

Azalea TopCo, Inc.

Healthcare Technology

3.63% (L + 3.50%)

Barracuda Networks, Inc.

4.50% (L + 3.75%)

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2021

Portfolio Company (3)

Interest Rate

of Net Assets

BCP Raptor, LLC (5)(7)

Oil, Gas and Consumable Fuels

5.25% (L + 4.25%)

BCP Renaissance Parent L.L.C.

Oil, Gas and Consumable Fuels

4.50% (L + 3.50%)

Belfor Holdings Inc.

Commercial Services and Supplies

3.85% (L + 3.75%)

Boxer Parent Company, Inc.

3.88% (L + 3.75%)

Caesars Resort Collection, LLC (4)(7)

Hotels, Restaurants and Leisure

3.60% (L + 3.50%)

Castle US Holding Corporation (8)

Professional Services

3.88% (L + 3.75%)

Castle US Holding Corporation (8)

Professional Services

4.75% (L + 4.00%)

CCI Buyer, Inc.

Wireless Telecommunication Services

4.50% (L + 3.75%)

CCS-CMGC Holdings, Inc.

Healthcare Providers and Services

5.63% (L + 5.50%)

CHG Healthcare Services, Inc (7)

Healthcare Providers and Services

4.00% (L + 3.50%)

Connectwise LLC (7)

4.00% (L + 3.50%)

Consolidated Communications, Inc.

Diversified Telecommunication Services

4.25% (L + 3.50%)

ConvergeOne Holdings Corp.

5.10% (L + 5.00%)

Corelogic, Inc.

Internet Software and Services

4.00% (L + 3.50%)

CP Atlas Buyer, Inc (7)

Building Products

4.25% (L + 3.75%)

Creation Technologies, Inc.

Electronic Equipment, Instruments and Components

6.00% (L + 5.50%)

Curia Global, Inc.

Healthcare Providers and Services

4.50% (L + 3.75%)

DCert Buyer, Inc.

4.10% (L + 4.00%)

Deerfield Dakota Holding, LLC (7)

Diversified Financial Services

4.75% (L + 3.75%)

Delek US Holdings, Inc.

Oil, Gas and Consumable Fuels

6.50% (L + 5.50%)

Delta Topco, Inc.

4.50% (L + 3.75%)

Digi International Inc.

Technology Hardware, Storage and Peripherals

5.50% (L + 5.00%)

DIRECTV Financing, LLC (7)

5.75% (L + 5.00%)

Dotdash Meredith, Inc.

4.50% (C + SCA + 4.00%)

EAB Global, Inc.

Professional Services

4.00% (L + 3.50%)

ECI Software Solutions, Inc.

4.50% (L + 3.75%)

ECL Entertainment, LLC (8)

Hotels, Restaurants and Leisure

8.25% (L + 7.50%)

EFS Cogen Holdings I LLC (5)(7)(8)

Independent Power and Renewable Electricity Producers

4.50% (L + 3.50%)

Endurance International Group, Inc.

Professional Services

4.25% (L + 3.50%)

Ensemble RCM, LLC (7)

Healthcare Technology

3.88% (L + 3.75%)

Enterprise Development Authority (8)

Hotels, Restaurants and Leisure

5.00% (L + 4.25%)

Epicor Software Corporation (7)

4.00% (L + 3.25%)

Excelitas Technologies Corp.

Industrial Conglomerates

4.50% (L + 3.50%)

Filtration Group Corporation (7)

Industrial Conglomerates

4.00% (L + 3.50%)

Flexera Software LLC (7)(8)

4.50% (L + 3.75%)

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2021

Portfolio Company (3)

Interest Rate

of Net Assets

Generation Bridge Acquisition, LLC (5)(8)

Electric Utilities

5.75% (L + 5.00%)

Generation Bridge Acquisition, LLC (5)(8)

Electric Utilities

5.75% (L + 5.00%)

Getty Images, Inc.

4.63% (L + 4.50%)

GFL Environmental Inc.

Commercial Services and Supplies

3.50% (L + 3.00%)

Global Medical Response, Inc.

Healthcare Providers and Services

5.25% (L + 4.25%)

Grab Holdings Inc (4)(5)(7)

5.50% (L + 4.50%)

Great Outdoors Group, LLC (7)

Specialty Retail

4.50% (L + 3.75%)

Grinding Media Inc.

Metals and Mining

4.75% (L + 4.00%)

HAH Group Holding Company LLC (7)

Healthcare Providers and Services

6.00% (L + 5.00%)

HAH Group Holding Company LLC (7)

Healthcare Providers and Services

6.00% (L + 5.00%)

Hamilton Projects Acquiror LLC (7)(8)

Independent Power and Renewable Electricity Producers

5.50% (L + 4.50%)

Harbor Freight Tools USA, Inc.

Specialty Retail

3.25% (L + 2.75%)

Help/Systems Holdings, Inc.

4.75% (L + 4.00%)

HUB International Limited (7)

4.00% (L + 3.25%)

Hyland Software, Inc.

4.25% (L + 3.50%)

Hyperion Refinance S.a.r.l.

4.00% (L + 3.25%)

4.50% (L + 3.75%)

IMA Financial Group, Inc.

4.25% (L + 3.75%)

Infinite Bidco LLC (7)

Electronic Equipment, Instruments and Components

4.25% (L + 3.75%)

Professional Services

5.00% (L + 4.00%)

IRB Holding Corporation (7)

Hotels, Restaurants and Leisure

4.25% (L + 3.25%)

Ivanti Software, Inc.

4.75% (L + 4.00%)

Ivanti Software, Inc.

5.00% (L + 4.25%)

Jack Ohio Finance LLC (8)

Hotels, Restaurants and Leisure

5.50% (L + 4.75%)

Kestrel Acquisition LLC (7)

Independent Power and Renewable Electricity Producers

5.25% (L + 4.25%)

Kleopatra Finco S.a.r.l (4)(7)

Containers and Packaging

5.25% (L + 4.75%)

Landry’s Finance Acquisition Co

Hotels, Restaurants and Leisure

13.00% (L + 12.00%)

LBM Acquisition LLC (5)(7)(8)

Building Products

4.50% (L + 3.75%)

Life Time, Inc.

Hotels, Restaurants and Leisure

5.75% (L + 4.75%)

Lifescan Global Corporation (5)(7)

Healthcare Equipment and Supplies

6.13% (L + 6.00%)

Lightstone Holdco, LLC

Independent Power and Renewable Electricity Producers

4.75% (L + 3.75%)

Lightstone Holdco, LLC

Independent Power and Renewable Electricity Producers

4.75% (L + 3.75%)

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2021

Portfolio Company (3)

Interest Rate

of Net Assets

Lions Gate Capital Holdings LLC (4)(7)

2.35% (L + 2.25%)

LogMeIn, Inc.

4.86% (L + 4.75%)

Lucid Energy Group II Borrower, LLC (7)

Oil, Gas and Consumable Fuels

5.00% (L + 4.25%)

Magenta Buyer LLC (7)

5.75% (L + 5.00%)

McAfee, LLC (4)(7)

3.84% (L + 3.75%)

Medical Solutions L.L.C.

Healthcare Providers and Services

4.00% (L + 3.50%)

MetroNet Systems Holdings, LLC (7)(8)

Diversified Telecommunication Services

4.50% (L + 3.75%)

Michael Baker International, LLC (8)

Construction and Engineering

5.75% (L + 5.00%)

Micro Holding Corp.

4.75% (L + 3.75%)

Midwest Veterinary Partners, LLC (5)(7)

Healthcare Providers and Services

4.75% (L + 4.00%)

Milano Acquisition Corporation (7)

Healthcare Providers and Services

4.75% (L + 4.00%)

Minotaur Acquisition, Inc.

Diversified Financial Services

4.84% (L + 4.75%)

Mitchell International, Inc.

Professional Services

4.25% (L + 3.75%)

MLN US HoldCo LLC (7)

Diversified Telecommunication Services

4.60% (L + 4.50%)

Moneygram International, Inc.

Diversified Consumer Services

5.00% (L + 4.50%)

National Mentor Holdings, Inc.

Healthcare Providers and Services

4.50% (L + 3.75%)

National Mentor Holdings, Inc.

Healthcare Providers and Services

4.50% (L + 3.75%)

Navicure, Inc.

Healthcare Technology

4.10% (L + 4.00%)

Nexus Buyer LLC (7)

Professional Services

3.85% (L + 3.75%)

NMSC Holdings, Inc.

Healthcare Providers and Services

6.00% (L + 5.00%)

NorthStar Group Services, Inc.

Commercial Services and Supplies

6.50% (L + 5.50%)

NSM Top Holdings Corp.

Healthcare Equipment and Supplies

5.35% (L + 5.25%)

OneDigital Borrower LLC (7)

4.75% (C + SCA + 4.25%)

Orchid Merger Sub II, LLC (5)(7)

5.25% (L + 4.75%)

Oregon Clean Energy, LLC (7)

Independent Power and Renewable Electricity Producers

4.75% (L + 3.75%)

Pactiv Evergreen Group Holdings Inc.

Containers and Packaging

4.00% (L + 3.50%)

Padagis LLC (7)

Pharmaceuticals

5.25% (L + 4.75%)

Pathway Vet Alliance LLC (7)

Healthcare Providers and Services

3.85% (L + 3.75%)

PECF USS Intermediate Holding III Corporation (5)(8)

Professional Services

4.75% (L + 4.25%)

Peraton Corp.

4.50% (L + 3.75%)

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2021

Portfolio Company (3)

Interest Rate

of Net Assets

PetVet Care Centers, LLC (7)

Healthcare Providers and Services

4.25% (L + 3.50%)

Phoenix Guarantor Inc.

Healthcare Providers and Services

3.60% (L + 3.50%)

PODS, LLC (7)

Road and Rail

3.75% (L + 3.00%)

PQ Performance Chemicals (7)

4.25% (L + 3.50%)

Prairie ECI Acquiror LP (7)

Oil, Gas and Consumable Fuels

4.85% (L + 4.75%)

Presidio Holdings, Inc.

Professional Services

3.61% (L + 3.50%)

Pretium PKG Holdings, Inc.

Containers and Packaging

4.50% (L + 4.00%)

Prime Security Services Borrower, LLC (4)(7)

Diversified Consumer Services

3.50% (L + 2.75%)

Project Alpha Intermediate Holding, Inc.

4.11% (L + 4.00%)

Project Boost Purchaser, LLC (7)

Professional Services

4.00% (L + 3.50%)

Proofpoint, Inc.

3.75% (L + 3.25%)

PS Holdco, LLC (8)

Road and Rail

5.00% (L + 4.25%)

PT Intermediate Holdings III LLC (8)

6.25% (L + 5.50%)

PT Intermediate Holdings III LLC (8)

6.25% (L + 5.50%)

Quest Software US Holdings Inc (7)

4.38% (L + 4.25%)

Radiate Holdco, LLC (7)

4.00% (L + 3.25%)

Radiology Partners, Inc.

Healthcare Providers and Services

4.35% (L + 4.25%)

RC Buyer, Inc.

Auto Components

4.25% (L + 3.50%)

RealPage, Inc.

Real Estate Management and Development

3.75% (L + 3.25%)

Red Planet Borrower, LLC (7)

Internet Software and Services

4.25% (L + 3.75%)

Redstone Holdco 2 LP (7)(8)

5.50% (L + 4.75%)

RegionalCare Hospital Partners Holdings, Inc.

Healthcare Providers and Services

3.85% (L + 3.75%)

Rocket Software, Inc.

4.75% (L + 4.25%)

Rodan & Fields, LLC (7)

Textiles, Apparel and Luxury Goods

4.11% (L + 4.00%)

Rohm Holding GMBH (4)(7)(8)

4.90% (L + 4.75%)

RSC Acquisition, Inc.

6.25% (L + 5.50%)

RSC Acquisition, Inc.

6.25% (L + 5.50%)

RSC Acquisition, Inc.

6.25% (L + 5.50%)

Runner Buyer Inc.

Household Durables

6.25% (L + 5.50%)

Ryan Specialty Group LLC (4)(7)

3.75% (L + 3.00%)

Sabert Corporation (7)(8)

Containers and Packaging

5.50% (L + 4.50%)

Severin Acquisition, LLC (7)

Diversified Consumer Services

3.10% (L + 3.00%)

Shearer’s Foods, LLC (7)

Food Products

4.25% (L + 3.50%)

Sotera Health Holdings, LLC (7)

Healthcare Equipment and Supplies

3.25% (L + 2.75%)

Sovos Compliance, LLC (8)

5.00% (L + 4.50%)

Specialty Building Products Holdings, LLC (5)(7)(8)

Building Products

4.25% (L + 3.75%)

Springer Nature Deutschland GmbH (4)(7)

3.75% (L + 3.00%)

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2021

Portfolio Company (3)

Interest Rate

of Net Assets

Summer BC Holdco B LLC (4)(8)

5.25% (L + 4.50%)

Surf Holdings, LLC (7)

3.69% (L + 3.50%)

Surgery Center Holdings, Inc.

Healthcare Providers and Services

4.50% (L + 3.75%)

Talen Energy Supply, LLC (7)

Independent Power and Renewable Electricity Producers

3.85% (L + 3.75%)

Tecta America Corp.

Construction and Engineering

5.00% (L + 4.25%)

The Edelman Financial Engines Centre, LLC (7)

Diversified Financial Services

4.25% (L + 3.50%)

Professional Services

9.50% (L + 8.50%)

TIBCO Software Inc (7)

3.85% (L + 3.75%)

Tidal Power Holdings, LLC (4)(7)

Independent Power and Renewable Electricity Producers

4.75% (L + 3.75%)

Tiger Acquisition, LLC (7)

Industrial Conglomerates

3.75% (L + 3.25%)

Titan US Finco, LLC (4)(8)

4.50% (L + 4.00%)

Torrid, LLC (4)(8)

Specialty Retail

6.25% (L + 5.50%)

Tory Burch LLC (7)

Specialty Retail

3.50% (L + 3.00%)

Tosca Services, LLC (7)

Containers and Packaging

4.25% (L + 3.50%)

Traverse Midstream Partners LLC (7)

Oil, Gas and Consumable Fuels

5.25% (C + SCA + 4.25%)

Triton Water Holdings, Inc.

Food Products

4.00% (L + 3.50%)

Truck Hero, Inc.

Auto Components

4.00% (L + 3.25%)

Renal Care, Inc.

Healthcare Providers and Services

5.13% (L + 5.00%)

Renal Care, Inc.

Healthcare Providers and Services

6.50% (L + 5.50%)

Silica Company (4)(7)

Metals and Mining

5.00% (L + 4.00%)

Ultimate Software Group, The (7)

3.85% (L + 3.75%)

United Airlines, Inc.

4.50% (L + 3.75%)

Univision Communications Inc.

4.00% (L + 3.25%)

US Radiology Specialists, Inc.

Healthcare Providers and Services

6.00% (L + 5.25%)

VeriFone Systems, Inc.

Commercial Services and Supplies

4.18% (L + 4.00%)

Verscend Holding Corp.

Healthcare Technology

4.10% (L + 4.00%)

Vision Solutions, Inc.

4.75% (L + 4.00%)

Watlow Electric Manufacturing Company (5)(7)

Electrical Equipment

4.25% (L + 3.75%)

Whatabrands LLC (7)

Hotels, Restaurants and Leisure

3.75% (L + 3.25%)

White Cap Buyer LLC (5)(7)(8)

Building Products

4.50% (L + 4.00%)

Wilsonart LLC (7)(8)

Building Products

4.50% (L + 3.50%)

Zelis Cost Management Buyer, Inc.

Healthcare Technology

3.60% (L + 3.50%)

Total First Lien Senior Secured

1,012,130,228

$ 1,003,839,402

$ 1,007,407,474

Second Lien Senior Secured (2)

Almonde, Inc.

8.25% (L + 7.25%)

ARC Falcon I Inc.

7.50% (L + 7.00%)

Artera Services, LLC (7)

Construction and Engineering

8.25% (L + 7.25%)

Aruba Investments, Inc.

8.50% (L + 7.75%)

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2021

Portfolio Company (3)

Interest Rate

of Net Assets

Asurion, LLC (5)(7)

5.35% (L + 5.25%)

Curium BidCo S.a r.l.

Pharmaceuticals

8.50% (L + 7.75%)

DCert Buyer, Inc.

7.10% (L + 7.00%)

Energy Acquisition LP (5)

Electrical Equipment

8.50% (L + 8.50%)

Epicor Software Corporation (5)(7)

8.75% (L + 7.75%)

Help/Systems Holdings, Inc.

7.50% (L + 6.75%)

Infinite Bidco LLC (5)(7)

Electronic Equipment, Instruments and Components

7.50% (L + 7.00%)

Professional Services

9.00% (L + 8.00%)

Ivanti Software, Inc.

7.75% (L + 7.25%)

Magenta Buyer LLC

9.00% (L + 8.25%)

Peraton Corp.

8.50% (L + 7.75%)

Pretium PKG Holdings, Inc.

Containers and Packaging

7.25% (L + 6.75%)

Quest Software US Holdings Inc (7)

8.38% (L + 8.25%)

TIBCO Software Inc (5)

7.35% (L + 7.25%)

Vision Solutions, Inc.

8.00% (L + 7.25%)

Total Second Lien Senior Secured

Corporate Bonds

Diebold Inc (4)

Diversified Consumer Services

KOBE US Midco 2 Inc

Total Corporate Bonds

Convertible Bonds

Dish Network Corp (4)

Total Convertible Bonds

Total Debt Investments

1,080,749,178

$ 1,072,062,425

$ 1,075,955,626

CLO Mezzanine (2)

522 Funding CLO 2020-6, Ltd.

Structured Note

8.17% (L + 8.04%)

Barings CLO Ltd (4)

Structured Note

6.88% (L + 6.75%)

Carlyle US CLO 2020-2, Ltd (4)

Structured Note

8.66% (L + 8.53%)

Elmwood CLO III Ltd.

Structured Note

7.86% (L + 7.74%)

GoldenTree Loan Management US 2020-7A (4)

Structured Note

7.88% (L + 7.50%)

GoldenTree Loan Management US 2021-10A (4)

Structured Note

7.92% (L + 7.79%)

GoldenTree Loan Management US 2021-9A (4)

Structured Note

6.88% (L + 6.75%)

HPS Loan Management Series 15A-19 (4)

Structured Note

6.73% (L + 6.60%)

Magnetite CLO Ltd 2015-16A (4)

Structured Note

6.62% (L + 6.50%)

Thayer Park CLO, Ltd.

Structured Note

9.00% (L + 8.87%)

Total CLO Mezzanine

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2021

Portfolio Company (3)

Interest Rate

of Net Assets

Ares CLO LTD 2021-62A (4)

Structured Subordinated Note

Dryden 86 CLO, Ltd.

Structured Subordinated Note

Long Point Park CLO, Ltd.

Structured Subordinated Note

Regatta XII Funding Ltd.

Structured Subordinated Note

Stratus CLO Series 2021-1A (4)

Structured Subordinated Note

Total CLO Equity

of Net Assets

Equity Investments

Custom Truck One Source Inc (4)

Commercial Services and Supplies

Total Equity Investments

Total Equity and Other Investments

of Net Assets

Short-Term Investments

Fidelity Investments Money Market Government Portfolio - Institutional Class, 0.01% (9)

Total Short-Term Investments

Total Investments

$ 1,189,713,653

$ 1,194,257,584

Liabilities in Excess of Other Assets

(741,459,996 )

$ 452,797,588

(1) The amortized cost represents the original cost adjusted

for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method.

(2) Loan contains a variable rate structure, subject to an interest rate floor.

Variable rate loans bear interest at a rate that may be determined by reference to either a) the London Interbank Offered Rate (“LIBOR”

or “L”) (which can include one-, two-, three- or six-month LIBOR) or b) the CME Term Secured Overnight Financing Rate (“SOFR”

or “S”) (which can include one-, three-, or six-month SOFR), which resets periodically based on the terms of the loan agreement.

At the borrower’s option, loans may instead reference an alternate base rate (which can include the Federal Funds Effective Rate or the

Prime Rate), which also resets periodically based on the terms of the loan agreements.

Loans that reference SOFR may include a Credit

Spread Adjustment (“CSA”), where the CSA is a defined additional spread amount based on the tenor of SOFR the borrower selects

(making the reference rate S+CSA).

For the holdings as of 12/31/21 that have S+CSA as the base rate, the CSA is 10bp for 1M SOFR, 15bp

for 3M SOFR, and 25bp for 6M SOFR.

For the avoidance of doubt, loan floors apply to S+CSA, not S.

(3) As of December 31, 2021, all investments are non-controlled,

non-affiliated investments.

Non-controlled, non-affiliated investments are defined as investments in which the Company owns less

than 5% of the portfolio company’s outstanding voting securities and does not have the power to exercise control over the management

or policies of such portfolio company.

(4) Non-qualifying investment as defined by Section 55(a) of

the Investment Company Act of 1940.

The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying

assets represent at least 70% of the Company’s total assets.

As of December 31, 2021, 13.3% of the Company’s total assets

were in non-qualifying investments.

(5) Investments or a portion of investments are unsettled as

of December 31, 2021.

(6) As of December 31, 2021, the tax cost of the Company’s

investments approximates their amortized cost.

(7) Security or portion thereof held within Palmer Square BDC

Funding I, LLC (“PS BDC Funding”) and is pledged as collateral supporting the amounts outstanding under a revolving credit

facility with Bank of America, N.A.

(“BofA N.A.”) (see Note 6 to the consolidated financial statements).

(8) Security or portion thereof held within Palmer Square BDC

Funding II, LLC (“PS BDC Funding II”) and is pledged as collateral supporting the amounts outstanding under a revolving credit

facility with Wells Fargo Bank, National Association (“WFB”) (see Note 6 to the consolidated financial statements).

(9) 7-day effective yield as of December 31, 2021.

(10) Of the $3,765,060 commitment to RSC Acquisition, Inc., $3,237,952 was unfunded

as of December 31, 2021.

The accompanying notes are an integral part of

these consolidated financial statements.

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2020

Percentage of

Lien Senior Secured (2)

Convoy (Luxembourg) S.a.r.l.

Aerospace and

Molecular Research, Inc.

Healthcare Providers

Group Intermediate Holdings, Inc.

Specialty Retail

5.75% (L + 5.00%)

Acrisure, LLC

3.65% (L + 3.50%)

AI Convoy (Luxembourg)

Aerospace and Defense

4.50% (L + 3.50%)

Albany Molecular

Research, Inc.

Healthcare Providers and Services

4.25% (L + 3.25%)

Intermediate Holdings, Inc.

4.50% (L + 4.00%)

AlixPartners,

Diversified Financial

Holdings Intermediate LLC (7)

Holding Company, Inc.

Diversified Financial Services

2.65% (L + 2.50%)

Alliant Holdings

Intermediate LLC (7)

3.40% (L + 3.25%)

Alliant Holdings

Intermediate LLC (7)

4.25% (L + 3.75%)

Alphabet Holding

Company, Inc.

Food Products

Mountain Company (7)

Hotels, Restaurants

Mountain Company (7)

Hotels, Restaurants

Government Services Holdings LLC (7)

Construction and

Government Services Holdings LLC (7)

Construction and

Rock Salt Company LLC (7)

3.65% (L + 3.50%)

Alterra Mountain

Hotels, Restaurants and Leisure

5.50% (L + 4.50%)

Alterra Mountain

Hotels, Restaurants and Leisure

2.90% (L + 2.75%)

Amentum Government

Services Holdings LLC (7)

Construction and Engineering

3.65% (L + 3.50%)

Amentum Government

Services Holdings LLC (7)

Construction and Engineering

5.50% (L + 4.75%)

American Rock

Salt Company LLC (7)

Metals and Mining

Agency Borrower, Inc.

Holdings Limited Partnership (4)(7)

Independent Power

and Renewable Electricity Producers

Corporation (7)

Interactive Media

International PTY Ltd (4)(7)

Hotels, Restaurants

Investments, Inc.

Learning, LLC (7)

Diversified Consumer

4.50% (L + 3.50%)

AmWINS Group,

3.75% (L + 2.75%)

Amynta Agency

Borrower, Inc.

4.65% (L + 4.50%)

APLP Holdings

Limited Partnership (4)(7)

Independent Power and Renewable Electricity Producers

3.50% (L + 2.50%)

Applovin Corporation

3.65% (L + 3.50%)

Interactive Media and Services

4.50% (L + 4.00%)

Aristocrat International

PTY Ltd (4)(7)

Hotels, Restaurants and Leisure

4.75% (L + 3.75%)

Aruba Investments,

4.75% (L + 4.00%)

Ascend Learning,

Diversified Consumer Services

4.00% (L + 3.00%)

AssuredPartners,

5.50% (L + 4.50%)

AssuredPartners,

Diversified Consumer

3.65% (L + 3.50%)

Diversified Consumer Services

3.40% (L + 3.25%)

Athenahealth,

Healthcare Providers

Diversified Telecommunication

Healthcare Providers

Networks, Inc.

Pro Group, LLC (7)

Healthcare Providers and Services

4.65% (L + 4.50%)

Diversified Telecommunication Services

4.41% (L + 4.25%)

Diversified Telecommunication Services

4.39% (L + 4.25%)

Azalea TopCo,

Healthcare Providers and Services

3.71% (L + 3.50%)

Barracuda Networks,

4.50% (L + 3.75%)

Bass Pro Group,

Specialty Retail

Health Companies Inc.

5.75% (L + 5.00%)

Bausch Health

Companies Inc.

Pharmaceuticals

Holdings Inc.

Commercial Services

Healthcare Providers

3.15% (L + 3.00%)

Belfor Holdings

Commercial Services and Supplies

4.15% (L + 4.00%)

Bioscrip, Inc.

Healthcare Providers and Services

4.40% (L + 4.25%)

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2020

Percentage of

Portfolio Company (3)

CQP Holdco LP (7)

Energy Equipment

Parent Company, Inc.

Property REIT Inc.

Real Estate Investment

Trusts (REITs)

WEC Holdings Inc.

Commercial Services

Merger Sub Ltd.

Energy Equipment and Services

3.74% (L + 3.50%)

Company, Inc.

4.40% (L + 4.25%)

Brookfield Property

Real Estate Investment Trusts (REITs)

2.65% (L + 2.50%)

Brookfield WEC

Holdings Inc.

Commercial Services and Supplies

3.75% (L + 3.00%)

Leisure Products

Resort Collection, LLC (4)(7)

Hotels, Restaurants

2.90% (L + 2.75%)

Caesars Resort

Collection, LLC (4)(7)

Hotels, Restaurants and Leisure

4.65% (L + 4.50%)

Acquisition 1 Co.

Professional Services

Wireless Telecommunication

3.15% (L + 3.00%)

CCI Buyer, Inc.

Wireless Telecommunication Services

4.75% (L + 4.00%)

CCS-CMGC Holdings,

Healthcare Providers and Services

5.71% (L + 5.50%)

Change Healthcare

Holdings, Inc.

Healthcare Providers

Healthcare Holdings, Inc.

Healthcare Providers

Healthcare Services, Inc (7)

Healthcare Providers

Securities LP (7)

Diversified Financial

Healthcare Providers and Services

3.50% (L + 2.50%)

CHG Healthcare

Services, Inc (7)

Healthcare Providers and Services

4.00% (L + 3.00%)

Cincinnati Bell

4.25% (L + 3.25%)

Citadel Securities

Diversified Financial Services

2.90% (L + 2.75%)

Communications, Inc.

Diversified Telecommunication

Atlas Buyer, Inc (7)

Diversified Telecommunication Services

5.75% (L + 4.75%)

CP Atlas Buyer,

Building Products

Atlas Buyer, Inc (7)

5.25% (L + 4.50%)

CP Atlas Buyer,

Building Products

Artists Agency, LLC (7)

Oil, Gas and Consumable

Square Capital BDC Inc.

Schedule of Investments

of December 31, 2020

5.25% (L + 4.50%)

Creative Artists

Agency, LLC (7)

3.90% (L + 3.75%)

Crestwood Holdings

Oil, Gas and Consumable Fuels

7.66% (L + 7.50%)

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2020

Percentage of

Portfolio Company (3)

4.15% (L + 4.00%)

Dakota Holding, LLC (7)

Financial Services

4.75% (L + 3.75%)

US Holdings, Inc.

Gas and Consumable Fuels

and Consumable Fuels

6.50% (L + 5.50%)

4.50% (L + 3.75%)

Dun & Bradstreet Corporation (4)(7)

3.90% (L + 3.75%)

4.75% (L + 3.75%)

Software Solutions, Inc.

4.50% (L + 3.75%)

Cogen Holdings I LLC (7)

Power and Renewable Electricity Producers

4.50% (L + 3.50%)

Animal Health Incorporated (4)(7)

Providers and Services

1.90% (L + 1.75%)

Luxembourg Finance Company I S.a.r.l.

Pharmaceuticals

5.00% (L + 4.25%)

Providers and Services

3.96% (L + 3.75%)

Software Corporation (7)

5.25% (L + 4.25%)

Payments Inc.

11.50% (L + 10.50%)

Payments Inc.

3.75% (L + 2.75%)

Group LLC (4)(7)

3.65% (L + 3.50%)

Software LLC (5)(7)

4.50% (L + 3.75%)

Software LLC (5)(7)

4.25% (L + 3.25%)

World Security Corporation (7)

Consumer Services

4.99% (L + 4.75%)

Environmental Inc.

Services and Supplies

3.50% (L + 3.00%)

Medical Response, Inc.

Providers and Services

5.75% (L + 4.75%)

Partners Investment Management Holdings, LLC (7)

Financial Services

3.50% (L + 2.75%)

4.65% (L + 4.50%)

Group Holding Company LLC (7)

Providers and Services

6.00% (L + 5.00%)

Projects Acquiror LLC (7)

5.75% (L + 4.75%)

Freight Tools USA, Inc.

4.00% (L + 3.25%)

Gen Funding, LLC (7)

Power and Renewable Electricity Producers

4.75% (L + 3.75%)

Holdings, Inc.

5.75% (L + 4.75%)

Brands, LLC (4)(7)

Food Products

3.00% (L + 2.25%)

International Limited (7)

5.00% (L + 4.00%)

Software, Inc.

4.25% (L + 3.50%)

Refinance S.a.r.l.

4.50% (L + 3.50%)

US Intermediate Holdings II, Inc.

Providers and Services

6.75% (L + 5.75%)

5.00% (L + 4.00%)

3.40% (L + 3.25%)

5.00% (L + 4.00%)

Holding Corporation (5)(7)

Restaurants and Leisure

Hotels, Restaurants

4.25% (L + 3.25%)

Satellite LLC (4)(7)

Telecommunication Services

4.75% (L + 3.75%)

Software, Inc.

5.75% (L + 4.75%)

Street Group, LLC (7)

Financial Services

3.23% (L + 3.00%)

Acquisition LLC (7)

Power and Renewable Electricity Producers

5.25% (L + 4.25%)

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2020

Percentage of

Klockner-Pentaplast

of America, Inc.

and Packaging

Containers and Packaging

5.25% (L + 4.25%)

Landry’s

Finance Acquisition Co

Restaurants and Leisure

Acquisition LLC (5)(7)

Loan Financing LLC (7)

Telecommunication Services

Power and Renewable Electricity Producers

Bay Terminals, LLC (5)(7)

Gas and Consumable Fuels

Gate Capital Holdings LLC (4)(7)

Packaging Solutions Holding Company (7)

and Packaging

Hotels, Restaurants and Leisure

13.00% (L + 12.00%)

LBM Acquisition

Construction Materials

4.50% (L + 3.75%)

LCPR Loan Financing

Diversified Telecommunication Services

5.16% (L + 5.00%)

Lightstone Holdco

Independent Power and Renewable Electricity Producers

4.75% (L + 3.75%)

Lightstone Holdco

Independent Power and Renewable Electricity Producers

4.75% (L + 3.75%)

Terminals, LLC (5)(7)

Oil, Gas and Consumable Fuels

5.00% (L + 4.00%)

Lions Gate Capital

Holdings LLC (4)(7)

2.40% (L + 2.25%)

LogMeIn, Inc.

4.90% (L + 4.75%)

Mauser Packaging

Solutions Holding Company (7)

Containers and Packaging

3.48% (L + 3.25%)

3.90% (L + 3.75%)

Meredith Corporation

5.25% (L + 4.25%)

Michaels Stores,

Specialty Retail

4.25% (L + 3.50%)

Milano Acquisition

Corporation (7)

Acquisition Corporation (7)

Care Technology

Acquisition, Inc.

Financial Services

International, Inc.

Acquisition Holdings LLC (7)

Providers and Services

Mentor Holdings, Inc.

Healthcare Providers

Mentor Holdings, Inc.

Healthcare Providers

Care Technology

Arclin US Holding Corp.

Group Holdings II, Inc.

Financial Services

Buyer LLC (7)

Finance LLC (4)(7)

Group Services, Inc.

Services and Supplies

Square Capital BDC Inc.

Schedule of Investments

of December 31, 2020

Health Care Technology

4.75% (L + 4.00%)

Minotaur Acquisition,

Diversified Financial Services

5.15% (L + 5.00%)

Mitchell International,

4.75% (L + 4.25%)

MPH Acquisition

Holdings LLC (7)

Healthcare Providers and Services

3.75% (L + 2.75%)

National Mentor

Holdings, Inc.

Healthcare Providers and Services

4.40% (L + 4.25%)

National Mentor

Holdings, Inc.

Healthcare Providers and Services

4.40% (L + 4.25%)

Navicure, Inc.

Health Care Technology

4.75% (L + 4.00%)

New Arclin US

Holding Corp.

4.50% (L + 3.50%)

Newport Group

Holdings II, Inc.

Diversified Financial Services

3.72% (L + 3.50%)

Professional Services

3.90% (L + 3.75%)

Nielsen Finance

4.75% (L + 3.75%)

NorthStar Group

Services, Inc.

Commercial Services and Supplies

6.50% (L + 5.50%)

4.24% (L + 4.00%)

Palmer Square Capital BDC Inc.

Consolidated Schedule

of Investments

As of December 31, 2020

Percentage of

Borrower LLC (7)

Clean Energy, LLC (7)

Power and Renewable Electricity Producers

Vet Alliance LLC (7)

Providers and Services

Vet Alliance LLC (7)

Providers and Services

Gaming Authority (7)

Restaurants and Leisure

Animal Supplies, Inc.

Care Centers, LLC (7)

Providers and Services

Guarantor Inc.

Providers and Services

Corporation (7)

and Engineering

Holding Corp.

Restaurants and Leisure

Legal Services, Inc.

Consumer Services

Legal Services, Inc.

Consumer Services

5.25% (L + 4.50%)

Energy, LLC (7)

Independent Power and Renewable Electricity Producers

4.75% (L + 3.75%)

Alliance LLC (7)

Healthcare Providers and Services

Alliance LLC (7)

Healthcare Providers and Services

4.15% (L + 4.00%)

PCI Gaming Authority

Hotels, Restaurants and Leisure

2.65% (L + 2.50%)

Supplies, Inc.

Specialty Retail

4.25% (L + 3.25%)

Centers, LLC (7)

Healthcare Providers and Services

5.25% (L + 4.25%)

Phoenix Guarantor

Healthcare Providers and Services

4.25% (L + 3.75%)

Pike Corporation

Construction and Engineering

4.12% (L + 3.97%)

Playtika Holding

Hotels, Restaurants and Leisure

7.00% (L + 6.00%)

PODS, LLC (7)

Building Products

3.75% (L + 2.75%)

Pre-Paid Legal

Services, Inc.

Diversified Consumer Services

4.75% (L + 4.00%)

Pre-Paid Legal

Services, Inc.

Diversified Consumer Services

3.40% (L + 3.25%)

Presidio Holdings,

Professional Services

3.72% (L + 3.50%)

Holdings, Inc.

PKG Holdings, Inc.

and Packaging

Security Services Borrower, LLC (4)(7)

Consumer Services

Alpha Intermediate Holding, Inc.

and Direct Marketing Retail

Software US Holdings Inc (7)

Hosting, Inc.

Hardware, Storage and Peripherals

Holdco, LLC (7)

Partners, Inc.

Providers and Services

Buyer, LLC (7)

Containers and Packaging

4.75% (L + 4.00%)

Prime Security

Services Borrower, LLC (4)(7)

Diversified Consumer Services

4.25% (L + 3.25%)

Project Alpha

Intermediate Holding, Inc.

4.50% (L + 3.50%)

Internet and Direct Marketing Retail

3.65% (L + 3.50%)

Quest Software

US Holdings Inc (7)

4.46% (L + 4.25%)

Rackspace Hosting,

Technology Hardware, Storage and Peripherals

4.00% (L + 3.00%)

Radiate Holdco,

4.25% (L + 3.50%)

Radiology Partners,

Healthcare Providers and Services

4.40% (L + 4.25%)

Redstone Buyer,

6.00% (L + 5.00%)

Hospital Partners Holdings, Inc.

Providers and Services

Healthcare Providers and Services

3.90% (L + 3.75%)

Holding Corp (7)

Consumer Services

Specialty Group LLC (7)

Corporation (7)

and Packaging

Diversified Consumer Services

3.40% (L + 3.25%)

Ryan Specialty

Group LLC (7)

4.00% (L + 3.25%)

Sabert Corporation

Containers and Packaging

5.50% (L + 4.50%)

Palmer Square Capital BDC Inc.

Consolidated Schedule

of Investments

As of December 31, 2020

Percentage of

International S.A.

Apparel and Luxury Goods

Games International, Inc.

Salt Holdings Inc.

Textiles, Apparel and Luxury Goods

5.50% (L + 4.50%)

Scientific Games

International, Inc.

Leisure Products

2.90% (L + 2.75%)

SCIH Salt Holdings

Metals and Mining

5.50% (L + 4.50%)

Shearer’s

Foods, LLC (7)

Software Inc.

Health Holdings LLC (4)(7)

Equipment and Supplies

Nature Deutschland GmbH (5)(7)

Food Products

4.75% (L + 4.00%)

SmartBear Software

4.46% (L + 4.25%)

4.50% (L + 3.75%)

Sotera Health

Holdings LLC (4)(7)

Incorporated (7)

Energy Supply, LLC (7)

Power and Renewable Electricity Producers

Holdings, Inc.

Equipment and Supplies

Edelman Financial Center, LLC (7)

Financial Services

Software Inc (7)

Services, LLC (7)

and Packaging

Midstream Partners LLC (7)

Gas and Consumable Fuels

Finance LLC (4)(7)

Energy Services, LLC (7)

Gas and Consumable Fuels

Software Group, The (7)

Communications Inc.

Services and Supplies

Radiology Specialists, Inc., (7)

Providers and Services

Renal Care, Inc.

Providers and Services

Holdings, Inc.

and Engineering

Materials LLC (4)(7)

Systems, Inc.

Services and Supplies

Holding Corp.

Care Technology

Parent LLC (4)(7)

Consolidated Inc.

Transportation

Infrastructure

Media and Services

Cap Buyer LLC (7)

Communications Inc (7)

Telecommunication Services

Healthcare Equipment and Supplies

5.50% (L + 4.50%)

Springer Nature

Deutschland GmbH (5)(7)

4.50% (L + 3.50%)

Surf Holdings,

3.73% (L + 3.50%)

Syncsort Incorporated

7.00% (L + 6.00%)

Supply, LLC (7)

Independent Power and Renewable Electricity Producers

3.90% (L + 3.75%)

TecoStar Holdings,

Healthcare Equipment and Supplies

4.50% (L + 3.50%)

Financial Center, LLC (7)

Diversified Financial Services

3.15% (L + 3.00%)

TIBCO Software

3.90% (L + 3.75%)

Tosca Services,

Containers and Packaging

5.25% (L + 4.25%)

Traverse Midstream

Partners LLC (7)

Oil, Gas and Consumable Fuels

6.50% (L + 5.50%)

Tronox Finance

3.15% (L + 3.00%)

UGI Energy Services,

Oil, Gas and Consumable Fuels

3.90% (L + 3.75%)

Ultimate Software

Group, The (7)

4.75% (L + 4.00%)

Ultimate Software

Group, The (7)

3.90% (L + 3.75%)

Univision Communications

4.75% (L + 3.75%)

Commercial Services and Supplies

4.40% (L + 4.25%)

Specialists, Inc., (7)

Healthcare Providers and Services

6.25% (L + 5.50%)

Healthcare Providers and Services

5.15% (L + 5.00%)

4.25% (L + 4.00%)

USIC Holdings,

Construction and Engineering

4.00% (L + 3.00%)

Venator Materials

3.15% (L + 3.00%)

VeriFone Systems,

Commercial Services and Supplies

4.22% (L + 4.00%)

Verscend Holding

Health Care Technology

4.65% (L + 4.50%)

VFH Parent LLC

Capital Markets

3.15% (L + 3.00%)

VM Consolidated

Transportation Infrastructure

3.40% (L + 3.25%)

Interactive Media and Services

4.75% (L + 3.75%)

White Cap Buyer

Construction Materials

4.50% (L + 4.00%)

Xplornet Communications

Wireless Telecommunication Services

4.90% (L + 4.75%)

Cost Management Buyer, Inc.

Care Technology

Health Care Technology

4.90% (L + 4.75%)

First Lien Senior Secured

1 unchanged sentence

$ 566,459,850

Square Capital BDC Inc.

Schedule of Investments

of December 31, 2020

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2020

Percentage of

21 unchanged sentences

Collateralized Securities and Structured Products - Debt

Total Debt Investments

Debt Investments

$ 586,995,766

$ 600,051,331

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2020

Percentage of

Short-Term Investments

Fidelity Investments Money

Market Government Portfolio - Institutional Class, 0.01% (8)

Total Short-Term Investments

Total Investments

Liabilities in Excess of Other Assets

amortized cost represents the original cost adjusted for the amortization of discounts

and premiums, as applicable, on debt investments using the effective interest method.

contains a variable rate structure, subject to an interest rate floor.

Variable rate

loans bear interest at a rate that may be determined by reference to either the London

Interbank Offered Rate (“LIBOR”

or “L”) (which can include one-,

two-, three- or six-month LIBOR) or an alternate base rate (which can include the Federal

Funds Effective Rate or the Prime Rate), at the borrower’s option, and which reset

periodically based on the terms of the loan agreement.

of December 31, 2020, all investments are non-controlled, non-affiliated investments.

Non-controlled,

non-affiliated investments are defined as investments in which the Company owns less

than 5% of the portfolio company’s outstanding voting securities and does not have

the power to exercise control over the management or policies of such portfolio company.

(4) Non-qualifying

investment as defined by Section 55(a) of the Investment Company Act of 1940.

may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying

assets represent at least 70% of the Company’s total assets.

As of December 31, 2020,

15.5% of the Company’s total assets were in non-qualifying investments.

(5) Investments

or a portion of investments are unsettled as of December 31, 2020.

of December 31, 2020, the tax cost of the Company’s investments approximates their amortized

or portion thereof held within Palmer Square BDC Funding I, LLC (“PS BDC Funding”)

and is pledged as collateral supporting the amounts outstanding under a revolving credit

facility with Bank of America, N.A.

(“BofA N.A.”) (see Note 6 to the consolidated

financial statements).

effective yield as of December 31, 2020.

accompanying notes are an integral part of these consolidated financial statements.

Square Capital BDC Inc.

to Consolidated Financial Statements

Palmer Square Capital

(the “Company”) is a financial services company that primarily lends to and invests in corporate debt securities

of privately held companies, including small to large private U.S.

The Company was organized as a Maryland corporation

on August 26, 2019 and is structured as an externally managed, non-diversified closed-end management investment company.

has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as

amended (the “1940 Act”) and, beginning with its taxable year ending December 31, 2020, the Company intends to elect

to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1985, as

amended (the “Code”).

Investments Money Market Government Portfolio - Institutional Class, 0.01% (8)

Short-Term Investments

$ 640,100,635

$ 653,156,200

in Excess of Other Assets

(400,011,229 )

$ 253,144,971

The amortized cost represents the original cost adjusted for the amortization

of discounts and premiums, as applicable, on debt investments using the effective interest method.

Loan contains a variable rate structure, subject to an interest rate

Variable rate loans bear interest at a rate that may be determined by reference to either the London Interbank Offered Rate

(“LIBOR”

or “L”) (which can include one-, two-, three- or six-month LIBOR) or an alternate base rate (which

can include the Federal Funds Effective Rate or the Prime Rate), at the borrower’s option, and which reset periodically based

on the terms of the loan agreement.

As of December 31, 2020, all investments are non-controlled, non-affiliated

Non-controlled, non-affiliated investments are defined as investments in which the Company owns less than 5% of

the portfolio company’s outstanding voting securities and does not have the power to exercise control over the management or

policies of such portfolio company.

Non-qualifying investment as defined by Section 55(a) of the Investment

Company Act of 1940.

The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent

at least 70% of the Company’s total assets.

As of December 31, 2020, 15.5% of the Company’s total assets were in non-qualifying

Investments or a portion of investments are unsettled as of December

As of December 31, 2020, the tax cost of the Company’s investments

approximates their amortized cost.

Security or portion thereof held within Palmer Square BDC Funding I,

LLC (“PS BDC Funding”) and is pledged as collateral supporting the amounts outstanding under a revolving credit facility

with Bank of America, N.A.

(“BofA N.A.”) (see Note 6 to the consolidated financial statements).

7-day effective yield as of December 31, 2020.

The accompanying notes are an integral part of

these consolidated financial statements.

Palmer Square Capital BDC Inc.

Notes to Consolidated Financial Statements

Palmer Square Capital BDC

(the “Company”) is a financial services company that primarily lends to and invests in corporate debt securities of

companies, including small to large private U.S.

The Company was organized as a Maryland corporation on August 26, 2019 and

is structured as an externally managed, non-diversified closed-end management investment company.

The Company has elected to be regulated

as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”).

Beginning with its taxable year ending December 31, 2020, the Company has elected to be treated as a regulated investment company (“RIC”)

under Subchapter M of the Internal Revenue Code of 1985, as amended (the “Code”) and expects to qualify as a RIC thereafter.

The Company commenced operations on January 23, 2020.

Palmer Square BDC Funding I, LLC (“PS

BDC Funding”) was formed on January 21, 2020 and entered into a senior, secured revolving credit facility with BofA N.A.

Palmer Square BDC Funding II LLC (“PS BDC Funding II”) was formed on September 8, 2020 and entered into a senior, secured

Palmer Square BDC Funding I, LLC (“PS BDC Funding”) was formed on January

21, 2020 and entered into a senior, secured revolving credit facility with BofA N.A.

Palmer Square BDC Funding II LLC (“PS BDC

Funding II”) was formed on September 8, 2020 and entered into a senior, secured credit facility with Wells Fargo, National Association.

The Company’s investment

objective is to maximize total return, comprised of current income and capital appreciation.

The Company’s current investment focus

is guided by two strategies that facilitate its investment opportunities and core competencies:

(1) investing in corporate debt securities

and, to a lesser extent, (2) investing in collateralized loan obligation (“CLO”) structured credit funds that typically own

corporate debt securities, including the equity and junior debt tranches of CLOs.

To a limited extent, the Company may enter into derivatives

transactions, which 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 the Company’s portfolio positions from changes in currency exchange

rates and market interest rates or to earn income and enhance the Company’s total returns.

The Company may receive or purchase

warrants or rights to acquire equity or other securities in connection with making a debt investment in a company.

During the year ended

December 31, 2021 and the period January 23, 2020 (Commencement of Operations) through December 31, 2020, the Company did not invest

in any derivative contracts.

The Company is externally

managed by Palmer Square BDC Advisor LLC (the “Investment Advisor”), an investment adviser that is registered with the Securities

and Exchange Commission (the “SEC”) under the Investment Advisers Act of 1940, pursuant to an investment advisory agreement

between the Company and the Investment Advisor (the “Advisory Agreement”).

The Investment Advisor, in its capacity as administrator

(the “Administrator”), provides the administrative services necessary for the Company to operate pursuant to an administration

agreement between the Company and the Administrator (the “Administration Agreement”).

The Company’s fiscal year ends

on December 31.

The Company has two wholly-owned

subsidiaries:

PS BDC Funding, a special purpose wholly-owned subsidiary established for utilizing the Company’s revolving credit

facility with BofA N.A., and PS BDC Funding II, a special purpose wholly-owned subsidiary established for utilizing the Company’s

credit facility with Wells Fargo, National Association.

Company’s investment objective is to maximize total return, comprised of current income and capital appreciation.

The Company’s

current investment focus is guided by two strategies that facilitate its investment opportunities and core competencies:

(1) investing

in corporate debt securities and, to a lesser extent, (2) investing in collateralized loan obligation (“CLO”) structured

credit that typically owns corporate debt securities, including the equity and junior debt tranches of CLOs.

To a limited extent,

the Company may enter into derivatives transactions, which 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 the Company’s

portfolio positions from changes in currency exchange rates and market interest rates or to earn income and enhance the Company’s

total returns.

The Company may receive or purchase warrants or rights to acquire equity or other securities in connection with

making a debt investment in a company.

During the period January 23, 2020 (Commencement of Operations) through December 31, 2020,

the Company did not invest in any derivative contracts.

Company is externally managed by Palmer Square BDC Advisor LLC (the “Investment Advisor”), an investment adviser that

is registered with the Securities and Exchange Commission (the “SEC”) under the Investment Advisers Act of 1940, pursuant

to an investment advisory agreement between the Company and the Investment Advisor (the “Advisory Agreement”).

Investment Advisor, in its capacity as administrator (the “Administrator”), provides the administrative services necessary

for the Company to operate pursuant to an administration agreement between the Company and the Administrator (the “Administration

Agreement”).

The Company’s fiscal year ends on December 31.

The Company has two

wholly-owned subsidiaries:

PS BDC Funding, a special purpose wholly-owned subsidiary established for utilizing the Company’s

revolving credit facility with BofA N.A., and PS BDC Funding II, a special purpose wholly-owned subsidiary established for utilizing

the Company’s credit facility with Wells Fargo, National Association.

These subsidiaries are consolidated in the financial

statements of the Company.

These subsidiaries are consolidated in the financial statements of the Company.

Significant Accounting Policies

The Company is an

investment company and applies specific accounting and financial reporting requirements under Financial Accounting Standards Board

(“FASB”) Accounting Standards Topic 946, Financial Services-Investment Companies .

The Company’s functional

currency is U.S.

dollars (“USD”) and these consolidated financial statements have been prepared in that currency.

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted

in the United States of America (“GAAP”) and pursuant to Regulation S-X.

The preparation of

the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect

the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated

financial statements.

Actual results could differ from those estimates.

Indemnifications

the normal course of business, the Company enters into contracts that contain a variety of representations which provide general

The Company is an investment

company and applies specific accounting and financial reporting requirements under Financial Accounting Standards Board (“FASB”)

Accounting Standards Topic 946, Financial Services-Investment Companies .

The Company’s functional currency is U.S.

(“USD”) and these consolidated financial statements have been prepared in that currency.

The accompanying consolidated financial

statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”)

and pursuant to Regulation S-X.

Use of Estimates

The preparation of the consolidated

financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of

assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements.

results could differ from those estimates.

Indemnifications

The Company’s maximum exposure under these arrangements cannot be known;

however, the Company expects

any risk of loss to be remote.

and Cash Equivalents

is comprised of cash on deposit with major financial institutions.

Cash equivalents consist of highly liquid investments with

original maturities of three months or less.

The Company places its cash with high credit quality institutions to minimize credit

risk exposure.

Issuance Costs

Company records origination and other expenses related to its debt obligations as deferred financing costs.

These expenses are

deferred and amortized over the life of the related debt instrument.

Debt issuance costs are presented on the consolidated statement

of assets and liabilities as a direct deduction from the debt liability.

In circumstances in which there is not an associated

debt liability amount recorded in the consolidated financial statements when the debt issuance costs are incurred, such debt issuance

costs will be reported on the consolidated statement of assets and liabilities as an asset until the debt liability is recorded.

As of December 31, 2020, the balance of deferred financing costs was $2.1 million, included in Credit Facility (as defined below),

net of $393.2 million on the consolidated statement of assets and liabilities.

The Company has elected

to be treated as a RIC under Subchapter M of the Code, for the taxable year ending December 31, 2020.

So long as the Company maintains

its status as a RIC, it generally will not pay corporate-level U.S.

federal income taxes on any ordinary income or capital gains

that it distributes at least annually to its stockholders as dividends.

qualify as a RIC, the Company must, among other things, meet certain source-of-income and asset diversification requirements.

In addition, to qualify for RIC tax treatment, the Company must distribute to its stockholders, for each taxable year, at least

90% of its “investment company taxable income”

for that year, which is generally its ordinary income plus the excess

of its realized net short-term capital gains over its realized net long-term capital losses.

In order for the Company not to be

subject to U.S.

federal excise taxes, it must distribute annually an amount at least equal to the sum of (i) 98% of its net ordinary

income (taking into account certain deferrals and elections) for the calendar year, (ii) 98.2% of its capital gains in excess

of capital losses for the one year period ending October 31 in such calendar year and (iii) any net ordinary income and capital

gains in excess of capital losses for preceding years that were not distributed during such years.

The Company, at its discretion,

may carry forward taxable income in excess of calendar year dividends and pay a 4% nondeductible U.S.

federal excise tax on this

Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements

to determine whether the tax positions are “more-likely-than-not”

In the normal course of business,

the Company enters into contracts that contain a variety of representations which provide general indemnifications.

The Company’s

maximum exposure under these arrangements cannot be known;

however, the Company expects any risk of loss to be remote.

Cash and Cash Equivalents

Cash is comprised of cash

on deposit with major financial institutions.

Cash equivalents consist of highly liquid investments with original maturities of three

months or less.

The Company places its cash with high credit quality institutions to minimize credit risk exposure.

Debt Issuance Costs

The Company records origination

and other expenses related to its debt obligations as deferred financing costs.

These expenses are deferred and amortized over the life

of the related debt instrument.

Debt issuance costs are presented on the consolidated statement of assets and liabilities as a direct

deduction from the debt liability.

In circumstances in which there is not an associated debt liability amount recorded in the consolidated

financial statements when the debt issuance costs are incurred, such debt issuance costs will be reported on the consolidated statement

of assets and liabilities as an asset until the debt liability is recorded.

As of December 31, 2020, the balance of deferred financing

costs was $2.1 million, included in BoA Credit Facility (as defined below), net of $393.2 million on the consolidated statement of assets

and liabilities.

As of December 31, 2021, the balance of debt issuance costs was $2.1 million, representing deferred financing costs of

$3.4 million less accrued interest of $1.3 million, included in BoA Credit Facility and WF Credit Facility (each as defined below), net

of $649.9 million on the consolidated statement of assets and liabilities.

The Company has elected to

be treated as a RIC under Subchapter M of the Code.

So long as the Company maintains its status as a RIC, it generally will not pay corporate-level

federal income taxes on any ordinary income or capital gains that it distributes at least annually to its stockholders as dividends.

To qualify as a RIC, the Company

must, among other things, meet certain source-of-income and asset diversification requirements.

In addition, to qualify for RIC tax treatment,

the Company must distribute to its stockholders, for each taxable year, at least 90% of its “investment company taxable income”

for that year, which is generally its ordinary income plus the excess of its realized net short-term capital gains over its realized

net long-term capital losses.

In order for the Company not to be subject to U.S.

federal excise taxes, it must distribute annually an

amount at least equal to the sum of (i) 98% of its net ordinary income (taking into account certain deferrals and elections) for the

calendar year, (ii) 98.2% of its capital gains in excess of capital losses for the one year period ending October 31 in such calendar

year and (iii) any net ordinary income and capital gains in excess of capital losses for preceding years that were not distributed during

The Company, at its discretion, may carry forward taxable income in excess of calendar year dividends and pay a 4% nondeductible

federal excise tax on this income.

The Company evaluates tax

positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax

positions are “more-likely-than-not”

to be sustained by the applicable tax authority.

Tax positions not deemed to meet the “more-likely-than-not”

threshold are reserved and recorded as a tax benefit or

expense in the current year.

All penalties and interest associated with income taxes are included in income tax expense.

regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited

to, on-going analyses of tax laws, regulations and interpretations thereof.

and Dividend Income Recognition

Interest income is

recorded on the accrual basis and includes amortization of premiums or accretion of discounts.

Discounts and premiums to par value

on securities purchased are accreted and amortized, respectively, into interest income over the contractual life of the respective

security using the effective interest method.

The amortized cost of investments represents the original cost adjusted for the

amortization of premiums or accretion of discounts, if any.

Upon prepayment of a loan or debt security, any prepayment premiums,

unamortized upfront loan origination fees, paydown gains/losses and unamortized discounts are recorded as interest income in the

current period.

are generally placed on non-accrual status when there is reasonable doubt that principal or interest will be collected in full.

Accrued interest is generally reversed when a loan is placed on non-accrual status.

Interest payments received on non-accrual

loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability.

Non-accrual loans are restored to accrual status when past due principal and interest is paid current and, in management’s

judgment, are likely to remain current.

Management may make exceptions to this treatment and determine to not place a loan on

non-accrual status if the loan has sufficient collateral value and is in the process of collection.

income on preferred equity securities is recorded on the accrual basis to the extent that such amounts are payable by the portfolio

company and are expected to be collected.

Dividend income on common equity securities and money market funds is recorded on the

record date for private portfolio companies or on the ex-dividend date for publicly-traded portfolio companies.

From time to time,

the Company may receive fees for services provided to portfolio companies.

These fees are generally only available to the Company

as a result of closing investments, are normally paid at the closing of the investments, are generally non-recurring and are recognized

as revenue when earned upon closing of the investment.

The services that the Investment Advisor provides vary by investment, but

can include closing, work, diligence or other similar

fees and fees for providing managerial assistance to the Company’s portfolio companies.

In addition, the Company may generate

revenue in the form of commitment, origination, structuring or diligence fees, monitoring fees and possibly consulting and performance-

costs in connection with the offering of common stock of the Company are capitalized as a deferred charge and amortized to expense

on a straight-line basis over 12 months from the commencement of operations, January 23, 2020.

These expenses consist primarily

of legal fees and other costs incurred with Company’s share offerings, the preparation of the Company’s registration

statement, and registration fees.

Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation

Company measures realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized

cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized, but considering

unamortized upfront fees and prepayment penalties.

Net change in unrealized appreciation or depreciation reflects the change in

portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation

or depreciation, when gains or losses are realized.

Accounting Pronouncements

In March 2020,

the FASB issued Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848) –

Facilitation of the Effects of

Reference Rate Reform on Financial Reporting (“ASU 2020-04”).

The guidance provides optional expedients and

exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions,

subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued.

is effective for all entities as of March 12, 2020 through December 31, 2022.

The Company is currently evaluating the impact

of adopting ASU 2020-04 on its consolidated financial statements.

Tax positions not deemed to meet the

“more-likely-than-not”

threshold are reserved and recorded as a tax benefit or expense in the current year.

All penalties

and interest associated with income taxes are included in income tax expense.

Conclusions regarding tax positions are subject to review

and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations

Interest and Dividend Income Recognition

Interest income is recorded

on the accrual basis and includes amortization of premiums or accretion of discounts.

Discounts and premiums to par value on securities

purchased are accreted and amortized, respectively, into interest income over the contractual life of the respective security using the

effective interest method.

The amortized cost of investments represents the original cost adjusted for the amortization of premiums or

accretion of discounts, if any.

Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination

fees, paydown gains/losses and unamortized discounts are recorded as interest income in the current period.

Loans are generally placed

on non-accrual status when there is reasonable doubt that principal or interest will be collected in full.

Accrued interest is generally

reversed when a loan is placed on non-accrual status.

Interest payments received on non-accrual loans may be recognized as income or

applied to principal depending upon management’s judgment regarding collectability.

Non-accrual loans are restored to accrual status

when past due principal and interest is paid current and, in management’s judgment, are likely to remain current.

Management may

make exceptions to this treatment and determine to not place a loan on non-accrual status if the loan has sufficient collateral value

and is in the process of collection.

Dividend income on preferred

equity securities is recorded on the accrual basis to the extent that such amounts are payable by the portfolio company and are expected

to be collected.

Dividend income on common equity securities and money market funds is recorded on the record date for private portfolio

companies or on the ex-dividend date for publicly-traded portfolio companies.

From time to time, the Company

may receive fees for services provided to portfolio companies.

These fees are generally only available to the Company as a result of

closing investments, are normally paid at the closing of the investments, are generally non-recurring and are recognized as revenue when

earned upon closing of the investment.

The services that the Investment Advisor provides vary by investment, but can include closing,

work, diligence or other similar fees and fees for providing managerial assistance to the Company’s portfolio companies.

the Company may generate revenue in the form of commitment, origination, structuring or diligence fees, monitoring fees and possibly

consulting and performance- based fees.

Offering Costs

Offering costs in connection

with the offering of common stock of the Company are capitalized as a deferred charge and amortized to expense on a straight-line basis

over 12 months from the commencement of operations, January 23, 2020.

These expenses consist primarily of legal fees and other costs

incurred with Company’s share offerings, the preparation of the Company’s registration statement, and registration fees.

Net Realized Gains or Losses and Net Change

in Unrealized Appreciation or Depreciation

The Company measures realized

gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment,

without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized upfront fees and prepayment

Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting

period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.

New Accounting Pronouncements

In March 2020, the FASB issued

Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848) –

Facilitation of the Effects of Reference Rate Reform on

Financial Reporting (“ASU 2020-04”).

The guidance provides optional expedients and exceptions for applying generally accepted

accounting principles to contracts, hedging relationships, and other transactions, subject to meeting certain criteria, that reference

LIBOR or another reference rate expected to be discontinued.

ASU 2020-04 is effective for all entities as of March 12, 2020 through December

The Company is currently evaluating the impact of adopting ASU 2020-04 on its consolidated financial statements.

Agreements and Related Party Transactions

Administration

The Company has entered

into the Administration Agreement with the Administrator.

Pursuant to the Administration Agreement, the Administrator furnishes

office facilities and equipment and provides clerical, bookkeeping, recordkeeping and other administrative services at such facilities.

Under the Administration Agreement, the Administrator performs, or oversees the performance of, required administrative services,

which include being responsible for the financial and

other records that the Company is required to maintain and preparing reports to stockholders and reports and other materials filed

with the SEC.

In addition, the Administrator assists the Company in determining and publishing the Company’s net asset value,

overseeing the preparation and filing of tax returns and the printing and dissemination of reports and other materials to stockholders,

and generally overseeing the payment of expenses and the performance of administrative and professional services rendered to the

Company by others.

Under the Administration Agreement, the Administrator also provides managerial assistance on the Company’s

behalf to those portfolio companies that have accepted the offer to provide such assistance.

the Administration Agreement, the Company reimburses the Administrator based upon its allocable portion of the Administrator’s

overhead (including rent) in performing its obligations under the Administration Agreement, including rent, the fees and expenses

associated with performing compliance functions and the Company’s allocable portion of the cost of its officers (including

the Company’s Chief Financial Officer and Chief Compliance Officer), and any of their respective staff who provide services

to the Company, operations staff who provide services to the Company, and internal audit staff, if any, to the extent internal

audit performs a role in the Company’s Sarbanes-Oxley internal control assessment.

In addition, if requested to provide

managerial assistance to portfolio companies, the Administrator is reimbursed based on the services provided.

The Administration

Agreement has an initial term of two years and may be renewed with the approval of the Company’s board of directors (the

“Board”).

Administration Agreement

The Company has entered into

the Administration Agreement with the Administrator.

Pursuant to the Administration Agreement, the Administrator furnishes office facilities

and equipment and provides clerical, bookkeeping, compliance, recordkeeping and other administrative services at such facilities.

the Administration Agreement, the Administrator performs, or oversees the performance of, required administrative services, which include

being responsible for the financial and other records that the Company is required to maintain and preparing reports to stockholders

and reports and other materials filed with the SEC.

In addition, the Administrator assists the Company in determining and publishing

the Company’s net asset value, overseeing the preparation and filing of tax returns and the printing and dissemination of reports

and other materials to stockholders, and generally overseeing the payment of expenses and the performance of administrative and professional

services rendered to the Company by others.

Under the Administration Agreement, the Administrator also provides managerial assistance

on the Company’s behalf to those portfolio companies that have accepted the offer to provide such assistance.

Under the Administration Agreement,

the Company reimburses the Administrator based upon its allocable portion of the Administrator’s overhead (including rent) in performing

its obligations under the Administration Agreement, including rent, the fees and expenses associated with performing compliance functions

and the Company’s allocable portion of the cost of its officers (including the Company’s Chief Financial Officer and Chief

Compliance Officer), and any of their respective staff who provide services to the Company, operations staff who provide services to the

Company, and internal audit staff, if any, to the extent internal audit performs a role in the Company’s Sarbanes-Oxley internal

control assessment.

In addition, if requested to provide managerial assistance to portfolio companies, the Administrator is reimbursed

based on the services provided.

The Administration Agreement has an initial term of two years and may be renewed with the approval of

the Company’s board of directors (the “Board”).

The agreement was renewed during the year for an additional one year

The Administration Agreement may be terminated by either party without penalty upon 60 days’

notice to the other party.

To the extent that the Administrator outsources any of its functions, the Company pays the fees associated

with such functions on a direct basis without any incremental profit to the Administrator.

addition, the Administrator has, pursuant to a sub-administration agreement, engaged U.S.

Bancorp Fund Services, LLC to act on

behalf of the Company’s Administrator in the performance of certain other administrative services.

The Company pays fees

Bancorp Fund Services, LLC pursuant to the sub-administration agreement.

written notice to the other

To the extent that the Administrator outsources any of its functions, the Company pays the fees associated with such functions

on a direct basis without any incremental profit to the Administrator.

In addition, the Administrator

has, pursuant to a sub-administration agreement, engaged U.S.

Bancorp Fund Services, LLC to act on behalf of the Company’s Administrator

in the performance of certain other administrative services.

The Company has also engaged U.S.

Bank, National

Association or its affiliates (“US Bank”) directly to serve as custodian, transfer agent, distribution paying agent

and registrar.

Advisory Agreement

Investment Advisor serves as the investment adviser of the Company and is registered as an investment adviser with the SEC.

Investment Advisor’s primary business is to provide a variety of investment management services, including an investment

program for the Company.

The Investment Advisor is responsible for all business activities and oversight of the investment decisions

made for the Company.

return for providing management services to the Company, the Company pays the Investment Advisor a base management fee, calculated

and paid quarterly in arrears at an annual rate of 2.00% of the average value of the weighted average (based on the number of

shares outstanding each day in the quarter) of the Company’s total net assets at the end of the two most recently completed

calendar quarters.

For the Company’s first quarter, the base management fee was calculated based on the weighted average

of total net assets as of such quarter-end.

The base management fee for any partial quarter will be pro-rated based on the number

of days actually elapsed in that quarter relative to the total number of days in such quarter.

Investment Advisor, however, has agreed to waive its right to receive management fees in excess of 1.75% of the total net assets

during any period prior to the listing of the Company’s common stock on a national securities exchange (a “Listing”).

If a Listing does not occur, such fee waiver will remain in place through liquidation of the Company.

The Investment Advisor will

not be permitted to recoup any waived amounts at any time and the waiver may only be modified or terminated prior to a Listing

with the approval of the Board.

Additionally,

pursuant to the Advisory Agreement, the Investment Advisor is not entitled to an incentive fee prior to a Listing.

Listing, the Investment Advisor will be entitled to an incentive fee (the “Income Incentive Fee”) based on the Company’s

pre-incentive fee net investment income for the then most recently completed calendar quarter, as adjusted downward (but not upward)

if over the most recently completed and three preceding calendar quarters aggregate net realized losses on the Company’s

investments exceed the Company’s aggregate net investment income over the same period, excluding the most recently completed

quarter, as described in more detail below.

In this regard, if the Company’s net realized losses over the most recently

completed and three preceding calendar quarters are greater than the Company’s net investment income over the same period,

excluding the most recently completed quarter, then the pre-incentive fee net income used in the calculation of the Income Incentive

Fee would be subject to a downward adjustment.

The amount of the adjustment would be equal to the amount by which such net realized

losses exceed such net investment income.

On the other hand, if the Company’s net investment income over the most recently

completed and three preceding calendar quarters is equal to or greater than the Company’s net realized losses over the same

period, excluding the most recently completed quarter, then no adjustment to pre-incentive fee net investment income would be

The Income Incentive Fee will be calculated and payable quarterly in arrears commencing with the first calendar quarter

following a Listing.

The Company will pay the Investment Advisor an Income Incentive Fee with respect to its “adjusted net

investment income”

Bank, National Association or its affiliates

(“US Bank”) directly to serve as custodian, transfer agent, distribution paying agent and registrar.

Investment Advisory Agreement

The Investment Advisor serves

as the investment adviser of the Company and is registered as an investment adviser with the SEC.

The Investment Advisor’s primary

business is to provide a variety of investment management services, including an investment program for the Company.

The Investment Advisor

is responsible for all business activities and oversight of the investment decisions made for the Company.

In return for providing management

services to the Company, the Company pays the Investment Advisor a base management fee, calculated and paid quarterly in arrears at an

annual rate of 2.00% of the average value of the weighted average (based on the number of shares outstanding each day in the quarter)

of the Company’s total net assets at the end of the two most recently completed calendar quarters.

The base management fee for

any partial quarter will be pro-rated based on the number of days actually elapsed in that quarter relative to the total number of days

in such quarter.

The Investment Advisor, however,

has agreed to waive its right to receive management fees in excess of 1.75% of the total net assets during any period prior to the listing

of the Company’s common stock on a national securities exchange (a “Listing”).

If a Listing does not occur, such fee

waiver will remain in place through liquidation of the Company.

The Investment Advisor will not be permitted to recoup any waived amounts

at any time and the waiver may only be modified or terminated prior to a Listing with the approval of the Board.

Additionally, pursuant to

the Advisory Agreement, the Investment Advisor is not entitled to an incentive fee prior to a Listing.

Following a Listing, the Investment

Advisor will be entitled to an incentive fee (the “Income Incentive Fee”) based on the Company’s pre-incentive fee

net investment income for the then most recently completed calendar quarter, as adjusted downward (but not upward) if over the most recently

completed and three preceding calendar quarters aggregate net realized losses on the Company’s investments exceed the Company’s

aggregate net investment income over the same period, excluding the most recently completed quarter, as described in more detail below.

In this regard, if the Company’s net realized losses over the most recently completed and three preceding calendar quarters are

greater than the Company’s net investment income over the same period, excluding the most recently completed quarter, then the

pre-incentive fee net income used in the calculation of the Income Incentive Fee would be subject to a downward adjustment.

of the adjustment would be equal to the amount by which such net realized losses exceed such net investment income.

On the other hand,

if the Company’s net investment income over the most recently completed and three preceding calendar quarters is equal to or greater

than the Company’s net realized losses over the same period, excluding the most recently completed quarter, then no adjustment

to pre-incentive fee net investment income would be made.

The Income Incentive Fee will be calculated and payable quarterly in arrears

commencing with the first calendar quarter following a Listing.

The Company will pay the Investment Advisor an Income Incentive Fee with

respect to its “adjusted net investment income”

in each calendar quarter as follows:

Income Incentive Fee in any calendar quarter in which the Company’s “adjusted

net investment income”

does not exceed an amount equal to a “hurdle rate”

of 1.5% per quarter (6% annualized) of the Company’s total net assets at the end

of that quarter (the “Hurdle Amount”);

of the Company’s “adjusted net investment income”

with respect to that

portion of such “adjusted net investment income,”

if any, that exceeds the

Hurdle Amount but is less than or equal to an amount (the “Catch-Up Amount”)

determined on a quarterly basis by multiplying 1.6875% by the Company’s total net

asset value for the immediately preceding calendar quarter.

Income Incentive Fee in any calendar quarter in which the Company’s “adjusted net investment income”

does not exceed

an amount equal to a “hurdle rate”

of 1.5% per quarter (6% annualized) of the Company’s total net assets at the

end of that quarter (the “Hurdle Amount”);

100% of the Company’s “adjusted net investment

income”

with respect to that portion of such “adjusted net investment income,”

if any, that exceeds the Hurdle

Amount but is less than or equal to an amount (the “Catch-Up Amount”) determined on a quarterly basis by multiplying

1.6875% by the Company’s total net asset value for the immediately preceding calendar quarter.

The Catch-Up Amount is intended

to provide the Investment Advisor with an incentive fee of 12.5% on all of the Company’s

“adjusted net investment income”

when the Company’s “adjusted

net investment income”

to provide the Investment Advisor with an incentive fee of 12.5% on all of the Company’s “adjusted net investment income”

when the Company’s “adjusted net investment income”

reaches the Catch-Up Amount in any calendar quarter;

any calendar quarter in which the Company’s “adjusted net investment income”

for any calendar quarter in which the Company’s

“adjusted net investment income”

exceeds the Catch-Up Amount, the Income Incentive Fee shall equal 12.5% of the amount

of the Company’s “adjusted net investment income”

for the calendar

“Adjusted

net investment income”

for the calendar quarter.

“Adjusted net investment

income”

means the Company’s “pre-incentive fee net investment income”

during the then most

recently completed calendar quarter minus the difference, if positive, between (i) the Company’s “net realized losses”

over the then most recently completed and three preceding calendar quarters (or if shorter, the number of calendar quarters that

have occurred since the Listing) and (ii) the Company’s “net investment income”

over the three preceding calendar

quarters (or if shorter, the number of calendar quarters that have occurred since the Listing).

No adjustment (downward or upward)

will be made to “pre-incentive fee net investment income”

if the difference between clause (i) minus clause (ii) is

zero or negative.

“Pre-incentive

during the then most recently completed

calendar quarter minus the difference, if positive, between (i) the Company’s “net realized losses”

over the then most

recently completed and three preceding calendar quarters (or if shorter, the number of calendar quarters that have occurred since the

Listing) and (ii) the Company’s “net investment income”

over the three preceding calendar quarters (or if shorter,

the number of calendar quarters that have occurred since the Listing).

No adjustment (downward or upward) will be made to “pre-incentive

fee net investment income”

means interest income, dividend income and any other income (including any other fees such as

commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies

but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the

quarter (including the base management fee, any expenses payable under the Administration Agreement, and any interest expense

and dividends paid on any outstanding preferred stock, but excluding the Income Incentive Fee).

“Pre-incentive fee net investment

income”

includes, in the case of investments with a deferred interest feature such as market discount, original issue discount

(“OID”), debt instruments with payment-in-kind (“PIK”) interest, preferred stock with PIK dividends and

zero-coupon securities, accrued income that the Company has not yet received in cash.

realized losses”

in respect of a particular period means the difference, if positive, between (i) the aggregate realized

capital losses on the Company’s investments in such period and (ii) the aggregate realized capital gains on the Company’s

investments in such period.

“Net investment income”

in respect of the particular period means interest income, dividend

income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees

or other fees that the Company receives from portfolio companies but excluding fees for providing managerial assistance) accrued

during the particular period, minus operating expenses for the particular (including the base management fee, the Income Incentive

Fee, any expenses payable under the Administration Agreement, and any interest expense and dividends paid on any outstanding preferred

if the difference between clause (i) minus clause (ii) is zero or negative.

“Pre-incentive fee net

investment income”

means interest income, dividend income and any other income (including any other fees such as commitment, origination,

structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies but excluding fees for providing

managerial assistance) accrued during the calendar quarter, minus operating expenses for the quarter (including the base management fee,

any expenses payable under the Administration Agreement, and any interest expense and dividends paid on any outstanding preferred stock,

but excluding the Income Incentive Fee).

“Pre-incentive fee net investment income”

includes, in the case of investments with

a deferred interest feature such as market discount, original issue discount (“OID”), debt instruments with payment-in-kind

(“PIK”) interest, preferred stock with PIK dividends and zero-coupon securities, accrued income that the Company has not

yet received in cash.

“Net realized losses”

in respect of a particular period means the difference, if positive, between (i) the aggregate realized capital losses on the Company’s

investments in such period and (ii) the aggregate realized capital gains on the Company’s investments in such period.

investment income”

in respect of the particular period means interest income, dividend income and any other income (including any

other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio

companies but excluding fees for providing managerial assistance) accrued during the particular period, minus operating expenses for the

particular period (including the base management fee, the Income Incentive Fee, any expenses payable under the Administration Agreement,

and any interest expense and dividends paid on any outstanding preferred stock).

“Net investment income”

includes, in the case of investments with a deferred interest feature such as market

discount, OID, debt instruments with PIK interest, preferred stock with PIK dividends and zero-coupon securities, accrued income

that the Company has not yet received in cash.

Income Incentive Fee amount, or the calculations pertaining thereto, as appropriate, will be pro-rated for any period less than

a full calendar quarter.

The following table

presents the composition of the Company’s investment portfolio at amortized cost and fair value as of December 31,

includes, in the

case of investments with a deferred interest feature such as market discount, OID, debt instruments with PIK interest, preferred stock

with PIK dividends and zero-coupon securities, accrued income that the Company has not yet received in cash.

The Income Incentive Fee amount,

or the calculations pertaining thereto, as appropriate, will be pro-rated for any period less than a full calendar quarter.

The following table presents

the composition of the Company’s investment portfolio at amortized cost and fair value as of December 31, 2021 and December 31,

December 31, 2021

December 31, 2020

First-lien senior secured debt

1 unchanged sentence

$ 1,007,407,474

$ 554,650,131

$ 566,459,850

Second-lien senior secured debt

Collateralized securities and structured products - debt

Corporate Bonds

Convertible Bond

CLO Mezzanine

Short-term investments

2 unchanged sentences

$ 1,194,257,584

of December 31, 2020, approximately 17.0% of the investment portfolio at amortized cost and 17.2% of the investment portfolio

measured at fair value, respectively, were invested in portfolio companies with foreign domiciles or non-controlled investment

With respect to the Company’s total assets, 15.5% of the Company’s total assets were in non-qualifying

assets as defined by Section 55(a) of the 1940 Act as of December 31, 2020.

industry composition of investments based on fair value, as a percentage of total investments at fair value, as of December 31,

2020 was as follows:

$ 640,100,635

$ 653,156,200

As of December 31, 2021, approximately

14.4% of the long-term investment portfolio at amortized cost and 14.5% of the long-term investment portfolio measured at fair value,

respectively, were invested in portfolio companies with foreign domiciles or non-controlled investment companies.

As of December 31, 2020,

approximately 17.0% of the investment portfolio at amortized cost and 17.2% of the investment portfolio measured at fair value, respectively,

were invested in portfolio companies with foreign domiciles or non-controlled investment companies.

With respect to the Company’s

total assets, 13.3% and 15.5% of the Company’s total assets were in non-qualifying assets as defined by Section 55(a) of the 1940

Act as of December 31, 2021 and December 31, 2020, respectively.

The industry composition of

investments based on fair value, as a percentage of total investments at fair value, as of December 31, 2021 and December 31, 2020 was

Healthcare Providers and Services

Short-Term Investments

Cash and cash equivalents

Professional Services

Diversified Financial Services

Hotels, Restaurants and Leisure

Independent Power and Renewable Electricity Producers

Diversified Consumer Services

Commercial Services and Supplies

Specialty Retail

Building Products

Oil, Gas and Consumable Fuels

Healthcare Technology

Healthcare Equipment and Supplies

Containers and Packaging

Health Care Technology

Diversified Telecommunication Services

Diversified Financial Services

Construction and Engineering

Structured Subordinated Note

Structured Note

Oil, Gas and Consumable Fuels

Interactive Media and Services

Metals and Mining

Commercial Services and Supplies

Auto Components

Diversified Telecommunication Services

Internet Software and Services

Specialty Retail

Food Products

Healthcare Equipment and Supplies

Building Products

Electronic Equipment, Instruments and Components

Aerospace and Defense

Diversified Consumer Services

Pharmaceuticals

Industrial Conglomerates

Electrical Equipment

Real Estate Management and Development

Road and Rail

Wireless Telecommunication Services

Technology Hardware, Storage and Peripherals

Household Durables

Leisure Products

Electric Utilities

Aerospace and Defense

Textiles, Apparel and Luxury Goods

Interactive Media and Services

Construction Materials

Internet and Direct Marketing Retail

Technology Hardware, Storage and Peripherals

Capital Markets

1 unchanged sentence

Real Estate Investment Trusts (REITs)

Textiles, Apparel and Luxury Goods

Transportation Infrastructure

Fair Value of Investments

value is defined as the price that the Company would receive upon selling an investment or paying to transfer a liability in an

orderly transaction to a market participant in the principal or most advantageous market for the investment.

Accounting guidance

emphasizes that valuation techniques maximize the use of observable market inputs and minimize the use of unobservable inputs.

refer broadly to the assumptions that market participants would use in pricing an asset or liability, including assumptions about

Inputs may be observable or unobservable.

Observable inputs are inputs that reflect the assumptions market participants

would use in pricing an asset or liability developed based on market data obtained from sources independent of the Company.

inputs are inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based

on the best information available in the circumstances.

The valuation hierarchical levels are based upon the transparency of the

inputs to the valuation of the investment as of the measurement date.

Fair value is defined as the

price that the Company would receive upon selling an investment or paying to transfer a liability in an orderly transaction to a market

participant in the principal or most advantageous market for the investment.

Accounting guidance emphasizes that valuation techniques

maximize the use of observable market inputs and minimize the use of unobservable inputs.

Inputs refer broadly to the

assumptions that market participants would use in pricing an asset or liability, including assumptions about risk.

Inputs may be observable

or unobservable.

Observable inputs are inputs that reflect the assumptions market participants would use in pricing an asset or liability

developed based on market data obtained from sources independent of the Company.

Unobservable inputs are inputs that reflect the assumptions

market participants would use in pricing an asset or liability developed based on the best information available in the circumstances.

The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the investment as of the measurement

The three levels are defined as follows:

Valuations based on quoted prices in active markets for identical assets or liabilities at the measurement date.

Valuations based on inputs other than quoted prices in active markets included in Level 1, which are either directly

or indirectly observable at the measurement date.

This category includes quoted prices for similar assets or liabilities in active

markets, quoted prices for identical or similar assets or liabilities in non-active markets including actionable bids from third

parties for privately held assets or liabilities, and observable inputs other than quoted prices such as yield curves and forward

currency rates that are entered directly into valuation models to determine the value of derivatives or other assets or liabilities.

Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement

in private investment companies measured based upon net asset value as a practical expedient to determine fair value are not required

to be categorized in the fair value hierarchy.

As of December 31, 2020, there were no investments accounted for using the practical

inputs for the determination of fair value may require significant management judgment or estimation and are based upon management’s

assessment of the assumptions that market participants would use in pricing the assets or liabilities.

These investments include

debt and equity investments in private companies or assets valued using the market or income approach and may involve pricing

models whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for

identical or similar investments.

The inputs in these valuations may include, but are not limited to, capitalization and discount

rates, beta and earnings before interest, taxes, depreciation, and amortization (“EBITDA”) multiples.

The information

may also include 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 disclaimer would result

in classification as Level 3 information, assuming no additional corroborating evidence.

inputs and weightings applied to determine fair value require subjective determination.

Accordingly, valuations do not necessarily

represent the amounts that may eventually be realized from sales or other dispositions of investments.

Level 1 —

Valuations based on

quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 —

Valuations based on

inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable at the measurement

This category includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar

assets or liabilities in non-active markets including actionable bids from third parties for privately held assets or liabilities, and

observable inputs other than quoted prices such as yield curves and forward currency rates that are entered directly into valuation models

to determine the value of derivatives or other assets or liabilities.

Level 3 —

Valuations based on

inputs that are unobservable and where there is little, if any, market activity at the measurement date.

Investments in private investment

companies measured based upon net asset value as a practical expedient to determine fair value are not required to be categorized in the

fair value hierarchy.

As of December 31, 2021 and as of December 31, 2020, there were no investments accounted for using the practical

The inputs for the determination

of fair value may require significant management judgment or estimation and are based upon management’s assessment of the assumptions

that market participants would use in pricing the assets or liabilities.

These investments include debt and equity investments in private

companies or assets valued using the market or income approach and may involve pricing models whose inputs require significant judgment

or estimation because of the absence of any meaningful current market data for identical or similar investments.

The inputs in these

valuations may include, but are not limited to, capitalization and discount rates, beta and earnings before interest, taxes, depreciation,

and amortization (“EBITDA”) multiples.

The information may also include 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 disclaimer would result in classification as Level 3 information, assuming no additional corroborating evidence.

Pricing inputs and weightings

applied to determine fair value require subjective determination.

Accordingly, valuations do not necessarily represent the amounts that

may eventually be realized from sales or other dispositions of investments.

A financial instrument’s

categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

following table presents the fair value hierarchy of investments as of December 31, 2020:

The following table presents

the fair value hierarchy of investments as of December 31, 2021:

Fair Value Hierarchy as of December 31, 2021

3 unchanged sentences

Second-lien senior secured debt

Corporate Bonds

Convertible Bond

CLO Mezzanine

Short Term Investments

Total Investments

$ 1,115,314,820

$ 1,194,257,584

The following table presents

the fair value hierarchy of investments as of December 31, 2020:

Fair Value Hierarchy as of December 31, 2020

First-lien senior secured debt

$ 566,459,850

Second-lien senior secured debt

Collateralized securities and structured products - debt

3 unchanged sentences

$ 653,156,200

the period from January 23, 2020 (Commencement of Operations) to December 31, 2020, the Company did not recognize any transfers

For the year ended December

31, 2021 and the period from January 23, 2020 (Commencement of Operations) to December 31, 2020, the Company did not recognize any transfers

to or from Level 3.

Not Carried at Fair Value

fair value of the Credit Facility, which would be categorized as Level 3 within the fair value hierarchy as of December 31, 2020,

approximates its carrying value because the Credit Facility has variable interest based on selected short term rates.

In accordance with

the 1940 Act, with certain limitations, BDCs are permitted to borrow amounts such that their asset coverage ratios, as defined

in the 1940 Act, are at least 150% after such borrowing.

Debt Not Carried at Fair Value

The fair value of the BoA Credit Facility and the WF Credit Facility, which

would be categorized as Level 3 within the fair value hierarchy as of December 31, 2021, approximates their respective carrying values

because the BoA Credit Facility and WF Credit Facility each have variable interest based on selected short term rates.

In accordance with the 1940

Act, with certain limitations, BDCs are permitted to borrow amounts such that their asset coverage ratios, as defined in the 1940 Act,

are at least 150% after such borrowing.

As of December 31, 2021, the Company’s asset coverage ratio was 170%.

February 18, 2020, the Company, through a special purpose wholly-owned subsidiary, PS BDC Funding (together with the Company,

the “Borrowers”) entered into a Credit Agreement (the “Credit Agreement”) with certain financial institutions

as lenders (“Lenders”), BofA N.A.

Bank of America Credit Facility

On February 18, 2020, the

Company, through a special purpose wholly-owned subsidiary, PS BDC Funding (together with the Company, the “Borrowers”) entered

into a Credit Agreement (the “Credit Agreement”) with certain financial institutions as lenders (“Lenders”), BofA

as the Administrative Agent and BofA Securities, Inc.

(“BofA Securities”),

as Lead Arranger and Sole Book Manager, pursuant to which the Lenders agreed to provide the Company with a revolving line of credit

(the “Credit Facility”).

the Credit Facility, which matures on February 18, 2023, the Lenders have agreed to extend credit to PS BDC Funding in an aggregate

amount up to the Commitment (as defined in the Credit Agreement) amount.

The Commitment amount for the Credit Facility was $200.0

million as of the closing date of the Credit Agreement and increased to $400.0 million on the one-month anniversary of the closing

date, and further increased to $475.0 million on October 12, 2020.

(“BofA Securities”), as Lead Arranger and Sole Book Manager, pursuant

to which the Lenders agreed to provide the Company with a revolving line of credit (the “BoA Credit Facility”).

Under the BoA Credit Facility,

which matures on February 18, 2025, the Lenders have agreed to extend credit to PS BDC Funding in an aggregate amount up to the Commitment

(as defined in the Credit Agreement) amount.

The Commitment amount for the BoA Credit Facility was $200.0 million as of the closing date

of the Credit Agreement, increased to $400.0 million on the one-month anniversary of the closing date, further increased to $475.0 million

on October 12, 2020, and further increased to $725 million on September 29, 2021.

The Borrowers’

ability to draw under the Credit Facility

is scheduled to terminate on February 11, 2023.

All amounts outstanding under the Credit Facility are required to be repaid by

February 18, 2023.

ability to draw under the BoA Credit

Facility is scheduled to terminate on February 11, 2025.

All amounts outstanding under the BoA Credit Facility are required to be repaid

by February 18, 2025.

As the Company raises additional capital, we may enter into additional credit agreements to expand our borrowing

obligations consisted of the following as of December 31, 2020:

Principal Committed

Debt obligations consisted

of the following as of December 31, 2021:

December 31, 2021

Aggregate Principal Committed

Available (1)

Carrying Value (2)

BoA Credit Facility

$ 725,000,000

4 unchanged sentences

$ 552,000,000

(1) The amount

available reflects any limitations related to the Credit Facility’s borrowing base.

carrying value of the Credit Facility is presented net of deferred financing costs of

$2.122 million.

Average debt outstanding

during the period January 23, 2020 (Commencement of Operations) through December 31, 2020, was $247.5 million.

The loans under the Credit Facility may be base rate loans or

eurocurrency rate loans.

The base rate loans will bear interest at the base rate plus 1.30%, and the eurocurrency rate loans will

bear interest at 1-month or 3-month LIBOR plus 1.30%.

$ 173,000,000

$ 550,262,297

(1) The amount available reflects

any limitations related to the BoA Credit Facility’s borrowing base.

carrying value of the BoA Credit Facility is presented net of deferred financing costs of $1.993 million and accrued interest of $255

Debt obligations consisted

of the following as of December 31, 2020:

December 31, 2020

Principal Committed

Outstanding Principal

Amount Available (1)

Net Carrying Value (2)

BoA Credit Facility

$ 475,000,000

$ 395,000,000

$ 393,152,103

$ 475,000,000

$ 395,000,000

$ 393,152,103

(1) The amount available reflects

any limitations related to the BoA Credit Facility’s borrowing base.

(2) The carrying value of the BoA Credit Facility is presented net of

deferred financing costs of $2.122 million.

Average debt outstanding under

the BoA Credit Facility during the year ended December 31, 2021 and the period January 23, 2020 (Commencement of Operations) through December

31, 2020, was $433.1 million and $247.5 million, respectively.

The loans under the BoA Credit Facility may be base rate loans or eurocurrency

The base rate loans will bear interest at the base rate plus 1.30%, and the eurocurrency rate loans will bear interest at

1-month or 3-month LIBOR plus 1.30%.

The “base rate”

will be equal to the highest of (a) the federal

funds rate plus ½

will be equal to the highest of (a) the federal funds rate plus ½

of 1%, (b) the prime rate, and (c) 1-month or 3-month LIBOR.

The Credit Agreement includes fallback language

in the event that LIBOR becomes unavailable.

Interest pursuant to base rate loans is payable quarterly in arrears, and interest

pursuant to eurocurrency loans is payable either quarterly or monthly, as specified by the Borrowers in a loan notice pertaining

The Credit Agreement requires the payment of a commitment fee of 0.50% for unused Commitments during the first five months

following the closing of the Credit Facility, and, thereafter, 1.80% for any unused Commitments above 70% of the total Commitments.

The Credit Agreement includes fallback language in the event that LIBOR becomes

Interest pursuant to base rate loans is payable quarterly in arrears, and interest pursuant to eurocurrency loans is payable

either quarterly or monthly, as specified by the Borrowers in a loan notice pertaining thereto.

The Credit Agreement requires the payment

of a commitment fee of 0.50% for unused Commitments until the four-month anniversary of the Second Amendment to the Credit Agreement.

Thereafter, the commitment fee is 0.50% on unused Commitments up to 30% of the BoA Credit Facility, and 1.30% on unused Commitments in

excess of 30% of the BoA Credit Facility.

Such fee is payable quarterly in arrears.

The advance rate for PS BDC Funding’s Eligible Collateral Assets ranges from 40%

for Second Lien Bank Loans to 70% for First Lien Bank Loans that are B Assets to 100% for Cash (excluding Excluded Amounts) (as

each such term is defined in the Credit Agreement).

the period January 23, 2020 (Commencement of Operations) through December 31, 2020, the components of interest expense were as

For the Period January 23, 2020

(Commencement of Operations) through

of debt issuance costs

The advance rate for PS BDC Funding’s Eligible

Collateral Assets ranges from 40% for Second Lien Bank Loans to 70% for First Lien Bank Loans that are B Assets to 100% for Cash (excluding

Excluded Amounts) (as each such term is defined in the Credit Agreement).

For the year ended December

31, 2021 and the period January 23, 2020 (Commencement of Operations) through December 31, 2020, the components of interest expense with

respect to the BoA Credit Facility were as follows:

For the Year Ended

For the Period January 23, 2020 (Commencement of Operations) through

Interest expense

Amortization of debt issuance costs

Total interest expense

Average interest rate

BDC Funding has pledged all of its assets to BofA N.A., in its capacity as Administrative Agent, to secure its obligations under

the Credit Facility.

Both the Company and PS BDC Funding have made customary representations and warranties and are required to

comply with various covenants, reporting requirements and other customary requirements for similar credit facilities.

under the Credit Facility is subject to the leverage restrictions contained in the 1940 Act.

The obligations under the Credit

Agreement may be accelerated upon the occurrence of an event of default under the Credit Agreement, including in the event of

a change of control of PS BDC Funding or if the Investment Advisor ceases to serve as investment adviser to the Company.

PS BDC Funding has pledged

all of its assets to BofA N.A., in its capacity as Administrative Agent, to secure its obligations under the BoA Credit Facility.

the Company and PS BDC Funding have made customary representations and warranties and are required to comply with various covenants, reporting

requirements and other customary requirements for similar credit facilities.

Borrowing under the BoA Credit Facility is subject to the

leverage restrictions contained in the 1940 Act and PS BDC Funding complies with 1940 Act provisions relating to affiliated transactions

The custodian of the assets pledged to BofA N.A.

pursuant to the BoA Credit Facility is U.S.

Bank National Administration.

The obligations under the Credit Agreement may be accelerated upon the occurrence of an event of default under the Credit Agreement, including

in the event of a change of control of PS BDC Funding or if the Investment Advisor ceases to serve as investment adviser to the Company.

Wells Fargo Credit Facility

On December 18, 2020,

the Company, through a special purpose wholly-owned subsidiary, Palmer Square BDC Funding II LLC (“PS BDC Funding II”

and together with the Company, the “WF Borrowers”) entered into a Loan and Security Agreement (the “Loan Agreement”)

with certain financial institutions as lenders (“WF Lenders”), Wells Fargo Bank, National Association as the administrative

agent (“WFB”) and U.S.

On December 18, 2020, the

Company, through a special purpose wholly-owned subsidiary, Palmer Square BDC Funding II LLC (“PS BDC Funding II”

with the Company, the “WF Borrowers”) entered into a Loan and Security Agreement (the “Loan Agreement”) with

certain financial institutions as lenders (“WF Lenders”), Wells Fargo Bank, National Association as the administrative agent

(“WFB”) and U.S.

Bank National Association (“U.S.

Bank”), as Collateral Agent and Custodian, pursuant

to which the WF Lenders agreed to provide the Company with a line of credit (the “WF Credit Facility”).

Under the WF Credit

Facility, which matures on December 18, 2025, the WF Lenders have agreed to extend credit to PS BDC Funding II in an aggregate

amount up to the Facility Amount (as defined in the Loan Agreement).

The Facility Amount for the WF Credit Facility was $150.0

million as of the closing date of the Loan Agreement.

Bank”), as Collateral Agent and Custodian, pursuant to which

the WF Lenders agreed to provide the Company with a line of credit (the “WF Credit Facility”).

Under the WF Credit Facility, which matures on December 18, 2025, the WF

Lenders have agreed to extend credit to PS BDC Funding II in an aggregate amount up to the Facility Amount (as defined in the Loan Agreement).

The Facility Amount for the WF Credit Facility was $150.0 million as of the closing date of the Loan Agreement.

The WF Borrowers’

ability to draw under the WF Credit Facility is scheduled

to terminate on December 18, 2023.

All amounts outstanding under the WF Credit Facility are required to be repaid by December 18,

The loans under the

WF Credit Facility may be Broadly Syndicated Loans or Middle Market Loans and shall be eurocurrency rate loans unless such rate

is unavailable, in which case the loans shall be base rate loans until such rate is available.

Broadly Syndicated Loans will bear

interest at the LIBOR or base rate, as applicable, plus 1.85%, and Middle Market Loans will bear interest at LIBOR or base rate,

as applicable, plus 2.35%.

ability to draw under the WF Credit Facility is scheduled to terminate on December 18, 2023.

All amounts outstanding under the WF Credit

Facility are required to be repaid by December 18, 2025.

Debt obligations consisted

of the following as of December 31, 2021:

December 31, 2021

Aggregate Principal Committed

Available (1)

WF Credit Facility

$ 150,000,000

$ 100,000,000

$ 150,000,000

$ 100,000,000

(1) The amount available reflects

any limitations related to the WF Credit Facility’s borrowing base.

carrying value of the WF Credit Facility is presented net of deferred financing costs of $1.4 million and accrued interest of $1.048

As of December 31, 2020, we

had no principal outstanding and $150 million of available Commitments under the WF Credit Facility.

Average debt outstanding under

the WF Credit Facility during the year ended December 31, 2021 and the period January 23, 2020 (Commencement of Operations) through December

31, 2020, was $13.9 million and $0, respectively.

The loans under the WF Credit Facility may be Broadly Syndicated Loans

or Middle Market Loans and shall be eurocurrency rate loans unless such rate is unavailable, in which case the loans shall be base rate

loans until such rate is available.

Broadly Syndicated Loans will bear interest at the LIBOR or base rate, as applicable, plus 1.85%,

and Middle Market Loans will bear interest at LIBOR or base rate, as applicable, plus 2.35%.

The “base rate”

will be equal to the highest of (a) the federal funds rate plus 1/2 of 1%

and (b) the prime rate.

The Loan Agreement includes fallback language in the event that LIBOR becomes unavailable.

payable quarterly, as determined by the WFB as the administrative agent.

The WF Loan Agreement requires the payment of a non-usage

fee of (x) 0.50% multiplied by daily unused Facility Amounts during the first six months following the closing of the WF Credit

Facility, (y) 0.50% multiplied by the lesser of (1) daily unused Facility Amounts and (2) 50% of the Facility Amount plus 2.00%

multiplied by the greater of (i) the difference between the daily unused Facility Amount and 50% of the Facility Amount and (ii)

zero between six and twelve months following the closing of the WF Credit Facility, and, (z) thereafter, 0.50% multiplied by the

lesser of (1) daily unused Facility Amounts and (2) 20% of the Facility Amount plus 2.00% multiplied by the greater of (i) the

difference between the daily unused Facility Amount and 20% of the Facility Amount and (ii) zero.

Such fee is payable quarterly

The applicable percentage for PS BDC Funding II’s Eligible Loans ranges from 67.5% for Middle Market Loans to

70% for Broadly Syndicated Loans (as each such term is defined in the Loan Agreement).

PS BDC Funding II has

pledged all of its assets to U.S.

Bank, in its capacity as Collateral Agent, to secure its obligations under the WF Credit Facility.

Both the Company and PS BDC Funding II have made customary representations and warranties and are required to comply with various

covenants, reporting requirements, and other customary requirements for similar credit facilities.

Borrowing under the WF Credit

Facility is subject to the leverage restrictions contained in the 1940 Act.

will be equal

to the highest of (a) the federal funds rate plus 1/2 of 1% and (b) the prime rate.

The Loan Agreement includes fallback language in the

event that LIBOR becomes unavailable.

Interest is payable quarterly, as determined by the WFB as the administrative agent.

Following the

Second Amendment of the WF Credit Facility, the Loan Agreement requires the payment of a non-usage fee of (x) during the first thirteen

months following the closing of the WF Credit Facility, 0.50% multiplied by daily unused Facility Amounts, (y) between thirteen and sixteen

months following the closing of the WF Credit Facility, 0.50% multiplied by the lesser of (1) daily unused Facility Amounts and (2) 50%

of the Facility Amount plus 2.00% multiplied by the greater of (i) the difference between the daily unused Facility Amount and 50% of

the Facility Amount and (ii) zero and, (z) thereafter, 0.50% multiplied by the lesser of (1) daily unused Facility Amounts and (2) 20%

of the Facility Amount plus 2.00% multiplied by the greater of (i) the difference between the daily unused Facility Amount and 20% of

the Facility Amount and (ii) zero.

Such fee is payable quarterly in arrears.

The WF Credit Facility includes the option to downsize the

facility by paying a Commitment Reduction Fee.

The Fee is equal to 2.00% of the facility reduction amount prior to the one year anniversary

of the closing of the WF Credit Facility, and 1.00% thereafter.

The applicable percentage for PS BDC Funding II’s Eligible Loans

ranges from 67.5% for Middle Market Loans to 70% for Broadly Syndicated Loans (as each such term is defined in the Loan Agreement).

For the year ended December

31, 2021, the components of interest expense with respect to the WF Credit Facility were as follows:

For the Year Ended

Interest expense

Amortization of debt issuance costs

Total interest expense

Average interest rate

PS BDC Funding II has pledged

all of its assets to U.S.

Bank, in its capacity as Collateral Agent, to secure its obligations under the WF Credit Facility and U.S.

Bank acts as the custodian of such assets.

Both the Company and PS BDC Funding II have made customary representations and warranties

and are required to comply with various covenants, reporting requirements, and other customary requirements for similar credit facilities.

Borrowing under the WF Credit Facility is subject to the leverage restrictions contained in the 1940 Act and PS BDC Funding II complies

with 1940 Act provisions relating to affiliated transactions and custody.

The obligations under the Loan Agreement may be accelerated

upon the occurrence of an event of default under the Loan Agreement, including in the event of a change of control of PS BDC Funding

II, if the Investment Advisor ceases to serve as investment adviser to the Company, or if Palmer Square or its affiliates cease

to directly or indirectly own a majority of the membership interests of the Investment Advisor.

As of December 31,

2020, we had no principal outstanding and $150 million of available Commitments under the WF Credit Facility.

II, if the Investment Advisor ceases to serve as investment adviser to the Company, or if Palmer Square or its affiliates cease to directly

or indirectly own a majority of the membership interests of the Investment Advisor.

Share Transactions

During the period January 23, 2020 (Commencement of Operations)

through December 31, 2020, the Company issued and sold 12,562,805 shares at an aggregate purchase price of $238.6 million.

amounts include shares issued in reinvestment.

Reinvestment Plan

Company has adopted a dividend reinvestment plan that will provide for reinvestment of its dividends and other distributions on

behalf of the Company’s stockholders, unless a stockholder elects to receive cash.

As a result, if the Company’s Board

authorizes, and the Company declares, a cash dividend or other distribution, then stockholders who do not “opt out”

of the Company’s dividend reinvestment plan will have their cash dividends and distributions automatically reinvested in

additional shares of the Company’s common stock, rather than receiving cash dividends and distributions.

to a Listing, the Board will use newly-issued shares of the Company’s common stock to implement the dividend reinvestment

The number of shares of common stock to be issued to a participant prior to a Listing would be equal to the quotient determined

by dividing the cash value of the dividend payable to such stockholder by the net asset value per share as of the date such dividend

was declared.

a Listing, the Board intends to primarily use newly-issued shares to implement the dividend reinvestment plan, whether or not

the shares are trading at a price per share at, below or above net asset value.

However, the Board reserves the right to purchase

shares in the open market in connection with the implementation of the dividend reinvestment plan.

The number of newly issued

shares to be issued to a participant would be determined by dividing the total dollar amount of the dividend payable to such stockholder

by the market price per share of the Company’s common stock at the close of regular trading on a national securities exchange

on the dividend payment date.

Shares purchased in open market transactions by US Bank, the plan administrator and the Company’s

transfer agent, registrar and dividend disbursing agent, will be allocated to a participant based upon the average purchase price,

excluding any brokerage charges or other charges, of all shares of the Company’s common stock purchased with respect to

the dividend.

registered stockholder may elect to receive an entire distribution in cash by notifying US Bank in writing so that such notice

is received by the plan administrator no later than the record date for distributions to stockholders.

The plan administrator

will set up an account for shares acquired through the plan for each stockholder who has not elected to receive dividends or other

distributions in cash and hold such shares in noncertificated form.

will be no brokerage charges or other charges to stockholders who participate in the plan.

The plan administrator’s fees

will be paid by the Company.

who receive dividends and other distributions in the form of stock are generally subject to the same U.S.

federal, state and local

tax consequences as are stockholders who elect to receive their distributions in cash.

However, since a participating stockholder’s

cash dividends will be reinvested, such stockholder will not receive cash with which to pay any applicable taxes on reinvested

A stockholder’s basis for determining gain or loss upon the sale of stock received in a dividend or other distribution

from the Company will generally be equal to the total dollar amount of the distribution payable to the stockholder.

received in a dividend or other distribution will have a new holding period for tax purposes commencing on the day following the

day on which the shares are credited to the U.S.

Offering Proceeds

During the year ended December

31, 2021 and the period January 23, 2020 (Commencement of Operations) through December 31, 2020, the Company issued and sold 10,007,526

shares at an aggregate purchase price of $206.6 million and 12,562,805 shares at an aggregate purchase price of $238.6 million, respectively.

These amounts include shares issued in reinvestment.

Distribution Reinvestment Plan

The Company has adopted a

dividend reinvestment plan that will provide for reinvestment of its dividends and other distributions on behalf of the Company’s

stockholders, unless a stockholder elects to receive cash.

As a result, if the Company’s Board authorizes, and the Company declares,

a cash dividend or other distribution, then stockholders who do not “opt out”

of the Company’s dividend reinvestment

plan will have their cash dividends and distributions automatically reinvested in additional shares of the Company’s common stock,

rather than receiving cash dividends and distributions.

Prior to a Listing, the Board

will use newly-issued shares of the Company’s common stock to implement the dividend reinvestment plan.

The number of shares of

common stock to be issued to a participant prior to a Listing would be equal to the quotient determined by dividing the cash value of

the dividend payable to such stockholder by the net asset value per share as of the date such dividend was declared.

After a Listing, the Board

intends to primarily use newly-issued shares to implement the dividend reinvestment

plan, whether or not the shares are trading at a price per share at, below or above net asset value.

However, the Board reserves the right

to purchase shares in the open market in connection with the implementation of the dividend reinvestment plan.

The Board will examine

the full facts and circumstances of each such dividend to determine the approach (i.e., to use newly issued shares or effectuate open

market purchases to implement the dividend reinvestment plan) that is in the best interests of stockholders taking into account the Board’s

fiduciary duties to stockholders, including by weighing the potential dilution in connection with such issuance to be incurred by the

Company’s stockholders against the Company’s need and usage of reinvested funds.

The number of newly issued shares to be issued

to a participant would be determined by dividing the total dollar amount of the dividend payable to such stockholder by the market price

per share of the Company’s common stock at the close of regular trading on a national securities exchange on the dividend payment

Shares purchased in open market transactions by US Bank, the plan administrator and the Company’s transfer agent, registrar

and dividend disbursing agent, will be allocated to a participant based upon the average purchase price, excluding any brokerage charges

or other charges, of all shares of the Company’s common stock purchased with respect to the dividend.

A registered stockholder may

elect to receive an entire distribution in cash by notifying US Bank in writing so that such notice is received by the plan administrator

no later than the record date for distributions to stockholders.

The plan administrator will set up an account for shares acquired through

the plan for each stockholder who has not elected to receive dividends or other distributions in cash and hold such shares in noncertificated

There will be no brokerage

charges or other charges to stockholders who participate in the plan.

The plan administrator’s fees will be paid by the Company.

Stockholders who receive dividends

and other distributions in the form of stock are generally subject to the same U.S.

federal, state and local tax consequences as are

stockholders who elect to receive their distributions in cash.

However, since a participating stockholder’s cash dividends will

be reinvested, such stockholder will not receive cash with which to pay any applicable taxes on reinvested dividends.

A stockholder’s

basis for determining gain or loss upon the sale of stock received in a dividend or other distribution from the Company will generally

be equal to the total dollar amount of the distribution payable to the stockholder.

Any stock received in a dividend or other distribution

will have a new holding period for tax purposes commencing on the day following the day on which the shares are credited to the U.S.

stockholder’s account.

may terminate their accounts under the plan by so notifying the plan administrator by submitting a letter of instruction terminating

the participant’s account under the plan to US Bank.

The plan may be terminated by the Company upon notice in writing mailed

to each participant at least 30 days prior to any record date for the payment of any dividend by the Company.

participants withdraw from the plan or the plan is terminated, the plan administrator will cause the shares held for the participant

under the plan to be delivered to the participant.

If an investor holds common stock with a brokerage firm that does not participate

in the plan, such investor will not be able to participate in the plan and any dividend reinvestment may be affected on different

terms than those described above.

Participants may terminate

their accounts under the plan by so notifying the plan administrator by submitting a letter of instruction terminating the participant’s

account under the plan to US Bank.

The plan may be terminated by the Company upon notice in writing mailed to each participant at least

30 days prior to any record date for the payment of any dividend by the Company.

If participants withdraw from

the plan or the plan is terminated, the plan administrator will cause the shares held for the participant under the plan to be delivered

to the participant.

If an investor holds common stock with a brokerage firm that does not participate in the plan, such investor will

not be able to participate in the plan and any dividend reinvestment may be affected on different terms than those described above.

Commitments and Contingencies

The Company had an aggregate of $1.3 million of unfunded commitments

to provide debt financing to its portfolio companies as of December 31, 2020.

As of December 31, 2020, there were no capital calls

or draw requests made by the portfolio companies to fund these commitments.

Such commitments are generally up to the Company’s

discretion to approve or are subject to the satisfaction of certain financial and nonfinancial covenants and involve, to varying

degrees, elements of credit risk in excess of the amount recognized in the Company’s consolidated statements of assets and

liabilities and are not reflected in the Company’s consolidated statements of assets and liabilities.

summary of the composition of the unfunded commitments as of December 31, 2020 is shown in the table below:

HAH Group Holding

As of December 31, 2021 and

December 31, 2020, the Company had an aggregate of $11.3 million and $1.3 million, respectively, of unfunded commitments to provide debt

financing to its portfolio companies.

As of each of December 31, 2021 and December 31, 2020, there were no capital calls or draw requests

made by the portfolio companies to fund these commitments.

Such commitments are generally up to the Company’s discretion to approve

or are subject to the satisfaction of certain financial and nonfinancial covenants and involve, to varying degrees, elements of credit

risk in excess of the amount recognized in the Company’s consolidated statement of assets and liabilities and are not reflected

in the Company’s consolidated statement of assets and liabilities.

A summary of the composition

of the unfunded commitments as of December 31, 2021 is shown in the table below:

ARC Falcon I Inc.

Aveanna Healthcare LLC

Culligan Water

Medical Solutions L.L.C.

National Mentor Holdings, Inc.

PT Intermediate Holdings III LLC

RSC Acquisition, Inc.

Sovos Compliance, LLC

Total unfunded commitments

Commitments are generally subject to borrowers meeting certain criteria

such as compliance with covenants and certain operational metrics.

These amounts may remain outstanding until the commitment period

of an applicable loan expires, which may be shorter than its maturity.

A summary of the composition

of the unfunded commitments as of December 31, 2020 is shown in the table below:

Expiration Date (1)

HAH Group Holding Company LLC

LBM Acquisition LLC

Total unfunded

(1) Commitments

are generally subject to borrowers meeting certain criteria such as compliance with covenants

and certain operational metrics.

These amounts may remain outstanding until the commitment

period of an applicable loan expires, which may be shorter than its maturity.

time to time, the Company may become a party to certain legal proceedings incidental to the normal course of its business.

of December 31, 2020, management is not aware of any pending or threatened litigation.

OneDigital Borrower LLC

Total unfunded commitments

Commitments are generally subject to borrowers meeting certain criteria

such as compliance with covenants and certain operational metrics.

These amounts may remain outstanding until the commitment period

of an applicable loan expires, which may be shorter than its maturity.

From time to time, the Company

may become a party to certain legal proceedings incidental to the normal course of its business.

As of December 31, 2021, management

is not aware of any pending or threatened litigation.

Earnings Per Share

accordance with the provisions of ASC Topic 260, Earnings per Share (“ASC 260”), basic earnings per share is

computed by dividing earnings available to common stockholders by the weighted average number of shares outstanding during the

Other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings

per share on a diluted basis.

As of December 31, 2020, there were no dilutive shares.

following table sets forth the computation of basic and diluted earnings per share of common stock for the period January 23,

In accordance with the provisions

of ASC Topic 260, Earnings per Share (“ASC 260”), basic earnings per share is computed by dividing earnings available

to common stockholders by the weighted average number of shares outstanding during the period.

Other potentially dilutive common shares,

and the related impact to earnings, are considered when calculating earnings per share on a diluted basis.

As of each of December 31,

2021 and as of December 31, 2020, there were no dilutive shares.

The following table sets forth

the computation of basic and diluted earnings per share of common stock for the year ended December 31, 2021 and the period January 23,

2020 (Commencement of Operations) through December 31, 2020:

For the Period January 23, 2020 (Commencement

of Operations) through

Net increase (decrease)

in net assets resulting from operations

Weighted average shares of common

stock outstanding - basic and diluted

Earnings (loss) per share of common

stock - basic and diluted

Company has elected to be treated as a RIC under the Code beginning with the taxable year end December 31, 2020.

the Company is not subject to federal income tax on the portion of its taxable income and gains distributed currently to its stockholders

as dividends.

As a RIC, the Company is also subject to a federal excise tax based on distributive requirements of its taxable

income on a calendar year basis.

Depending on the level of taxable income earned in a tax year, the Company may choose to carry

forward taxable income in excess of current year distributions into the next tax year and pay a 4% excise tax on such income,

to the extent required.

permanent differences for tax purposes from distributable earnings to additional paid in capital were reclassified for tax purposes

for the tax year ended December 31, 2020.

For the Period

January 23, 2020

(Commencement of

Operations) through

Net increase (decrease) in net assets resulting from operations

Weighted average shares of common stock outstanding - basic and diluted

Earnings (loss) per share of common stock - basic and diluted

The Company intends to elect to be treated as a RIC under the Internal

Revenue Code (“Code”) for its taxable year end December 31, 2021.

As a RIC, the Company is not subject to federal income tax

on the portion of its taxable income and gains distributed currently to its stockholders as a dividend.

The Company anticipates distributing

substantially all of its taxable income and gains, within the Subchapter M rules, and thus the Company anticipates that it will not incur

any federal or state income tax at the RIC level.

As a RIC, the Company is also subject to a federal excise tax based on distributive

requirements of its taxable income on a calendar year basis (e.g., calendar year 2021).

Depending on the level of taxable income earned

in a tax year, the Company may choose to carry forward taxable income in excess of current year distributions into the next tax year and

pay a 4% excise tax on such income, to the extent required.

The permanent differences

for tax purposes from distributable earnings to additional paid in capital were reclassified for tax purposes for the tax years ended

December 31, 2021 and December 31, 2020.

These reclassifications have no impact on net assets.

For the Period January 23, 2020 (Commencement of Operations) through December 31,

January 23, 2020 (Commencement

of Operations)

Increase (decrease) in distributable earnings

Increase (decrease) in capital in excess of par value

following reconciles net increase in net assets resulting from operations to taxable income for the period January 23, 2020 (Commencement

of Operations) through December 31, 2020:

For the Period

The following reconciles net

increase in net assets resulting from operations to taxable income for the year ended December 31, 2021 and the period January 23, 2020

(Commencement of Operations) through December 31, 2020:

(Commencement

5 unchanged sentences

Taxable income before deductions for distributions

the Period January 23, 2020 (Commencement of Operations) through December 31,

(Commencement

of Operations)

Distributions

Return of Capital

the period January 23, 2020 (Commencement of Operations) through December 31, 2020, the components of accumulated earnings on

a tax basis were as follows:

For the year ended December

31, 2021 and the period January 23, 2020 (Commencement of Operations) through December 31, 2020, the components of accumulated earnings

on a tax basis were as follows:

For the Period

6 unchanged sentences

Net unrealized appreciation (depreciation)

Capital losses can

be carried forward indefinitely to offset future capital gains.

As of December 31, 2020, the Company had no capital loss carryforwards.

of December 31, 2020, the Company’s aggregate unrealized appreciation and depreciation on investments based on cost

Capital losses can be carried

forward indefinitely to offset future capital gains.

As of December 31, 2021 and December 31, 2020, the Company had no capital loss

carryforwards.

As of December 31, 2021 and

December 31, 2020, the Company’s aggregate unrealized appreciation and depreciation on investments based on cost for U.S.

federal income tax purposes was as follows:

1,188,452,438

Gross unrealized appreciation

1 unchanged sentence

Net unrealized appreciation/(depreciation) on investments

The Company adopted

FASB ASC Topic 740, Accounting for Uncertainty in Income Taxes (“ASC 740”) as of January 23, 2020, commencement

of operations.

ASC 740 provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed

in the consolidated financial statements.

ASC 740 requires the evaluation of tax positions taken or expected to be taken in the

course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not”

The Company adopted FASB ASC Topic

740, Accounting for Uncertainty in Income Taxes (“ASC 740”) as of January 23, 2020, commencement of operations.

740 provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the consolidated financial

ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company’s

tax returns to determine whether the tax positions are “more-likely-than-not”

of being sustained by the applicable tax authority.

The Company recognizes the tax benefits of uncertain tax positions only where

the position is “more likely than not”

to be sustained assuming examination by tax authorities.

As of December 31,

2020, management has analyzed the Company’s tax positions, and has concluded that no liability for unrecognized tax benefits

should be recorded related to uncertain tax positions taken in the Company’s current year tax return.

The Company identifies

its major tax jurisdictions as U.S.

The Company recognizes the tax benefits of uncertain tax positions only where the position is “more likely than not”

sustained assuming examination by tax authorities.

As of December 31, 2021, management has analyzed the Company’s tax positions,

and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken in the Company’s

current year tax return.

The Company identifies its major tax jurisdictions as U.S.

Federal, New York State, and New York City.

The Company is not aware of any tax positions

for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12

Management’s determinations regarding ASC 740 may be subject to review and adjustment at a later date based upon

factors including, but not limited to, an ongoing analysis of tax laws, regulations and interpretations thereof.

and 2021 tax years remain subject to examination by U.S.

federal, state and local authorities.

Management’s determinations regarding

ASC 740 may be subject to review and adjustment at a later date based upon factors including, but not limited to, an ongoing analysis

of tax laws, regulations and interpretations thereof.

Financial Highlights

The following per

share of common stock data has been derived from information provided in the consolidated financial statements.

The following

is a schedule of financial highlights for the period January 23, 2020 (Commencement of Operations) through December 31, 2020:

For the Period January 23, 2020 (Commencement of Operations) through

The following per share of

common stock data has been derived from information provided in the consolidated financial statements.

The following is a schedule of

financial highlights for the year ended December 31, 2021 and the period January 23, 2020 (Commencement of Operations) through December

For the Period January 23,

2020 (Commencement of Operations) through

Per Common Share Operating Performance

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Distributions from Net Investment Income

Distributions from Realized Gains

Net Decrease in Net Assets Resulting from Distributions

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Net assets, end of period

$ 253,144,971

Weighted-average shares outstanding

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Ratio of net investment income (loss) to average net assets with waiver (2)

common share data was derived by using weighted average shares outstanding.

ratios reflect an annualized amount.

(3) Total return is calculated as the change in net asset value

(“NAV”) per share during the period, plus distributions per share (if any), divided by the beginning NAV per share.

Total return is not annualized and does not reflect sales load.

The per common share data was derived by using weighted average shares outstanding.

Ratios have been annualized for periods less than one year.

Total return is calculated as the change in net asset value (“NAV”) per share during the period, plus distributions per share (if any), divided by the beginning NAV per share.

Total return is not annualized.

Assumes reinvestment of distributions.

and unrealized gains and losses per share in this caption are balancing amounts necessary

to reconcile the change in net asset value per share for the period, and may not reconcile

with the aggregate gains and losses in the Consolidated Statement of Operations due to

share transactions during the period.

Selected Quarterly Financial Data (Unaudited)

The following are

the quarterly results of operations for the period January 23, 2020 (Commencement of Operations) through December 31, 2020.

following information reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods

Realized and unrealized gains and losses per share in this caption are balancing amounts necessary to reconcile the change in net asset value per share for the period, and may not reconcile with the aggregate gains and losses in the Consolidated Statement of Operations due to share transactions during the period.

Selected Quarterly Financial Data

The following are the quarterly

results of operations for the year ended December 31, 2021 and the period January 23, 2020 (Commencement of Operations) through December

The following information reflects all normal recurring adjustments necessary for a fair presentation of the information for

the periods presented.

The operating results for any quarter are not necessarily indicative of results for any future period.

For the Three Months Ended

September 30,

Investment income

Net investment income (loss)

Net realized gain (loss) on investments, and foreign currency transactions

Net unrealized gain (loss) on investments, foreign currency translations, and foreign currency contracts

Increase (decrease) in net assets resulting from operations

Net asset value per share as of the end of the quarter

For the Three Months Ended

For the Period

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Subsequent Events

The Company’s

management has evaluated subsequent events through the date of issuance of the consolidated financial statements included herein.

There have been no subsequent events that require recognition or disclosure in these consolidated financial statements except

for the following:

The Company’s management

has evaluated subsequent events through the date of issuance of the consolidated financial statements included herein.

There have been

no subsequent events that require recognition or disclosure in these consolidated financial statements except for the following:

Issuance of Common Stock

On January 4, 2021,

the Company issued and sold 99,256 shares of its common stock at an aggregate purchase price of $2,000,000.

The issuance of the

shares of common stock was exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section

4(a)(2) and Rule 506(b) of Regulation D thereof.

On February 1, 2021,

the Company issued and sold 1,349 shares of its common stock at an aggregate purchase price of $27,700.

The issuance of the shares

of common stock was exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2)

and Rule 506(b) of Regulation D thereof.

On January 3, 2022, the Company

issued and sold 231,805 shares of its common stock at an aggregate purchase price of $4.65 million.

The issuance of the shares of common

stock was exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) and Rule 506(b)

of Regulation D thereof.

On February 1, 2022, the Company

issued and sold 8,591 shares of its common stock at an aggregate purchase price of $174 thousand.

The issuance of the shares of common

stock was exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) and Rule 506(b)

of Regulation D thereof.

Unfunded Capital Commitments

As of January 11, 2022, PT Intermediate

Holdings III LLC was fully funded for $2.14 million.

Additionally, RSC Acquisition Inc.

was partially funded on January 19, 2022 for $196

Draws on Credit Facilities

As of March 11, 2022, the Company

incrementally drew an additional $14,000,000 on the BoA Credit Facility, and $16,000,000 on the WF Credit Facility.

Distributions

On December 31, 2020,

the Company declared a distribution of $0.31 per share, or $3,894,469, of which a cash distribution of $1,612,249 was payable

on January 19, 2021 and the remainder was paid in common stock through the Company’s dividend reinvestment plan.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

On December 30, 2021, the

Company declared a distribution of $0.65 per share, or $14,449,980, of which a cash distribution of $5,874,681 was payable on January

19, 2022 and the remainder was paid in common stock through the Company’s dividend reinvestment plan.

CHANGES IN AND DISAGREEMENTS WITH

ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not Applicable.

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 8. Financial Statements and Supplementary Data