What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2023-03-10 compared with 2022-03-11 · 40 added, 803 removed, 48 unchanged (95% of the section changed)

MARKET FOR REGISTRANT’S COMMON

EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

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In addition, as of the date hereof, we have not granted any registration rights to any of our stockholders.

No stock has been

authorized for issuance under any equity compensation plans.

As of March 11, 2022, we had

No stock has been authorized

for issuance under any equity compensation plans.

As of February 28, 2023, we had

215 record holders of our common stock.

Distributions

The following table reflects

the distributions declared on shares during the fiscal year ended December 31, 2021:

The following table

reflects the distributions declared on shares during the fiscal year ended December 31, 2022:

Distributions

4 unchanged sentences

The Company has adopted a

dividend reinvestment plan that provides 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

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

2 unchanged sentences

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.

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

2 unchanged sentences

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

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 date.

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

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

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.

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

The plan administrator’s fees are 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.

The plan administrator’s fees are 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

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.

1 unchanged sentence

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

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.

1 unchanged sentence

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

Stockholders can obtain additional information about the dividend reinvestment

plan by contacting US Bank via telephone at 1-866-775-9668 or by mailing a request to U.S.

Bank National Association, One Federal Street,

3rd Floor, Boston, Massachusetts 02110.

Stockholders can obtain additional

information about the dividend reinvestment plan by contacting US Bank via telephone at 1-866-775-9668 or by mailing a request to U.S.

Bank National Association, One Federal Street, 3rd Floor, Boston, Massachusetts 02110.

Recent sales of Unregistered Securities

4 unchanged sentences

Not applicable.

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion

and analysis should be read in conjunction with our consolidated financial statements and related notes and other financial information

appearing elsewhere in this Annual Report on Form 10-K.

Forward Looking Statements

This annual report on Form

10-K contains forward-looking statements that involve substantial known and unknown risks, uncertainties and other factors.

Undue reliance

should not be placed on such statements.

These forward-looking statements are not historical facts, but rather are based on current expectations,

estimates and projections about our company, our current and prospective portfolio investments, our industry, our beliefs and our assumptions.

Words such as “anticipates,”

“expects,”

“intends,”

“plans,”

“will,”

“may,”

“continue,”

“believes,”

“seeks,”

“estimates,”

“would,”

“could,”

“should,”

“targets,”

“projects,”

and variations of these words and similar expressions are intended

to identify forward-looking statements.

These statements are not guarantees of future performance and are subject to risks, uncertainties

and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially

from those expressed or forecasted in the forward-looking statements, including:

our future operating results;

our business prospects and the prospects of our portfolio companies;

changes in political, economic or industry conditions, the interest

rate environment or conditions affecting the financial and capital markets, including changes from the impact of the novel coronavirus

(SARS-CoV-2) and related respiratory disease (“COVID-19”) pandemic;

the ability of the Investment Advisor to locate suitable investments

for us and to monitor and administer our investments;

the ability of the Investment Advisor and its affiliates to attract

and retain highly talented professionals;

risk associated with possible disruptions in our operations or the

economy generally;

the timing of cash flows, if any, from the operations of the companies

in which we invest;

the ability of the companies in which we invest to achieve their objectives,

including as a result of the current COVID-19 pandemic;

our ability to continue to effectively manage our business due to the

disruptions caused by the current COVID-19 pandemic;

the dependence of our future success on the general economy and its

effect on the industries in which we invest;

our ability to maintain our qualification as a BDC and as a RIC under

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

the adequacy, availability and pricing of our financing sources and

working capital;

actual or potential conflicts of interest with the Investment Advisor

and its affiliates;

our contractual arrangements and relationships with third parties;

the current economic downturn, interest rate volatility, loss of key

personnel, and the illiquid nature of our investments;

the risks, uncertainties and other factors we identify under “Item

Risk Factors”

and elsewhere in this annual report on Form 10-K.

Although we believe that

the assumptions on which these forward-looking statements are based are reasonable, any of the assumptions could prove to be inaccurate,

and as a result, the forward-looking statements based on those assumptions also could be inaccurate.

In light of these and other uncertainties,

the inclusion of a projection or forward-looking statement in this annual report on Form 10-K should not be regarded as a representation

by us that our plans and objectives will be achieved.

These risks and uncertainties include those described or identified in the section

entitled “Item 1A.

Risk Factors”

and elsewhere in this annual report on Form 10-K.

You should not place undue reliance on

these forward-looking statements, which apply only as of the date of this annual report on Form 10-K.

Moreover, we assume no duty and

do not undertake to update the forward-looking statements.

We are a financial services

company that primarily lends to and invests in corporate debt securities of companies, including small to large private U.S.

We were organized as a Maryland corporation on August 26, 2019 and are structured as an externally managed, non-diversified closed-end

management investment company.

We have elected to be regulated as a BDC under the 1940 Act and, beginning with our taxable year ending

December 31, 2020, we have elected to be treated as a RIC under Subchapter M of the Code, and we expect to qualify as a RIC annually

We are externally managed

by the Investment Advisor, an investment adviser that is registered with the SEC under the Advisers Act, pursuant to the Advisory Agreement.

Subject to the supervision of our Board, a majority of which is made up of Independent Directors, our Investment Advisor manages our

day-to-day operations and provides us with investment advisory and management services and certain administrative services.

The Investment

Advisor, in its capacity as Administrator, provides the administrative services necessary for us to operate pursuant to the Administration

The Administrator has entered into the Sub-Administration Agreement to delegate certain administrative functions to the Sub-Administrator.

Our Investment Advisor is a majority-owned subsidiary of Palmer Square, which is a privately-held firm specializing in global alternative

(non-traditional) investments with a total return orientation.

Our 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 our investment opportunities and core competencies:

(1) investing in corporate debt securities and,

to a lesser extent, (2) investing in CLO structured credit that typically owns corporate debt securities, including the equity and junior

debt tranches of CLOs.

To a limited extent, we 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 our portfolio positions from changes in currency exchange rates and market interest rates or to earn income and enhance our total

We may also receive or purchase warrants or rights to acquire equity or other securities in connection with making a debt investment

in a company.

We may also invest in other strategies and opportunities from time to time that we view as attractive.

We will continue

to evaluate other investment strategies in the ordinary course of business with no specific top-down allocation to any single investment

We generate revenue primarily

in the form of interest and fee income on debt investments we hold and capital gains, if any, on investments.

Our debt investments generally

bear interest at a floating rate usually determined on the basis of a benchmark such as LIBOR.

Interest on debt securities is generally

payable quarterly or semi-annually.

In some instances, we receive payments on our debt investments based on scheduled amortization of

the outstanding balances.

In addition, we receive repayments of some of our debt investments prior to their scheduled maturity date.

The frequency or volume of these repayments is expected to fluctuate significantly from period to period.

Our portfolio activity also

reflects the proceeds of sales of securities.

We may also generate revenue in the form of commitment, origination, amendment, structuring

or due diligence fees, fees for providing managerial assistance and consulting fees.

Our primary operating expenses

include the payment of fees to the Investment Advisor under the Advisory Agreement, our allocable portion of overhead and rental expenses

under the Administration Agreement and other operating costs described below.

We bear all other out-of-pocket costs and expenses of our

operations and transactions, including:

interest expense and other costs associated with our indebtedness;

the cost of calculating our net asset value, including the cost of

any third-party valuation services;

the cost of effecting sales and repurchases of shares of our common

stock and other securities;

fees payable to third parties relating to making investments, including

our Investment Advisor’s or its affiliates’

travel expenses, research costs and out-of-pocket fees and expenses associated

with performing due diligence and reviews of prospective investments;

transfer agent and custodial fees;

operating costs incurred prior to the commencement of our operations;

out-of-pocket fees and expenses associated with marketing efforts;

federal and state registration fees and any stock exchange listing

federal, state and local taxes;

Independent Directors’

fees and expenses;

brokerage commissions and markups;

fidelity bond, directors’

and officers’

liability insurance

and other insurance premiums;

direct costs, such as printing, mailing, long distance telephone and

fees and expenses associated with independent audits and outside legal

costs associated with our reporting and compliance obligations under

the 1940 Act and other applicable U.S.

federal and state securities laws;

other expenses incurred by the Administrator or us in connection with

administering our business, including payments under the Administration Agreement that will be based upon our allocable portion (subject

to the review and approval of our Board) of overhead, including rental expenses.

Portfolio and Investment Activity

As of December 31, 2021, our weighted average total yield to maturity

of debt and income producing securities at fair value was 5.77%, and our weighted average total yield to maturity of debt and income producing

securities at amortized cost was 5.91%.

As of December 31, 2020,

our weighted average total yield to maturity of debt and income producing securities at fair value was 4.96%, and our weighted average

total yield to maturity of debt and income producing securities at amortized cost was 5.49%.

As of December 31, 2021, we

had 240 debt and equity investments in 212 portfolio companies with an aggregate fair value of approximately $1.1 billion.

As of December 31, 2020,

we had 202 debt and private investments in 181 portfolio companies with an aggregate fair value of approximately $600.1 million.

Our investment activity for

the year ended December 31, 2021 and the period January 23, 2020 (Commencement of Operations) through December 31, 2020 is presented

below (information presented herein is at amortized cost unless otherwise indicated).

For the Period

(Commencement of Operations) through

New investments:

Gross investments

$ 926,351,937

$ 854,515,933

sold investments

(401,760,802 )

(268,256,929 )

Total new investments

Principal amount of investments funded:

First-lien senior secured debt investments

$ 829,591,637

$ 810,935,108

Second-lien senior secured debt investments

Corporate bonds

Convertible bonds

Collateralized securities and structured products - debt

Collateralized securities and structured products - equity

Total principal amount of investments funded

Principal amount of investments sold or repaid:

First-lien senior secured debt investments

Second-lien senior secured debt investments

Convertible bonds

Collateralized securities and structured products - debt

Total principal amount of investments sold or repaid

Our investment activity for

the year ended December 31, 2021 and the period January 23, 2020 (Commencement of Operations) through December 31, 2020 is presented below

(information presented herein is at Par unless otherwise indicated).

New investment commitment refers to funded commitments in new securities

made during the year that remained outstanding as of December 31, 2021 and December 31, 2020 respectively.

For the Period

(Commencement of Operations) through

Number of new investment commitments

Average new investment commitment amount

Weighted average maturity for new investment commitments

Percentage of new debt investment commitments at floating rates

Percentage of new debt investment commitments at fixed rates

Weighted average interest rate of new investment commitments (1)

Weighted average spread over LIBOR of new floating rate investment commitments (2)

Weighted average interest rate on investment sold or paid down

(1) New CLO equity investments do not have an ascribed interest rate

Weighted Average Spread over SOFR as of December 31, 2021 is included in this calculation for three of the Company’s new floating rate investment commitments in the year ended December 31, 2021

As of December 31, 2021 and

December 31, 2020, our investments consisted of the following:

December 31, 2021

December 31, 2020

First-lien senior secured debt

$ 1,003,839,402

$ 1,007,407,474

$ 554,650,131

$ 566,459,850

Second-lien senior secured debt

Corporate Bonds

Convertible Bond

CLO Mezzanine

Short-term investments

Total Investments

$ 1,189,713,653

$ 1,194,257,584

$ 640,100,635

$ 653,156,200

The table below describes

investments by industry composition based on fair value as of December 31, 2021 and December 31, 2020:

Healthcare Providers and Services

Cash and cash equivalents

Professional Services

Hotels, Restaurants and Leisure

Independent Power and Renewable Electricity Producers

Building Products

Oil, Gas and Consumable Fuels

Healthcare Technology

Healthcare Equipment and Supplies

Containers and Packaging

Diversified Financial Services

Construction and Engineering

Structured Subordinated Note

Structured Note

Metals and Mining

Commercial Services and Supplies

Auto Components

Diversified Telecommunication Services

Internet Software and Services

Specialty Retail

Food 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

Textiles, Apparel and Luxury Goods

Interactive Media and Services

Construction Materials

Internet and Direct Marketing Retail

Capital Markets

Energy Equipment and Services

Real Estate Investment Trusts (REITs)

Transportation Infrastructure

The table below shows the

weighted average yields and interest rate of our debt investments at fair value as of December 31, 2021 and December 31, 2020:

Weighted average total yield of debt and income producing securities

Weighted average interest rate of debt and income producing securities (1)

Weighted average spread over LIBOR of all floating rate investments (2)

CLO equity securities are considered income producing securities but do not have an ascribed interest rate, and therefore are excluded from the calculation

Weighted Average Spread over SOFR as of December 31, 2021 is included in this calculation for three of the Company’s new floating rate investment commitments in the year ended December 31, 2021

Results of Operations

The following table represents

the operating results 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

Total investment income

Net investment income

Net realized gains (losses) on investments

Net change in unrealized gains (losses) on investments

Net increase (decrease) in net assets resulting from

Investment Income

Investment income for the

year ended December 31, 2021 and the period January 23, 2020 (Commencement of Operations) through December 31, 2020, was as follows:

For the Period

January 23, 2020

(Commencement of

Operations) through

Interest from investments

Dividend income

Total investment income

For the year ended December

31, 2021, total investment income was driven by interest income from our investments.

For the period January 23, 2020 (Commencement of

Operations) through December 31, 2020, total investment income was driven by our deployment of capital and interest income from our investments.

The size of our investment portfolio at fair value increased from $0.00 as of January 23, 2020 to $600.1 million as of December 31, 2020.

The size of our investment portfolio at fair value increased from $600.1 million as of December 31, 2020 to $1.1 billion as of December

All debt and short-term investments were income producing, and there were no loans on non-accrual status as of December 31,

Operating expenses for the

year ended December 31, 2021 and the period January 23, 2020 (Commencement of Operations) through December 31, 2020, was as follows:

For the Period

January 23, 2020

(Commencement of

Operations) through

Interest and debt financing expenses

Management fees

Other operating expenses

Initial organization

Directors fees

Management fee waiver

Net expenses for the year

ended December 31, 2021 were $16.9 million, which consisted of $8.6 million in interest and debt financing, $6.4 million in management

fees, $2.6 million in other operating expenses, and $75 thousand in directors fees offset by $796 thousand in management fee waiver from

the Investment Advisor.

Interest expense increased

during the year ended December 31, 2021 as a result of an increase in outstanding debt.

Average debt outstanding increased from $247.5

million to $447.0 million for the period January 23, 2020 (Commencement of Operations) through December 31, 2020 and the year ended December

31, 2021, respectively.

Management fees increased due to a higher value of total net assets during the period.

Total net assets increased

from $253.1 million to $452.8 million as of December 31, 2020 and December 31, 2021, respectively.

Net expenses for the period

from January 23, 2020 (Commencement of Operations) through December 31, 2020 were $10.8 million, which consisted of $4.7 million in interest

and debt financing, $3.9 million in management fees, $122 thousand in initial organization expenses, $2.4 million in other operating expense,

and $80 thousand in directors fees offset by $493 thousand in management fee waiver from the Investment Advisor.

Net Change in Unrealized Gains (Losses) on

We fair value our portfolio investments quarterly and any changes in

fair value are recorded as unrealized gains or losses.

During the year ended December 31, 2021 and the period January 23, 2020 (Commencement

of Operations) through December 31, 2020, net unrealized gains (losses) on our investment portfolio were comprised of the following:

For the Period

January 23, 2020

(Commencement of

Operations) through

Unrealized gains on investments

Unrealized (losses) on investments

(14,751,982 )

Net change in unrealized gains (losses) on investments

$ (8,527,786 )

The change in unrealized appreciation (depreciation) for the year ended

December 31, 2021 totaled $(8.5) million and the change in unrealized appreciation (depreciation) for the period from January 23,

2020 (Commencement of Operations) through December 31, 2020 totaled $13.1 million.

For the year ended December 31, 2021, this consisted

of net unrealized depreciation of $864 thousand related to existing portfolio investments and unrealized appreciation of $2.7 million

related to new portfolio investments, and net unrealized depreciation of $10.4 million related to exited portfolio investments (a portion

of which has been reclassified to realized gains).

The change in net unrealized appreciation for the period from January 23, 2020 (Commencement

of Operations) through December 31, 2020 was related to the appreciation of our investments in Boxer Parent Company, Inc., CHG Healthcare

Services, Inc, and Traverse Midstream Partners, LLC among other existing portfolio investments.

Financial Condition, Liquidity and Capital

We anticipate cash to be generated

from the private offering of our common stock and other future offerings of securities (including an initial public offering), and cash

flows from operations, including interest earned from the temporary investment of cash in cash equivalents, U.S.

government securities

and other high-quality debt investments that mature in one year or less.

Additionally, we are permitted, under specified conditions, to

issue multiple classes of indebtedness and one class of stock senior to our common stock if our asset coverage, as defined in the 1940

Act, is at least equal to 150% immediately after each such issuance.

If we are unable to obtain leverage or raise equity capital on terms

that are acceptable to us, our ability to grow our portfolio could be substantially impacted.

Furthermore, while any indebtedness and

senior securities remain outstanding, we may be required to prohibit any distribution to our stockholders or the repurchase of shares

unless we meet the applicable asset coverage ratios at the time of the distribution or repurchase.

In connection with borrowings, our

lenders, including under the BoA Credit Facility and the WF Credit Facility, may require us to pledge assets, investor commitments to

fund capital calls and/or the proceeds of those capital calls.

In addition, such lenders may ask us to comply with positive or negative

covenants that could have an effect on our operations.

During the year ended December

31, 2021, we experienced a net increase in cash and cash equivalents of $411 thousand.

During the period, net cash used in operating activities

was $438 million, primarily as a result of fundings of portfolio investments (excluding investments in short-term money market funds)

of $926.4 million, partially offset by proceeds received from sale of investments of $406.8 million.

We invested in short-term money market

funds during the period, and as of the end of the period we held $78.1 million in fair value of short-term money market funds.

the same period, net cash provided by financing activities was $438.4 million, primarily consisting of $256.6 million of net borrowing

under the BoA Credit Facility and WF Credit Facility and proceeds from the issuance of common stock of $188.9 million, partially offset

by distributions paid in cash of $6.3 million.

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

December 31, 2020, we experienced a net increase in cash and cash equivalents of $681 thousand.

During the period, net cash used in operating

activities was $623.2 million, primarily as a result of fundings of portfolio investments (excluding investments in short-term money market

funds) of $854.5 million, partially offset by proceeds received from sale of investments of $268.3 million.

We invested in short-term

money market funds during the period, and as of the end of the period we held $53.1 million in fair value of short-term money market funds.

During the same period, net cash provided by financing activities was $623.9 million, primarily consisting of $395.3 million of

net borrowing under the BoA Credit Facility and proceeds from the issuance of common stock of $233.7 million

As of December 31, 2021 and

December 31, 2020, we had cash and cash equivalents of $1.1 million and $683 thousand, respectively.

As of December 31, 2021, we had $552

million principal outstanding under the BoA Credit Facility and $100 million principal outstanding under the WF Credit Facility.

December 31, 2020, we had approximately $395 million principal outstanding under the BoA Credit Facility and no principal 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, we had aggregate capital commitments

and undrawn capital commitments from investors as follows:

December 31, 2021

December 31, 2020

Unfunded Capital

Commitments (1)

Unfunded Capital

Commitments(2)

$ 193,511,571

$ 235,670,000

100% of the unfunded commitments were drawn down in January 2022.

100% of the unfunded commitments were drawn down in January 2021.

As a BDC, we are required

to meet a coverage ratio of total assets to total borrowings and other senior securities, which include all of our borrowings and any

preferred stock that we may issue in the future, of at least 150%.

If this ratio declines below 150%, we cannot incur additional debt

and could be required to sell a portion of our investments to repay some debt when it is disadvantageous to do so.

As of December 31,

2021, our asset coverage ratio was 170%.

Capital Contributions

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.

Financing Arrangements

Bank of America Credit Facility

On February 18, 2020, the

Company, through a special purpose wholly-owned subsidiary, PS BDC Funding, entered into the Credit Agreement with the Lenders, BofA

as the administrative agent and 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.

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 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.

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

LIBOR plus 1.30%.

The “base rate”

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

rate and (c) 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 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

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).

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.

As of December 31, 2021, we

had approximately $552 million principal outstanding and $173 million of available Commitments under the BoA Credit Facility, and PS BDC

Funding was in compliance with the applicable covenants in the BoA Credit Facility on such date.

Wells Fargo Credit Facility

On December 18, 2020, the

Company, through a special purpose wholly-owned subsidiary, PS BDC Funding II, entered into the Loan Agreement with the WF Lenders, WFB

as the administrative agent and U.S.

Bank, as Collateral Agent and Custodian, pursuant to which the WF Lenders agreed to provide the

Company with a line of credit.

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

All amounts outstanding under the WF Credit Facility are required to be repaid by December 18, 2025.

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.

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).

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, 2021, we

had approximately $100 million outstanding and $50 million of available Commitments under the WF Credit Facility, and PS BDC Funding II

was in compliance with the applicable covenants in the WF Credit Facility on such date.

Distribution Policy

To the extent that we have

income available, we intend to distribute quarterly dividends to our stockholders.

Our quarterly dividends, if any, will be determined

by our Board.

Any dividends to our stockholders will be declared out of assets legally available for distribution.

We have elected to be treated,

and intend to operate in a manner so as to continuously qualify, as a RIC under the Code.

To obtain and maintain RIC tax treatment, among

other things, we must distribute dividends to our stockholders in respect of each taxable year of an amount at least equal to 90% of

the sum of our net ordinary income and net short-term capital gains in excess of our net long-term capital losses (“investment

company taxable income”), determined without regard to any deduction for dividends paid.

In order to avoid certain excise taxes

imposed on RICs, we currently intend to distribute dividends to our stockholders in respect of each calendar year of an amount at least

equal to the sum of:

(1) 98% of our net ordinary income (taking into account certain deferrals and elections) for such calendar year;

(2) 98.2% of our capital gains in excess of capital losses (“capital gain net income”), adjusted for certain ordinary losses,

generally for the one-year period ending on October 31 of such calendar year;

and (3) any net ordinary income and capital gain net income

for preceding years that were not distributed during such years and on which we previously paid no U.S.

federal income tax.

Under certain

applicable provisions of the Code and U.S.

Treasury regulations, distributions payable in cash or in shares of stock at the election

of the stockholders are treated as taxable dividends.

The Internal Revenue Service has published guidance indicating that this rule will

apply even where the total amount of cash that may be distributed is limited to no more than 20% of the total distribution.

guidance, if too many stockholders elect to receive their distributions in cash, the cash available for distribution must be allocated

among the stockholders electing to receive cash (with the balance of the distribution paid in stock).

If we decide to make any distributions

consistent with this guidance that are payable in part in stock, taxable stockholders receiving such dividends will be required to include

the full amount of the dividend (whether received in cash, shares of our stock, or a combination thereof) as ordinary income (or as long-term

capital gain to the extent such distribution is properly reported as a capital gain dividend) to the extent of our current and accumulated

earnings and profits for U.S.

federal income tax purposes.

As a result, a U.S.

stockholder may be required to pay tax with respect to

such dividends in excess of any cash received.

stockholder sells the stock it receives in order to pay this tax, the sales

proceeds may be less than the amount included in income with respect to the dividend, depending on the value of our stock at the time

Furthermore, with respect to non-U.S.

stockholders, the Company may be required to withhold U.S.

tax with respect to such

dividends, including in respect of all or a portion of such dividend that is payable in stock.

For these excise tax purposes,

we will be deemed to have distributed any net ordinary taxable income or capital gain net income on which we have paid U.S.

federal income

Depending on the level of taxable income earned in a calendar year, we may choose to carry forward taxable income for distribution

in the following calendar year, and pay any applicable U.S.

federal excise tax.

We may not be able to achieve results that will permit

the payment of cash distributions.

We currently intend to distribute

net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually out of the

assets legally available for such distributions.

However, we may decide in the future to retain such capital gains for investment, incur

a corporate-level tax on such capital gains, and elect to treat such capital gains as deemed distributions to our stockholders.

happens, our stockholders will be treated for U.S.

federal income tax purposes as if they had received an actual distribution of the

capital gains that we retain and reinvested the net after tax proceeds in us.

In this situation, our stockholders would be eligible to

claim a tax credit equal to their allocable share of the tax we paid on the capital gains deemed distributed to them.

We may not be able

to achieve operating results that will permit us to pay any cash distributions, and if we issue senior securities, we will be prohibited

from making distributions if doing so would cause us to fail to maintain the asset coverage ratios stipulated by the 1940 Act or if such

distributions are limited by the terms of any of our borrowings.

We have adopted a dividend

reinvestment plan that will provide for reinvestment of our dividends and other distributions on behalf of our stockholders, unless a

stockholder elects to receive cash.

As a result, if our Board authorizes, and we declare, 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 our 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 our 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 our 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 our 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

Critical Accounting Policies

Our consolidated financial

statements are prepared in conformity with accounting principles generally accepted in the United States of America, which requires us

to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial

statements and the reported amounts of revenues and expenses during the reporting periods.

Critical accounting policies

are those that require the application of management’s most difficult, subjective, or complex judgments, often because of the need

to make estimates about the effect of matters that are inherently uncertain and that may change in subsequent periods.

The preparation

of these financial statements will require management to make estimates and assumptions that affect the reported amounts of assets, liabilities,

revenues and expenses.

Changes in the economic environment, financial markets and any other parameters used in determining such estimates

could cause actual results to differ.

In addition to the discussion below, we have described our critical accounting policies in the

notes to our consolidated financial statements.

Valuation of Portfolio Investments

Under procedures established

by our Board, we value investments for which market quotations are readily available at such market quotations.

Assets listed on an exchange

will be valued at their last sales prices as reported to the consolidated quotation service at 4:00 P.M.

eastern time on the date of

determination.

If no such sales of such securities occurred, such securities will be valued at the mean between the last available bid

and ask prices as reported by an independent, third party pricing service on the date of determination.

Debt and equity securities that

are not publicly traded or whose market prices are not readily available are valued at fair value, subject at all times to the oversight

and approval of our Board.

Such determination of fair values may involve subjective judgments and estimates, although we will also engage

independent valuation providers to review the valuation of each portfolio investment that constitutes a material portion of our portfolio

and that does not have a readily available market quotation at least once annually.

With respect to unquoted securities, our Investment

Advisor, together with our independent valuation advisors, and subject at all times to the oversight and approval of our Board, will

value each investment considering, among other measures, discounted cash flow models, comparisons of financial ratios of peer companies

that are public and other factors.

With respect to Level 3 assets, we intend to retain one or more independent providers of financial

advisory services to assist the Investment Advisor and the Board by performing certain limited third-party valuation services.

appoint additional or different third-party valuation firms in the future.

When an external event such

as a purchase transaction, public offering or subsequent equity sale occurs with respect to a fair-valued portfolio company or comparable

company, our Board will use the pricing indicated by the external event to corroborate and/or assist us in our valuation.

expect that there will not be a readily available market for many of the investments in our portfolio, we expect to value many of our

portfolio investments at fair value as determined in good faith by our Board using a documented valuation policy and a consistently applied

valuation process.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available

market value, the fair value of our investments may differ significantly from the values that would have been used had readily available

market quotations existed for such investments, and the differences could be material.

With respect to investments

for which market quotations are not readily available, our Investment Advisor will undertake a multi-step valuation process each quarter,

as described below:

Securities for which no such market prices are available or reliable

will be preliminarily valued at such value as the Investment Advisor may reasonably determine, which may include third party valuations;

The audit committee of our Board (the “Audit Committee”)

will then review these preliminary valuations;

At least once annually, the valuation for each portfolio investment

that constitutes a material portion of our portfolio and that does not have a readily available market quotation will be reviewed

by an independent valuation firm;

Our Board will then discuss valuations and determine the fair value

of each investment in our portfolio in good faith, based on the input of our Investment Advisor, the respective independent valuation

firms and the Audit Committee.

All values assigned to securities

and other assets by the Board will be binding on all stockholders.

Net Realized Gains or Losses and Net Change

in Unrealized Appreciation or Depreciation

We measure 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.

Realized gains

and losses from securities transactions and unrealized appreciation and depreciation of securities are determined using the identified

cost basis method for financial reporting.

Related Party Transactions

We have entered into the

Advisory Agreement with the Investment Advisor and the Administration Agreement with the Investment Advisor (in such capacity, the Administrator).

Christopher D.

Long and Jeffrey D.

Fox, each an interested member of our Board, have an indirect pecuniary interest in the Investment

The Investment Advisor is a registered investment adviser under the Advisers Act that is majority-owned by Palmer Square.

Agreements and Related Party Transactions –

Administration Agreement ”

Advisory Agreement ”

in the notes to the accompanying consolidated financial statements.

Contractual Obligations

We have certain contracts

under which we have material future commitments.

We have entered into the Advisory Agreement with the Investment Advisor in accordance

with the 1940 Act.

Payments for investment advisory services under the Advisory Agreement are equal to (a) a base management fee calculated

at an annual rate of 2.0% of the average value of the weighted average of our total net assets at the end of the two most recently completed

quarters and (b) an incentive fee based on our performance.

The Investment Advisor 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 a Listing.

We have entered into an Administration Agreement

with the Administrator to serve as our administrator.

Pursuant to the Administration Agreement, the Administrator furnishes us with office

facilities and equipment, provides us with clerical, bookkeeping and recordkeeping services at such facilities, and provides us with

other services necessary for us to operate or has engaged a third-party firm to perform some or all of these functions.

A summary of our significant

contractual payment obligations related to the repayment of our outstanding indebtedness at December 31, 2021 is as follows:

Payments Due by Period

BoA Credit Facility, Net

$ 550,262,297

WF Credit Facility, Net

Total contractual obligations

$ 649,910,497

Off-Balance Sheet Arrangements

Unfunded commitments to provide

funds to portfolio companies are not recorded on our consolidated statements of assets and liabilities.

Our unfunded commitments may

be significant from time to time.

Unfunded commitments may expire without being drawn upon and the total commitment amount does not necessarily

represent future cash requirements.

As of December 31, 2021 and December 31, 2020, we had nine unfunded commitments totaling $11.3 million,

and three unfunded commitments totaling $1.3 million, respectively.

See “Note 8.

Commitments and Contingencies”

the notes to the accompanying consolidated financial statements for specific identification of the unfunded commitments.

We believe we

maintain sufficient liquidity in the form of cash (including restricted cash, if any), receivables and borrowing capacity to fund these

unfunded commitments should the need arise.

See Financial Condition, Liquidity and Capital Resources above.

Other than contractual commitments

and other legal contingencies incurred in the normal course of our business, we do not have any off- balance sheet financings or liabilities.

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 5. Market for Registrant’s Common Equity