What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-03-10 compared with 2022-03-11 · 1146 added, 1184 removed, 1296 unchanged (64% of the section changed)

3 unchanged sentences

Consolidated Statement of Assets and Liabilities as of December 31, 2022 and December 31, 2021

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 Statement of Operations for the years ended December 31, 2022 and December 31, 2021

Consolidated Statement of Changes in Net Assets for the years ended December 31, 2022 and December 31, 2021

Consolidated Statement of Cash Flows for the years ended December 31, 2022 and December 31, 2021

Consolidated Schedule of Investments as of December 31, 2022 and 2021

Notes to Consolidated Financial Statements

of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Palmer Square Capital BDC Inc.

Opinion on the Financial Statements

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, 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

Report of Independent Registered

Public Accounting Firm

To the Board of Directors and

Stockholders of Palmer Square Capital BDC Inc.

Opinion on the Financial

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, 2022 and 2021, and the related consolidated statements of operations,

of changes in net assets and of cash flows for the years then ended, 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, 2022 and 2021, and the results of its operations, changes in its net assets and its cash flows

for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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 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.

These consolidated financial

statements are the responsibility of the Company’s management.

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.

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 audits to obtain 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

As part 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 risks.

Such procedures included examining,

on a test basis, evidence regarding the amounts and disclosures in the consolidated 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 consolidated

financial statements.

Our procedures included confirmation of securities owned as of December 31, 2022 and 2021 by correspondence with

the custodian, brokers and agent banks.

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

2 unchanged sentences

March 10, 2023

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

Palmer Square Capital BDC Inc.

29 unchanged sentences

Total distributable earnings (accumulated deficit)

( 110,502,182 )

Total Net Assets

9 unchanged sentences

Consolidated Statement of Operations

For the Period

(Commencement of Operations) through

For the Year Ended

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

7 unchanged sentences

Directors fees

Offering costs

Initial organization

Other general and administrative expenses

1 unchanged sentence

Management fee waiver (Note 3)

( 1,041,089 )

Net Investment Income (Loss)

2 unchanged sentences

Non-controlled, non-affiliated investments

( 8,130,187 )

Total net realized gains (losses)

( 8,130,187 )

Net change in unrealized gains (losses):

Non-controlled, non-affiliated investments

( 107,432,980 )

( 8,527,786 )

Total net change in unrealized gains (losses)

( 107,432,980 )

( 8,527,786 )

Total realized and unrealized gains (losses)

( 115,563,167 )

( 3,774,523 )

Net Increase (Decrease) in Net Assets Resulting from Operations

$ ( 74,482,335 )

Per Common Share Data:

Basic and diluted net investment income per common share

Basic and diluted net increase in net assets resulting from operations

Weighted Average Common Shares Outstanding –

Basic and Diluted

Basic and diluted net increase (decrease) in net assets resulting from operations

Weighted Average Common Shares Outstanding - Basic and Diluted

The accompanying notes are an integral part of

2 unchanged sentences

Consolidated Statement of Changes in Net Assets

For the Period

(Commencement of Operations) through

For the Year Ended

Increase (Decrease) in Net Assets Resulting from Operations:

1 unchanged sentence

Net realized gains (losses) on investments and foreign currency transactions

( 8,130,187 )

Net change in unrealized gains (losses) on investments, foreign currency translations, and foreign currency exchange contracts

( 107,432,980 )

( 8,527,786 )

Net Increase (Decrease) in Net Assets Resulting from Operations

( 74,482,335 )

Decrease in Net Assets Resulting from Stockholder Distributions

3 unchanged sentences

Distributions declared from realized gains

( 8,106,718 )

Net Decrease in Net Assets Resulting from Stockholder Distributions

6 unchanged sentences

Total Increase (Decrease) in Net Assets

( 89,354,106 )

Net Assets, Beginning of Period

2 unchanged sentences

$ 452,797,588

The accompanying notes are an integral part of

these consolidated financial statements.

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

For the Year Ended December 31

Cash Flows from Operating Activities:

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:

$ ( 74,482,335 )

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

Net change in unrealized (gains)/losses on investments

( 4,753,263 )

Net change in unrealized (gains)/losses on investments

Net accretion of discount on investments

( 1,717,453 )

Purchases of short-term investments

10 unchanged sentences

( 13,620,479 )

( 5,631,875 )

(Increase)/decrease in interest and dividends receivable

( 2,770,690 )

( 2,224,325 )

(Increase)/decrease in due from investment adviser

1 unchanged sentence

(Increase)/decrease in prepaid expenses and other assets

Increase/(decrease) in interest payable on credit facilities

Increase/(decrease) in payable for investments purchased

( 61,528,210 )

Increase/(decrease) in management fees payable

1 unchanged sentence

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

Net cash used in operating activities

( 1,038,008 )

Net cash provided by (used in) operating activities

( 438,011,310 )

Cash Flows from Financing Activities:

Borrowings on credit facility

Payments on credit facility

Borrowings on the credit facilities

Payments on the credit facilities

( 92,000,000 )

Payments of debt issuance costs

Distributions paid in cash

( 18,829,187 )

( 6,288,461 )

Proceeds from issuance of common shares, net of change in subscriptions receivable of $ -

Net cash provided by financing activities

Net increase in cash and cash equivalents

Net cash provided by (used in) financing activities

( 24,555,386 )

Net increase/(decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of period

10 unchanged sentences

As of December 31, 2022

Portfolio Company (3)

Interest Rate

of Net Assets

Debt Investments

First Lien Senior Secured (2)

Lien Senior Secured (2)

AAdvantage Loyalty IP Ltd.

7 unchanged sentences

8.63 % (L + 4.25 %)

AHP Health Partners, Inc.

Healthcare Equipment and Supplies

4.00% (L + 3.50%)

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

Food Products

4.50% (L + 4.00%)

7.97 % (S + 3.75 %)

Aimbridge Acquisition Co., Inc.

1 unchanged sentence

8.13 % (L + 3.75 %)

Air Methods Corporation (7)

Aerospace and Defense

4.50% (L + 3.50%)

Alliant Holdings Intermediate LLC (7)

2 unchanged sentences

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%)

8.17 % (S + CSA + 3.75 %)

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%)

8.76 % (S + 4.00 %)

American Rock Salt Company LLC (7)

5 unchanged sentences

Hotels, Restaurants and Leisure

4.50% (L + 3.50%)

Applovin Corporation (4)(7)

3.50% (L + 3.00%)

8.73 % (S + CSA + 4.00 %)

Aptean Inc (7)(8)

4 unchanged sentences

8.13 % (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)

5 unchanged sentences

7.88 % (L + 3.50 %)

Athenahealth, Inc.

Healthcare Equipment and Supplies

4.40% (L + 4.25%)

AssuredPartners, Inc.

7.82 % (S + 3.50 %)

Athletico Management, LLC (7)

Healthcare Providers and Services

8.98 % (S + CSA + 4.25 %)

Autokiniton US Holdings, Inc.

1 unchanged sentence

8.79 % (L + 4.50 %)

Diversified Telecommunication Services

4.11% (L + 4.00%)

Diversified Telecommunication Services

4.36% (L + 4.25%)

Aveanna Healthcare LLC (4)(5)(7)

1 unchanged sentence

8.14 % (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.

8.59 % (S + 4.50 %)

BBB Industries (8)

Auto Components

9.67 % (S + CSA + 5.25 %)

BCP Renaissance Parent LLC (7)

Oil, Gas and Consumable Fuels

4.50% (L + 3.50%)

7.82 % (S + 3.50 %)

Belfor Holdings, Inc.

1 unchanged sentence

8.38 % (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 (7)(8)

6 unchanged sentences

Wireless Telecommunication Services

4.50% (L + 3.75%)

8.58 % (S + 4.00 %)

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2022

Portfolio Company (3)

Interest Rate

of Net Assets

CCS-CMGC Holdings, Inc.

1 unchanged sentence

9.91 % (L + 5.50 %)

CHG Healthcare Services, Inc (7)

Healthcare Providers and Services

4.00% (L + 3.50%)

CDK Global (7)

9.08 % (S + 4.50 %)

Congruex Group LLC (8)

Construction and Engineering

9.99 % (S + CSA + 5.75 %)

Connectwise LLC (7)

17 unchanged sentences

8.16 % (L + 3.75 %)

Dave & Buster’s, Inc.

Hotels, Restaurants and Leisure

9.44 % (S + CSA + 5.00 %)

DCert Buyer, Inc.

4.10% (L + 4.00%)

8.70 % (S + 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%)

8.07 % (S + 3.75 %)

Delta Topco, Inc.

4.50% (L + 3.75%)

8.15 % (S + 3.75 %)

Digi International Inc.

4 unchanged sentences

Dotdash Meredith, Inc.

4.50% (C + SCA + 4.00%)

8.22 % (S + CSA + 4.00 %)

EAB Global, Inc.

9 unchanged sentences

8.23 % (L + 3.50 %)

Endurance International Group, Inc.

Endurance International Group, Inc., The (7)

Professional Services

2 unchanged sentences

Healthcare Technology

3.88% (L + 3.75%)

Enterprise Development Authority (8)

7.94 % (S + CSA + 3.75 %)

Fertitta Entertainment, LLC (7)

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%)

8.32 % (S + 4.00 %)

Filtration Group Corporation (7)

6 unchanged sentences

As of December 31, 2022

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%)

Garda World Security Corporation (4)(5)(7)

Diversified Consumer Services

8.53 % (S + 4.25 %)

Getty Images, Inc.

8.94 % (L + 4.50 %)

GFL Environmental Inc.

Commercial Services and Supplies

GIP III Stetson I, LP (7)

Energy Equipment and Services

8.63 % (L + 4.25 %)

12 unchanged sentences

Healthcare Providers and Services

6.00% (L + 5.00%)

9.43 % (S + CSA + 5.00 %)

HAH Group Holding Company LLC (5)(7)

Healthcare Providers and Services

6.00% (L + 5.00%)

9.43 % (S + CSA + 5.00 %)

Hamilton Projects Acquiror, LLC (7)(8)

1 unchanged sentence

8.17 % (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%)

8.19 % (S + CSA + 4.00 %)

Hyland Software, Inc.

7.88 % (L + 3.50 %)

Hyperion Refinance S.a.r.l.

7.5 % (L + 3.75 %)

4.50% (L + 3.75%)

IMA Financial Group, Inc.

7.88 % (L + 3.50 %)

Ineos US Finance LLC (4)(5)(7)

8.17 % (S + CSA + 3.75 %)

Infinite Bidco LLC (7)

3 unchanged sentences

8.47 % (L + 4.00 %)

IRB Holding Corporation (7)

Hotels, Restaurants and Leisure

4.25% (L + 3.25%)

Ivanti Software, Inc.

10 unchanged sentences

Containers and Packaging

5.25% (L + 4.75%)

Landry’s Finance Acquisition Co

Hotels, Restaurants and Leisure

13.00% (L + 12.00%)

8.26 % (S + CSA + 4.75 %)

LBM Acquisition LLC (7)(8)

7 unchanged sentences

9.74 % (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.

1 unchanged sentence

As of December 31, 2022

Portfolio Company (3)

Interest Rate

of Net Assets

Lions Gate Capital Holdings LLC (4)(7)

2.35% (L + 2.25%)

Holdco LLC (7)

Independent Power and Renewable Electricity

10.07 % (S + 5.75 %)

Lightstone Holdco LLC (7)

Independent Power and Renewable Electricity Producers

10.07 % (S + 5.75 %)

LogMeIn, Inc.

9.14 % (L + 4.75 %)

Lucid Energy Group II Borrower, LLC (7)

Oil, Gas and Consumable Fuels

5.00% (L + 4.25%)

LSF9 Atlantis Holdings, LLC (7)

Specialty Retail

11.83 % (S + 7.25 %)

Magenta Buyer LLC (7)

9.17 % (L + 4.75 %)

McAfee, LLC (4)(7)

3.84% (L + 3.75%)

Mariner Wealth Advisors, LLC (5)(8)

Diversified Financial Services

9.04 % (S + CSA + 4.25 %)

Maxar Technologies, Inc.

Aerospace and Defense

8.67 % (S + CSA + 4.25 %)

Medical Solutions L.L.C.

1 unchanged sentence

7.88 % (L + 3.50 %)

MetroNet Systems Holdings, LLC (7)(8)

Diversified Telecommunication Services

4.50% (L + 3.75%)

Michael Baker International, LLC (8)

11 unchanged sentences

Diversified Financial Services

4.84% (L + 4.75%)

9.17 % (S + CSA + 5.00 %)

Mitchell International, Inc.

7 unchanged sentences

8.88 % (L + 4.50 %)

NAPA Management Services Corporation (7)

Healthcare Providers and Services

9.67 % (S + CSA + 5.25 %)

National Mentor Holdings, Inc.

7 unchanged sentences

8.38 % (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%)

9.94 % (S + CSA + 5.50 %)

NSM Top Holdings Corp.

Healthcare Equipment and Supplies

5.35% (L + 5.25%)

9.67 % (S + CSA + 5.25 %)

OneDigital Borrower LLC (7)

4.75% (C + SCA + 4.25%)

8.49 % (S + CSA + 4.25 %)

Orchid Merger Sub II, LLC (4)(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%)

9.58 % (S + CSA + 4.75 %)

Padagis, LLC (7)

1 unchanged sentence

8.49 % (L + 4.75 %)

Pathway Vet Alliance LLC (7)

Healthcare Providers and Services

3.85% (L + 3.75%)

PECF USS Intermediate Holding III Corporation (8)

2 unchanged sentences

Peraton Corp.

Aerospace and Defense

8.13 % (L + 3.75 %)

PetVet Care Centers, LLC (7)

Healthcare Providers and Services

7.88 % (L + 3.50 %)

8.49 % (S + CSA + 4.25 %)

Palmer Square Capital BDC Inc.

1 unchanged sentence

As of December 31, 2022

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)

3 unchanged sentences

9.13 % (L + 4.75 %)

Presidio Holdings, Inc.

Professional Services

3.61% (L + 3.50%)

Pretium PKG Holdings, Inc.

1 unchanged sentence

8.73 % (L + 4.00 %)

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

Diversified Consumer Services

3.50% (L + 2.75%)

Project Alpha Intermediate Holding, Inc.

12 unchanged sentences

10.23 % (L + 5.50 %)

Quest Software US Holdings Inc (7)

PT Intermediate Holdings III LLC (8)

10.23 % (L + 5.50 %)

Radiate Holdco, LLC (7)

PT Intermediate Spider DD T/L (Parts Town) (8)

10.23 % (L + 5.50 %)

Quest Software US Holdings Inc.

8.49 % (S + CSA + 4.25 %)

Radiology Partners, Inc.

12 unchanged sentences

9.11 % (L + 4.75 %)

RegionalCare Hospital Partners Holdings, Inc.

Healthcare Providers and Services

Refresco (4)(7)

Food Products

8.52 % (S + 4.25 %)

Renaissance Holdings Corp.

8.72 % (S + 4.50 %)

Rocket Software, Inc.

8.63 % (L + 4.25 %)

7 unchanged sentences

RSC Acquisition, Inc.

6.25% (L + 5.50%)

RSC Acquisition, Inc.

6.25% (L + 5.50%)

RSC Acquisition, Inc.

6.25% (L + 5.50%)

10.23 % (S + CSA + 5.50 %)

Runner Buyer Inc.

1 unchanged sentence

10.23 % (L + 5.50 %)

Ryan Specialty Group LLC (4)(7)

3.75% (L + 3.00%)

Sabert Corporation (8)

1 unchanged sentence

8.94 % (L + 4.50 %)

Severin Acquisition, LLC (7)

Diversified Consumer Services

3.10% (L + 3.00%)

Shearer’s Foods, LLC (7)

Food Products

7.88 % (L + 3.50 %)

4.25% (L + 3.50%)

Sotera Health Holdings, LLC (7)

Healthcare Equipment and Supplies

3.25% (L + 2.75%)

8.57 % (S + 4.00 %)

Sovos Compliance, LLC (8)

8.57 % (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.

1 unchanged sentence

As of December 31, 2022

Portfolio Company (3)

Interest Rate

of Net Assets

Summer BC Holdco B LLC (4)(8)

Specialty Building Products Holdings,

Building Products

7.64 % (L + 3.25 %)

Surf Holdings, LLC (7)

Summer BC Holdco B LLC (4)(8)

8.17 % (L + 4.50 %)

2 unchanged sentences

8.05 % (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)

8.69 % (S + CSA + 4.25 %)

The Edelman Financial Center, LLC (7)

Diversified Financial Services

2 unchanged sentences

12.88 % (L + 8.50 %)

TIBCO Software Inc (7)

3.85% (L + 3.75%)

Tidal Power Holdings, LLC (4)(7)

1 unchanged sentence

8.48 % (L + 3.75 %)

Tiger Acquisition, LLC (7)

Industrial Conglomerates

3.75% (L + 3.25%)

Titan US Finco, LLC (4)(8)

7.67 % (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%)

7.94 % (S + CSA + 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%)

8.95 % (S + CSA + 4.25 %)

Truck Hero, Inc.

10 unchanged sentences

8.44 % (L + 4.00 %)

Ultimate Software Group, The (7)

8.13 % (L + 3.75 %)

1 unchanged sentence

8.11 % (L + 3.75 %)

Univision Communications Inc.

4.00% (L + 3.25%)

US Radiology Specialists, Inc.

1 unchanged sentence

8.94 % (L + 5.25 %)

8.94 % (S + CSA + 4.75 %)

VeriFone Systems, Inc.

6 unchanged sentences

8.36 % (L + 4.00 %)

WaterBridge Midstream Operating, LLC (7)

Energy Equipment and Services

9.13 % (L + 5.75 %)

Watlow Electric Manufacturing Company (7)

Electrical Equipment

4.25% (L + 3.75%)

Whatabrands LLC (7)

Hotels, Restaurants and Leisure

3.75% (L + 3.25%)

8.15 % (S + CSA + 3.75 %)

Wencor Group (7)

Aerospace and Defense

8.42 % (S + CSA + 4.25 %)

White Cap Buyer LLC (7)(8)

Building Products

4.50% (L + 4.00%)

8.07 % (S + 3.75 %)

Wilsonart LLC (7)(8)

1 unchanged sentence

7.98 % (L + 3.25 %)

Zelis Cost Management Buyer, Inc.

Zelis Cost Management Buyer,

Healthcare Technology

7.88 % (L + 3.50 %)

Total First Lien Senior Secured

1,012,130,228

Lien Senior Secured

$ 951,753,250

$ 870,880,344

Second Lien Senior Secured (2)

Almonde, Inc.

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2022

of Net Assets

Lien Senior Secured (2)

American Rock Salt Company LLC

Metals and Mining

11.63 % (L + 7.25 %)

6 unchanged sentences

12.14 % (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 (7)

9.63 % (L + 5.25 %)

Curium BidCo S.a r.l.

Pharmaceuticals

8.50% (L + 7.75%)

Barracuda Networks, Inc.

11.09 % (S + 7.00 %)

DCert Buyer, Inc.

11.7 % (L + 7.00 %)

Delta Topco, Inc.

11.65 % (S + 7.25 %)

Energy Acquisition LP

4 unchanged sentences

Help/Systems Holdings, Inc.

7.50% (L + 6.75%)

10.94 % (S + CSA + 6.75 %)

10.5 % (L + 6.75 %)

8 unchanged sentences

12.67 % (L + 8.25 %)

Paradigm Outcomes

Healthcare Providers and Services

12.05 % (S + CSA + 7.50 %)

Peraton Corp.

Aerospace and Defense

12.09 % (L + 7.75 %)

3 unchanged sentences

Quest Software US Holdings Inc.

8.38% (L + 8.25%)

TIBCO Software Inc (5)

7.35% (L + 7.25%)

11.59 % (S + 7.50 %)

Vision Solutions, Inc.

11.61 % (L + 7.25 %)

Total Second Lien Senior Secured

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

KOBE US Midco 2

Total Corporate

1,033,577,501

1 unchanged sentence

$ 930,331,572

CLO Mezzanine (2)

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2022

of Net Assets

Mezzanine (2)

522 Funding CLO 2020-6, Ltd.

1 unchanged sentence

12.36 % (L + 8.04 %)

Barings CLO Ltd (4)

Barings CLO 2013-IA Class FR (4)

Structured Note

15 unchanged sentences

10.99 % (L + 6.75 %)

HPS Loan Management Series 15A-19 (4)

Structured Note

6.73% (L + 6.60%)

Magnetite CLO Ltd 2015-16A (4)

Magnetite CLO, Ltd.

Structured Note

3 unchanged sentences

13.11 % (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

Babson CLO 2018-4A, Ltd.

Structured Subordinated Note

Dryden 86 CLO, Ltd.

Structured Subordinated Note

HPS Loan Management 12-2018, Ltd.

Structured Subordinated Note

Long Point Park CLO, Ltd.

2 unchanged sentences

Structured Subordinated Note

Signal Peak CLO, LLC (4)

Structured Subordinated Note

Stratus CLO Series 2021-1A

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

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2022

of Net Assets

8 unchanged sentences

$ 363,443,482

(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.

(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

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), SOFR + Credit Spread Adjustment (S+CSA),

where the Credit Spread Adjustment is a defined additional spread amount based on the tenor of SOFR the borrower selects, 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.

For the holdings as of December 31, 2022 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.

2 unchanged sentences

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).

(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, 2022, 14.9% of the Company’s total assets were in non-qualifying

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

December 31, 2022.

(6) As of December 31, 2022, 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, 2022.

(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.

The accompanying notes are

an integral part of these consolidated financial statements.

Palmer Square Capital BDC Inc.

1 unchanged sentence

As of December 31, 2021

Percentage of

Portfolio Company (3)

Lien Senior Secured (2)

Specialty Retail

5.75% (L + 5.00%)

Acrisure, LLC

Loyalty IP Ltd.

5.50 % (L + 4.75 %)

AI Convoy (Luxembourg)

Aerospace and Defense

Providers and Services

4.18 % (L + 4.00 %)

Albany Molecular

Research, Inc.

Healthcare Providers and Services

3.63 % (L + 3.50 %)

Intermediate Holdings, Inc.

4.75 % (L + 4.25 %)

AlixPartners,

Diversified Financial Services

Health Partners, Inc.

Equipment and Supplies

4.00 % (L + 3.50 %)

Alliant Holdings

Intermediate LLC (7)

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

4.50 % (L + 4.00 %)

Alliant Holdings

Intermediate LLC (7)

Acquisition Co., Inc.

Restaurants and Leisure

3.84 % (L + 3.75 %)

Alphabet Holding

Company, Inc.

Food Products

Methods Corporation (7)

4.50 % (L + 3.50 %)

Alterra Mountain

Hotels, Restaurants and Leisure

Holdings Intermediate LLC (7)

4.00 % (L + 3.50 %)

Alterra Mountain

Hotels, Restaurants and Leisure

Universal Holdco LLC (7)

4.25 % (L + 3.75 %)

Amentum Government

Services Holdings LLC (7)

Construction and Engineering

Mountain Company (7)

Restaurants and Leisure

4.00 % (L + 3.50 %)

Amentum Government

Services Holdings LLC (7)

Construction and Engineering

Government Services Holdings LLC (7)

3.60 % (L + 3.50 %)

American Rock

Salt Company LLC (7)

Metals and Mining

Government Services Holdings LLC (7)

5.50 % (L + 4.75 %)

AmWINS Group,

Airlines, Inc.

2.11 % (L + 2.00 %)

Amynta Agency

Borrower, Inc.

Airlines, Inc.

1.85 % (L + 1.75 %)

APLP Holdings

Limited Partnership (4)(7)

Independent Power and Renewable Electricity Producers

Rock Salt Company LLC (7)

4.75 % (L + 4.00 %)

Applovin Corporation

Agency Borrower, Inc.

4.60 % (L + 4.50 %)

Interactive Media and Services

Gaming I, LLC (7)

Restaurants and Leisure

4.50 % (L + 3.50 %)

Aristocrat International

PTY Ltd (4)(7)

Hotels, Restaurants and Leisure

Corporation (4)(7)

3.50 % (L + 3.00 %)

Aruba Investments,

Inc (5)(7)(8)

4.35 % (L + 4.25 %)

Ascend Learning,

Diversified Consumer Services

Acquisition Holding, Inc.

4.75 % (L + 4.25 %)

AssuredPartners,

Falcon I Inc.

4.25 % (L + 3.75 %)

AssuredPartners,

3.75 % (L + 3.25 %)

Diversified Consumer Services

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

Restaurants and Leisure

4.75 % (L + 3.75 %)

Athenahealth,

Healthcare Providers and Services

Investments Holdings, LLC (7)

4.75 % (L + 4.00 %)

Diversified Telecommunication Services

Learning, LLC (5)(7)

4.00 % (L + 3.50 %)

Diversified Telecommunication Services

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2021

Portfolio Company (3)

AssuredPartners,

4.00 % (L + 3.50 %)

Azalea TopCo,

Healthcare Providers and Services

Athenahealth,

Equipment and Supplies

4.40 % (L + 4.25 %)

Barracuda Networks,

US Holdings, Inc.

5.00 % (L + 4.50 %)

Bass Pro Group,

Specialty Retail

Telecommunication Services

4.11 % (L + 4.00 %)

Bausch Health

Companies Inc.

Pharmaceuticals

Telecommunication Services

4.36 % (L + 4.25 %)

Belfor Holdings

Commercial Services and Supplies

Healthcare LLC (4)(7)

Providers and Services

4.25 % (L + 3.75 %)

Bioscrip, Inc.

Healthcare Providers and Services

3.63 % (L + 3.50 %)

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 and Services

Networks, Inc.

4.50 % (L + 3.75 %)

Company, Inc.

Raptor, LLC (5)(7)

Gas and Consumable Fuels

5.25 % (L + 4.25 %)

Brookfield Property

Real Estate Investment Trusts (REITs)

Renaissance Parent L.L.C.

Gas and Consumable Fuels

4.50 % (L + 3.50 %)

Brookfield WEC

Holdings Inc.

Commercial Services and Supplies

Services and Supplies

3.85 % (L + 3.75 %)

Leisure Products

Parent Company, Inc.

3.88 % (L + 3.75 %)

Caesars Resort

Collection, LLC (4)(7)

Hotels, Restaurants and Leisure

Resort Collection, LLC (4)(7)

Restaurants and Leisure

3.60 % (L + 3.50 %)

Acquisition 1 Co.

Professional Services

US Holding Corporation (8)

3.88 % (L + 3.75 %)

CCI Buyer, Inc.

Wireless Telecommunication Services

US Holding Corporation (8)

4.75 % (L + 4.00 %)

CCS-CMGC Holdings,

Healthcare Providers and Services

Telecommunication Services

4.50 % (L + 3.75 %)

Change Healthcare

Holdings, Inc.

Healthcare Providers and Services

3.50% (L + 2.50%)

CHG Healthcare

Services, Inc (7)

Healthcare Providers and Services

Providers and Services

5.63 % (L + 5.50 %)

Cincinnati Bell

Healthcare Services, Inc (7)

Providers and Services

4.00 % (L + 3.50 %)

Citadel Securities

Diversified Financial Services

4.00 % (L + 3.50 %)

Communications, Inc.

Diversified Telecommunication Services

Telecommunication Services

4.25 % (L + 3.50 %)

CP Atlas Buyer,

Building Products

Holdings Corp.

5.10 % (L + 5.00 %)

CP Atlas Buyer,

Building Products

Software and Services

4.00 % (L + 3.50 %)

Creative Artists

Agency, LLC (7)

Atlas Buyer, Inc (7)

4.25 % (L + 3.75 %)

Crestwood Holdings

Oil, Gas and Consumable Fuels

Technologies, Inc.

Equipment, Instruments and Components

6.00 % (L + 5.50 %)

Providers and Services

4.50 % (L + 3.75 %)

4.10 % (L + 4.00 %)

Palmer Square Capital BDC Inc.

1 unchanged sentence

As of December 31, 2021

Percentage of

Portfolio Company (3)

4.15% (L + 4.00%)

Dakota Holding, LLC (7)

Financial Services

Diversified Financial

4.75 % (L + 3.75 %)

US Holdings, Inc.

and Consumable Fuels

Oil, Gas and Consumable Fuels

6.50 % (L + 5.50 %)

4.50 % (L + 3.75 %)

Dun & Bradstreet Corporation (4)(7)

International Inc.

Technology Hardware, Storage

and Peripherals

5.50 % (L + 5.00 %)

Financing, LLC (7)

5.75 % (L + 5.00 %)

Meredith, Inc.

4.50 % (C + SCA + 4.00 %)

Professional Services

4.00 % (L + 3.50 %)

Software Solutions, Inc.

4.50 % (L + 3.75 %)

Entertainment, LLC (8)

Hotels, Restaurants and Leisure

8.25 % (L + 7.50 %)

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

Power and Renewable Electricity Producers

Independent Power and Renewable

Electricity Producers

4.50 % (L + 3.50 %)

Animal Health Incorporated (4)(7)

Providers and Services

International Group, Inc.

Professional Services

4.25 % (L + 3.50 %)

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

Pharmaceuticals

Healthcare Technology

3.88 % (L + 3.75 %)

Providers and Services

Development Authority (8)

Hotels, Restaurants and Leisure

5.00 % (L + 4.25 %)

1 unchanged sentence

4.00 % (L + 3.25 %)

Payments Inc.

11.50% (L + 10.50%)

Payments Inc.

Technologies Corp.

Industrial Conglomerates

4.50 % (L + 3.50 %)

Group LLC (4)(7)

Group Corporation (7)

Industrial Conglomerates

4.00 % (L + 3.50 %)

1 unchanged sentence

4.50 % (L + 3.75 %)

Software LLC (5)(7)

Bridge Acquisition, LLC (5)(8)

Electric Utilities

5.75 % (L + 5.00 %)

World Security Corporation (7)

Consumer Services

Bridge Acquisition, LLC (5)(8)

Electric Utilities

5.75 % (L + 5.00 %)

4.63 % (L + 4.50 %)

Environmental Inc.

Services and Supplies

Commercial Services and Supplies

3.50 % (L + 3.00 %)

Medical Response, Inc.

Providers and Services

Healthcare Providers and Services

5.25 % (L + 4.25 %)

Partners Investment Management Holdings, LLC (7)

Financial Services

Holdings Inc (4)(5)(7)

5.50 % (L + 4.50 %)

Outdoors Group, LLC (7)

Specialty Retail

4.50 % (L + 3.75 %)

Metals and Mining

4.75 % (L + 4.00 %)

Group Holding Company LLC (7)

Providers and Services

Healthcare Providers and Services

6.00 % (L + 5.00 %)

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2021

Portfolio Company (3)

Group Holding Company LLC (7)

Healthcare Providers

6.00 % (L + 5.00 %)

Projects Acquiror LLC (7)(8)

Independent Power and Renewable

Electricity Producers

5.50 % (L + 4.50 %)

Freight Tools USA, Inc.

4.00% (L + 3.25%)

Gen Funding, LLC (7)

Power and Renewable Electricity Producers

Specialty Retail

3.25 % (L + 2.75 %)

1 unchanged sentence

4.75 % (L + 4.00 %)

Brands, LLC (4)(7)

Food Products

3.00% (L + 2.25%)

International Limited (7)

4 unchanged sentences

4.00 % (L + 3.25 %)

US Intermediate Holdings II, Inc.

Providers and Services

4.50 % (L + 3.75 %)

Financial Group, Inc.

4.25 % (L + 3.75 %)

Bidco LLC (7)

Electronic Equipment, Instruments

and Components

4.25 % (L + 3.75 %)

Professional Services

5.00 % (L + 4.00 %)

Holding Corporation (7)

Hotels, Restaurants

Hotels, Restaurants and Leisure

4.25 % (L + 3.25 %)

Satellite LLC (4)(7)

Telecommunication Services

Software, Inc.

4.75 % (L + 4.00 %)

1 unchanged sentence

5.00 % (L + 4.25 %)

Street Group, LLC (7)

Financial Services

Ohio Finance LLC (8)

Hotels, Restaurants and Leisure

5.50 % (L + 4.75 %)

Acquisition LLC (7)

Power and Renewable Electricity Producers

Independent 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.

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

Containers and Packaging

5.25 % (L + 4.75 %)

Landry’s

Finance Acquisition Co

1 unchanged sentence

13.00 % (L + 12.00 %)

LBM Acquisition

Construction Materials

Acquisition LLC (5)(7)(8)

Building Products

4.50 % (L + 3.75 %)

LCPR Loan Financing

Diversified Telecommunication Services

Hotels, Restaurants and Leisure

5.75 % (L + 4.75 %)

Lightstone Holdco

Independent Power and Renewable Electricity Producers

Global Corporation (5)(7)

Healthcare Equipment and Supplies

6.13 % (L + 6.00 %)

Lightstone Holdco

Independent Power and Renewable Electricity Producers

Independent Power and Renewable

Electricity Producers

4.75 % (L + 3.75 %)

Terminals, LLC (5)(7)

Independent Power and Renewable

Electricity Producers

4.75 % (L + 3.75 %)

Gate Capital Holdings LLC (4)(7)

2.35 % (L + 2.25 %)

4.86 % (L + 4.75 %)

Energy Group II Borrower, LLC (7)

Oil, Gas and Consumable Fuels

5.00 % (L + 4.25 %)

Lions Gate Capital

Holdings LLC (4)(7)

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2021

Portfolio Company (3)

Buyer LLC (7)

5.75 % (L + 5.00 %)

LogMeIn, Inc.

3.84 % (L + 3.75 %)

Mauser Packaging

Solutions Holding Company (7)

Containers and Packaging

Solutions L.L.C.

Providers and Services

4.00 % (L + 3.50 %)

Systems Holdings, LLC (7)(8)

Telecommunication Services

4.50 % (L + 3.75 %)

Meredith Corporation

Baker International, LLC (8)

and Engineering

5.75 % (L + 5.00 %)

Michaels Stores,

Specialty Retail

Holding Corp.

4.75 % (L + 3.75 %)

Milano Acquisition

Corporation (7)

Health Care Technology

Veterinary Partners, LLC (5)(7)

Providers and Services

4.75 % (L + 4.00 %)

Minotaur Acquisition,

Diversified Financial Services

Acquisition Corporation (7)

Providers and Services

4.75 % (L + 4.00 %)

Mitchell International,

Acquisition, Inc.

Financial Services

4.84 % (L + 4.75 %)

MPH Acquisition

Holdings LLC (7)

Healthcare Providers and Services

International, Inc.

4.25 % (L + 3.75 %)

National Mentor

Holdings, Inc.

Healthcare Providers and Services

US HoldCo LLC (7)

Telecommunication Services

4.60 % (L + 4.50 %)

National Mentor

Holdings, Inc.

Healthcare Providers and Services

International, Inc.

Consumer Services

5.00 % (L + 4.50 %)

Navicure, Inc.

Health Care Technology

Mentor Holdings, Inc.

Providers and Services

4.50 % (L + 3.75 %)

New Arclin US

Holding Corp.

Mentor Holdings, Inc.

Providers and Services

4.50 % (L + 3.75 %)

Newport Group

Holdings II, Inc.

Diversified Financial Services

4.10 % (L + 4.00 %)

Professional Services

Buyer LLC (7)

3.85 % (L + 3.75 %)

Nielsen Finance

Holdings, Inc.

Providers and Services

6.00 % (L + 5.00 %)

NorthStar Group

Services, Inc.

Commercial Services and Supplies

Group Services, Inc.

Services and Supplies

6.50 % (L + 5.50 %)

Top Holdings Corp.

Equipment and Supplies

5.35 % (L + 5.25 %)

Palmer Square Capital BDC Inc.

Consolidated Schedule

of Investments

As of December 31, 2020

Percentage of

Borrower LLC (7)

4.75 % (C + SCA + 4.25 %)

Merger Sub II, LLC (5)(7)

5.25 % (L + 4.75 %)

Energy, LLC (7)

Independent Power and Renewable Electricity Producers

Clean Energy, LLC (7)

Power and Renewable Electricity Producers

4.75 % (L + 3.75 %)

Alliance LLC (7)

Healthcare Providers and Services

Alliance LLC (7)

Healthcare Providers and Services

Evergreen Group Holdings Inc.

and Packaging

4.00 % (L + 3.50 %)

PCI Gaming Authority

Hotels, Restaurants and Leisure

Pharmaceuticals

5.25 % (L + 4.75 %)

Supplies, Inc.

Specialty Retail

Vet Alliance LLC (7)

Providers and Services

3.85 % (L + 3.75 %)

Centers, LLC (7)

Healthcare Providers and Services

USS Intermediate Holding III Corporation (5)(8)

4.75 % (L + 4.25 %)

Phoenix Guarantor

Healthcare Providers and Services

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2021

Portfolio Company (3)

4.50 % (L + 3.75 %)

Pike Corporation

Construction and Engineering

Care Centers, LLC (7)

Healthcare Providers and Services

4.25 % (L + 3.50 %)

Playtika Holding

Hotels, Restaurants and Leisure

Guarantor Inc.

Healthcare Providers and Services

3.60 % (L + 3.50 %)

PODS, LLC (7)

Building Products

Road and Rail

3.75 % (L + 3.00 %)

Pre-Paid Legal

Services, Inc.

Diversified Consumer Services

Performance Chemicals (7)

4.25 % (L + 3.50 %)

Pre-Paid Legal

Services, Inc.

Diversified Consumer Services

ECI Acquiror LP (7)

Oil, Gas and Consumable Fuels

4.85 % (L + 4.75 %)

Presidio Holdings,

Holdings, Inc.

Professional Services

3.61 % (L + 3.50 %)

Holdings, Inc.

PKG Holdings, Inc.

Containers and Packaging

4.50 % (L + 4.00 %)

Prime Security

Services Borrower, LLC (4)(7)

Security Services Borrower, LLC (4)(7)

Diversified Consumer Services

3.50 % (L + 2.75 %)

Project Alpha

Intermediate Holding, Inc.

Alpha Intermediate Holding, Inc.

4.11 % (L + 4.00 %)

Internet and Direct Marketing Retail

Boost Purchaser, LLC (7)

Professional Services

4.00 % (L + 3.50 %)

Quest Software

US Holdings Inc (7)

3.75 % (L + 3.25 %)

Rackspace Hosting,

Technology Hardware, Storage and Peripherals

Holdco, LLC (8)

Road and Rail

5.00 % (L + 4.25 %)

Radiate Holdco,

Intermediate Holdings III LLC (8)

6.25 % (L + 5.50 %)

Radiology Partners,

Intermediate Holdings III LLC (8)

6.25 % (L + 5.50 %)

Software US Holdings Inc (7)

4.38 % (L + 4.25 %)

Holdco, LLC (7)

4.00 % (L + 3.25 %)

Partners, Inc.

Healthcare Providers and Services

4.35 % (L + 4.25 %)

Redstone Buyer,

Auto Components

4.25 % (L + 3.50 %)

Real Estate Management and

3.75 % (L + 3.25 %)

Planet Borrower, LLC (7)

Internet Software and Services

4.25 % (L + 3.75 %)

Holdco 2 LP (7)(8)

5.50 % (L + 4.75 %)

Hospital Partners Holdings, Inc.

1 unchanged sentence

3.85 % (L + 3.75 %)

Holding Corp (7)

Diversified Consumer Services

Software, Inc.

4.75 % (L + 4.25 %)

Ryan Specialty

Group LLC (7)

& Fields, LLC (7)

Textiles, Apparel and Luxury

4.11 % (L + 4.00 %)

Sabert Corporation

Containers and Packaging

Holding GMBH (4)(7)(8)

4.90 % (L + 4.75 %)

Palmer Square Capital BDC Inc.

Consolidated Schedule

of Investments

Consolidated Schedule of Investments

As of December 31, 2021

Percentage of

International S.A.

Textiles, Apparel and Luxury Goods

Portfolio Company (3)

Acquisition, Inc.

6.25 % (L + 5.50 %)

Scientific Games

International, Inc.

Leisure Products

Acquisition, Inc.

6.25 % (L + 5.50 %)

SCIH Salt Holdings

Metals and Mining

Acquisition, Inc.

6.25 % (L + 5.50 %)

Shearer’s

Household Durables

6.25 % (L + 5.50 %)

Specialty Group LLC (4)(7)

3.75 % (L + 3.00 %)

Corporation (7)(8)

Containers and Packaging

5.50 % (L + 4.50 %)

Acquisition, LLC (7)

Diversified Consumer Services

3.10 % (L + 3.00 %)

Foods, LLC (7)

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4.25 % (L + 3.50 %)

SmartBear Software

4.25 % (L + 3.50 %)

4.50% (L + 3.75%)

Sotera Health

Holdings LLC (4)(7)

Health Holdings, LLC (7)

Healthcare Equipment and Supplies

3.25 % (L + 2.75 %)

Springer Nature

Deutschland GmbH (5)(7)

Compliance, LLC (8)

5.00 % (L + 4.50 %)

Surf Holdings,

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

Building Products

4.25 % (L + 3.75 %)

Syncsort Incorporated

Nature Deutschland GmbH (4)(7)

3.75 % (L + 3.00 %)

Supply, LLC (7)

Independent Power and Renewable Electricity Producers

BC Holdco B LLC (4)(8)

5.25 % (L + 4.50 %)

TecoStar Holdings,

Healthcare Equipment and Supplies

Holdings, LLC (7)

3.69 % (L + 3.50 %)

Financial Center, LLC (7)

Center Holdings, Inc.

Healthcare Providers and Services

4.50 % (L + 3.75 %)

Energy Supply, LLC (7)

Independent Power and Renewable

Electricity Producers

3.85 % (L + 3.75 %)

America Corp.

Construction and Engineering

5.00 % (L + 4.25 %)

Edelman Financial Engines Centre, LLC (7)

Diversified Financial Services

4.25 % (L + 3.50 %)

TIBCO Software

Professional Services

9.50 % (L + 8.50 %)

Tosca Services,

Containers and Packaging

Software Inc (7)

3.85 % (L + 3.75 %)

Traverse Midstream

Partners LLC (7)

Oil, Gas and Consumable Fuels

Power Holdings, LLC (4)(7)

Independent Power and Renewable

Electricity Producers

4.75 % (L + 3.75 %)

Tronox Finance

Acquisition, LLC (7)

Industrial Conglomerates

3.75 % (L + 3.25 %)

UGI Energy Services,

Oil, Gas and Consumable Fuels

US Finco, LLC (4)(8)

4.50 % (L + 4.00 %)

Ultimate Software

Group, The (7)

Specialty Retail

6.25 % (L + 5.50 %)

Ultimate Software

Group, The (7)

Burch LLC (7)

Specialty Retail

3.50 % (L + 3.00 %)

Univision Communications

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2021

Portfolio Company (3)

Services, LLC (7)

and Packaging

4.25 % (L + 3.50 %)

Commercial Services and Supplies

Midstream Partners LLC (7)

Gas and Consumable Fuels

5.25 % (C + SCA + 4.25 %)

Water Holdings, Inc.

4.00 % (L + 3.50 %)

Specialists, Inc., (7)

Healthcare Providers and Services

4.00 % (L + 3.25 %)

Healthcare Providers and Services

Renal Care, Inc.

Providers and Services

5.13 % (L + 5.00 %)

Renal Care, Inc.

Providers and Services

6.50 % (L + 5.50 %)

USIC Holdings,

Construction and Engineering

Silica Company (4)(7)

5.00 % (L + 4.00 %)

Venator Materials

Software Group, The (7)

3.85 % (L + 3.75 %)

VeriFone Systems,

Commercial Services and Supplies

Airlines, Inc.

4.50 % (L + 3.75 %)

Verscend Holding

Health Care Technology

Communications Inc.

4.00 % (L + 3.25 %)

VFH Parent LLC

Capital Markets

Radiology Specialists, Inc.

Providers and Services

6.00 % (L + 5.25 %)

VM Consolidated

Transportation Infrastructure

Systems, Inc.

Services and Supplies

4.18 % (L + 4.00 %)

Interactive Media and Services

Holding Corp.

4.10 % (L + 4.00 %)

White Cap Buyer

Construction Materials

Solutions, Inc.

4.75 % (L + 4.00 %)

Xplornet Communications

Wireless Telecommunication Services

Electric Manufacturing Company (5)(7)

4.25 % (L + 3.75 %)

Restaurants and Leisure

3.75 % (L + 3.25 %)

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

4.50 % (L + 4.00 %)

4.50 % (L + 3.50 %)

Cost Management Buyer, Inc.

Health Care Technology

3.60 % (L + 3.50 %)

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$ 1,003,839,402

$ 1,007,407,474

Palmer Square Capital BDC Inc.

1 unchanged sentence

As of December 31, 2021

Percentage of

Portfolio Company (3)

Lien Senior Secured (2)

Holding Company, Inc.

8.25 % (L + 7.25 %)

Falcon I Inc.

7.50 % (L + 7.00 %)

Services, LLC (7)

Construction and Engineering

8.25 % (L + 7.25 %)

Investments, Inc.

Consumer Services

8.50 % (L + 7.75 %)

5.35 % (L + 5.25 %)

BidCo S.a r.l.

Pharmaceuticals

8.50 % (L + 7.75 %)

7.10 % (L + 7.00 %)

Acquisition LP (5)

Electrical Equipment

8.50 % (L + 8.50%)

Software Corporation (5)(7)

International, Inc.

Arclin US Holding Corp.

Services, LLC (5)

and Engineering

8.75 % (L + 7.75 %)

Holdings, Inc.

7.50 % (L + 6.75 %)

Bidco LLC (5)(7)

Electronic Equipment, Instruments

and Components

7.50 % (L + 7.00 %)

Professional Services

9.00 % (L + 8.00 %)

Software, Inc.

7.75 % (L + 7.25 %)

9.00 % (L + 8.25 %)

8.50 % (L + 7.75 %)

PKG Holdings, Inc.

Containers and Packaging

7.25 % (L + 6.75 %)

Software US Holdings Inc (7)

Invictus Intermediate II S.a.r.l.

8.38 % (L + 8.25 %)

Software Inc (5)

7.35 % (L + 7.25 %)

Solutions, Inc.

8.00 % (L + 7.25 %)

Second Lien Senior Secured

Collateralized

Securities and Structured Products - Debt (2)

CLO Ltd 2019-3A (4)

Park CLO, Ltd (4)

Vance CLO 2019-1, Ltd.

Loan Management Series 15A-19 (4)

XIV-R, Limited (4)

CLO Ltd 2015-16A (4)

BSL CLO 1 Ltd (4)

Collateralized Securities and Structured Products - Debt

Diversified Consumer Services

US Midco 2 Inc

Corporate Bonds

Palmer Square Capital BDC Inc.

Consolidated Schedule of Investments

As of December 31, 2021

Portfolio Company (3)

Network Corp (4)

Convertible Bonds

Debt Investments

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$ 1,072,062,425

$ 1,075,955,626

Mezzanine (2)

Funding CLO 2020-6, Ltd.

Structured Note

8.17 % (L + 8.04 %)

Structured Note

6.88 % (L + 6.75 %)

US CLO 2020-2, Ltd (4)

Structured Note

8.66 % (L + 8.53 %)

Structured Note

7.86 % (L + 7.74 %)

Loan Management US 2020-7A (4)

Structured Note

7.88 % (L + 7.50 %)

Loan Management US 2021-10A (4)

Structured Note

7.92 % (L + 7.79 %)

Loan Management US 2021-9A (4)

Structured Note

6.88 % (L + 6.75 %)

Loan Management Series 15A-19 (4)

Structured Note

6.73 % (L + 6.60 %)

CLO Ltd 2015-16A (4)

Structured Note

6.62 % (L + 6.50 %)

Park CLO, Ltd.

Structured Note

9.00 % (L + 8.87 %)

CLO Mezzanine

CLO LTD 2021-62A (4)

Structured Subordinated Note

Point Park CLO, Ltd.

Structured Subordinated Note

XII Funding Ltd.

Structured Subordinated Note

CLO Series 2021-1A (4)

Structured Subordinated Note

Palmer Square Capital BDC Inc.

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As of December 31, 2021

Percentage of

Short-Term Investments

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

Portfolio Company (3)

Custom Truck One Source Inc (4)

Commercial Services and Supplies

Total Equity Investments

Total Equity and Other Investments

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

in Excess of Other Assets

Liabilities in Excess of Other Assets

( 741,459,996 )

$ 452,797,588

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

(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

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

(“LIBOR” or “L”) (which can include one-, two-, three- or six-month LIBOR), SOFR + Credit Spread Adjustment (S+CSA),

where the Credit Spread Adjustment is a defined additional spread amount based on the tenor of SOFR the borrower selects, 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.

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.

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) 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.

The accompanying notes are an integral part of

these consolidated financial statements.

(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

Palmer Square Capital BDC Inc.

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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”) 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 1986, as amended (the “Code”) and expects to qualify as a RIC each year

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 credit facility with Wells Fargo, National Association.

The Company’s investment

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 Bank of America, N.A.

(“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 (“WFB”).

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.

1 unchanged sentence

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.

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 years ended December

31, 2022 and December 31, 2021, 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”).

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

(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.

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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.

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 WFB.

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

1 unchanged sentence

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 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.

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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;

16 unchanged sentences

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.

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.

As of December 31, 2022, the balance of debt issuance costs was $( 0.1 ) million, representing deferred financing costs of $ 2.4 million

less accrued interest of $ 2.5 million, included in BoA Credit Facility and WF Credit Facility (each as defined below), net of $ 641.3 million

on the consolidated statement of assets and liabilities.

The Company has elected to

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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.

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

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

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

2 unchanged sentences

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.

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.

“more-likely-than-not” threshold are reserved and recorded as a tax benefit or expense in the current year.

All penalties

2 unchanged sentences

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

Basis of Consolidation

As provided under ASC 946, the Company will generally

not consolidate its investment in a company other than a substantially wholly owned investment company subsidiary or a controlled operating

company whose business consists of providing services to the Company.

Accordingly, the Company consolidated the results of the Company’s

wholly owned investment company subsidiaries (PS BDC Funding and PS BDC Funding II) in its consolidated financial statements.

Interest and Dividend Income Recognition

8 unchanged sentences

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

3 unchanged sentences

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

Non-Accrual Status

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 not to place a loan on non-accrual status if the loan has sufficient collateral value and is

in the process of collection.

Management reviews all

loans that have principal or interest that is 90 days past due, or when there is reasonable doubt as to the collection of principal or

interest to determine if a loan will be placed on non-accrual status.

When a loan is placed on non-accrual status, the accrued interest

and unpaid interest is generally reversed, and any discount (market or original) is no longer accreted to interest income.

Interest payments

received while a loan is on non-accrual status may be applied to principal or recognized as income, as determined by management’s

judgement regarding collectability.

A loan may be taken off non-accrual

status if past due payments are made, and if management determines the issuer is likely to remain current on future payments.

may make exceptions to this policy if the loan has sufficient collateral value or is in the process of collection.

Management may also

leave a loan on accrual status while actively seeking recovery of past due payment.

As of December 31, 2022, the Company had no portfolio

investments on non-accrual status.

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.

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- based fees.

Offering Costs

2 unchanged sentences

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.

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

7 unchanged sentences

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”).

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

1 unchanged sentence

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.

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

In December 2022 the FASB issued Accounting Standards Update 2022-06, Reference Rate Reform (Topic 848) – Deferral of

the Sunset Date of Topic 848 which extended the effective period through December 31, 2024.

Agreements and Related Party Transactions

5 unchanged sentences

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.

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.

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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’

written notice to the other

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

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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.

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Bank, National Association or its affiliates

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

Investment Advisory Agreement

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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.

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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.

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

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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

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”);

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”

reaches the Catch-Up Amount in any calendar quarter;

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 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

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 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:

no 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” reaches the Catch-Up Amount in any calendar quarter;

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 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 fee net

investment income”

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

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 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

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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

“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

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

“Net investment income”

includes, in the

“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

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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,

the composition of the Company’s investment portfolio at amortized cost and fair value as of December 31, 2022 and December 31,

December 31, 2022

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16.0 % of the long-term investment portfolio at amortized cost and 16.3 % 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.

respectively, were invested in non-qualifying assets.

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 non-qualifying

With respect to the Company’s total assets, 14.9 % and 13.3 % 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, 2022 and December 31, 2021, respectively.

The industry composition of

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Healthcare Providers and Services

Cash and cash equivalents

Professional Services

Cash and Cash Equivalents

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

Independent Power and Renewable Electricity Producers

Diversified Financial Services

Aerospace and Defense

Construction and Engineering

Structured Subordinated Note

Structured Note

Healthcare Technology

Metals and Mining

Commercial Services and Supplies

Auto Components

Diversified Telecommunication Services

Internet Software and Services

Specialty Retail

Oil, Gas and Consumable Fuels

Diversified Consumer Services

Containers and Packaging

Structured Note

Food Products

Specialty Retail

Commercial Services and Supplies

Electronic Equipment, Instruments and Components

Aerospace and Defense

Diversified Consumer Services

Internet Software and Services

Healthcare Equipment and Supplies

Real Estate Management and Development

Wireless Telecommunication Services

Pharmaceuticals

Industrial Conglomerates

Energy Equipment and Services

Electrical Equipment

Real Estate Management and Development

Road and Rail

Wireless Telecommunication Services

Technology Hardware, Storage and Peripherals

Industrial Conglomerates

Household Durables

Diversified Telecommunication Services

Textiles, Apparel and Luxury Goods

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

Fair Value of Investments

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The three levels are defined as follows:

Level 1 —

Valuations based on

Level 1 — Valuations based on

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

Level 2 —

Valuations based on

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

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

Level 3 —

Valuations based on

Level 3 — Valuations based on

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

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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.

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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.

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

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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.

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Corporate Bonds

Convertible Bond

CLO Mezzanine

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Second-lien senior secured debt

Collateralized securities and structured products - debt

Corporate Bonds

Convertible Bond

CLO Mezzanine

Short Term Investments

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$ 1,194,257,584

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.

For the years ended December

31, 2022 and December 31, 2021, the Company did not recognize any transfers to or from Level 3.

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.

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, 2022,

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

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are at least 150 % after such borrowing.

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

As of December 31, 2022, the Company’s asset coverage ratio was 157 %.

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

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 “BoA Credit Facility”).

(“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,

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

The Borrowers’

ability to draw under the BoA Credit

The Borrowers’ ability to draw under the BoA Credit

Facility is scheduled to terminate on February 11, 2025.

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

Debt obligations consisted

of the following as of December 31, 2021:

Debt obligations under the

BoA Credit Facility consisted of the following as of December 31, 2022:

December 31, 2022

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$ 513,726,164

(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:

(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 $ 1.358 million and accrued interest of $ 584 thousand.

Debt obligations under the

BoA Credit Facility consisted of the following as of December 31, 2021:

December 31, 2021

Principal Committed

Outstanding Principal

Amount Available (1)

Net Carrying Value (2)

Aggregate Principal Committed

Available (1)

BoA Credit Facility

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$ 552,000,000

(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.

$ 173,000,000

$ 550,262,297

(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 $ 1.993 million and accrued interest of $ 255 thousand.

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

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

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.

the BoA Credit Facility during the years ended December 31, 2022 and December 31, 2021, was $ 544.0 million and $ 433.1 million, respectively.

The loans under the BoA 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%.

The “base rate” will be equal to the highest

of (a) the federal funds rate plus 0.5%, (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 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).

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:

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 years ended December

31, 2022 and December 31, 2021, 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

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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.

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”

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.

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, 2025.

Debt obligations consisted

of the following as of December 31, 2021:

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”), 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 (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

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

Debt obligations under the

WF Credit Facility consisted of the following as of December 31, 2022:

December 31, 2022

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$ 150,000,000

(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.

$ 126,750,000

$ 127,583,253

(1) The amount available reflects any limitations related to the WF Credit Facility’s borrowing base.

(2) The carrying value of the WF Credit Facility is presented net of deferred financing costs of $1.047 million and accrued interest of $1.880 million.

Debt obligations under the

WF Credit Facility 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.

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

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.

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.

the WF Credit Facility during the years ended December 31, 2022 and December 31, 2021, was $ 123.4 million and $ 13.9 million, 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 0.50% 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:

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 years ended

December 31, 2022 and December 31, 2021, the components of interest expense with respect to the WF Credit Facility were as follows:

For the Year Ended

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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.

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.

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.

Share Transactions

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.

During the years ended December

31, 2022 and December 31, 2021, the Company issued and sold 1,716,297 shares at an aggregate purchase price of $ 29.2 million and 10,007,526

shares at an aggregate purchase price of $ 206.6 million, respectively.

These amounts include shares issued in reinvestment.

1 unchanged sentence

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,

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

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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.

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 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.

A registered stockholder may

5 unchanged sentences

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.

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.

12 unchanged sentences

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.

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 statement of assets and liabilities.

A summary of the composition

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ARC Falcon I Inc.

Total unfunded commitments

(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.

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

6 unchanged sentences

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

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.

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.

As of December 31, 2022, management is

not aware of any pending or threatened litigation.

Earnings Per Share

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.

4 unchanged sentences

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

the computation of basic and diluted earnings per share of common stock for the years ended December 31, 2022 and December 31, 2021:

For the Year Ended

Net increase (decrease) in net assets resulting from operations

$ ( 74,482,335 )

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 Company intends to elect

to be treated as a RIC under the Internal Revenue Code (“Code”) for its taxable year end December 31, 2022.

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

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

2 unchanged sentences

These reclassifications have no impact on net assets.

January 23, 2020 (Commencement

of Operations)

Year Ended December 31,

Increase (decrease) in distributable earnings

1 unchanged sentence

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

of Operations)

increase in net assets resulting from operations to taxable income for the years ended December 31, 2022 and December 31, 2021:

Year Ended December 31,

Net increase (decrease) in net assets resulting from operations

Net change in unrealized appreciation (depreciation) from investments

$ ( 74,482,335 )

Net change in unrealized appreciation (depreciation) from investments

Other book tax differences

Taxable income before deductions for distributions

(Commencement

of Operations)

Distributions

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

(Commencement

of Operations)

Year Ended December 31,

Distributions paid from:

Ordinary income

Capital gains

Return of Capital

For the years ended December

31, 2022 and December 31, 2021, the components of accumulated earnings on a tax basis were as follows:

Undistributed net investment income (loss)

Undistributed capital gains

Capital loss carryforward

Other accumulated gain (loss)

Net unrealized appreciation (depreciation)

( 102,926,664

( 110,502,182

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, 2022 and December 31, 2021, the Company had no capital loss carryforwards.

As of December 31, 2022 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:

December 31, 2021, the Company’s aggregate unrealized appreciation and depreciation on investments based on cost for U.S.

income tax purposes was as follows:

1,120,121,398

1,188,452,438

Gross unrealized appreciation

Gross unrealized depreciation

( 103,934,928

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.

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”

( 102,926,664

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” 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, 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

As of December 31, 2022, 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.

and 2021 tax years remain subject to examination by U.S.

The Company identifies its major tax jurisdiction as U.S.

The 2020-2022

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.

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 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

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 years ended December 31, 2022 and December 31, 2021, and for the period January 23, 2020 (Commencement of Operations) through

December 31, 2020:

For the Year Ended

For the Period

(Commencement

of Operations)

Per Common Share Operating Performance

12 unchanged sentences

Net assets, end of period

$ 363,443,482

$ 452,797,588

$ 253,144,971

Weighted-average shares outstanding

6 unchanged sentences

(1) 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.

(2) The 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.

Assumes reinvestment of distributions.

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.

(4) 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 Statements 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.

results of operations for the years ended December 31, 2022 and December 31, 2021.

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

3 unchanged sentences

Net realized gain (loss) on investments, and foreign currency transactions

( 6,776,866 )

Net unrealized gain (loss) on investments, foreign currency translations, and foreign currency contracts

( 11,731,503 )

( 74,394,896 )

( 16,711,415 )

( 4,595,166 )

Increase (decrease) in net assets resulting from operations

$ ( 3,430,800 )

$ ( 65,332,117 )

$ ( 6,755,673 )

Net asset value per share as of the end of the quarter

For the Three Months Ended

For the Period

(Commencement

of Operations)

September 30,

4 unchanged sentences

( 1,826,413 )

Increase (decrease) in net assets resulting from operations

( 1,871,880 )

( 4,156,148 )

Increase (decrease) in net assets resulting from operations

Net asset value per share as of the end of the quarter

Subsequent Events

The Company’s management

has evaluated subsequent events through the date of issuance of the consolidated financial statements included herein.

2 unchanged sentences

Issuance of Common Stock

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

On January 1, 2023, the Company issued and sold 86,898 shares of its

common stock at an aggregate purchase price of $ 1.3 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, 2023, the Company issued and sold 34,639 shares of its

common stock at an aggregate purchase price of $ 554.2 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.

As of March 1, 2023, the Company

incrementally drew an additional $14,000,000 on the BoA Credit Facility, and $16,000,000 on the WF Credit Facility.

sold approximately $ 9.25 million of shares of its common stock (with the final number of shares of common stock to be determined based

on the to-be-determined net asset value per share).

The offer and sale 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 February 21, 2023, Vocus

Group was fully funded for $ 2.0 million.

Change in Interest Rate on the BoA Credit Facility

On February 3, 2023, the Company

entered into an omnibus amendment to the BoA Credit Facility that, among other things:

(i) removes LIBOR transition language, (ii) replaces

eurocurrency rate loans with SOFR loans for which the spread over the base rate increased from 1.30% to (a) with respect to any SOFR Loan

with a term of one month, 1.40%, and (b) with a term of three months, 1.45%, and (iv) with respect to any base rate loan, such base rate

Distributions

On December 30, 2022, 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

Company declared a distribution of $ 0.64 per share, or $ 15,183,248 , of which a cash distribution of $ 6,941,066 was paid on January 13,

2023 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