Palmer Square Capital BDC Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm F-2 Consolidated Statement of Assets and Liabilities as of December 31, 2022 and December 31, 2021 F-3 Consolidated Statement of Operations for the years ended December 31, 2022 and December 31, 2021 F-4 Consolidated Statement of Changes in Net Assets for the years ended December 31, 2022 and December 31, 2021 F-5 Consolidated Statement of Cash Flows for the years ended December 31, 2022 and December 31, 2021 F-6 Consolidated Schedule of Investments as of December 31, 2022 and 2021 F-7 – F-26 Notes to Consolidated Financial Statements F-27 – F-44 F- 1 Report 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, 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 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. 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 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 reporting. 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. /s/ PricewaterhouseCoopers LLP Kansas City, Missouri March 10, 2023 We have served as the Company’s auditor since 2019. PCAOB ID: 238 F- 2 Palmer Square Capital BDC Inc. Consolidated Statement of Assets and Liabilities December 31, 2022 December 31, 2021 Assets: Non-controlled, non-affiliated investments, at fair value (amortized cost of $ 1,120,099,935 and $ 1,189,713,653 , respectively) $ 1,017,211,732 $ 1,194,257,584 Cash and cash equivalents 1,650,801 1,093,503 Receivables: Receivable for sales of investments 31,014,356 17,393,877 Receivable for paydowns of investments 136,119 227,548 Due from investment adviser 234,102 280,740 Dividend receivable 141,997 833 Interest receivable 6,465,594 3,836,068 Prepaid expenses and other assets 598,327 195,996 Total Assets $ 1,057,453,028 $ 1,217,286,149 Liabilities: Credit facilities, net (Note 6) $ 641,309,417 $ 649,910,497 Payables: Payable for investments purchased 42,750,748 104,278,958 Distributions payable 6,941,066 5,874,681 Management fee payable 1,872,815 2,245,918 Directors fee payable - 5,000 Accrued other general and administrative expenses 1,135,500 2,173,507 Total Liabilities $ 694,009,546 $ 764,488,561 Commitments and contingencies (Note 8) Net Assets: Common Shares, $ 0.001 par value; 450,000,000 shares authorized; 24,286,628 and 22,570,331 as of December 31, 2022 and December 31, 2021, respectively issued and outstanding $ 24,287 $ 22,570 Additional paid-in capital 473,921,377 444,739,748 Total distributable earnings (accumulated deficit) ( 110,502,182 ) 8,035,270 Total Net Assets $ 363,443,482 $ 452,797,588 Total Liabilities and Net Assets $ 1,057,453,028 $ 1,217,286,149 Net Asset Value Per Common Share $ 14.96 $ 20.06 The accompanying notes are an integral part of these consolidated financial statements. F- 3 Palmer Square Capital BDC Inc. Consolidated Statement of Operations For the Year Ended December 31 2022 2021 Income: Investment income from non-controlled, non-affiliated investments: Interest income $ 73,705,450 $ 38,897,216 Dividend income 610,203 9,597 Other income 184,247 778,840 Total investment income from non-controlled, non-affiliated investments 74,499,900 39,685,653 Total Investment Income 74,499,900 39,685,653 Expenses: Interest expense 23,452,169 8,616,661 Management fees 8,328,713 6,369,583 Professional fees 741,961 758,435 Directors fees 75,000 75,000 Other general and administrative expenses 1,862,314 1,827,931 Total Expenses 34,460,157 17,647,610 Less: Management fee waiver (Note 3) ( 1,041,089 ) ( 796,198 ) Net expenses 33,419,068 16,851,412 Net Investment Income (Loss) 41,080,832 22,834,241 Realized and unrealized gains (losses) on investments and foreign currency transactions Net realized gains (losses): Non-controlled, non-affiliated investments ( 8,130,187 ) 4,753,263 Total net realized gains (losses) ( 8,130,187 ) 4,753,263 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 ) $ 19,059,718 Per Common Share Data: Basic and diluted net investment income per common share $ 1.78 $ 1.47 Basic and diluted net increase (decrease) in net assets resulting from operations $ ( 3.22 ) $ 1.23 Weighted Average Common Shares Outstanding - Basic and Diluted 23,130,666 15,494,614 The accompanying notes are an integral part of these consolidated financial statements. F- 4 Palmer Square Capital BDC Inc. Consolidated Statement of Changes in Net Assets For the Year Ended December 31 2022 2021 Increase (Decrease) in Net Assets Resulting from Operations: Net investment income (loss) $ 41,080,832 $ 22,834,241 Net realized gains (losses) on investments and foreign currency transactions ( 8,130,187 ) 4,753,263 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 ) 19,059,718 Decrease in Net Assets Resulting from Stockholder Distributions Dividends and distributions to stockholders ( 43,102,007 ) ( 17,845,775 ) Distributions declared from realized gains ( 953,110 ) ( 8,106,718 ) Net Decrease in Net Assets Resulting from Stockholder Distributions ( 44,055,117 ) ( 25,952,493 ) Increase in Net Assets Resulting from Capital Share Transactions Issuance of common shares 5,023,801 188,861,571 Reinvestment of distributions 24,159,545 17,683,821 Net Increase in Net Assets Resulting from Capital Share Transactions 29,183,346 206,545,392 Total Increase (Decrease) in Net Assets ( 89,354,106 ) 199,652,617 Net Assets, Beginning of Period 452,797,588 253,144,971 Net Assets, End of Period $ 363,443,482 $ 452,797,588 The accompanying notes are an integral part of these consolidated financial statements. F- 5 Palmer Square Capital BDC Inc. Consolidated Statement of Cash Flows For the Year Ended December 31 2022 2021 Cash Flows from Operating Activities: Net increase (decrease) in net assets resulting from operations $ ( 74,482,335 ) $ 19,059,718 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 8,130,187 ( 4,753,263 ) Net change in unrealized (gains)/losses on investments 107,432,980 8,527,786 Net accretion of discount on investments ( 1,717,453 ) ( 286,282 ) Purchases of short-term investments ( 374,447,403 ) ( 662,604,311 ) Purchases of portfolio investments ( 278,951,054 ) ( 926,351,937 ) Proceeds from sale of short-term investments 402,242,952 637,566,416 Proceeds from sale of portfolio investments 314,355,643 406,800,208 Amortization of deferred financing cost 988,243 909,269 Increase/(decrease) in operating assets and liabilities: (Increase)/decrease in receivable for sales of investments ( 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 46,638 ( 125,387 ) (Increase)/decrease in receivable for paydowns of investments 91,429 ( 106,157 ) (Increase)/decrease in prepaid expenses and other assets ( 402,331 ) ( 195,996 ) Increase/(decrease) in interest payable on credit facilities 1,160,678 - Increase/(decrease) in payable for investments purchased ( 61,528,210 ) 88,725,508 Increase/(decrease) in management fees payable ( 373,103 ) 1,003,097 Increase/(decrease) in directors fee payable ( 5,000 ) - Increase/(decrease) in accrued other general and administrative expenses ( 1,038,008 ) 1,676,221 Net cash provided by (used in) operating activities 25,112,684 ( 438,011,310 ) Cash Flows from Financing Activities: Borrowings on the credit facilities 81,250,000 256,629,745 Payments on the credit facilities ( 92,000,000 ) - Payments of debt issuance costs - ( 780,621 ) Distributions paid in cash ( 18,829,187 ) ( 6,288,461 ) Proceeds from issuance of common shares, net of change in subscriptions receivable of $ - 5,023,801 188,861,571 Net cash provided by (used in) financing activities ( 24,555,386 ) 438,422,234 Net increase/(decrease) in cash and cash equivalents 557,298 410,924 Cash and cash equivalents, beginning of period 1,093,503 682,579 Cash and cash equivalents, end of period $ 1,650,801 $ 1,093,503 Supplemental and Non-Cash Information: Interest paid during the period $ 22,291,491 $ 7,313,093 Distributions declared during the period $ 44,055,117 $ 25,952,493 Reinvestment of distributions during the period $ 24,159,545 $ 17,683,821 Distributions payable $ 6,941,066 $ 5,874,681 The accompanying notes are an integral part of these consolidated financial statements. F- 6 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2022 Portfolio Company (3) Industry Interest Rate Maturity Date Principal / Par Amortized Cost (1)(6) Fair Value Percentage of Net Assets Debt Investments First Lien Senior Secured (2) AAdvantage Loyalty IP Ltd. (4)(7) Insurance 8.99 % (L + 4.75 %) 4/20/2028 $ 3,750,000 $ 3,716,805 $ 3,740,039 0.9 % AccentCare, Inc. (7) Healthcare Providers and Services 8.73 % (L + 4.00 %) 6/22/2026 5,970,140 5,971,668 4,059,695 1.1 % Acrisure, LLC (7) Insurance 7.88 % (L + 3.50 %) 2/12/2027 5,842,349 5,829,939 5,496,511 1.5 % Acrisure, LLC (7) Insurance 8.63 % (L + 4.25 %) 2/15/2027 4,999,500 4,968,962 4,851,590 1.3 % AI Aqua Merger Sub, Inc., (7)(8) Food Products 7.97 % (S + 3.75 %) 6/16/2028 7,661,500 7,664,792 7,235,329 2.0 % Aimbridge Acquisition Co., Inc. (7) Hotels, Restaurants and Leisure 8.13 % (L + 3.75 %) 2/2/2026 4,936,225 4,848,346 4,508,945 1.2 % Alliant Holdings Intermediate LLC (7) Insurance 7.85 % (L + 3.50 %) 11/5/2027 5,925,000 5,919,495 5,799,094 1.6 % Allied Universal Holdco LLC (7) Professional Services 8.17 % (S + CSA + 3.75 %) 4/7/2028 6,912,500 6,907,152 6,580,735 1.8 % Amentum Government Services Holdings LLC (7) Aerospace and Defense 8.76 % (S + 4.00 %) 2/15/2029 5,970,000 5,944,146 5,831,944 1.6 % American Rock Salt Company LLC (7) Metals and Mining 8.38 % (L + 4.00 %) 6/9/2028 5,914,950 5,906,545 5,582,234 1.5 % Amynta Agency Borrower, Inc. (7) Insurance 8.88 % (L + 4.50 %) 2/28/2025 8,837,032 8,726,822 8,395,181 2.3 % AP Gaming I, LLC (4)(5)(7) Hotels, Restaurants and Leisure 8.73 % (S + CSA + 4.00 %) 2/15/2029 8,689,362 8,574,269 8,254,894 2.3 % Aptean Inc (7)(8) Software 8.98 % (L + 4.25 %) 4/23/2026 7,804,752 7,806,146 7,492,562 2.1 % AQA Acquisition Holding, Inc. (5)(7) Software 8.98 % (L + 4.25 %) 11/19/2027 8,431,026 8,314,473 8,107,865 2.2 % ARC Falcon I Inc. (7) Chemicals 8.13 % (L + 3.75 %) 8/31/2028 4,319,427 4,298,413 3,740,771 1.0 % Aruba Investments Holdings, LLC (7) Chemicals 8.14 % (L + 4.00 %) 10/28/2027 2,463,819 2,437,480 2,400,178 0.7 % Ascend Learning, LLC (7) Professional Services 7.88 % (L + 3.50 %) 11/18/2028 7,425,000 7,392,488 7,038,789 1.9 % AssuredPartners, Inc. (7) Insurance 7.88 % (L + 3.50 %) 2/12/2027 4,416,472 4,421,141 4,288,394 1.2 % AssuredPartners, Inc. (7) Insurance 7.82 % (S + 3.50 %) 2/12/2027 1,985,000 1,973,934 1,932,398 0.5 % Athletico Management, LLC (7) Healthcare Providers and Services 8.98 % (S + CSA + 4.25 %) 2/2/2029 7,188,875 7,157,111 5,890,384 1.6 % Autokiniton US Holdings, Inc. (7)(8) Auto Components 8.79 % (L + 4.50 %) 3/27/2028 8,134,273 8,142,050 7,895,370 2.2 % Aveanna Healthcare LLC (4)(5)(7) Healthcare Providers and Services 8.14 % (L + 3.75 %) 6/30/2028 5,149,341 5,111,181 3,988,165 1.1 % Barracuda Networks, Inc. (7) Software 8.59 % (S + 4.50 %) 4/13/2029 7,500,000 7,285,329 7,245,825 2.0 % BBB Industries (8) Auto Components 9.67 % (S + CSA + 5.25 %) 6/29/2029 4,000,000 3,616,539 3,650,000 1.0 % BCP Renaissance Parent LLC (7) Oil, Gas and Consumable Fuels 7.82 % (S + 3.50 %) 10/30/2026 7,569,511 7,554,173 7,511,377 2.1 % Belfor Holdings, Inc. (5)(7) Commercial Services and Supplies 8.38 % (L + 3.75 %) 3/31/2026 1,994,832 1,989,845 1,984,858 0.5 % Castle US Holding Corporation (7)(8) Professional Services 8.38 % (L + 4.00 %) 1/29/2027 6,037,233 5,981,767 3,758,177 1.0 % Castle US Holding Corporation (8) Professional Services 8.13 % (L + 3.75 %) 1/29/2027 1,974,737 1,966,699 1,230,508 0.3 % CCI Buyer, Inc. (7)(8) Wireless Telecommunication Services 8.58 % (S + 4.00 %) 12/17/2027 6,795,280 6,789,067 6,509,879 1.8 % F- 7 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2022 Portfolio Company (3) Industry Interest Rate Maturity Date Principal / Par Amortized Cost (1)(6) Fair Value Percentage of Net Assets CCS-CMGC Holdings, Inc. (7) Healthcare Providers and Services 9.91 % (L + 5.50 %) 10/1/2025 5,355,711 5,303,965 4,263,360 1.2 % CDK Global (7) Software 9.08 % (S + 4.50 %) 7/6/2029 4,000,000 3,883,280 3,970,680 1.1 % Congruex Group LLC (8) Construction and Engineering 9.99 % (S + CSA + 5.75 %) 4/28/2029 6,218,750 6,073,258 6,063,281 1.7 % Connectwise LLC (7) IT Services 7.88 % (L + 3.50 %) 9/29/2028 7,920,000 7,908,488 7,543,800 2.1 % Consolidated Communications, Inc. (4)(7) Diversified Telecommunication Services 7.88 % (L + 3.50 %) 10/2/2027 1,428,009 1,412,497 1,265,573 0.3 % ConvergeOne Holdings Corp. (7)(8) IT Services 9.38 % (L + 5.00 %) 1/4/2026 9,839,102 9,682,304 5,765,959 1.6 % Corelogic, Inc. (7) Internet Software and Services 7.94 % (L + 3.50 %) 4/14/2028 7,900,000 7,893,718 6,618,739 1.8 % CP Atlas Buyer, Inc (7) Building Products 7.88 % (L + 3.50 %) 11/23/2027 6,894,514 6,800,708 6,064,484 1.7 % Creation Technologies, Inc. (4)(8) Electronic Equipment, Instruments and Components 9.25 % (L + 5.50 %) 9/14/2028 4,975,000 4,911,130 4,004,875 1.1 % Curia Global, Inc. (7) Healthcare Providers and Services 8.16 % (L + 3.75 %) 8/30/2026 4,850,056 4,836,404 4,017,980 1.1 % Dave & Buster’s, Inc. (4)(5)(7) Hotels, Restaurants and Leisure 9.44 % (S + CSA + 5.00 %) 6/22/2029 5,000,000 4,981,250 4,982,825 1.4 % DCert Buyer, Inc. (7) IT Services 8.70 % (S + 4.00 %) 10/16/2026 7,835,452 7,835,021 7,586,402 2.1 % Deerfield Dakota Holding, LLC (7) Diversified Financial Services 8.07 % (S + 3.75 %) 2/25/2027 4,875,000 4,824,100 4,564,999 1.3 % Delta Topco, Inc. (7) IT Services 8.15 % (S + 3.75 %) 10/29/2027 6,902,406 6,897,810 6,398,530 1.8 % Digi International Inc. (4)(8) Technology Hardware, Storage and Peripherals 9.38 % (L + 5.00 %) 12/22/2028 4,386,161 4,308,443 4,353,265 1.2 % DIRECTV Financing, LLC (7) Media 9.38 % (L + 5.00 %) 8/2/2027 5,325,000 5,287,772 5,195,762 1.4 % Dotdash Meredith, Inc. (7) Media 8.22 % (S + CSA + 4.00 %) 11/23/2028 9,900,000 9,856,743 8,563,500 2.4 % EAB Global, Inc. (7) Professional Services 7.88 % (L + 3.50 %) 6/28/2028 1,791,912 1,784,394 1,728,237 0.5 % ECI Software Solutions, Inc. (7) Software 8.48 % (L + 3.75 %) 9/30/2027 6,864,925 6,841,429 6,607,490 1.8 % ECL Entertainment, LLC (8) Hotels, Restaurants and Leisure 11.88 % (L + 7.50 %) 3/31/2028 1,970,000 2,006,853 1,968,365 0.5 % EFS Cogen Holdings I, LLC (7)(8) Independent Power and Renewable Electricity Producers 8.23 % (L + 3.50 %) 10/29/2027 7,680,240 7,686,971 7,404,558 2.0 % Endurance International Group, Inc., The (7) Professional Services 7.72 % (L + 3.50 %) 2/10/2028 4,686,175 4,620,144 4,229,273 1.2 % Ensemble RCM, LLC (7) Healthcare Technology 7.94 % (S + CSA + 3.75 %) 7/24/2026 5,689,474 5,618,296 5,636,135 1.6 % Fertitta Entertainment, LLC (7) Hotels, Restaurants and Leisure 8.32 % (S + 4.00 %) 1/29/2029 7,443,750 7,415,307 7,092,070 2.0 % Filtration Group Corporation (7) Industrial Conglomerates 7.88 % (L + 3.50 %) 10/20/2028 3,950,000 3,941,824 3,887,452 1.1 % Flexera Software LLC (7)(8) Software 8.14 % (L + 3.75 %) 1/26/2028 8,837,266 8,817,772 8,503,129 2.3 % F- 8 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2022 Portfolio Company (3) Industry Interest Rate Maturity Date Principal / Par Amortized Cost (1)(6) Fair Value Percentage of Net Assets Garda World Security Corporation (4)(5)(7) Diversified Consumer Services 8.53 % (S + 4.25 %) 2/12/2029 7,000,000 6,772,500 6,755,000 1.9 % Getty Images, Inc. (5)(7)(8) Media 8.94 % (L + 4.50 %) 2/13/2026 8,356,730 8,358,691 8,351,507 2.3 % GIP III Stetson I, LP (7) Energy Equipment and Services 8.63 % (L + 4.25 %) 7/19/2025 1,855,663 1,804,227 1,822,614 0.5 % Global Medical Response, Inc. (7) Healthcare Providers and Services 8.42 % (L + 4.25 %) 9/24/2025 9,095,838 9,053,579 6,429,666 1.8 % Grab Holdings Inc (4)(7) IT Services 8.89 % (L + 4.50 %) 2/27/2026 4,903,031 4,942,597 4,854,001 1.3 % Great Outdoors Group, LLC (7) Specialty Retail 8.13 % (L + 3.75 %) 3/6/2028 7,007,670 6,979,386 6,749,262 1.9 % Grinding Media Inc. (8) Metals and Mining 7.93 % (L + 4.00 %) 9/21/2028 4,937,500 4,916,856 4,616,563 1.3 % HAH Group Holding Company LLC (5)(7) Healthcare Providers and Services 9.43 % (S + CSA + 5.00 %) 10/22/2027 710,949 693,320 679,845 0.2 % HAH Group Holding Company LLC (5)(7) Healthcare Providers and Services 9.43 % (S + CSA + 5.00 %) 10/20/2027 5,618,604 5,479,223 5,372,790 1.5 % Hamilton Projects Acquiror, LLC (7)(8) Independent Power and Renewable Electricity Producers 8.17 % (L + 4.50 %) 6/11/2027 8,721,780 8,681,952 8,596,404 2.4 % Help/Systems Holdings, Inc. (7) Software 8.19 % (S + CSA + 4.00 %) 11/19/2026 6,849,306 6,812,195 6,193,485 1.7 % Hyland Software, Inc. (7) Software 7.88 % (L + 3.50 %) 7/1/2024 4,905,349 4,904,261 4,849,551 1.3 % Idera, Inc. (7) IT Services 7.5 % (L + 3.75 %) 3/2/2028 9,799,449 9,760,546 9,266,604 2.5 % IMA Financial Group, Inc. (8) Insurance 7.88 % (L + 3.50 %) 10/16/2028 4,950,000 4,928,624 4,801,525 1.3 % Ineos US Finance LLC (4)(5)(7) Chemicals 8.17 % (S + CSA + 3.75 %) 11/8/2027 4,077,252 3,934,548 4,021,189 1.1 % Infinite Bidco LLC (7) Electronic Equipment, Instruments and Components 7.98 % (L + 3.25 %) 3/2/2028 6,409,925 6,364,641 6,169,552 1.7 % Inmar, Inc. (7)(8) Professional Services 8.47 % (L + 4.00 %) 5/1/2024 7,842,418 7,822,586 7,158,167 2.0 % Ivanti Software, Inc. (7) Software 8.73 % (L + 4.00 %) 12/1/2027 982,500 980,602 778,022 0.2 % Ivanti Software, Inc. (7) Software 9.01 % (L + 4.25 %) 12/1/2027 6,922,688 6,877,857 5,512,917 1.5 % Jack Ohio Finance LLC (8) Hotels, Restaurants and Leisure 9.13 % (L + 4.75 %) 10/31/2028 4,948,645 4,950,641 4,862,044 1.3 % Kestrel Acquisition, LLC (7) Independent Power and Renewable Electricity Producers 8.64 % (L + 4.25 %) 5/2/2025 6,832,098 6,333,128 6,657,025 1.8 % Kleopatra Finco S.a.r.l (4)(7) Containers and Packaging 8.26 % (S + CSA + 4.75 %) 2/4/2026 1,965,000 1,959,187 1,753,763 0.5 % LBM Acquisition LLC (7)(8) Building Products 7.12 % (L + 3.75 %) 12/31/2027 7,391,911 7,318,369 6,441,385 1.8 % Life Time, Inc. (4)(7) Hotels, Restaurants and Leisure 9.48 % (L + 4.75 %) 12/10/2024 7,582,556 7,575,249 7,555,335 2.1 % Lifescan Global Corporation (7) Healthcare Equipment and Supplies 9.74 % (L + 6.00 %) 10/1/2024 6,146,918 6,121,209 4,471,883 1.2 % F- 9 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2022 Portfolio Company (3) Industry Interest Rate Maturity Date Principal / Par Amortized Cost (1)(6) Fair Value Percentage of Net Assets Lightstone Holdco LLC (7) Independent Power and Renewable Electricity Producers 10.07 % (S + 5.75 %) 2/1/2027 4,795,064 4,322,409 4,411,459 1.2 % Lightstone Holdco LLC (7) Independent Power and Renewable Electricity Producers 10.07 % (S + 5.75 %) 2/1/2027 271,204 244,463 249,508 0.1 % LogMeIn, Inc. (7) IT Services 9.14 % (L + 4.75 %) 8/31/2027 9,844,496 9,742,894 6,379,233 1.8 % LSF9 Atlantis Holdings, LLC (7) Specialty Retail 11.83 % (S + 7.25 %) 3/29/2029 6,912,500 6,654,959 6,734,503 1.9 % Magenta Buyer LLC (7) Software 9.17 % (L + 4.75 %) 7/27/2028 5,445,000 5,401,766 4,687,818 1.3 % Mariner Wealth Advisors, LLC (5)(8) Diversified Financial Services 9.04 % (S + CSA + 4.25 %) 8/18/2028 3,000,000 2,865,000 2,891,250 0.8 % Maxar Technologies, Inc. (4)(5)(7) Aerospace and Defense 8.67 % (S + CSA + 4.25 %) 6/14/2029 3,888,979 3,888,979 3,890,709 1.1 % Medical Solutions L.L.C. (8) Healthcare Providers and Services 7.88 % (L + 3.50 %) 10/6/2028 4,966,304 4,945,113 4,665,744 1.3 % Michael Baker International, LLC (8) Construction and Engineering 9.38 % (L + 5.00 %) 11/2/2028 6,187,500 6,132,616 6,001,875 1.7 % Micro Holding Corp. (7) IT Services 8.13 % (L + 3.75 %) 9/13/2024 9,861,126 9,824,488 9,604,046 2.6 % Midwest Veterinary Partners, LLC (7) Healthcare Providers and Services 8.38 % (L + 4.00 %) 4/27/2028 8,882,538 8,806,026 8,038,697 2.2 % Milano Acquisition Corporation (5)(7) Healthcare Providers and Services 8.73 % (L + 4.00 %) 10/1/2027 8,878,393 8,719,701 8,356,788 2.3 % Minotaur Acquisition, Inc. (7)(8) Diversified Financial Services 9.17 % (S + CSA + 5.00 %) 3/27/2026 11,944,106 12,017,475 11,356,411 3.1 % Mitchell International, Inc. (7) Professional Services 8.41 % (L + 3.75 %) 10/16/2028 9,925,000 9,862,344 9,175,514 2.5 % MLN US HoldCo LLC (7) Diversified Telecommunication Services 8.25 % (L + 4.50 %) 12/31/2025 4,056,188 3,997,358 1,429,806 0.4 % Moneygram International, Inc. (4)(7) Diversified Consumer Services 8.88 % (L + 4.50 %) 7/21/2026 9,895,833 9,876,860 9,891,182 2.7 % NAPA Management Services Corporation (7) Healthcare Providers and Services 9.67 % (S + CSA + 5.25 %) 2/23/2029 7,940,000 7,874,026 6,538,114 1.8 % National Mentor Holdings, Inc. (7) Healthcare Providers and Services 8.33 % (L + 3.75 %) 2/18/2028 9,134,164 9,111,508 6,434,516 1.8 % National Mentor Holdings, Inc. (7) Healthcare Providers and Services 8.48 % (L + 3.75 %) 2/18/2028 291,993 291,242 205,693 0.1 % Navicure, Inc. (7) Healthcare Technology 8.38 % (L + 4.00 %) 10/22/2026 4,625,815 4,627,579 4,556,428 1.3 % NorthStar Group Services, Inc. (7)(8) Commercial Services and Supplies 9.94 % (S + CSA + 5.50 %) 11/9/2026 8,649,114 8,620,554 8,526,599 2.3 % NSM Top Holdings Corp. (7) Healthcare Equipment and Supplies 9.67 % (S + CSA + 5.25 %) 11/12/2026 4,936,387 4,916,697 4,450,967 1.2 % OneDigital Borrower LLC (7) Insurance 8.49 % (S + CSA + 4.25 %) 11/16/2027 9,871,228 9,770,988 9,352,989 2.6 % Orchid Merger Sub II, LLC (4)(7) Software 9.58 % (S + CSA + 4.75 %) 5/12/2027 4,331,250 4,127,214 3,789,844 1.0 % Padagis, LLC (7) Pharmaceuticals 8.49 % (L + 4.75 %) 7/31/2028 6,588,235 6,553,975 5,874,532 1.6 % PECF USS Intermediate Holding III Corporation (8) Professional Services 8.63 % (L + 4.25 %) 11/6/2028 4,950,000 4,940,828 4,145,972 1.1 % Peraton Corp. (7)(8) Aerospace and Defense 8.13 % (L + 3.75 %) 2/1/2028 10,644,693 10,616,273 10,414,075 2.9 % PetVet Care Centers, LLC (7) Healthcare Providers and Services 7.88 % (L + 3.50 %) 2/14/2025 6,867,196 6,857,497 6,475,079 1.8 % PMHC II Inc. (7) Chemicals 8.49 % (S + CSA + 4.25 %) 2/2/2029 6,588,488 6,532,502 5,601,927 1.5 % F- 10 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2022 Portfolio Company (3) Industry Interest Rate Maturity Date Principal / Par Amortized Cost (1)(6) Fair Value Percentage of Net Assets PQ Performance Chemicals (7) Chemicals 7.39 % (L + 3.25 %) 4/28/2028 4,950,000 4,947,652 4,830,383 1.3 % Prairie ECI Acquiror LP (7) Oil, Gas and Consumable Fuels 9.13 % (L + 4.75 %) 3/11/2026 7,182,326 7,013,472 7,000,757 1.9 % Pretium PKG Holdings, Inc. (7)(8) Containers and Packaging 8.73 % (L + 4.00 %) 9/22/2028 5,940,000 5,892,087 4,764,741 1.3 % Project Alpha Intermediate Holding, Inc. (5)(7) Software 8.39 % (L + 4.00 %) 4/26/2024 8,350,738 8,289,560 8,167,022 2.2 % Project Boost Purchaser, LLC (7) Professional Services 7.88 % (L + 3.50 %) 6/1/2026 5,910,000 5,899,689 5,714,261 1.6 % Proofpoint, Inc. (5)(7) IT Services 7.98 % (L + 3.25 %) 6/9/2028 2,421,385 2,414,428 2,334,276 0.6 % PS Holdco, LLC (8) Road and Rail 8.63 % (L + 4.25 %) 10/31/2028 5,433,731 5,411,542 5,060,162 1.4 % PT Intermediate Holdings III LLC (8) Machinery 10.23 % (L + 5.50 %) 11/1/2028 2,296,800 2,287,978 2,227,896 0.6 % PT Intermediate Holdings III LLC (8) Machinery 10.23 % (L + 5.50 %) 11/1/2028 496,250 491,647 481,363 0.1 % PT Intermediate Holdings III LLC (8) Machinery 10.23 % (L + 5.50 %) 11/1/2028 1,520,750 1,507,724 1,475,128 0.4 % PT Intermediate Spider DD T/L (Parts Town) (8) Machinery 10.23 % (L + 5.50 %) 11/1/2028 2,118,600 2,118,600 2,055,042 0.6 % Quest Software US Holdings Inc. (7) Software 8.49 % (S + CSA + 4.25 %) 2/1/2029 9,476,250 9,385,131 7,353,001 2.0 % Radiology Partners, Inc. (7) Healthcare Providers and Services 8.64 % (L + 4.25 %) 7/9/2025 6,000,000 5,993,919 5,064,390 1.4 % RC Buyer, Inc. (7) Auto Components 8.23 % (L + 3.50 %) 7/28/2028 2,073,750 2,069,336 1,946,090 0.5 % RealPage, Inc. (7) Real Estate Management and Development 7.38 % (L + 3.00 %) 2/18/2028 6,912,500 6,903,165 6,587,613 1.8 % Red Planet Borrower, LLC (7) Internet Software and Services 8.13 % (L + 3.75 %) 10/2/2028 7,900,000 7,866,755 4,984,900 1.4 % Redstone Holdco 2 LP (7)(8) IT Services 9.11 % (L + 4.75 %) 4/14/2028 7,900,000 7,852,104 5,507,406 1.5 % Refresco (4)(7) Food Products 8.52 % (S + 4.25 %) 12/13/2024 5,000,000 4,958,869 4,850,000 1.3 % Renaissance Holdings Corp. (7) Software 8.72 % (S + 4.50 %) 4/1/2027 4,975,000 4,836,940 4,795,900 1.3 % Rocket Software, Inc. (5)(7) Software 8.63 % (L + 4.25 %) 11/28/2025 3,490,933 3,377,477 3,364,823 0.9 % Rocket Software, Inc. (7) Software 8.63 % (L + 4.25 %) 11/28/2025 4,932,406 4,912,516 4,762,855 1.3 % Rodan & Fields, LLC (7) Textiles, Apparel and Luxury Goods 8.32 % (L + 4.00 %) 6/16/2025 1,714,103 1,561,291 640,063 0.2 % Rohm Holding GMBH (4)(7)(8) Chemicals 8.37 % (L + 4.75 %) 7/31/2026 8,845,183 8,830,408 7,418,897 2.0 % RSC Acquisition, Inc. (8) Insurance 10.23 % (S + CSA + 5.50 %) 9/30/2026 6,193,331 6,147,556 6,023,015 1.7 % Runner Buyer Inc. (8) Household Durables 10.23 % (L + 5.50 %) 10/20/2028 4,962,500 4,919,797 3,523,375 1.0 % Sabert Corporation (8) Containers and Packaging 8.94 % (L + 4.50 %) 11/26/2026 2,101,808 2,109,801 2,091,299 0.6 % Shearer’s Foods, LLC (7) Food Products 7.88 % (L + 3.50 %) 9/23/2027 1,674,054 1,665,320 1,600,814 0.4 % Sophia, L.P. (7) Software 8.57 % (S + 4.00 %) 10/7/2027 1,990,000 1,971,843 1,941,912 0.5 % Sovos Compliance, LLC (8) Software 8.57 % (L + 4.50 %) 7/28/2028 3,962,945 3,955,834 3,660,771 1.0 % F- 11 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2022 Portfolio Company (3) Industry Interest Rate Maturity Date Principal / Par Amortized Cost (1)(6) Fair Value Percentage of Net Assets Specialty Building Products Holdings, LLC (7)(8) Building Products 7.64 % (L + 3.25 %) 10/5/2028 9,925,000 9,909,395 8,969,768 2.5 % Summer BC Holdco B LLC (4)(8) Media 8.17 % (L + 4.50 %) 12/4/2026 4,937,500 4,942,258 4,595,998 1.3 % Surgery Center Holdings, Inc. (4)(7) Healthcare Providers and Services 8.05 % (L + 3.75 %) 9/3/2026 4,217,676 4,201,753 4,175,035 1.1 % Tecta America Corp. (7)(8) Construction and Engineering 8.69 % (S + CSA + 4.25 %) 4/6/2028 8,585,091 8,568,674 8,263,150 2.3 % The Edelman Financial Center, LLC (7) Diversified Financial Services 7.88 % (L + 3.50 %) 4/7/2028 7,859,918 7,783,213 7,354,919 2.0 % Thryv, Inc. (4)(7) Professional Services 12.88 % (L + 8.50 %) 2/18/2026 4,850,226 4,861,233 4,791,636 1.3 % Tidal Power Holdings, LLC (4)(7) Independent Power and Renewable Electricity Producers 8.48 % (L + 3.75 %) 4/1/2027 848,961 847,980 846,838 0.2 % Titan US Finco, LLC (4)(8) Media 7.67 % (L + 4.00 %) 10/6/2028 5,955,000 5,942,128 5,711,857 1.6 % Tosca Services, LLC (7) Containers and Packaging 7.94 % (S + CSA + 3.50 %) 8/18/2027 6,899,596 6,847,551 5,640,420 1.6 % Traverse Midstream Partners LLC (7) Oil, Gas and Consumable Fuels 8.95 % (S + CSA + 4.25 %) 9/27/2024 3,162,774 3,153,165 3,160,798 0.9 % Truck Hero, Inc. (7) Auto Components 8.13 % (L + 3.50 %) 1/20/2028 6,980,675 6,973,011 6,016,469 1.7 % U.S. Renal Care, Inc. (7)(8) Healthcare Providers and Services 9.44 % (L + 5.00 %) 6/26/2026 8,820,648 8,697,196 4,978,153 1.4 % U.S. Renal Care, Inc. (7) Healthcare Providers and Services 9.94 % (L + 5.50 %) 6/26/2026 493,750 488,355 278,660 0.1 % U.S. Silica Company (4)(7) Metals and Mining 8.44 % (L + 4.00 %) 4/25/2025 7,856,622 7,724,787 7,797,697 2.1 % UKG Inc. (7) Software 8.13 % (L + 3.75 %) 4/8/2026 4,365,880 4,352,517 4,217,746 1.2 % United Airlines, Inc. (4)(7) Airlines 8.11 % (L + 3.75 %) 4/21/2028 7,887,124 7,944,048 7,809,909 2.1 % US Radiology Specialists, Inc. (7) Healthcare Providers and Services 8.94 % (L + 5.25 %) 12/10/2027 8,880,300 8,788,150 8,046,395 2.2 % Veracode (7) Software 8.94 % (S + CSA + 4.75 %) 4/20/2029 8,778,000 8,735,737 8,245,878 2.3 % VeriFone Systems, Inc. (7) Commercial Services and Supplies 8.36 % (L + 4.00 %) 8/20/2025 2,946,292 2,916,464 2,714,743 0.7 % Verscend Holding Corp. (7) Healthcare Technology 8.38 % (L + 4.00 %) 8/27/2025 6,063,985 6,052,127 6,037,455 1.7 % Vision Solutions, Inc. (7) IT Services 8.36 % (L + 4.00 %) 4/24/2028 9,875,000 9,848,442 8,203,656 2.3 % WaterBridge Midstream Operating, LLC (7) Energy Equipment and Services 9.13 % (L + 5.75 %) 6/22/2026 3,959,079 3,866,350 3,816,176 1.1 % Watlow Electric Manufacturing Company (7) Electrical Equipment 8.15 % (S + CSA + 3.75 %) 3/2/2028 3,281,909 3,260,223 3,165,007 0.9 % Wencor Group (7) Aerospace and Defense 8.42 % (S + CSA + 4.25 %) 6/19/2026 2,976,923 2,913,743 2,906,221 0.8 % White Cap Buyer LLC (7)(8) Building Products 8.07 % (S + 3.75 %) 10/8/2027 6,890,281 6,880,543 6,674,960 1.8 % Wilsonart LLC (7)(8) Building Products 7.98 % (L + 3.25 %) 12/18/2026 9,849,375 9,807,312 9,397,535 2.6 % Zelis Cost Management Buyer, Inc. (7) Healthcare Technology 7.88 % (L + 3.50 %) 9/30/2026 4,744,302 4,738,488 4,701,319 1.3 % Total First Lien Senior Secured 959,720,843 $ 951,753,250 $ 870,880,344 239.6 % F- 12 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2022 Portfolio Company (3) Industry Interest Rate Maturity Date Principal / Par Amortized Cost (1)(6) Fair Value Percentage of Net Assets Second Lien Senior Secured (2) American Rock Salt Company LLC Metals and Mining 11.63 % (L + 7.25 %) 6/4/2029 2,750,000 2,774,395 2,640,000 0.7 % ARC Falcon I Inc. (7) Chemicals 11.38 % (L + 7.00 %) 9/24/2029 2,000,000 1,982,524 1,745,000 0.5 % Artera Services, LLC (7) Construction and Engineering 11.98 % (L + 7.25 %) 3/6/2026 7,810,000 7,499,293 4,867,309 1.3 % Aruba Investments, Inc. (7) Chemicals 12.14 % (L + 7.75 %) 10/27/2028 2,350,000 2,318,902 2,150,250 0.6 % Asurion, LLC (7) Insurance 9.63 % (L + 5.25 %) 1/19/2029 6,000,000 5,965,262 4,699,290 1.3 % Barracuda Networks, Inc. Software 11.09 % (S + 7.00 %) 5/17/2030 3,000,000 2,912,610 2,741,250 0.8 % DCert Buyer, Inc. (7) IT Services 11.7 % (L + 7.00 %) 2/19/2029 1,500,000 1,497,620 1,375,500 0.4 % Delta Topco, Inc. IT Services 11.65 % (S + 7.25 %) 10/6/2028 3,435,617 3,470,139 2,735,610 0.8 % Energy Acquisition LP Electrical Equipment 12.88 % (L + 8.50 %) 6/25/2026 2,812,400 2,726,657 2,271,013 0.6 % Epicor Software Corporation (7) Software 12.13 % (L + 7.75 %) 7/31/2028 3,000,000 3,044,723 2,968,500 0.8 % Help/Systems Holdings, Inc. Software 10.94 % (S + CSA + 6.75 %) 11/19/2027 3,656,217 3,663,047 2,911,263 0.8 % Idera, Inc. IT Services 10.5 % (L + 6.75 %) 2/5/2029 5,000,000 5,027,564 4,150,000 1.1 % Infinite Bidco LLC (7) Electronic Equipment, Instruments and Components 11.73 % (L + 7.00 %) 2/24/2029 2,729,999 2,725,339 2,525,249 0.7 % Inmar, Inc. (7) Professional Services 12.38 % (L + 8.00 %) 5/1/2025 5,000,000 5,004,820 4,675,000 1.3 % Ivanti Software, Inc. Software 12.01 % (L + 7.25 %) 12/1/2028 3,000,000 3,011,509 1,755,000 0.5 % Magenta Buyer LLC Software 12.67 % (L + 8.25 %) 7/27/2029 5,000,000 4,990,886 3,975,000 1.1 % Paradigm Outcomes Healthcare Providers and Services 12.05 % (S + CSA + 7.50 %) 10/26/2026 1,500,000 1,479,565 1,440,000 0.4 % Peraton Corp. Aerospace and Defense 12.09 % (L + 7.75 %) 2/26/2029 2,912,425 2,970,059 2,783,551 0.8 % Pretium PKG Holdings, Inc. (7) Containers and Packaging 11.54 % (L + 6.75 %) 9/30/2029 2,000,000 1,982,769 1,247,510 0.3 % Quest Software US Holdings Inc. Software 11.59 % (S + 7.50 %) 2/1/2030 3,000,000 2,958,821 1,851,255 0.5 % Vision Solutions, Inc. IT Services 11.61 % (L + 7.25 %) 4/23/2029 3,500,000 3,506,759 2,610,790 0.7 % Total Second Lien Senior Secured 71,956,658 71,513,263 58,118,340 16.0 % Corporate Bonds KOBE US Midco 2 Inc Chemicals 9.25 % 11/1/2026 1,900,000 1,884,529 1,332,888 0.4 % Total Corporate Bonds 1,900,000 1,884,529 1,332,888 0.4 % Total Debt Investments 1,033,577,501 $ 1,025,151,042 $ 930,331,572 256.0 % F- 13 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2022 Portfolio Company (3) Industry Interest Rate Maturity Date Principal / Par Amortized Cost (1)(6) Fair Value Percentage of Net Assets CLO Mezzanine (2) 522 Funding CLO 2020-6, Ltd. (4) Structured Note 12.36 % (L + 8.04 %) 10/23/2034 2,800,000 2,723,983 2,188,332 0.7 % Barings CLO 2013-IA Class FR (4) Structured Note 10.99 % (L + 6.75 %) 1/20/2028 2,000,000 1,935,102 1,788,731 0.5 % Carlyle US CLO 2020-2, Ltd (4) Structured Note 12.89 % (L + 8.53 %) 1/25/2035 4,000,000 3,889,711 3,213,525 0.9 % Elmwood CLO III Ltd. (4) Structured Note 11.98 % (L + 7.74 %) 10/20/2034 2,000,000 1,927,196 1,600,079 0.4 % GoldenTree Loan Management US 2020-7A (4) Structured Note 11.99 % (L + 7.75 %) 4/20/2034 2,000,000 1,895,346 1,532,172 0.4 % GoldenTree Loan Management US 2021-10A (4) Structured Note 12.03 % (L + 7.79 %) 7/20/2034 1,250,000 1,216,595 983,411 0.3 % GoldenTree Loan Management US 2021-9A (4) Structured Note 10.99 % (L + 6.75 %) 1/20/2033 2,000,000 1,896,778 1,558,971 0.4 % Magnetite CLO, Ltd. 2015-16A (4) Structured Note 10.69 % (L + 6.50 %) 1/18/2028 1,000,000 842,116 854,968 0.2 % Thayer Park CLO, Ltd. (4) Structured Note 13.11 % (L + 8.87 %) 4/20/2034 1,300,000 1,262,503 1,012,532 0.3 % Total CLO Mezzanine 18,350,000 17,589,330 14,732,721 4.1 % CLO Equity Ares CLO Ltd 2021-62A (4) Structured Subordinated Note NA 1/25/2034 5,000,000 4,225,172 3,679,447 1.0 % Babson CLO 2018-4A, Ltd. (4) Structured Subordinated Note NA 10/15/2030 4,000,000 1,856,928 1,637,600 0.5 % Dryden 86 CLO, Ltd. (4) Structured Subordinated Note NA 7/17/2030 6,000,000 4,395,442 3,732,464 1.0 % HPS Loan Management 12-2018, Ltd. (4) Structured Subordinated Note NA 7/18/2031 7,500,000 4,290,326 3,006,631 0.8 % Long Point Park CLO, Ltd. (4) Structured Subordinated Note NA 1/17/2030 6,358,000 3,836,615 2,550,735 0.7 % Regatta XII Funding Ltd. (4) Structured Subordinated Note NA 10/15/2032 6,000,000 4,430,480 3,845,111 1.1 % Signal Peak CLO, LLC (4) Structured Subordinated Note NA 10/26/2034 5,000,000 2,437,836 2,253,444 0.6 % Stratus CLO Series 2021-1A (4) Structured Subordinated Note NA 12/29/2029 2,000,000 1,539,549 1,094,792 0.3 % Total CLO Equity 41,858,000 27,012,348 21,800,224 6.0 % Total Other Investments 60,208,000 $ 44,601,678 $ 36,532,945 10.1 % F- 14 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2022 Number of Fair Percentage Shares Cost Value of Net Assets Short-Term Investments Fidelity Investments Money Market Government Portfolio - Institutional Class, 4.10% (9) 50,347,215 50,347,215 50,347,215 13.9 % Total Short-Term Investments 50,347,215 $ 50,347,215 $ 50,347,215 13.9 % Total Investments $ 1,120,099,935 $ 1,017,211,732 280.0 % Liabilities in Excess of Other Assets ( 653,768,250 ) ( 180.0 )% Net Assets $ 363,443,482 100.0 % (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 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. (3) As of December 31, 2022, 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, 2022, 14.9% of the Company’s total assets were in non-qualifying investments. (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. The accompanying notes are an integral part of these consolidated financial statements. F- 15 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2021 Interest Maturity Principal / Amortized Fair Percentage of Net Portfolio Company (3) Industry Rate Date Par Cost (1)(6) Value Assets Debt Investments First Lien Senior Secured (2) AAdvantage Loyalty IP Ltd. (4)(7) Airlines 5.50 % (L + 4.75 %) 4/20/2028 $ 3,500,000 $ 3,466,993 $ 3,632,808 0.7 % AccentCare, Inc. (7) Healthcare Providers and Services 4.18 % (L + 4.00 %) 6/22/2026 6,030,750 6,033,232 6,019,443 1.2 % Acrisure, LLC (7) Insurance 3.63 % (L + 3.50 %) 2/12/2027 5,902,424 5,887,108 5,846,351 1.2 % Acrisure, LLC (7) Insurance 4.75 % (L + 4.25 %) 2/15/2027 5,050,000 5,012,608 5,056,313 1.0 % AHP Health Partners, Inc. (7) Healthcare Equipment and Supplies 4.00 % (L + 3.50 %) 8/4/2028 2,992,500 2,978,139 2,997,183 0.6 % AI Aqua Merger Sub, Inc., (5)(7)(8) Food Products 4.50 % (L + 4.00 %) 6/16/2028 6,993,333 6,996,036 7,021,412 1.6 % Aimbridge Acquisition Co., Inc. (7) Hotels, Restaurants and Leisure 3.84 % (L + 3.75 %) 2/2/2026 4,987,245 4,873,305 4,887,500 1.1 % Air Methods Corporation (7) Aerospace and Defense 4.50 % (L + 3.50 %) 4/12/2024 4,973,958 4,912,811 4,737,695 1.0 % Alliant Holdings Intermediate LLC (7) Insurance 4.00 % (L + 3.50 %) 11/5/2027 5,985,000 5,977,585 5,986,077 1.3 % Allied Universal Holdco LLC (7) Professional Services 4.25 % (L + 3.75 %) 4/7/2028 6,982,500 6,976,936 6,968,570 1.5 % Alterra Mountain Company (7) Hotels, Restaurants and Leisure 4.00 % (L + 3.50 %) 8/31/2028 1,992,263 1,979,085 1,992,263 0.4 % Amentum Government Services Holdings LLC (7) Aerospace and Defense 3.60 % (L + 3.50 %) 2/26/2027 4,432,500 4,208,252 4,375,720 1.0 % Amentum Government Services Holdings LLC (7) Aerospace and Defense 5.50 % (L + 4.75 %) 1/29/2027 1,488,750 1,463,719 1,491,541 0.3 % American Airlines, Inc. (4)(7) Airlines 2.11 % (L + 2.00 %) 12/15/2023 1,979,167 1,934,458 1,943,403 0.4 % American Airlines, Inc. (4)(7) Airlines 1.85 % (L + 1.75 %) 6/27/2025 2,000,000 1,900,671 1,901,250 0.4 % American Rock Salt Company LLC (7) Metals and Mining 4.75 % (L + 4.00 %) 6/9/2028 4,975,000 4,963,324 4,968,781 1.1 % Amynta Agency Borrower, Inc. (7) Insurance 4.60 % (L + 4.50 %) 2/28/2025 8,929,545 8,774,227 8,912,847 2.0 % AP Gaming I, LLC (7) Hotels, Restaurants and Leisure 4.50 % (L + 3.50 %) 2/15/2024 6,831,409 6,817,784 6,803,639 1.5 % Applovin Corporation (4)(7) Software 3.50 % (L + 3.00 %) 10/20/2028 2,493,750 2,487,556 2,492,964 0.6 % Aptean Inc (5)(7)(8) Software 4.35 % (L + 4.25 %) 4/23/2026 7,886,443 7,889,119 7,865,505 1.7 % AQA Acquisition Holding, Inc. (7) Software 4.75 % (L + 4.25 %) 11/19/2027 2,985,000 2,971,382 2,988,119 0.7 % ARC Falcon I Inc. (7) Chemicals 4.25 % (L + 3.75 %) 8/31/2028 4,363,057 4,338,582 4,363,232 1.0 % Arches Buyer Inc. (7) Leisure Products 3.75 % (L + 3.25 %) 12/6/2027 4,950,000 4,906,378 4,923,419 1.1 % Aristocrat International PTY Ltd (4)(5)(7)(8) Hotels, Restaurants and Leisure 4.75 % (L + 3.75 %) 10/31/2024 4,949,874 4,923,279 4,979,276 1.1 % Aruba Investments Holdings, LLC (7) Chemicals 4.75 % (L + 4.00 %) 10/28/2027 1,488,769 1,476,015 1,492,491 0.3 % Ascend Learning, LLC (5)(7) Professional Services 4.00 % (L + 3.50 %) 11/18/2028 7,500,000 7,462,500 7,498,463 1.7 % F- 16 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2021 Interest Maturity Principal / Amortized Fair Percentage of Net Portfolio Company (3) Industry Rate Date Par Cost (1)(6) Value Assets AssuredPartners, Inc. (7) Insurance 4.00 % (L + 3.50 %) 2/12/2027 6,461,337 6,451,803 6,460,336 1.4 % Athenahealth, Inc. (7) Healthcare Equipment and Supplies 4.40 % (L + 4.25 %) 2/11/2026 5,272,356 5,244,158 5,279,606 1.2 % Autokiniton US Holdings, Inc. (7)(8) Auto Components 5.00 % (L + 4.50 %) 3/27/2028 8,216,855 8,226,508 8,239,739 1.8 % Avaya Inc. (4)(7) Diversified Telecommunication Services 4.11 % (L + 4.00 %) 12/15/2027 1,600,000 1,600,000 1,601,304 0.4 % Avaya Inc. (4)(5)(7) Diversified Telecommunication Services 4.36 % (L + 4.25 %) 12/15/2027 4,939,059 4,800,270 4,960,174 1.1 % Aveanna Healthcare LLC (4)(7) Healthcare Providers and Services 4.25 % (L + 3.75 %) 6/30/2028 3,237,170 3,232,811 3,225,054 0.7 % Azalea TopCo, Inc. (7) Healthcare Technology 3.63 % (L + 3.50 %) 7/23/2026 3,922,262 3,885,223 3,910,005 0.9 % Barracuda Networks, Inc. (7) IT Services 4.50 % (L + 3.75 %) 1/10/2025 3,979,022 3,978,706 3,996,430 0.9 % BCP Raptor, LLC (5)(7) Oil, Gas and Consumable Fuels 5.25 % (L + 4.25 %) 6/7/2024 5,968,265 5,915,310 5,970,354 1.3 % BCP Renaissance Parent L.L.C. (5)(7) Oil, Gas and Consumable Fuels 4.50 % (L + 3.50 %) 10/31/2024 7,648,566 7,629,890 7,642,600 1.7 % Belfor Holdings Inc. (7) Commercial Services and Supplies 3.85 % (L + 3.75 %) 3/31/2026 2,945,882 2,837,141 2,953,247 0.7 % Boxer Parent Company, Inc. (7) Software 3.88 % (L + 3.75 %) 10/2/2025 2,992,266 2,713,403 2,977,304 0.7 % Caesars Resort Collection, LLC (4)(7) Hotels, Restaurants and Leisure 3.60 % (L + 3.50 %) 7/31/2025 2,962,500 2,895,715 2,968,425 0.7 % Castle US Holding Corporation (8) Professional Services 3.88 % (L + 3.75 %) 1/27/2027 1,991,579 1,981,844 1,976,642 0.4 % Castle US Holding Corporation (8) Professional Services 4.75 % (L + 4.00 %) 1/31/2027 2,981,250 2,926,408 2,978,761 0.7 % CCI Buyer, Inc. (5)(7)(8) Wireless Telecommunication Services 4.50 % (L + 3.75 %) 12/31/2027 6,864,444 6,856,831 6,880,369 1.5 % CCS-CMGC Holdings, Inc. (7) Healthcare Providers and Services 5.63 % (L + 5.50 %) 10/1/2025 5,411,500 5,342,101 5,349,781 1.2 % CHG Healthcare Services, Inc (7) Healthcare Providers and Services 4.00 % (L + 3.50 %) 9/22/2028 7,980,000 7,941,694 7,990,973 1.8 % Connectwise LLC (7) IT Services 4.00 % (L + 3.50 %) 9/29/2028 8,000,000 7,986,895 7,991,440 1.8 % Consolidated Communications, Inc. (4)(7) Diversified Telecommunication Services 4.25 % (L + 3.50 %) 10/2/2027 1,428,009 1,409,815 1,427,788 0.3 % ConvergeOne Holdings Corp. (7)(8) IT Services 5.10 % (L + 5.00 %) 3/31/2026 9,941,326 9,736,805 9,758,058 2.2 % Corelogic, Inc. (7) Internet Software and Services 4.00 % (L + 3.50 %) 4/14/2028 7,980,000 7,973,450 7,983,990 1.8 % CP Atlas Buyer, Inc (7) Building Products 4.25 % (L + 3.75 %) 11/23/2027 4,962,827 4,921,475 4,947,939 1.1 % Creation Technologies, Inc. (8) Electronic Equipment, Instruments and Components 6.00 % (L + 5.50 %) 9/14/2028 5,000,000 4,927,276 4,968,750 1.1 % Curia Global, Inc. (7) Healthcare Providers and Services 4.50 % (L + 3.75 %) 8/30/2026 4,899,295 4,880,965 4,911,543 1.1 % DCert Buyer, Inc. (7) IT Services 4.10 % (L + 4.00 %) 8/7/2026 7,916,022 7,916,047 7,911,075 1.7 % F- 17 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2021 Interest Maturity Principal / Amortized Fair Percentage of Net Portfolio Company (3) Industry Rate Date Par Cost (1)(6) Value Assets Deerfield Dakota Holding, LLC (7) Diversified Financial Services 4.75 % (L + 3.75 %) 2/25/2027 4,925,000 4,862,889 4,936,943 1.1 % Delek US Holdings, Inc. (4)(7) Oil, Gas and Consumable Fuels 6.50 % (L + 5.50 %) 3/31/2025 2,358,000 2,239,637 2,366,253 0.5 % Delta Topco, Inc. (7) IT Services 4.50 % (L + 3.75 %) 10/29/2027 6,972,481 6,966,632 6,988,692 1.5 % Digi International Inc. (5)(8) Technology Hardware, Storage and Peripherals 5.50 % (L + 5.00 %) 12/22/2028 6,250,000 6,125,000 6,199,219 1.4 % DIRECTV Financing, LLC (7) Media 5.75 % (L + 5.00 %) 8/2/2027 5,865,000 5,816,327 5,877,962 1.3 % Dotdash Meredith, Inc. (7) Media 4.50 % (C + SCA + 4.00 %) 11/23/2028 10,000,000 9,991,795 10,018,750 2.2 % EAB Global, Inc. (7) Professional Services 4.00 % (L + 3.50 %) 6/28/2028 5,000,000 4,975,872 4,979,175 1.1 % ECI Software Solutions, Inc. (7) Software 4.50 % (L + 3.75 %) 9/30/2027 6,934,975 6,907,467 6,946,903 1.5 % ECL Entertainment, LLC (8) Hotels, Restaurants and Leisure 8.25 % (L + 7.50 %) 3/31/2028 1,990,000 2,033,092 2,029,800 0.4 % EFS Cogen Holdings I LLC (5)(7)(8) Independent Power and Renewable Electricity Producers 4.50 % (L + 3.50 %) 10/29/2027 7,700,229 7,708,062 7,603,977 1.7 % Endurance International Group, Inc. (7) Professional Services 4.25 % (L + 3.50 %) 2/10/2028 3,233,750 3,219,247 3,211,017 0.7 % Ensemble RCM, LLC (7) Healthcare Technology 3.88 % (L + 3.75 %) 7/24/2026 5,748,280 5,659,044 5,753,654 1.3 % Enterprise Development Authority (8) Hotels, Restaurants and Leisure 5.00 % (L + 4.25 %) 2/18/2028 1,974,359 1,974,359 1,975,188 0.4 % Epicor Software Corporation (7) Software 4.00 % (L + 3.25 %) 6/1/2022 3,950,000 3,930,702 3,952,034 0.9 % Excelitas Technologies Corp. (7) Industrial Conglomerates 4.50 % (L + 3.50 %) 12/2/2024 1,989,637 1,989,637 1,999,585 0.4 % Filtration Group Corporation (7) Industrial Conglomerates 4.00 % (L + 3.50 %) 10/20/2028 3,990,000 3,980,185 3,990,838 0.9 % Flexera Software LLC (7)(8) Software 4.50 % (L + 3.75 %) 1/26/2028 8,959,368 8,935,714 8,976,794 2.0 % Generation Bridge Acquisition, LLC (5)(8) Electric Utilities 5.75 % (L + 5.00 %) 8/6/2028 196,262 196,262 197,243 0.0 % Generation Bridge Acquisition, LLC (5)(8) Electric Utilities 5.75 % (L + 5.00 %) 8/6/2028 2,803,738 2,803,738 2,817,757 0.6 % Getty Images, Inc. (7)(8) Media 4.63 % (L + 4.50 %) 2/13/2026 7,961,137 7,984,386 7,982,711 1.8 % GFL Environmental Inc. (4)(7) Commercial Services and Supplies 3.50 % (L + 3.00 %) 5/30/2025 2,596,036 2,521,808 2,605,771 0.6 % Global Medical Response, Inc. (7) Healthcare Providers and Services 5.25 % (L + 4.25 %) 9/24/2025 8,938,653 8,882,000 8,914,071 2.0 % Grab Holdings Inc (4)(5)(7) IT Services 5.50 % (L + 4.50 %) 2/27/2026 4,962,488 5,027,425 4,989,359 1.1 % Great Outdoors Group, LLC (7) Specialty Retail 4.50 % (L + 3.75 %) 3/6/2028 7,078,634 7,045,910 7,095,587 1.6 % Grinding Media Inc. (8) Metals and Mining 4.75 % (L + 4.00 %) 9/21/2028 4,987,500 4,963,517 4,990,617 1.1 % HAH Group Holding Company LLC (7) Healthcare Providers and Services 6.00 % (L + 5.00 %) 10/20/2027 3,525,086 3,479,561 3,526,549 0.8 % F- 18 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2021 Interest Maturity Principal / Amortized Fair Percentage of Net Portfolio Company (3) Industry Rate Date Par Cost (1)(6) Value Assets HAH Group Holding Company LLC (7) Healthcare Providers and Services 6.00 % (L + 5.00 %) 10/22/2027 446,034 440,286 446,220 0.1 % Hamilton Projects Acquiror LLC (7)(8) Independent Power and Renewable Electricity Producers 5.50 % (L + 4.50 %) 6/11/2027 9,794,600 9,741,768 9,807,872 2.2 % Harbor Freight Tools USA, Inc. (7) Specialty Retail 3.25 % (L + 2.75 %) 10/19/2027 3,465,000 3,435,680 3,462,176 0.8 % Help/Systems Holdings, Inc. (7) Software 4.75 % (L + 4.00 %) 11/19/2026 6,919,736 6,874,074 6,909,633 1.5 % HUB International Limited (7) Insurance 4.00 % (L + 3.25 %) 4/25/2025 3,940,125 3,892,565 3,944,834 0.9 % Hyland Software, Inc. (7) Software 4.25 % (L + 3.50 %) 7/1/2024 4,956,580 4,955,729 4,981,363 1.1 % Hyperion Refinance S.a.r.l. (4)(7) Insurance 4.00 % (L + 3.25 %) 11/12/2027 6,162,429 6,103,569 6,143,171 1.4 % Idera, Inc. (7) IT Services 4.50 % (L + 3.75 %) 6/28/2028 9,899,189 9,852,953 9,903,841 2.2 % IMA Financial Group, Inc. (8) Insurance 4.25 % (L + 3.75 %) 10/16/2028 5,000,000 4,975,043 4,991,650 1.1 % Infinite Bidco LLC (7) Electronic Equipment, Instruments and Components 4.25 % (L + 3.75 %) 3/2/2028 4,975,000 4,956,124 4,967,239 1.1 % Inmar, Inc. (7)(8) Professional Services 5.00 % (L + 4.00 %) 5/1/2024 7,925,407 7,891,920 7,929,568 1.8 % IRB Holding Corporation (7) Hotels, Restaurants and Leisure 4.25 % (L + 3.25 %) 11/19/2027 6,952,443 6,947,309 6,962,212 1.5 % Ivanti Software, Inc. (7) Software 4.75 % (L + 4.00 %) 12/1/2027 992,500 990,203 988,987 0.2 % Ivanti Software, Inc. (5)(7) Software 5.00 % (L + 4.25 %) 12/1/2027 6,975,000 6,921,420 6,994,600 1.5 % Jack Ohio Finance LLC (8) Hotels, Restaurants and Leisure 5.50 % (L + 4.75 %) 10/31/2028 5,000,000 5,002,417 4,996,900 1.1 % Kestrel Acquisition LLC (7) Independent Power and Renewable Electricity Producers 5.25 % (L + 4.25 %) 5/2/2025 6,914,055 6,212,084 6,347,967 1.4 % Kleopatra Finco S.a.r.l (4)(7) Containers and Packaging 5.25 % (L + 4.75 %) 2/4/2026 1,985,000 1,976,611 1,937,856 0.4 % Landry’s Finance Acquisition Co Hotels, Restaurants and Leisure 13.00 % (L + 12.00 %) 10/4/2023 18,875 18,450 20,291 0.0 % LBM Acquisition LLC (5)(7)(8) Building Products 4.50 % (L + 3.75 %) 12/31/2027 5,472,028 5,436,335 5,431,425 1.2 % Life Time, Inc. (4)(7) Hotels, Restaurants and Leisure 5.75 % (L + 4.75 %) 12/10/2024 1,451,838 1,451,195 1,463,337 0.3 % Lifescan Global Corporation (5)(7) Healthcare Equipment and Supplies 6.13 % (L + 6.00 %) 10/1/2024 6,744,535 6,702,882 6,607,857 1.5 % Lightstone Holdco, LLC Independent Power and Renewable Electricity Producers 4.75 % (L + 3.75 %) 1/30/2024 1,609,237 1,379,571 1,367,304 0.3 % Lightstone Holdco, LLC Independent Power and Renewable Electricity Producers 4.75 % (L + 3.75 %) 1/30/2024 90,763 77,809 77,118 0.0 % Lions Gate Capital Holdings LLC (4)(7) Media 2.35 % (L + 2.25 %) 3/19/2025 976,423 951,495 971,136 0.2 % LogMeIn, Inc. (7) IT Services 4.86 % (L + 4.75 %) 8/31/2027 6,444,950 6,365,479 6,418,074 1.4 % Lucid Energy Group II Borrower, LLC (7) Oil, Gas and Consumable Fuels 5.00 % (L + 4.25 %) 11/22/2028 7,000,000 6,930,663 6,926,500 1.5 % F- 19 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2021 Interest Maturity Principal / Amortized Fair Percentage of Net Portfolio Company (3) Industry Rate Date Par Cost (1)(6) Value Assets Magenta Buyer LLC (7) Software 5.75 % (L + 5.00 %) 5/3/2028 5,486,250 5,436,630 5,480,243 1.2 % McAfee, LLC (4)(7) Software 3.84 % (L + 3.75 %) 9/30/2024 3,040,646 3,031,471 3,046,910 0.7 % Medical Solutions L.L.C. (8) Healthcare Providers and Services 4.00 % (L + 3.50 %) 10/6/2028 4,200,000 4,175,369 4,200,900 0.9 % MetroNet Systems Holdings, LLC (7)(8) Diversified Telecommunication Services 4.50 % (L + 3.75 %) 5/26/2028 4,975,031 4,969,084 4,983,738 1.1 % Michael Baker International, LLC (8) Construction and Engineering 5.75 % (L + 5.00 %) 11/2/2028 6,250,000 6,187,892 6,312,500 1.4 % Micro Holding Corp. (7) IT Services 4.75 % (L + 3.75 %) 9/13/2024 9,962,265 9,905,089 9,995,490 2.2 % Midwest Veterinary Partners, LLC (5)(7) Healthcare Providers and Services 4.75 % (L + 4.00 %) 4/27/2028 9,987,500 9,888,421 9,962,531 2.2 % Milano Acquisition Corporation (7) Healthcare Providers and Services 4.75 % (L + 4.00 %) 8/31/2027 4,953,722 4,905,503 4,972,917 1.1 % Minotaur Acquisition, Inc. (7)(8) Diversified Financial Services 4.84 % (L + 4.75 %) 3/27/2026 9,060,468 9,048,923 9,026,491 2.0 % Mitchell International, Inc. (7) Professional Services 4.25 % (L + 3.75 %) 10/16/2028 10,000,000 9,926,431 9,956,250 2.2 % MLN US HoldCo LLC (7) Diversified Telecommunication Services 4.60 % (L + 4.50 %) 12/31/2025 4,069,042 3,993,846 3,942,352 0.9 % Moneygram International, Inc. (4)(7) Diversified Consumer Services 5.00 % (L + 4.50 %) 7/21/2026 7,200,000 7,175,766 7,211,268 1.6 % National Mentor Holdings, Inc. (7) Healthcare Providers and Services 4.50 % (L + 3.75 %) 2/18/2028 9,227,133 9,201,152 9,136,594 2.0 % National Mentor Holdings, Inc. (7) Healthcare Providers and Services 4.50 % (L + 3.75 %) 2/18/2028 291,993 291,126 289,256 0.1 % Navicure, Inc. (7) Healthcare Technology 4.10 % (L + 4.00 %) 10/22/2026 4,673,381 4,675,564 4,675,320 1.0 % Nexus Buyer LLC (7) Professional Services 3.85 % (L + 3.75 %) 10/30/2026 6,996,379 6,924,176 6,973,886 1.5 % NMSC Holdings, Inc. (7) Healthcare Providers and Services 6.00 % (L + 5.00 %) 4/19/2023 8,442,209 8,421,850 8,444,319 1.9 % NorthStar Group Services, Inc. (5)(7)(8) Commercial Services and Supplies 6.50 % (L + 5.50 %) 11/9/2026 8,879,759 8,843,367 8,910,306 2.0 % NSM Top Holdings Corp. (7) Healthcare Equipment and Supplies 5.35 % (L + 5.25 %) 11/12/2026 4,987,277 4,962,950 4,987,277 1.1 % OneDigital Borrower LLC (7) Insurance 4.75 % (C + SCA + 4.25 %) 11/16/2027 9,970,938 9,852,427 9,964,706 2.2 % Orchid Merger Sub II, LLC (5)(7) Software 5.25 % (L + 4.75 %) 5/12/2027 3,500,000 3,290,000 3,360,000 0.7 % Oregon Clean Energy, LLC (7) Independent Power and Renewable Electricity Producers 4.75 % (L + 3.75 %) 3/2/2026 4,887,891 4,779,206 4,503,850 1.0 % Pactiv Evergreen Group Holdings Inc. (4)(7) Containers and Packaging 4.00 % (L + 3.50 %) 9/22/2028 2,992,500 2,978,041 2,992,500 0.7 % Padagis LLC (7) Pharmaceuticals 5.25 % (L + 4.75 %) 7/31/2028 6,588,235 6,550,008 6,567,647 1.5 % Pathway Vet Alliance LLC (7) Healthcare Providers and Services 3.85 % (L + 3.75 %) 3/31/2027 4,941,089 4,876,527 4,931,824 1.1 % PECF USS Intermediate Holding III Corporation (5)(8) Professional Services 4.75 % (L + 4.25 %) 11/6/2028 5,000,000 4,987,500 5,011,625 1.1 % F- 20 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2021 Interest Maturity Principal / Amortized Fair Percentage of Net Portfolio Company (3) Industry Rate Date Par Cost (1)(6) Value Assets Peraton Corp. (7)(8) IT Services 4.50 % (L + 3.75 %) 2/1/2028 8,952,437 8,951,088 8,971,595 2.0 % PetVet Care Centers, LLC (7) Healthcare Providers and Services 4.25 % (L + 3.50 %) 2/14/2025 6,938,175 6,923,597 6,945,980 1.5 % Phoenix Guarantor Inc. (7) Healthcare Providers and Services 3.60 % (L + 3.50 %) 3/5/2026 4,950,094 4,910,625 4,936,481 1.1 % PODS, LLC (7) Road and Rail 3.75 % (L + 3.00 %) 3/31/2028 1,985,025 1,975,873 1,980,747 0.4 % PQ Performance Chemicals (7) Chemicals 4.25 % (L + 3.50 %) 4/28/2028 5,000,000 4,997,651 5,012,500 1.1 % Prairie ECI Acquiror LP (7) Oil, Gas and Consumable Fuels 4.85 % (L + 4.75 %) 3/11/2026 7,182,326 6,969,074 6,962,870 1.5 % Presidio Holdings, Inc. (7) Professional Services 3.61 % (L + 3.50 %) 1/31/2027 2,364,000 2,334,043 2,366,222 0.5 % Pretium PKG Holdings, Inc. (8) Containers and Packaging 4.50 % (L + 4.00 %) 9/22/2028 5,000,000 4,976,019 4,997,200 1.1 % Prime Security Services Borrower, LLC (4)(7) Diversified Consumer Services 3.50 % (L + 2.75 %) 5/2/2022 1,782,584 1,771,416 1,782,985 0.4 % Project Alpha Intermediate Holding, Inc. (7) Software 4.11 % (L + 4.00 %) 4/26/2024 5,916,866 5,897,864 5,933,522 1.3 % Project Boost Purchaser, LLC (7) Professional Services 4.00 % (L + 3.50 %) 6/1/2026 5,970,000 5,955,902 5,977,463 1.3 % Proofpoint, Inc. (7) IT Services 3.75 % (L + 3.25 %) 6/9/2028 5,000,000 4,976,654 4,987,125 1.1 % PS Holdco, LLC (8) Road and Rail 5.00 % (L + 4.25 %) 10/31/2028 4,987,500 4,963,067 4,996,852 1.1 % PT Intermediate Holdings III LLC (8) Machinery 6.25 % (L + 5.50 %) 10/15/2025 2,320,000 2,296,800 2,308,400 0.5 % PT Intermediate Holdings III LLC (8) Machinery 6.25 % (L + 5.50 %) 11/1/2028 1,536,150 1,520,799 1,528,469 0.3 % Quest Software US Holdings Inc (7) Software 4.38 % (L + 4.25 %) 5/16/2025 6,934,002 6,926,135 6,936,637 1.5 % Radiate Holdco, LLC (7) Media 4.00 % (L + 3.25 %) 9/25/2026 3,000,000 2,992,599 2,993,760 0.7 % Radiology Partners, Inc. (7) Healthcare Providers and Services 4.35 % (L + 4.25 %) 7/9/2025 6,000,000 5,991,169 5,924,190 1.3 % RC Buyer, Inc. (7) Auto Components 4.25 % (L + 3.50 %) 7/28/2028 2,094,750 2,089,576 2,093,450 0.5 % RealPage, Inc. (5)(7) Real Estate Management and Development 3.75 % (L + 3.25 %) 2/18/2028 6,982,500 6,971,036 6,970,525 1.5 % Red Planet Borrower, LLC (7) Internet Software and Services 4.25 % (L + 3.75 %) 10/2/2028 7,980,000 7,940,911 7,948,080 1.8 % Redstone Holdco 2 LP (7)(8) IT Services 5.50 % (L + 4.75 %) 4/14/2028 7,980,000 7,924,198 7,645,838 1.7 % RegionalCare Hospital Partners Holdings, Inc. (5)(7) Healthcare Providers and Services 3.85 % (L + 3.75 %) 11/14/2025 5,028,873 5,019,995 5,031,363 1.1 % Rocket Software, Inc. (7) Software 4.75 % (L + 4.25 %) 11/28/2025 4,982,481 4,956,315 4,983,104 1.1 % Rodan & Fields, LLC (7) Textiles, Apparel and Luxury Goods 4.11 % (L + 4.00 %) 6/16/2025 1,732,051 1,524,775 974,279 0.2 % Rohm Holding GMBH (4)(7)(8) Chemicals 4.90 % (L + 4.75 %) 7/31/2026 8,936,606 8,917,170 8,940,314 2.0 % F- 21 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2021 Interest Maturity Principal / Amortized Fair Percentage of Net Portfolio Company (3) Industry Rate Date Par Cost (1)(6) Value Assets RSC Acquisition, Inc. (8) Insurance 6.25 % (L + 5.50 %) 10/30/2026 1,731,928 1,714,630 1,729,763 0.4 % RSC Acquisition, Inc. (8)(10) Insurance 6.25 % (L + 5.50 %) 10/30/2026 527,108 489,464 522,402 0.1 % RSC Acquisition, Inc. (8) Insurance 6.25 % (L + 5.50 %) 9/30/2026 753,012 745,646 752,070 0.2 % Runner Buyer Inc. (8) Household Durables 6.25 % (L + 5.50 %) 10/20/2028 5,000,000 4,950,645 4,950,000 1.1 % Ryan Specialty Group LLC (4)(7) Insurance 3.75 % (L + 3.00 %) 9/1/2027 1,975,000 1,962,730 1,978,209 0.4 % Sabert Corporation (7)(8) Containers and Packaging 5.50 % (L + 4.50 %) 11/26/2026 7,122,923 7,125,462 7,131,862 1.6 % Severin Acquisition, LLC (7) Diversified Consumer Services 3.10 % (L + 3.00 %) 8/31/2025 3,721 3,599 3,708 0.0 % Shearer’s Foods, LLC (7) Food Products 4.25 % (L + 3.50 %) 9/23/2027 1,691,137 1,680,722 1,688,312 0.4 % Sophia, L.P. (7) Software 4.25 % (L + 3.50 %) 10/7/2027 4,950,094 4,918,451 4,954,425 1.1 % Sotera Health Holdings, LLC (7) Healthcare Equipment and Supplies 3.25 % (L + 2.75 %) 12/11/2026 4,000,000 4,000,000 3,990,620 0.9 % Sovos Compliance, LLC (8) Software 5.00 % (L + 4.50 %) 7/28/2028 3,410,959 3,402,432 3,426,279 0.8 % Specialty Building Products Holdings, LLC (5)(7)(8) Building Products 4.25 % (L + 3.75 %) 10/5/2028 10,000,000 10,016,507 9,986,537 2.2 % Springer Nature Deutschland GmbH (4)(7) Media 3.75 % (L + 3.00 %) 8/14/2026 2,086,931 2,082,809 2,091,167 0.5 % Summer BC Holdco B LLC (4)(8) Media 5.25 % (L + 4.50 %) 12/4/2026 4,987,500 4,993,734 4,990,617 1.1 % Surf Holdings, LLC (7) IT Services 3.69 % (L + 3.50 %) 1/15/2027 1,970,012 1,881,892 1,957,700 0.4 % Surgery Center Holdings, Inc. (7) Healthcare Providers and Services 4.50 % (L + 3.75 %) 9/3/2026 4,714,375 4,692,584 4,718,807 1.0 % Talen Energy Supply, LLC (7) Independent Power and Renewable Electricity Producers 3.85 % (L + 3.75 %) 6/26/2026 3,866,834 3,675,471 3,450,086 0.8 % Tecta America Corp. (7)(8) Construction and Engineering 5.00 % (L + 4.25 %) 4/6/2028 6,172,249 6,180,294 6,183,822 1.4 % The Edelman Financial Engines Centre, LLC (7) Diversified Financial Services 4.25 % (L + 3.50 %) 4/7/2028 7,939,714 7,850,378 7,945,193 1.8 % Thryv, Inc. (4)(7) Professional Services 9.50 % (L + 8.50 %) 2/18/2026 6,011,096 6,022,690 6,116,290 1.4 % TIBCO Software Inc (7) Software 3.85 % (L + 3.75 %) 6/30/2026 2,955,000 2,948,675 2,936,530 0.6 % Tidal Power Holdings, LLC (4)(7) Independent Power and Renewable Electricity Producers 4.75 % (L + 3.75 %) 4/1/2027 4,252,248 4,229,645 4,300,086 0.9 % Tiger Acquisition, LLC (7) Industrial Conglomerates 3.75 % (L + 3.25 %) 5/19/2028 2,992,500 2,981,347 2,978,076 0.7 % Titan US Finco, LLC (4)(8) Media 4.50 % (L + 4.00 %) 10/6/2028 6,000,000 5,985,062 5,994,990 1.3 % Torrid, LLC (4)(8) Specialty Retail 6.25 % (L + 5.50 %) 5/19/2028 2,000,000 2,022,001 2,017,500 0.4 % Tory Burch LLC (7) Specialty Retail 3.50 % (L + 3.00 %) 4/14/2028 1,990,000 1,971,658 1,990,000 0.4 % F- 22 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2021 Interest Maturity Principal / Amortized Fair Percentage of Net Portfolio Company (3) Industry Rate Date Par Cost (1)(6) Value Assets Tosca Services, LLC (7) Containers and Packaging 4.25 % (L + 3.50 %) 8/18/2027 2,970,000 2,957,856 2,968,159 0.7 % Traverse Midstream Partners LLC (7) Oil, Gas and Consumable Fuels 5.25 % (C + SCA + 4.25 %) 9/27/2024 5,673,975 5,385,313 5,659,819 1.2 % Triton Water Holdings, Inc. (7) Food Products 4.00 % (L + 3.50 %) 3/31/2028 4,975,001 4,958,709 4,928,360 1.1 % Truck Hero, Inc. (7) Auto Components 4.00 % (L + 3.25 %) 1/20/2028 7,051,725 7,041,693 7,028,066 1.6 % U.S. Renal Care, Inc. (7)(8) Healthcare Providers and Services 5.13 % (L + 5.00 %) 6/26/2026 8,911,817 8,759,285 8,690,180 1.9 % U.S. Renal Care, Inc. (7) Healthcare Providers and Services 6.50 % (L + 5.50 %) 6/26/2026 498,750 492,009 490,022 0.1 % U.S. Silica Company (4)(7) Metals and Mining 5.00 % (L + 4.00 %) 4/25/2025 7,945,544 7,762,054 7,786,633 1.7 % Ultimate Software Group, The (7) Software 3.85 % (L + 3.75 %) 4/8/2026 4,411,006 4,392,996 4,403,727 1.0 % United Airlines, Inc. (4)(7) Airlines 4.50 % (L + 3.75 %) 4/21/2028 7,967,400 8,034,531 8,014,009 1.8 % Univision Communications Inc. (7) Media 4.00 % (L + 3.25 %) 3/13/2026 4,121,311 4,008,960 4,135,798 0.9 % US Radiology Specialists, Inc. (5)(7) Healthcare Providers and Services 6.00 % (L + 5.25 %) 12/10/2027 8,970,000 8,862,961 8,976,997 2.0 % VeriFone Systems, Inc. (7) Commercial Services and Supplies 4.18 % (L + 4.00 %) 8/20/2025 2,976,982 2,936,772 2,930,095 0.6 % Verscend Holding Corp. (7) Healthcare Technology 4.10 % (L + 4.00 %) 8/27/2025 6,126,073 6,110,295 6,132,199 1.4 % Vision Solutions, Inc. (7) IT Services 4.75 % (L + 4.00 %) 4/24/2028 9,975,000 9,944,077 9,975,000 2.2 % Watlow Electric Manufacturing Company (5)(7) Electrical Equipment 4.25 % (L + 3.75 %) 3/2/2028 5,101,525 5,115,092 5,103,132 1.1 % Whatabrands LLC (7) Hotels, Restaurants and Leisure 3.75 % (L + 3.25 %) 7/21/2028 2,400,000 2,388,461 2,394,948 0.5 % White Cap Buyer LLC (5)(7)(8) Building Products 4.50 % (L + 4.00 %) 10/8/2027 6,959,924 6,949,443 6,974,923 1.5 % Wilsonart LLC (7)(8) Building Products 4.50 % (L + 3.50 %) 12/18/2026 7,949,623 7,945,181 7,958,765 1.8 % Zelis Cost Management Buyer, Inc. (7) Healthcare Technology 3.60 % (L + 3.50 %) 9/30/2026 4,792,714 4,784,986 4,767,408 1.1 % Total First Lien Senior Secured 1,012,130,228 $ 1,003,839,402 $ 1,007,407,474 222.4 % F- 23 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2021 Interest Maturity Principal / Amortized Fair Percentage of Net Portfolio Company (3) Industry Rate Date Par Cost (1)(6) Value Assets Second Lien Senior Secured (2) Almonde, Inc. (5) Software 8.25 % (L + 7.25 %) 4/28/2025 3,000,000 3,003,750 3,000,345 0.7 % ARC Falcon I Inc. (7) Chemicals 7.50 % (L + 7.00 %) 9/24/2029 2,000,000 1,980,393 1,980,000 0.4 % Artera Services, LLC (7) Construction and Engineering 8.25 % (L + 7.25 %) 3/6/2026 7,810,000 7,423,359 7,731,900 1.7 % Aruba Investments, Inc. (7) Chemicals 8.50 % (L + 7.75 %) 10/27/2028 2,350,000 2,316,709 2,373,500 0.5 % Asurion, LLC (5)(7) Insurance 5.35 % (L + 5.25 %) 1/19/2029 6,000,000 5,960,590 5,983,140 1.3 % Curium BidCo S.a r.l. (4)(5) Pharmaceuticals 8.50 % (L + 7.75 %) 10/27/2028 3,000,000 3,052,500 3,033,750 0.7 % DCert Buyer, Inc. (7) IT Services 7.10 % (L + 7.00 %) 2/19/2029 1,500,000 1,496,858 1,506,248 0.3 % Energy Acquisition LP (5) Electrical Equipment 8.50 % (L + 8.50%) 6/25/2026 2,812,400 2,720,196 2,624,320 0.6 % Epicor Software Corporation (5)(7) Software 8.75 % (L + 7.75 %) 7/31/2028 3,000,000 3,041,862 3,077,505 0.7 % Help/Systems Holdings, Inc. Software 7.50 % (L + 6.75 %) 11/19/2027 3,656,217 3,665,199 3,657,752 0.8 % Idera, Inc. IT Services 7.50 % (L + 6.75 %) 2/5/2029 3,000,000 3,029,512 3,007,500 0.7 % Infinite Bidco LLC (5)(7) Electronic Equipment, Instruments and Components 7.50 % (L + 7.00 %) 2/24/2029 2,743,333 2,738,086 2,760,479 0.6 % Inmar, Inc. (7) Professional Services 9.00 % (L + 8.00 %) 5/1/2025 5,000,000 5,007,347 5,012,500 1.1 % Ivanti Software, Inc. (5) Software 7.75 % (L + 7.25 %) 12/1/2028 2,000,000 2,000,000 2,005,010 0.4 % Magenta Buyer LLC Software 9.00 % (L + 8.25 %) 5/3/2029 3,000,000 2,985,021 2,987,820 0.7 % Peraton Corp. IT Services 8.50 % (L + 7.75 %) 2/26/2029 3,000,000 3,066,820 3,048,750 0.7 % Pretium PKG Holdings, Inc. (7) Containers and Packaging 7.25 % (L + 6.75 %) 9/21/2029 2,000,000 1,980,887 1,998,750 0.4 % Quest Software US Holdings Inc (7) Software 8.38 % (L + 8.25 %) 5/18/2026 3,347,000 3,331,490 3,351,535 0.7 % TIBCO Software Inc (5) Software 7.35 % (L + 7.25 %) 2/28/2028 2,500,000 2,509,375 2,513,013 0.6 % Vision Solutions, Inc. IT Services 8.00 % (L + 7.25 %) 4/23/2029 3,000,000 3,007,499 3,004,695 0.7 % Total Second Lien Senior Secured 64,718,950 64,317,453 64,658,512 14.3 % Corporate Bonds Diebold Inc (4) Diversified Consumer Services 8.50 % 4/15/2024 1,000,000 1,002,202 1,000,071 0.3 % KOBE US Midco 2 Inc Chemicals 9.25 % 11/1/2026 1,900,000 1,881,394 1,947,500 0.4 % Total Corporate Bonds 2,900,000 2,883,596 2,947,571 0.7 % F- 24 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2021 Interest Maturity Principal / Amortized Fair Percentage of Net Portfolio Company (3) Industry Rate Date Par Cost (1)(6) Value Assets Convertible Bonds Dish Network Corp (4) Media 3.38 % 8/15/2026 1,000,000 1,021,974 942,069 0.2 % Total Convertible Bonds 1,000,000 1,021,974 942,069 0.2 % Total Debt Investments 1,080,749,178 $ 1,072,062,425 $ 1,075,955,626 237.6 % CLO Mezzanine (2) 522 Funding CLO 2020-6, Ltd. (4) Structured Note 8.17 % (L + 8.04 %) 10/23/2034 2,800,000 2,717,549 2,738,208 0.6 % Barings CLO Ltd (4) Structured Note 6.88 % (L + 6.75 %) 1/20/2028 2,000,000 1,922,263 1,892,175 0.4 % Carlyle US CLO 2020-2, Ltd (4) Structured Note 8.66 % (L + 8.53 %) 1/25/2035 4,000,000 3,880,576 3,911,604 0.9 % Elmwood CLO III Ltd. (4) Structured Note 7.86 % (L + 7.74 %) 10/20/2034 2,000,000 1,921,030 1,905,811 0.4 % GoldenTree Loan Management US 2020-7A (4) Structured Note 7.88 % (L + 7.50 %) 4/20/2034 2,000,000 1,886,090 1,900,494 0.4 % GoldenTree Loan Management US 2021-10A (4) Structured Note 7.92 % (L + 7.79 %) 7/20/2034 1,250,000 1,213,704 1,187,520 0.3 % GoldenTree Loan Management US 2021-9A (4) Structured Note 6.88 % (L + 6.75 %) 1/20/2033 2,000,000 1,886,518 1,877,447 0.4 % HPS Loan Management Series 15A-19 (4) Structured Note 6.73 % (L + 6.60 %) 7/22/2032 1,500,000 1,409,524 1,485,842 0.3 % Magnetite CLO Ltd 2015-16A (4) Structured Note 6.62 % (L + 6.50 %) 1/18/2028 1,000,000 810,847 946,886 0.2 % Thayer Park CLO, Ltd. (4) Structured Note 9.00 % (L + 8.87 %) 4/20/2034 1,300,000 1,259,186 1,259,407 0.3 % Total CLO Mezzanine 19,850,000 18,907,287 19,105,394 4.2 % CLO Equity Ares CLO LTD 2021-62A (4) Structured Subordinated Note NA 1/25/2034 5,000,000 4,620,000 4,619,794 1.0 % Dryden 86 CLO, Ltd. (4) Structured Subordinated Note NA 7/17/2030 6,000,000 4,695,000 4,734,172 1.0 % Long Point Park CLO, Ltd. (4) Structured Subordinated Note NA 1/17/2030 6,358,000 4,332,977 4,430,826 1.0 % Regatta XII Funding Ltd. (4) Structured Subordinated Note NA 10/15/2032 6,000,000 4,710,000 4,714,852 1.0 % Stratus CLO Series 2021-1A (4) Structured Subordinated Note NA 12/29/2029 2,000,000 1,743,200 1,754,156 0.5 % Total CLO Equity 25,358,000 20,101,177 20,253,800 4.5 % F- 25 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2021 Interest Maturity Number of Fair Percentage of Net Portfolio Company (3) Industry Rate Date Shares Cost Value Assets Custom Truck One Source Inc (4) Commercial Services and Supplies NA NA 100,000 500,000 800,000 0.2 % Total Equity Investments 100,000 500,000 800,000 0.2 % Total Equity and Other Investments 45,308,000 39,508,464 40,159,194 8.9 % Percentage Number of Shares Cost Fair Value of Net Assets Short-Term Investments Fidelity Investments Money Market Government Portfolio - Institutional Class, 0.01% (9) 78,142,764 78,142,764 78,142,764 17.3 % Total Short-Term Investments 78,142,764 $ 78,142,764 $ 78,142,764 17.3 % Total Investments $ 1,189,713,653 $ 1,194,257,584 263.8 % Liabilities in Excess of Other Assets ( 741,459,996 ) ( 163.8 )% Net Assets $ 452,797,588 100.0 % (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 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 12/31/21 that have S+CSA as the base rate, the CSA is 10bp for 1M SOFR, 15bp for 3M SOFR, and 25bp for 6M SOFR. For the avoidance of doubt, loan floors apply to S+CSA, not S. (3) As of December 31, 2021, all investments are non-controlled, non-affiliated investments. Non-controlled, non-affiliated investments are defined as investments in which the Company owns less than 5% of the portfolio company’s outstanding voting securities and does not have the power to exercise control over the management or policies of such portfolio company. (4) Non-qualifying investment as defined by Section 55(a) of the Investment Company Act of 1940. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2021, 13.3% of the Company’s total assets were in non-qualifying investments. (5) Investments or a portion of investments are unsettled as of December 31, 2021. (6) As of December 31, 2021, the tax cost of the Company’s investments approximates their amortized cost. (7) Security or portion thereof held within Palmer Square BDC Funding I, LLC (“PS BDC Funding”) and is pledged as collateral supporting the amounts outstanding under a revolving credit facility with Bank of America, N.A. (“BofA N.A.”) (see Note 6 to the consolidated financial statements). (8) Security or portion thereof held within Palmer Square BDC Funding II, LLC (“PS BDC Funding II”) and is pledged as collateral supporting the amounts outstanding under a revolving credit facility with Wells Fargo Bank, National Association (“WFB”) (see Note 6 to the consolidated financial statements). (9) 7-day effective yield as of December 31, 2021. (10) Of the $3,765,060 commitment to RSC Acquisition, Inc., $3,237,952 was unfunded as of December 31, 2021. The accompanying notes are an integral part of these consolidated financial statements. F- 26 Palmer Square Capital BDC Inc. Notes to Consolidated Financial Statements Note 1. Organization Organization Palmer Square Capital BDC Inc. (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. companies. 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 thereafter. The Company commenced operations on January 23, 2020. Palmer Square BDC Funding I, LLC (“PS BDC Funding”) was formed on January 21, 2020 and entered into a senior, secured revolving credit facility with 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. To a limited extent, the Company may enter into derivatives transactions, which may utilize instruments such as forward contracts, currency options and interest rate swaps, caps, collars and floors to seek to hedge against fluctuations in the relative values of the Company’s portfolio positions from changes in currency exchange rates and market interest rates or to earn income and enhance the Company’s total returns. The Company may receive or purchase warrants or rights to acquire equity or other securities in connection with making a debt investment in a company. During the 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”). The Investment Advisor, in its capacity as administrator (the “Administrator”), provides the administrative services necessary for the Company to operate pursuant to an administration agreement between the Company and the Administrator (the “Administration Agreement”). The Company’s fiscal year ends on December 31. The Company has two wholly-owned subsidiaries: PS BDC Funding, a special purpose wholly-owned subsidiary established for utilizing the Company’s revolving credit facility with BofA N.A., and PS BDC Funding II, a special purpose wholly-owned subsidiary established for utilizing the Company’s credit facility with WFB. These subsidiaries are consolidated in the financial statements of the Company. Note 2. Significant Accounting Policies The Company is an investment company and applies specific accounting and financial reporting requirements under Financial Accounting Standards Board (“FASB”) Accounting Standards Topic 946, Financial Services-Investment Companies . The Company’s functional currency is U.S. dollars (“USD”) and these consolidated financial statements have been prepared in that currency. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to Regulation S-X. F- 27 Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Actual results could differ from those estimates. Indemnifications In the normal course of business, the Company enters into contracts that contain a variety of representations which provide general indemnifications. The Company’s maximum exposure under these arrangements cannot be known; however, the Company expects any risk of loss to be remote. Cash and Cash Equivalents Cash is comprised of cash on deposit with major financial institutions. Cash equivalents consist of highly liquid investments with original maturities of three months or less. The Company places its cash with high credit quality institutions to minimize credit risk exposure. Debt Issuance Costs The Company records origination and other expenses related to its debt obligations as deferred financing costs. These expenses are deferred and amortized over the life of the related debt instrument. Debt issuance costs are presented on the consolidated statement of assets and liabilities as a direct deduction from the debt liability. In circumstances in which there is not an associated debt liability amount recorded in the consolidated financial statements when the debt issuance costs are incurred, such debt issuance costs will be reported on the consolidated statement of assets and liabilities as an asset until the debt liability is recorded. As of December 31, 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. Income Taxes The Company has elected to be treated as a RIC under Subchapter M of the Code. So long as the Company maintains its status as a RIC, it generally will not pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that it distributes at least annually to its stockholders as dividends. To qualify as a RIC, the Company must, among other things, meet certain source-of-income and asset diversification requirements. In addition, to qualify for RIC tax treatment, the Company must distribute to its stockholders, for each taxable year, at least 90 % of its “investment company taxable income” for that year, which is generally its ordinary income plus the excess of its realized net short-term capital gains over its realized net long-term capital losses. In order for the Company not to be subject to U.S. federal excise taxes, it must distribute annually an amount at least equal to the sum of (i) 98% of its net ordinary income (taking into account certain deferrals and elections) for the calendar year, (ii) 98.2% of its capital gains in excess of capital losses for the one year period ending October 31 in such calendar year and (iii) any net ordinary income and capital gains in excess of capital losses for preceding years that were not distributed during such years. The Company, at its discretion, may carry forward taxable income in excess of calendar year dividends and pay a 4% nondeductible U.S. federal excise tax on this income. The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are reserved and recorded as a tax benefit or expense in the current year. All penalties and interest associated with income taxes are included in income tax expense. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof. F- 28 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 Interest income is recorded on the accrual basis and includes amortization of premiums or accretion of discounts. Discounts and premiums to par value on securities purchased are accreted and amortized, respectively, into interest income over the contractual life of the respective security using the effective interest method. The amortized cost of investments represents the original cost adjusted for the amortization of premiums or accretion of discounts, if any. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees, paydown gains/losses and unamortized discounts are recorded as interest income in the current period. Dividend income on preferred equity securities is recorded on the accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities and money market funds is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly-traded portfolio companies. 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. Management 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. Other Income From time to time, the Company may receive fees for services provided to portfolio companies. These fees are generally only available to the Company as a result of closing investments, are normally paid at the closing of the investments, are generally non-recurring and are recognized as revenue when earned upon closing of the investment. The services that the Investment Advisor provides vary by investment, but can include closing, work, diligence or other similar fees and fees for providing managerial assistance to the Company’s portfolio companies. In addition, the Company may generate revenue in the form of commitment, origination, structuring or diligence fees, monitoring fees and possibly consulting and performance- based fees. Offering Costs Offering costs in connection with the offering of common stock of the Company are capitalized as a deferred charge and amortized to expense on a straight-line basis over 12 months from the commencement of operations, January 23, 2020. These expenses consist primarily of legal fees and other costs incurred with Company’s share offerings, the preparation of the Company’s registration statement, and registration fees. F- 29 Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation The Company measures realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized upfront fees and prepayment penalties. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized. New Accounting Pronouncements In March 2020, the FASB issued Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The guidance provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. ASU 2020-04 was effective for all entities as of March 12, 2020 through December 31, 2022. 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. Note 3. Agreements and Related Party Transactions Administration Agreement The Company has entered into the Administration Agreement with the Administrator. Pursuant to the Administration Agreement, the Administrator furnishes office facilities and equipment and provides clerical, bookkeeping, compliance, recordkeeping and other administrative services at such facilities. Under the Administration Agreement, the Administrator performs, or oversees the performance of, required administrative services, which include being responsible for the financial and other records that the Company is required to maintain and preparing reports to stockholders and reports and other materials filed with the SEC. In addition, the Administrator assists the Company in determining and publishing the Company’s net asset value, overseeing the preparation and filing of tax returns and the printing and dissemination of reports and other materials to stockholders, and generally overseeing the payment of expenses and the performance of administrative and professional services rendered to the Company by others. Under the Administration Agreement, the Administrator also provides managerial assistance on the Company’s behalf to those portfolio companies that have accepted the offer to provide such assistance. Under the Administration Agreement, the Company reimburses the Administrator based upon its allocable portion of the Administrator’s overhead (including rent) in performing its obligations under the Administration Agreement, including rent, the fees and expenses associated with performing compliance functions and the Company’s allocable portion of the cost of its officers (including the Company’s Chief Financial Officer and Chief Compliance Officer), and any of their respective staff who provide services to the Company, operations staff who provide services to the Company, and internal audit staff, if any, to the extent internal audit performs a role in the Company’s Sarbanes-Oxley internal control assessment. In addition, if requested to provide managerial assistance to portfolio companies, the Administrator is reimbursed based on the services provided. The Administration Agreement has an initial term of two years and may be renewed with the approval of the Company’s board of directors (the “Board”). The agreement was renewed during the year for an additional one year period. The Administration Agreement may be terminated by either party without penalty upon 60 days’ written notice to the other party. To the extent that the Administrator outsources any of its functions, the Company pays the fees associated with such functions on a direct basis without any incremental profit to the Administrator. In addition, the Administrator has, pursuant to a sub-administration agreement, engaged U.S. Bancorp Fund Services, LLC to act on behalf of the Company’s Administrator in the performance of certain other administrative services. The Company has also engaged U.S. Bank, National Association or its affiliates (“US Bank”) directly to serve as custodian, transfer agent, distribution paying agent and registrar. Investment Advisory Agreement The Investment Advisor serves as the investment adviser of the Company and is registered as an investment adviser with the SEC. The Investment Advisor’s primary business is to provide a variety of investment management services, including an investment program for the Company. The Investment Advisor is responsible for all business activities and oversight of the investment decisions made for the Company. In return for providing management services to the Company, the Company pays the Investment Advisor a base management fee, calculated and paid quarterly in arrears at an annual rate of 2.00 % of the average value of the weighted average (based on the number of shares outstanding each day in the quarter) of the Company’s total net assets at the end of the two most recently completed calendar quarters. The base management fee for any partial quarter will be pro-rated based on the number of days actually elapsed in that quarter relative to the total number of days in such quarter. The Investment Advisor, however, has agreed to waive its right to receive management fees in excess of 1.75% of the total net assets during any period prior to the listing of the Company’s common stock on a national securities exchange (a “Listing”). If a Listing does not occur, such fee waiver will remain in place through liquidation of the Company. The Investment Advisor will not be permitted to recoup any waived amounts at any time and the waiver may only be modified or terminated prior to a Listing with the approval of the Board. F- 30 Additionally, pursuant to the Advisory Agreement, the Investment Advisor is not entitled to an incentive fee prior to a Listing. Following a Listing, the Investment Advisor will be entitled to an incentive fee (the “Income Incentive Fee”) based on the Company’s pre-incentive fee net investment income for the then most recently completed calendar quarter, as adjusted downward (but not upward) if over the most recently completed and three preceding calendar quarters aggregate net realized losses on the Company’s investments exceed the Company’s aggregate net investment income over the same period, excluding the most recently completed quarter, as described in more detail below. In this regard, if the Company’s net realized losses over the most recently completed and three preceding calendar quarters are greater than the Company’s net investment income over the same period, excluding the most recently completed quarter, then the pre-incentive fee net income used in the calculation of the Income Incentive Fee would be subject to a downward adjustment. 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; and ● 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, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the quarter (including the base management fee, any expenses payable under the Administration Agreement, and any interest expense and dividends paid on any outstanding preferred stock, but excluding the Income Incentive Fee). “Pre-incentive fee net investment income” includes, in the case of investments with a deferred interest feature such as market discount, original issue discount (“OID”), debt instruments with payment-in-kind (“PIK”) interest, preferred stock with PIK dividends and zero-coupon securities, accrued income that the Company has not yet received in cash. F- 31 “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. “Net investment income” in respect of the particular period means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies but excluding fees for providing managerial assistance) accrued during the particular period, minus operating expenses for the particular period (including the base management fee, the Income Incentive Fee, any expenses payable under the Administration Agreement, and any interest expense and dividends paid on any outstanding preferred stock). “Net investment income” includes, in the case of investments with a deferred interest feature such as market discount, OID, debt instruments with PIK interest, preferred stock with PIK dividends and zero-coupon securities, accrued income that the Company has not yet received in cash. The Income Incentive Fee amount, or the calculations pertaining thereto, as appropriate, will be pro-rated for any period less than a full calendar quarter. Note 4. Investments The following table presents the composition of the Company’s investment portfolio at amortized cost and fair value as of December 31, 2022 and December 31, 2021: December 31, 2022 December 31, 2021 Amortized Fair Amortized Fair Cost Value Cost Value First-lien senior secured debt $ 951,753,250 $ 870,880,344 $ 1,003,839,402 $ 1,007,407,474 Second-lien senior secured debt 71,513,263 58,118,340 64,317,453 64,658,512 Corporate Bonds 1,884,529 1,332,888 2,883,596 2,947,571 Convertible Bond - - 1,021,974 942,069 CLO Mezzanine 17,589,330 14,732,721 18,907,287 19,105,394 CLO Equity 27,012,348 21,800,224 20,101,177 20,253,800 Equity - - 500,000 800,000 Short-term investments 50,347,215 50,347,215 78,142,764 78,142,764 Total Investments $ 1,120,099,935 $ 1,017,211,732 $ 1,189,713,653 $ 1,194,257,584 As of December 31, 2022, approximately 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 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 assets. 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. F- 32 The industry composition of investments based on fair value, as a percentage of total investments at fair value, as of December 31, 2022 and December 31, 2021 was as follows: December 31, 2022 December 31, 2021 Software 12.9 % 10.2 % Healthcare Providers and Services 9.9 % 10.8 % IT Services 8.4 % 9.4 % Professional Services 5.9 % 6.4 % Insurance 5.8 % 5.7 % Cash and Cash Equivalents 4.9 % 6.5 % Hotels, Restaurants and Leisure 3.9 % 3.5 % Building Products 3.7 % 3.0 % Chemicals 3.3 % 2.2 % Media 3.2 % 3.9 % Independent Power and Renewable Electricity Producers 2.8 % 3.1 % Diversified Financial Services 2.6 % 1.8 % Aerospace and Defense 2.5 % 0.9 % Construction and Engineering 2.5 % 1.7 % Structured Subordinated Note 2.1 % 1.7 % Healthcare Technology 2.1 % 2.1 % Metals and Mining 2.0 % 1.5 % Auto Components 1.9 % 1.5 % Oil, Gas and Consumable Fuels 1.7 % 3.0 % Diversified Consumer Services 1.6 % 0.8 % Containers and Packaging 1.5 % 1.8 % Structured Note 1.4 % 1.6 % Food Products 1.3 % 1.1 % Specialty Retail 1.3 % 1.2 % Commercial Services and Supplies 1.3 % 1.5 % Electronic Equipment, Instruments and Components 1.2 % 1.1 % Internet Software and Services 1.1 % 1.3 % Healthcare Equipment and Supplies 0.9 % 2.0 % Airlines 0.8 % 1.3 % Real Estate Management and Development 0.6 % 0.6 % Wireless Telecommunication Services 0.6 % 0.6 % Machinery 0.6 % 0.3 % Pharmaceuticals 0.6 % 0.8 % Energy Equipment and Services 0.6 % - % Electrical Equipment 0.5 % 0.6 % Road and Rail 0.5 % 0.6 % Technology Hardware, Storage and Peripherals 0.4 % 0.5 % Industrial Conglomerates 0.4 % 0.8 % Household Durables 0.3 % 0.4 % Diversified Telecommunication Services 0.3 % 1.4 % Textiles, Apparel and Luxury Goods 0.1 % 0.1 % Leisure Products - % 0.4 % Electric Utilities - % 0.3 % Total 100.0 % 100.0 % F- 33 Note 5. Fair Value of Investments Fair value is defined as the price that the Company would receive upon selling an investment or paying to transfer a liability in an orderly transaction to a market participant in the principal or most advantageous market for the investment. Accounting guidance emphasizes that valuation techniques maximize the use of observable market inputs and minimize the use of unobservable inputs. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the investment as of the measurement date. The three levels are defined as follows: Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 — Valuations based on inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable at the measurement date. This category includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in non-active markets including actionable bids from third parties for privately held assets or liabilities, and observable inputs other than quoted prices such as yield curves and forward currency rates that are entered directly into valuation models to determine the value of derivatives or other assets or liabilities. Level 3 — Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement date. Investments in private investment companies measured based upon net asset value as a practical expedient to determine fair value are not required to be categorized in the fair value hierarchy. As of December 31, 2022 and as of December 31, 2021, there were no investments accounted for using the practical expedient. The inputs for the determination of fair value may require significant management judgment or estimation and are based upon management’s assessment of the assumptions that market participants would use in pricing the assets or liabilities. These investments include debt and equity investments in private companies or assets valued using the market or income approach and may involve pricing models whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for identical or similar investments. The inputs in these valuations may include, but are not limited to, capitalization and discount rates, beta and earnings before interest, taxes, depreciation, and amortization (“EBITDA”) multiples. The information may also include pricing information or broker quotes, which include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level 3 information, assuming no additional corroborating evidence. Pricing inputs and weightings applied to determine fair value require subjective determination. Accordingly, valuations do not necessarily represent the amounts that may eventually be realized from sales or other dispositions of investments. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following table presents the fair value hierarchy of investments as of December 31, 2022: Fair Value Hierarchy as of December 31, 2022 Investments: Level 1 Level 2 Level 3 Total First-lien senior secured debt $ - $ 870,880,344 $ - $ 870,880,344 Second-lien senior secured debt - 58,118,340 - 58,118,340 Corporate Bonds - 1,332,888 - 1,332,888 CLO Mezzanine - 14,732,721 - 14,732,721 CLO Equity - 21,800,224 - 21,800,224 Short Term Investments 50,347,215 - - 50,347,215 Total Investments $ 50,347,215 $ 966,864,517 $ - $ 1,017,211,732 F- 34 The following table presents the fair value hierarchy of investments as of December 31, 2021: Fair Value Hierarchy as of December 31, 2021 Investments: Level 1 Level 2 Level 3 Total First-lien senior secured debt $ - $ 1,007,407,474 $ - $ 1,007,407,474 Second-lien senior secured debt - 64,658,512 - 64,658,512 Corporate Bonds - 2,947,571 - 2,947,571 Convertible Bond - 942,069 - 942,069 CLO Mezzanine - 19,105,394 - 19,105,394 CLO Equity - 20,253,800 - 20,253,800 Equity 800,000 - - 800,000 Short Term Investments 78,142,764 - - 78,142,764 Total Investments $ 78,942,764 $ 1,115,314,820 $ - $ 1,194,257,584 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, 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. Note 6. Borrowings In accordance with the 1940 Act, with certain limitations, BDCs are permitted to borrow amounts such that their asset coverage ratios, as defined in the 1940 Act, are at least 150 % after such borrowing. As of December 31, 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 N.A. 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”). Under the BoA Credit Facility, which matures on February 18, 2025, the Lenders have agreed to extend credit to PS BDC Funding in an aggregate amount up to the Commitment (as defined in the Credit Agreement) amount. The Commitment amount for the BoA Credit Facility was $200.0 million as of the closing date of the Credit Agreement, increased to $400.0 million on the one-month anniversary of the closing date, further increased to $475.0 million on October 12, 2020, and further increased to $725 million on September 29, 2021. The Borrowers’ ability to draw under the BoA Credit Facility is scheduled to terminate on February 11, 2025. All amounts outstanding under the BoA Credit Facility are required to be repaid by February 18, 2025. As the Company raises additional capital, we may enter into additional credit agreements to expand our borrowing capacity. F- 35 Debt obligations under the BoA Credit Facility consisted of the following as of December 31, 2022: December 31, 2022 Aggregate Principal Committed Outstanding Principal Amount Available (1) Net Carrying Value (2) BoA Credit Facility $ 725,000,000 $ 514,500,000 $ 210,500,000 $ 513,726,164 Total debt $ 725,000,000 $ 514,500,000 $ 210,500,000 $ 513,726,164 (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 Aggregate Principal Committed Outstanding Principal Amount Available (1) Net Carrying Value (2) BoA Credit Facility $ 725,000,000 $ 552,000,000 $ 173,000,000 $ 550,262,297 Total debt $ 725,000,000 $ 552,000,000 $ 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 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 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 December 31, 2022 2021 Interest expense $ 17,356,543 $ 6,711,315 Amortization of debt issuance costs 635,331 550,610 Total interest expense $ 17,991,874 $ 7,261,925 Average interest rate 2.97 % 1.40 % F- 36 PS BDC Funding has pledged all of its assets to BofA N.A., in its capacity as Administrative Agent, to secure its obligations under the BoA Credit Facility. Both the Company and PS BDC Funding have made customary representations and warranties and are required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities. Borrowing under the BoA Credit Facility is subject to the leverage restrictions contained in the 1940 Act and PS BDC Funding complies with 1940 Act provisions relating to affiliated transactions and custody. The custodian of the assets pledged to BofA N.A. pursuant to the BoA Credit Facility is U.S. Bank National Administration (“US Bank”). The obligations under the Credit Agreement may be accelerated upon the occurrence of an event of default under the Credit Agreement, including in the event of a change of control of PS BDC Funding or if the Investment Advisor ceases to serve as investment adviser to the Company. Wells Fargo Credit Facility On December 18, 2020, the Company, through a special purpose wholly-owned subsidiary, Palmer Square BDC Funding II LLC (“PS BDC Funding II” and together with the Company, the “WF Borrowers”) entered into a Loan and Security Agreement (the “Loan Agreement”) with certain financial institutions as lenders (“WF Lenders”), 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 18, 2023. 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 Aggregate Principal Committed Outstanding Principal Amount Available (1) Net Carrying Value (2) WF Credit Facility $ 150,000,000 $ 126,750,000 $ 23,250,000 $ 127,583,253 Total debt $ 150,000,000 $ 126,750,000 $ 23,250,000 $ 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 Outstanding Principal Amount Available (1) Net Carrying Value (2) WF Credit Facility $ 150,000,000 $ 100,000,000 $ 50,000,000 $ 99,648,200 Total debt $ 150,000,000 $ 100,000,000 $ 50,000,000 $ 99,648,200 (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. F- 37 Average debt outstanding under 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 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 December 31, 2022 2021 Interest expense $ 5,107,383 $ 996,077 Amortization of debt issuance costs 352,912 358,659 Total interest expense $ 5,460,295 $ 1,354,736 Average interest rate 4.03 % 2.18 % PS BDC Funding II has pledged all of its assets to U.S. Bank, in its capacity as Collateral Agent, to secure its obligations under the WF Credit Facility and U.S. Bank acts as the custodian of such assets. Both the Company and PS BDC Funding II have made customary representations and warranties and are required to comply with various covenants, reporting requirements, and other customary requirements for similar credit facilities. Borrowing under the WF Credit Facility is subject to the leverage restrictions contained in the 1940 Act and PS BDC Funding II complies with 1940 Act provisions relating to affiliated transactions and custody. The obligations under the Loan Agreement may be accelerated upon the occurrence of an event of default under the Loan Agreement, including in the event of a change of control of PS BDC Funding II, if the Investment Advisor ceases to serve as investment adviser to the Company, or if Palmer Square or its affiliates cease to directly or indirectly own a majority of the membership interests of the Investment Advisor. F- 38 Note 7. Share Transactions Offering Proceeds 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. Distribution Reinvestment Plan The Company has adopted a dividend reinvestment plan that will provide for reinvestment of its dividends and other distributions on behalf of the Company’s stockholders, unless a stockholder elects to receive cash. As a result, if the Company’s Board authorizes, and the Company declares, a cash dividend or other distribution, then stockholders who do not “opt out” of the Company’s dividend reinvestment plan will have their cash dividends and distributions automatically reinvested in additional shares of the Company’s common stock, rather than receiving cash dividends and distributions. Prior to a Listing, the Board will use newly-issued shares of the Company’s common stock to implement the dividend reinvestment plan. The number of shares of common stock to be issued to a participant prior to a Listing would be equal to the quotient determined by dividing the cash value of the dividend payable to such stockholder by the net asset value per share as of the date such dividend was declared. After a Listing, the Board intends to primarily use newly-issued shares to implement the dividend reinvestment plan, whether or not the shares are trading at a price per share at, below or above net asset value. However, the Board reserves the right to purchase shares in the open market in connection with the implementation of the dividend reinvestment plan. The Board will examine the full facts and circumstances of each such dividend to determine the approach (i.e., to use newly issued shares or effectuate open market purchases to implement the dividend reinvestment plan) that is in the best interests of stockholders taking into account the Board’s fiduciary duties to stockholders, including by weighing the potential dilution in connection with such issuance to be incurred by the Company’s stockholders against the Company’s need and usage of reinvested funds. The number of newly issued shares to be issued to a participant would be determined by dividing the total dollar amount of the dividend payable to such stockholder by the market price per share of the Company’s common stock at the close of regular trading on a national securities exchange on the dividend payment 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 elect to receive an entire distribution in cash by notifying US Bank in writing so that such notice is received by the plan administrator no later than the record date for distributions to stockholders. The plan administrator will set up an account for shares acquired through the plan for each stockholder who has not elected to receive dividends or other distributions in cash and hold such shares in noncertificated form. There will be no brokerage charges or other charges to stockholders who participate in the plan. The plan administrator’s fees will be paid by the Company. F- 39 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. Participants may terminate their accounts under the plan by so notifying the plan administrator by submitting a letter of instruction terminating the participant’s account under the plan to US Bank. The plan may be terminated by the Company upon notice in writing mailed to each participant at least 30 days prior to any record date for the payment of any dividend by the Company. If participants withdraw from the plan or the plan is terminated, the plan administrator will cause the shares held for the participant under the plan to be delivered to the participant. If an investor holds common stock with a brokerage firm that does not participate in the plan, such investor will not be able to participate in the plan and any dividend reinvestment may be affected on different terms than those described above. Note 8. Commitments and Contingencies As of December 31, 2022 and December 31, 2021, the Company had an aggregate of $ 2.6 million and $ 11.3 million, respectively, of unfunded commitments to provide debt financing to its portfolio companies. As of each of December 31, 2022 and December 31, 2021, there were no capital calls or draw requests made by the portfolio companies to fund these commitments. Such commitments are generally up to the Company’s discretion to approve or are subject to the satisfaction of certain financial and nonfinancial covenants and involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Company’s consolidated statements of assets and liabilities and are not reflected in the Company’s consolidated statement of assets and liabilities. A summary of the composition of the unfunded commitments as of December 31, 2022 is shown in the table below: Expiration Date (1) As of December 31, 2022 ARC Falcon I Inc. 3/30/2023 $ 636,943 Vocus Group 6/18/2023 2,000,000 Total unfunded commitments $ 2,636,943 (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: Expiration Date (1) As of December 31, 2021 ARC Falcon I Inc. 3/30/2023 $ 636,943 Aveanna Healthcare LLC 7/15/2023 754,717 Culligan Water 1/30/2023 706,667 Medical Solutions L.L.C. 11/2/2023 800,000 National Mentor Holdings, Inc. 3/2/2022 430,398 PT Intermediate Holdings III LLC 4/7/2022 2,140,000 RSC Acquisition, Inc. 11/12/2023 3,237,952 Sovos Compliance, LLC 8/12/2023 589,041 Vocus Group 6/18/2023 2,000,000 Total unfunded commitments $ 11,295,718 (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. F- 40 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, 2022, management is not aware of any pending or threatened litigation. Note 9. 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. Other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. As of each of December 31, 2022 and as of December 31, 2021, there were no dilutive shares. The following table sets forth 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 December 31, 2022 2021 Net increase (decrease) in net assets resulting from operations $ ( 74,482,335 ) $ 19,059,718 Weighted average shares of common stock outstanding - basic and diluted 23,130,666 15,494,614 Earnings (loss) per share of common stock - basic and diluted $ ( 3.22 ) $ 1.23 Note 10. Income Taxes 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 2022). Depending on the level of taxable income earned in a tax year, the Company may choose to carry forward taxable income in excess of current year distributions into the next tax year and pay a 4 % excise tax on such income, to the extent required. The permanent differences for tax purposes from distributable earnings to additional paid in capital were reclassified for tax purposes for the tax years ended December 31, 2022 and December 31, 2021. These reclassifications have no impact on net assets. Year Ended December 31, 2022 2021 Increase (decrease) in distributable earnings $ - $ - Increase (decrease) in capital in excess of par value $ - $ - F- 41 The following reconciles net 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, 2022 2021 Net increase (decrease) in net assets resulting from operations $ ( 74,482,335 ) $ 19,059,718 Net change in unrealized appreciation (depreciation) from investments 107,432,980 8,527,786 Other book tax differences 8,109,784 ( 897,245 ) Taxable income before deductions for distributions $ 41,060,429 $ 26,690,259 Year Ended December 31, 2022 2021 Distributions paid from: Ordinary income $ 43,482,016 $ 22,163,852 Capital gains 573,101 3,788,641 Return of Capital - - Total $ 44,055,117 $ 25,952,493 For the years ended December 31, 2022 and December 31, 2021, the components of accumulated earnings on a tax basis were as follows: Year Ended December 31, 2022 Year Ended December 31, 2021 Undistributed net investment income (loss) $ - $ 1,834,053 Undistributed capital gains - 513,796 Other accumulated gain (loss) ( 7,575,518 ) ( 101,573 ) Net unrealized appreciation (depreciation) ( 102,926,664 ) 5,788,994 Total $ ( 110,502,182 ) $ 8,035,270 Capital losses can be carried forward indefinitely to offset future capital gains. As of December 31, 2022 and December 31, 2021, the Company had no capital loss carryforwards. As of December 31, 2022 and December 31, 2021, 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, December 31, 2022 2021 Tax cost 1,120,121,398 1,188,452,438 Gross unrealized appreciation 1,008,264 9,331,858 Gross unrealized depreciation ( 103,934,928 ) ( 3,542,964 ) Net unrealized appreciation/(depreciation) on investments $ ( 102,926,664 ) $ 5,788,994 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, 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 jurisdiction as U.S. Federal. 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. F- 42 Note 11. 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 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 December 31, For the Period January 23, 2020 (Commencement of Operations) through December 31, 2022 2021 2020 Per Common Share Operating Performance Net Asset Value, Beginning of Period $ 20.06 $ 20.15 $ 20.00 Results of Operations: Net Investment Income (1) 1.78 1.47 1.32 Net Realized and Unrealized Gain (Loss) on Investments (1)(4) ( 5.00 ) ( 0.18 ) ( 0.19 ) Net Increase (Decrease) in Net Assets Resulting from Operations ( 3.22 ) 1.29 1.13 Distributions to Common Stockholders Distributions from Net Investment Income ( 1.85 ) ( 1.01 ) ( 0.98 ) Distributions from Realized Gains ( 0.03 ) ( 0.37 ) - Net Decrease in Net Assets Resulting from Distributions ( 1.88 ) ( 1.38 ) ( 0.98 ) Net Asset Value, End of Period $ 14.96 $ 20.06 $ 20.15 Shares Outstanding, End of Period 24,286,628 22,570,331 12,562,805 Ratio/Supplemental Data Net assets, end of period $ 363,443,482 $ 452,797,588 $ 253,144,971 Weighted-average shares outstanding 23,130,666 15,494,614 11,156,932 Total Return (3) ( 16.51 )% 8.10 % 4.29 % Portfolio turnover 27 % 53 % 63 % Ratio of operating expenses to average net assets without waiver (2) 8.28 % 5.54 % 5.69 % Ratio of operating expenses to average net assets with waiver (2) 8.03 % 5.29 % 5.44 % Ratio of net investment income (loss) to average net assets without waiver (2) 9.61 % 6.92 % 7.18 % Ratio of net investment income (loss) to average net assets with waiver (2) 9.86 % 7.17 % 7.43 % (1) The per common share data was derived by using weighted average shares outstanding. (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. (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. F- 43 Note 12. Selected Quarterly Financial Data (Unaudited) The following are the quarterly 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 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Investment income $ 14,254,960 $ 16,497,241 $ 19,973,554 $ 23,774,145 Net expenses 5,584,387 6,947,708 9,521,115 11,365,858 Net investment income (loss) 8,670,573 9,549,533 10,452,439 12,408,287 Net realized gain (loss) on investments, and foreign currency transactions ( 369,870 ) ( 486,754 ) ( 496,697 ) ( 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 ) $ 1,036,255 Net asset value per share as of the end of the quarter $ 19.91 $ 16.71 $ 16.00 $ 14.96 For the Three Months Ended March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 Investment income $ 9,674,876 $ 7,869,228 $ 8,875,949 $ 13,265,600 Net expenses 3,637,128 3,673,024 3,966,032 5,575,228 Net investment income (loss) 6,037,748 4,196,204 4,909,917 7,690,372 Net realized gain (loss) on investments, and foreign currency transactions 1,132,657 2,712,837 489,555 418,214 Net unrealized gain (loss) on investments, foreign currency translations, and foreign currency contracts ( 1,826,413 ) ( 1,871,880 ) ( 673,345 ) ( 4,156,148 ) Increase (decrease) in net assets resulting from operations $ 5,343,992 $ 5,037,161 $ 4,726,127 $ 3,952,438 Net asset value per share as of the end of the quarter $ 20.57 $ 20.65 $ 20.70 $ 20.06 Note 13. Subsequent Events The Company’s management has evaluated subsequent events through the date of issuance of the consolidated financial statements included herein. There have been no subsequent events that require recognition or disclosure in these consolidated financial statements except for the following: Issuance of Common Stock 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 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 became 1. 40%. Distributions On December 30, 2022, the 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. F- 44 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not Applicable.