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, 2023 and 2022 F-3 Consolidated Statement of Operations for the years ended December 31, 2023, 2022, and 2021 F-4 Consolidated Statement of Changes in Net Assets for the years ended December 31, 2023, 2022, and 2021 F-5 Consolidated Statement of Cash Flows for the years ended December 31, 2023, 2022, and 2021 F-6 Consolidated Schedule of Investments as of December 31, 2023 and 2022 F-7 – F-28 Notes to Consolidated Financial Statements F-29 – F-47 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, 2023 and 2022, and the related consolidated statements of operations, changes in net assets and cash flows for each of the three years in the period ended December 31, 2023, 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, 2023 and 2022, and the results of its operations, changes in its net assets and its cash flows for each of the three years in the period ended December 31, 2023 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, 2023 and 2022 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 February 28, 2024 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, 2023 December 31, 2022 Assets: Non-controlled, non-affiliated investments, at fair value (amortized cost of $ 1,159,135,422 and $ 1,120,099,935 , respectively) $ 1,108,810,753 $ 1,017,211,732 Cash and cash equivalents 2,117,109 1,650,801 Receivables: Receivable for sales of investments 97,141 31,014,356 Receivable for paydowns of investments 344,509 136,119 Due from investment adviser 1,718,960 234,102 Dividend receivable 301,637 141,997 Interest receivable 8,394,509 6,465,594 Prepaid expenses and other assets 30,100 598,327 Total Assets $ 1,121,814,718 $ 1,057,453,028 Liabilities: Credit facilities, net (Note 6) $ 641,828,805 $ 641,309,417 Payables: Payable for investments purchased 14,710,524 42,750,748 Distributions payable - 6,941,066 Management fee payable 2,252,075 1,872,815 Accrued other general and administrative expenses 1,067,921 1,135,500 Total Liabilities $ 659,859,325 $ 694,009,546 Commitments and contingencies (Note 8) Net Assets: Common Shares, $ 0.001 par value; 450,000,000 shares authorized; 27,102,794 and 24,286,628 as of December 31, 2023 and December 31, 2022, respectively issued and outstanding $ 27,103 $ 24,287 Additional paid-in capital 520,663,106 473,921,377 Total distributable earnings (accumulated deficit) ( 58,734,816 ) ( 110,502,182 ) Total Net Assets $ 461,955,393 $ 363,443,482 Total Liabilities and Net Assets $ 1,121,814,718 $ 1,057,453,028 Net Asset Value Per Common Share $ 17.04 $ 14.96 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 2023 2022 2021 Income: Investment income from non-controlled, non-affiliated investments: Interest income $ 107,739,382 $ 73,705,450 $ 38,897,216 Dividend income 4,066,745 610,203 9,597 Other income 417,480 184,247 778,840 Total investment income from non-controlled, non-affiliated investments 112,223,607 74,499,900 39,685,653 Total Investment Income 112,223,607 74,499,900 39,685,653 Expenses: Interest expense 44,483,152 23,452,169 8,616,661 Management fees 8,408,074 8,328,713 6,369,583 Professional fees 792,645 741,961 758,435 Directors fees 75,000 75,000 75,000 Other general and administrative expenses 1,528,225 1,862,314 1,827,931 Total Expenses 55,287,096 34,460,157 17,647,610 Less: Management fee waiver (Note 3) ( 1,051,009 ) ( 1,041,089 ) ( 796,198 ) Net expenses 54,236,087 33,419,068 16,851,412 Net Investment Income (Loss) 57,987,520 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 ( 2,715,413 ) ( 8,130,187 ) 4,753,263 Total net realized gains (losses) ( 2,715,413 ) ( 8,130,187 ) 4,753,263 Net change in unrealized gains (losses): Non-controlled, non-affiliated investments 52,563,544 ( 107,432,980 ) ( 8,527,786 ) Total net change in unrealized gains (losses) 52,563,544 ( 107,432,980 ) ( 8,527,786 ) Total realized and unrealized gains (losses) 49,848,131 ( 115,563,167 ) ( 3,774,523 ) Net Increase (Decrease) in Net Assets Resulting from Operations $ 107,835,651 ( 74,482,335 ) 19,059,718 Per Common Share Data: Basic and diluted net investment income per common share $ 2.26 1.78 1.47 Basic and diluted net increase (decrease) in net assets resulting from operations $ 4.20 ( 3.22 ) 1.23 Weighted Average Common Shares Outstanding - Basic and Diluted 25,700,603 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 2023 2022 2021 Increase (Decrease) in Net Assets Resulting from Operations: Net investment income (loss) $ 57,987,520 $ 41,080,832 $ 22,834,241 Net realized gains (losses) on investments and foreign currency transactions ( 2,715,413 ) ( 8,130,187 ) 4,753,263 Net change in unrealized gains (losses) on investments, foreign currency translations, and foreign currency exchange contracts 52,563,544 ( 107,432,980 ) ( 8,527,786 ) Net Increase (Decrease) in Net Assets Resulting from Operations 107,835,651 ( 74,482,335 ) 19,059,718 Decrease in Net Assets Resulting from Stockholder Distributions Dividends and distributions to stockholders ( 56,068,285 ) ( 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 ( 56,068,285 ) ( 44,055,117 ) ( 25,952,493 ) Increase in Net Assets Resulting from Capital Share Transactions Issuance of common shares 17,654,225 5,023,801 188,861,571 Reinvestment of distributions 29,090,320 24,159,545 17,683,821 Net Increase in Net Assets Resulting from Capital Share Transactions 46,744,545 29,183,346 206,545,392 Total Increase (Decrease) in Net Assets 98,511,911 ( 89,354,106 ) 199,652,617 Net Assets, Beginning of Period 363,443,482 452,797,588 253,144,971 Net Assets, End of Period $ 461,955,393 $ 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 2023 2022 2021 Cash Flows from Operating Activities: Net increase (decrease) in net assets resulting from operations $ 107,835,651 $ ( 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 2,715,413 8,130,187 ( 4,753,263 ) Net change in unrealized (gains)/losses on investments ( 52,563,544 ) 107,432,980 8,527,786 Net accretion of discount on investments ( 1,851,339 ) ( 1,717,453 ) ( 286,282 ) Purchases of short-term investments ( 578,708,751 ) ( 374,447,403 ) ( 662,604,311 ) Purchases of portfolio investments ( 273,733,424 ) ( 278,951,054 ) ( 926,351,937 ) Proceeds from sale of short-term investments 565,459,502 402,242,952 637,566,416 Proceeds from sale of portfolio investments 247,083,117 314,355,643 406,800,208 Amortization of deferred financing cost 1,005,799 988,243 909,269 Increase/(decrease) in operating assets and liabilities: (Increase)/decrease in receivable for sales of investments 30,917,215 ( 13,620,479 ) ( 5,631,875 ) (Increase)/decrease in interest and dividends receivable ( 2,088,555 ) ( 2,770,690 ) ( 2,224,325 ) (Increase)/decrease in due from investment adviser ( 1,484,858 ) 46,638 ( 125,387 ) (Increase)/decrease in receivable for paydowns of investments ( 208,390 ) 91,429 ( 106,157 ) (Increase)/decrease in prepaid expenses and other assets 568,233 ( 402,331 ) ( 195,996 ) Increase/(decrease) in interest payable on credit facilities 2,326,070 1,160,678 - Increase/(decrease) in payable for investments purchased ( 28,040,224 ) ( 61,528,210 ) 88,725,508 Increase/(decrease) in management fees payable 379,260 ( 373,103 ) 1,003,097 Increase/(decrease) in directors fee payable - ( 5,000 ) - Increase/(decrease) in accrued other general and administrative expenses ( 67,579 ) ( 1,038,008 ) 1,676,221 Net cash provided by (used in) operating activities 19,543,596 25,112,684 ( 438,011,310 ) Cash Flows from Financing Activities: Borrowings on the credit facilities 27,500,000 81,250,000 256,629,745 Payments on the credit facilities ( 28,500,000 ) ( 92,000,000 ) - Payments of debt issuance costs ( 1,812,482 ) - ( 780,621 ) Distributions paid in cash ( 33,919,031 ) ( 18,829,187 ) ( 6,288,461 ) Proceeds from issuance of common shares, net of change in subscriptions receivable of $ - 17,654,225 5,023,801 188,861,571 Net cash provided by (used in) financing activities ( 19,077,288 ) ( 24,555,386 ) 438,422,234 Net increase/(decrease) in cash and cash equivalents 466,308 557,298 410,924 Cash and cash equivalents, beginning of period 1,650,801 1,093,503 682,579 Cash and cash equivalents, end of period $ 2,117,109 $ 1,650,801 1,093,503 Supplemental and Non-Cash Information: Interest paid during the period $ 42,157,082 $ 22,291,491 $ 7,313,093 Distributions declared during the period $ 56,068,285 $ 44,055,117 $ 25,952,493 Reinvestment of distributions during the period $ 29,090,320 $ 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, 2023 Portfolio Company (3) Industry Interest Rate Maturity Date Principal/ Par Amortized Cost (1)(5) Fair Value Percentage of Net Assets Debt Investments First Lien Senior Secured (2) 888 Holdings PLC (4)(6) Hotels, Restaurants and Leisure 10.82% (S + CSA + 5.25%) 7/8/2028 $ 3,391,190 $ 3,170,705 $ 3,301,560 0.6 % AAdvantage Loyalty IP Ltd. (4)(6) Insurance 10.43% (S + CSA + 4.75%) 4/20/2028 3,375,000 3,349,525 3,472,300 0.7 % AccentCare, Inc. (6) Healthcare Providers and Services 9.65% (S + CSA + 4.00%) 6/22/2026 5,909,529 5,910,503 4,648,848 0.9 % Accession Risk Management Group, Inc. (9) Insurance 11.35% (S + 6.00%) 10/30/2029 167,153 140,244 154,018 0.0 % Accession Risk Management Group, Inc. Insurance 11.41% (S + CSA + 6.00%) 10/30/2029 375,000 375,000 373,125 0.1 % Accession Risk Management Group, Inc. Insurance 11.02% (S + CSA + 5.50%) 11/1/2029 798,244 778,995 798,244 0.2 % Accession Risk Management Group, Inc. (7) Insurance 11.01% (S + CSA + 5.50%) 11/1/2029 6,129,372 6,094,817 6,129,372 1.2 % Acrisure, LLC (6) Insurance 9.90% (L + 4.25%) 2/15/2027 4,949,000 4,925,187 4,970,652 1.0 % Acrisure, LLC (6) Insurance 9.15% (L + 3.50%) 2/12/2027 5,782,273 5,774,311 5,780,741 1.2 % AI Aqua Merger Sub, Inc., (6)(7) Food Products 9.09% (S + 3.75%) 6/16/2028 7,584,500 7,588,317 7,599,745 1.6 % Aimbridge Acquisition Co., Inc. (6) Hotels, Restaurants and Leisure 9.22% (S + CSA + 3.75%) 2/2/2026 4,885,204 4,823,681 4,565,932 1.0 % Alliant Holdings Intermediate LLC (6) Insurance 8.86% (S + 3.50%) 11/6/2030 2,378,637 2,377,608 2,392,172 0.5 % Allied Universal Holdco LLC (6) Professional Services 9.21% (S + CSA + 3.75%) 4/7/2028 6,842,500 6,836,638 6,824,778 1.5 % Amentum Government Services Holdings LLC (6) Aerospace and Defense 9.36% (S + 4.00%) 2/15/2029 5,910,000 5,890,084 5,923,298 1.3 % American Rock Salt Company LLC (6) Metals and Mining 9.47% (S + CSA + 4.00%) 6/9/2028 5,854,900 5,848,790 5,551,177 1.2 % Amynta Agency Borrower, Inc. (6) Insurance 9.61% (S + 4.25%) 2/28/2028 6,965,044 6,784,256 6,982,456 1.5 % AP Gaming I, LLC (4)(6) Hotels, Restaurants and Leisure 9.46% (S + CSA + 4.00%) 2/15/2029 8,601,812 8,501,084 8,647,488 1.9 % Apollo Finco BV (4) Household Durables 8.74% (E + 4.85%) 10/2/2028 1,000,000 789,613 810,000 0.2 % Aptean Inc (6)(7) Software 9.71% (S + CSA + 4.25%) 4/23/2026 8,721,003 8,706,221 8,709,907 1.9 % Aptean Inc (7) Software 10.61% (S + 5.25%) 12/14/2030 4,711,640 4,664,524 4,664,524 1.0 % AQA Acquisition Holding, Inc. (6) Software 9.89% (S + CSA + 4.25%) 3/3/2028 8,345,432 8,250,166 8,349,604 1.8 % Aramsco, Inc. (7) Machinery 10.10% (S + 4.75%) 10/10/2030 4,087,129 3,991,632 4,091,137 0.9 % ARC Falcon I Inc. (6) Chemicals 8.96% (S + CSA + 3.50%) 8/31/2028 4,906,369 4,889,855 4,866,505 1.1 % Aretec Group, Inc. (6) Diversified Financial Services 9.96% (S + CSA + 4.50%) 8/9/2030 4,987,469 4,838,877 4,990,860 1.1 % F- 7 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2023 Portfolio Company (3) Industry Interest Rate Maturity Date Principal/ Par Amortized Cost (1)(5) Fair Value Percentage of Net Assets Ascend Learning, LLC (6) Professional Services 8.96% (S + CSA + 3.50%) 11/18/2028 7,350,000 7,323,339 7,235,671 1.6 % Aspire Bakeries Holdings, LLC (6) Food Products 9.61% (S + 4.25%) 12/13/2030 3,000,000 2,970,012 3,015,000 0.7 % AssuredPartners, Inc. (6) Insurance 8.97% (S + CSA + 3.50%) 2/12/2027 4,371,635 4,374,552 4,388,028 0.9 % AssuredPartners, Inc. (6) Insurance 8.86% (S + 3.50%) 2/12/2027 1,965,000 1,956,461 1,971,878 0.4 % Athletico Management, LLC (6) Healthcare Providers and Services 9.75% (S + CSA + 4.25%) 2/2/2029 7,116,625 7,090,060 6,015,790 1.3 % Autokiniton US Holdings, Inc. (6)(7) Auto Components 9.97% (S + CSA + 4.50%) 3/27/2028 8,051,692 8,056,553 8,092,675 1.8 % Aveanna Healthcare LLC (4)(6) Healthcare Providers and Services 9.24% (S + CSA + 3.75%) 6/30/2028 5,096,375 5,061,286 4,757,848 1.0 % Barracuda Networks, Inc. (6) Software 9.88% (S + 4.50%) 8/15/2029 7,425,000 7,238,805 7,269,558 1.6 % B’laster Holdings, LLC (7) Chemicals 10.94% (S + 5.50%) 10/16/2029 4,433,334 4,342,011 4,362,774 0.9 % Boxer Parent Company, Inc. (6) Software 9.61% (S + 4.25%) 12/2/2028 5,000,000 4,950,000 5,043,125 1.1 % Castle US Holding Corporation (7) Professional Services 9.40% (S + CSA + 3.75%) 1/27/2027 1,957,895 1,951,797 1,384,163 0.3 % Castle US Holding Corporation (6)(7) Professional Services 9.65% (S + CSA + 4.00%) 1/31/2027 5,986,178 5,943,311 4,184,338 0.9 % CCI Buyer, Inc. (6)(7) Wireless Telecommunication Services 9.35% (S + 4.00%) 12/17/2027 6,726,117 6,720,617 6,716,499 1.5 % CCS-CMGC Holdings, Inc. (6) Healthcare Providers and Services 11.32% (S + CSA + 5.50%) 10/1/2025 5,299,922 5,265,722 4,499,131 1.0 % CDK Global (6) Software 9.35% (S + 4.00%) 7/6/2029 3,970,000 3,857,969 3,997,075 0.9 % Congruex Group LLC (7) Construction and Engineering 11.28% (S + CSA + 5.75%) 4/28/2029 6,156,250 6,030,595 5,879,219 1.3 % Connectwise LLC (6) IT Services 8.97% (S + CSA + 3.50%) 9/29/2028 7,840,000 7,830,094 7,840,000 1.7 % Consolidated Communications, Inc. (4)(6) Diversified Telecommunication Services 8.97% (S + CSA + 3.50%) 10/2/2027 4,428,009 4,139,814 4,133,458 0.9 % ConvergeOne Holdings Corp. (6)(7)(2) IT Services 12.50% (P + 4.00%) 1/4/2026 9,736,877 9,630,247 5,537,849 1.2 % Corelogic, Inc. (6) Internet Software and Services 8.97% (S + CSA + 3.50%) 4/14/2028 7,820,000 7,813,343 7,631,030 1.7 % CP Atlas Buyer, Inc (6) Building Products 9.21% (S + CSA + 3.75%) 11/23/2027 6,826,201 6,749,038 6,733,024 1.5 % CPM Holdings, Inc. (6) Machinery 9.84% (S + 4.50%) 9/27/2028 4,050,000 3,991,878 4,068,569 0.9 % Creation Technologies, Inc. (4)(7) Electronic Equipment, Instruments and Components 11.18% (S + CSA + 5.50%) 9/14/2028 4,925,000 4,870,143 4,801,875 1.0 % Crown Subsea Communications Holding, Inc. (6) Construction and Engineering 10.71% (S + CSA + 5.25%) 4/27/2027 1,828,125 1,797,330 1,840,693 0.4 % F- 8 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2023 Portfolio Company (3) Industry Interest Rate Maturity Date Principal/ Par Amortized Cost (1)(5) Fair Value Percentage of Net Assets Curia Global, Inc. (6) Healthcare Providers and Services 9.23% (S + CSA + 3.75%) 8/30/2026 4,800,817 4,790,688 4,334,249 0.9 % Deerfield Dakota Holding, LLC (6) Diversified Financial Services 9.10% (S + 3.75%) 2/25/2027 4,825,000 4,785,512 4,788,813 1.0 % Delta Topco, Inc. (6) IT Services 9.12% (S + 3.75%) 10/29/2027 6,832,331 6,829,206 6,837,455 1.5 % DIRECTV Financing, LLC (6) Media 10.65% (S + CSA + 5.00%) 8/2/2027 4,785,000 4,758,070 4,793,685 1.0 % Dotdash Meredith, Inc. (6) Media 9.44% (S + CSA + 4.00%) 11/23/2028 9,800,000 9,764,648 9,751,000 2.1 % EAB Global, Inc. (6) Professional Services 8.97% (S + CSA + 3.50%) 6/28/2028 1,773,812 1,767,846 1,773,812 0.4 % ECI Software Solutions, Inc. (6) Software 9.36% (S + CSA + 3.75%) 9/30/2027 2,835,691 2,828,591 2,840,341 0.6 % ECL Entertainment, LLC (7) Hotels, Restaurants and Leisure 10.11% (S + 4.75%) 9/3/2030 4,987,500 4,891,150 5,007,450 1.1 % EFS Cogen Holdings I, LLC (6)(7) Independent Power and Renewable Electricity Producers 9.11% (S + 3.50%) 10/29/2027 7,276,177 7,281,384 7,275,740 1.6 % Endurance International Group, Inc., The (6) Professional Services 9.42% (S + CSA + 3.50%) 2/10/2028 4,638,599 4,584,186 4,556,705 1.0 % EnergySolutions, LLC (6) Commercial Services and Supplies 9.36% (S + 4.00%) 9/20/2030 2,992,500 2,956,004 2,996,241 0.6 % Enverus Holdings, Inc. (7) Software 10.86% (S + 5.50%) 12/22/2029 6,216,216 6,113,561 6,113,547 1.3 % EP Purchaser, LLC (6) Professional Services 10.11% (S + CSA + 4.50%) 11/6/2028 4,974,929 4,913,751 4,922,070 1.1 % EPIC Y-Grade Services, LP (6) Energy Equipment and Services 11.49% (S + CSA + 6.00%) 6/30/2027 7,000,000 6,728,726 6,856,080 1.5 % Fertitta Entertainment, LLC (6) Hotels, Restaurants and Leisure 9.36% (S + 4.00%) 1/29/2029 7,368,750 7,344,237 7,381,424 1.6 % Filtration Group Corp. (6) Industrial Conglomerates 9.72% (S + CSA + 4.25%) 10/23/2028 3,970,000 3,932,675 3,992,331 0.9 % Flexera Software LLC (6)(7) Software 9.22% (S + CSA + 3.75%) 1/26/2028 8,710,472 8,692,911 8,716,613 1.9 % Fugue Finance, LLC (4)(6) Diversified Consumer Services 9.39% (S + 4.00%) 1/31/2028 3,945,188 3,877,785 3,968,306 0.9 % Gainwell Acquisition Corp. (6) Healthcare Providers and Services 9.45% (S + CSA + 4.00%) 10/1/2027 8,787,797 8,657,860 8,568,102 1.9 % Garda World Security Corporation (4)(6) Diversified Consumer Services 9.62% (S + 4.25%) 2/12/2029 7,919,799 7,690,415 7,941,698 1.7 % Generation Bridge Northeast, LLC (6) Independent Power and Renewable Electricity Producers 9.61% (S + 4.25%) 8/22/2029 4,405,585 4,362,895 4,428,538 1.0 % Genuine Financial Holdings LLC (4)(6) Professional Services 9.36% (S + 4.00%) 9/20/2030 3,990,000 3,932,484 3,986,429 0.9 % F- 9 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2023 Portfolio Company (3) Industry Interest Rate Maturity Date Principal/ Par Amortized Cost (1)(5) Fair Value Percentage of Net Assets Getty Images, Inc. (4)(6)(7) Media 9.95% (S + CSA + 4.50%) 2/13/2026 7,744,017 7,745,054 7,789,513 1.7 % Global Medical Response, Inc. (6) Healthcare Providers and Services 9.93% (S + CSA + 4.25%) 9/24/2025 9,003,023 8,974,743 7,097,398 1.5 % Gloves Buyer, Inc. Machinery 10.47% (S + CSA + 5.00%) 12/29/2027 1,995,000 1,929,386 1,970,063 0.4 % Grab Holdings Inc (4)(6) IT Services 9.97% (S + CSA + 4.50%) 2/27/2026 2,180,433 2,192,657 2,192,698 0.5 % Great Outdoors Group, LLC (6) Specialty Retail 9.22% (S + CSA + 3.75%) 3/6/2028 6,936,707 6,914,945 6,945,377 1.5 % Grinding Media Inc. (7) Metals and Mining 9.68% (S + CSA + 4.00%) 9/21/2028 4,887,500 4,870,648 4,887,500 1.1 % HAH Group Holding Company LLC (6) Healthcare Providers and Services 10.46% (S + CSA + 5.00%) 10/22/2027 703,731 689,126 699,776 0.2 % HAH Group Holding Company LLC (6) Healthcare Providers and Services 10.46% (S + CSA + 5.00%) 10/20/2027 5,561,417 5,445,970 5,530,162 1.2 % Hamilton Projects Acquiror, LLC (6)(7) Independent Power and Renewable Electricity Producers 9.97% (S + CSA + 4.50%) 6/11/2027 7,664,093 7,634,935 7,709,004 1.7 % Helios Software Holdings, Inc. (4)(6) Diversified Financial Services 9.70% (S + CSA + 4.25%) 7/18/2030 2,500,000 2,403,593 2,501,825 0.5 % Help/Systems Holdings, Inc. (6) Software 9.48% (S + CSA + 4.00%) 11/19/2026 6,778,876 6,751,274 6,442,373 1.4 % HUB International Ltd. Insurance 9.66% (S + 4.25%) 6/20/2030 4,089,750 4,050,095 4,112,469 0.9 % Idera, Inc. (6) IT Services 9.28% (S + CSA + 3.75%) 3/2/2028 9,699,709 9,669,409 9,669,397 2.1 % IMA Financial Group, Inc. (7) Insurance 9.22% (S + CSA + 3.75%) 10/16/2028 4,900,000 4,882,618 4,906,125 1.1 % Imagefirst Holdings, LLC (7) Healthcare Providers and Services 10.72% (S + CSA + 5.00%) 4/27/2028 4,145,833 4,033,403 4,145,833 0.9 % Indicor, LLC (6) Software 9.35% (S + 4.00%) 11/22/2029 3,970,050 3,844,297 3,983,707 0.9 % Indy US Holdco, LLC (6) Media 11.61% (S + 6.25%) 3/6/2028 6,567,000 5,900,941 6,439,764 1.4 % Infinite Bidco, LLC (6) Electronic Equipment, Instruments and Components 9.39% (S + CSA + 3.75%) 3/2/2028 6,345,825 6,307,674 6,203,044 1.3 % Infinite Bidco, LLC Electronic Equipment, Instruments and Components 11.88% (S + CSA + 6.25%) 3/2/2028 2,970,000 2,963,048 2,940,300 0.6 % F- 10 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2023 Portfolio Company (3) Industry Interest Rate Maturity Date Principal/ Par Amortized Cost (1)(5) Fair Value Percentage of Net Assets Inmar, Inc. (6)(7) Professional Services 10.85% (S + 5.50%) 5/1/2026 7,782,563 7,537,171 7,704,737 1.7 % Invenergy Thermal Operating I LLC (7) Independent Power and Renewable Electricity Producers 9.92% (S + CSA + 4.50%) 8/14/2029 3,558,261 3,489,433 3,572,725 0.8 % Invenergy Thermal Operating I LLC (7) Independent Power and Renewable Electricity Producers 9.92% (S + CSA + 4.50%) 8/14/2029 294,071 288,403 295,267 0.1 % iSolved, Inc. (6) Software 9.48% (S + 4.00%) 10/5/2030 2,600,000 2,574,027 2,608,125 0.6 % Ivanti Software, Inc. (6) Software 9.67% (S + CSA + 4.00%) 12/1/2027 972,500 971,445 924,079 0.2 % Ivanti Software, Inc. (6) Software 9.91% (S + CSA + 4.25%) 12/1/2027 6,852,938 6,816,310 6,523,722 1.4 % IVC Acquisition, Ltd. (4)(6) Professional Services 10.87% (S + 5.50%) 11/17/2028 5,000,000 4,900,475 5,027,075 1.1 % Jack Ohio Finance LLC (7) Hotels, Restaurants and Leisure 10.22% (S + CSA + 4.75%) 10/31/2028 4,895,434 4,898,075 4,838,843 1.0 % Jones DesLauriers Insurance Management Inc. (4)(7) Insurance 9.62% (S + 4.25%) 3/16/2030 2,750,000 2,730,178 2,765,469 0.6 % Kestrel Acquisition, LLC (6) Independent Power and Renewable Electricity Producers 9.72% (S + CSA + 4.25%) 5/2/2025 5,900,476 5,636,874 5,831,735 1.3 % Kleopatra Finco S.a.r.l (4)(6) Containers and Packaging 10.48% (S + CSA + 4.73%) 2/4/2026 1,945,000 1,942,008 1,841,069 0.4 % LBM Acquisition LLC (6)(7) Building Products 9.21% (S + CSA + 3.75%) 12/31/2027 7,316,803 7,259,009 7,247,074 1.6 % Life Time, Inc. (4)(6) Hotels, Restaurants and Leisure 10.11% (S + CSA + 4.25%) 1/15/2026 7,582,556 7,570,881 7,643,216 1.7 % Lifescan Global Corporation (6) Healthcare Equipment and Supplies 11.98% (S + CSA + 6.50%) 12/31/2026 5,406,440 5,394,007 4,068,346 0.9 % Lightstone Holdco LLC (6) Independent Power and Renewable Electricity Producers 11.13% (S + 5.75%) 2/1/2027 4,741,832 4,364,801 4,525,486 1.0 % Lightstone Holdco LLC (6) Independent Power and Renewable Electricity Producers 11.13% (S + 5.75%) 2/1/2027 268,194 246,863 255,957 0.1 % LogMeIn, Inc. (6) IT Services 10.28% (S + CSA + 4.75%) 8/31/2027 9,744,042 9,663,298 6,493,722 1.4 % Magenta Buyer LLC (6) Software 10.64% (S + CSA + 5.00%) 7/27/2028 5,390,000 5,353,819 3,857,219 0.8 % Mariner Wealth Advisors, LLC (7) Diversified Financial Services 9.70% (S + CSA + 4.25%) 8/18/2028 4,954,962 4,804,638 4,964,253 1.1 % Maverick 1, LLC Software 9.89% (S + CSA + 4.25%) 5/18/2028 4,975,000 4,751,890 4,931,469 1.1 % Max US Bidco Inc. Food Products 10.35% (S + 5.00%) 10/3/2030 5,725,000 5,445,089 5,365,756 1.2 % Medical Solutions L.L.C. (7) Healthcare Providers and Services 8.71% (S + CSA + 3.25%) 10/6/2028 4,916,517 4,899,589 4,629,736 1.0 % F- 11 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2023 Portfolio Company (3) Industry Interest Rate Maturity Date Principal/ Par Amortized Cost (1)(5) Fair Value Percentage of Net Assets Mermaid Bidco, Inc. Software 9.88% (S + 4.50%) 12/22/2027 1,990,000 1,954,539 2,002,438 0.4 % Michael Baker International, LLC (7) Construction and Engineering 10.47% (S + CSA + 5.00%) 11/2/2028 6,125,000 6,078,246 6,125,000 1.3 % Micro Holding Corp. (6) IT Services 9.61% (S + 4.25%) 5/3/2028 9,786,662 9,541,199 9,639,862 2.1 % Midwest Veterinary Partners, LLC (6) Healthcare Providers and Services 9.47% (S + CSA + 4.00%) 4/27/2028 8,793,690 8,730,243 8,740,136 1.9 % Minotaur Acquisition, Inc. (6)(7) Diversified Financial Services 10.21% (S + CSA + 4.75%) 3/27/2026 11,820,011 11,750,011 11,767,918 2.5 % Mitchell International, Inc. (6) Professional Services 9.40% (S + CSA + 3.75%) 10/16/2028 9,825,000 9,773,159 9,834,923 2.1 % MLN US HoldCo LLC (6) Diversified Telecommunication Services 9.97% (S + CSA + 4.50%) 12/31/2025 4,056,188 4,014,973 473,215 0.1 % Momentive Performance Materials USA, LLC (6) Chemicals 9.86% (S + 4.50%) 3/29/2028 3,845,938 3,708,614 3,732,982 0.8 % NAPA Management Services Corporation (6) Healthcare Providers and Services 10.71% (S + CSA + 5.25%) 2/23/2029 7,860,000 7,804,787 7,254,937 1.6 % National Mentor Holdings, Inc. (6) Healthcare Providers and Services 9.20% (S + CSA + 3.75%) 2/18/2028 291,993 291,396 266,748 0.1 % National Mentor Holdings, Inc. (6) Healthcare Providers and Services 9.20% (S + CSA + 3.75%) 2/18/2028 9,041,196 9,022,958 8,259,494 1.8 % Navicure, Inc. (6) Healthcare Technology 9.47% (S + CSA + 4.00%) 10/22/2026 4,578,249 4,579,772 4,601,140 1.0 % Nexus Buyer LLC (6) Diversified Financial Services 9.86% (S + 4.50%) 12/11/2028 5,000,000 4,850,569 4,975,025 1.1 % NorthStar Group Services, Inc. (6)(7) Commercial Services and Supplies 10.97% (S + CSA + 5.50%) 11/9/2026 8,418,468 8,395,525 8,413,206 1.8 % NSM Top Holdings Corp. (6) Healthcare Equipment and Supplies 10.70% (S + CSA + 5.25%) 11/12/2026 4,885,496 4,870,473 4,751,145 1.0 % OMNIA Partners, LLC (6) Professional Services 9.63% (S + 4.25%) 7/25/2030 2,376,731 2,351,405 2,396,244 0.5 % OneDigital Borrower LLC (6) Insurance 9.71% (S + CSA + 4.25%) 11/16/2027 9,771,519 9,690,190 9,777,675 2.1 % Orchid Merger Sub II, LLC (4)(6) Software 10.25% (S + CSA + 4.75%) 7/27/2027 4,106,250 3,949,028 2,477,444 0.5 % Padagis, LLC (6) Pharmaceuticals 10.43% (S + CSA + 4.75%) 7/31/2028 6,588,235 6,558,110 6,382,353 1.4 % F- 12 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2023 Portfolio Company (3) Industry Interest Rate Maturity Date Principal/ Par Amortized Cost (1)(5) Fair Value Percentage of Net Assets Patriot Growth Insurance Services, LLC (7)(10) Insurance 11.10% (S + 5.75%) 10/14/2028 350,000 276,916 293,500 0.1 % PECF USS Intermediate Holding III Corporation (7) Professional Services 9.89% (S + CSA + 4.25%) 11/6/2028 4,900,000 4,893,280 3,849,293 0.8 % Peraton Corp. (7) Aerospace and Defense 9.21% (S + CSA + 3.75%) 2/1/2028 4,778,345 4,786,723 4,796,264 1.0 % PMHC II Inc. (6) Chemicals 9.81% (S + CSA + 4.25%) 2/2/2029 6,522,438 6,474,251 6,266,301 1.4 % Prairie ECI Acquiror LP (6) Oil, Gas and Consumable Fuels 10.21% (S + CSA + 4.75%) 3/11/2026 9,656,148 9,533,263 9,679,227 2.1 % Pretium PKG Holdings, Inc. Containers and Packaging 10.39% (S + 5.00%) incl. 2.50% PIK 10/2/2028 1,481,076 1,428,726 1,455,165 0.3 % Pretium PKG Holdings, Inc. (6)(7) Containers and Packaging 9.99% (S + 4.60%) incl. 1.40% PIK 10/2/2028 5,517,720 5,479,051 4,345,205 0.9 % Project Alpha Intermediate Holding, Inc. (6) Software 10.11% (S + 4.75%) 10/28/2030 8,000,000 7,842,603 8,059,160 1.7 % Project Boost Purchaser, LLC (6) Professional Services 8.97% (S + CSA + 3.50%) 6/1/2026 5,850,000 5,844,776 5,862,197 1.3 % Prometric Holdings, Inc. (6) Diversified Consumer Services 10.72% (S + CSA + 5.25%) 1/31/2028 5,706,603 5,561,435 5,711,083 1.2 % PS Holdco, LLC (7) Road and Rail 9.72% (S + CSA + 4.25%) 10/31/2028 5,378,706 5,361,695 5,292,996 1.1 % PT Intermediate Holdings III, LLC (7) Machinery 11.47% (S + CSA + 5.98%) 11/1/2028 491,250 487,340 492,478 0.1 % PT Intermediate Holdings III, LLC (7) Machinery 11.47% (S + CSA + 5.98%) 11/1/2028 1,505,350 1,494,290 1,509,113 0.3 % PT Intermediate Holdings III, LLC (7) Machinery 11.47% (S + CSA + 5.98%) 11/1/2028 2,273,600 2,267,494 2,279,284 0.5 % PT Intermediate Holdings III, LLC (7) Machinery 11.47% (S + CSA + 5.98%) 11/1/2028 2,097,200 2,097,200 2,102,443 0.5 % PT Intermediate Holdings III, LLC Machinery 11.85% (S + 6.50%) 11/1/2028 1,409,701 1,388,314 1,424,623 0.3 % Quest Software US Holdings Inc. (6) Software 9.78% (S + CSA + 4.25%) 2/1/2029 9,381,250 9,301,754 7,213,149 1.6 % Radiology Partners, Inc. (6) Healthcare Providers and Services 10.18% (S + CSA + 4.25%) 7/9/2025 5,971,261 5,967,601 4,846,067 1.0 % RC Buyer, Inc. (6) Auto Components 8.89% (S + CSA + 3.25%) 7/28/2028 2,052,750 2,049,357 2,046,335 0.4 % RealPage, Inc. (6) Real Estate Management and Development 8.47% (S + CSA + 3.00%) 2/18/2028 6,842,500 6,835,914 6,804,456 1.5 % RealTruck Group, Inc. Auto Components 10.47% (S + CSA + 5.00%) 1/31/2028 2,000,000 1,951,919 2,000,000 0.4 % RealTruck Group, Inc. (6) Auto Components 8.97% (S + CSA + 3.50%) 1/20/2028 6,909,625 6,905,406 6,834,759 1.5 % Red Planet Borrower, LLC (6) Internet Software and Services 9.21% (S + CSA + 3.75%) 10/2/2028 7,820,000 7,793,625 7,532,146 1.6 % F- 13 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2023 Portfolio Company (3) Industry Interest Rate Maturity Date Principal/ Par Amortized Cost (1)(5) Fair Value Percentage of Net Assets Redstone Holdco 2 LP (6)(7) IT Services 10.22% (S + CSA + 4.75%) 4/14/2028 4,892,258 4,867,936 3,728,439 0.8 % Refresco (4)(6) Food Products 9.63% (S + 4.25%) 7/12/2029 4,950,000 4,930,051 4,960,049 1.1 % Renaissance Holding Corp. (6) Software 10.11% (S + 4.75%) 4/5/2030 7,727,778 7,559,120 7,765,335 1.7 % Rocket Software, Inc. (6) Software 10.11% (S + 4.75%) 11/28/2028 8,337,684 8,117,739 8,207,407 1.8 % Rohm Holding GMBH (4)(6)(7) Chemicals 10.88% (S + CSA + 5.00%) 7/31/2026 8,753,760 8,745,516 7,768,962 1.7 % Runner Buyer Inc. (7) Household Durables 11.00% (S + CSA + 5.50%) 10/20/2028 4,912,500 4,876,527 3,889,079 0.8 % Ryan, LLC (7) Professional Services 9.86% (S + 4.50%) 11/8/2030 4,885,714 4,789,346 4,911,040 1.1 % Shearer’s Foods, LLC (6) Food Products 8.97% (S + CSA + 3.50%) 9/23/2027 1,656,972 1,650,032 1,661,396 0.4 % Simon & Schuster, Inc. (6) Media 9.39% (S + 4.00%) 10/30/2030 2,000,000 1,980,410 2,008,750 0.4 % Sophia, L.P. (6) Software 9.61% (S + 4.25%) 10/7/2027 6,157,383 6,137,486 6,168,929 1.3 % Sovos Compliance, LLC (7) Software 9.97% (S + CSA + 4.50%) 7/28/2028 3,922,945 3,918,460 3,883,716 0.8 % Specialty Building Products Holdings, LLC (6)(7) Building Products 9.21% (S + CSA + 3.75%) 10/5/2028 9,825,000 9,813,016 9,825,000 2.1 % Summer BC Holdco B LLC (4)(7) Media 10.11% (S + CSA + 4.50%) 12/4/2026 4,887,500 4,890,408 4,850,086 1.0 % Talen Energy Supply, LLC (4)(6) Independent Power and Renewable Electricity Producers 9.87% (S + 4.50%) 5/17/2030 2,198,476 2,136,074 2,214,052 0.5 % Talen Energy Supply, LLC (4)(6) Independent Power and Renewable Electricity Producers 9.87% (S + 4.50%) 5/17/2030 1,790,476 1,739,503 1,803,162 0.4 % Tank Holding Corp. (11) Containers and Packaging 11.46% (S + CSA + 6.00%) 3/31/2028 302,243 285,571 268,521 0.1 % Tank Holding Corp. Containers and Packaging 11.21% (S + CSA + 5.75%) 3/31/2028 2,487,374 2,439,747 2,387,879 0.5 % Tank Holding Corp. Containers and Packaging 11.46% (S + CSA + 6.00%) 3/31/2028 2,084,250 2,044,729 2,006,091 0.4 % Tecta America Corp. (6)(7) Construction and Engineering 9.47% (S + CSA + 4.00%) 4/6/2028 8,497,933 8,484,923 8,532,477 1.8 % The Edelman Financial Center, LLC (6) Diversified Financial Services 8.97% (S + CSA + 3.50%) 4/7/2028 7,780,122 7,715,379 7,800,817 1.7 % F- 14 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2023 Portfolio Company (3) Industry Interest Rate Maturity Date Principal/ Par Amortized Cost (1)(5) Fair Value Percentage of Net Assets Thryv, Inc. (4)(6) Professional Services 13.97% (S + CSA + 8.50%) 2/18/2026 4,935,721 4,941,411 4,941,915 1.1 % Titan US Finco, LLC (4)(7) Media 9.61% (S + CSA + 4.00%) 10/6/2028 5,895,000 5,885,073 5,811,468 1.3 % Tosca Services, LLC (6) Containers and Packaging 9.14% (S + CSA + 3.50%) 8/18/2027 6,829,192 6,786,034 5,746,287 1.2 % Transnetwork, LLC (7) Diversified Financial Services 10.85% (S + 5.50%) 11/20/2030 5,200,000 5,096,000 5,187,000 1.1 % U.S. Renal Care, Inc. (6)(7) Healthcare Providers and Services 10.47% (S + CSA + 5.00%) 6/20/2028 7,836,947 7,749,489 5,975,672 1.3 % UKG Inc. (6) Software 9.99% (S + CSA + 4.50%) 5/4/2026 4,975,000 4,869,333 5,002,586 1.1 % US Radiology Specialists, Inc. (6) Healthcare Providers and Services 10.75% (S + CSA + 5.25%) 12/10/2027 8,790,600 8,715,244 8,731,967 1.9 % Veracode (6) Software 9.98% (S + CSA + 4.50%) 4/20/2029 8,690,000 8,653,769 8,247,375 1.8 % VeriFone Systems, Inc. (6) Commercial Services and Supplies 9.64% (S + 4.00%) 8/20/2025 2,915,601 2,896,373 2,829,955 0.6 % Verscend Holding Corp. (6) Healthcare Technology 9.47% (S + CSA + 4.00%) 8/27/2025 6,002,422 5,994,020 6,029,913 1.3 % Vision Solutions, Inc. (6) IT Services 9.64% (S + CSA + 4.00%) 4/24/2028 9,775,000 9,753,558 9,716,350 2.1 % Vocus Group DD T/L (4)(6) Diversified Telecommunication Services 9.14% (S + CSA + 3.50%) 5/26/2028 1,975,000 1,958,023 1,979,938 0.4 % WarHorse Gaming, LLC Hotels, Restaurants and Leisure 14.74% (S + CSA + 9.25%) 6/28/2028 5,000,000 4,806,421 5,125,000 1.1 % WaterBridge Midstream Operating, LLC (6) Energy Equipment and Services 11.39% (S + CSA + 5.75%) 6/22/2026 8,140,282 8,058,105 8,162,708 1.8 % Watlow Electric Manufacturing Company (6) Electrical Equipment 9.40% (S + CSA + 3.75%) 3/2/2028 3,193,863 3,176,511 3,199,852 0.7 % White Cap Buyer LLC (6) Building Products 9.11% (S + 3.75%) 10/8/2027 2,910,656 2,893,120 2,920,363 0.6 % Wilsonart LLC (6) Building Products 8.70% (S + CSA + 3.25%) 12/18/2026 5,354,560 5,314,657 5,374,211 1.2 % Total First Lien Senior Secured 995,596,712 $ 984,089,538 $ 952,100,626 206.1 % F- 15 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2023 Portfolio Company (3) Industry Interest Rate Maturity Date Principal/ Par Amortized Cost (1)(5) Fair Value Percentage of Net Assets Second Lien Senior Secured (2) American Rock Salt Company LLC Metals and Mining 12.72% (S + CSA + 7.25%) 6/4/2029 2,750,000 2,770,553 2,406,250 0.6 % ARC Falcon I Inc. (6) Chemicals 12.46% (S + CSA + 7.00%) 9/24/2029 2,000,000 1,984,833 1,815,000 0.4 % Artera Services, LLC (6) Construction and Engineering 12.70% (S + CSA + 7.25%) 3/6/2026 9,060,000 8,515,560 6,235,862 1.3 % Aruba Investments, Inc. (6) Chemicals 13.21% (S + CSA + 7.75%) 10/27/2028 2,350,000 2,322,955 2,217,813 0.5 % Asurion, LLC (6) Insurance 10.72% (S + CSA + 5.25%) 1/19/2029 6,000,000 5,970,805 5,677,020 1.2 % Barracuda Networks, Inc. Software 12.38% (S + 7.00%) 8/15/2030 3,000,000 2,919,701 2,681,880 0.6 % DCert Buyer, Inc. (6) IT Services 12.36% (S + 7.00%) 2/19/2029 1,500,000 1,498,435 1,372,500 0.3 % Delta Topco, Inc. IT Services 12.62% (S + 7.25%) 10/6/2028 3,435,617 3,465,588 3,447,213 0.7 % Energy Acquisition LP Electrical Equipment 13.96% (S + CSA + 8.50%) 6/25/2026 2,812,400 2,747,137 2,474,912 0.5 % Gainwell Acquisition Corp. Healthcare Providers and Services 13.52% (S + CSA + 8.00%) 10/2/2028 3,000,000 2,959,549 2,925,000 0.6 % Help/Systems Holdings, Inc. Software 12.35% (S + CSA + 6.75%) 11/19/2027 3,656,217 3,659,888 3,004,386 0.7 % Idera, Inc. IT Services 12.28% (S + CSA + 6.75%) 2/5/2029 5,000,000 5,023,383 4,896,875 1.1 % Infinite Bidco, LLC (6) Electronic Equipment, Instruments and Components 12.64% (S + CSA + 7.00%) 2/24/2029 2,729,999 2,726,270 2,334,149 0.5 % Ivanti Software, Inc. Software 12.91% (S + CSA + 7.25%) 12/1/2028 3,000,000 3,009,723 2,434,995 0.5 % Magenta Buyer LLC Software 13.89% (S + CSA + 8.25%) 7/27/2029 5,000,000 4,991,100 1,900,000 0.4 % Paradigm Outcomes Healthcare Providers and Services 13.04% (S + CSA + 7.50%) 10/26/2026 1,500,000 1,484,212 1,398,750 0.3 % F- 16 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2023 Portfolio Company (3) Industry Interest Rate Maturity Date Principal/ Par Amortized Cost (1)(5) Fair Value Percentage of Net Assets Peraton Corp. Aerospace and Defense 13.22% (S + CSA + 7.75%) 2/26/2029 2,898,876 2,949,038 2,891,180 0.6 % Pretium PKG Holdings, Inc. (6) Containers and Packaging 12.21% (S + CSA + 6.75%) 9/30/2029 2,000,000 1,984,274 840,000 0.2 % Quest Software US Holdings Inc. Software 13.03% (S + CSA + 7.50%) 2/1/2030 3,000,000 2,962,166 1,811,775 0.4 % Vision Solutions, Inc. IT Services 12.89% (S + CSA + 7.25%) 4/23/2029 3,500,000 3,504,600 3,223,658 0.7 % Total Second Lien Senior Secured 68,193,109 67,449,770 55,989,218 12.1 % Corporate Bonds Altice Financing S.A. (4) Diversified Telecommunication Services 5.00 % 1/15/2028 3,000,000 2,607,052 2,733,750 0.6 % KOBE US Midco 2 Inc Chemicals 10.00% PIK 11/1/2026 1,995,000 1,888,052 1,506,225 0.3 % Total Corporate Bonds 4,995,000 4,495,104 4,239,975 0.9 % Total Debt Investments $ 1,068,784,821 $ 1,056,034,412 $ 1,012,329,819 219.1 % CLO Mezzanine (2) 522 Funding CLO 2020-6, Ltd. (4) Structured Note 13.71% (S + CSA + 8.04%) 10/23/2034 2,800,000 2,730,416 2,500,181 0.5 % Carlyle US CLO 2020-2, Ltd (4) Structured Note 14.17% (S + CSA + 8.53%) 1/25/2035 4,000,000 3,898,845 3,612,187 0.8 % Elmwood CLO III Ltd. (4) Structured Note 13.42% (S + CSA + 7.74%) 10/20/2034 2,000,000 1,933,361 1,822,391 0.4 % F- 17 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2023 Portfolio Company (3) Industry Interest Rate Maturity Date Principal/ Par Amortized Cost (1)(5) Fair Value Percentage of Net Assets GoldenTree Loan Management US 2020-7A (4) Structured Note 13.43% (S + CSA + 7.75%) 4/20/2034 2,000,000 1,904,602 1,768,848 0.4 % GoldenTree Loan Management US 2021-10A (4) Structured Note 13.47% (S + CSA + 7.79%) 7/20/2034 1,250,000 1,219,485 1,079,204 0.2 % GoldenTree Loan Management US 2021-9A (4) Structured Note 12.43% (S + CSA + 6.75%) 1/20/2033 2,000,000 1,907,039 1,795,407 0.4 % Thayer Park CLO, Ltd. (4) Structured Note 14.55% (S + CSA + 8.87%) 4/20/2034 1,300,000 1,265,819 1,186,402 0.3 % Total CLO Mezzanine 15,350,000 14,859,567 13,764,620 3.0 % CLO Equity Ares CLO Ltd 2021-62A (4) Structured Subordinated Note NA 1/25/2034 5,000,000 3,924,864 3,170,040 0.6 % Babson CLO 2018-4A, Ltd. (4) Structured Subordinated Note NA 10/15/2030 4,000,000 1,693,196 1,303,519 0.3 % Dryden 86 CLO, Ltd. (4) Structured Subordinated Note NA 7/17/2030 6,000,000 4,132,788 3,077,510 0.7 % HPS Loan Management 12-2018, Ltd. (4) Structured Subordinated Note NA 7/18/2031 7,500,000 3,893,560 3,360,577 0.7 % Long Point Park CLO, Ltd. (4) Structured Subordinated Note NA 1/17/2030 6,358,000 3,126,918 1,710,370 0.4 % Regatta XII Funding Ltd. (4) Structured Subordinated Note NA 10/15/2032 6,000,000 4,117,741 3,310,569 0.7 % Signal Peak CLO, LLC (4) Structured Subordinated Note NA 10/26/2034 5,000,000 2,250,892 1,695,404 0.4 % Stratus CLO Series 2021-1A (4) Structured Subordinated Note NA 12/29/2029 2,000,000 1,338,479 1,325,320 0.3 % Total CLO Equity 41,858,000 24,478,438 18,953,309 4.1 % Total Equity and Other Investments $ 57,208,000 $ 39,338,005 $ 32,717,929 7.1 % F- 18 Palmer Square Capital BDC Inc. Consolidated Schedule of Investments As of December 31, 2023 Number of Shares Cost Fair Value Percentage of Net Assets Short-Term Investments Fidelity Investments Money Market Government Portfolio - Institutional Class, 5.29 % (8) 63,763,005 63,763,005 63,763,005 13.8 % Total Short-Term Investments 63,763,005 $ 63,763,005 $ 63,763,005 13.8 % Total Investments $ 1,159,135,422 $ 1,108,810,753 240.0 % Liabilities in Excess of Other Assets ( 646,855,360 ) ( 140.0 )% Net Assets $ 461,955,393 100.0 % (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), the Secured Overnight Financing Rate (“SOFR” or “S”), 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, the Euro Interbank Offered Rate (“Euribor” or “E”), the U.S. Prime Rate (“P”), or an alternate base rate (which can include the Federal Funds Effective 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, 2023 that have S+CSA as the base rate, the credit spread adjustment ranges from 10bps to 42.8bps. (3) As of December 31, 2023, 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, 2023, 13.2% of the Company’s total assets were in non-qualifying investments. (5) As of December 31, 2023, the tax cost of the Company’s investments approximates their amortized cost. (6) Security or portion thereof held within Palmer Square BDC Funding I, LLC (“PS BDC Funding”) and is pledged as collateral supporting the amounts outstanding under a revolving credit facility with Bank of America, N.A. (“BofA N.A.”) (see Note 6 to the consolidated financial statements). (7) Security or portion thereof held within Palmer Square BDC Funding 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). (8) 7-day effective yield as of December 31, 2023. (9) Of the $2,625,000 commitment to Accession Risk Management Group, Inc., $2,457,857.14 was unfunded as of December 31, 2023. (10) Of the $5,000,000 commitment to Patriot Growth Insurance Services, LLC, $4,650,000 was unfunded as of December 31, 2023. (11) Of the $899,242.50 commitment to Tank Holding Corp., $597,000 was unfunded as of December 31, 2023. The accompanying notes are an integral part of these consolidated financial statements. F- 19 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- 20 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- 21 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- 22 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- 23 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- 24 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- 25 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- 26 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- 27 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- 28 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, 2023, 2022, and 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. On January 22, 2024, the Company completed its initial public offering (“IPO”), issuing 5,450,000 shares of common stock, par value $ 0.001 , at a public offering price of $ 16.45 per share. The Company’s common stock began trading on the New York Stock Exchange under the symbol “PSBD” on January 18, 2024. See Note 13 “Subsequent Events.” 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- 29 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, 2023, the balance of debt issuance costs was $( 1.6 ) million, representing deferred financing costs of $ 3.2 million less accrued interest of $ 4.8 million, included in BoA Credit Facility and WF Credit Facility (each as defined below), net of $ 641.8 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- 30 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, 2023 and 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 consent, waiver, amendment, unused, and prepayment fees associated with the Company’s investment activities and commitment, organization, 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 the Company’s share offerings, the preparation of the Company’s registration statement, and registration fees. F- 31 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. On July 26, 2023, the SEC adopted amendments intended to enhance and standardize disclosures related to cybersecurity. The amendments require timely disclosure of material cybersecurity incidents and annual disclosures related to cybersecurity risk management, strategy, and governance. The disclosures are effective beginning with annual reports for fiscal years ending on or after December 15, 2023. The Company has evaluated the impact of adoption on its consolidated financial statements and is effective for the current filing. 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 Equiniti Trust Company, LLC or its affiliates (“Equiniti”) directly to serve as transfer agent, registrar and dividend disbursing agent and engaged U.S. Bank or its affiliates directly to serve as custodian. Prior to the Company’s engagement of Equiniti upon the closing of the IPO, U.S. Bank served as the Company’s 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. F- 32 Subsequent to the IPO, 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 1.75 % 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. Prior to the IPO, the base management fee was 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 Investment Advisor, however, during any period prior to the IPO, agreed to waive its right to receive management fees in excess of an annual rate of 1.75 % of the average value of the weighted average total net assets at the end of each of our two most recently completed calendar quarters. The Investment Advisor will not be permitted to recoup any base management fees waived for any period of time prior to the IPO. Additionally, pursuant to the Advisory Agreement, the Investment Advisor is not entitled to an incentive fee prior to the IPO because the Advisory Agreement provides that no incentive fee is payable prior to the listing of the Company’s common stock on a national securities exchange. Effective upon completion of the IPO, the Investment Advisor is 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 eleven preceding calendar quarters since the IPO (or if shorter, the number of calendar quarters since the IPO) (each such period is referred to herein as the “Trailing Twelve 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 Trailing Twelve Quarters since the IPO (or if shorter, the number of calendar quarters since the IPO) 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 Trailing Twelve Quarters since the IPO (or if shorter, the number of calendar quarters since the IPO) 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 the IPO. 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 Trailing Twelve Quarters (or if shorter, the number of calendar quarters that have occurred since the IPO) and (ii) the Company’s “net investment income” over the Trailing Twelve Quarters (excluding the then most recently completed calendar quarter). 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- 33 “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. As noted above, “net realized losses” will not by itself cause an upward adjustment to adjusted net investment income. “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. Effective upon completion of the IPO, the Investment Advisor has also agreed to use the most recently completed and three preceding calendar quarters (each such period is referred to herein as the “Trailing Four Quarters”) in addition to the Trailing Twelve Quarters to compute the incentive fee payable to it by the Company. In conjunction therewith, the Investment Advisor has agreed to calculate the incentive fee based on the Trailing Twelve Quarters and the Trailing Four Quarters and in the event that any Trailing Four Quarter period calculation produces a lower incentive fee as compared to the applicable Trailing Twelve Quarter period calculation for any quarterly period, then the Trailing Four Quarter Period will be used in connection with the calculation of the incentive fee payable to the Investment Advisor by the Company for such quarter. The Investment Advisor has agreed to pay all offering costs in connection with the IPO. These expenses consist primarily of legal fees and other costs incurred with the Company’s share offerings, the preparation of the Company’s registration statement, and registration fees. The Company is not obligated to repay any such offering costs paid by our Investment Advisor. As the December 31, 2023, the balance of Due from Advisor was $ 1.4 million, representing the offering costs incurred on the statement of assets and liabilities. 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, 2023 and December 31, 2022: December 31, 2023 December 31, 2022 Amortized Fair Amortized Fair Cost Value Cost Value First-lien senior secured debt $ 984,089,538 $ 952,100,626 $ 951,753,250 $ 870,880,344 Second-lien senior secured debt 67,449,770 55,989,218 71,513,263 58,118,340 Corporate Bonds 4,495,104 4,239,975 1,884,529 1,332,888 CLO Mezzanine 14,859,567 13,764,620 17,589,330 14,732,721 CLO Equity 24,478,438 18,953,309 27,012,348 21,800,224 Short-term investments 63,763,005 63,763,005 50,347,215 50,347,215 Total Investments $ 1,159,135,422 $ 1,108,810,753 $ 1,120,099,935 $ 1,017,211,732 As of December 31, 2023, approximately 14.2 % of the long-term investment portfolio at amortized cost and 14.1 % of the long-term investment portfolio measured at fair value, respectively, were invested in non-qualifying assets. 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. With respect to the Company’s total assets, 13.2 % and 14.9 % 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, 2023 and December 31, 2022, respectively. F- 34 The industry composition of investments based on fair value, as a percentage of total investments at fair value, as of December 31, 2023 and December 31, 2022 was as follows: December 31, 2023 December 31, 2022 Software 14.0 % 12.9 % Healthcare Providers and Services 9.3 % 9.9 % Professional Services 7.2 % 5.9 % IT Services 6.7 % 8.4 % Insurance 5.9 % 5.8 % Short Term Investments 5.8 % 4.9 % Diversified Financial Services 4.2 % 2.6 % Hotels, Restaurants and Leisure 4.2 % 3.9 % Media 3.7 % 3.2 % Independent Power and Renewable Electricity Producers 3.4 % 2.8 % Chemicals 2.9 % 3.3 % Building Products 2.9 % 3.7 % Construction and Engineering 2.6 % 2.5 % Food Products 2.0 % 1.3 % Auto Components 1.7 % 1.9 % Structured Subordinated Note 1.7 % 2.1 % Containers and Packaging 1.7 % 1.5 % Machinery 1.6 % 0.6 % Diversified Consumer Services 1.6 % 1.6 % Electronic Equipment, Instruments and Components 1.5 % 1.2 % Internet Software and Services 1.4 % 1.1 % Energy Equipment and Services 1.4 % 0.6 % Commercial Services and Supplies 1.3 % 1.3 % Structured Note 1.2 % 1.4 % Aerospace and Defense 1.2 % 2.5 % Metals and Mining 1.2 % 2.0 % Healthcare Technology 1.0 % 2.1 % Oil, Gas and Consumable Fuels 0.9 % 1.7 % Diversified Telecommunication Services 0.8 % 0.3 % Healthcare Equipment and Supplies 0.8 % 0.9 % Specialty Retail 0.6 % 1.3 % Real Estate Management and Development 0.6 % 0.6 % Wireless Telecommunication Services 0.6 % 0.6 % Pharmaceuticals 0.6 % 0.6 % Electrical Equipment 0.5 % 0.5 % Road and Rail 0.5 % 0.5 % Household Durables 0.4 % 0.3 % Industrial Conglomerates 0.4 % 0.4 % Technology Hardware, Storage and Peripherals - % 0.4 % Textiles, Apparel and Luxury Goods - % 0.1 % Airlines - % 0.8 % Total 100.0 % 100.0 % 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. F- 35 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, 2023 and as of December 31, 2022, 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, 2023: Fair Value Hierarchy as of December 31, 2023 Investments: Level 1 Level 2 Level 3 Total First-lien senior secured debt $ - $ 952,100,626 - $ 952,100,626 Second-lien senior secured debt - 55,989,218 - 55,989,218 Corporate Bonds - 4,239,975 - 4,239,975 Convertible Bond - - - - CLO Mezzanine - 13,764,620 - 13,764,620 CLO Equity - 18,953,309 - 18,953,309 Equity - - - - Short Term Investments 63,763,005 - - 63,763,005 Total Investments $ 63,763,005 $ 1,045,047,748 $ - $ 1,108,810,753 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- 36 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, 2023, 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, 2023, the Company’s asset coverage ratio was 172 %. 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 is currently $725 million. 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. Debt obligations under the BoA Credit Facility consisted of the following as of December 31, 2023: December 31, 2023 Aggregate Principal Committed Outstanding Principal Amount Available (1) Net Carrying Value (2) BoA Credit Facility $ 725,000,000 $ 504,000,000 $ 221,000,000 $ 505,417,357 Total debt $ 725,000,000 $ 504,000,000 $ 221,000,000 $ 505,417,357 (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 $ 739 thousand and accrued interest of $ 2.156 million. F- 37 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. Average debt outstanding under the BoA Credit Facility during the years ended December 31, 2023, 2022, and 2021 was $ 498.3 million, $ 544.0 million and $ 433.1 million, respectively. Prior to February 3, 2023, the loans under the BOA Credit Facility may have been base rate loans or euro currency loans. The base rate loans bore interest at the base rate plus 1.30%, and the eurocurrency rate loans bore interest at 1-month or 3-month LIBOR plus 1.30%. The “base rate” was equal to the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate, and (c) 1-month or 3-month LIBOR. On February 3, 2023, the Company entered into an omnibus amendment to the BoA Credit Facility that, among other things: (i) removed LIBOR transition language and (ii) replaced eurocurrency rate loans with SOFR loans. As of February 3, 2023, the loans under the BoA Credit Facility may be base rate loans or Secured Overnight Financing Rate (“SOFR”) loans. The base rate loans will bear interest at the base rate plus 1.40%, and the SOFR loans will bear interest at 1-month SOFR plus 1.40% or 3-month SOFR plus 1.45%. The “base rate” will be equal to the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate, and (c) 1-month or 3-month SOFR plus 0.10%. The Credit Agreement includes fallback language in the event that SOFR becomes unavailable. Interest pursuant to base rate loans is payable quarterly in arrears, and interest pursuant to SOFR 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, 2023, 2022, and 2021, the components of interest expense with respect to the BoA Credit Facility were as follows: For the Year Ended December 31 2023 2022 2021 Interest expense $ 33,703,442 $ 17,356,543 $ 6,711,315 Amortization of debt issuance costs 646,738 635,331 550,610 Total interest expense $ 34,350,180 $ 17,991,874 $ 7,261,925 Average interest rate 6.42 % 2.97 % 1.40 % F- 38 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 (Section 17, as modified by Section 57, of the 1940 Act). 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”). On December 18, 2023, the Company entered into an amendment to the WF Credit Facility (the “WF Credit Facility Fourth Amendment”) that amends the WF Credit Facility to, among other things: (i) increase the amount available for borrowing under the WF Credit Facility from $ 150,000,000 to $ 175,000,000 , (ii) extend the facility maturity date from December 18, 2025 to December 18, 2028 and (iii) extend the reinvestment period from December 18, 2023 to December 18, 2026 (subject to other provisions of the WF Credit Facility). Debt obligations under the WF Credit Facility consisted of the following as of December 31, 2023: December 31, 2023 Aggregate Principal Committed Outstanding Principal Amount Available (1) Net Carrying Value (2) WF Credit Facility $ 175,000,000 $ 136,250,000 $ 38,750,000 $ 136,411,448 Total debt $ 175,000,000 $ 136,250,000 $ 38,750,000 $ 136,411,448 (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 $ 2.472 million and accrued interest of $ 2.634 million. 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. Average debt outstanding under the WF Credit Facility during the years ended December 31, 2023, 2022, and 2021, was $ 131.4 million and $ 123.4 million and $ 13.9 million, respectively. Prior to April 10, 2023 the loans under the WF Credit Facility may have been Broadly Syndicated Loans or Middle Market loans and were eurocurrency rate loans unless such rate was unavailable, in which case the loans were base rate loans until such rate was available. Broadly Syndicated Loans bore interest at the LIBOR or base rate, as applicable, plus 1.85%, and Middle Market Loans bore interest at LIBOR or base rate, as applicable, plus 2.35%. The “base rate” was equal to the highest of (a) the federal funds rate plus 0.50% and (b) the prime rate. On April 10, 2023, the Company entered into an amendment to the WF Credit Facility that, among other things: (i) transferred and assigned U.S. Bank National Association’s rights and obligations as collateral agent and as a secured party to U.S. Bank Trust Company, National Association, (ii) referenced SOFR instead of LIBOR and (iii) removed LIBOR transition language. F- 39 As of April 10, 2023, the loans under the WF Credit Facility may be Broadly Syndicated Loans or Middle Market Loans and will bear interest at Daily Simple SOFR, or base rate (to the extent Daily Simple SOFR is unavailable), plus 2.50%, with an interest rate floor of 0.0%. 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 Daily Simple SOFR becomes unavailable. Interest is payable quarterly, as determined by the WFB as the administrative agent. Following an amendment to the WF Credit Facility on October 13, 2021, 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 WF Credit Facility Fourth Amendment, and 1.00% thereafter. The applicable percentage for the advance rate on 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, 2023, 2022, and 2021, the components of interest expense with respect to the WF Credit Facility were as follows: For the Year Ended December 31, 2023 2022 2021 Interest expense $ 9,773,911 $ 5,107,383 $ 996,077 Amortization of debt issuance costs 359,061 352,912 358,659 Total interest expense $ 10,132,972 $ 5,460,295 $ 1,354,736 Average interest rate 7.20 % 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 (Section 17, as modified by Section 57, of the 1940 Act). 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 PSCM or its affiliates cease to directly or indirectly own a majority of the membership interests of the Investment Advisor. Senior Securities Information about the Company’s senior securities is shown in the following table for the fiscal years ended December 31, 2023, 2022, 2021, and 2020 (in thousands). Class and Period Ended Total Amount Outstanding Exclusive of Treasury Securities (1) ($ in Millions) Asset Coverage per Unit (2) Involuntary Liquidating Preference per Unit (3) Average Market Value per Unit (4) BoA Credit Facility December 31, 2023 504.0 1,721.5 — — December 31, 2022 514.5 1,566.8 — — December 31, 2021 552.0 1,694.5 — — December 31, 2020 395.0 1,640.9 WF Credit Facility December 31, 2023 136.3 1,721.5 — — December 31, 2022 126.8 1,566.8 — — December 31, 2021 100.0 1,694.5 — — December 31, 2020 0.0 1,640.9 (1) Total amount of each class of senior securities outstanding at the end of the period presented. (2) Asset coverage per unit is the ratio of the carrying value of our total consolidated assets, less all liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $ 1,000 of indebtedness. (3) The amount to which such class of senior security would be entitled upon the voluntary liquidation of the issuer in preference to any security junior to it. The “—” in this column indicates that the SEC expressly does not require this information to be disclosed for certain types of senior securities. (4) Not applicable because such senior securities are not registered for public trading. F- 40 Note 7. Share Transactions Offering Proceeds During the years ended December 31, 2023, 2022, and 2021, the Company issued and sold 2,816,166 shares at an aggregate purchase price of $ 46.7 million, 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 the IPO, the Board primarily used 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 the IPO 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 the IPO, 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 ,and, if the Company’s uses newly issued shares to implement the dividend reinvestment plan at a time when the shares are trading at a price below NAV, the stockholders’ receipt of fewer shares than they would have if the Company had effectuated open market purchases. 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 Equiniti, 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 Equiniti 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. 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 Equiniti. 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. Open Market Share Repurchase Plan The Board authorized the Company to repurchase shares of its common stock through an open-market share repurchase program for up to $ 20 million in the aggregate of shares of the Company’s common stock through 12 months from the date of the IPO. Pursuant to such authorization and concurrently with the closing of the IPO, the Company entered into a share repurchase plan (the “Company Rule 10b5-1 Stock Repurchase Plan”) to acquire up to $ 15 million in the aggregate of shares of its common stock, in accordance with the guidelines specified in Rule 10b-18 and Rule 10b5-1 of the Exchange Act. The Company Rule 10b5-1 Stock Repurchase Plan is intended to allow the Company to repurchase shares of its common stock at times when it otherwise might be prevented from doing so under insider trading laws. The Company Rule 10b5-1 Stock Repurchase Plan will require the Company’s agent to repurchase shares of the Company’s common stock on the Company’s behalf when the market price per share of the Company’s common stock is below the most recently reported NAV per share of common stock (including any updates, corrections or adjustments publicly announced by the Company to any previously announced NAV per share). Under the Company Rule 10b5-1 Stock Repurchase Plan, the agent will increase the volume of purchases made as the price of the Company’s common stock declines, subject to volume restrictions. F- 41 The repurchase of shares pursuant to the Company Rule 10b5-1 Stock Repurchase Plan is intended to satisfy the conditions of Rule 10b5-1 and Rule 10b-18 under the Exchange Act and will otherwise be subject to applicable law, including Regulation M, which may prohibit purchases under certain circumstances. The Company Rule 10b5-1 Stock Repurchase Plan will commence beginning 60 calendar days following the end of the “restricted period” under Regulation M and terminate upon the earliest to occur of (i) 12 months from the date of the Company Rule 10b5-1 Stock Repurchase Plan, (ii) the end of the trading day on which the aggregate purchase price for all shares purchased under the Company Rule 10b5-1 Stock Repurchase Plan equals $ 15 million and (iii) the occurrence of certain other events described in the Company Rule 10b5-1 Stock Repurchase Plan. The “restricted period” under Regulation M will end upon the closing of the IPO and, therefore, the common stock repurchases/purchases described above shall not begin prior to 60 days after the closing of the IPO. PSCM Rule 10b5-1 Stock Purchase Plan In addition, PSCM will purchase up to $ 5 million in the aggregate of shares of the Company’s common stock in the open market within one year of the date of the IPO if the shares of the Company’s common stock trade below a specific level of NAV per share following the completion of the IPO. In order to facilitate PSCM’s purchase commitment, concurrently with the closing of the IPO, PSCM entered into a share purchase plan (the “PSCM Rule 10b5-1 Stock Purchase Plan”) to permit the purchase of up to $ 2.5 million of shares of the Company’s common stock. The purchases of shares pursuant to the PSCM Rule 10b5-1 Stock Purchase Plan will be implemented in accordance with Rule 10b5-1 and Rule 10b-18 under the Exchange Act. The PSCM Rule 10b5-1 Stock Purchase Plan is intended to allow PSCM to purchase shares of the Company’s common stock at times when it otherwise might be prevented from doing so under insider trading laws. The PSCM Rule 10b5-1 Stock Purchase Plan will require PSCM’s agent to purchase shares of common stock on PSCM’s behalf when the market price per share of the Company’s common stock is trading below the most recently reported NAV per share of common stock (including any updates, corrections or adjustments publicly announced by the Company to any previously announced NAV per share). Under the PSCM Rule 10b-1 Stock Purchase Plan, the agent will increase the volume of purchases made as the price of the Company’s common stock declines, subject to volume restrictions. The purchase of shares pursuant to the PSCM Rule 10b5-1 Stock Purchase Plan is intended to satisfy the conditions of Rule 10b5-1 and Rule 10b-18 under the Exchange Act, and will otherwise be subject to applicable law, including Regulation M, which may prohibit purchases under certain circumstances. The PSCM Rule 10b5-1 Stock Purchase Plan will commence beginning 60 calendar days following the end of the “restricted period” under Regulation M and terminate upon the earliest to occur of (i) 12 months from the date of the PSCM Rule 10b5-1 Stock Purchase Plan, (ii) the end of the trading day on which the aggregate purchase price for all shares purchased under the PSCM Rule 10b5-1 Stock Purchase Plan equals $ 2.5 million and (iii) the occurrence of certain other events described in the PSCM Rule 10b5-1 Stock Purchase Plan. The “restricted period” under Regulation M will end upon the closing of the IPO and, therefore, the common stock repurchases/purchases described above shall not begin prior to 60 days after the closing of the IPO. Note 8. Commitments and Contingencies As of December 31, 2023 and December 31, 2022, the Company had an aggregate of $ 20.1 million and $ 2.6 million, respectively, of unfunded commitments to provide debt financing to its portfolio companies. As of each of December 31, 2023 and December 31, 2022, 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, 2023 is shown in the table below: Expiration Date (1) As of December 31, 2023 Accession Risk Management Group, Inc. 2/14/2025 2,457,847 Aptean Inc. 1/30/2031 436,880 Aptean Inc. 1/30/2026 851,480 Aramsco, Inc. 10/10/2025 712,871 B’Laster Holdings, LLC 10/25/2025 466,666 Enverus Holdings, Inc. 12/22/2025 310,811 Enverus Holdings, Inc. 12/24/2029 472,973 ImageFirst Holdings, LLC 4/28/2025 833,333 MRI Software LLC 2/10/2027 6,363,630 MRI Software LLC 2/10/2027 636,370 OMNIA Partners, LLC 1/25/2024 223,269 Patriot Growth Insurance Services, LLC 11/17/2025 4,650,000 PT Intermediate Holdings III, LLC 9/1/2024 579,942 Ryan, LLC 11/14/2024 514,286 Tank Holding Corp. 5/22/2024 597,000 Total unfunded commitments $ 20,107,358 (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- 42 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. 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, 2023, 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, 2023, 2022, and 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, 2023, 2022, and 2021: For the Year Ended December 31, 2023 2022 2021 Net increase (decrease) in net assets resulting from operations $ 107,835,651 $ ( 74,482,335 ) $ 19,059,718 Weighted average shares of common stock outstanding - basic and diluted 25,700,603 23,130,666 15,494,614 Earnings (loss) per share of common stock - basic and diluted $ 4.20 $ ( 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, 2023. 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 2023). 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, 2023, 2022, and 2021. These reclassifications have no impact on net assets. Year Ended December 31, 2023 2022 2021 Increase (decrease) in distributable earnings $ - $ - $ - Increase (decrease) in capital in excess of par value $ - $ - $ - F- 43 The following reconciles net increase in net assets resulting from operations to taxable income for the years ended December 31, 2023, 2022, and 2021: Year Ended December 31, 2023 2022 2021 Net increase (decrease) in net assets resulting from operations $ 107,835,651 $ ( 74,482,335 ) $ 19,059,718 Net change in unrealized appreciation (depreciation) from investments ( 52,563,544 ) 107,432,980 8,527,786 Other book tax differences 1,677,010 8,109,784 ( 897,245 ) Taxable income before deductions for distributions $ 56,949,117 $ 41,060,429 $ 26,690,259 Year Ended December 31, 2023 2022 2021 Distributions paid from: Ordinary income $ 56,068,285 $ 43,482,016 $ 22,163,852 Capital gains - 573,101 3,788,641 Return of Capital - - - Total $ 56,068,285 $ 44,055,117 $ 25,952,493 For the years ended December 31, 2023, 2022, and 2021, the components of accumulated earnings on a tax basis were as follows: Year Ended December 31, 2023 Year Ended December 31, 2022 Year Ended December 31, 2021 Undistributed net investment income (loss) $ 148,613 $ - $ 1,834,053 Undistributed capital gains - - 513,796 Capital loss carryforward ( 9,042,947 ) - - Other accumulated gain (loss) ( 85,947 ) ( 7,575,518 ) ( 101,573 ) Net unrealized appreciation (depreciation) ( 49,754,535 ) ( 102,926,664 ) 5,788,994 Total $ ( 58,734,816 ) $ ( 110,502,182 ) $ 8,035,270 Capital losses can be carried forward indefinitely to offset future capital gains. As of December 31, 2023, the Company had $ 9,042,947 in capital loss carryforwards. As of December 31, 2022, and 2021, the Company had no capital loss carryforwards. As of December 31, 2023, 2022, and 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, December 31, 2023 2022 2021 Tax cost $ 1,158,548,300 $ 1,120,121,398 $ 1,188,452,438 Gross unrealized appreciation 9,383,672 1,008,264 9,331,858 Gross unrealized depreciation ( 59,138,207 ) ( 103,934,928 ) ( 3,542,964 ) Net unrealized appreciation/(depreciation) on investments $ ( 49,754,535 ) $ ( 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, 2023, 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 2020-2023 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- 44 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, 2023, 2022, and 2021, and for the period January 23, 2020 (Commencement of Operations) through December 31, 2020: For the Period January 23, 2020 (Commencement of Operations) through For the Year Ended December 31, December 31, 2023 2022 2021 2020 Per Common Share Operating Performance Net Asset Value, Beginning of Period $ 14.96 $ 20.06 $ 20.15 20.00 Results of Operations: Net Investment Income (1) 2.26 1.78 1.47 1.32 Net Realized and Unrealized Gain (Loss) on Investments (4) 1.98 ( 5.00 ) ( 0.18 ) ( 0.19 ) Net Increase (Decrease) in Net Assets Resulting from Operations 4.24 ( 3.22 ) 1.29 1.13 Distributions to Common Stockholders Distributions from Net Investment Income ( 2.16 ) ( 1.85 ) ( 1.01 ) ( 0.98 ) Distributions from Realized Gains - ( 0.03 ) ( 0.37 ) - Net Decrease in Net Assets Resulting from Distributions ( 2.16 ) ( 1.88 ) ( 1.38 ) ( 0.98 ) Net Asset Value, End of Period $ 17.04 $ 14.96 $ 20.06 20.15 Shares Outstanding, End of Period 27,102,794 24,286,628 22,570,331 12,562,805 Ratio/Supplemental Data Net assets, end of period $ 461,955,393 $ 363,443,482 $ 452,797,588 253,144,971 Weighted-average shares outstanding 25,700,603 23,130,666 15,494,614 11,156,932 Total Return (3) 29.21 % ( 16.51 %) 8.10 % 4.29 % Portfolio turnover 25 % 27 % 53 % 63 % Ratio of operating expenses to average net assets without waiver (2) 13.15 % 8.28 % 5.54 % 5.69 % Ratio of operating expenses to average net assets with waiver (2) 12.90 % 8.03 % 5.29 % 5.44 % Ratio of net investment income (loss) to average net assets without waiver (2) 13.54 % 9.61 % 6.92 % 7.18 % Ratio of net investment income (loss) to average net assets with waiver (2) 13.79 % 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- 45 Note 12. Selected Quarterly Financial Data (Unaudited) The following are the quarterly results of operations for the years ended December 31, 2023, 2022, and 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, 2023 June 30, 2023 September 30, 2023 December 31, 2023 Investment income $ 26,185,502 $ 27,441,864 $ 28,773,690 $ 29,822,551 Net expenses 12,592,823 13,241,745 13,969,777 14,431,742 Net investment income (loss) 13,592,679 14,200,119 14,803,913 15,390,809 Net realized gain (loss) on investments, and foreign currency transactions ( 317,446 ) ( 2,570 ) ( 2,103,618 ) ( 291,779 ) Net change in unrealized gain (loss) on investments, foreign currency translations, and foreign currency contracts 14,813,089 9,743,113 21,152,793 6,854,549 Increase (decrease) in net assets resulting from operations $ 28,088,322 $ 23,940,662 $ 33,853,088 $ 21,953,579 Net asset value per share as of the end of the quarter $ 16.12 $ 16.55 $ 16.76 $ 17.04 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 change in 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 change in 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: Initial Public Offering On January 22, 2024, the Company completed its IPO, issuing 5,450,000 shares of common stock, par value $ 0.001 , at a public offering price of $ 16.45 per share. Total net proceeds were $ 89,652,500 . The Company’s common stock began trading on the New York Stock Exchange under the symbol “PSBD” on January 18, 2024. Proceeds from this offering were primarily used to make investments in accordance with the Company’s investment objectives and strategies. Unfunded Capital Commitments As of January 24, 2024, OMNIA Partners, LLC was fully funded for $ 223,269 . As of January 31, 2024, $ 33,214 of the outstanding commitment to Accession Risk Management Group Inc. was funded. The balance of the remaining unfunded commitment is $ 2,424,643 . As of February 8, 2024, $ 41,439 of the outstanding commitment to Aptean Inc. was funded. The balance of the remaining unfunded commitment is $ 810,041 . F- 46 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not Applicable.