`UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                    FOR THE QUARTER ENDED SEPTEMBER 30, 2004.

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                         COMMISSION FILE NUMBER: 0-50398

                       TECHNOLOGY INVESTMENT CAPITAL CORP.
             (Exact name of registrant as specified in its charter)




                      MARYLAND                                             20-0188736
  (State or other jurisdiction of incorporation or            (I.R.S. Employer Identification No.)
                   organization)


                         8 SOUND SHORE DRIVE, SUITE 255
                          GREENWICH, CONNECTICUT 06830
                     (Address of principal executive office)

                                 (203) 983-5275
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. Yes |X| No |_|.

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12 b-2 of the Exchange Act). Yes |_| No |X|.

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. The number of shares of the
issuer's Common Stock, $0.01 par value, outstanding as of November 9, 2004 was
10,125,406.


--------------------------------------------------------------------------------







                       TECHNOLOGY INVESTMENT CAPITAL CORP.

                                TABLE OF CONTENTS




PART I   FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)

         Balance Sheets as of September 30, 2004 and December 31, 2003
         Schedule of Investments as of September 30, 2004
         Statement of Operations for the three months and nine months ended September 30, 2004
         Statement of Stockholders' Equity for the nine months ended September 30, 2004
         Statement of Cash Flows for the nine months ended September 30, 2004
         Notes to financial statements


Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations
         Overview
         Critical Accounting Policies
         Results of Operations
         Liquidity and Capital Resources
         Risk Factors

 Item 3. Quantitative and Qualitative Disclosure About Market Risk

 Item 4. Controls and Procedures

 PART II  OTHER INFORMATION

 Item 1. Legal Proceedings

 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 Item 3. Defaults Upon Senior Securities

 Item 4. Submission of Matters to a Vote of Security Holders

 Item 5. Other Information

 Item 6. Exhibits


SIGNATURES


                                        2

-------------------------------------------------------------------------------





                    TECHNOLOGY INVESTMENT CAPITAL CORPORATION
                                 BALANCE SHEETS
                 AS OF SEPTEMBER 30, 2004 AND DECEMBER 31, 2003





                                     ASSETS
                                                SEPTEMBER 30,    DECEMBER 31,
                                                    2004             2003
                                                 (Unaudited)       (Audited)
                                                ------------     -------------

ASSETS
  Investments at fair value (cost: $64,610,162
       @ 9/30/04; none @ 12/31/03)............. $ 64,610,162     $          0
  Cash and cash equivalents....................   73,794,091      138,228,765
  Interest receivable .........................      598,791           23,667
  Prepaid expenses and other assets............       31,087           72,446
                                                 -----------      -----------
TOTAL ASSETS................................... $139,034,131     $138,324,878
                                                 -----------      -----------


                      LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
  Accrued expenses.............................  $    932,640    $    335,810
  Accrued offering expenses....................             0          19,441
                                                     --------          ------

    Total Liabilities..........................       932,640         355,251
                                                     --------         -------

STOCKHOLDERS' EQUITY
 Common stock, $0.01 par value,
 100,000,000 shares authorized, and
 10,125,406 and 10,000,100 issued and outstanding,
 respectively                                          101,254        100,001

 Capital in excess of par value.................   139,959,089    138,189,832
 (Overdistributed)net investment income (loss)..    (1,958,852)      (320,206)
                                                   -----------       --------

    Total Stockholders' Equity.................    138,101,491    137,969,627
                                                   -----------    -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.....  $ 139,034,131   $138,324,878
                                                 -------------    -----------





 SEE ACCOMPANYING NOTES.









                       TECHNOLOGY INVESTMENT CAPITAL CORP.
                             SCHEDULE OF INVESTMENTS
                               SEPTEMBER 30, 2004
                                   (UNAUDITED)





COMPANY (1)                 INDUSTRY                   INVESTMENT                 COST          FAIR VALUE(2)
-----------------------------------------------------------------------------------------------------------------

Questia Media,Inc.        digital media         senior secured notes(3)(4)       $ 8,665,292     $ 8,665,292


MortgageIT, Inc.          financial services    senior secured notes              15,000,000      15,000,000


Advanced Aesthetics       medical services      senior secured notes              10,000,000      10,000,000
  Institute                                      warrants to purchase
                                                  common stock                          -               -

Endurance International   webhosting            senior secured notes (4)(5)        6,855,600       6,855,600
  Group, Inc.                                    warrants to purchase
                                                 convertible preferred stock         150,000         150,000

DirectRevenue,LLC         internet advertising  senior secured notes (5)(6)        6,199,000       6,199,000
                                                 warrants to purchase
                                                  common units                       240,000         240,000

Avue Technologies,Corp.   software              senior secured notes (4)(5)        2,487,270       2,487,270
                                                 warrants to purchase
                                                  common stock                        13,000          13,000

TrenStar Inc.             logistics             senior secured notes (3)          15,000,000      15,000,000
                                                 warrants to purchase
                                                  convertible preferred stock           -               -
                                                                                ----------------------------


Total investments                                                             $   64,610,162      64,610,162
                                                                                  --------------------------


----------------------------


(1)        We do not "control" and are not an "affiliate" of any of our
           portfolio companies, each as defined in the Investment Company Act of
           1940 (the "1940 Act"). In general, under the 1940 Act, we would
           "control" a portfolio company if we owned 25% or more of its voting
           securities and would be an "affiliate" of a portfolio company if we
           owned 5% or more of its voting securities.
(2)        Fair value is determined in good faith by the Board of Directors of
           the Company.
(3)        Investment has some payment-in-kind interest.
(4)        Transaction also includes a commitment for additional notes and/or
           warrants upon satisfaction of certain specified conditions.
(5)        Cost and fair value reflect accretion of original issue discount.
(6)        Cost and fair value reflect repayment of principal.
(7)        As a percentage of net assets at September 30, 2004, investments at
           fair value are categorized as follows: senior secured notes (46.5%)
           and warrants to purchase equity securities (0.3%).

SEE ACCOMPANYING NOTES.






                    TECHNOLOGY INVESTMENT CAPITAL CORPORATION
                             STATEMENT OF OPERATIONS
          FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2004
                                   (UNAUDITED)



                                          Three Months ended    Nine Months ended
                                           September 30, 2004   September 30, 2004
                                           ------------------   ------------------

INVESTMENT INCOME
  Interest income.............................$1,652,616        $3,279,261
  Other fees .................................   691,921         1,221,921
                                               ---------         ---------

    Total Investment Income................... 2,344,537         4,501,182
                                               ---------         ---------

EXPENSES
  Salaries and benefits.......................    54,780           152,918
  Investment advisory fees....................   698,337         2,077,286
  Professional fees...........................   126,500           353,596
  Insurance...................................    20,240            60,280
  Directors' fees.............................    32,250           102,750
  General and administrative..................    65,274           177,734
                                                --------          --------

    Total Expenses............................   997,381         2,924,564
                                                --------         ---------

NET INVESTMENT INCOME.........................$1,347,156        $1,576,618
                                               ---------         ---------

NET INCREASE IN STOCKHOLDERS' EQUITY
RESULTING FROM OPERATIONS.....................$1,347,156        $1,576,618
                                               ---------         ---------


Net increase in stockholders' equity resulting
  from operations per common share:
  Basic and Diluted..........................   $ 0.13           $  0.16
Weighted average shares of common stock
  outstanding:
  Basic and Diluted.......................... 10,093,067        10,046,048





  SEE ACCOMPANYING NOTES.








                       TECHNOLOGY INVESTMENT CAPITAL CORP.
                        STATEMENT OF STOCKHOLDERS' EQUITY
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004
                                   (UNAUDITED)





                                 Common Stock            Capital       (Overdist.)       Total
                                 -----------             -------       -----------       ------
                                                      in Excess of   Net Investment  Stockholders'
                                                      ------------   --------------  -------------
                              Shares    Amount         Par Value      Income (Loss)     Equity
                              ------    ------         ---------      -------------     ------

Balance at December 31,
 2003 ..............        10,000,100 $100,001      $138,189,832     $ (320,206)    $137,969,627


Net Increase in
Stockholders' Equity
Resulting from Operations        -        -              -              1,576,618       1,576,618

Shares issued in
connection with
dividend reinvestment          125,306    1,253        1,769,257           -            1,770,510

Dividends declared               -        -              -             (3,215,264)     (3,215,264)
                           ----------------------------------------------------------------------


Balance at September 30,
  2004.............         10,125,406 $101,254      139,959,089       (1,958,852)    138,101,491

                           =======================================================================






SEE ACCOMPANYING NOTES










                    TECHNOLOGY INVESTMENT CAPITAL CORPORATION
                             STATEMENT OF CASH FLOWS
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004
                                   (UNAUDITED)







CASH FLOWS FROM OPERATING ACTIVITIES
  Net increase in stockholders' equity resulting from
    operations.......................................               $  1,576,618
  Adjustments to reconcile net increase in stockholders'
    equity resulting from operations to net cash provided/
    used by operating activities:
      Increase in interest receivable................                   (575,124)
      Decrease in prepaid expenses and other assets..                     41,359
      Increase in investments due to PIK interest....                   (665,292)
      Amortization of discounts......................                    (24,870)
      Increase in accrued expenses and
        other liabilities............................                    577,389
                                                                        --------


  Net Cash Provided by Operating Activities..........                    930,080
                                                                       ---------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of investments..........................                  (64,200,000)
  Repayment of principal...........................                      280,000
                                                                     -----------

  Net cash used in investing activities............                  (63,920,000)
                                                                     ------------


CASH FLOWS FROM FINANCING ACTIVITIES
  Dividends paid ..................................                   (1,444,754)
                                                                     ------------

NET DECREASE IN CASH AND CASH EQUIVALENTS............                (64,434,674)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD.......                138,228,765
                                                                     -----------

CASH AND CASH EQUIVALENTS, END OF PERIOD.............               $ 73,794,091
                                                                    ------------


NON-CASH FINANCING ACTIVITIES
  Shares issued in connection with
    dividend reinvestment plan....................                  $  1,770,510
                                                                    ------------



SEE ACCOMPANYING NOTES








                    TECHNOLOGY INVESTMENT CAPITAL CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004
                                   (UNAUDITED)



NOTE 1. UNAUDITED INTERIM FINANCIAL STATEMENTS

Interim financial statements of Technology Investment Capital Corp. ("TICC" or
"Company") are prepared in accordance with generally accepted accounting
principles ("GAAP")for interim financial information and pursuant to the
requirements for reporting on Form 10-Q and Article 10 of Regulation S-X.
Accordingly, certain disclosures accompanying annual financial statements
prepared in accordance with GAAP are omitted. In the opinion of management, all
adjustments, consisting solely of normal recurring accruals, necessary for the
fair presentation of financial statements for the interim periods have been
included. The current period's results of operations are not necessarily
indicative of results that may be achieved for the year. The interim financial
statements and notes thereto should be read in conjunction with the financial
statements and notes thereto included in the Company's Form 10-K for the year
ended December 31, 2003, as filed with the Securities and Exchange Commission.

NOTE 2. ORGANIZATION

TICC was incorporated under the General Corporation Laws of the State of
Maryland on July 21, 2003 as a closed-end investment company. The Company has
elected to be treated as a business development company under the Investment
Company Act of 1940, as amended (the "1940 Act"). In addition, the Company
intends to operate so as to qualify to be taxed as a regulated investment
company, or RIC, under the Internal Revenue Code of 1986, as amended (the
"Code"). The Company's investment objective is to maximize its total return,
principally by investing in the debt and/or equity securities of
technology-related companies.

TICC's investment activities are managed by Technology Investment Management,
LLC, ("TIM"), a registered investment adviser under the Investment Advisers Act
of 1940, as amended. BDC Partners, LLC ("BDC") is the managing member of TIM and
serves as the administrator of TICC.

On November 26, 2003, the Company closed its initial public offering and sold
8,695,653 shares of its common stock at a price to the public of $15.00 per
share, less an underwriting discount of $1.05 per share and offering expenses of
$954,048. Certain of TICC's directors and officers and employees of BDC Partners
purchased shares at the public offering price net of the sales concession. On
December 10, 2003, the Company issued an additional 1,304,347 shares of its
common stock at the






same price pursuant to the underwriters' overallotment. The total net proceeds
to the Company from the initial public offering, including the exercise of the
overallotment, were $138,545,952. The Company also reimbursed TIM for
approximately $350,000 for organizational expenses advanced by TIM on behalf of
TICC.

NOTE 3. INVESTMENT VALUATION

The Company carries its investments at fair value, as determined in good faith
by the Board of Directors. Securities that are publicly traded are valued at the
closing price on the valuation date. Debt and equity securities that are not
publicly traded are valued at fair value as determined in good faith by the
Board of Directors. Beginning in March 2004, the Company engaged an independent
valuation firm, Houlihan Lokey Howard & Zukin ("Houlihan Lokey"), to perform
independent valuations of its investments. The Board of Directors uses the
recommended valuations as prepared by Houlihan Lokey as a component of the
foundation for the final fair value determination. In making such determination,
the Board of Directors values non-convertible debt securities at cost plus
amortized original issue discount plus payment-in-kind ("PIK") interest, if any,
unless material factors lead to a determination of a lesser or greater
valuation. Due to the uncertainty inherent in the valuation process, such
estimates of fair value may differ significantly from the values that would have
resulted had a readily available market for the securities existed, and the
differences could be material. Additionally, changes in the market environment
and other events that may occur over the life of the investments may cause the
gains or losses ultimately realized on these investments to be different than
the valuation currently assigned.

NOTE 4. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted net increase
in stockholders' equity resulting from operations per share for the three months
and nine months ended September 30, 2004:



                                                Three Months ended  Nine Months ended
                                                September 30, 2004  September 30, 2004
                                                ------------------  ------------------

Numerator for basic and diluted
   earnings per share.......................       $1,347,156         $1,576,618
Denominator for basic and diluted
   weighted average shares..................       10,093,067         10,046,048

Basic and diluted net increase in stockholders'
   equity resulting from operations
   per common share.........................          $0.13            $ 0.16


NOTE 5. RELATED PARTY TRANSACTIONS

The Company's investment activities are managed by its investment adviser,
Technology Investment Management, LLC ("TIM") pursuant to an investment advisory
agreement. TIM is owned by BDC Partners, LLC, its managing member, and Royce &
Associates, LLC. Jonathan Cohen, our Chief Executive Officer, and Saul
Rosenthal, our President and Chief Operating Officer, are the members of BDC
Partners, and Charles Royce, our non-executive Chairman, is the President of
Royce & Associates. For the three months and nine months ended September 30,
2004, TICC incurred investment advisory fees of approximately $698,000 and
$2,077,000, respectively; approximately $698,000 was payable to TIM at the end
of the quarter. Pursuant to the terms of its administration agreement with BDC
Partners, TICC incurred $54,780




and $152,918 in compensation expenses for employees allocated to the
administrative activities of TICC and $11,353 and $17,262 for reimbursement of
facility costs allocated to TICC, for the three months and nine months ended
September 30, 2004, respectively. At September 30, 2004 $9,894 and $0 remained
payable to BDC Partners for compensation expense and facility costs,
respectively.

NOTE 6. DIVIDENDS

The Company intends to operate so as to qualify to be taxed as a RIC under the
Internal Revenue Code and, as such, would not be subject to federal income tax
on the portion of its taxable income and gains distributed to stockholders. To
qualify as a RIC, the Company is required, among other requirements, to
distribute at least 90% of its investment company taxable income, as defined by
the Code. The amount to be paid out as a dividend is determined by the Board of
Directors each quarter and is based upon the annual earnings estimated by the
management of the Company.

To the extent the Company's earnings fall below management's annual estimate,
however, a portion of the total amount of the Company's dividends for the fiscal
year may be deemed a tax return of capital to the Company's stockholders.
Management currently believes that a tax return of capital is likely to occur
with respect to the current fiscal year. Specifically, the dividend we intend to
distribute on December 31, 2004 may result in a tax return of capital to our
shareholders. A written statement identifying the source of the dividend (i.e.,
net income from operations, accumulated undistributed net profits from the sale
of securities, and/or paid-in capital surplus) will accompany our fourth quarter
dividend payments to our shareholders.

On September 30, 2004, the Company paid a dividend of $0.11 per share. On
October 27, 2004, the Company declared a dividend of $0.11 per share for the
fourth quarter.

The Company has a dividend reinvestment plan under which all net investment
income dividends and capital gain distributions are paid to stockholders in the
form of additional shares unless a stockholder elects to receive cash.

NOTE 7. NET ASSET VALUE PER SHARE

The Company's net asset value per share at September 30, 2004 was $13.64, and at
December 31, 2003 was $13.80. In determining the Company's net asset value per
share, the Board of Directors determined in good faith the net asset value of
the Company's portfolio investments for which no public trading market exists.

NOTE 8.  PAYMENT-IN-KIND INTEREST

The Company has loans in its portfolio which contain a payment-in-kind ("PIK")
provision. The PIK interest is added to the principal balance of the loan and
recorded as income. To maintain the Company's status as a RIC (as discussed in
Note 6, above), this non-cash source of income must be paid out to stockholders
in the form of dividends, even though the Company has not yet collected the
cash. For the three months and nine months ended September 30, 2004, the Company
recorded PIK income of $253,726 and $665,292, respectively, and a corresponding
increase in the cost of the investment. In addition, the Company recorded
original issue discount income of approximately $24,870 for each of the three
months and nine months ended September 30, 2004, representing the amortization
of the discounted cost attributed to certain debt securities purchased by the
Company in connection with the issuance of warrants.



NOTE 9. OTHER FEES

For the three months and nine months ended September 30, 2004, other fees
totaled $691,921 and $1,221,921 respectively. These fees include closing fees,
including origination fees, associated with investments in portfolio companies.
Such fees are normally paid at the closing of the Company's investments and are
generally non-recurring.

The 1940 Act requires that a business development company make available
managerial assistance to its portfolio companies. The Company may receive fee
income for managerial assistance it renders to portfolio companies in connection
with its investments. For the three months and nine months ended September 30,
2004, the Company received no fee income for managerial assistance.


NOTE 10. FINANCIAL HIGHLIGHTS



                                         Three Months ended       Nine Months ended
                                         September 30, 2004       September 30, 2004
                                             (UNAUDITED)             (UNAUDITED)
                                             -----------             ----------

Per Share Data (1)

Net asset value at beginning of period        $ 13.61               $ 13.80
Net investment income (2)                        0.13                  0.16
Net realized and unrealized gains (5)            0.01                  0.00
Distributions from net investment income        (0.11)                (0.32)
                                                ------                ------
Net asset value at end of period              $ 13.64               $ 13.64
                                                ------                ------

Per share market value at beginning of period $ 13.51               $ 15.55
Per share market value at end of period         13.99                 13.99
Total return (3)(4)                              4.4%                 (8.0)%
Shares outstanding at end of period          10,125,406           10,125,406


Ratios/Supplemental Data

Net assets at end of period                 $ 138,101,491        $ 138,101,491
Average net assets                            137,584,626          137,711,756
Ratio of expenses to average net assets -
        annualized                                2.90%                 2.83%
Ratio of net investment income to average
        net assets - annualized                   3.92%                 1.53%

------------------------------------------

(1) Basic per share data.
(2) Represents per share net investment income for the period.
(3) Calculated using weighted average share method.
(4) Total return equals the increase or decrease in the ending market value plus
    dividends divided by the beginning market value.
(5) Represents rounding adjustment to reconcile change in net asset value per
    share; there were no actual realized or unrealized gains or losses for the
    periods presented.








NOTE 11. CASH AND CASH EQUIVALENTS

At September 30, 2004 and December 31, 2003, respectively, cash and cash
equivalents consisted of:



                                               September 30, 2004       December 31, 2003
                                               ------------------       -----------------

UBS Select Money Market Fund...............   $    1,319,900               $  28,000,000
Eurodollar Time Deposit(due 10/1/04) ......       21,700,000                  10,000,000
U.S. Treasury Bill (due 1/22/04)...........            -                      49,976,083
U.S. Treasury Bill (due 3/18/04)...........            -                      49,910,167
Federal National Mortgage Assn. discount note
 (due 10/7/04).............................       49,986,500                  -
                                                ------------            ----------------

            Total Cash Equivalents.........       73,006,400                 137,886,250
            Cash ..........................          787,691                     342,515
                                                ------------            ----------------

            Cash and Cash Equivalents ....     $  73,794,091               $ 138,228,765
                                               -------------            ----------------



NOTE 12. COMMITMENTS

As part of the Company's investment in the senior notes of Questia Media, Inc.,
a commitment for an additional purchase of $2 million in senior notes, over the
two year period ending January 28, 2006, was issued. The fulfillment of this
commitment is contingent on the achievement of agreed-upon financial milestones.

Similarly, the investments in Avue Technologies, Inc. and Endurance
International Group, Inc. also provide for additional purchases of notes, in the
amounts of $5 million and $3 million, respectively, based upon achieving certain
financial milestones.

NOTE 13. SUBSEQUENT EVENTS

On October 4, 2004 the Company announced that it had completed a $13 million
transaction with 3001, Inc. 3001, Inc. is a leading single-source provider of
geospatial data production and analysis, including airborne imaging, surveying,
mapping, and Geographic Information Systems. TICC's investment consists of $10
million in senior notes, $2 million in preferred stock and $1 million in common
stock.

On October 27, 2004, the Company declared a cash dividend of $0.11 per share to
holders of record on December 10, 2004, payable on December 31, 2004.

NOTE 14. RECLASSIFICATIONS

For the three months and nine months ended September 30, 2004 valuation fees
were classified as professional fees; in prior periods, approximately $32,000 of
such fees were classified as general and administrative expenses.








ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

The information contained in this section should be read in conjunction with the
Selected Financial Data and Other Data, and our Financial Statements and notes
thereto appearing elsewhere in this Quarterly Report. This Quarterly Report,
including the Management's Discussion and Analysis of Financial Condition and
Results of Operations, contains forward-looking statements that involve
substantial risks and uncertainties. These forward-looking statements are not
historical facts, but rather are based on current expectations, estimates and
projections about our industry, our beliefs, and our assumptions. Words such as
"anticipates", "expects", "intends", "plans", "believes", "seeks", and
"estimates" and variations of these words and similar expressions are intended
to identify forward-looking statements. These statements are not guarantees of
future performance and are subject to risks, uncertainties, and other factors,
some of which are beyond our control and are difficult to predict and could
cause actual results to differ materially from those expressed or forecasted in
the forward-looking statements, including without limitation:

         o        economic downturns or recessions may impair our portfolio
                  companies' performance;

         o        a contraction of available credit and/or an inability to
                  access the equity markets could impair our lending and
                  investment activities;

         o        the risks associated with the possible disruption in the
                  Company's operations due to terrorism; and

         o        the risks, uncertainties and other factors we identify from
                  time to time in our filings with the Securities and Exchange
                  Commission, including our Form 10-Ks, Form 10-Qs and Form
                  8-Ks.

Although we believe that the assumptions on which these forward-looking
statements are based are reasonable, any of those assumptions could prove to be
inaccurate, and as a result, the forward-looking statements based on those
assumptions also could be incorrect. In light of these and other uncertainties,
the inclusion of a projection or forward-looking statement in this Quarterly
Report should not be regarded as a representation by us that our plans and
objectives will be achieved. You should not place undue reliance on these
forward-looking statements, which apply only as of the date of this Quarterly
Report. We undertake no obligation to update such statements to reflect
subsequent events.

The following analysis of our financial condition and results of operations
should be read in conjunction with our financial statements and the notes
thereto contained elsewhere in this report.

OVERVIEW

Our investment objective is to maximize our portfolio's total return,
principally by investing in the debt and/or equity securities of
technology-related companies. Our primary focus is to seek current income
through investment in debt and long-term capital appreciation by acquiring
accompanying warrants or other equity securities. We may also invest in the
publicly traded debt and/or equity securities of other technology-related
companies. We operate as a closed-end, non-diversified management investment
company, and have elected to be treated as a business development company under
the 1940 Act. We have elected to be treated for tax purposes as a regulated
investment company, or RIC, under the Internal Revenue Code of 1986 (the
"Code"), beginning with the 2003 taxable year.

Our investment activities are managed by TIM, a registered investment adviser
under the Investment Advisers Act of 1940. TIM is owned by BDC Partners, its
managing member, and Royce & Associates, LLC. Jonathan H. Cohen, our Chief
Executive Officer, and Saul B. Rosenthal, our President and Chief Operating
Officer, are the members of BDC Partners, and Charles M. Royce, our
non-executive Chairman, is the President of Royce & Associates, LLC. Under the
investment advisory agreement, we have agreed to pay TIM an annual base fee and
an incentive fee based upon our performance. Under the administration




agreement, we have agreed to pay or reimburse BDC Partners, as administrator,
for certain expenses incurred in operating TICC.

We concentrate our investments in companies having annual revenues of less than
$100 million and/or a market capitalization of less than $200 million. We focus
on companies that create products or provide services requiring advanced
technology and companies that compete in industries characterized by such
products or services, including companies in the following businesses: Internet,
IT services, media, telecommunications, semiconductors, hardware and
technology-enabled services.

While the structure of our investments varies, we invest primarily in the debt
of established technology-related companies. We seek to invest in entities that,
as a general matter, have been operating for at least one year prior to the date
of our investment and at the time of our investment have employees and revenues.
Many of these companies will have financial backing provided by private equity
or venture capital funds or other financial or strategic sponsors at the time we
make an investment. Our investments typically range from $5 million to $15
million, mature in up to seven years and accrue interest at fixed or variable
rates. Our loans may carry a provision for deferral of some or all of the
interest payments, which is added to the principal amount of the loan. This form
of deferred interest is referred to as "payment-in-kind" or "PIK" interest and,
when earned, is recorded as interest income and an increase in the principal
amount of the loan. We had PIK interest of approximately $254,000 for the
quarter ended September 30, 2004.

To the extent possible, our loans are collateralized by a security interest in
the borrower's assets and/or guaranteed by a principal to the transaction.
Interest payments, if not deferred, are normally payable quarterly. In addition,
we seek an equity component in connection with a substantial portion of our
investments, in the form of warrants to purchase stock or similar equity
instruments. When we receive a warrant to purchase stock in a portfolio company,
the warrant will frequently have a nominal strike price, and will entitle us to
purchase a modest percentage of the borrower's stock.

In addition, as a business development company under the 1940 Act, we are
required to make available significant managerial assistance, for which we may
receive fees, to our portfolio companies. These fees are generally
non-recurring, however in some instances they may have a recurring component. We
have received no fee income for managerial assistance to date.

Prior to making an investment, we typically enter into a non-binding term sheet
with the potential portfolio company. These term sheets are generally subject to
a number of conditions, including but not limited to the satisfactory completion
of our due diligence investigations of the company's business and legal
documentation for the loan.

Since our initial public offering in November 2003 through November 9, 2004 we
have made eight loans to target companies in the total amount of $77.6 million,
with a commitment of an additional $10.0 million to three of our portfolio
companies.







We have completed the following transactions since our initial public offering:



                                                                                         AMOUNT AT COST
            PORTFOLIO COMPANY                     DATE              INVESTMENT           (IN THOUSANDS)
            -----------------                     ----              ----------           --------------


Questia Media, Inc. (1)(2)                 January 2004            Senior secured
                                                                            notes                $8,665

MortgageIT, Inc.                           March 2004              Senior secured
                                                                            notes                15,000

Advanced Aesthetics Institute              March 2004              Senior secured
                                                                            notes                10,000

                                                                      Warrants to
                                                                  purchase common
                                                                            stock                    --

The Endurance International Group (1)      July 2004               Senior secured
                                                                            notes                 6,856


                                                                      Warrants to
                                                                         purchase
                                                                      convertible
                                                                  preferred stock                   150

DirectRevenue, LLC                         August 2004             Senior secured
                                                                            notes                 6,199

                                                                      Warrants to
                                                                  purchase common
                                                                            units                   240

Avue Technologies Corporation (1)          August 2004             Senior secured
                                                                            notes                  2,487

                                                                      Warrants to
                                                                  purchase common
                                                                            stock                    13

Trenstar Inc. (2)                          September 2004          Senior secured
                                                                            notes                15,000

                                                                      Warrants to
                                                                         purchase
                                                                      convertible
                                                                  preferred stock                    --

3001, Inc. (3)                             October 2004          Senior unsecured
                                                                            notes                10,000

                                                                  Preferred stock                 2,000

                                                                     Common stock                 1,000
                                                                                               --------

TOTAL INVESTMENTS:                                                                              $77,610
                                                                                               ========


(1)      Total investment includes issuance of additional senior notes and/or
         warrants upon the satisfaction of certain specified conditions.
(2)      Includes a payment-in-kind component.
(3)      Preferred stock and common stock are indirectly held through
         limited liability company interests.


In addition, we believe that we have a strong pipeline of potential transactions
in various stages. We continue to work diligently toward the consummation of
additional investments, and our management is actively involved in identifying
and evaluating potential opportunities. We currently believe that we will have
substantially invested the proceeds from our initial public offering by the end
of 2004 based upon our current pipeline.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements and related disclosures in conformity
with generally accepted accounting principles in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosure of contingent assets and liabilities at the
date of the financial statements, and revenues and expenses during the periods
reported. Actual results could materially differ from those estimates. We have
identified our investment valuation process as our most critical accounting
policy.







Investment Valuation
--------------------

The most significant estimate inherent in the preparation of our financial
statements is the valuation of investments and the related amounts of unrealized
appreciation and depreciation of investments recorded.

We value our investment portfolio each quarter. Members of our portfolio
management team provide information to our Board of Directors on each portfolio
company including the most recent financial statements and forecasts, if any. In
addition, we have engaged the firm of Houlihan Lokey to evaluate our portfolio
investments, although our Board of Directors retains ultimate authority as to
the appropriate valuation of each investment. At September 30, 2004, our board
of directors used the information provided by the portfolio management team and
Houlihan Lokey in its determination of the final fair value of investments, as
noted in the Schedule of Investments.

The Board of Directors' final determination of fair value is based on some or
all of the following factors, as applicable, and any other factors considered to
be relevant:

         o        the nature of any restrictions on the disposition of the
                  securities;
         o        assessment of the general liquidity/illiquidity of the
                  securities;
         o        the issuer's financial condition, including its ability to
                  make payments and its earnings and discounted cash flow;
         o        the markets in which the issuer does business;
         o        the cost of the investment;
         o        the size of the holding and the capitalization of issuer;
         o        the nature and value of any collateral;
         o        the prices of any recent transactions or bids/offers for the
                  securities or similar securities or any comparable securities
                  that are publicly traded; and
         o        any available analyst, media or other reports or information
                  deemed reliable by the independent valuation firm regarding
                  the issuer or the markets or industry in which it operates.

        Fair value securities may include, but are not limited to, the
following:

         o        private placements and restricted securities that do not have
                  an active trading market;
         o        securities whose trading has been suspended or for which
                  market quotes are no longer available;
         o        debt securities that have recently gone into default and for
                  which there is no current market;
         o        securities whose prices are stale; and
         o        securities affected by significant events.

In addition, when we receive nominal cost warrants or free equity securities
("nominal cost equity") in connection with our purchase of debt securities, we
allocate our cost basis in our investment between the debt securities and our
nominal cost equity at the time of origination. At that time, the original issue
discount basis of the nominal cost equity is recorded by increasing the cost
basis in the equity and decreasing the cost basis in the related debt
securities.








RESULTS OF OPERATIONS

We were incorporated on July 21, 2003 and commenced operations in November 2003.
Therefore, there is no period with which to compare the results of operations
for the first, second and third quarters of 2004.

For the three months ended September 30, 2004.

INVESTMENT INCOME

Investment income for the three months ended September 30, 2004 was
approximately $2,345,000. This amount primarily consisted of interest income of
approximately $1,072,000 cash interest from portfolio investments, $302,000 from
cash and cash equivalents, $254,000 in PIK from one of our debt investments, and
amortization of original issue discount of approximately $25,000. Non-recurring
fee income of $692,000 was also recorded, which consisted primarily of
origination fees earned in connection with the initiation of new investments.

Interest income from our investment in cash and cash equivalents reflects the
investment of the net proceeds from our initial public offering. Income from
investments in debt securities increased in the third quarter reflecting our
accrual of interest from four new portfolio investments.

OPERATING EXPENSES

Operating expenses for the three months ended September 30, 2004 were
approximately $997,000. This amount consisted primarily of investment advisory
fees, salaries and benefits, professional fees, and general and administrative
expenses.

The investment advisory fee for the quarter was approximately $698,000,
representing the base fee as provided for in the advisory agreement. Salaries
and benefits were approximately $55,000, reflecting the allocation of
compensation expenses for the services of our Chief Financial Officer, office
manager, and the Vice President of Investor Relations.

Professional fees, consisting of legal, valuation and audit fees, were $126,500;
in prior periods valuation fees of approximately $32,000 were included in
general and administrative expenses. Directors' fees were approximately $32,000
for the quarter, and insurance costs were $20,240.

General and administrative expenses, consisting primarily of custody and
accounting services fees, transfer agent fees, office supplies, facilities costs
and other expenses, were approximately $65,000. Office supplies, facilities
costs and other expenses are allocated to the Company under the terms of the
administration agreement with TIM and BDC Partners.

NET INCREASE IN STOCKHOLDERS' EQUITY FROM OPERATIONS

We had a net increase in stockholders' equity resulting from operations of
approximately $1,347,000 for the three months ended September 30, 2004. Based on
a weighted-average of 10,093,067 (basic and fully diluted) shares outstanding,
our net increase in stockholders' equity from operations per common share for
the three months ended September 30, 2004 was $0.13 for basic and fully diluted
earnings.

For the nine months ended September 30, 2004.

INVESTMENT INCOME

Investment income for the nine months ended September 30, 2004 was approximately
$4,501,000. This amount primarily consisted of interest income of approximately
$1,763,000 cash interest from portfolio investments, $826,000 from cash and cash
equivalents, $665,000 in PIK from one of our debt investments, and amortization
of original issue discount of approximately $25,000. Non-recurring fee income of
approximately $1,222,000 was also recorded, which consisted primarily of
origination fees earned in connection with the initiation of new investments.



Interest income from our investment in cash and cash equivalents reflects the
investment of the net proceeds from our initial public offering. Income from
investments in debt securities increased during the nine months ended September
30, 2004 reflecting our accrual of interest from seven new portfolio
investments.

OPERATING EXPENSES

Operating expenses for the nine months ended September 30, 2004 were
approximately $2,925,000. This amount consisted primarily of investment advisory
fees, salaries and benefits, professional fees, and general and administrative
expenses.

The investment advisory fee for the nine months was approximately $2,077,000,
representing the base fee as provided for in the advisory agreement. On June 17,
2004, our shareholders approved an amendment to our investment advisory
agreement that changed our base fee from 2.0% of net assets to 2.0% of gross
assets. The portion of the investment advisory fee payable subsequent to that
date was calculated in accordance with the terms of that amendment.

Salaries and benefits were approximately $153,000, reflecting the allocation of
compensation expenses for the services of our Chief Financial Officer, office
manager, and the Vice President of Investor Relations.

Professional fees, consisting of legal, valuation and audit fees, were
approximately $354,000; in prior periods valuation fees were included in general
and administrative expenses. Directors' fees were $102,750 for the nine months
ended September 30, 2004, and insurance costs were $60,280.

General and administrative expenses, consisting primarily of custody and
accounting services fees, transfer agent fees, office supplies, facilities costs
and other expenses, were approximately $178,000. Office supplies, facilities
costs and other expenses are allocated to the Company under the terms of the
administration agreement with TIM and BDC Partners.

NET INCREASE IN STOCKHOLDERS' EQUITY FROM OPERATIONS

We had a net increase in stockholders' equity resulting from operations of
approximately $1,577,000 for the nine months ended September 30, 2004. Based on
a weighted-average of 10,046,048 (basic and fully diluted) shares outstanding,
our net increase in stockholders' equity from operations per common share for
the nine months ended September 30, 2004 was $0.16 for basic and fully diluted
earnings.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2004, we had investments in debt securities of, or loans to,
seven private companies, totaling approximately $64.6 million of total
investment assets. This number includes approximately $665,000 in accrued PIK
interest which, as described in "Overview," is added to the carrying value of
our investments, as well as repayments of principal.

Cash provided by operating activities for the nine months ended September 30,
2004, consisting primarily of the items described in "Results of Operations,"
was approximately $930,000, reflecting net investment income, offset to some
degree by non-cash income related to PIK interest and original issue discount,
and the increase in accrued interest receivable.

During the nine months ended September 30, 2004, cash and cash equivalents
decreased from approximately $138.2 million at the beginning of the period to
approximately $73.8 million at the end of the period due primarily to our
investing activities. As a business development company, we expect to have an
ongoing need to raise additional capital for investment purposes. As a result,
we expect from time to time to access the debt and/or equity markets when we
believe it is necessary and appropriate to do so.

In order to qualify as a regulated investment company and to avoid corporate
level tax on the income we distribute to our stockholders, we are required,
under Subchapter M of the Code, to distribute at least 90% of our ordinary





income and short-term capital gains to our stockholders on an annual basis. In
accordance with these requirements, we declared a dividend of $0.10 per common
share the first quarter, which was paid in April 2004, a dividend of $0.11 per
share in the second quarter which was paid on June 30, 2004, and a dividend of
$0.11 per share in the third quarter which was paid on September 30, 2004. On
October 27, 2004, the Company declared a dividend of $0.11 per share for the
fourth quarter.

To the extent the Company's earnings fall below management's annual estimate,
however, a portion of the total amount of the Company's dividends for the fiscal
year may be deemed a tax return of capital to the Company's stockholders.
Management currently believes that a tax return of capital is likely to occur
with respect to the current fiscal year. Specifically, the dividend we intend to
distribute on December 31, 2004 may result in a tax return of capital to our
shareholders. A written statement identifying the source of the dividend (i.e.,
net income from operations, accumulated undistributed net profits from the sale
of securities, and/or paid-in-capital surplus) will accompany our fourth quarter
dividend payments to our shareholders.

RISK FACTORS

An investment in our securities involves certain risks relating to our structure
and investment objectives. The risks set out below are not the only risks we
face. If any of the following risks occur, our business, financial condition and
results of operations could be materially adversely affected. In such case, our
net asset value and the trading price of our common stock could decline, and you
may lose all or part of your investment.

RISKS RELATING TO OUR BUSINESS AND STRUCTURE

WE ARE A NEW COMPANY WITH LIMITED OPERATING HISTORY.

We were incorporated in July 2003 and have a limited operating history. We are
subject to all of the business risks and uncertainties associated with any new
business enterprise, including the risk that we will not achieve our investment
objective and that the value of your investment in us could decline
substantially.

ANY FAILURE ON OUR PART TO MAINTAIN OUR STATUS AS A BUSINESS DEVELOPMENT COMPANY
WOULD REDUCE OUR OPERATING FLEXIBILITY.

If we do not remain a business development company, we might be regulated as a
closed-end investment company under the 1940 Act, which would decrease our
operating flexibility.

WE ARE DEPENDENT UPON TIM'S KEY MANAGEMENT PERSONNEL FOR OUR FUTURE SUCCESS,
PARTICULARLY JONATHAN H. COHEN, SAUL B. ROSENTHAL AND LEE D. STERN.

We depend on the diligence, skill and network of business contacts of the senior
management of TIM. The senior management, together with other investment
professionals, evaluate, negotiate, structure, close, monitor and service our
investments. Our future success will depend to a significant extent on the
continued service and coordination of the senior management team, particularly
Jonathan H. Cohen, the Chief Executive Officer of TIM, Saul B. Rosenthal, the
President and Chief Operating Officer of TIM, and Lee D. Stern, the Chief
Transaction Officer of TIM. Only Messrs. Rosenthal and Stern devote
substantially all of their business time to our operations. Neither Mr.
Rosenthal nor Mr. Stern has extensive private equity investment experience, and
neither Mr. Cohen nor Mr. Rosenthal has extensive private debt investment
experience. None of these individuals is subject to an employment contract. The
departure of any of these employees could have a material adverse effect on our
ability to achieve our investment objective.

OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS WILL DEPEND ON OUR ABILITY TO
MANAGE OUR FUTURE GROWTH EFFECTIVELY.

TIM is a recently formed investment adviser, and TICC is a recently organized
company. As such, each entity is subject to the business risks and uncertainties
associated with any new business enterprise, including the lack of experience in
managing or operating a business development company. Our ability to achieve our
investment objective will depend on our ability to grow, which will depend, in
turn, on our investment adviser's ability to identify, analyze, invest in and
finance companies that meet our investment criteria. Accomplishing this result
on a cost-effective basis is largely a function of our investment adviser's
structuring of the investment process, its ability to provide competent,
attentive and efficient services to us and our access to financing on acceptable
terms. As we grow, we and TIM, through its managing member, BDC Partners, will
need to hire, train, supervise and manage new employees. Failure to manage our
future





growth effectively could have a material adverse effect on our business,
financial condition and results of operations.

WE OPERATE IN A HIGHLY COMPETITIVE MARKET FOR INVESTMENT OPPORTUNITIES.

A large number of entities compete with us to make the types of investments that
we make in target technology-related companies. We compete with a large number
of private equity and venture capital funds, other equity and non-equity based
investment funds, investment banks and other sources of financing, including
traditional financial services companies such as commercial banks and specialty
finance companies. Many of our competitors are substantially larger and have
considerably greater financial, technical and marketing resources than we do.
For example, some competitors may have a lower cost of funds and access to
funding sources that are not available to us. In addition, some of our
competitors may have higher risk tolerances or different risk assessments, which
could allow them to consider a wider variety of investments and establish more
relationships than us. Furthermore, many of our competitors are not subject to
the regulatory restrictions that the 1940 Act imposes on us as a business
development company. There can be no assurance that the competitive pressures we
face will not have a material adverse effect on our business, financial
condition and results of operations. Also, as a result of this competition, we
may not be able to take advantage of attractive investment opportunities from
time to time, and we can offer no assurance that we will be able to identify and
make investments that are consistent with our investment objective.

OUR BUSINESS MODEL DEPENDS UPON THE DEVELOPMENT OF STRONG REFERRAL RELATIONSHIPS
WITH PRIVATE EQUITY AND VENTURE CAPITAL FUNDS AND INVESTMENT BANKING FIRMS.

Senior management of TIM maintains active communication with private equity and
venture capital funds and investment banking firms in order to seek out
investment opportunities. We rely, to a significant extent, upon these informal
relationships to provide us with deal flow. If we fail to maintain our
relationships with key firms, or if we fail to establish strong referral
relationships with other firms or other sources of investment opportunities, we
will not be able to grow our portfolio of loans and achieve our investment
objective. In addition, persons with whom we have informal relationships are not
obligated to provide us with investment opportunities, and therefore, there is
no assurance that such relationships will lead to the origination of debt or
other investments.

WE MAY NOT REALIZE GAINS FROM OUR EQUITY INVESTMENTS.

When we invest in debt securities, we generally expect to acquire warrants or
other equity securities as well. Our goal is ultimately to dispose of these
equity interests and realize gains upon our disposition of such interests. Over
time, the gains that we realize on these equity interests may offset, to some
extent, losses we experience on defaults under debt securities that we hold.
However, the equity interests we receive may not appreciate in value and, in
fact, may decline in value. Accordingly, we may not be able to realize gains
from our equity interests, and any gains that we do realize on the disposition
of any equity interests may not be sufficient to offset any other losses we
experience.

BECAUSE MOST OF OUR INVESTMENTS ARE NOT IN PUBLICLY TRADED SECURITIES, THERE IS
UNCERTAINTY REGARDING THE VALUE OF OUR INVESTMENTS, WHICH COULD ADVERSELY AFFECT
THE DETERMINATION OF OUR NET ASSET VALUE.

Our portfolio investments are not generally in publicly traded securities. As a
result, the fair value of these securities is not readily determinable. We value
these securities at fair value as determined in good faith by our Board of
Directors based upon the recommendation of its Valuation Committee. The
Valuation Committee utilizes the services of Houlihan Lokey, an independent
valuation firm. However, the Board of Directors retains ultimate authority as to
the appropriate valuation of each investment. The types of factors that the
Valuation Committee takes into account in providing its fair value
recommendation to the Board of Directors includes, as relevant, the nature and
value of any collateral, the portfolio company's ability to make payments and
its earnings, the markets in which the portfolio company does business,
comparison to valuations of publicly traded companies, comparisons to recent
sales of comparable companies, the discounted value of the cash flows of the
portfolio company and other relevant factors. Because such






valuations are inherently uncertain and may be based on estimates, our
determinations of fair value may differ materially from the values that would
be assessed if a readily available market for these securities existed.

THE LACK OF LIQUIDITY IN OUR INVESTMENTS MAY ADVERSELY AFFECT OUR BUSINESS.

As stated above, our investments are not generally in publicly traded
securities. Substantially all of these securities are subject to legal and other
restrictions on resale or will otherwise be less liquid than publicly traded
securities. The illiquidity of our investments may make it difficult for us to
sell such investments if the need arises. Also, if we are required to liquidate
all or a portion of our portfolio quickly, we may realize significantly less
than the value at which we have previously recorded our investments.

In addition, since we generally invest in debt securities with a term of up to
seven years and hold our investments in debt securities and related equity
securities until maturity of the debt, we do not expect realization events, if
any, to occur in the near-term. We expect that our holdings of equity securities
may require several years to appreciate in value, and we can offer no assurance
that such appreciation will occur.

WE MAY EXPERIENCE FLUCTUATIONS IN OUR QUARTERLY RESULTS.

We may experience fluctuations in our quarterly operating results due to a
number of factors, including the rate at which we make new investments, the
interest rates payable on the debt securities we acquire, the default rate on
such securities, the level of our expenses, variations in and the timing of the
recognition of realized and unrealized gains or losses, the degree to which we
encounter competition in our markets and general economic conditions. As a
result of these factors, results for any period should not be relied upon as
being indicative of performance in future periods.

REGULATIONS GOVERNING OUR OPERATION AS A BUSINESS DEVELOPMENT COMPANY AFFECT OUR
ABILITY TO, AND THE WAY IN WHICH WE RAISE ADDITIONAL CAPITAL, WHICH MAY EXPOSE
US TO RISKS, INCLUDING THE TYPICAL RISKS ASSOCIATED WITH LEVERAGE.

Our business will require a substantial amount of capital, which we may acquire
from the following sources:

SENIOR SECURITIES AND OTHER INDEBTEDNESS
We may issue debt securities or preferred stock and/or borrow money from banks
or other financial institutions, which we refer to collectively as "senior
securities," up to the maximum amount permitted by the 1940 Act. Under the
provisions of the 1940 Act, we are permitted, as a business development company,
to issue senior securities in amounts such that our asset coverage, as defined
in the 1940 Act, equals at least 200% after each issuance of senior securities.
If we issue senior securities, including preferred stock and debt securities, we
will be exposed to typical risks associated with leverage, including an
increased risk of loss. If we incur leverage to make investments, a decrease in
the value of our investments would have a greater negative impact on the value
of our common stock. If we issue debt securities or preferred stock, it is
likely that such securities will be governed by an indenture or other instrument
containing covenants restricting our operating flexibility. In addition, such
securities may be rated by rating agencies, and in obtaining a rating for such
securities, we may be required to abide by operating and investment guidelines
that could further restrict our operating flexibility.

Our ability to pay dividends or issue additional senior securities would be
restricted if our asset coverage ratio were not at least 200%. If the value of
our assets declines, we may be unable to satisfy this test. If that happens, we
may be required to sell a portion of our investments and, depending on the
nature of our leverage, repay a portion of our indebtedness at a time when such
sales may be disadvantageous. Furthermore, any amounts that we use to service
our indebtedness would not be available for distributions to our common
stockholders.

COMMON STOCK



We are not generally able to issue and sell our common stock at a price below
net asset value per share. We may, however, sell our common stock, or warrants,
options or rights to acquire our common stock, at a price below the then current
net asset value of our common stock if our Board of Directors determines that
such sale is in the best interests of TICC and its stockholders and our
stockholders approve such sale (under certain limited exceptions, stockholder
approval may not be required). In any such case, the price at which our
securities are to be issued and sold may not be less than a price which, in the
determination of our Board of Directors, closely approximates the market value
of such securities (less any distributing commission or discount). If we raise
additional funds by issuing more common stock or senior securities convertible
into, or exchangeable for, our common stock, the percentage ownership of our
stockholders at that time would decrease and they may experience dilution.
Moreover, we can offer no assurance that we will be able to issue and sell
additional equity securities in the future, on favorable terms or at all.

A CHANGE IN INTEREST RATES MAY ADVERSELY AFFECT OUR PROFITABILITY.

A portion of our income will depend upon the difference between the rate at
which we borrow funds (if we do borrow) and the interest rate on the debt
securities in which we invest. We anticipate using a combination of equity and
long-term and short-term borrowings to finance our investment activities. Some
of our investments in debt securities are at fixed rates and others at variable
rates. We may, but will not be required to, hedge against interest rate
fluctuations by using standard hedging instruments such as futures, options and
forward contracts, subject to applicable legal requirements. These activities
may limit our ability to participate in the benefits of lower interest rates
with respect to the hedged portfolio. Adverse developments resulting from
changes in interest rates or hedging transactions could have a material adverse
effect on our business, financial condition and results of operations. Also, we
have limited experience in entering into hedging transactions, and we will
initially have to purchase or develop such expertise.

WE WILL BE SUBJECT TO CORPORATE-LEVEL INCOME TAX IF WE ARE UNABLE TO QUALIFY AS
A RIC.

To maintain our qualification as a RIC under the Code, we must meet certain
income source, asset diversification and annual distribution requirements. The
annual distribution requirement for a RIC is satisfied if we distribute at least
90% of our ordinary income and realized net short-term capital gains in excess
of realized net long-term capital losses, if any, to our stockholders on an
annual basis. Because we may use debt financing in the future, we may be subject
to certain asset coverage ratio requirements under the 1940 Act and financial
covenants under loan and credit agreements that could, under certain
circumstances, restrict us from making distributions necessary to qualify as a
RIC. If we are unable to obtain cash from other sources, we may fail to qualify
for special tax treatment as a RIC and, thus, may be subject to corporate-level
income tax on all our income. To qualify as a RIC, we must also meet certain
asset diversification requirements at the end of each calendar quarter. Failure
to meet these tests may result in our having to dispose of certain investments
quickly in order to prevent the loss of RIC status. Because most of our
investments will be in private companies, any such dispositions could be made at
disadvantageous prices and may result in substantial losses. If we fail to
qualify as a RIC for any reason and remain or become subject to corporate income
tax, the resulting corporate taxes could substantially reduce our net assets,
the amount of income available for distribution and the amount of our
distributions. Such a failure would have a material adverse effect on us and our
stockholders.

WE MAY HAVE DIFFICULTY PAYING OUR REQUIRED DISTRIBUTIONS IF WE RECOGNIZE INCOME
BEFORE OR WITHOUT RECEIVING CASH REPRESENTING SUCH INCOME.

For federal income tax purposes, we will include in income certain amounts that
we have not yet received in cash, such as original issue discount, which may
arise if we receive warrants in connection with the making of a loan or possibly
in other circumstances, or contracted payment-in-kind interest, which represents
contractual interest added to the loan balance and due at the end of the loan
term. We also may be required to include in income certain other amounts that we
will not receive in cash.

Since in certain cases we may recognize income before or without receiving cash
representing such income, we may have difficulty meeting the tax requirement to
distribute at least 90% of our ordinary income and realized net short-term
capital gains in excess of realized net long-term capital losses, if any, to






maintain our status as a RIC. Accordingly, we may have to sell some of our
investments at times we would not consider advantageous, raise additional debt
or equity capital or reduce new investment originations to meet these
distribution requirements. If we are not able to obtain cash from other sources,
we may fail to qualify as a RIC and thus be subject to corporate-level income
tax.

THERE ARE SIGNIFICANT POTENTIAL CONFLICTS OF INTEREST, WHICH COULD IMPACT OUR
INVESTMENT RETURNS.

Our executive officers and directors, and the executive officers of our
investment adviser, TIM, and its managing member, BDC Partners, serve or may
serve as officers and directors of entities who operate in the same or related
line of business as we do. Accordingly, they may have obligations to investors
in those entities, the fulfillment of which might not be in the best interests
of us or our stockholders. For example, Jonathan H. Cohen, the Chief Executive
Officer of TIM, BDC Partners and TICC, is the principal of JHC Capital
Management, LLC, a registered investment adviser. Steven P. Novak, one of our
independent directors, is also the President of Palladio Capital Management,
LLC, the manager of an equity-oriented hedge fund; Charles M. Royce, the
non-executive Chairman of our Board of Directors, is the President and Chief
Investment Officer of Royce & Associates, LLC, the non-managing member of our
investment adviser.

In order to minimize the potential conflicts of interest that might arise, we
have adopted a policy that prohibits us from making investments in, or otherwise
knowingly doing business with, any company in which any fund or other client
account managed by JHC Capital Management, Royce & Associates, or Palladio
Capital Management holds a long or short position. The investment focus of each
of these entities tends to be different from our investment objective.
Nevertheless, it is possible that new investment opportunities that meet our
investment objective may come to the attention of one of these entities in
connection with another investment advisory client or program, and, if so, such
opportunity might not be offered, or otherwise made available, to us. Also, our
investment policy, precluding the investments referenced above, could cause us
to miss out on some investment opportunities. However, our executive officers,
directors and investment adviser intend to treat us in a fair and equitable
manner over time consistent with their applicable duties under law so that we
will not be disadvantaged in relation to any other particular client. Finally,
we pay BDC Partners our allocable portion of overhead and other expenses
incurred by BDC Partners in performing its obligations under the administration
agreement, including a portion of the rent and the compensation of our Chief
Financial Officer, Vice President of Investor Relations and other administrative
support personnel, which creates conflicts of interest that our Board of
Directors must monitor.

CHANGES IN LAWS OR REGULATIONS GOVERNING OUR OPERATIONS MAY ADVERSELY AFFECT OUR
BUSINESS.

We and our portfolio companies are subject to regulation by laws at the local,
state and federal level. These laws and regulations, as well as their
interpretation, may be changed from time to time. Accordingly, any change in
these laws or regulations could have a material adverse effect on our business.

OUR ABILITY TO INVEST IN PRIVATE COMPANIES MAY BE LIMITED IN CERTAIN
CIRCUMSTANCES.

If we are to maintain our status as a business development company, we must not
acquire any assets other than "qualifying assets" unless, at the time of and
after giving effect to such acquisition, at least 70% of our total assets are
qualifying assets. If we acquire debt or equity securities from an issuer that
has outstanding marginable securities at the time we make an investment, these
acquired assets cannot be treated as qualifying assets. This result is dictated
by the definition of "eligible portfolio company" under the 1940 Act, which in
part looks to whether a company has outstanding marginable securities.

Amendments promulgated in 1998 by the Federal Reserve expanded the definition of
a marginable security under the Federal Reserve's margin rules to include any
non-equity security. Thus, any debt securities issued by any entity are
marginable securities under the Federal Reserve's current margin rules. As a






result, the staff of the SEC has raised the question to the BDC industry as to
whether a private company that has outstanding debt securities would qualify as
an "eligible portfolio company" under the 1940 Act.

The SEC has recently issued proposed rules to correct the unintended consequence
of the Federal Reserve's 1998 margin rule amendments of apparently limiting the
investment opportunities of business development companies. In general, the
SEC's proposed rules would define an eligible portfolio company as any company
that does not have securities listed on a national securities exchange or
association. We are currently in the process of reviewing the SEC's proposed
rules and assessing its impact, to the extent such proposed rules are
subsequently approved by the SEC, on our investment activities. We do not
believe that these proposed rules will have a material adverse effect on our
operations.

Until the SEC or its staff has taken a final public position with respect to the
issue discussed above, we will continue to monitor this issue closely, and may
be required to adjust our investment focus to comply with and/or take advantage
of any future administrative position, judicial decision or legislative action.

THERE CAN BE NO ASSURANCE THAT MANAGEMENT WILL COMPLETE ITS ASSESSMENT OF THE
EFFECTIVENESS OF OUR INTERNAL CONTROLS OVER FINANCIAL REPORTING, OR THAT
PRICEWATERHOUSECOOPERS, OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, WILL
BE ABLE TO COMPLETE ITS ASSESSMENT AND REPORT ON OUR INTERNAL CONTROLS OVER
FINANCIAL REPORTING, PRIOR TO THE FILING OF OUR FORM 10-K FOR THE CURRENT FISCAL
YEAR.

Management is currently in the process of assessing the effectiveness of our
internal controls over financial reporting, as required by Section 404 of the
Sarbanes-Oxley Act. While we believe that management will complete its
assessment in a timely manner, there can be no assurance that management's
assessment will be completed prior to the filing of our Form 10-K for the
current fiscal year ending December 31, 2004. In addition, we can provide no
assurance that PricewaterhouseCoopers, our independent registered public
accounting firm, will complete its report regarding the effectiveness of our
internal controls over financial reporting prior to the filing of our Form 10-K
for the current fiscal year ending December 31, 2004.

RISKS RELATED TO OUR INVESTMENTS

OUR PORTFOLIO MAY BE CONCENTRATED IN A LIMITED NUMBER OF PORTFOLIO COMPANIES IN
THE TECHNOLOGY-RELATED SECTOR, WHICH WILL SUBJECT US TO A RISK OF SIGNIFICANT
LOSS IF ANY OF THESE COMPANIES DEFAULTS ON ITS OBLIGATIONS UNDER ANY OF ITS DEBT
SECURITIES THAT WE HOLD OR IF THE TECHNOLOGY-RELATED SECTOR EXPERIENCES A
FURTHER DOWNTURN.

A consequence of this limited number of investments is that the aggregate
returns we realize may be significantly adversely affected if a small number of
investments perform poorly or if we need to write down the value of any one
investment. Beyond our income tax asset diversification requirements, we do not
have fixed guidelines for diversification, and our investments could be
concentrated in relatively few issuers. In addition, we intend to concentrate in
the technology-related sector and to invest, under normal circumstances, at
least 80% of the value of our net assets (including the amount of any borrowings
for investment purposes) in technology-related companies. As a result, a further
downturn in the technology-related sector could materially adversely affect us.

THE TECHNOLOGY-RELATED SECTOR IS SUBJECT TO MANY RISKS, INCLUDING VOLATILITY,
INTENSE COMPETITION, DECREASING LIFE CYCLES AND PERIODIC DOWNTURNS.

We invest in companies in the technology-related sector, some of which may have
relatively short operating histories. The revenues, income (or losses) and
valuations of technology-related companies can and often do fluctuate suddenly
and dramatically. Also, the technology-related market is generally characterized
by abrupt business cycles and intense competition. Since mid-2000, there has
been substantial excess capacity and a significant slowdown in many industries
in the technology-related sector. In addition, this overcapacity, together with
a cyclical economic downturn, resulted in substantial decreases in the market
capitalization of many technology-related companies. While such valuations have
recovered to some extent, we can offer no assurance that such decreases in
market capitalizations will not recur, or that any future decreases in
technology company valuations will be insubstantial or temporary in nature.
Therefore, our portfolio companies may face considerably more risk of loss than
companies in other industry sectors.

In addition, because of rapid technological change, the average selling prices
of products and some services provided by the technology-related sector have
historically decreased over their productive lives. As a result, the average
selling prices of products and services offered by our portfolio companies may
decrease






over time, which could adversely affect their operating results and their
ability to meet their obligations under their debt securities, as well as the
value of any equity securities, that we may hold. This could, in turn,
materially adversely affect our business, financial condition and results of
operations.

OUR INVESTMENTS IN THE TECHNOLOGY-RELATED COMPANIES THAT WE ARE TARGETING MAY BE
EXTREMELY RISKY AND WE COULD LOSE ALL OR PART OF OUR INVESTMENT.

Although a prospective portfolio company's assets are one component of our
analysis when determining whether to provide debt capital, we generally do not
base an investment decision primarily on the liquidation value of a company's
balance sheet assets. Instead, given the nature of the companies that TICC
invests in, we also review the company's historical and projected cash flows,
equity capital and "soft" assets, including intellectual property (patented and
non-patented), databases, business relationships (both contractual and
non-contractual) and the like. Accordingly, considerably higher levels of
overall risk will likely be associated with TICC's portfolio compared with that
of a traditional asset-based lender whose security consists primarily of
receivables, inventories, equipment and other tangible assets. Interest rates
payable by our portfolio companies may not compensate us for these additional
risks.

Specifically, investment in the technology-related companies that we are
targeting involves a number of significant risks, including:

   o     these companies may have limited financial resources and may be unable
         to meet their obligations under their debt securities that we hold,
         which may be accompanied by a deterioration in the value of any
         collateral and a reduction in the likelihood of us realizing any
         guarantees we may have obtained in connection with our investment;

   o     they typically have limited operating histories, narrower product lines
         and smaller market shares than larger businesses, which tend to render
         them more vulnerable to competitors' actions and market conditions, as
         well as general economic downturns;

   o     because they are generally privately owned, there is generally little
         publicly available information about these businesses; therefore,
         although TIM's agents will perform "due diligence" investigations on
         these portfolio companies, their operations and their prospects, we may
         not learn all of the material information we need to know regarding
         these businesses;

   o     they are more likely to depend on the management talents and efforts of
         a small group of persons; therefore, the death, disability, resignation
         or termination of one or more of these persons could have a material
         adverse impact on our portfolio company and, in turn, on us; and

   o     they generally have less predictable operating results, may from time
         to time be parties to litigation, may be engaged in rapidly changing
         businesses with products subject to a substantial risk of obsolescence,
         and may require substantial additional capital to support their
         operations, finance expansion or maintain their competitive position.

A portfolio company's failure to satisfy financial or operating covenants
imposed by us or other lenders could lead to defaults and, potentially,
termination of its loans and foreclosure on its secured assets, which could
trigger cross-defaults under other agreements and jeopardize our portfolio
company's ability to meet its obligations under the debt securities that we
hold. We may incur expenses to the extent necessary to seek recovery upon
default or to negotiate new terms with a defaulting portfolio company. In
addition, if a portfolio company goes bankrupt, even though we may have
structured our interest as senior debt, depending on the facts and
circumstances, including the extent to which we actually provided significant
"managerial assistance" to that portfolio company, a bankruptcy court might
recharacterize our debt holding and subordinate all or a portion of our claim to
that of other creditors.

OUR INCENTIVE FEE MAY INDUCE TIM TO MAKE SPECULATIVE INVESTMENTS.




The incentive fee payable by us to TIM may create an incentive for TIM to make
investments on our behalf that are risky or more speculative than would be the
case in the absence of such compensation arrangement. The way in which the
incentive fee payable to TIM is determined, which is calculated as a percentage
of the return on invested capital, may encourage TIM to use leverage to increase
the return on our investments. Under certain circumstances, the use of leverage
may increase the likelihood of default, which would disfavor holders of our
common stock. Similarly, because TIM will receive the incentive fee based, in
part, upon the capital gains realized on our investments, the investment adviser
may invest more than would otherwise be appropriate in companies whose
securities are likely to yield capital gains, as compared to income producing
securities. Such a practice could result in our investing in more speculative
securities than would otherwise be the case, which could result in higher
investment losses, particularly during cyclical economic downturns.

OUR PORTFOLIO COMPANIES MAY INCUR DEBT THAT RANKS EQUALLY WITH, OR SENIOR TO,
OUR INVESTMENTS IN SUCH COMPANIES.

We intend to invest primarily in senior debt securities, but may also invest in
subordinated debt securities, issued by our portfolio companies. In some cases
portfolio companies will be permitted to have other debt that ranks equally
with, or senior to, the debt securities in which we invest. By their terms, such
debt instruments may provide that the holders thereof are entitled to receive
payment of interest or principal on or before the dates on which we are entitled
to receive payments in respect of the debt securities in which we invest. Also,
in the event of insolvency, liquidation, dissolution, reorganization or
bankruptcy of a portfolio company, holders of debt instruments ranking senior to
our investment in that portfolio company would typically be entitled to receive
payment in full before we receive any distribution in respect of our investment.
After repaying such senior creditors, such portfolio company may not have any
remaining assets to use for repaying its obligation to us. In the case of debt
ranking equally with debt securities in which we invest, we would have to share
on an equal basis any distributions with other creditors holding such debt in
the event of an insolvency, liquidation, dissolution, reorganization or
bankruptcy of the relevant portfolio company. In addition, we will not be in a
position to control any portfolio company by investing in its debt securities.
As a result, we are subject to the risk that a portfolio company in which we
invest may make business decisions with which we disagree and the management of
such companies, as representatives of the holders of their common equity, may
take risks or otherwise act in ways that do not best serve our interests as debt
investors.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are subject to financial market risks, including changes in interest rates.
As of September 30, 2004, three of our portfolio investments are at fixed rates
and the other four are at variable rates. We expect that our future loans will
generally be made at variable rates. We may in the future hedge against interest
rate fluctuations by using standard hedging instruments such as futures, options
and forward contracts. While hedging activities may insulate us against adverse
changes in interest rates, they may also limit our ability to participate in the
benefits of lower interest rates with respect to our portfolio of investments.

ITEM 4. CONTROLS AND PROCEDURES.

As of September 30, 2004, we, including our Chief Executive Officer and Chief
Financial Officer, evaluated the effectiveness of the design and operation of
our disclosure controls and procedures. Based on that evaluation, our
management, including the Chief Executive Officer and Chief Financial Officer,
concluded that our disclosure controls and procedures were effective in timely
alerting management, including the Chief Executive Officer and Chief Financial
Officer, of material information about us required to be included in periodic
Securities and Exchange Commission filings. However, in evaluating the
disclosure controls and procedures, management recognized that any controls and
procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and management
was therefore required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.





There have been no changes in our internal control over financial reporting that
occurred during the quarter ended September 30, 2004, that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

                            PART II-OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We are not currently subject to any material legal proceedings, nor, to our
knowledge, is any material legal proceeding threatened against us. From time to
time, we may be a party to certain legal proceedings incidental to the normal
course of our business including the enforcement of our rights under contracts
with our portfolio companies. While the outcome of these legal proceedings
cannot be predicted with certainty, we do not expect that these proceedings will
have a material effect upon our financial condition or results of operations.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.


During the three months ended September 30, 2004, we issued a total of 32,694
shares of common stock under our dividend reinvestment plan pursuant to an
exemption from the registration requirements of the Securities Act of 1933. The
aggregate offering price for the shares of common stock issued under the
dividend reinvestment plan was approximately $457,000.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.


Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

ITEM 5. OTHER INFORMATION.

Not applicable.







         ITEM 6. EXHIBITS.



      EXHIBIT
       NUMBER                                                           DESCRIPTION
---------------------   -----------------------------------------------------------------------------------------------------------

        3.1             Articles of Incorporation (Incorporated by reference to the Registrant's Registration Statement on Form N-2
                        (File No. 333-109055) filed on September 23, 2003).
        3.2             Amended and Restated Bylaws (Incorporated by reference to Pre-Effective Amendment No. 2 to the Registrant's
                        Registration Statement on Form N-2 (File No. 333-109055) filed on November 19, 2003).
        4.1             Form of Share Certificate (Incorporated by reference to the Registrant's Registration Statement on Form N-2
                        (File No. 333-109055) filed on September 23, 2003).
       10.1             Form of Amended and Restated Investment Advisory Agreement between Registrant and Technology Investment
                        Management, LLC (Incorporated by reference to Appendix B to the Registrant's Definitive Proxy Materials on
                        Schedule 14A (File No. 000-50398) filed on May 18, 2004).
       10.2             Custodian Agreement between Registrant and State Street Bank and Trust Company (Incorporated by reference
                        to Pre-Effective Amendment No. 2 to the Registrant's Registration Statement on Form N-2 (File
                        No. 333-109055) filed on November 19, 2003).
       10.3             Administration Agreement between Registrant and BDC Partners, LLC (Incorporated by reference to
                        Pre-Effective Amendment No. 2 to the Registrant's Registration Statement on Form N-2 (File No. 333-109055)
                        filed on November 19, 2003).
       10.4             Transfer Agency and Service Agreement among Registrant, EquiServe Trust Company, N.A. and EquiServe, Inc.
                        (Incorporated by reference to Pre-Effective Amendment No. 2 to the Registrant's Registration Statement on
                        Form N-2 (File No. 333-109055) filed on November 19, 2003).
       10.5             Dividend Reinvestment Plan (Incorporated by reference to Pre-Effective Amendment No. 1 to the Registrant's
                        Registration Statement on Form N-2 (File No. 333-109055) filed on November 6, 2003).
       11               Computation of Per Share Earnings (included in notes to the financial statements included in this report).
       31.1*            Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.
       31.2*            Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.
       32.1*            Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
       32.2*            Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.








                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.




                                                                       TECHNOLOGY INVESTMENT CAPITAL CORP.

         Date: November 12, 2004                                       By: /s/ Jonathan H. Cohen
                                                                       -----------------------------------------------------------
                                                                       Jonathan H. Cohen
                                                                       Chief Executive Officer


         Date: November 12, 2004                                       By: /s/ Patrick F. Conroy
                                                                       -----------------------------------------------------------
                                                                       Patrick F. Conroy
                                                                       Chief Financial Officer
                                                                       (Principal Accounting and Financial Officer)`