UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549










FORM 10-Q



(Mark One)



|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934
|- | -------------------------------------------------------------------------------------------



FOR THE QUARTERLY PERIOD ENDED SEPTEMBER
30, 2012



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



COMMISSION FILE NUMBER: 0-50398



TICC CAPITAL CORP.

(Exact name of registrant as specified
in its charter)










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



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 (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. YesxNo ̈



Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes ̈No ̈



Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of
“large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act.



|Large accelerated filer |  ̈ | Accelerated filer         | x
|----------------------- | - | ------------------------- | -
|                        |   |                           |  
|Non-accelerated filer   |  ̈ | Smaller reporting company |  ̈



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ̈Nox



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 8, 2012 was 41,312,780.











TICC CAPITAL CORP.

TABLE OF CONTENTS



|PART I. FINANCIAL INFORMATION | 3                                                                                                                                         
|----------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------
|                              |                                                                                                                                           
|Item 1.                       | Financial Statements (Unaudited)                                                                                                          
|                              |                                                                                                                                           
|                              | Consolidated Statements of Assets and Liabilities as of September 30,
    2012 and December 31, 2011                                      
|                              |                                                                                                                                           
|                              | Consolidated Schedule of Investments as of September 30, 2012                                                                             
|                              |                                                                                                                                           
|                              | Consolidated Schedule of Investments as of December 31, 2011                                                                              
|                              |                                                                                                                                           
|                              | Consolidated Statements of Operations for the three and nine months ended
    September 30, 2012 and 2011                                 
|                              |                                                                                                                                           
|                              | Consolidated Statements of Changes in Net Assets for the nine months
    ended September 30, 2012 and for the year ended December 31, 2011
|                              |                                                                                                                                           
|                              | Consolidated Statements of Cash Flows for the nine months ended September
    30, 2012 and 2011                                           
|                              |                                                                                                                                           
|                              | Notes to Consolidated Financial Statements                                                                                                
|                              |                                                                                                                                           
|Item 2.                       | Management’s Discussion and Analysis of Financial Condition and
    Results of Operations                                                 
|                              |                                                                                                                                           
|                              | Cautionary Statements Regarding Forward-Looking Statements                                                                                
|                              |                                                                                                                                           
|                              | Overview                                                                                                                                  
|                              |                                                                                                                                           
|                              | Critical Accounting Policies                                                                                                              
|                              |                                                                                                                                           
|                              | Portfolio Composition and Investment Activity                                                                                             
|                              |                                                                                                                                           
|                              | Results of Operations                                                                                                                     
|                              |                                                                                                                                           
|                              | Liquidity and Capital Resources                                                                                                           
|                              |                                                                                                                                           
|                              | Recent Developments                                                                                                                       
|                              |                                                                                                                                           
|Item 3.                       | Quantitative and Qualitative Disclosures About Market Risk                                                                                
|                              |                                                                                                                                           
|Item 4.                       | Controls and Procedures                                                                                                                   
|                              |                                                                                                                                           
|PART II. OTHER INFORMATION    | 52                                                                                                                                        
|                              |                                                                                                                                           
|Item 1.                       | Legal Proceedings                                                                                                                         
|                              |                                                                                                                                           
|Item 1A.                      | Risk Factors                                                                                                                              
|                              |                                                                                                                                           
|Item 2.                       | Unregistered Sales of Equity Securities and Use of Proceeds                                                                               
|                              |                                                                                                                                           
|Item 3.                       | Defaults Upon Senior Securities                                                                                                           
|                              |                                                                                                                                           
|Item 4.                       | Mine Safety Disclosures                                                                                                                   
|                              |                                                                                                                                           
|Item 5.                       | Other Information                                                                                                                         
|                              |                                                                                                                                           
|Item 6.                       | Exhibits                                                                                                                                  
|                              |                                                                                                                                           
|SIGNATURES                    | 72                                                                                                                                        











PART I—FINANCIAL INFORMATION



ITEM 1. FINANCIAL STATEMENTS
(UNAUDITED)



TICC CAPITAL CORP.



CONSOLIDATED STATEMENTS OF ASSETS AND
LIABILITIES

(unaudited)



|                                                                                                                                     |  | September 30, 2012 |             |   | December 31, 2011 |  
|------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------ | ----------- | - | ----------------- | -
|                                                                                                                                     |  |                    |             |   |                   |  
|ASSETS                                                                                                                               |  |                    |             |   |                   |  
|                                                                                                                                     |  |                    |             |   |                   |  
|Non-affiliated/non-control investments
    (cost: $495,670,473 @ 9/30/12; $372,091,255 @ 12/31/11)                                   |  | $                  | 521,247,939 |   |                   | $
|Control investments (cost: $17,239,639
    @ 9/30/12; $17,434,371 @ 12/31/11)                                                        |  |                    | 16,450,000  |   |                   |  
|Total investments at fair value                                                                                                      |  |                    | 537,697,939 |   |                   |  
|Cash and cash equivalents                                                                                                            |  |                    | 122,905,470 |   |                   |  
|Restricted cash                                                                                                                      |  |                    | 96,729,990  |   |                   |  
|Deferred debt issuance costs                                                                                                         |  |                    | 8,182,726   |   |                   |  
|Interest and distributions receivable                                                                                                |  |                    | 4,497,012   |   |                   |  
|Securities sold not settled                                                                                                          |  |                    | 503,750     |   |                   |  
|Other assets                                                                                                                         |  |                    | 102,138     |   |                   |  
|Total assets                                                                                                                         |  | $                  | 770,619,025 |   |                   | $
|                                                                                                                                     |  |                    |             |   |                   |  
|LIABILITIES                                                                                                                          |  |                    |             |   |                   |  
|Notes payable - debt securitizations                                                                                                 |  | $                  | 212,443,165 |   |                   | $
|Convertible senior notes payable                                                                                                     |  |                    | 105,000,000 |   |                   |  
|Accrued interest payable                                                                                                             |  |                    | 1,027,631   |   |                   |  
|Investment advisory fee payable to affiliate                                                                                         |  |                    | 3,800,311   |   |                   |  
|Accrued capital gains incentive fee to affiliate                                                                                     |  |                    | 5,668,706   |   |                   |  
|Securities purchased not settled                                                                                                     |  |                    | 34,561,217  |   |                   |  
|Accrued expenses                                                                                                                     |  |                    | 1,220,546   |   |                   |  
|Total liabilities                                                                                                                    |  |                    | 363,721,576 |   |                   |  
|                                                                                                                                     |  |                    |             |   |                   |  
|NET ASSETS                                                                                                                           |  |                    |             |   |                   |  
|Common stock, $0.01 par value, 100,000,000 shares
    authorized, and 41,312,780 and 32,818,428 issued and outstanding, respectively |  |                    | 413,128     |   |                   |  
|Capital in excess of par value                                                                                                       |  |                    | 452,280,904 |   |                   |  
|Net unrealized appreciation on investments                                                                                           |  |                    | 24,787,827  |   |                   |  
|Accumulated net realized losses on investments                                                                                       |  |                    | (66,752,406 | ) |                   |  
|Distributions in excess of investment
    income                                                                                     |  |                    | (3,832,004  | ) |                   |  
|Total net assets                                                                                                                     |  |                    | 406,897,449 |   |                   |  
|Total liabilities and net assets                                                                                                     |  | $                  | 770,619,025 |   |                   | $
|Net asset value per common share                                                                                                     |  | $                  | 9.85        |   |                   | $



See Accompanying Notes.



3







TICC CAPITAL CORP.



CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2012

(unaudited)



|COMPANY(1)                                            |  | INDUSTRY                             |  | INVESTMENT                                                                     |  | PRINCIPALAMOUNT |            |  | COST |   |            | FAIR VALUE(2) |  |   | % of NetAssets | 
|----------------------------------------------------- |  | ------------------------------------ |  | ------------------------------------------------------------------------------ |  | --------------- | ---------- |  | ---- | - | ---------- | ------------- |  | - | -------------- | 
|                                                      |  |                                      |  |                                                                                |  |                 |            |  |      |   |            |               |  |   |                | 
|Senior
    Secured Notes                              |  |                                      |  |                                                                                |  |                 |            |  |      |   |            |               |  |   |                | 
|                                                      |  |                                      |  |                                                                                |  |                 |            |  |      |   |            |               |  |   |                | 
|Algorithmic Implementations, Inc.(d/b/a "Ai Squared") |  | software                             |  | senior secured notes(4)(5)(6)(9.84%,
    due September 11, 2013)               |  | $               | 14,300,000 |  |      | $ | 14,239,639 |               |  | $ | 14,300,000     | 
|                                                      |  |                                      |  |                                                                                |  |                 |            |  |      |   |            |               |  |   |                | 
|Aspen Dental Management, Inc.                         |  | healthcare                           |  | senior secured notes(4)(10)(7.00%,
    due October 6, 2016)                    |  |                 | 3,989,950  |  |      |   | 4,014,887  |               |  |   | 4,014,887      | 
|                                                      |  |                                      |  |                                                                                |  |                 |            |  |      |   |            |               |  |   |                | 
|Attachmate Corporation                                |  | enterprise software                  |  | senior secured notes(4)(5)(9)(10)(7.25%,
    due April 27, 2017)               |  |                 | 7,850,000  |  |      |   | 7,698,489  |               |  |   | 7,906,442      | 
|                                                      |  |                                      |  |                                                                                |  |                 |            |  |      |   |            |               |  |   |                | 
|                                                      |  |                                      |  | second lien senior secured notes(4)(5)(9)(11.00%,
    due November 22, 2018)   |  |                 | 13,000,000 |  |      |   | 12,659,186 |               |  |   | 12,714,000     | 
|                                                      |  |                                      |  |                                                                                |  |                 |            |  |      |   |            |               |  |   |                | 
|Band Digital Inc.(F/K/A
    "WHITTMANHART, Inc.")     |  | IT consulting                        |  | senior secured notes(3)(4)(6)(7)(13)(0.0%,
    due December 31, 2013)          |  |                 | 1,831,768  |  |      |   | 1,803,000  |               |  |   | 1,145,000      | 
|                                                      |  |                                      |  |                                                                                |  |                 |            |  |      |   |            |               |  |   |                | 
|Blue Coat System, Inc.                                |  | software                             |  | first lien senior secured notes(4)(5)(9)(7.50%,
    due February 15, 2018)     |  |                 | 5,962,500  |  |      |   | 5,904,303  |               |  |   | 5,992,313      | 
|                                                      |  |                                      |  |                                                                                |  |                 |            |  |      |   |            |               |  |   |                | 
|                                                      |  |                                      |  | second lien senior secured notes(4)(5)(10)(11.50%,
    due August 15, 2018)    |  |                 | 5,214,286  |  |      |   | 5,147,507  |               |  |   | 5,318,572      | 
|                                                      |  |                                      |  |                                                                                |  |                 |            |  |      |   |            |               |  |   |                | 
|BNY Convergex                                         |  | financial intermediaries             |  | second lien senior secured notes(4)(9)(8.75%,
    due December 17, 2017)       |  |                 | 1,875,000  |  |      |   | 1,874,937  |               |  |   | 1,734,375      | 
|                                                      |  |                                      |  |                                                                                |  |                 |            |  |      |   |            |               |  |   |                | 
|DG Fastchannel, Inc.                                  |  | advertising                          |  | first lien senior secured notes(4)(5)(10)(5.75%,
    due July 26, 2018)        |  |                 | 2,992,013  |  |      |   | 2,917,131  |               |  |   | 2,897,256      | 
|                                                      |  |                                      |  |                                                                                |  |                 |            |  |      |   |            |               |  |   |                | 
|Diversified Machine, Inc.                             |  | autoparts manufacturer               |  | first lien senior secured notes(4)(5)(9)(9.29%,
    due December 1, 2016)      |  |                 | 2,605,833  |  |      |   | 2,583,105  |               |  |   | 2,549,365      | 
|                                                      |  |                                      |  |                                                                                |  |                 |            |  |      |   |            |               |  |   |                | 
|Drew Marine Partners                                  |  | shipping and transportation          |  | first lien senior secured notes(4)(5)(9)(6.25%,
    due September 1, 2014)     |  |                 | 3,456,250  |  |      |   | 3,421,467  |               |  |   | 3,456,250      | 
|                                                      |  |                                      |  |                                                                                |  |                 |            |  |      |   |            |               |  |   |                | 
|Embanet-Compass Knowledge Group, Inc.                 |  | education                            |  | senior secured notes(4)(5)(6)(9)(5.50%,
    due June 27, 2017)                 |  |                 | 4,654,948  |  |      |   | 4,536,593  |               |  |   | 4,631,673      | 
|                                                      |  |                                      |  |                                                                                |  |                 |            |  |      |   |            |               |  |   |                | 
|Endurance International Group, Inc.                   |  | web hosting                          |  | first lien senior secured notes(4)(5)(9)(10)(7.75%,
    due December 28, 2016) |  |                 | 15,960,000 |  |      |   | 15,850,571 |               |  |   | 15,999,900     | 
|                                                      |  |                                      |  |                                                                                |  |                 |            |  |      |   |            |               |  |   |                | 
|First Data Corporation                                |  | financial intermediaries             |  | first lien senior secured notes(4)(5)(9)(10)(5.22%,
    due March 24, 2017)    |  |                 | 10,000,000 |  |      |   | 9,885,460  |               |  |   | 9,857,500      | 
|                                                      |  |                                      |  |                                                                                |  |                 |            |  |      |   |            |               |  |   |                | 
|GenuTec Business Solutions, Inc.                      |  | interactive voice messaging services |  | senior secured notes(4)(5)(7)(0.0%,
    due October 30, 2014)                  |  |                 | 3,476,000  |  |      |   | 3,187,306  |               |  |   | -              | 
|                                                      |  |                                      |  |                                                                                |  |                 |            |  |      |   |            |               |  |   |                | 
|Getty Images, Inc.                                    |  | printing and publishing              |  | senior secured notes(4)(5)(6)(9)(5.25%,
    due November 5, 2016)              |  |                 | 4,605,025  |  |      |   | 4,558,482  |               |  |   | 4,605,025      | 
|                                                      |  |                                      |  |                                                                                |  |                 |            |  |      |   |            |               |  |   |                | 
|Global Tel Link Corp.                                 |  | telecommunication services           |  | senior secured notes(4)(5)(6)(9)(10)(6.00%,
    due December 14, 2017)         |  |                 | 8,351,862  |  |      |   | 8,366,480  |               |  |   | 8,356,038      | 
|                                                      |  |                                      |  |                                                                                |  |                 |            |  |      |   |            |               |  |   |                | 
|Goodman Global, Inc.                                  |  | building and development             |  | senior secured notes(4)(5)(6)(9)(5.75%,
    due October 28, 2016)              |  |                 | 2,860,748  |  |      |   | 2,818,839  |               |  |   | 2,860,748      | 
|                                                      |  |                                      |  |                                                                                |  |                 |            |  |      |   |            |               |  |   |                | 
|Grede Holdings LLC                                    |  | auto parts manufacturer              |  | senior secured notes(4)(9)(7.00%,
    due April 3, 2017)                       |  |                 | 4,900,000  |  |      |   | 4,821,753  |               |  |   | 4,893,875      | 
|                                                      |  |                                      |  |                                                                                |  |                 |            |  |      |   |            |               |  |   |                | 
|GXS Worldwide Inc.                                    |  | business services                    |  | senior secured notes(5)(9)(9.75%,
    due June 15, 2015)                       |  |                 | 8,000,000  |  |      |   | 7,924,464  |               |  |   | 8,290,000      | 



(Continued on next page)



See Accompanying Notes.



4







TICC CAPITAL CORP.



CONSOLIDATED SCHEDULE OF INVESTMENTS
- (Continued)

SEPTEMBER 30, 2012

(unaudited)



|COMPANY(1)                             |  | INDUSTRY                   |  | INVESTMENT                                                                                       |  | PRINCIPALAMOUNT |            |  | COST |   |            | FAIR VALUE(2) |  |   | % of NetAssets | 
|-------------------------------------- |  | -------------------------- |  | ------------------------------------------------------------------------------------------------ |  | --------------- | ---------- |  | ---- | - | ---------- | ------------- |  | - | -------------- | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|Senior
    Secured Notes - (continued) |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|HHI Holdings LLC                       |  | auto parts manufacturer    |  | senior secured notes(4)(5)(9)(7.75%,
    due March 21, 2017)                                     |  | $               | 4,432,534  |  |      | $ | 4,418,411  |               |  | $ | 4,421,453      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|Hoffmaster Group, Inc.                 |  | retail                     |  | first lien senior secured notes(4)(5)(6)(9)(10)(6.50%,
    due January 3, 2018)                  |  |                 | 6,964,918  |  |      |   | 6,936,448  |               |  |   | 6,924,313      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|Immucor, Inc.                          |  | healthcare                 |  | senior secured term B notes(4)(5)(9)(5.75%
    , due August 19, 2018)                            |  |                 | 4,455,084  |  |      |   | 4,312,783  |               |  |   | 4,499,635      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|Infor, Inc.                            |  | enterprise software        |  | first lien senior secured notes(4)(5)(10)(5.25%
    , due April 5, 2018)                         |  |                 | 1,000,000  |  |      |   | 995,009    |               |  |   | 995,000        | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|Integra Telecom Holdings, Inc.         |  | telecommunication services |  | first lien senior secured notes(4)(10)(9.25%,
    due August 15, 2015)                           |  |                 | 7,804,066  |  |      |   | 7,457,220  |               |  |   | 7,758,567      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|InfoNXX Inc.                           |  | telecommunication services |  | second lien senior secured notes(4)(5)(9)(6.47%
    , due December 1, 2013)                      |  |                 | 7,000,000  |  |      |   | 6,807,589  |               |  |   | 6,527,500      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|Mercury Payment Systems, LLC           |  | financial intermediaries   |  | senior secured notes(4)(6)(9)(5.50%,
    due July 1, 2017)                                       |  |                 | 3,950,000  |  |      |   | 3,950,000  |               |  |   | 3,950,000      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|Merrill Communications, LLC            |  | printing and publishing    |  | second lien senior secured notes(3)(4)(5)(9)(12.00%
    cash/4.87% PIK, due November 15, 2013)   |  |                 | 6,363,000  |  |      |   | 6,338,393  |               |  |   | 4,525,684      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|Mirion Technologies, Inc.              |  | utilities                  |  | senior secured notes(4)(9)(6.25%,
    due March 30, 2018)                                        |  |                 | 2,487,500  |  |      |   | 2,440,896  |               |  |   | 2,487,500      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|Mmodal, Inc.                           |  | healthcare                 |  | first lien senior secured notes(4)(5)(9)(10)(6.75%,
    due August 17, 2019)                     |  |                 | 10,000,000 |  |      |   | 9,885,945  |               |  |   | 9,887,500      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|National Healing Corp.                 |  | healthcare                 |  | senior secured notes(4)(5)(9)(10)(8.25%,
    due November 30, 2017)                              |  |                 | 10,724,734 |  |      |   | 10,467,083 |               |  |   | 10,724,734     | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|National Vision, Inc.                  |  | retail                     |  | senior secured term B notes(4)(5)(9)(10)(7.00%,
    due August 2, 2018)                          |  |                 | 5,320,000  |  |      |   | 5,261,159  |               |  |   | 5,373,199      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|New Breed Logistics                    |  | logistics                  |  | senior secured term B notes(4)(5)(9)(10)(6.00%,
    due October 1, 2019)                         |  |                 | 8,000,000  |  |      |   | 8,000,000  |               |  |   | 7,920,000      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|Nextag, Inc.                           |  | retail                     |  | senior secured notes(4)(5)(6)(9)(10)(7.00%,
    due January 27, 2016)                            |  |                 | 15,023,278 |  |      |   | 14,452,733 |               |  |   | 14,560,111     | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|NAB Holdings, LLC                      |  | financial intermediaries   |  | first lien senior secured notes(4)(5)(6)(9)(10)(7.00%,
    due April 24, 2018)                   |  |                 | 8,887,500  |  |      |   | 8,854,485  |               |  |   | 8,909,719      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|Pegasus Solutions, Inc.                |  | enterprise software        |  | first lien senior secured notes(3)(4)(5)(6)(9)(10)(7.75%
    cash/0.75% PIK, due April 17, 2013) |  |                 | 9,164,737  |  |      |   | 8,788,675  |               |  |   | 8,660,676      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|                                       |  |                            |  | second lien senior secured notes(3)(5)(6)(0.00%
    Cash/13.00% PIK, due April 15, 2014)         |  |                 | 6,390,892  |  |      |   | 5,093,032  |               |  |   | 5,623,985      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|Petco, Inc.                            |  | retail                     |  | senior secured notes(4)(9)(4.50%,
    due November 24, 2017)                                     |  |                 | 4,949,495  |  |      |   | 4,745,817  |               |  |   | 4,964,987      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|Phillips Plastics Corporation          |  | healthcare                 |  | senior secured notes(4)(5)(6)(9)(6.50%,
    due February 12, 2017)                               |  |                 | 2,970,000  |  |      |   | 2,948,289  |               |  |   | 2,945,260      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|Plato, Inc.                            |  | education                  |  | first lien senior secured notes(4)(5)(6)(9)(7.50%,
    due May 17, 2018)                         |  |                 | 4,937,500  |  |      |   | 4,860,197  |               |  |   | 4,937,500      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|Presidio IS Corp.                      |  | business services          |  | senior secured notes(4)(6)(9)(10)(7.25%,
    due March 31, 2017)                                 |  |                 | 10,000,000 |  |      |   | 9,970,646  |               |  |   | 9,900,000      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|RBS Holding Company                    |  | printing and publishing    |  | term B senior secured notes(4)(5)(9)(9.25%,
    due March 23, 2017)                              |  |                 | 4,925,000  |  |      |   | 4,897,121  |               |  |   | 2,955,000      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|Renaissance Learning                   |  | education                  |  | senior secured notes(4)(5)(9)(7.75%,
    due October 19, 2017)                                   |  |                 | 3,960,000  |  |      |   | 3,820,066  |               |  |   | 3,983,087      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|Roundy's Supermarkets, Inc.            |  | grocery                    |  | term B senior secured notes(4)(5)(10)(5.75%,
    due February 13, 2019)                          |  |                 | 3,989,975  |  |      |   | 3,835,572  |               |  |   | 3,903,752      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|Rovi Solutions Corp.                   |  | digital media              |  | senior secured notes(4)(5)(10)(4.00%,
    due March 29, 2019)                                    |  |                 | 2,992,481  |  |      |   | 2,880,711  |               |  |   | 2,913,928      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|Securus Technologies                   |  | telecommunication services |  | second lien senior secured notes(4)(5)(9)(10.75%,
    due May 18, 2018)                          |  |                 | 5,400,000  |  |      |   | 5,307,255  |               |  |   | 5,339,250      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|Six3 Systems, Inc.                     |  | IT consulting              |  | term B senior secured notes(4)(5)(9)(10)(7.00%,
    due October 4, 2019)                         |  |                 | 10,000,000 |  |      |   | 9,900,000  |               |  |   | 9,900,000      | 
|                                       |  |                            |  |                                                                                                  |  |                 |            |  |      |   |            |               |  |   |                | 
|SkillSoft Corporation                  |  | business services          |  | senior secured notes(4)(5)(6)(9)(10)(5.00%,
    due May 26, 2017)                                |  |                 | 5,980,346  |  |      |   | 5,938,303  |               |  |   | 6,032,674      | 



(Continued on next page)

See Accompanying Notes.



5









TICC CAPITAL CORP.



CONSOLIDATED SCHEDULE OF INVESTMENTS
- (Continued)

SEPTEMBER 30, 2012

(unaudited)



|COMPANY(1)                                        |  | INDUSTRY                   |  | INVESTMENT                                                                    |  | PRINCIPALAMOUNT |            |  | COST |   |             | FAIR VALUE(2) |  |   | % of NetAssets | 
|------------------------------------------------- |  | -------------------------- |  | ----------------------------------------------------------------------------- |  | --------------- | ---------- |  | ---- | - | ----------- | ------------- |  | - | -------------- | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Senior
    Secured Notes - (continued)            |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|SourceHOV, LLC                                    |  | business services          |  | second lien senior secured notes(4)(5)(10)(10.50%,
    due May 19, 2018)      |  | $               | 12,000,000 |  |      | $ | 11,000,220  |               |  | $ | 10,860,000     | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Sterling Infosystems, Inc.                        |  | business services          |  | senior secured notes(4)(5)(9)(7.25%,
    due February 1, 2018)                |  |                 | 2,743,125  |  |      |   | 2,692,935   |               |  |   | 2,736,267      | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Stratus Technologies, Inc.                        |  | computer hardware          |  | first lien high yield notes(5)(9)(12.00%,
    due March 29, 2015)             |  |                 | 9,520,000  |  |      |   | 9,000,486   |               |  |   | 8,925,000      | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Teleguam Holdings, LLC                            |  | telecommunication services |  | second lien senior secured notes(4)(5)(9)(9.75%,
    due June 9, 2017)        |  |                 | 4,687,500  |  |      |   | 4,648,626   |               |  |   | 4,476,563      | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Unitek Global Services, Inc.                      |  | IT consulting              |  | tranche B term loan (4)(5)(9)(10)(9.00%,
    due April 15, 2018)              |  |                 | 10,872,500 |  |      |   | 10,596,257  |               |  |   | 10,655,050     | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|US FT HoldCo. Inc.(A/K/A
    Fundtech)            |  | financial intermediaries   |  | senior secured notes(4)(5)(6)(9)(7.50%,
    due November 30, 2017)            |  |                 | 5,955,000  |  |      |   | 5,814,985   |               |  |   | 5,962,444      | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Vision Solutions, Inc                             |  | software                   |  | second lien senior secured notes(4)(5)(9)(10)(9.50%,
    due July 23, 2017)   |  |                 | 10,000,000 |  |      |   | 9,918,799   |               |  |   | 9,950,000      | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|WEB.COM Group, Inc.                               |  | web hosting                |  | senior secured notes(4)(5)(9)(10)(11)(7.00%,
    due October 27, 2017)        |  |                 | 8,658,693  |  |      |   | 8,184,704   |               |  |   | 8,707,441      | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Total
    Senior Secured Notes                    |  |                            |  |                                                                               |  |                 |            |  |      | $ | 359,634,449 |               |  | $ | 355,320,998    | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Subordinated
    Notes                            |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Fusionstorm, Inc.                                 |  | IT value-added reseller    |  | subordinated notes(4)(5)(6)(11.74%, due February
    28, 2013)                |  | $               | 422,500    |  |      | $ | 422,351     |               |  | $ | 415,930        | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Shearer's Food Inc.                               |  | food products manufacturer |  | subordinated notes(3)(4)(5)(9)(12.00%
    Cash/3.75% PIK, due March 31, 2016) |  |                 | 4,342,823  |  |      |   | 4,273,929   |               |  |   | 4,473,108      | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Total
    Subordinated Notes                      |  |                            |  |                                                                               |  |                 |            |  |      | $ | 4,696,280   |               |  | $ | 4,889,038      | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Collateralized Loan Obligation - Debt Investments |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Avenue CLO V LTD 2007-5A, 5X D1                   |  | structured finance         |  | CLO secured notes(4)(5)(11)(12)(4.01%,
    due April 25, 2019)                |  | $               | 4,574,756  |  |      | $ | 2,461,070   |               |  | $ | 3,341,403      | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Canaras CLO - 2007-1A E                           |  | structured finance         |  | CLO secured notes(4)(5)(11)(12)(4.73%,
    due June 19, 2021)                 |  |                 | 3,500,000  |  |      |   | 1,951,349   |               |  |   | 2,811,900      | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|CGMS 2012 3A D                                    |  | structured finance         |  | CLO secured notes(4)(5)(11)(12)(5.87%,
    due October 4, 2024)               |  |                 | 3,000,000  |  |      |   | 2,624,803   |               |  |   | 2,624,730      | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|CIFC CLO - 2006-1A B2L                            |  | structured finance         |  | CLO secured notes(4)(5)(11)(12)(4.46%,
    due October 20, 2020)              |  |                 | 3,247,284  |  |      |   | 1,750,596   |               |  |   | 2,476,379      | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Emporia CLO 2007 3A E                             |  | structured finance         |  | CLO secured notes(4)(5)(11)(12)(4.15%,
    due April 23, 2021)                |  |                 | 10,991,000 |  |      |   | 7,755,279   |               |  |   | 8,204,782      | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Flagship 2005-4A D                                |  | structured finance         |  | CLO secured notes(4)(5)(11)(12)(5.17%,
    due June 1, 2017)                  |  |                 | 2,612,988  |  |      |   | 1,736,422   |               |  |   | 2,311,188      | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Harbourview CLO VI LTD 6 6X D                     |  | structured finance         |  | CLO secured notes(4)(5)(11)(12)(4.06%,
    due December 27, 2019)             |  |                 | 5,000,000  |  |      |   | 3,293,062   |               |  |   | 3,762,500      | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Harch 2005-2A BB CLO                              |  | structured finance         |  | CLO secured notes(4)(5)(11)(12)(5.45%,
    due October 22, 2017)              |  |                 | 4,819,262  |  |      |   | 2,754,956   |               |  |   | 4,033,722      | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Hewetts Island CDO 2007 - 1RA E                   |  | structured finance         |  | CDO secured notes(4)(5)(6)(11)(12)(7.19%,
    due November 12, 2019)          |  |                 | 3,132,057  |  |      |   | 1,954,204   |               |  |   | 2,893,081      | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Hewetts Island CDO III 2005-1A D                  |  | structured finance         |  | CDO secured notes(4)(5)(11)(12)(6.19%,
    due August 9, 2017)                |  |                 | 6,363,074  |  |      |   | 3,731,467   |               |  |   | 5,832,394      | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Hewetts Island CDO IV 2006-4 E                    |  | structured finance         |  | CDO secured notes(4)(5)(11)(12)(4.99%,
    due May 9, 2018)                   |  |                 | 7,897,268  |  |      |   | 5,748,199   |               |  |   | 6,554,732      | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Kingsland LTD 2007 4A E                           |  | structured finance         |  | CDO secured notes(4)(5)(11)(12)(3.81%,
    due April 16, 2021)                |  |                 | 4,000,000  |  |      |   | 2,552,288   |               |  |   | 2,840,000      | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Landmark V CDO LTD                                |  | structured finance         |  | CDO senior secured notes(4)(5)(6)(11)(12)(5.67%,
    due June 1, 2017)        |  |                 | 3,646,669  |  |      |   | 2,367,676   |               |  |   | 3,229,125      | 
|                                                  |  |                            |  |                                                                               |  |                 |            |  |      |   |             |               |  |   |                | 
|Latitude II CLO 2006 2A D                         |  | structured finance         |  | CDO senior secured notes(4)(5)(6)(11)(12)(4.14%,
    due December 15, 2018)   |  |                 | 2,828,018  |  |      |   | 1,658,428   |               |  |   | 2,121,014      | 





(Continued on next page)



See Accompanying Notes.



6







TICC CAPITAL CORP.



CONSOLIDATED SCHEDULE OF INVESTMENTS
- (Continued)

SEPTEMBER 30, 2012

(unaudited)







|COMPANY(1)                                                      |  | INDUSTRY                   |  | INVESTMENT                                                                 |  | PRINCIPALAMOUNT |           |   | COST       |   |            | FAIR VALUE(2) |            |   | % of NetAssets | 
|--------------------------------------------------------------- |  | -------------------------- |  | -------------------------------------------------------------------------- |  | --------------- | --------- | - | ---------- | - | ---------- | ------------- | ---------- | - | -------------- | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Collateralized Loan Obligation - Debt Investments - (continued) |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Latitude III CLO 2007-3A                                        |  | structured finance         |  | CDO secured notes(4)(5)(11)(12)(4.21%,
    due April 11, 2021)             |  | $               | 4,000,000 |   |            | $ | 2,020,189  |               |            | $ | 3,100,000      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Lightpoint CLO 2007-8A                                          |  | structured finance         |  | CDO secured notes(4)(5)(11)(12)(6.96%,
    due July 25, 2018)              |  |                 | 5,000,000 |   |            |   | 3,033,898  |               |            |   | 4,605,000      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Loomis Sayles CLO 2006-1AE                                      |  | structured finance         |  | CDO secured notes(4)(5)(11)(12)(4.30%,
    due October 26, 2020)           |  |                 | 3,322,992 |   |            |   | 1,973,655  |               |            |   | 2,654,406      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Marlborough Street CLO LTD 2007 1A E                            |  | structured finance         |  | CDO secured notes(4)(5)(11)(12)(4.11%,
    due April 18, 2019)             |  |                 | 3,000,000 |   |            |   | 2,112,462  |               |            |   | 2,389,800      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Muir Grove CLO LTD 2007 1X E                                    |  | structured finance         |  | CDO secured notes(4)(5)(11)(12)(8.45%,
    due March 25, 2020)             |  |                 | 7,690,915 |   |            |   | 6,806,439  |               |            |   | 7,789,358      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Ocean Trails CLO II 2007-2a-d                                   |  | structured finance         |  | CLO subordinated secured notes(4)(5)(11)(12)(4.96%,
    due June 27, 2022) |  |                 | 3,649,700 |   |            |   | 2,167,397  |               |            |   | 2,928,154      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Primus 2007 2X Class E CLO                                      |  | structured finance         |  | CLO notes (4)(5)(11)(12)(5.20%,
    due July 15, 2021)                     |  |                 | 2,834,633 |   |            |   | 2,203,346  |               |            |   | 2,182,668      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Prospero CLO II BV                                              |  | structured finance         |  | CLO senior secured notes(4)(5)(11)(12)(4.41%,
    due October 20, 2022)    |  |                 | 9,900,000 |   |            |   | 4,554,161  |               |            |   | 7,416,090      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Sargas CLO I LTD                                                |  | structured finance         |  | CLO senior secured notes(4)(5)(11)(12)(4.43%, due August 27, 2020)         |  |                 | 2,000,000 |   |            |   | 1,590,000  |               |            |   | 1,590,000      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Total Collateralized Loan Obligation - Debt Investments         |  |                            |  |                                                                            |  |                 |           | $ | 68,801,346 |   |            | $             | 87,692,426 |   |                | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Collateralized Loan Obligation - Equity Investments             |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|ACA CLO 2006-2, Limited                                         |  | structured finance         |  | CLO preferred equity(11)(12)                                               |  | $               | -         |   |            | $ | 2,200,000  |               |            | $ | 4,500,000      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|ACA CLO 2007-1a sub                                             |  | structured finance         |  | CLO preferred equity(11)(12)                                               |  |                 | -         |   |            |   | 10,583,500 |               |            |   | 11,346,000     | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|ACAS 2012-1A CLO sub                                            |  | structured finance         |  | CLO preferred equity(11)(12)                                               |  |                 | -         |   |            |   | 4,050,000  |               |            |   | 4,050,000      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Canaras CLO Equity - 2007-1A, 1X                                |  | structured finance         |  | CLO income notes(11)(12)                                                   |  |                 | -         |   |            |   | 4,355,000  |               |            |   | 5,400,000      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|GALE 2007-4A CLO                                                |  | structured finance         |  | CLO income notes(11)(12)                                                   |  |                 | -         |   |            |   | 1,965,000  |               |            |   | 2,760,000      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|GSC Partners 2007-8X Sub CDO                                    |  | structured finance         |  | CLO income notes(11)(12)                                                   |  |                 | -         |   |            |   | 4,110,000  |               |            |   | 6,000,000      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Harbourview - 2006A CLO Equity                                  |  | structured finance         |  | CDO subordinates notes(11)(12)                                             |  |                 | -         |   |            |   | 3,639,870  |               |            |   | 4,254,250      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Jersey Street 2006-1A CLO LTD                                   |  | structured finance         |  | CLO income notes(11)(12)                                                   |  |                 | -         |   |            |   | 4,924,238  |               |            |   | 5,915,000      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Kingsland LTD 2007-4X Sub                                       |  | structured finance         |  | CLO income notes(11)(12)                                                   |  |                 | -         |   |            |   | 402,500    |               |            |   | 565,000        | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Lightpoint CLO 2005-3X                                          |  | structured finance         |  | CLO income notes(11)(12)                                                   |  |                 | -         |   |            |   | 3,330,000  |               |            |   | 2,700,000      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Lightpoint CLO VII LTD 2007-7                                   |  | structured finance         |  | CDO subordinates notes(11)(12)                                             |  |                 | -         |   |            |   | 1,562,500  |               |            |   | 1,800,000      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Marea 2012-1A CLO                                               |  | structured finance         |  | CLO income notes(11)(12)                                                   |  |                 | -         |   |            |   | 10,934,215 |               |            |   | 10,934,215     | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Marlborough Street 2007-1A                                      |  | structured finance         |  | CLO income notes(11)(12)                                                   |  |                 | -         |   |            |   | 1,739,000  |               |            |   | 2,068,000      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|OCT11 2007-1A CLO                                               |  | structured finance         |  | CLO income notes(11)(12)                                                   |  |                 | -         |   |            |   | 2,434,163  |               |            |   | 2,970,000      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Rampart 2007-1A CLO Equity                                      |  | structured finance         |  | CDO subordinates notes(11)(12)                                             |  |                 | -         |   |            |   | 3,412,500  |               |            |   | 3,675,000      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Sargas CLO 2006 -1A                                             |  | structured finance         |  | CDO subordinates notes(11)(12)                                             |  |                 | -         |   |            |   | 4,945,500  |               |            |   | 6,817,500      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Stone Tower CLO LTD 2007
    7X                                 |  | structured finance         |  | CDO subordinates notes(11)(12)                                             |  |                 | -         |   |            |   | 6,265,000  |               |            |   | 7,070,000      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Total Collateralized Loan Obligation  - Equity Investments      |  |                            |  |                                                                            |  |                 |           | $ | 70,852,986 |   |            | $             | 82,824,965 |   |                | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Common
    Stock                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Algorithmic Implementations, Inc.                               |  | software                   |  | common stock                                                               |  | $               | -         |   |            | $ | 3,000,000  |               |            | $ | 2,150,000      | 
|(d/b/a "Ai Squared")                                            |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Integra Telecom Holdings, Inc.                                  |  | telecommunication services |  | common stock(7)                                                            |  |                 | -         |   |            |   | 1,712,396  |               |            |   | 2,362,451      | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Pegasus Solutions, Inc.                                         |  | enterprise software        |  | common equity(7)                                                           |  |                 | -         |   |            |   | 62,595     |               |            |   | 41,488         | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Stratus Technologies,
    Inc.                                  |  | computer hardware          |  | common equity(7)                                                           |  |                 | -         |   |            |   | 377,928    |               |            |   | -              | 
|                                                                |  |                            |  |                                                                            |  |                 |           |   |            |   |            |               |            |   |                | 
|Total
    Common Stock Investments                              |  |                            |  |                                                                            |  |                 |           |   |            | $ | 5,152,919  |               |            | $ | 4,553,939      | 





(Continued on next page)



See Accompanying Notes.



7







TICC CAPITAL CORP.



CONSOLIDATED SCHEDULE OF INVESTMENTS
- (Continued)

SEPTEMBER 30, 2012

(unaudited)



|COMPANY(1)                                        |  | INDUSTRY                             |  | INVESTMENT                                   |  | PRINCIPALAMOUNT |   |  | COST |   |             | FAIR VALUE(2) |  |   | % of NetAssets | 
|------------------------------------------------- |  | ------------------------------------ |  | -------------------------------------------- |  | --------------- | - |  | ---- | - | ----------- | ------------- |  | - | -------------- | 
|                                                  |  |                                      |  |                                              |  |                 |   |  |      |   |             |               |  |   |                | 
|Preferred
    Equity                              |  |                                      |  |                                              |  |                 |   |  |      |   |             |               |  |   |                | 
|                                                  |  |                                      |  |                                              |  |                 |   |  |      |   |             |               |  |   |                | 
|GenuTec Business Solutions, Inc.                  |  | interactive voice messaging services |  | convertible preferred stock(7)               |  | $               | - |  |      | $ | 1,500,000   |               |  | $ | -              | 
|                                                  |  |                                      |  |                                              |  |                 |   |  |      |   |             |               |  |   |                | 
|Pegasus Solutions, Inc.                           |  | enterprise software                  |  | preferred equity(3)(14.00%
    PIK dividend) |  |                 | - |  |      |   | 1,360,510   |               |  |   | 1,367,328      | 
|                                                  |  |                                      |  |                                              |  |                 |   |  |      |   |             |               |  |   |                | 
|Stratus Technologies,
    Inc.                    |  | computer hardware                    |  | preferred equity(7)                          |  |                 | - |  |      |   | 186,622     |               |  |   | 80,752         | 
|                                                  |  |                                      |  |                                              |  |                 |   |  |      |   |             |               |  |   |                | 
|Total
    Preferred Equity Investments            |  |                                      |  |                                              |  |                 |   |  |      | $ | 3,047,132   |               |  | $ | 1,448,080      | 
|                                                  |  |                                      |  |                                              |  |                 |   |  |      |   |             |               |  |   |                | 
|Warrants                                          |  |                                      |  |                                              |  |                 |   |  |      |   |             |               |  |   |                | 
|                                                  |  |                                      |  |                                              |  |                 |   |  |      |   |             |               |  |   |                | 
|Band Digital Inc.(F/K/A
    "WHITTMANHART, Inc.") |  | IT consulting                        |  | warrants to purchase common stock(7)         |  | $               | - |  |      | $ | -           |               |  | $ | -              | 
|                                                  |  |                                      |  |                                              |  |                 |   |  |      |   |             |               |  |   |                | 
|Fusionstorm, Inc.                                 |  | IT value-added reseller              |  | warrants to purchase common stock(7)         |  |                 | - |  |      |   | 725,000     |               |  |   | 968,493        | 
|                                                  |  |                                      |  |                                              |  |                 |   |  |      |   |             |               |  |   |                | 
|Total
    Warrants                                |  |                                      |  |                                              |  |                 |   |  |      | $ | 725,000     |               |  | $ | 968,493        | 
|                                                  |  |                                      |  |                                              |  |                 |   |  |      |   |             |               |  |   |                | 
|Total
    Investments                             |  |                                      |  |                                              |  |                 |   |  |      | $ | 512,910,112 |               |  | $ | 537,697,939    | 












| | (1) | Other than Algorithmic Implementation, Inc.
                                                                                (d/b/a Ai Squared), which we may be deemed to
                                                                                control, 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 be presumed to "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) | Portfolio includes $28,093,220 of principal
                                                                                amount of debt investments which contain a PIK
                                                                                provision. Portfolio also includes one preferred
                                                                                equity position which contains a PIK dividend
                                                                                provision.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Notes bear interest at variable rates.
| | --- | --------------------------------------

| | (5) | Cost value reflects accretion of original
                                                                                issue discount or market discount.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | Cost value reflects repayment of principal.
| | --- | -------------------------------------------

| | (7) | Non-income producing at the relevant period
                                                                                end.
| | --- | --------------------------------------------------------------------------------------------------------------------------------

| | (8) | Aggregate gross unrealized appreciation for
                                                                                federal income tax purposes is $37,571,864; aggregate
                                                                                gross unrealized depreciation for federal income
                                                                                tax purposes is $31,312,556. Net unrealized appreciation
                                                                                is $6,259,308 based upon a tax cost basis of $531,438,631.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (9) | All or a portion of this investment represents
                                                                                TICC CLO LLC collateral.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------

| | (10) | All or a portion of this investment represents
                                                                                 TICC CLO 2012-1 LLC collateral.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (11) | Indicates assets that the Company believes
                                                                                 do not represent “qualifying assets”
                                                                                 under Section 55(a) of the Investment Company
                                                                                 Act of 1940, as amended. Qualifying assets must
                                                                                 represent at least 70% of the Company’s
                                                                                 total assets at the time of acquisition of any
                                                                                 additional non-qualifying assets.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (12) | Investment not domiciled in the United States.
| | ---- | ----------------------------------------------

| | (13) | Debt investment on non-accrued status at
                                                                                 the relevant period end.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------



See Accompanying Notes.



8







TICC CAPITAL CORP.



CONSOLIDATED SCHEDULE OF INVESTMENTS

DECEMBER 31, 2011



|COMPANY (1)                                               |  | INDUSTRY                             |  | INVESTMENT                                                                 |  | PRINCIPAL AMOUNT |            |  | COST |   |            | FAIR VALUE(2) |  |   | % of NetAssets | 
|--------------------------------------------------------- |  | ------------------------------------ |  | -------------------------------------------------------------------------- |  | ---------------- | ---------- |  | ---- | - | ---------- | ------------- |  | - | -------------- | 
|Senior Secured Notes                                      |  |                                      |  |                                                                            |  |                  |            |  |      |   |            |               |  |   |                | 
|                                                          |  |                                      |  |                                                                            |  |                  |            |  |      |   |            |               |  |   |                | 
|Airvana Network Solutions, Inc.                           |  | telecommunication services           |  | senior secured notes (4)(5)(6)(9)(10.00%,
    due March 25, 2015)          |  | $                | 5,476,190  |  |      | $ | 5,386,864  |               |  | $ | 5,465,950      | 
|                                                          |  |                                      |  |                                                                            |  |                  |            |  |      |   |            |               |  |   |                | 
|AKQA, Inc.                                                |  | advertising                          |  | senior secured notes(4)(6)(9)(5.09%, due March 20, 2013)                   |  |                  | 7,730,214  |  |      |   | 7,730,214  |               |  |   | 7,575,604      | 
|                                                          |  |                                      |  |                                                                            |  |                  |            |  |      |   |            |               |  |   |                | 
|Algorithmic Implementations, Inc.(d/b/a
    “Ai Squared”) |  | software                             |  | senior secured notes(4)(5)(6)(9.84%,
    due September 11, 2013)           |  |                  | 14,550,000 |  |      |   | 14,434,371 |               |  |   | 14,550,000     | 
|                                                          |  |                                      |  |                                                                            |  |                  |            |  |      |   |            |               |  |   |                | 
|American Integration Technologies, LLC                    |  | semiconductor capital equipment      |  | senior secured notes(4)(5)(11.75%, due December 31, 2013)                  |  |                  | 23,401,906 |  |      |   | 21,116,076 |               |  |   | 22,582,839     | 
|                                                          |  |                                      |  |                                                                            |  |                  |            |  |      |   |            |               |  |   |                | 
|Anchor Glass Container Corporation                        |  | packaging and glass                  |  | senior secured notes(4)(9)(6.00%,
    due March 2, 2016)                   |  |                  | 4,957,465  |  |      |   | 4,957,465  |               |  |   | 4,932,678      | 
|                                                          |  |                                      |  |                                                                            |  |                  |            |  |      |   |            |               |  |   |                | 
|Attachmate Corporation                                    |  | enterprise software                  |  | senior secured notes(4)(5)(9)(6.50%,
    due April 27, 2017)               |  |                  | 4,937,500  |  |      |   | 4,793,262  |               |  |   | 4,816,531      | 
|                                                          |  |                                      |  |                                                                            |  |                  |            |  |      |   |            |               |  |   |                | 
|Band Digital Inc.(F/K/A
    “WHITTMANHART, Inc.”)         |  | IT consulting                        |  | senior secured notes(4)(6)(15.58%, due December 31, 2012)                  |  |                  | 1,900,000  |  |      |   | 1,900,000  |               |  |   | 1,900,000      | 
|                                                          |  |                                      |  |                                                                            |  |                  |            |  |      |   |            |               |  |   |                | 
|BNY Convergex                                             |  | financial intermediaries             |  | second lien senior secured notes(4)(9)(8.75%,
    due December 17, 2017)   |  |                  | 1,875,000  |  |      |   | 1,858,003  |               |  |   | 1,781,250      | 
|                                                          |  |                                      |  |                                                                            |  |                  |            |  |      |   |            |               |  |   |                | 
|CHS/Community Health Systems, Inc.                        |  | healthcare                           |  | senior secured notes(4)(5)(6)(9)(10)(3.96%,
    due July 25, 2014)         |  |                  | 3,979,849  |  |      |   | 3,714,932  |               |  |   | 3,838,087      | 
|                                                          |  |                                      |  |                                                                            |  |                  |            |  |      |   |            |               |  |   |                | 
|Decision Resources, LLC                                   |  | healthcare                           |  | first lien senior secured notes(4)(5)(9)(7.00%,
    due December 28, 2016) |  |                  | 4,950,000  |  |      |   | 4,890,742  |               |  |   | 4,702,500      | 
|                                                          |  |                                      |  |                                                                            |  |                  |            |  |      |   |            |               |  |   |                | 
|                                                          |  |                                      |  | second lien senior secured notes(4)(5)(9.50%,
    due May 13, 2018)        |  |                  | 5,333,333  |  |      |   | 5,283,543  |               |  |   | 5,226,667      | 
|                                                          |  |                                      |  |                                                                            |  |                  |            |  |      |   |            |               |  |   |                | 
|Diversified Machine, Inc.                                 |  | autoparts manufacturer               |  | first lien senior secured notes(4)(5)(9)(9.25%,
    due December 1, 2016)  |  |                  | 5,000,000  |  |      |   | 4,926,898  |               |  |   | 4,987,500      | 
|                                                          |  |                                      |  |                                                                            |  |                  |            |  |      |   |            |               |  |   |                | 
|Embanet-Compass Knowledge Group, Inc.                     |  | education                            |  | senior secured notes(4)(5)(6)(9)(5.50%, due June 27, 2017)                 |  |                  | 4,975,000  |  |      |   | 4,831,896  |               |  |   | 4,825,750      | 
|                                                          |  |                                      |  |                                                                            |  |                  |            |  |      |   |            |               |  |   |                | 
|Emdeon, Inc.                                              |  | healthcare                           |  | senior secured notes(4)(5)(6)(9)(6.75%, due November 2, 2018)              |  |                  | 1,950,000  |  |      |   | 1,892,562  |               |  |   | 1,964,625      | 
|                                                          |  |                                      |  |                                                                            |  |                  |            |  |      |   |            |               |  |   |                | 
|Endurance International Group, Inc.                       |  | web hosting                          |  | first lien senior secured notes(4)(5)(9)(7.75%,
    due December 28, 2016) |  |                  | 10,000,000 |  |      |   | 9,900,000  |               |  |   | 9,950,000      | 
|                                                          |  |                                      |  |                                                                            |  |                  |            |  |      |   |            |               |  |   |                | 
|GenuTec Business Solutions, Inc.                          |  | interactive voice messaging services |  | senior secured notes(4)(5)(7)(0.0%,
    due October 30, 2014)              |  |                  | 3,476,000  |  |      |   | 3,152,069  |               |  |   | 2,000,000      | 
|                                                          |  |                                      |  |                                                                            |  |                  |            |  |      |   |            |               |  |   |                | 
|Getty Images, Inc.                                        |  | printing and publishing              |  | senior secured notes(4)(5)(6)(9)(5.25%,
    due November 5, 2016)          |  |                  | 5,000,000  |  |      |   | 4,941,392  |               |  |   | 5,000,000      | 
|                                                          |  |                                      |  |                                                                            |  |                  |            |  |      |   |            |               |  |   |                | 
|Global Tel Link Corp.                                     |  | telecommunication services           |  | senior secured notes(4)(5)(6)(9)(7.00%, due December 14, 2017)             |  |                  | 5,818,182  |  |      |   | 5,717,186  |               |  |   | 5,727,302      | 
|                                                          |  |                                      |  |                                                                            |  |                  |            |  |      |   |            |               |  |   |                | 
|Goodman Global, Inc.                                      |  | building and development             |  | senior secured notes(4)(5)(6)(9)(5.75%, due October 28, 2016)              |  |                  | 4,860,748  |  |      |   | 4,778,271  |               |  |   | 4,847,916      | 
|                                                          |  |                                      |  |                                                                            |  |                  |            |  |      |   |            |               |  |   |                | 
|GRD Holding III                                           |  | retail                               |  | senior secured notes(4)(5)(6)(9)(8.75%, due October 5, 2017)               |  |                  | 4,000,000  |  |      |   | 3,610,953  |               |  |   | 3,520,000      | 
|                                                          |  |                                      |  |                                                                            |  |                  |            |  |      |   |            |               |  |   |                | 
|GXS Worldwide Inc.                                        |  | business services                    |  | senior secured notes(5)(9)(9.75%,
    due June 15, 2015)                   |  |                  | 8,000,000  |  |      |   | 7,906,828  |               |  |   | 7,440,000      | 



( Continued on next page )



See Accompanying Notes.



9







TICC CAPITAL CORP.



CONSOLIDATED SCHEDULE OF INVESTMENTS
– (Continued)

DECEMBER 31, 2011



|COMPANY (1)                      |  | INDUSTRY                   |  | INVESTMENT                                                                                     |  | PRINCIPALAMOUNT |            |  | COST |   |            | FAIR VALUE (2) |  |   | % of NetAssets | 
|-------------------------------- |  | -------------------------- |  | ---------------------------------------------------------------------------------------------- |  | --------------- | ---------- |  | ---- | - | ---------- | -------------- |  | - | -------------- | 
|Senior Secured Notes—(continued) |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|                                 |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|HHI Holdings LLC                 |  | auto parts manufacturer    |  | senior secured notes(4)(5)(9)(7.00%,
    due March 21, 2017)                                   |  | $               | 4,466,250  |  |      | $ | 4,448,122  |                |  | $ | 4,393,673      | 
|                                 |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|Hyland Software, Inc.            |  | enterprise software        |  | senior secured notes(4)(5)(6)(9)(5.75%, due December 19, 2016)                                 |  |                 | 2,852,555  |  |      |   | 2,798,057  |                |  |   | 2,809,767      | 
|                                 |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|Immucor, Inc.                    |  | healthcare                 |  | senior secured term B notes(4)(5)(9)(7.25%, due August 19, 2018)                               |  |                 | 4,488,750  |  |      |   | 4,332,486  |                |  |   | 4,508,949      | 
|                                 |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|InfoNXX Inc.                     |  | telecommunication services |  | second lien senior secured notes(4)(5)(9)(6.55%,
    due December 1, 2013)                     |  |                 | 7,000,000  |  |      |   | 6,693,859  |                |  |   | 6,440,000      | 
|                                 |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|Mercury Payment Systems, LLC     |  | financial intermediaries   |  | senior secured notes(4)(6)(9)(6.50%,
    due July 1, 2017)                                     |  |                 | 3,980,000  |  |      |   | 3,980,000  |                |  |   | 3,960,100      | 
|                                 |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|Merrill Communications, LLC      |  | printing and publishing    |  | second lien senior secured notes(3)(4)(5)(9)(11.75%
    cash/2.62% PIK, due November 15, 2013) |  |                 | 6,219,910  |  |      |   | 6,180,828  |                |  |   | 5,867,428      | 
|                                 |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|National Healing Corp.           |  | healthcare                 |  | senior secured notes(4)(5)(9)(8.25%, due November 30, 2017)                                    |  |                 | 6,000,000  |  |      |   | 5,702,372  |                |  |   | 5,760,000      | 
|                                 |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|Nextag, Inc.                     |  | retail                     |  | senior secured notes(4)(5)(6)(9)(7.00%, due January 27, 2016)                                  |  |                 | 10,766,667 |  |      |   | 10,153,496 |                |  |   | 10,416,750     | 
|                                 |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|Pegasus Solutions, Inc.          |  | enterprise software        |  | first lien senior secured notes(4)(5)(6)(9)(7.75%,
    due April 17, 2013)                     |  |                 | 2,577,942  |  |      |   | 2,448,984  |                |  |   | 2,496,299      | 
|                                 |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|                                 |  |                            |  | second lien senior secured notes(3)(5)(6)(0.00%
    Cash/13.00% PIK, due April 15, 2014)       |  |                 | 6,000,838  |  |      |   | 4,283,558  |                |  |   | 5,640,788      | 
|                                 |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|Petco, Inc.                      |  | retail                     |  | senior secured notes(4)(9)(4.50%, due November 24, 2017)                                       |  |                 | 5,000,000  |  |      |   | 4,768,740  |                |  |   | 4,865,000      | 
|                                 |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|Phillips Plastics Corporation    |  | healthcare                 |  | senior secured notes(4)(5)(6)(9)(6.50%, due February 12, 2017)                                 |  |                 | 2,992,500  |  |      |   | 2,967,686  |                |  |   | 2,955,094      | 
|                                 |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|Power Tools, Inc.                |  | software                   |  | senior secured notes(4)(5)(6)(12.00%, due May 16, 2014)                                        |  |                 | 8,000,000  |  |      |   | 7,947,337  |                |  |   | 7,200,000      | 
|                                 |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|Presidio IS Corp.                |  | business services          |  | senior secured notes(4)(6)(9)(7.25%, due March 31, 2017)                                       |  |                 | 4,743,590  |  |      |   | 4,743,590  |                |  |   | 4,672,436      | 
|                                 |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|RBS Holding Company              |  | printing and publishing    |  | term B senior secured notes(4)(5)(9)(6.50%,
    due March 23, 2017)                            |  |                 | 4,962,500  |  |      |   | 4,917,481  |                |  |   | 3,870,750      | 
|                                 |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|RCN Telecom Services, LLC        |  | cable/satellite television |  | senior secured notes(4)(5)(9)(6.50%, due August 26, 2016)                                      |  |                 | 4,974,811  |  |      |   | 4,890,594  |                |  |   | 4,878,847      | 
|                                 |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|Renaissance Learning             |  | education                  |  | senior secured notes(4)(5)(9)(7.75%, due October 19, 2017)                                     |  |                 | 3,990,000  |  |      |   | 3,833,900  |                |  |   | 3,920,175      | 
|                                 |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|Securus Technologies             |  | telecommunication services |  | second lien senior secured notes(4)(5)(9)(10.00%,
    due May 18, 2018)                        |  |                 | 5,400,000  |  |      |   | 5,298,371  |                |  |   | 5,319,000      | 
|                                 |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|Shield Finance Co.               |  | software                   |  | first lien term notes(4)(5)(9)(10)(11)(7.75%,
    due June 15, 2016)                           |  |                 | 3,790,914  |  |      |   | 3,662,185  |                |  |   | 3,781,437      | 
|                                 |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|SkillSoft Corporation            |  | business services          |  | senior secured notes(4)(5)(6)(9)(6.50%, due May 26, 2017)                                      |  |                 | 5,000,000  |  |      |   | 4,952,306  |                |  |   | 4,952,100      | 
|                                 |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|SonicWall, Inc.                  |  | software                   |  | first lien senior secured notes(4)(5)(9)(8.27%,
    due January 23, 2016)                      |  |                 | 1,071,774  |  |      |   | 1,043,499  |                |  |   | 1,071,774      | 
|                                 |  |                            |  |                                                                                                |  |                 |            |  |      |   |            |                |  |   |                | 
|                                 |  |                            |  | second lien senior secured notes(4)(5)(9)(12.00%,
    due January 23, 2017)                    |  |                 | 5,000,000  |  |      |   | 4,873,705  |                |  |   | 4,950,000      | 



( Continued on next page )



See Accompanying Notes.



10







TICC CAPITAL CORP.



CONSOLIDATED SCHEDULE OF INVESTMENTS
– (Continued)

DECEMBER 31, 2011



|COMPANY (1)                                      |  | INDUSTRY                   |  | INVESTMENT                                                                  |  | PRINCIPALAMOUNT |            |  | COST |   |             | FAIR VALUE (2) |  |   | % of NetAssets | 
|------------------------------------------------ |  | -------------------------- |  | --------------------------------------------------------------------------- |  | --------------- | ---------- |  | ---- | - | ----------- | -------------- |  | - | -------------- | 
|Senior Secured Notes—(continued)                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|SourceHOV, LLC                                   |  | business services          |  | second lien senior secured notes(4)(5)(10.50%,
    due May 19, 2018)        |  | $               | 8,000,000  |  |      | $ | 7,661,825   |                |  | $ | 6,560,000      | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|Stratus Technologies, Inc.                       |  | computer hardware          |  | first lien high yield notes(5)(9)(12.00%,
    due March 29, 2015)           |  |                 | 9,753,000  |  |      |   | 9,098,094   |                |  |   | 9,753,000      | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|Sunquest Information Systems,Inc.                |  | healthcare                 |  | senior secured notes(4)(5)(6)(9)(6.25%, due December 16, 2016)              |  |                 | 4,975,000  |  |      |   | 4,868,469   |                |  |   | 4,912,813      | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|Syniverse Holdings, Inc.                         |  | telecommunication services |  | senior secured notes(4)(5)(6)(9)(5.25%,
    due December 21, 2017)          |  |                 | 3,979,900  |  |      |   | 3,836,252   |                |  |   | 3,971,622      | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|Teleguam Holdings, LLC                           |  | telecommunication services |  | second lien senior secured notes(4)(5)(9)(9.75%,
    due June 9, 2017)      |  |                 | 4,687,500  |  |      |   | 4,643,890   |                |  |   | 4,593,750      | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|Unitek Global Services, Inc.                     |  | IT consulting              |  | tranche B term loan(4)(5)(9)(9.00%,
    due April 15, 2018)                 |  |                 | 7,940,000  |  |      |   | 7,713,041   |                |  |   | 7,701,800      | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|US FT HoldCo. Inc.(A/K/A
    US FT HoldCo. Inc.) |  | financial intermediaries   |  | senior secured notes(4)(5)(6)(9)(7.50%,
    due November 30, 2017)          |  |                 | 6,000,000  |  |      |   | 5,844,017   |                |  |   | 5,880,000      | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|Vision Solutions, Inc.                           |  | software                   |  | second lien senior secured notes(4)(5)(9)(9.50%, due July 23, 2017)         |  |                 | 10,000,000 |  |      |   | 9,908,753   |                |  |   | 9,600,000      | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|WEB.COM Group, Inc.                              |  | web hosting                |  | senior secured notes(4)(5)(9)(10)(7.00%,
    due October 27, 2017)          |  |                 | 5,000,000  |  |      |   | 4,428,688   |                |  |   | 4,575,000      | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|Total
    Senior Secured Notes                   |  |                            |  |                                                                             |  |                 |            |  |      | $ | 290,647,712 |                |  | $ | 289,913,551    | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|Subordinated
    Notes                           |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|Fusionstorm, Inc.                                |  | IT value-added reseller    |  | subordinated notes(4)(5)(6)(11.74%, due February
    28, 2013)              |  | $               | 1,022,500  |  |      | $ | 1,022,351   |                |  | $ | 962,939        | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|Shearer’s Food Inc.                              |  | food products manufacturer |  | subordinated notes(3)(4)(5)(9)(12.00% Cash/3.75% PIK, due March 31,2016)    |  |                 | 4,221,193  |  |      |   | 4,141,875   |                |  |   | 3,967,921      | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|Total
    Subordinated Notes                     |  |                            |  |                                                                             |  |                 |            |  |      | $ | 5,164,226   |                |  | $ | 4,930,860      | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|Collateralized  Loan Obligation—Debt Investments |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|Avenue CLO V LTD 2007-5A D1                      |  | structured finance         |  | CLO secured notes(4)(5)(10)(11)(3.87%,
    due April 25, 2019)              |  | $               | 4,574,756  |  |      | $ | 2,327,337   |                |  | $ | 2,511,999      | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|Canaras CLO—2007-1A E                            |  | structured finance         |  | CLO secured notes(4)(5)(10)(11)(4.91%,
    due June 19, 2021)               |  |                 | 3,500,000  |  |      |   | 1,884,762   |                |  |   | 2,152,500      | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|CIFC CLO—2006-1A B2L                             |  | structured finance         |  | CLO secured notes(4)(5)(10)(11)(4.41%,
    due October 20, 2020)            |  |                 | 3,247,284  |  |      |   | 1,679,332   |                |  |   | 2,061,863      | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|Emporia CLO 2007 3A E                            |  | structured finance         |  | CLO secured notes(4)(5)(10)(11)(4.12%,
    due April 23, 2021)              |  |                 | 5,391,000  |  |      |   | 4,140,712   |                |  |   | 3,180,690      | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|Flagship 2005-4A D                               |  | structured finance         |  | CLO secured notes(4)(5)(10)(11)(5.28%,
    due June 1, 2017)                |  |                 | 2,612,988  |  |      |   | 1,644,453   |                |  |   | 1,835,624      | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|Harch 2005-2A BB CLO                             |  | structured finance         |  | CLO secured notes(4)(5)(10)(11)(5.42%,
    due October 22, 2017)            |  |                 | 4,819,262  |  |      |   | 2,580,789   |                |  |   | 3,108,424      | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|Hewetts Island CDO 2007—1RA E                    |  | structured finance         |  | CDO secured notes(4)(5)(10)(11)(7.20%,
    due November 12, 2019)           |  |                 | 3,132,057  |  |      |   | 1,890,861   |                |  |   | 2,380,363      | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|Hewetts Island CDO III 2005-1A D                 |  | structured finance         |  | CDO secured notes(4)(5)(6)(10)(11)(6.19%,
    due August 9, 2017)           |  |                 | 6,456,937  |  |      |   | 3,587,739   |                |  |   | 5,072,944      | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|Hewetts Island CDO IV 2006-4 E                   |  | structured finance         |  | CDO secured notes(4)(5)(10)(11)(4.99%,
    due May 9, 2018)                 |  |                 | 7,897,268  |  |      |   | 5,575,257   |                |  |   | 5,176,396      | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|Landmark V CDO LTD.                              |  | structured finance         |  | CDO senior secured notes(4)(5)(6)(10)(11)(5.78%,
    due June 1, 2017)      |  |                 | 3,646,669  |  |      |   | 2,243,178   |                |  |   | 2,511,825      | 
|                                                 |  |                            |  |                                                                             |  |                 |            |  |      |   |             |                |  |   |                | 
|Latitude II CLO 2006 2A D                        |  | structured finance         |  | CLO senior secured notes(4)(5)(6)(10)(11)(4.30%,
    due December 15, 2018) |  |                 | 2,828,018  |  |      |   | 1,575,173   |                |  |   | 1,753,371      | 



( Continued on next page )

See Accompanying Notes.



11







TICC CAPITAL CORP.



CONSOLIDATED SCHEDULE OF INVESTMENTS
– (Continued)

DECEMBER 31, 2011



|COMPANY (1)                                                         |  | INDUSTRY                  |  | INVESTMENT                                                            |  | PRINCIPALAMOUNT |           |  | COST |   |            | FAIR VALUE (2) |  |   | % of NetAsset | 
|------------------------------------------------------------------- |  | ------------------------- |  | --------------------------------------------------------------------- |  | --------------- | --------- |  | ---- | - | ---------- | -------------- |  | - | ------------- | 
|Collateralized
    Loan Obligation - Debt Investments — (continued) |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Latitude III CLO 2007-3A                                            |  | structured finance        |  | CLO secured notes(4)(5)(10)(11)(4.14%, due April 11, 2021)            |  | $               | 4,000,000 |  |      | $ | 1,935,665  |                |  | $ | 2,360,000     | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Liberty CDO LTD 2005-1A C                                           |  | structured finance        |  | CDO secured notes(4)(5)(6)(10)(11)(2.33%, due November 1,2017)        |  |                 | 1,986,259 |  |      |   | 1,155,372  |                |  |   | 1,311,924     | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Lightpoint CLO 2007-8A                                              |  | structured finance        |  | CLO secured notes(4)(5)(10)(11)(6.90%, due July 25, 2018)             |  |                 | 5,000,000 |  |      |   | 2,896,267  |                |  |   | 3,700,000     | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Loomis Sayles CLO 2006-1AE                                          |  | structured finance        |  | CLO secured notes(4)(5)(10)(11)(4.27%, due October 26, 2020)          |  |                 | 3,322,992 |  |      |   | 1,903,601  |                |  |   | 1,993,795     | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Ocean Trails CLO II 2007-2a-d                                       |  | structured finance        |  | CLO subordinated securednotes(4)(5)(10)(11)(4.90%, due June 27, 2022) |  |                 | 3,649,700 |  |      |   | 2,079,669  |                |  |   | 2,189,820     | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Primus 2007 2X Class E CLO                                          |  | structured finance        |  | CLO notes (4)(5)(10)(11)(5.15%, due July 15, 2021)                    |  |                 | 2,834,633 |  |      |   | 2,168,472  |                |  |   | 1,686,607     | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Prospero CLO II BV                                                  |  | structured finance        |  | CLO senior secured notes(4)(5)(10)(11)(4.20%, due October 20, 2022)   |  |                 | 9,900,000 |  |      |   | 4,389,696  |                |  |   | 5,940,000     | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Total
    Collateralized Loan Obligation—Debt Investments           |  |                           |  |                                                                       |  |                 |           |  |      | $ | 45,658,335 |                |  | $ | 50,928,145    | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Collateralized
    Loan Obligation—Equity Investments               |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|ACA CLO 2006-2, Limited                                             |  | structured finance        |  | CLO preferred equity(10)(11)                                          |  | $               | —         |  |      | $ | 2,200,000  |                |  | $ | 3,750,000     | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Canaras CLO Equity - 2007-1A, 1X                                    |  | structured finance        |  | CLO income notes(10)(11)                                              |  |                 | —         |  |      |   | 4,355,000  |                |  |   | 3,825,000     | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|GALE 2007-4A CLO                                                    |  | structured finance        |  | CLO income notes(10)(11)                                              |  |                 | —         |  |      |   | 1,965,000  |                |  |   | 1,950,000     | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|GSC Partners 2007-8X Sub CDO                                        |  | structured finance        |  | CLO income notes(10)(11)                                              |  |                 | —         |  |      |   | 4,110,000  |                |  |   | 4,560,000     | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Harbourview - 2006A CLO Equity                                      |  | structured finance        |  | CDO subordinated notes(10)(11)                                        |  |                 | —         |  |      |   | 3,639,870  |                |  |   | 2,729,350     | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Jersey Street 2006-1A CLO LTD.                                      |  | structured finance        |  | CLO income notes(10)(11)                                              |  |                 | —         |  |      |   | 4,924,237  |                |  |   | 4,229,225     | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Kingsland LTD 2007-4X Sub.                                          |  | structured finance        |  | CLO income notes(10)(11)                                              |  |                 | —         |  |      |   | 402,500    |                |  |   | 376,250       | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Lightpoint CLO 2005-3X                                              |  | structured finance        |  | CLO income notes(10)(11)                                              |  |                 | —         |  |      |   | 3,330,000  |                |  |   | 3,116,250     | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Lightpoint CLO VII LTD 2007-7                                       |  | structured finance        |  | CLO subordinated notes(10)(11)                                        |  |                 | —         |  |      |   | 1,562,500  |                |  |   | 1,360,000     | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Marlborough Street 2007-1A                                          |  | structured finance        |  | CLO income notes(10)(11)                                              |  |                 | —         |  |      |   | 1,739,000  |                |  |   | 1,504,000     | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|OCT11 2007-1A CLO                                                   |  | structured finance        |  | CLO income notes(10)(11)                                              |  |                 | —         |  |      |   | 2,434,162  |                |  |   | 2,351,250     | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Rampart 2007-1A CLO Equity                                          |  | structured finance        |  | CLO subordinated notes(10)(11)                                        |  |                 | —         |  |      |   | 3,412,500  |                |  |   | 2,870,000     | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Sargas CLO 2006 -1A                                                 |  | structured finance        |  | CLO subordinated notes(10)(11)                                        |  |                 | —         |  |      |   | 4,945,500  |                |  |   | 6,666,000     | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Total
    Collateralized Loan Obligation—Equity Investments         |  |                           |  |                                                                       |  |                 |           |  |      | $ | 39,020,269 |                |  | $ | 39,287,325    | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Common
    Stock                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Algorithmic Implementations, Inc.                                   |  | software                  |  | common stock                                                          |  | $               | —         |  |      | $ | 3,000,000  |                |  | $ | 1,125,000     | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|(d/b/a “Ai Squared”)                                                |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Integra Telecomm, Inc.                                              |  | telecommunicationservices |  | common stock(7)                                                       |  |                 | —         |  |      |   | 1,712,397  |                |  |   | 1,051,271     | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Pegasus Solutions, Inc.                                             |  | enterprise software       |  | common equity(7)                                                      |  |                 | —         |  |      |   | 62,595     |                |  |   | 959,999       | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Stratus Technologies,
    Inc.                                      |  | computer hardware         |  | common equity(7)                                                      |  |                 | —         |  |      |   | 377,928    |                |  |   | —             | 
|                                                                    |  |                           |  |                                                                       |  |                 |           |  |      |   |            |                |  |   |               | 
|Total
    Common Stock Investments                                  |  |                           |  |                                                                       |  |                 |           |  |      | $ | 5,152,920  |                |  | $ | 3,136,270     | 



( Continued on next page )

See Accompanying Notes.



12







TICC CAPITAL CORP.



CONSOLIDATED SCHEDULE OF INVESTMENTS
– (Continued)

DECEMBER 31, 2011



|COMPANY (1)                                   |  | INDUSTRY                             |  | INVESTMENT                                   |  | PRINCIPALAMOUNT |   |  | COST |   |             | FAIR VALUE (2) |  |   | % of NetAssets | 
|--------------------------------------------- |  | ------------------------------------ |  | -------------------------------------------- |  | --------------- | - |  | ---- | - | ----------- | -------------- |  | - | -------------- | 
|Preferred Equity                              |  |                                      |  |                                              |  |                 |   |  |      |   |             |                |  |   |                | 
|                                              |  |                                      |  |                                              |  |                 |   |  |      |   |             |                |  |   |                | 
|GenuTec Business Solutions, Inc.              |  | interactive voice messaging services |  | convertible preferred stock(7)               |  | $               | — |  |      | $ | 1,500,000   |                |  | $ | —              | 
|                                              |  |                                      |  |                                              |  |                 |   |  |      |   |             |                |  |   |                | 
|Pegasus Solutions, Inc.                       |  | enterprise software                  |  | preferred equity(3)(14.00%
    PIK dividend) |  |                 | — |  |      |   | 1,120,542   |                |  |   | 2,176,237      | 
|                                              |  |                                      |  |                                              |  |                 |   |  |      |   |             |                |  |   |                | 
|Stratus Technologies,
    Inc.                |  | computer hardware                    |  | preferred equity(7)                          |  |                 | — |  |      |   | 186,622     |                |  |   | 318,451        | 
|                                              |  |                                      |  |                                              |  |                 |   |  |      |   |             |                |  |   |                | 
|Total
    Preferred Equity Investments        |  |                                      |  |                                              |  |                 |   |  |      | $ | 2,807,164   |                |  | $ | 2,494,688      | 
|                                              |  |                                      |  |                                              |  |                 |   |  |      |   |             |                |  |   |                | 
|Warrants                                      |  |                                      |  |                                              |  |                 |   |  |      |   |             |                |  |   |                | 
|                                              |  |                                      |  |                                              |  |                 |   |  |      |   |             |                |  |   |                | 
|Band Digital Inc.(F/K/A “WHITTMANHART, Inc.”) |  | IT consulting                        |  | warrants to purchase common stock (7)        |  | $               | — |  |      | $ | —           |                |  | $ | —              | 
|                                              |  |                                      |  |                                              |  |                 |   |  |      |   |             |                |  |   |                | 
|Fusionstorm, Inc.                             |  | IT value-added reseller              |  | warrants to purchase common stock (7)        |  |                 | — |  |      |   | 725,000     |                |  |   | 578,000        | 
|                                              |  |                                      |  |                                              |  |                 |   |  |      |   |             |                |  |   |                | 
|Power Tools, Inc.                             |  | software                             |  | warrants to purchase common stock(7)         |  |                 | — |  |      |   | 350,000     |                |  |   | 200,000        | 
|                                              |  |                                      |  |                                              |  |                 |   |  |      |   |             |                |  |   |                | 
|Total
    Warrants                            |  |                                      |  |                                              |  |                 |   |  |      | $ | 1,075,000   |                |  | $ | 778,000        | 
|                                              |  |                                      |  |                                              |  |                 |   |  |      |   |             |                |  |   |                | 
|Total
    Investments                         |  |                                      |  |                                              |  |                 |   |  |      | $ | 389,525,626 |                |  | $ | 391,468,839    | 



| | (1) | Other than Algorithmic Implementation, Inc. (d/b/a Ai Squared),
                                                             which we may be deemed to control, 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 be presumed
                                                             to “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) | Portfolio includes $16,441,941 of principal amount of debt investments
                                                             which contain a PIK provision. Portfolio also includes one preferred
                                                             equity position which contains a PIK dividend provision. For the
                                                             year ending December 31, 2011, total PIK income is $1,474,475, which
                                                             is derived from the following investments with a PIK provision: Merrill
                                                             Communications, LLC ($150,893), Pegasus Solutions, Inc. ($710,143),
                                                             Pegasus Solutions, Inc. Preferred Equity ($463,295) and Shearer’s
                                                             Food Inc. ($150,144). See also Note 2 to the Consolidated Financial
                                                             Statements.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Notes bear interest at variable rates.
| | --- | --------------------------------------

| | (5) | Cost value reflects accretion of original issue discount or market
                                                             discount.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------

| | (6) | Cost value reflects repayment of principal.
| | --- | -------------------------------------------

| | (7) | Non-income producing at the relevant period end.
| | --- | ------------------------------------------------

| | (8) | Aggregate gross unrealized appreciation for federal income tax
                                                             purposes is $18,879,992; aggregate gross unrealized depreciation
                                                             for federal income tax purposes is $35,465,298. Net unrealized depreciation
                                                             is $16,585,306 based upon a tax cost basis of $408,054,145.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (9) | All or a portion of this investment represents TICC CLO LLC collateral.
| | --- | -----------------------------------------------------------------------

| | (10) | Indicates assets that the Company believes do not represent
                                                              “qualifying assets” under Section 55(a) of the Investment
                                                              Company Act of 1940, as amended. Qualifying assets must represent
                                                              at least 70% of the Company’s total assets at the time of
                                                              acquisition of any additional non-qualifying assets.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (11) | Investment not domiciled in the United States.
| | ---- | ----------------------------------------------



See Accompanying Notes.



13







TICC CAPITAL CORP.



CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)



|                                                                                      |  | Three Months
    Ended September 30, 2012 |            |  | Three Months
    Ended September 30, 2011 |   |             | Nine Months
    Ended September 30, 2012 |  |   | Nine Months
    Ended September 30, 2011 | 
|------------------------------------------------------------------------------------- |  | ----------------------------------------- | ---------- |  | ----------------------------------------- | - | ----------- | ---------------------------------------- |  | - | ---------------------------------------- | 
|                                                                                      |  |                                           |            |  |                                           |   |             |                                          |  |   |                                          | 
|INVESTMENT INCOME                                                                     |  |                                           |            |  |                                           |   |             |                                          |  |   |                                          | 
|From non-affiliated/non-control investments:                                          |  |                                           |            |  |                                           |   |             |                                          |  |   |                                          | 
|Interest income - debt investments                                                    |  | $                                         | 8,908,966  |  |                                           | $ | 7,435,546   |                                          |  | $ | 27,159,248                               | 
|Distributions from securitization vehicles and equity
    investments                 |  |                                           | 6,025,634  |  |                                           |   | 3,196,002   |                                          |  |   | 17,919,415                               | 
|Commitment, amendment fee income
    and other income                                 |  |                                           | 278,613    |  |                                           |   | 60,953      |                                          |  |   | 4,524,825                                | 
|Total investment income from
    non-affiliated/non-control investments               |  |                                           | 15,213,213 |  |                                           |   | 10,692,501  |                                          |  |   | 49,603,488                               | 
|From control investments:                                                             |  |                                           |            |  |                                           |   |             |                                          |  |   |                                          | 
|Interest income - debt investments                                                    |  |                                           | 377,401    |  |                                           |   | 392,449     |                                          |  |   | 1,136,010                                | 
|Distributions from equity investments                                                 |  |                                           | -          |  |                                           |   | -           |                                          |  |   | 62,041                                   | 
|Total investment income from
    control investments                                  |  |                                           | 377,401    |  |                                           |   | 392,449     |                                          |  |   | 1,198,051                                | 
|Total investment income                                                               |  |                                           | 15,590,614 |  |                                           |   | 11,084,950  |                                          |  |   | 50,801,539                               | 
|EXPENSES                                                                              |  |                                           |            |  |                                           |   |             |                                          |  |   |                                          | 
|Compensation expense                                                                  |  |                                           | 289,361    |  |                                           |   | 217,639     |                                          |  |   | 839,049                                  | 
|Investment advisory fees                                                              |  |                                           | 2,796,873  |  |                                           |   | 1,942,657   |                                          |  |   | 7,390,894                                | 
|Professional fees                                                                     |  |                                           | 420,696    |  |                                           |   | 386,087     |                                          |  |   | 1,647,733                                | 
|Interest expense and other debt financing expenses                                    |  |                                           | 1,398,975  |  |                                           |   | 434,283     |                                          |  |   | 3,052,056                                | 
|General and administrative                                                            |  |                                           | 423,884    |  |                                           |   | 185,833     |                                          |  |   | 1,151,363                                | 
|Total expenses before incentive
    fees                                              |  |                                           | 5,329,789  |  |                                           |   | 3,166,499   |                                          |  |   | 14,081,095                               | 
|Net investment income incentive fees                                                  |  |                                           | 1,003,437  |  |                                           |   | 455,864     |                                          |  |   | 4,360,917                                | 
|Capital gains incentive fees                                                          |  |                                           | 4,649,814  |  |                                           |   | (4,153,198  | )                                        |  |   | 4,559,957                                | 
|Total incentive fees                                                                  |  |                                           | 5,653,251  |  |                                           |   | (3,697,334  | )                                        |  |   | 8,920,874                                | 
|Total expenses                                                                        |  |                                           | 10,983,040 |  |                                           |   | (530,835    | )                                        |  |   | 23,001,969                               | 
|Net investment income                                                                 |  |                                           | 4,607,574  |  |                                           |   | 11,615,785  |                                          |  |   | 27,799,570                               | 
|Net change in unrealized
    appreciation (depreciation) on investments               |  |                                           | 21,471,506 |  |                                           |   | (20,114,242 | )                                        |  |   | 22,844,614                               | 
|Net realized gains on investments                                                     |  |                                           | 1,777,564  |  |                                           |   | 83,178      |                                          |  |   | 3,555,702                                | 
|Net increase (decrease) in net
    assets resulting     from operations               |  | $                                         | 27,856,644 |  |                                           | $ | (8,415,279  | )                                        |  | $ | 54,199,886                               | 
|                                                                                      |  |                                           |            |  |                                           |   |             |                                          |  |   |                                          | 
|Net increase in net assets resulting from net investment
    income per common share: |  |                                           |            |  |                                           |   |             |                                          |  |   |                                          | 
|Basic                                                                                 |  | $                                         | 0.12       |  |                                           | $ | 0.36        |                                          |  | $ | 0.75                                     | 
|Diluted                                                                               |  | $                                         | 0.12       |  |                                           | $ | 0.36        |                                          |  | $ | 0.75                                     | 
|Net increase (decrease) in net assets resulting from
    operations     per           |  |                                           |            |  |                                           |   |             |                                          |  |   |                                          | 
|common share:                                                                         |  |                                           |            |  |                                           |   |             |                                          |  |   |                                          | 
|Basic                                                                                 |  | $                                         | 0.71       |  |                                           | $ | (0.26       | )                                        |  | $ | 1.47                                     | 
|Diluted                                                                               |  | $                                         | 0.70       |  |                                           | $ | (0.26       | )                                        |  | $ | 1.47                                     | 
|Weighted average shares of common stock outstanding:                                  |  |                                           |            |  |                                           |   |             |                                          |  |   |                                          | 
|Basic                                                                                 |  |                                           | 39,383,076 |  |                                           |   | 32,672,294  |                                          |  |   | 36,859,005                               | 
|Diluted                                                                               |  |                                           | 39,880,940 |  |                                           |   | 32,672,294  |                                          |  |   | 37,026,172                               | 



See Accompanying Notes.



14







TICC CAPITAL CORP.



CONSOLIDATED STATEMENTS OF CHANGES IN
NET ASSETS

(unaudited)



|                                                                                                                              |  | Nine Months
    Ended September 30, 2012 |             |   | Year Ended December 31, 2011 |  
|----------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------- | ----------- | - | ---------------------------- | -
|                                                                                                                              |  |                                          |             |   |                              |  
|Increase in net assets from operations:                                                                                       |  |                                          |             |   |                              |  
|Net investment income                                                                                                         |  | $                                        | 27,799,570  |   |                              | $
|Net realized gains on investments                                                                                             |  |                                          | 3,555,702   |   |                              |  
|Net change in unrealized appreciation
    (depreciation) on investments                                                       |  |                                          | 22,844,614  |   |                              |  
|                                                                                                                              |  |                                          |             |   |                              |  
|Net increase in net assets resulting
    from operations                                                                      |  |                                          | 54,199,886  |   |                              |  
|                                                                                                                              |  |                                          |             |   |                              |  
|                                                                                                                              |  |                                          |             |   |                              |  
|Distributions to shareholders                                                                                                 |  |                                          | (32,338,693 | ) |                              |  
|                                                                                                                              |  |                                          |             |   |                              |  
|Capital share transactions:                                                                                                   |  |                                          |             |   |                              |  
|Issuance of common stock (net of offering costs of
    $3,545,895 and $318,630, respectively)                                 |  |                                          | 78,426,107  |   |                              |  
|Reinvestment of dividends                                                                                                     |  |                                          | 1,508,158   |   |                              |  
|                                                                                                                              |  |                                          |             |   |                              |  
|Net increase in net assets from
    capital share transactions                                                                |  |                                          | 79,934,265  |   |                              |  
|                                                                                                                              |  |                                          |             |   |                              |  
|Total increase (decrease) in net assets                                                                                       |  |                                          | 101,795,458 |   |                              |  
|Net assets at beginning of period                                                                                             |  |                                          | 305,101,991 |   |                              |  
|Net assets at end of period
    (including over distributed net investment income of $3,832,004 and $3,852,838, respectively) |  | $                                        | 406,897,449 |   |                              | $
|Capital share activity:                                                                                                       |  |                                          |             |   |                              |  
|Shares sold                                                                                                                   |  |                                          | 8,337,500   |   |                              |  
|Shares issued from reinvestment
    of dividends                                                                              |  |                                          | 156,852     |   |                              |  
|                                                                                                                              |  |                                          |             |   |                              |  
|Net increase in capital share
    activity                                                                                    |  |                                          | 8,494,352   |   |                              |  



See Accompanying Notes.



15







TICC CAPITAL CORP.



CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)



|                                                                                                                            |  | Nine Months
     Ended September 30, 2012 |              |   | Nine Months
     Ended September 30, 2011 |  
|--------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------- | ------------ | - | ----------------------------------------- | -
|                                                                                                                            |  |                                           |              |   |                                           |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                                        |  |                                           |              |   |                                           |  
|Net increase in net assets resulting from
    operations                                                                    |  | $                                         | 54,199,886   |   |                                           | $
|Adjustments to reconcile net increase in net assets
    resulting from operations to net cash used by operating activities: |  |                                           |              |   |                                           |  
|Amortization of discounts                                                                                                   |  |                                           | (4,289,325   | ) |                                           |  
|Amortization of discount on notes payable and deferred
    debt issuance costs                                              |  |                                           | 430,826      |   |                                           |  
|Increase in investments due to PIK                                                                                          |  |                                           | (4,380,550   | ) |                                           |  
|Purchases of investments                                                                                                    |  |                                           | (226,365,499 | ) |                                           |  
|Repayments of principal and reductions to investment
    cost value                                                         |  |                                           | 115,860,293  |   |                                           |  
|Proceeds from the sale of investments                                                                                       |  |                                           | 20,051,265   |   |                                           |  
|Net realized gains on investments                                                                                           |  |                                           | (3,555,702   | ) |                                           |  
|Net change in unrealized (appreciation) depreciation
    on investments                                                     |  |                                           | (22,844,614  | ) |                                           |  
|Increase in interest and distributions receivable                                                                           |  |                                           | (2,659,130   | ) |                                           |  
|Decrease (increase) in other assets                                                                                         |  |                                           | 136,347      |   |                                           |  
|(Decrease) increase in accrued interest payable                                                                             |  |                                           | (48,482      | ) |                                           |  
|Increase in investment advisory fee payable                                                                                 |  |                                           | 904,512      |   |                                           |  
|Increase in accrued capital gains incentive fee                                                                             |  |                                           | 4,559,957    |   |                                           |  
|Increase in accrued expenses                                                                                                |  |                                           | 346,954      |   |                                           |  
|Net cash used by operating activities                                                                                       |  |                                           | (67,653,263  | ) |                                           |  
|CASH FLOWS FROM INVESTING ACTIVIES                                                                                          |  |                                           |              |   |                                           |  
|Change in restricted cash                                                                                                   |  |                                           | (73,546,292  | ) |                                           |  
|Net cash used by investing activities                                                                                       |  |                                           | (73,546,292  | ) |                                           |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                                                        |  |                                           |              |   |                                           |  
|Notes payable - debt securitizations (net of
    discount     of $4,440,163 and $1,588,125, respectively)                   |  | $                                         | 112,559,837  |   |                                           | $
|Proceeds from the issuance of convertible senior notes                                                                      |  |                                           | 105,000,000  |   |                                           |  
|Deferred debt issuance costs                                                                                                |  |                                           | (5,545,177   | ) |                                           |  
|Proceeds from the issuance of common stock                                                                                  |  |                                           | 81,972,002   |   |                                           |  
|Offering expenses from the issuance of common stock                                                                         |  |                                           | (3,545,895   | ) |                                           |  
|Distributions paid (net of stock issued under dividend
    reinvestment plan of $1,508,158 and $1,964,565, respectively)    |  |                                           | (30,830,535  | ) |                                           |  
|Net cash provided by financing
    activities                                                                               |  |                                           | 259,610,232  |   |                                           |  
|                                                                                                                            |  |                                           |              |   |                                           |  
|Net increase (decrease) in cash and cash equivalents                                                                        |  |                                           | 118,410,677  |   |                                           |  
|                                                                                                                            |  |                                           |              |   |                                           |  
|Cash and cash equivalents, beginning
    of period                                                                          |  |                                           | 4,494,793    |   |                                           |  
|                                                                                                                            |  |                                           |              |   |                                           |  
|Cash and cash equivalents, end
    of period                                                                                |  | $                                         | 122,905,470  |   |                                           | $
|                                                                                                                            |  |                                           |              |   |                                           |  
|NON-CASH FINANCING ACTIVITIES                                                                                               |  |                                           |              |   |                                           |  
|Value of shares issued in connection with dividend
    reinvestment plan                                                    |  | $                                         | 1,508,158    |   |                                           | $
|                                                                                                                            |  |                                           |              |   |                                           |  
|SUPPLEMENTAL DISCLOSURES                                                                                                    |  |                                           |              |   |                                           |  
|Securities sold not settled                                                                                                 |  | $                                         | 503,750      |   |                                           | $
|Securities purchased not settled                                                                                            |  | $                                         | 34,561,217   |   |                                           | $
|Cash paid for interest                                                                                                      |  | $                                         | 2,669,712    |   |                                           | $



See Accompanying Notes.



16







TICC CAPITAL CORP.



NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

SEPTEMBER 30,
2012



NOTE 1. UNAUDITED INTERIM FINANCIAL STATEMENTS



Interim consolidated financial statements
of TICC Capital Corp. (“TICC” and, together with its subsidiaries, the “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 statement of consolidated financial results for the interim periods have been included. The current
period’s consolidated results of operations are not necessarily indicative of results that may be achieved for the year.
The interim consolidated 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, 2011, as filed with the Securities and
Exchange Commission (“SEC”).



NOTE 2. ORGANIZATION



TICC was incorporated under the General
Corporation Laws of the State of Maryland on July 21, 2003 and is a non-diversified, closed-end investment company. TICC has elected
to be treated as a business development company under the Investment Company Act of 1940, as amended (the “1940 Act”).
In addition, TICC has elected to be treated for tax purposes as a regulated investment company (“RIC”), under Subchapter
M of the Internal Revenue Code of 1986, as amended (the “Code”). The Company’s investment objective is to maximize
its total return, by investing primarily in corporate debt securities.



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



On August 10, 2011, the Company completed
a $225.0 million debt securitization financing transaction. The Class A Notes offered in the debt securitization were issued by
TICC CLO LLC (the “2011 Securitization Issuer” or “ TICC CLO”), a subsidiary of TICC Capital Corp. 2011-1
Holdings, LLC (“Holdings”), a direct subsidiary of TICC, and the notes are secured by the assets held by the 2011
Securitization Issuer. The securitization was executed through a private placement of $101.25 million of Aaa/AAA Class A Notes
of the 2011 Securitization Issuer. Holdings retained all of the subordinated notes, which totaled $123.75 million, and retained
all the membership interests in the 2011 Securitization Issuer. For further information on this securitization, see Note 4.



On August 23, 2012, the Company
completed a $160 million debt securitization financing transaction. The secured and subordinated notes offered in the debt
securitization were issued by TICC CLO 2012-1 LLC (“2012 Securitization Issuer” or “TICC CLO
2012-1”), a newly formed special purpose vehicle that is a wholly-owned subsidiary of the Company. The secured notes of
the 2012 Securitization Issuer have an aggregate face amount of $120 million and were issued in four classes. The class A-1
notes have an initial face amount of $88 million, are rated AAA(sf)/Aaa(sf)by Standard & Poor’s
Ratings Services (S&P) and Moody’s Investors Service, Inc. (Moody’s), respectively, and bear interest at
three-month LIBOR plus 1.75%. The class B-1 notes have an initial face amount of $10 million, are rated
AA(sf)/Aa2(sf)by S&P and Moody’s, respectively, and bear interest at three-month LIBOR plus 3.50%.
The class C-1 notes have an initial face amount of $11.5 million, are rated A(sf)/A2(sf) by S&P and
Moody’s, respectively, and bear interest at three-month LIBOR plus 4.75%. The class D-1 notes have an initial face
amount of $10.5 million, are rated BBB(sf)/Baa2(sf)by S&P and Moody’s, respectively, and bear
interest at three-month LIBOR plus 5.75%. TICC presently owns all of the subordinated notes, which totaled $40 million, and
$3 million of the class D-1 notes issued in this CLO transaction. For further information on this securitization, see
Note 4.



The Company consolidated the results of
its subsidiaries, Holdings, TICC CLO and TICC CLO 2012-1, in its consolidated financial statements as the subsidiaries are operated
solely for investment activities of the Company, and the Company has substantial equity at risk. The creditors of TICC CLO and
TICC CLO 2012-1 have received security interests in the assets owned by TICC CLO and TICC CLO 2012-1, respectively, and such assets
are not intended to be available to the creditors of TICC (or any other affiliate of TICC).



17







On September 26, 2012, the Company closed
a private placement of 5-year unsecured 7.50% Senior Convertible Notes Due 2017 (the “Convertible Notes”). A total
of $105 million aggregate principal amount of the Convertible Notes were issued at the closing. An additional $10 million aggregate
principal amount of the Convertible Notes were issued on October 22, 2012 pursuant to the exercise of the initial purchasers’
option to purchase additional Convertible Notes. The Convertible Notes are convertible into shares of the Company’s common
stock based on an initial conversion rate of 87.2448 shares of the Company’s common stock per $1,000 principal amount of
Convertible Notes, which is equivalent to an initial conversion price of approximately $11.46 per share of common stock, representing
an approximately 10.0% conversion premium over the last reported sale price of the Company’s common stock on September 20,
2012, which was $10.42 per share. The conversion price for the Convertible Notes will be reduced for quarterly cash dividends
paid to common shares to the extent that the quarterly dividend exceeds $0.29 cents per share, subject to adjustment. The Convertible
Notes bear interest at an annual rate of 7.50%, payable semiannually in arrears on May 1 and November 1 of each year, beginning
May 1, 2013. The Convertible Notes mature on November 1, 2017, unless previously converted in accordance with their terms. The
Convertible Notes are general unsecured obligations of the Company, rank equally in right of payment with the Company’s
future senior unsecured debt, and rank senior in right of payment to any potential subordinated debt, should any be issued in
the future.



NOTE 3. INVESTMENT VALUATION



The most significant estimates made
in the preparation of TICC’s consolidated financial statements are the valuation of investments and the related amounts
of unrealized appreciation and depreciation of investments recorded. TICC believes that there is no single definitive method
for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the
specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for
the types of investments TICC makes. TICC is required to specifically fair value each individual investment on a
quarterly basis.



In May 2011, the FASB issued ASU 2011-04,
“Fair Value Measurement which represents amendments to achieve common fair value measurement and disclosure requirements
in US GAAP and IFRS .” The amendments are of two types: (i) those that clarify the FASB’s intent about the application
of existing fair value measurement and disclosure requirements and (ii) those that change a particular principle or requirement
for measuring fair value or for disclosing information about fair value measurements. The amendments that change a particular
principle or requirement for measuring fair value or disclosing information about fair value measurements relate to (i) measuring
the fair value of the financial instruments that are managed within a portfolio; (ii) application of premium and discount in a
fair value measurement; and (iii) additional disclosures about fair value measurements. The update is effective for annual periods
beginning after December 15, 2011 and as such TICC has adopted this ASU beginning with the quarter ended March 31, 2012. TICC
has increased its disclosures related to Level 3 fair value measurement, in addition to other required disclosures. There were
no related impacts on TICC’s financial position or results of operations.



TICC adopted ASC 820-10, Fair Value
Measurements and Disclosure, which establishes a three-level valuation hierarchy for disclosure of fair value measurements,
on January 1, 2008. ASC 820-10 clarified the definition of fair value and requires companies to expand their disclosure about
the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. ASC 820-10
defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. ASC 820-10 also establishes a three-tier fair value hierarchy, which prioritizes
the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active
markets; Level 2, which includes inputs such as quoted prices for similar securities in active markets and quoted prices for identical
securities in markets that are not active; and Level 3, defined as unobservable inputs for which little or no market data exists,
therefore requiring an entity to develop its own assumptions. TICC has determined that due to the general illiquidity of the market
for its investment portfolio, whereby little or no market data exists, almost all of TICC’s investments are based upon “Level
3” inputs.



TICC’s Board of Directors determines
the value of its investment portfolio each quarter. In connection with that determination, members of TICC Management’s
portfolio management team prepare portfolio company valuations using the most recent portfolio company financial statements and
forecasts. Since March 2004, TICC has engaged third-party valuation firms to provide assistance in valuing its bilateral investments
and, more recently, for certain of its syndicated loans, although TICC’s Board of Directors ultimately determines the appropriate
valuation of each such investment.



TICC’s process for determining the
fair value of a bilateral investment begins with determining the enterprise value of the portfolio company. Enterprise value means
the entire value of the company to a potential buyer, including the sum of the values of debt and equity securities used to capitalize
the enterprise at a point in time. The fair value of TICC’s investment is based, in part, on the enterprise value at which
the portfolio company could be sold in an orderly disposition over a reasonable period of time between willing parties other than
in a forced or liquidation sale. The liquidity event whereby TICC exits a private investment is generally the sale, the recapitalization
or, in some cases, the initial public offering of the portfolio company.



There is no one methodology to determine
enterprise value and, in fact, for any one portfolio company, enterprise value is best expressed as a range of fair values, from
which TICC derives a single estimate of enterprise value. To determine the enterprise value of a portfolio company, TICC analyzes
the historical and projected financial results, as well as the nature and value of any collateral. TICC also uses industry valuation
benchmarks and public market comparables. TICC also considers other events, including private mergers and acquisitions, a purchase
transaction, public offering or subsequent debt or equity sale or restructuring, and include these events in the enterprise valuation
process. TICC generally requires portfolio companies to provide annual audited and quarterly unaudited financial statements, as
well as annual projections for the upcoming fiscal year.



18







Typically, TICC’s bilateral debt
investments are valued on the basis of a fair value determination arrived at through an analysis of the borrower’s financial
and operating condition or other factors, as well as consideration of the entity’s enterprise value. The types of factors
that TICC may take into account in valuing its investments include: market trading and transaction comparables, applicable market
yields and multiples, security covenants, call protection provisions, the nature and realizable value of any collateral, the portfolio
company’s ability to make payments and its earnings and discounted cash flows, among other factors. The fair value of equity
interests in portfolio companies is determined based on various factors, including the enterprise value remaining for equity holders
after the repayment of the portfolio company’s debt and other preference capital, and other pertinent factors such as recent
offers to purchase a portfolio company, recent transactions involving the purchase or sale of the portfolio company’s equity
securities, or other liquidity events. The determined equity values are generally discounted when TICC has a minority position,
restrictions on resale, specific concerns about the receptivity of the capital markets to a specific company at a certain time,
or other factors.



TICC will record unrealized depreciation
on bilateral investments when TICC believes that an investment has become impaired, including where collection of a loan or realization
of an equity security is doubtful. To the extent that TICC believes that it has become probable that a loan is not collectible
or probable that an equity investment is not realizable, TICC will classify that amount as a realized loss. TICC will record unrealized
appreciation if TICC believes that the underlying portfolio company has appreciated in value and TICC’s equity security
has also appreciated in value. Changes in fair value, other than such changes that are considered probable of non-collection or
non-realization, as described above, are recorded in the statement of operations as net change in unrealized appreciation or depreciation.



Under the valuation procedures approved
by TICC’s Board of Directors, upon the recommendation of the Valuation Committee, a third-party valuation firm will prepare
valuations for each of TICC’s bilateral investments for which market quotations are not readily available that, when combined
with all other investments in the same portfolio company, (i) have a value as of the previous quarter of greater than or equal
to 2.5% of its total assets as of the previous quarter, and (ii) have a value as of the current quarter of greater than or equal
to 2.5% of its total assets as of the previous quarter, after taking into account any repayment of principal during the current
quarter. In addition, the frequency of those third-party valuations of TICC’s portfolio securities is based upon the grade
assigned to each such security under its credit grading system as follows: Grade 1, at least annually; Grade 2, at least semi-annually;
Grades 3, 4, and 5, at least quarterly. TICC Management also retains the authority to seek, on TICC’s behalf, additional
third party valuations with respect to both TICC’s bilateral portfolio securities and TICC’s syndicated loan investments.
TICC’s Board of Directors retains ultimate authority as to the third-party review cycle as well as the appropriate valuation
of each investment.



On April 9, 2009, the FASB issued additional
guidelines under ASC 820-10-35, “ Determining Fair Value When the Volume and Level of Activity for the Asset or Liability
Have Significantly Decreased and Identifying Transactions That Are Not Orderly ,” which provides guidance on factors
that should be considered in determining when a previously active market becomes inactive and whether a transaction is orderly.
In accordance with ASC 820-10-35, TICC’s valuation procedures specifically provide for the review of indicative quotes supplied
by the large agent banks that make a market for each security. However, the marketplace for which TICC obtains indicative bid
quotes for purposes of determining the fair value of its syndicated loan investments have shown these attributes of illiquidity
as described by ASC-820-10-35. Due to limited market liquidity in the syndicated loan market, TICC believes that the non-binding
indicative bids received from agent banks for certain syndicated investments that TICC owns may not be determinative of their
fair value and therefore alternative valuation procedures may need to be undertaken. As a result, TICC has engaged third-party
valuation firms to provide assistance in valuing certain syndicated investments that TICC owns. In addition, TICC Management prepares
an analysis of each syndicated loan, including a financial summary, covenant compliance review, recent trading activity in the
security, if known, and other business developments related to the portfolio company. All available information, including non-binding
indicative bids which may not be determinative of fair value, is presented to the Valuation Committee to consider in its determination
of fair value. In some instances, there may be limited trading activity in a security even though the market for the security
is considered not active. In such cases the Valuation Committee will consider the number of trades, the size and timing of each
trade, and other circumstances around such trades, to the extent such information is available, in its determination of fair value.
The Valuation Committee will evaluate the impact of such additional information, and factor it into its consideration of the fair
value that is indicated by the analysis provided by third-party valuation firms, if any. TICC has considered the factors described
in ASC 820-10 and has determined that TICC is properly valuing the securities in its portfolio.



During the past several quarters, TICC
has acquired a number of debt and equity positions in collateralized loan obligation (“CLO”) investment vehicles.
These investments are special purpose financing vehicles. In valuing such investments, TICC considers the operating metrics of
the specific investment vehicle, including compliance with collateralization tests, defaulted and restructured securities, and
payment defaults, if any. In addition, TICC considers the indicative prices provided by a recognized industry pricing service
as well as the indicative prices provided by the broker who arranges transactions in such investment vehicles, as well as any
available information on other relevant transactions including firm bids and offers in the market. TICC Management or the Valuation
Committee may request an additional analysis by a third-party firm to assist in the valuation process of CLO investment vehicles.
All information is presented to TICC’s Board of Directors for its determination of fair value of these investments.



19







The Company’s assets measured at
fair value on a recurring basis subject to the disclosure requirements of ASC 820-10-35 at September 30, 2012, were as follows:



|($ in millions)             |  | Fair Value Measurements at Reporting Date Using                     |     |  |                                                    |  
|--------------------------- |  | ------------------------------------------------------------------- | --- |  | -------------------------------------------------- | -
|Assets                      |  | Quoted Prices in
    Active  Markets for Identical Assets (Level 1) |     |  | Significant Other 
    Observable Inputs (Level 2) |  
|Cash equivalents            |  | $                                                                   | 0.0 |  |                                                    | $
|Senior Secured Notes        |  |                                                                     | 0.0 |  |                                                    |  
|CLO Debt                    |  |                                                                     | 0.0 |  |                                                    |  
|CLO Equity                  |  |                                                                     | 0.0 |  |                                                    |  
|Subordinated Notes          |  |                                                                     | 0.0 |  |                                                    |  
|Common Stock                |  |                                                                     | 0.0 |  |                                                    |  
|Preferred Shares            |  |                                                                     | 0.0 |  |                                                    |  
|Warrants to purchase equity |  |                                                                     | 0.0 |  |                                                    |  
|                            |  |                                                                     |     |  |                                                    |  
|Total                       |  | $                                                                   | 0.0 |  |                                                    | $



Significant Unobservable Inputs for Level 3 Investments



In accordance with ASU 2011-04, the following
table provides quantitative information about the Company’s Level 3 fair value measurements as of September 30, 2012. The
Company’s valuation policy, as described above, establishes parameters for the sources and types of valuation analysis,
as well as the methodologies and inputs that the Company uses in determining fair value. If the Valuation Committee or TICC Management
determines that additional techniques, sources or inputs are appropriate or necessary in a given situation, such additional work
will be undertaken. The table, therefore, is not all-inclusive, but provides information on the significant Level 3 inputs that
are pertinent to the Company’s fair value measurements. The weighted average calculations in the table below are based on
principal balances for all debt related calculations and CLO equity.



20







|($ in millions)                          |  | Quantitative Information about Level 3 Fair Value Measurements |       | 
|---------------------------------------- |  | -------------------------------------------------------------- | ----- | 
|                                         |  | Fair Value as of                                               |       | 
|                                         |  | September 30,                                                  |       | 
|Assets                                   |  | 2012                                                           |       | 
|Corporate debt investments               |  |                                                                |       | 
|syndicated                               |  | $                                                              | 331.6 | 
|bilateral                                |  |                                                                | 15.9  | 
|CLO debt                                 |  |                                                                | 87.7  | 
|CLO equity                               |  |                                                                | 82.8  | 
|Other investments                        |  |                                                                | 7.0   | 
|Total Fair Value for Level 3 Investments |  | $                                                              | 525.0 | 



| | (1) | The Company generally uses prices
                                                            provided by an independent pricing service, or broker or agent bank
                                                            non-binding indicative bid prices (NBIB) on or near the valuation
                                                            date as the primary basis for the fair value determinations for syndicated
                                                            notes, and CLO debt and equity investments. These bid prices are non-binding,
                                                            and may not be determinative of fair value. Each bid price is evaluated
                                                            by the Valuation Committee in conjunction with additional information
                                                            compiled by TICC Management, including financial performance, recent
                                                            business developments, and, in the case of CLO debt and equity investments,
                                                            performance and covenant compliance information as provided by the
                                                            independent trustee.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | For
                                                                                                      the Company’s bilateral
                                                                                                      debt investments and equity
                                                                                                      investments, third-party
                                                                                                      valuation firms evaluate
                                                                                                      the financial and operational
                                                                                                      information of the portfolio
                                                                                                      companies that the Company
                                                                                                      provides to them, as well
                                                                                                      as independent market and
                                                                                                      industry information that
                                                                                                      they consider appropriate
                                                                                                      in forming an opinion as
                                                                                                      to the fair value of the
                                                                                                      Company’s securities.
                                                                                                      In those instances where
                                                                                                      the carrying value and/or
                                                                                                      internal credit rating of
                                                                                                      the investment does not
                                                                                                      require the use of a third-party
                                                                                                      valuation firm, a valuation
                                                                                                      is prepared by TICC Management,
                                                                                                      which may include liquidation
                                                                                                      analysis or which may utilize
                                                                                                      a subsequent transaction
                                                                                                      to provide an indication
                                                                                                      of fair value.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | EBITDA,
                                                                                                      or earnings before interest
                                                                                                      expense, taxes, depreciation
                                                                                                      and amortization, is an
                                                                                                      unobservable input which
                                                                                                      is generally based on most
                                                                                                      recently available twelve
                                                                                                      month financial statements
                                                                                                      provided by the portfolio
                                                                                                      company. Market multiples,
                                                                                                      also an unobservable input,
                                                                                                      represent an estimation
                                                                                                      of where market participants
                                                                                                      might value an enterprise
                                                                                                      based upon information available
                                                                                                      for comparable companies
                                                                                                      in the market.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | The
                                                                                                      Company has adopted a credit
                                                                                                      grading system for its debt
                                                                                                      investments as part of the
                                                                                                      valuation process. The internal
                                                                                                      credit grading (ICG), which
                                                                                                      ranges from 1 (highest)
                                                                                                      to 5 (lowest), is an unobservable
                                                                                                      input which represents a
                                                                                                      proprietary grading system
                                                                                                      developed by TICC Management.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Discount
                                                                                                      rate represents the rate
                                                                                                      at which future cash flows
                                                                                                      are discounted to calculate
                                                                                                      a present value, reflecting
                                                                                                      market assumptions for risk.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | The
                                                                                                      calculation of weighted
                                                                                                      average for a range of values,
                                                                                                      for multiple investments
                                                                                                      within a given asset category,
                                                                                                      is not considered to provide
                                                                                                      a meaningful representation
                                                                                                      (“ncm”).
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Significant increases or decreases in any of the unobservable
inputs in isolation may result in a significantly lower or higher fair value measurement.



Financial Instruments Disclosed, But Not Carried, At Fair
Value







21







The following table presents the carrying value and fair value
of the Company's financial liabilities disclosed, but not carried, at fair value as of September 30, 2012 and the level of each
financial liability within the fair value hierarchy:



|($ in thousands)                                     |  | Carrying Value |         |  | Fair Value |   |         | Level 1 |  |   | Level 2 |  |  | Level 3 |  
|---------------------------------------------------- |  | -------------- | ------- |  | ---------- | - | ------- | ------- |  | - | ------- |  |  | ------- | -
|TICC CLO LLC Class A Notes, net of discount          |  | $              | 99,843  |  |            | $ | 100,997 |         |  | $ | -       |  |  | $       | -
|TICC CLO 2012-1 LLC Class A-1 Notes, net of discount |  |                | 86,105  |  |            |   | 86,680  |         |  |   | -       |  |  |         | -
|TICC CLO 2012-1 LLC Class B-1 Notes, net of discount |  |                | 9,443   |  |            |   | 9,600   |         |  |   | -       |  |  |         | -
|TICC CLO 2012-1 LLC Class C-1 Notes, net of discount |  |                | 10,478  |  |            |   | 10,609  |         |  |   | -       |  |  |         | -
|TICC CLO 2012-1 LLC Class D-1 Notes, net of discount |  |                | 6,574   |  |            |   | 6,938   |         |  |   | -       |  |  |         | -
|2017 Convertible Notes                               |  |                | 105,000 |  |            |   | 105,000 |         |  |   |         |  |  |         |  
|Total                                                |  | $              | 317,443 |  |            | $ | 319,824 |         |  | $ | -       |  |  | $       | -



Fair value is based upon the bid price provided by the placement
agent at the measurement date.



A reconciliation of the fair value of investments for three
months ended September 30, 2012, utilizing significant unobservable inputs, is as follows:



|($ in millions)                                                                                                                                                                                                                                                                                                                |  | SeniorSecured NoteInvestments |       |   | CollateralizedLoanObligationDebtInvestments |   |      | CollateralizedLoanObligationEquityInvestments |  |   | SubordinatedNoteInvestments |  |  | CommonStockInvestments |      |   | PreferredShare EquityInvestments |   |     | Warrants toPurchaseEquityInvestments |  |   | Total |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------------------- | ----- | - | ------------------------------------------- | - | ---- | --------------------------------------------- |  | - | --------------------------- |  |  | ---------------------- | ---- | - | -------------------------------- | - | --- | ------------------------------------ |  | - | ----- | -
|Balance at June 30, 2012                                                                                                                                                                                                                                                                                                       |  | $                             | 292.1 |   |                                             | $ | 68.8 |                                               |  | $ | 58.9                        |  |  | $                      | 4.4  |   |                                  | $ | 4.2 |                                      |  | $ | 1.8   |  
|Realized Gains included
    in earnings                                                                                                                                                                                                                                                                                        |  |                               | 1.6   |   |                                             |   | 0.0  |                                               |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                      |  |   | 0.0   |  
|Unrealized (depreciation)
    appreciation included in earnings                                                                                                                                                                                                                                                                |  |                               | 1.2   |   |                                             |   | 10.4 |                                               |  |   | 8.9                         |  |  |                        | 0.6  |   |                                  |   | 0.4 |                                      |  |   | (0.5  | )
|Accretion of discount                                                                                                                                                                                                                                                                                                          |  |                               | 0.5   |   |                                             |   | 0.8  |                                               |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                      |  |   | 0.0   |  
|Purchases                                                                                                                                                                                                                                                                                                                      |  |                               | 95.3  |   |                                             |   | 7.7  |                                               |  |   | 15.0                        |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                      |  |   | 0.0   |  
|Repayments and Sales                                                                                                                                                                                                                                                                                                           |  |                               | (48.2 | ) |                                             |   | 0.0  |                                               |  |   | 0.0                         |  |  |                        | (0.1 | ) |                                  |   | 0.0 |                                      |  |   | 0.0   |  
|Payment in Kind income                                                                                                                                                                                                                                                                                                         |  |                               | 0.1   |   |                                             |   | 0.0  |                                               |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                      |  |   | 0.1   |  
|Transfers
    in and/or out of level 3                                                                                                                                                                                                                                                                                         |  |                               | 0.0   |   |                                             |   | 0.0  |                                               |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                      |  |   | 0.0   |  
|                                                                                                                                                                                                                                                                                                                               |  |                               |       |   |                                             |   |      |                                               |  |   |                             |  |  |                        |      |   |                                  |   |     |                                      |  |   |       |  
|Balance at September
    30, 2012                                                                                                                                                                                                                                                                                              |  | $                             | 342.6 |   |                                             | $ | 87.7 |                                               |  | $ | 82.8                        |  |  | $                      | 4.9  |   |                                  | $ | 4.6 |                                      |  | $ | 1.4   |  
|                                                                                                                                                                                                                                                                                                                               |  |                               |       |   |                                             |   |      |                                               |  |   |                             |  |  |                        |      |   |                                  |   |     |                                      |  |   |       |  
|The
    amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses
    relating to our Level 3 assets still held at the reporting date and reported within the net change in unrealized gains or
    losses on investments in our Statement of Operations(1) |  | $                             | 2.8   |   |                                             | $ | 10.4 |                                               |  | $ | 8.9                         |  |  | $                      | 0.6  |   |                                  | $ | 0.3 |                                      |  | $ | (0.4  | )



| | (1) | Includes rounding adjustments to reconcile period balances.
| | --- | -----------------------------------------------------------



A reconciliation of the fair value of investments for nine
months ending September 30, 2012, utilizing significant unobservable inputs, is as follows:



|($ in millions)                                                                                                                                                                                                                                                                                                                |  | SeniorSecuredNoteInvestments |        |   | CollateralizedLoanObligationDebtInvestments |   |      | CollateralizedLoanObligationEquityInvestments |  |   | SubordinatedNoteInvestments |  |  | CommonStockInvestments |      |   | PreferredShareEquityInvestments |   |     | Warrants toPurchaseEquityInvestments |  |   | Total |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------- | ------ | - | ------------------------------------------- | - | ---- | --------------------------------------------- |  | - | --------------------------- |  |  | ---------------------- | ---- | - | ------------------------------- | - | --- | ------------------------------------ |  | - | ----- | -
|Balance at December 31,
    2011                                                                                                                                                                                                                                                                                               |  | $                            | 279.2  |   |                                             | $ | 51.0 |                                               |  | $ | 39.3                        |  |  | $                      | 4.9  |   |                                 | $ | 3.1 |                                      |  | $ | 2.5   |  
|Realized Gains included
    in earnings                                                                                                                                                                                                                                                                                        |  |                              | 3.0    |   |                                             |   | 0.2  |                                               |  |   | 0.0                         |  |  |                        | 0.0  |   |                                 |   | 0.0 |                                      |  |   | 0.0   |  
|Unrealized (depreciation)
    appreciation included in earnings                                                                                                                                                                                                                                                                |  |                              | (3.4   | ) |                                             |   | 13.6 |                                               |  |   | 11.7                        |  |  |                        | 0.5  |   |                                 |   | 1.5 |                                      |  |   | (1.4  | )
|Accretion of discount                                                                                                                                                                                                                                                                                                          |  |                              | 2.1    |   |                                             |   | 2.1  |                                               |  |   | 0.0                         |  |  |                        | 0.0  |   |                                 |   | 0.0 |                                      |  |   | 0.0   |  
|Purchases                                                                                                                                                                                                                                                                                                                      |  |                              | 183.5  |   |                                             |   | 22.3 |                                               |  |   | 31.8                        |  |  |                        | 0.0  |   |                                 |   | 0.0 |                                      |  |   | 0.0   |  
|Repayments and Sales                                                                                                                                                                                                                                                                                                           |  |                              | (125.9 | ) |                                             |   | (1.5 | )                                             |  |   | 0.0                         |  |  |                        | (0.5 | ) |                                 |   | 0.0 |                                      |  |   | 0.0   |  
|Payment in Kind income                                                                                                                                                                                                                                                                                                         |  |                              | 4.1    |   |                                             |   | 0.0  |                                               |  |   | 0.0                         |  |  |                        | 0.0  |   |                                 |   | 0.0 |                                      |  |   | 0.3   |  
|Transfers
    in and/or out of level 3                                                                                                                                                                                                                                                                                         |  |                              | 0.0    |   |                                             |   | 0.0  |                                               |  |   | 0.0                         |  |  |                        | 0.0  |   |                                 |   | 0.0 |                                      |  |   | 0.0   |  
|                                                                                                                                                                                                                                                                                                                               |  |                              |        |   |                                             |   |      |                                               |  |   |                             |  |  |                        |      |   |                                 |   |     |                                      |  |   |       |  
|Balance at September 30,
    2012                                                                                                                                                                                                                                                                                              |  | $                            | 342.6  |   |                                             | $ | 87.7 |                                               |  | $ | 82.8                        |  |  | $                      | 4.9  |   |                                 | $ | 4.6 |                                      |  | $ | 1.4   |  
|                                                                                                                                                                                                                                                                                                                               |  |                              |        |   |                                             |   |      |                                               |  |   |                             |  |  |                        |      |   |                                 |   |     |                                      |  |   |       |  
|The
    amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses
    relating to our Level 3 assets still held at the reporting date and reported within the net change in unrealized gains or
    losses on investments in our Statement of Operations(1) |  | $                            | (2.4   | ) |                                             | $ | 13.8 |                                               |  | $ | 11.7                        |  |  | $                      | 0.4  |   |                                 | $ | 1.4 |                                      |  | $ | (1.3  | )



(1)	Includes rounding adjustments to reconcile
period balances.



22







Our assets measured at fair value on a
recurring basis subject to the disclosure requirements of ASC 820-10-35 at December 31, 2011, were as follows:



|($ in millions)             |  | Fair Value Measurements at Reporting Date Using                     |     |  |                                                   |  
|--------------------------- |  | ------------------------------------------------------------------- | --- |  | ------------------------------------------------- | -
|Assets                      |  | Quoted Prices in
    Active  Markets for Identical Assets (Level 1) |     |  | Significant Other
    Observable Inputs (Level 2) |  
|Cash equivalents            |  | $                                                                   | 0.0 |  |                                                   | $
|Senior Secured Notes        |  |                                                                     | 0.0 |  |                                                   |  
|CLO Debt                    |  |                                                                     | 0.0 |  |                                                   |  
|CLO Equity                  |  |                                                                     | 0.0 |  |                                                   |  
|Subordinated Notes          |  |                                                                     | 0.0 |  |                                                   |  
|Common Stock                |  |                                                                     | 0.0 |  |                                                   |  
|Preferred Shares            |  |                                                                     | 0.0 |  |                                                   |  
|Warrants to purchase equity |  |                                                                     | 0.0 |  |                                                   |  
|                            |  |                                                                     |     |  |                                                   |  
|Total                       |  | $                                                                   | 0.0 |  |                                                   | $



A reconciliation of the fair value of investments
for the year ended December 31, 2011, utilizing significant unobservable inputs, is as follows:



|($ in millions)                                                                                                                                                                                                                                                                                                             |  | SeniorSecuredNoteInvestments |        |   | CollateralizedLoanObligationDebtInvestments |   |      | CollateralizedLoanObligationEquityInvestments |  |   | SubordinatedNoteInvestments |   |  | CommonStockInvestments |      |   | PreferredShareEquityInvestments |   |      | Warrantsto PurchaseEquityInvestments |  |   | Total | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ------ | - | ------------------------------------------- | - | ---- | --------------------------------------------- |  | - | --------------------------- | - |  | ---------------------- | ---- | - | ------------------------------- | - | ---- | ------------------------------------ |  | - | ----- | 
|Balance at December31, 2010                                                                                                                                                                                                                                                                                                 |  | $                            | 173.9  |   |                                             | $ | 50.4 |                                               |  | $ | 8.9                         |   |  | $                      | 6.0  |   |                                 | $ | 5.8  |                                      |  | $ | 2.0   | 
|Realized Losses included
    inearnings                                                                                                                                                                                                                                                                                     |  |                              | 2.7    |   |                                             |   | 0.9  |                                               |  |   | 0.0                         |   |  |                        | 0.0  |   |                                 |   | 0.0  |                                      |  |   | 0.0   | 
|Unrealized (depreciation)
    appreciation included in earnings                                                                                                                                                                                                                                                             |  |                              | (5.7   | ) |                                             |   | (9.5 | )                                             |  |   | (1.5                        | ) |  |                        | (0.4 | ) |                                 |   | (2.7 | )                                    |  |   | 0.1   | 
|Accretion of discount                                                                                                                                                                                                                                                                                                       |  |                              | 2.8    |   |                                             |   | 2.2  |                                               |  |   | 0.0                         |   |  |                        | 0.0  |   |                                 |   | 0.0  |                                      |  |   | 0.0   | 
|Purchases                                                                                                                                                                                                                                                                                                                   |  |                              | 230.0  |   |                                             |   | 10.6 |                                               |  |   | 31.9                        |   |  |                        | 0.0  |   |                                 |   | 0.0  |                                      |  |   | 0.0   | 
|Repayments and Sales (1)                                                                                                                                                                                                                                                                                                    |  |                              | (113.8 | ) |                                             |   | (3.6 | )                                             |  |   | 0.0                         |   |  |                        | (0.7 | ) |                                 |   | 0.0  |                                      |  |   | 0.4   | 
|Transfers
    in and/or out of level 3                                                                                                                                                                                                                                                                                      |  |                              | (10.7  | ) |                                             |   | 0.0  |                                               |  |   | 0.0                         |   |  |                        | 0.0  |   |                                 |   | 0.0  |                                      |  |   | 0.0   | 
|Balance at December
    31, 2011                                                                                                                                                                                                                                                                                            |  | $                            | 279.2  |   |                                             | $ | 51.0 |                                               |  | $ | 39.3                        |   |  | $                      | 4.9  |   |                                 | $ | 3.1  |                                      |  | $ | 2.5   | 
|The
    amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses
    relating to our Level 3 assets still held at the reporting date and reported within the net change in unrealized gains or
    losses on investments in our Statement of Operations |  | $                            | (4.1   | ) |                                             | $ | (8.8 | )                                             |  | $ | (1.3                        | ) |  | $                      | (0.3 | ) |                                 | $ | (2.7 | )                                    |  | $ | 0.1   | 



| | (1) | Includes
                                                                                           PIK income of approximately $1.5 million
                                                                                           and rounding adjustments to reconcile
                                                                                           period balances.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



23







NOTE 4. BORROWINGS



In accordance with the 1940 Act, with
certain limited exceptions, the Company is only allowed to borrow amounts such that its asset coverage, as defined in the 1940
Act, is at least 200% after such borrowing. As of September 30, 2012, the Company’s asset coverage for borrowed amounts
was 224%.



The following are the Company’s
outstanding principal amounts, carrying values and fair values of the Company’s notes payable as of September 30, 2012
and December 31, 2011. Fair values of our notes payable are based upon the bid price provided by the placement agent
at the measurement date, if available:



|                                         |  | As of              |        
|---------------------------------------- |  | ------------------ | -------
|                                         |  | September 30, 2012 |        
|($ in thousands)                         |  | PrincipalAmount    |        
|TICC CLO LLC 2021 Notes                  |  | $                  | 101,250
|TICC CLO 2012-1 LLC Class A-1 2023 Notes |  |                    | 88,000 
|TICC CLO 2012-1 LLC Class B-1 2023 Notes |  |                    | 10,000 
|TICC CLO 2012-1 LLC Class C-1 2023 Notes |  |                    | 11,500 
|TICC CLO 2012-1 LLC Class D-1 2023 Notes |  |                    | 7,500  
|Sub-total TICC CLO 2012-1, LLC           |  |                    | 117,000
|2017 Convertible Notes                   |  |                    | 105,000
|                                         |  |                    |        
|                                         |  | $                  | 323,250










| | (1) | Represents the aggregate principal amount outstanding less
                                                                   the unaccreted  discount. The total unaccreted discount
                                                                   for the 2021 Notes, the 2023 Class A Notes, the 2023 Class
                                                                   B Notes, the 2023 Class C Notes and the 2023 Class D Notes
                                                                   was approximately $1,407, $1,895, $557, $1,022 and $926, respectively.
                                                                   As of December 31, 2011, the unaccreted discount on the 2021
                                                                   Notes was approximately $1,526.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | TICC CLO 2012-1 LLC Class D-1 notes owned by TICC Capital
                                                                   Corp. at $3.0 million are not shown in this table as the note
                                                                   indebtedness is eliminated in consolidation of TICC’s
                                                                   financial statements.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Fair value of the 2017 Convertible Notes is at carrying
                                                                   value, as no bids were available.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------



The weighted average stated interest rate
and weighted average maturity on all our debt outstanding as of September 30, 2012 were 4.43% and 8.4 years, respectively, and
as of December 31, 2011 were 2.66% and 9.6 years, respectively.



Debt Securitzation



Notes payable - TICC CLO LLC



On August 10, 2011, the Company completed
a $225.0 million debt securitization financing transaction. The Class A Notes offered in the securitization were issued by TICC
CLO, and are secured by the assets held by the trustee on behalf of the Securitization Issuer. The securitization was executed
through a private placement of $101.25 million of Aaa/AAA Class A Notes which bear interest, after the effective date, at three-month
London Inter Bank Offered Rate (“LIBOR”) plus 2.25% (prior to the effective date, the Class A Notes bear interest
at five-month LIBOR plus 2.25%). The notes were sold at a discount to par, and the amount of the discount is being amortized over
the term of the notes. The Class A Notes are included in the September 30, 2012 consolidated statements of assets and liabilities.
On July 25, 2012, the Class A note holders were paid interest on the Class A notes of approximately $695,000 and for the nine
months ending September 30, 2012, the Class A note holders were paid interest on the Class A notes of approximately $2.7 million.
Holdings retained all of the subordinated notes totaling $123.75 million (the “2011 Subordinated Notes”) and all of
the membership interests in the 2011 Securitization Issuer. The 2011 Subordinated Notes do not bear interest, but are entitled
to the residual economic interest in the 2011 Securitization Issuer.



During a period of up to three years from
the closing date, all principal collections received on the underlying collateral may be used by the 2011 Securitization Issuer
to purchase new collateral under the direction of TICC in its capacity as collateral manager of the 2011 Securitization Issuer
and in accordance with the Company’s investment strategy, allowing the Company to maintain the initial leverage in the securitization
for such three-year period. The Class A Notes are scheduled to mature on July 25, 2021.



24







The proceeds of the private placement
of the Class A Notes, net of discount and debt issuance costs, were used for investment purposes. As part of the securitization,
TICC entered into a master loan sale agreement with Holdings and the 2011 Securitization Issuer under which TICC agreed to sell
or contribute certain senior secured and second lien loans (or participation interests therein) to Holdings, and Holdings agreed
to sell or contribute such loans (or participation interests therein) to the 2011 Securitization Issuer and to purchase or otherwise
acquire subordinated notes issued by the 2011 Securitization Issuer. The Class A Notes are the secured obligations of the 2011
Securitization Issuer, and an indenture governing the notes of the 2011 Securitization Issuer includes customary covenants and
events of default.



TICC serves as collateral manager to the
2011 Securitization Issuer under a collateral management agreement. TICC is entitled to a deferred fee for its services as collateral
manager. The deferred fee is eliminated in consolidation.



As of September 30, 2012, there were 45
investments in portfolio companies with a total fair value of approximately $224.1 million, securing the Class A Notes. The pool
of loans in the securitization must meet certain requirements, including asset mix and concentration, collateral coverage, term,
agency rating, minimum coupon, minimum spread and sector diversity requirements.



Effective January 25, 2012 and through
April 24, 2012, the interest rate of 2.81% charged under the securitization was based on three-month LIBOR of 0.56%. Effective
April 25, 2012 and through July 24, 2012, the interest rate of 2.72% charged under the securitization was based on three-month
LIBOR of 0.47%. Effective July 25 and through September 30, 2012, the interest rate of 2.70% charged under the securitization
was based on three-month LIBOR of 0.45%. For the three and nine months ended September 30, 2012, respectively, the effective annualized
average interest rate, which includes amortization of discount and debt issuance costs on the securitization, was 3.20% and 3.25%.
For the three and nine months ended September 30, 2012, respectively, interest expense, including the amortization of deferred
debt issuance costs and the discount on the face amount of the Class A Notes, was $816,063 and $2,469,145.



The amounts, ratings and interest rates
(expressed as a spread to LIBOR) of the Class A Notes are as follows:



|Description              | Class A Notes               
|------------------------ | ----------------------------
|Type                     | Senior Secured Floating Rate
|Amount Outstanding       | $101,250,000                
|Moody’s Rating           | “Aaa”                       
|Standard & Poor’s Rating | “AAA”                       
|Interest Rate            | LIBOR + 2.25%               
|Stated Maturity          | July 25, 2021               



Deferred debt issuance costs represent
fees and other direct incremental costs incurred in connection with the Company’s debt securitization. As of September 30,
2012, the Company had deferred debt issuance costs of approximately $2.7 million. Discount on the notes of the 2011 Securitization
Issuer at the time of issuance totaled approximately $1.6 million. These amounts are being amortized and included in interest
expense in the consolidated statements of operations over the term of the debt securitization. Amortization expense for the three
and nine months ended September 30, 2012, was approximately $116,000 and $359,000, respectively. The amortization expense for
the year ended December 31, 2011 was approximately $167,000.



Notes payable - TICC CLO 2012-1 LLC



On August 23, 2012, the Company completed a $160 million debt securitization
financing transaction. The secured and subordinated notes offered in the debt securitization were issued by TICC CLO 2012-1 LLC
(“2012 Securitization Issuer” or “TICC CLO 2012-1”), a newly formed special purpose vehicle that is a
wholly-owned subsidiary of the Company. The secured notes of the 2012 Securitization Issuer have an aggregate face amount of $120
million and were issued in four classes. The class A-1 notes have an initial face amount of $88 million, are rated AAA(sf)/Aaa(sf)by Standard & Poor’s Ratings Services (S&P) and Moody’s Investors Service, Inc. (Moody’s), respectively,
and bear interest at three-month LIBOR plus 1.75%. The class B-1 notes have an initial face amount of $10 million, are rated AA(sf)/Aa2(sf)by S&P and Moody’s, respectively, and bear interest at three-month LIBOR plus 3.50%. The class C-1 notes have an
initial face amount of $11.5 million, are rated A(sf)/A2(sf) by S&P and Moody’s, respectively, and bear
interest at three-month LIBOR plus 4.75%. The class D-1 notes have an initial face amount of $10.5 million, are rated BBB(sf)/Baa2(sf)by S&P and Moody’s, respectively, and bear interest at three-month LIBOR plus 5.75%. TICC presently owns all of
the subordinated notes, which totaled $40 million, and $3 million of the class D-1 notes issued in this CLO transaction. For further
information on this securitization, see Note 4.



During a period of up to four years from
the closing date, all principal collections received on the underlying collateral may be used by the 2012 Securitization Issuer
to purchase new collateral under the direction of TICC in its capacity as collateral manager of the 2012 Securitization Issuer
and in accordance with the Company’s investment strategy, allowing the Company to maintain the initial leverage in the securitization
for such three-year period. All note classes are scheduled to mature on August 25, 2023.



25







The proceeds of the private placement
of the Classes A, B, C, D and 2012 Subordinated Notes of the 2012 Securitization Issuer, net of discount and debt issuance costs,
were used for investment purposes. As part of the securitization, TICC entered into a master loan sale agreement with TICC CLO
2012-1 pursuant to which TICC agreed to sell or contribute certain senior secured and second lien loans (or participation interests
therein) to TICC CLO 2012-1, and to purchase or otherwise acquire the 2012 Subordinated Notes. The Classes A, B, C, D and 2012
Subordinated Notes of the 2012 Securitization Issuer are the secured obligations of TICC CLO 2012-1, and an indenture governing
the notes of the 2012 Securitization Issuer includes customary covenants and events of default.



As of September 30, 2012, there
were 26 investments in portfolio companies with a total fair value of approximately $99.5 million, collateralizing the secured
notes of the 2012 Securitization Issuer. The pool of loans in the securitization must meet certain requirements, including
asset mix and concentration, collateral coverage, term, agency rating, minimum coupon, minimum spread and sector
diversity requirements.



For the three and nine months ended September
30, 2112, the effective annualized interest rate, which includes amortization of discount and debt issuance costs on the securitization,
was 3.74%. For the same period, interest expense, including the amortization of deferred debt issuance costs and the discount
on the face amount of the notes under the securitization was $467,398 comprised of coupon interest expense ($401,672) and accreted
discount ($40,637), as well as amortized deferred debt issuance costs  ($25,089).



Effective August 23, 2012 and as of September
30, 2012, the interest charged under the securitization was based on six-month LIBOR, which was 0.72%. The classes, interest rates,
spread over LIBOR, stated interest expense and note discount expense are as follows:



|                                    |  | Stated 
Interest
    Rate |          |  | LIBOR Spread (basis points) |  |     | Stated 
Interest Expense |  |   | Note Discount Expense | 
|----------------------------------- |  | ------------------------- | -------- |  | --------------------------- |  | --- | ------------------------ |  | - | --------------------- | 
|TICC CLO 2012-1 LLC Class A-1 Notes |  |                           | 2.46815% |  |                             |  | 175 |                          |  | $ | 235,297               | 
|TICC CLO 2012-1 LLC Class B-1 Notes |  |                           | 4.21815% |  |                             |  | 350 |                          |  |   | 45,697                | 
|TICC CLO 2012-1 LLC Class C-1 Notes |  |                           | 5.46815% |  |                             |  | 475 |                          |  |   | 68,124                | 
|TICC CLO 2012-1 LLC Class D-1 Notes |  |                           | 6.46815% |  |                             |  | 575 |                          |  |   | 52,554                | 
|Total                               |  |                           |          |  |                             |  |     |                          |  | $ | 401,672               | 



The amounts, ratings and interest rates (expressed
as a spread to LIBOR) of the Class A-1, B-1, C-1, D-1 and 2012 Subordinated Notes are as follows:



|Description              |  | Class A-1 Notes               |  | Class B-1 Notes             |  | Class C-1 Notes                 |  | Class D-1 Notes                 |  | Subordinated Notes
|------------------------ |  | ----------------------------- |  | --------------------------- |  | ------------------------------- |  | ------------------------------- |  | ------------------
|Type                     |  | Senior SecuredFloating Rate   |  | Senior SecuredFloating Rate |  | Secured DeferrableFloating Rate |  | Secured DeferrableFloating Rate |  | Subordinated      
|Amount Outstanding       |  | $88,000,000                   |  | $10,000,000                 |  | $11,500,000                     |  | $10,500,000                     |  | $40,000,000       
|Moody's Rating           |  | "Aaa"                         |  | "Aa2"                       |  | "A2"                            |  | "Baa2"                          |  | N/A               
|Standard & Poor's Rating |  | "AAA"                         |  | "AA"                        |  | "A"                             |  | "BBB"                           |  | N/A               
|Interest Rate            |  | LIBOR + 1.75%                 |  | LIBOR + 3.50%               |  | LIBOR + 4.75%                   |  | LIBOR + 5.75%                   |  | N/A               
|Stated Maturity          |  | August 25, 2023               |  | August 25, 2023             |  | August 25, 2023                 |  | August 25, 2023                 |  | August 25, 2023   
|Junior Classes           |  | B-1, C-1, D-1and Subordinated |  | C-1, D-1and Subordinated    |  | D-1and Subordinated             |  | Subordinated                    |  | None              



TICC serves as collateral manager to the
2012 Securitization Issuer under a collateral management agreement. TICC is entitled to a deferred fee for its services as collateral
manager. The deferred fee is eliminated in consolidation.



2017 Convertible
Notes



On September 26, 2012, the Company issued
$105,000,000 aggregate principal amount of the Convertible Notes, which mature on November 1, 2017, unless previously converted
in accordance with their terms. An additional $10,000,000 aggregate principal amount of the Convertible Notes were issued on October
22, 2012 pursuant to the exercise of the initial purchasers’ option to purchase additional Convertible Notes. The Convertible
Notes bear interest at a rate of 7.50% per year, payable semi-annually in arrears on May 1 and November 1 of each year, commencing
on May 1, 2013. The Company does not have the right to redeem the Convertible Notes prior to maturity.



In certain circumstances, the Convertible
Notes will be convertible into shares of the Company’s common stock at its initial conversion rate (listed below) subject
to customary anti-dilution adjustments and the requirements of its indenture, at any time on or prior to the close of business
on the business day immediately preceding the maturity date. We will in certain circumstances increase the conversion rate by
a number of additional shares.



26







|                                                                              |  | November 2017 Convertible
    Notes |                   
|----------------------------------------------------------------------------- |  | ----------------------------------- | ------------------
|                                                                              |  |                                     |                   
|Conversion preimium                                                           |  |                                     | 10.00             
|Closing stock price                                                           |  | $                                   | 10.42             
|Closing stock price date                                                      |  |                                     | September 20, 2012
|Initial conversion price                                                      |  | $                                   | 11.46             
|Initial conversion rate (shares per one thousand
    dollar principal amount) |  |                                     | 87.2448           
|Maturity date                                                                 |  |                                     | November 1, 2017  



As of September 30, 2012, the principal
amount of the Convertible Notes exceeded the value of the underlying shares multiplied by the per share closing price of the Company’s
common stock.



The Convertible Notes are the Company’s
general, unsecured obligations and rank equal in right of payment with all of the Company’s existing and future senior,
unsecured indebtedness and senior in right of payment to any of the Company’s subordinated indebtedness. As a result, the
Convertible Notes will be effectively subordinated to the Company’s existing and future secured indebtedness to the extent
of the value of the assets securing such indebtedness and structurally subordinated to any existing and future liabilities and
other indebtedness of the Company’s subsidiaries.



NOTE 5. EARNINGS PER SHARE



The following table sets forth the computation
of basic and diluted net increase in net assets resulting from operations per share for the three months and nine months ended
September 30, 2012 and 2011, respectively:



|                                                                                                                    |  | Three MonthsEndedSeptember 30, 2012 |            |  | Three MonthsEndedSeptember 30, 2011 |   |            | Nine MonthsEndedSeptember 30, 2012 |  |   | Nine MonthsEndedSeptember 30, 2011 | 
|------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------- | ---------- |  | ----------------------------------- | - | ---------- | ---------------------------------- |  | - | ---------------------------------- | 
|                                                                                                                    |  |                                     |            |  |                                     |   |            |                                    |  |   |                                    | 
|Earnings per common share
    – basic:                                                                              |  |                                     |            |  |                                     |   |            |                                    |  |   |                                    | 
|Net increase
    (decrease) in net assets resulting from operations                                                 |  | $                                   | 27,856,644 |  |                                     | $ | (8,415,279 | )                                  |  | $ | 54,199,886                         | 
|Weighted average common shares outstanding
    - basic                                                              |  |                                     | 39,383,076 |  |                                     |   | 32,672,294 |                                    |  |   | 36,859,005                         | 
|Earnings per common share
    - basic                                                                               |  | $                                   | 0.71       |  |                                     | $ | (0.26      | )                                  |  | $ | 1.47                               | 
|Earnings per common share
    - diluted:                                                                            |  |                                     |            |  |                                     |   |            |                                    |  |   |                                    | 
|Net increase
    (decrease) in net assets
    resulting from operations, before adjustments                         |  | $                                   | 27,856,644 |  |                                     | $ | (8,415,279 | )                                  |  | $ | 54,199,886                         | 
|Adjustments
    for interest on convertible senior notes, deferred issuance costs, advisory fees and incentive fees |  |                                     | 93,042     |  |                                     |   | N/A        |                                    |  |   | 93,042                             | 
|Net
    increase
    (decrease) in net assets resulting from operations, as adjusted                                |  | $                                   | 27,949,686 |  |                                     | $ | (8,415,279 | )                                  |  | $ | 54,292,928                         | 
|Weighted average common shares outstanding
    - basic                                                              |  |                                     | 39,383,076 |  |                                     |   | 32,672,294 |                                    |  |   | 36,859,005                         | 
|Adjustments
    for dilutive effect of convertible notes                                                            |  |                                     | 497,864    |  |                                     |   | N/A        |                                    |  |   | 167,167                            | 
|Weighted average
    common shares outstanding – diluted                                                            |  |                                     | 39,880,940 |  |                                     |   | 32,672,294 |                                    |  |   | 37,026,172                         | 
|Earnings per common share
    - diluted                                                                             |  | $                                   | 0.70       |  |                                     | $ | (0.26      | )                                  |  | $ | 1.47                               | 



NOTE 6. RELATED PARTY TRANSACTIONS



TICC has entered into an investment advisory
agreement with TICC Management (the “Investment Advisory Agreement”) under which TICC Management, subject to the overall
supervision of TICC’s Board of Directors, manages the day-to-day operations of, and provides investment advisory services
to, TICC. For providing these services TICC Management receives a fee from TICC, consisting of two components: a base management
fee (the “Base Fee”) and an incentive fee. The Base Fee is calculated at an annual rate of 2.00%. The Base Fee is
payable quarterly in arrears, and is calculated based on the average value of TICC’s gross assets at the end of the two
most recently completed calendar quarters, and appropriately adjusted for any equity or debt capital raises, repurchases or redemptions
during the current calendar quarter. Accordingly, the Base Fee will be payable regardless of whether the value of TICC’s
gross assets have decreased during the quarter.



The incentive fee has two parts. The first
part is calculated and payable quarterly in arrears based on the Company’s “Pre-Incentive Fee Net Investment Income”
for the immediately preceding calendar quarter. For this purpose, “Pre-Incentive Fee Net Investment Income” means
interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring,
diligence and consulting fees or other fees that TICC receives from portfolio companies) accrued during the calendar quarter,
minus the Company’s operating expenses for the quarter (including the Base Fee, expenses payable under the Company’s
administration agreement with BDC Partners (the “Administration Agreement”), and any interest expense and dividends
paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-Incentive Fee Net Investment Income
includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with
PIK interest and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-Incentive Fee Net
Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.
Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of the Company’s net assets at the end
of the immediately preceding calendar quarter, is compared to one- fourth of an annual “hurdle rate.” Given that this
portion of the incentive fee is payable without regard to any capital gain, capital loss or unrealized depreciation that may occur
during the quarter, this portion of TICC Management’s incentive fee may also be payable notwithstanding a decline in net
asset value that quarter.



27







For each year commencing on or after January
1, 2005, the annual hurdle rate has been determined as of the immediately preceding December 31 st by adding 5.0% to
the interest rate then payable on the most recently issued five-year U.S. Treasury Notes, up to a maximum annual hurdle rate of
10.0%. The annual hurdle rate for the 2011, 2010 and 2009 calendar year was 7.01%, 7.69% and 6.55%, respectively. The current
hurdle rate for the 2012 calendar year, calculated as of December 31, 2011, is 5.83%.



The second part of the incentive fee is
determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement,
as of the termination date), and equals 20% of the Company’s “Incentive Fee Capital Gains,” which consist of
the Company’s realized capital gains for each calendar year, computed net of all realized capital losses and unrealized
capital depreciation for that calendar year. For accounting purposes only, in order to reflect the theoretical capital gains incentive
fee that would be payable for a given period as if all unrealized gains were realized, we will accrue a capital gains incentive
fee based upon net realized capital gains and unrealized capital depreciation for that calendar year (in accordance with the terms
of the Investment Advisory Agreement), plus unrealized capital appreciation on investments held at the end of the period. It should
be noted that a fee so calculated and accrued would not necessarily be payable under the Investment Advisory Agreement, and may
never be paid based upon the computation of capital gains incentive fees in subsequent periods. Amounts paid under the Investment
Advisory Agreement will be consistent with the formula reflected in the Investment Advisory Agreement.



Incentive fees, based upon pre-incentive
fee net investment income, were approximately $1.0 million and $456,000 for the quarters ended September 30, 2012 and 2011, respectively;
for the nine month periods ended September 30, 2012 and 2011, TICC incurred pre-incentive fee net investment income incentive
fees of approximately $4.4 million and $1.4 million, respectively. The net investment income incentive fee payable to TICC Management
as of September 30, 2012 and 2011, was approximately $1.0 million and $456,000, respectively. For the three months ending
September 30, 2012, the investment adviser permanently waived $5,000 of this incentive fee.



For the quarter ended September
30, 2012, the capital gains incentive fee expense was approximately $4.6 million compared with an expense reduction
of approximately $4.2 million for the quarter ended September 30, 2011. For the  nine months  ending September 30,
2012, the capital gains incentive fee was approximately $4.6 million compared with expenses of approximately $873,000 for the
nine months ending September 30, 2011. The amount of capital gains incentive fee expense related to the hypothetical
liquidation of the portfolio (and assuming no other changes in realized or unrealized gains and losses) would only become
payable to TICC Management in the event of a complete liquidation of TICC’s portfolio as of period end and the
termination of the Investment Advisory Agreement on such date. Also, it should be noted that the capital gains incentive fee
expense fluctuates with the Company’s overall investment results. The accrued capital gains incentive fee payable as of
September 30, 2012 and 2011, was approximately $5.7 million and $873,000, respectively.



In addition, in the event the Company
recognizes payment-in-kind, or “PIK,” interest income in excess of its available capital, the Company may be required
to liquidate assets in order to pay a portion of the incentive fee. TICC Management, however, is not required to reimburse the
Company for the portion of any incentive fees attributable to PIK loan interest income in the event of a subsequent default.



TICC Management is controlled by BDC Partners,
its managing member. Charles M. Royce, as the non-managing member, holds a minority, non-controlling interest in TICC Management.
BDC Partners, as the managing member of TICC Management, manages the business and internal affairs of TICC Management. In addition,
BDC Partners provides TICC with office facilities and administrative services pursuant to an amended and restated administration
agreement (the “Administration Agreement”). Jonathan H. Cohen, the Company’s Chief Executive Officer, as well
as a Director, is the managing member of BDC Partners. Saul B. Rosenthal, the Company’s President and Chief Operating Officer,
is also the President and Chief Operating Officer of TICC Management and a member of BDC Partners. Messrs. Cohen and Rosenthal
have an equal equity interest in BDC Partners. Charles M. Royce, the Company’s non-executive Chairman of the Board of Directors,
does not take part in the management or participate in the operations of TICC Management; however, Mr. Royce is expected to be
available from time to time to TICC Management to provide certain consulting services without compensation. BDC Partners is also
the managing member of Oxford Gate Capital, LLC, a private fund in which Messrs. Cohen and Rosenthal, along with certain investment
and administrative personnel of TICC Management, are invested.



Under the Administration Agreement, BDC
Partners provides administrative services for TICC. The Company pays BDC Partners an 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 the chief financial officer, chief compliance officer, controller and other administrative support personnel,
which creates potential conflicts of interest that the Board of Directors must monitor.



For the quarters ended September 30, 2012
and 2011, respectively, TICC incurred base investment advisory fees of approximately $2.8 million and $1.9 million in accordance
with the terms of the Investment Advisory Agreement; for the nine months ended September 30, 2012 and 2011, TICC incurred investment
advisory fees of approximately $7.4 million and $5.2 million, respectively, of which amounts $2.8 million and $1.9 million remained
payable to TICC Management at the end of each respective period. For the quarters ended September 30, 2012 and 2011, respectively,
TICC incurred approximately $289,000 and $218,000, respectively, in compensation expenses for the services of employees allocated
to the administrative activities of TICC, pursuant to the Administration Agreement with BDC Partners; for the nine months ended
September 30, 2012 and 2011, TICC incurred compensation expenses of approximately $839,000 and $713,000, respectively, of which
amounts approximately $450,000 and $338,000 were accrued for compensation expense at the end of each respective period. In addition,
TICC incurred approximately $17,400 and $16,600 for reimbursement of facility costs allocated under the Administraton Agreement
for the quarters ended September 30, 2012 and 2011, respectively; for the nine months ended September 30, 2012 and 2011, TICC
incurred approximately $51,100 and $51,300, respectively, for reimbursement of facility costs allocated under the Administration
Agreement, of which no amounts remained payable at the end of each respective period.



28







NOTE 7. DIVIDENDS



The Company intends to continue to
operate so as to qualify to be taxed as a RIC under the Code and, as such, the Company 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 annual 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 that the Company’s investment company taxable income
falls below the amount of dividends declared, however, a portion of the total amount of the Company’s dividends for
the fiscal year may be deemed a return of capital for tax purposes to the Company’s stockholders.



The Company intends to comply with the
applicable provisions of the Code pertaining to regulated investment companies to make distributions of taxable income sufficient
to relieve it of substantially all Federal income taxes. The Company, at its discretion, may carry forward taxable income in excess
of calendar year distributions and pay a 4% excise tax on this income. The Company will accrue excise tax on estimated excess
taxable income, if any, as required.



On September 28, 2012, the Company paid
a dividend of $0.29 per share. The Company has a dividend reinvestment plan under which all distributions are paid to stockholders
in the form of additional shares, unless a stockholder elects to receive cash. The plan was recently amended to provide a 5% discount
for shares purchased under the dividend reinvestment plan.



NOTE 8. NET ASSET VALUE PER SHARE



The Company’s net asset value per
share at September 30, 2012 was $9.85, and at December 31, 2011 was $9.30. In determining the Company’s net asset value
per share, the Board of Directors determined in good faith the fair value of the Company’s portfolio investments for which
reliable market quotations are not readily available.



NOTE 9. PAYMENT-IN-KIND



The Company may have investments in its
portfolio which contain a payment-in-kind, or PIK, provision. The PIK interest and PIK fee is added to the cost basis of the investment
and recorded as income. To maintain the Company’s status as a RIC (as discussed in Note 7 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. Amounts
necessary to pay these dividends may come from available cash or the liquidation of certain investments. For the three months
ended September 30, 2012 and 2011, the Company recorded approximately $201,000 and $147,000 in PIK income, respectively. For the
nine months ended September 30, 2012 and 2011, the Company recorded approximately $4.4 million ($3.4 million of PIK fee income
recognized during the second quarter of 2012) and $953,000 in PIK income, respectively.



In addition, the Company recorded original
issue discount income of approximately $1.4 million and $1.3 million for the three months ended September 30, 2012 and 2011, respectively,
representing the amortization of the discount attributed to certain debt securities purchased by the Company, including original
issue discount (“OID”) and market discount. The Company had discount income of approximately $4.3 million and $3.7
million for the nine months ended September 30, 2012 and 2011, respectively.



NOTE 10. OTHER INCOME



Other income includes primarily closing
fees or origination fees associated with investments in portfolio companies. Such fees are normally paid at closing of the Company’s
investments, are fully earned and non-refundable, and are generally non-recurring.



For the three months ended September
30, 2012 and 2011, respectively, the Company recorded approximately $279,000 and $61,000 in other income. The Company recorded
other income totaling approximately $4.5 million and $507,000 for the nine months ended September 30, 2012 and 2011, respectively.
The $4.5 million recorded for the nine months ended September 30, 2012 includes the one-time PIK fee of approximately $3.4 million
recognized during the second quarter of 2012.



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, 2012 and 2011, respectively, the Company received no fee income for managerial
assistance.



29







NOTE 11. DISTRIBUTIONS FROM SECURITIZATION VEHICLES AND
EQUITY INVESTMENTS



The Company also receives distributions
on the “equity” tranches of securitization vehicles in which it invests. These tranches represent the residual economic
interests in such securitization vehicles, and those distributions are determined by the respective trustee on a quarterly basis.
The distributions are recognized in the period that they are finally determined and payable. The Company earned approximately
$6.0 million in such distributions during the quarter ended September 30, 2012, compared to approximately $3.2 million during
the quarter ended September 30, 2011. The Company received distributions of approximately $18.0 million and $9.1 million for the
nine months ended September 30, 2012 and 2011, respectively.



NOTE 12. FINANCIAL HIGHLIGHTS



Financial highlights for the three and
nine months ending September 30, 2012 and 2011, respectively, are as follows:



|                                                                        |  | Three MonthsEndedSeptember 30,2012(unaudited) |            |   | Three MonthsEndedSeptember 30,2011(unaudited) |   |            | Nine MonthsEndedSeptember 30,2012(unaudited) |  |   | Nine MonthsEndedSeptember 30,2011(unaudited) |  
|----------------------------------------------------------------------- |  | --------------------------------------------- | ---------- | - | --------------------------------------------- | - | ---------- | -------------------------------------------- |  | - | -------------------------------------------- | -
|                                                                        |  |                                               |            |   |                                               |   |            |                                              |  |   |                                              |  
|Per Share Data                                                          |  |                                               |            |   |                                               |   |            |                                              |  |   |                                              |  
|Net asset value at beginning of period                                  |  | $                                             | 9.47       |   |                                               | $ | 9.85       |                                              |  | $ | 9.30                                         |  
|                                                                        |  |                                               |            |   |                                               |   |            |                                              |  |   |                                              |  
|Net investment income(1)                                                |  |                                               | 0.12       |   |                                               |   | 0.36       |                                              |  |   | 0.75                                         |  
|Net realized and unrealized capital gains (losses)                      |  |                                               | 0.59       |   |                                               |   | (0.62      | )                                            |  |   | 0.72                                         |  
|                                                                        |  |                                               |            |   |                                               |   |            |                                              |  |   |                                              |  
|Total from net investment operations                                    |  |                                               | 0.71       |   |                                               |   | (0.26      | )                                            |  |   | 1.47                                         |  
|                                                                        |  |                                               |            |   |                                               |   |            |                                              |  |   |                                              |  
|Distributions per share from net investment income                      |  |                                               | (0.29      | ) |                                               |   | (0.25      | )                                            |  |   | (0.83                                        | )
|                                                                        |  |                                               |            |   |                                               |   |            |                                              |  |   |                                              |  
|Distributions based on weighted average share impact                    |  |                                               | (0.03      | ) |                                               |   | -          |                                              |  |   | (0.08                                        | )
|                                                                        |  |                                               |            |   |                                               |   |            |                                              |  |   |                                              |  
|Total distributions(2)                                                  |  |                                               | (0.32      | ) |                                               |   | (0.25      | )                                            |  |   | (0.91                                        | )
|                                                                        |  |                                               |            |   |                                               |   |            |                                              |  |   |                                              |  
|Effect of shares issued, net of offering expenses                       |  |                                               | (0.01      | ) |                                               |   | -          |                                              |  |   | (0.01                                        | )
|                                                                        |  |                                               |            |   |                                               |   |            |                                              |  |   |                                              |  
|Net asset value at end of period                                        |  | $                                             | 9.85       |   |                                               | $ | 9.34       |                                              |  | $ | 9.85                                         |  
|                                                                        |  |                                               |            |   |                                               |   |            |                                              |  |   |                                              |  
|Per share market value at beginning of period                           |  | $                                             | 9.69       |   |                                               | $ | 9.60       |                                              |  | $ | 8.65                                         |  
|Per share market value at end of period                                 |  | $                                             | 10.40      |   |                                               | $ | 8.17       |                                              |  | $ | 10.40                                        |  
|Total return(3)                                                         |  |                                               | 10.32      | % |                                               |   | (12.29     | )%                                           |  |   | 30.55                                        | %
|Shares outstanding at end of period                                     |  |                                               | 41,312,780 |   |                                               |   | 32,745,881 |                                              |  |   | 41,312,780                                   |  
|Ratios/Supplemental Data                                                |  |                                               |            |   |                                               |   |            |                                              |  |   |                                              |  
|Net assets at end of period (000’s)                                     |  |                                               | 406,897    |   |                                               |   | 305,801    |                                              |  |   | 406,897                                      |  
|Average net assets (000’s)                                              |  |                                               | 374,696    |   |                                               |   | 326,988    |                                              |  |   | 349,297                                      |  
|Ratio of expenses to average net assets:                                |  |                                               |            |   |                                               |   |            |                                              |  |   |                                              |  
|Expenses before incentive fees(4)                                       |  |                                               | 5.69       | % |                                               |   | 3.87       | %                                            |  |   | 5.37                                         | %
|Net investment income incentive fees(4)                                 |  |                                               | 1.07       | % |                                               |   | 0.56       | %                                            |  |   | 1.67                                         | %
|Capital gains incentive
    fees(4)                                     |  |                                               | 4.96       | % |                                               |   | (5.08      | )%                                           |  |   | 1.74                                         | %
|                                                                        |  |                                               |            |   |                                               |   |            |                                              |  |   |                                              |  
|Total ratio of expenses to average net assets(4)                        |  |                                               | 11.72      | % |                                               |   | (0.65      | )%                                           |  |   | 8.78                                         | %
|                                                                        |  |                                               |            |   |                                               |   |            |                                              |  |   |                                              |  
|Ratio of expenses, excluding interest expense, to average net assets(4) |  |                                               | 10.23      | % |                                               |   | (1.18      | )%                                           |  |   | 7.62                                         | %
|                                                                        |  |                                               |            |   |                                               |   |            |                                              |  |   |                                              |  
|Ratio of net investment income to average net assets(4)                 |  |                                               | 4.92       | % |                                               |   | 14.21      | %                                            |  |   | 10.61                                        | %












| | (1) | Represents
                                                                                          per share net investment income for
                                                                                          the period, based upon average shares
                                                                                          outstanding.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Management
                                                                                          monitors available taxable earnings,
                                                                                          including net investment income and
                                                                                          realized capital gains, to determine
                                                                                          if a tax return of capital may occur
                                                                                          for the year. To the extent the Company’s
                                                                                          taxable earnings fall below the total
                                                                                          amount of the Company’s distributions
                                                                                          for that fiscal year, a portion of those
                                                                                          distributions may be deemed a tax return
                                                                                          of capital to the Company’s stockholders.
                                                                                          The tax character of distributions will
                                                                                          be determined at the end of the fiscal
                                                                                          year. However, if the character of such
                                                                                          distributions were determined as of
                                                                                          September 30, 2012, none of the distributions
                                                                                          for 2012 would have been characterized
                                                                                          as a tax return of capital to the Company’s
                                                                                          stockholders; this tax return of capital
                                                                                          may differ from the return of capital
                                                                                          calculated with reference to net investment
                                                                                          income for financial reporting purposes.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Total return
                                                                                          equals the increase or decrease of ending
                                                                                          market value over beginning market value,
                                                                                          plus distributions, divided by the beginning
                                                                                          market value, assuming dividend reinvestment
                                                                                          prices obtained under the Company’s
                                                                                          dividend reinvestment plan. Total return
                                                                                          is not annualized.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Annualized.
| | --- | -----------



30









NOTE 13. CASH AND CASH EQUIVALENTS



At September 30, 2012 and December 31,
2011, respectively, cash and cash equivalents consisted of:



|                                    |  | September 30,
    2012 |             |  | December 31,
    2011 |  
|----------------------------------- |  | ---------------------- | ----------- |  | --------------------- | -
|Cash Equivalents                    |  | $                      | —           |  |                       | $
|                                    |  |                        |             |  |                       |  
|Cash                                |  |                        | 122,905,470 |  |                       |  
|Restricted Cash                     |  |                        | 96,729,990  |  |                       |  
|                                    |  |                        |             |  |                       |  
|Total Cash and Cash
    Equivalents |  | $                      | 219,635,460 |  |                       | $



Restricted cash represents amounts that
are collected and are held by Bank of New York as trustee and custodian of the assets for both of the Company’s debt securitization
vehicles. Restricted cash is held by the trustee for payment of interest expense and principal on the outstanding borrowings or
reinvestment in new assets.



NOTE 14. COMMITMENTS



As of September 30, 2012, the
Company had commitments of approximately $131 million to purchase additional debt investments.



NOTE 15. SUBSEQUENT EVENTS



On November 1, 2012, the Board of Directors
declared a distribution of $0.29 per share for the fourth quarter, payable on December 31, 2012 to shareholders of record as of
December 17, 2012.





31







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



CAUTIONARY STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS



This Quarterly Report on Form 10-Q 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 TICC, our current and prospective portfolio
investments, our industry, our beliefs, and our assumptions. Words such as “anticipates,” “expects,” “intends,”
“plans,” “will,” “may,” “continue,” “believes,” “seeks,”
“estimates,” “would,” “could,” “should,” “targets,” “projects,”
and variations of these words and similar expressions are intended to identify forward-looking statements. The forward-looking
statements contained in this Quarterly Report on Form 10-Q involve risks and uncertainties, including statements as to:



| | • | our future operating results;
| | - | -----------------------------



| | • | our business prospects and the prospects of our portfolio
                                                                    companies;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------



| | • | the impact of investments that we expect to make;
| | - | -------------------------------------------------



| | • | our contractual arrangements and relationships with third
                                                                    parties;
| | - | --------------------------------------------------------------------------------------------------------------------------------------



| | • | the dependence of our future success on the general economy
                                                                    and its impact on the industries in which we invest;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | the ability of our portfolio companies to achieve their
                                                                    objectives;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------



| | • | our expected financings and investments;
| | - | ----------------------------------------



| | • | the adequacy of our cash resources and working capital;
                                                                    and
| | - | -------------------------------------------------------------------------------------------------------------------------------



| | • | the timing of cash flows, if any, from the operations
                                                                    of our portfolio companies.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------



These statements are not guarantees of
future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult
to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements,
including without limitation:



| | • | an economic downturn could impair our portfolio companies’
                                                                    ability to continue to operate, which could lead to the loss
                                                                    of some or all of our investments in such portfolio companies;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



| | • | interest rate volatility could adversely affect our results,
                                                                    particularly if we elect to use leverage as part of our investment
                                                                    strategy;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | currency fluctuations could adversely affect the results
                                                                    of our investments in foreign companies, particularly to the
                                                                    extent that we receive payments denominated in foreign currency
                                                                    rather than U.S. dollars; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | the risks, uncertainties and other factors we identify
                                                                    in “Risk Factors” and elsewhere in this Quarterly
                                                                    Report on Form 10-Q and in our filings with the SEC.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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 inaccurate. Important assumptions include
our ability to originate new loans and investments, certain margins and levels of profitability and the availability of additional
capital. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Quarterly
Report on Form 10-Q should not be regarded as a representation by us that our plans and objectives will be achieved. These risks
and uncertainties include those described or identified in “Risk Factors” and elsewhere in this Quarterly Report on
Form 10-Q. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Quarterly
Report on Form 10-Q.



Except where the context requires otherwise,
the terms “TICC,” “Company,” “we,” “us” and “our” refer to TICC Capital
Corp. together with its subsidiaries, TICC Capital Corp. 2011-1 Holdings LLC (“Holdings”) TICC CLO LLC (“2011
Securitization Issuer” or “TICC CLO”) and TICC CLO 2012-1 LLC (“2012 Securitization Issuer” or “TICC
CLO 2012-1”); “TICC Management” refers to TICC Management, LLC; and “BDC Partners” refers to BDC
Partners, LLC.



The following analysis of our financial
condition and results of operations should be read in conjunction with our financial statements and the related notes thereto
contained elsewhere in this Quarterly Report on Form 10-Q.



32







OVERVIEW



Our investment objective is to maximize
our portfolio’s total return. Our primary focus is to seek current income by investing in corporate debt securities. We
have also invested and may continue to invest in structured finance investments, including CLO vehicles, which own debt securities.
We may also invest in publicly traded debt and/or equity securities. We operate as a closed-end, non-diversified management investment
company and have elected to be treated as a business development company under the Investment Company Act of 1940, as amended
(the “1940 Act”). We have elected to be treated for tax purposes as a regulated investment company (“RIC”),
under the Internal Revenue Code of 1986, as amended (the “Code”), beginning with our 2003 taxable year.



Our investment activities are managed by
TICC Management, a registered investment adviser under the Investment Advisers Act of 1940, as amended. TICC Management is owned
by BDC Partners, its managing member, and Charles M. Royce, our non-executive Chairman, who holds a minority, non-controlling
interest in TICC Management. Jonathan H. Cohen, our Chief Executive Officer, and Saul B. Rosenthal, our President and Chief Operating
Officer, are the members of BDC Partners. Under an investment advisory agreement (the “Investment Advisory Agreement”),
we have agreed to pay TICC Management an annual base fee calculated on gross assets, and an incentive fee based upon our performance.
Under an amended and restated administration agreement (the “Administration Agreement”), we have agreed to pay or
reimburse BDC Partners, as administrator, for certain expenses incurred in operating TICC. Our executive officers and directors,
and the executive officers of TICC Management and BDC Partners, serve or may serve as officers and directors of entities that
operate in a line of business similar to our own. 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 more information, see “Risk Factors—Risks
Relating to our Business and Structure—There are significant potential conflicts of interest, which could impact our investment
returns.”



On August 10, 2011, the Company completed
a $225.0 million debt securitization financing transaction. The Class A Notes offered in the debt securitization were issued by
TICC CLO, a subsidiary of Holdings, a direct subsidiary of TICC, and the notes are secured by the assets held by the 2011 Securitization
Issuer. The securitization was executed through a private placement of $101.25 million of Aaa/AAA Class A Notes of the 2011 Securitization
Issuer. Holdings retained all of the subordinated notes, which totaled $123.75 million (the “2011 Subordinated Notes”),
and retained all the membership interests in the 2011 Securitization Issuer.



On August 23, 2012, the
Company completed a $160 million debt securitization financing transaction. The secured and subordinated notes offered in the
debt securitization were issued by TICC CLO 2012-1 LLC (“2012 Securitization Issuer” or “TICC
CLO 2012-1”), a newly formed special purpose vehicle that is a wholly-owned subsidiary of the Company. The secured
notes of the 2012 Securitization Issuer have an aggregate face amount of $120 million and were issued in four classes. The
class A-1 notes have an initial face amount of $88 million, are rated AAA(sf)/Aaa(sf)by Standard &
Poor’s Ratings Services (S&P) and Moody’s Investors Service, Inc. (Moody’s), respectively, and bear
interest at three-month LIBOR plus 1.75%. The class B-1 notes have an initial face amount of $10 million, are
rated AA(sf)/Aa2(sf)by S&P and Moody’s, respectively, and bear interest at three-month LIBOR plus
3.50%. The class C-1 notes have an initial face amount of $11.5 million, are rated A(sf)/A2(sf) by S&P
and Moody’s, respectively, and bear interest at three-month LIBOR plus 4.75%. The class D-1 notes have an initial
face amount of $10.5 million, are rated BBB(sf)/Baa2(sf)by S&P and Moody’s, respectively, and
bear interest at three-month LIBOR plus 5.75%. TICC presently owns all of the subordinated notes, which totaled $40 million,
and $3 million of the class D-1 notes issued in this CLO transaction. For further information on this securitization, see
Note 4.



On September 26, 2012, we completed a
private placement of 5-year unsecured 7.50% Senior Convertible Notes Due 2017 (the “Convertible Notes”). A total of
$105.0 million aggregate principal amount of the Convertible Notes were issued at the closing. An additional $10.0 million aggregate
principal amount of the Convertible Notes were issued on October 22, 2012 pursuant to the exercise of the initial purchasers’
option to purchase additional Convertible Notes. The Convertible Notes are convertible into shares of our common stock based on
an initial conversion rate of 87.2448 shares of our common stock per $1,000 principal amount of Convertible Notes, which is equivalent
to an initial conversion price of approximately $11.46 per share of common stock. The conversion price for the Convertible Notes
will be reduced for quarterly cash dividends paid to common shares to the extent that the quarterly dividend exceeds $0.29 cents
per share, subject to adjustment. The Convertible Notes bear interest at an annual rate of 7.50%, payable semiannually in arrears
on May 1 and November 1 of each year, beginning May 1, 2013. The Convertible Notes mature on November 1, 2017, unless previously
converted in accordance with their terms. The Convertible Notes are our general unsecured obligations, rank equally in right of
payment with our future senior unsecured debt, and rank senior in right of payment to any potential subordinated debt, should
any be issued in the future.



While the structure of our investments
will vary, and while we invest across a wide range of different industries, we have historically overweighted our investments
in the debt of 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 that will, at the time of our investment, have employees and revenues,
and are cash flow positive. 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. The types of portfolio companies in which we
invest, however, will generally be considered below investment grade.



We generally expect to invest between $5
million and $25 million in each of our portfolio companies, although this investment size may vary proportionately as the size
of our capital base changes and market conditions warrant, and accrue interest at fixed or variable rates. We expect that our
investment portfolio will be diversified among a large number of investments with few investments, if any, exceeding 5% of the
total portfolio. As of September 30, 2012, our debt investments had stated interest rates of between 3.81% and 16.00% (excluding
our investment in GenuTec Business Solutions, Inc. which carries a zero interest rate through October 30, 2014) and maturity dates
of between 5 and 144 months. In addition, our total portfolio had a weighted average yield on debt investments of approximately
10.3% including GenuTec Business Solutions, Inc.



33















Our loans may carry a provision for deferral
of some or all of the interest payments and amendment fees, which will be added to the principal amount of the loan. This form
of deferred income is referred to as “payment-in-kind,” or “PIK,” interest or other income and, when earned,
is recorded as interest or other income and an increase in the principal amount of the loan. For the quarter ended September 30,
2012, we recognized approximately $201,000 from PIK interest and dividend income associated with our investments in Pegasus Solutions,
Inc., Merrill Communications, LLC., and Shearers Food, Inc., compared to PIK interest of approximately $147,000 for the quarter
ended September 30, 2011. In the event we recognize deferred loan interest income in excess of our available capital as a result
of our receipt of PIK income, we may be required to liquidate assets in order to pay a portion of the incentive fee due to TICC
Management.



We have historically and may continue to
borrow funds to make investments. As a result, we are exposed to the risks of leverage, which may be considered a speculative
investment technique. Borrowings, also known as leverage, magnify the potential for gain and loss on amounts invested and therefore
increase the risks associated with investing in our securities. In addition, the costs associated with our borrowings, including
any increase in the management fee payable to TICC Management, will be borne by our common stockholders.



In addition, as a BDC 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 would be 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 may 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.



To the extent possible, our loans will
be collateralized by a security interest in the borrower’s assets or guaranteed by a principal to the transaction. Interest
payments, if not deferred, are normally payable quarterly with most debt investments having scheduled principal payments on a
monthly or quarterly basis. When we receive a warrant to purchase stock in a portfolio company, the warrant will typically have
a nominal strike price, and will entitle us to purchase a modest percentage of the borrower’s stock.



During the quarter ended September 30,
2012, we closed approximately $128.0 million in portfolio investments, including additional investments of approximately $44.2
million in existing portfolio companies and approximately $83.8 million in new portfolio companies. During the quarter ended September
30, 2012, we recognized a total of $45.3 million from principal repayments on debt investments, and we recognized approximately
$9.0 million from the sale of portfolio investments. We realized net gains on investments during the quarter ended September 30,
2012 in the amount of approximately $1.8 million. For the quarter ended September 30, 2012, we had net unrealized appreciation
of approximately $21.5 million.



Based upon the fair value determinations
made in good faith by the Board of Directors, during the quarter ended September 30, 2012, we had net unrealized appreciation
of approximately $21.5 million, comprised of $25.4 million in gross unrealized appreciation, $2.4 million in gross unrealized
depreciation and approximately $1.5 million relating to the reversal of prior period net unrealized appreciation as an investment
was realized. The most significant changes in net unrealized appreciation and depreciation during the quarter ended September
30, 2012 were as follows (in millions):





34









|Portfolio Company                      |  | Unrealized appreciation
    (depreciation) |     
|-------------------------------------- |  | ------------------------------------------ | ----
|Jersey Street 2006-1A CLO LTD.         |  | $                                          | 1.5 
|Canaras CLO Equity - 2007-1A, 1X       |  |                                            | 1.4 
|Emporia CLO 2007 3A E                  |  |                                            | 1.2 
|Stone Tower CLO LTD 2007 7X            |  |                                            | 1.1 
|ACA CLO 2007-1a sub                    |  |                                            | 1.1 
|Muir Grove CLO LTD 2007 1X E           |  |                                            | 1.0 
|GSC Partners 2007-8X Sub CDO           |  |                                            | 0.9 
|Rampart 2007-1A CLO Equity             |  |                                            | 0.7 
|OCT11 2007-1A CLO                      |  |                                            | 0.7 
|ACA CLO 2006-2, Limited                |  |                                            | 0.7 
|Merrill Communications, LLC            |  |                                            | 0.6 
|Fusionstorm, Inc. 2                    |  |                                            | 0.6 
|Prospero CLO II BV                     |  |                                            | 0.6 
|Band Digital Inc.                      |  |                                            | (0.7
|American Integration Technologies, LLC |  |                                            | (1.4
|Net all other                          |  |                                            | 11.5
|                                       |  |                                            |     
|Total                                  |  | $                                          | 21.5



For the quarter ended September 30, 2011,
we recorded net realized gains on investments of approximately $0.1 million, which represents the gain realized on the repayment
of our investment in Flexera Software.



Based upon the fair value determinations
made in good faith by the Board of Directors, during the quarter ended September 30, 2011, we had net unrealized depreciation
of approximately $20.1 million, comprised of $0.3million in gross unrealized appreciation, $20.3 million in gross unrealized depreciation
and approximately $0.1 million relating to the reversal of prior period net unrealized appreciation as an investment was realized.
The most significant changes in net unrealized appreciation and depreciation during the quarter ended September 30, 2011
were as follows (in millions):



|                                 |  | Unrealized     |      
|-------------------------------- |  | -------------- | -----
|                                 |  | appreciation   |      
|Portfolio Company                |  | (depreciation) |      
|Vision Solutions, Inc.           |  | $              | (0.4 
|CIFC CLO - 2006-1A B2L           |  |                | (0.4 
|Ocean Trails CLO II 2007-2a-d    |  |                | (0.4 
|Hewetts Island CDO 2007 - 1RA E  |  |                | (0.4 
|Nextag, Inc.                     |  |                | (0.4 
|Primus 2007 2X Class E CLO       |  |                | (0.4 
|GXS Worldwide Inc.               |  |                | (0.4 
|Canaras CLO Equity - 2007-1A, 1X |  |                | (0.4 
|Latitude II CLO 2006 2A D        |  |                | (0.4 
|RBS Holding Company              |  |                | (0.4 
|Loomis Sayles CLO 2006-1AE       |  |                | (0.5 
|Pegasus Solutions, Inc.          |  |                | (0.5 
|Hewetts Island CDO III 2005-1A D |  |                | (0.5 
|Jersey Straits 2006-1A CLO LTD   |  |                | (0.5 
|Avenue CLO V LTD 2007-5A D1      |  |                | (0.5 
|SourceHov, LLC                   |  |                | (0.6 
|Lightpoint CLO 2007-8a           |  |                | (0.6 
|ACA CLO 2006-2, Limited          |  |                | (0.6 
|Latitude III CLO 2007-3A         |  |                | (0.6 
|Landmark V CDO LTD               |  |                | (0.6 
|Emporia CLO 2007 3A E            |  |                | (0.7 
|Harch 2005-2A BB CLO             |  |                | (0.7 
|Integra Telecomm, Inc.           |  |                | (0.9 
|Hewetts Island CDO IV 2006-4     |  |                | (1.0 
|Prospero CLO II BV               |  |                | (2.0 
|Net all other                    |  |                | (5.3 
|                                 |  |                |      
|Total                            |  | $              | (20.1







35









Current Market and Economic Conditions



Current market conditions appear generally
stable. During 2011 and through the quarter ended September 30, 2012, we saw much less severe price volatility for corporate loans
(compared with the prior three year period), consistent with many other parts of the debt and equity markets. During 2012, the
market for new investments has become more competitive and yields have generally decreased. We expect the market for new investments
to remain competitive through the remainder of 2012. In view of the above circumstances, we continue to invest in syndicated and
larger middle-market loans, and, opportunistically, in certain structured finance investments, including collateralized loan obligation
investment vehicles, and continue to be active in those markets.



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 policy as a critical accounting policy.



Investment Valuation



The most significant estimates made
in the preparation of our consolidated financial statements are the valuation of investments and the related amounts of
unrealized appreciation and depreciation of investments recorded. We believe that there is no single definitive method for
determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific
facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types
of investments we make. We are required to specifically fair value each individual investment on a quarterly basis.



In May 2011, the FASB issued ASU 2011-04,
“ Fair Value Measurement which represents amendments to achieve common fair value measurement and disclosure requirements
in US GAAP and IFRS .” The amendments are of two types: (i) those that clarify the FASB’s intent about the application
of existing fair value measurement and disclosure requirements and (ii) those that change a particular principle or requirement
for measuring fair value or for disclosing information about fair value measurements. The amendments that change a particular
principle or requirement for measuring fair value or disclosing information about fair value measurements relate to (i) measuring
the fair value of the financial instruments that are managed within a portfolio; (ii) application of premium and discount in a
fair value measurement; and (iii) additional disclosures about fair value measurements. The update is effective for annual periods
beginning after December 15, 2011 and as such we have adopted this ASU beginning with the quarter ended March 31, 2012. We have
increased our disclosures related to Level 3 fair value measurement, in addition to other required disclosures. There were no
related impacts on our financial position or results of operations.



We adopted ASC 820-10, Fair Value Measurements
and Disclosure, which establishes a three-level valuation hierarchy for disclosure of fair value measurements, on January
1, 2008. ASC 820-10 clarified the definition of fair value and requires companies to expand their disclosure about the use of
fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. ASC 820-10 defines
fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. ASC 820-10 also establishes a three-tier fair value hierarchy, which prioritizes
the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active
markets; Level 2, which includes inputs such as quoted prices for similar securities in active markets and quoted prices for identical
securities in markets that are not active; and Level 3, defined as unobservable inputs for which little or no market data exists,
therefore requiring an entity to develop its own assumptions. We have determined that due to the general illiquidity of the market
for our investment portfolio, whereby little or no market data exists, almost all of our investments are based upon “Level
3” inputs.



36







Our Board of Directors determines the
value of our investment portfolio each quarter. In connection with that determination, members of TICC Management’s portfolio
management team prepare portfolio company valuations using the most recent portfolio company financial statements and forecasts.
Since March 2004, we have engaged third-party valuation firms to provide assistance in valuing our bilateral investments and,
more recently, for certain of our syndicated loans, although our Board of Directors ultimately determines the appropriate valuation
of each such investment.



Our process for determining the fair value
of a bilateral investment begins with determining the enterprise value of the portfolio company. Enterprise value means the entire
value of the company to a potential buyer, including the sum of the values of debt and equity securities used to capitalize the
enterprise at a point in time. The fair value of our investment is based, in part, on the enterprise value at which the portfolio
company could be sold in an orderly disposition over a reasonable period of time between willing parties other than in a forced
or liquidation sale. The liquidity event whereby we exit a private investment is generally the sale, the recapitalization or,
in some cases, the initial public offering of the portfolio company.



There is no one methodology to determine
enterprise value and, in fact, for any one portfolio company, enterprise value is best expressed as a range of fair values, from
which we derive a single estimate of enterprise value. To determine the enterprise value of a portfolio company, we analyze the
historical and projected financial results, as well as the nature and value of any collateral. We also use industry valuation
benchmarks and public market comparables. We also consider other events, including private mergers and acquisitions, a purchase
transaction, public offering or subsequent debt or equity sale or restructuring, and include these events in the enterprise valuation
process. We generally require portfolio companies to provide annual audited and quarterly unaudited financial statements, as well
as annual projections for the upcoming fiscal year.



Typically, our bilateral debt investments
are valued on the basis of a fair value determination arrived at through an analysis of the borrower’s financial and operating
condition or other factors, as well as consideration of the entity’s enterprise value. The types of factors that we may
take into account in valuing our investments include: market trading and transaction comparables, applicable market yields and
multiples, security covenants, call protection provisions, the nature and realizable value of any collateral, the portfolio company’s
ability to make payments and its earnings and discounted cash flows, among other factors. The fair value of equity interests in
portfolio companies is determined based on various factors, including the enterprise value remaining for equity holders after
the repayment of the portfolio company’s debt and other preference capital, and other pertinent factors such as recent offers
to purchase a portfolio company, recent transactions involving the purchase or sale of the portfolio company’s equity securities,
or other liquidity events. The determined equity values are generally discounted when we have a minority position, restrictions
on resale, specific concerns about the receptivity of the capital markets to a specific company at a certain time, or other factors.



We will record unrealized depreciation
on bilateral investments when we believe that an investment has become impaired, including where collection of a loan or realization
of an equity security is doubtful. To the extent that we believe that it has become probable that a loan is not collectible or
probable that an equity investment is not realizable, we will classify that amount as a realized loss. We will record unrealized
appreciation if we believe that the underlying portfolio company has appreciated in value and our equity security has also appreciated
in value. Changes in fair value, other than such changes that are considered probable of non-collection or non-realization, as
described above, are recorded in the statement of operations as net change in unrealized appreciation or depreciation.



37







Under the valuation procedures approved
by our Board of Directors, upon the recommendation of the Valuation Committee, a third-party valuation firm will prepare valuations
for each of our bilateral investments for which market quotations are not readily available that, when combined with all other
investments in the same portfolio company, (i) have a value as of the previous quarter of greater than or equal to 2.5% of our
total assets as of the previous quarter, and (ii) have a value as of the current quarter of greater than or equal to 2.5% of our
total assets as of the previous quarter, after taking into account any repayment of principal during the current quarter. In addition,
the frequency of those third-party valuations of our portfolio securities is based upon the grade assigned to each such security
under our credit grading system as follows: Grade 1, at least annually; Grade 2, at least semi-annually; Grades 3, 4, and 5, at
least quarterly. TICC Management also retains the authority to seek, on our behalf, additional third party valuations with respect
to both our bilateral portfolio securities and our syndicated loan investments. Our Board of Directors retains ultimate authority
as to the third-party review cycle as well as the appropriate valuation of each investment.



On April 9, 2009, the FASB issued additional
guidelines under ASC 820-10-35, “ Determining Fair Value When the Volume and Level of Activity for the Asset or Liability
Have Significantly Decreased and Identifying Transactions That Are Not Orderly ,” which provides guidance on factors
that should be considered in determining when a previously active market becomes inactive and whether a transaction is orderly.
In accordance with ASC 820-10-35, our valuation procedures specifically provide for the review of indicative quotes supplied by
the large agent banks that make a market for each security. However, the marketplace for which we obtain indicative bid quotes
for purposes of determining the fair value of our syndicated loan investments have shown these attributes of illiquidity as described
by ASC-820-10-35. Due to limited market liquidity in the syndicated loan market, TICC believes that the non-binding indicative
bids received from agent banks for certain syndicated investments that we own may not be determinative of their fair value and
therefore alternative valuation procedures may need to be undertaken. As a result, TICC may engage third-party valuation firms
to provide assistance in valuing certain syndicated investments that we own. In addition, TICC Management prepares an analysis
of each syndicated loan, including a financial summary, covenant compliance review, recent trading activity in the security, if
known, and other business developments related to the portfolio company. All available information, including non-binding indicative
bids which may not be determinative of fair value, is presented to the Valuation Committee to consider in its determination of
fair value. In some instances, there may be limited trading activity in a security even though the market for the security is
considered not active. In such cases the Valuation Committee will consider the number of trades, the size and timing of each trade,
and other circumstances around such trades, to the extent such information is available, in its determination of fair value. The
Valuation Committee will evaluate the impact of such additional information, and factor it into its consideration of the fair
value that is indicated by the analysis provided by third-party valuation firms. We have considered the factors described in ASC
820-10 and have determined that we are properly valuing the securities in our portfolio.



We have also acquired a number of debt
and equity positions in CLO investment vehicles. These investments are special purpose financing vehicles. In valuing such investments,
we consider the operating metrics of the specific investment vehicle, including compliance with collateralization tests, defaulted
and restructured securities, and payment defaults, if any. In addition, we consider the indicative prices provided by the broker
who arranges transactions in such investment vehicles, as well as any available information on other relevant transactions in
the market. TICC Management or the Valuation Committee may request an additional analysis by a third-party firm to assist in the
valuation process of CLO investment vehicles. All information is presented to our Board of Directors for its determination of
fair value of these investments.



The Company’s assets measured at
fair value on a recurring basis subject to the disclosure requirements of ASC 820-10-35 at September 30, 2012, were as follows:



|($ in millions)             |  | Fair Value Measurements at Reporting Date Using                     |     |  |                                                    |  
|--------------------------- |  | ------------------------------------------------------------------- | --- |  | -------------------------------------------------- | -
|Assets                      |  | Quoted Prices in
    Active  Markets for Identical Assets (Level 1) |     |  | Significant Other 
    Observable Inputs (Level 2) |  
|Cash equivalents            |  | $                                                                   | 0.0 |  |                                                    | $
|Senior Secured Notes        |  |                                                                     | 0.0 |  |                                                    |  
|CLO Debt                    |  |                                                                     | 0.0 |  |                                                    |  
|CLO Equity                  |  |                                                                     | 0.0 |  |                                                    |  
|Subordinated Notes          |  |                                                                     | 0.0 |  |                                                    |  
|Common Stock                |  |                                                                     | 0.0 |  |                                                    |  
|Preferred Shares            |  |                                                                     | 0.0 |  |                                                    |  
|Warrants to purchase equity |  |                                                                     | 0.0 |  |                                                    |  
|                            |  |                                                                     |     |  |                                                    |  
|Total                       |  | $                                                                   | 0.0 |  |                                                    | $



38







A reconciliation of the fair value of investments for three
months ended September 30, 2012, utilizing significant unobservable inputs, is as follows:



|($ in millions)                                                                                                                                                                                                                                                                                                                |  | SeniorSecured NoteInvestments |       |   | CollateralizedLoanObligationDebtInvestments |   |      | CollateralizedLoanObligationEquityInvestments |  |   | SubordinatedNoteInvestments |  |  | CommonStockInvestments |      |   | PreferredShare EquityInvestments |   |     | Warrants toPurchaseEquityInvestments |  |   | Total |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------------------- | ----- | - | ------------------------------------------- | - | ---- | --------------------------------------------- |  | - | --------------------------- |  |  | ---------------------- | ---- | - | -------------------------------- | - | --- | ------------------------------------ |  | - | ----- | -
|Balance at June 30, 2012                                                                                                                                                                                                                                                                                                       |  | $                             | 292.1 |   |                                             | $ | 68.8 |                                               |  | $ | 58.9                        |  |  | $                      | 4.4  |   |                                  | $ | 4.2 |                                      |  | $ | 1.8   |  
|Realized Gains included
    in earnings                                                                                                                                                                                                                                                                                        |  |                               | 1.6   |   |                                             |   | 0.0  |                                               |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                      |  |   | 0.0   |  
|Unrealized (depreciation)
    appreciation included in earnings                                                                                                                                                                                                                                                                |  |                               | 1.2   |   |                                             |   | 10.4 |                                               |  |   | 8.9                         |  |  |                        | 0.6  |   |                                  |   | 0.4 |                                      |  |   | (0.5  | )
|Accretion of discount                                                                                                                                                                                                                                                                                                          |  |                               | 0.5   |   |                                             |   | 0.8  |                                               |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                      |  |   | 0.0   |  
|Purchases                                                                                                                                                                                                                                                                                                                      |  |                               | 95.3  |   |                                             |   | 7.7  |                                               |  |   | 15.0                        |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                      |  |   | 0.0   |  
|Repayments and Sales                                                                                                                                                                                                                                                                                                           |  |                               | (48.2 | ) |                                             |   | 0.0  |                                               |  |   | 0.0                         |  |  |                        | (0.1 | ) |                                  |   | 0.0 |                                      |  |   | 0.0   |  
|Payment in Kind income                                                                                                                                                                                                                                                                                                         |  |                               | 0.1   |   |                                             |   | 0.0  |                                               |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                      |  |   | 0.1   |  
|Transfers
    in and/or out of level 3                                                                                                                                                                                                                                                                                         |  |                               | 0.0   |   |                                             |   | 0.0  |                                               |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                      |  |   | 0.0   |  
|                                                                                                                                                                                                                                                                                                                               |  |                               |       |   |                                             |   |      |                                               |  |   |                             |  |  |                        |      |   |                                  |   |     |                                      |  |   |       |  
|Balance at September
    30, 2012                                                                                                                                                                                                                                                                                              |  | $                             | 342.6 |   |                                             | $ | 87.7 |                                               |  | $ | 82.8                        |  |  | $                      | 4.9  |   |                                  | $ | 4.6 |                                      |  | $ | 1.4   |  
|                                                                                                                                                                                                                                                                                                                               |  |                               |       |   |                                             |   |      |                                               |  |   |                             |  |  |                        |      |   |                                  |   |     |                                      |  |   |       |  
|The
    amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses
    relating to our Level 3 assets still held at the reporting date and reported within the net change in unrealized gains or
    losses on investments in our Statement of Operations(1) |  | $                             | 2.8   |   |                                             | $ | 10.4 |                                               |  | $ | 8.9                         |  |  | $                      | 0.6  |   |                                  | $ | 0.3 |                                      |  | $ | (0.4  | )



| | (1) | Includes rounding adjustments to reconcile period balances.
| | --- | -----------------------------------------------------------



A reconciliation of the fair value of investments for nine
months ending September 30, 2012, utilizing significant unobservable inputs, is as follows:



|($ in millions)                                                                                                                                                                                                                                                                                                                |  | SeniorSecuredNoteInvestments |        |   | CollateralizedLoanObligationDebtInvestments |   |      | CollateralizedLoanObligationEquityInvestments |  |   | SubordinatedNoteInvestments |  |  | CommonStockInvestments |      |   | PreferredShare EquityInvestments |   |     | Warrants toPurchaseEquityInvestments |  |   | Total |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------- | ------ | - | ------------------------------------------- | - | ---- | --------------------------------------------- |  | - | --------------------------- |  |  | ---------------------- | ---- | - | -------------------------------- | - | --- | ------------------------------------ |  | - | ----- | -
|Balance at December 31,
    2011                                                                                                                                                                                                                                                                                               |  | $                            | 279.2  |   |                                             | $ | 51.0 |                                               |  | $ | 39.3                        |  |  | $                      | 4.9  |   |                                  | $ | 3.1 |                                      |  | $ | 2.5   |  
|Realized Gains included
    in earnings                                                                                                                                                                                                                                                                                        |  |                              | 3.0    |   |                                             |   | 0.2  |                                               |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                      |  |   | 0.0   |  
|Unrealized (depreciation)
    appreciation included in earnings                                                                                                                                                                                                                                                                |  |                              | (3.4   | ) |                                             |   | 13.6 |                                               |  |   | 11.7                        |  |  |                        | 0.5  |   |                                  |   | 1.5 |                                      |  |   | (1.4  | )
|Accretion of discount                                                                                                                                                                                                                                                                                                          |  |                              | 2.1    |   |                                             |   | 2.1  |                                               |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                      |  |   | 0.0   |  
|Purchases                                                                                                                                                                                                                                                                                                                      |  |                              | 183.5  |   |                                             |   | 22.3 |                                               |  |   | 31.8                        |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                      |  |   | 0.0   |  
|Repayments and Sales                                                                                                                                                                                                                                                                                                           |  |                              | (125.9 | ) |                                             |   | (1.5 | )                                             |  |   | 0.0                         |  |  |                        | (0.5 | ) |                                  |   | 0.0 |                                      |  |   | 0.0   |  
|Payment in Kind income                                                                                                                                                                                                                                                                                                         |  |                              | 4.1    |   |                                             |   | 0.0  |                                               |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                      |  |   | 0.3   |  
|Transfers in and/or out
    of level 3                                                                                                                                                                                                                                                                                         |  |                              | 0.0    |   |                                             |   | 0.0  |                                               |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                      |  |   | 0.0   |  
|                                                                                                                                                                                                                                                                                                                               |  |                              |        |   |                                             |   |      |                                               |  |   |                             |  |  |                        |      |   |                                  |   |     |                                      |  |   |       |  
|Balance at September 30,
    2012                                                                                                                                                                                                                                                                                              |  | $                            | 342.6  |   |                                             | $ | 87.7 |                                               |  | $ | 82.8                        |  |  | $                      | 4.9  |   |                                  | $ | 4.6 |                                      |  | $ | 1.4   |  
|                                                                                                                                                                                                                                                                                                                               |  |                              |        |   |                                             |   |      |                                               |  |   |                             |  |  |                        |      |   |                                  |   |     |                                      |  |   |       |  
|The
    amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses
    relating to our Level 3 assets still held at the reporting date and reported within the net change in unrealized gains or
    losses on investments in our Statement of Operations(1) |  | $                            | (2.4   | ) |                                             | $ | 13.8 |                                               |  | $ | 11.7                        |  |  | $                      | 0.4  |   |                                  | $ | 1.4 |                                      |  | $ | (1.3  | )



| | (1) | Includes rounding adjustments to reconcile period balances.
| | --- | -----------------------------------------------------------



39







Our assets measured at fair value on a
recurring basis subject to the disclosure requirements of ASC 820-10-35 at December 31, 2011, were as follows:



|($ in millions)             |  | Fair Value Measurements at Reporting Date Using                     |     |  |                                                   |  
|--------------------------- |  | ------------------------------------------------------------------- | --- |  | ------------------------------------------------- | -
|Assets                      |  | Quoted Prices in
    Active  Markets for Identical Assets (Level 1) |     |  | Significant Other
    Observable Inputs (Level 2) |  
|Cash equivalents            |  | $                                                                   | 0.0 |  |                                                   | $
|Senior Secured Notes        |  |                                                                     | 0.0 |  |                                                   |  
|CLO Debt                    |  |                                                                     | 0.0 |  |                                                   |  
|CLO Equity                  |  |                                                                     | 0.0 |  |                                                   |  
|Subordinated Notes          |  |                                                                     | 0.0 |  |                                                   |  
|Common Stock                |  |                                                                     | 0.0 |  |                                                   |  
|Preferred Shares            |  |                                                                     | 0.0 |  |                                                   |  
|Warrants to purchase equity |  |                                                                     | 0.0 |  |                                                   |  
|                            |  |                                                                     |     |  |                                                   |  
|Total                       |  | $                                                                   | 0.0 |  |                                                   | $



A reconciliation of the fair value of
investments for the year ended December 31, 2011, utilizing significant unobservable inputs, is as follows:



|($ in millions)                                                                                                                                                                                                                                                                                                             |  | SeniorSecuredNoteInvestments |        |   | CollateralizedLoanObligationDebtInvestments |   |      | CollateralizedLoanObligationEquityInvestments |  |   | SubordinatedNoteInvestments |   |  | CommonStockInvestments |      |   | PreferredShareEquityInvestments |   |      | Warrantsto PurchaseEquityInvestments |  |   | Total | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ------ | - | ------------------------------------------- | - | ---- | --------------------------------------------- |  | - | --------------------------- | - |  | ---------------------- | ---- | - | ------------------------------- | - | ---- | ------------------------------------ |  | - | ----- | 
|Balance at December 31,2010                                                                                                                                                                                                                                                                                                 |  | $                            | 173.9  |   |                                             | $ | 50.4 |                                               |  | $ | 8.9                         |   |  | $                      | 6.0  |   |                                 | $ | 5.8  |                                      |  | $ | 2.0   | 
|Realized Losses included
    inearnings                                                                                                                                                                                                                                                                                     |  |                              | 2.7    |   |                                             |   | 0.9  |                                               |  |   | 0.0                         |   |  |                        | 0.0  |   |                                 |   | 0.0  |                                      |  |   | 0.0   | 
|Unrealized (depreciation)
    appreciation included in earnings                                                                                                                                                                                                                                                             |  |                              | (5.7   | ) |                                             |   | (9.5 | )                                             |  |   | (1.5                        | ) |  |                        | (0.4 | ) |                                 |   | (2.7 | )                                    |  |   | 0.1   | 
|Accretion of discount                                                                                                                                                                                                                                                                                                       |  |                              | 2.8    |   |                                             |   | 2.2  |                                               |  |   | 0.0                         |   |  |                        | 0.0  |   |                                 |   | 0.0  |                                      |  |   | 0.0   | 
|Purchases                                                                                                                                                                                                                                                                                                                   |  |                              | 230.0  |   |                                             |   | 10.6 |                                               |  |   | 31.9                        |   |  |                        | 0.0  |   |                                 |   | 0.0  |                                      |  |   | 0.0   | 
|Repayments and Sales (1)                                                                                                                                                                                                                                                                                                    |  |                              | (113.8 | ) |                                             |   | (3.6 | )                                             |  |   | 0.0                         |   |  |                        | (0.7 | ) |                                 |   | 0.0  |                                      |  |   | 0.4   | 
|Transfers
    in and/or out of level 3                                                                                                                                                                                                                                                                                      |  |                              | (10.7  | ) |                                             |   | 0.0  |                                               |  |   | 0.0                         |   |  |                        | 0.0  |   |                                 |   | 0.0  |                                      |  |   | 0.0   | 
|Balance at December
    31, 2011                                                                                                                                                                                                                                                                                            |  | $                            | 279.2  |   |                                             | $ | 51.0 |                                               |  | $ | 39.3                        |   |  | $                      | 4.9  |   |                                 | $ | 3.1  |                                      |  | $ | 2.5   | 
|The
    amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses
    relating to our Level 3 assets still held at the reporting date and reported within the net change in unrealized gains or
    losses on investments in our Statement of Operations |  | $                            | (4.1   | ) |                                             | $ | (8.8 | )                                             |  | $ | (1.3                        | ) |  | $                      | (0.3 | ) |                                 | $ | (2.7 | )                                    |  | $ | 0.1   | 



(1)	Includes PIK income of approximately $1.5
million and rounding adjustments to reconcile period balances.



PORTFOLIO COMPOSITION
AND INVESTMENT ACTIVITY



The total fair value of our investment
portfolio was approximately $537.7 million and $391.5 million as of September 30, 2012 and December 31, 2011, respectively. The
increase in investments during the nine month period was due primarily to new investments of approximately $247.6 million and
net unrealized appreciation of approximately $22.8 million. Funding for these new investments was provided by equity and debt
capital raises. These increases were partially offset by debt repayments and sales of securities totaling approximately $136.4
million.



40







In certain instances, we receive payments
based on scheduled amortization of the outstanding balances and sales of portfolio investments. In addition, we receive repayments
of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments may fluctuate
significantly from period to period. For the quarter ended September 30, 2012, we recognized approximately $9.0 million largely
from the sales of our debt investment in CHS Community Health Systems, Inc. ($3.9 million), Airvana Network Solutions, Inc. ($2.7
million) and our partial sale of our investment in Goodman Global, Inc. ($2.0 million), whereas for the year ended December 31,
2011, we recognized proceeds of approximately $11.3 million from the sales of securities. Also, during the quarter ended September
30, 2012, we had repayments and amortization payments of approximately $45.3 million, whereas, for the year ended December 31,
2011, we had repayments and amortization payments of approximately $107.9 million.



As of September 30, 2012, we had investments
in debt securities of, or loans to, 78 portfolio companies, with a fair value of approximately $447.9 million, and equity investments
in 24 portfolio companies, with a fair value of approximately $89.8 million. As of December 31, 2011, we had investments in debt
securities of, or loans to, 69 portfolio companies, with a fair value of approximately $345.8 million, and equity investments
in 21 portfolio companies, with a fair value of approximately $45.7 million.



A reconciliation of the investment portfolio
for the nine months ended September 30, 2012 and the year ended December 31, 2011 follows:



|                                           |  | September 30, 2012    |        |   | December 31, 2011     |  
|------------------------------------------ |  | --------------------- | ------ | - | --------------------- | -
|                                           |  | (dollars in millions) |        |   | (dollars in millions) |  
|                                           |  |                       |        |   |                       |  
|Beginning Investment Portfolio             |  | $                     | 391.5  |   |                       | $
|Portfolio Investments Acquired             |  |                       | 247.6  |   |                       |  
|Debt repayments                            |  |                       | (115.9 | ) |                       |  
|Sales of securities                        |  |                       | (20.5  | ) |                       |  
|Payment in Kind                            |  |                       | 4.4    |   |                       |  
|Original Issue Discount                    |  |                       | 4.3    |   |                       |  
|Net Unrealized Appreciation (Depreciation) |  |                       | 22.8   |   |                       |  
|Net Realized Gains                         |  |                       | 3.5    |   |                       |  
|                                           |  | $                     | 537.7  |   |                       | $



The following table indicates the quarterly
portfolio investment activity for the past seven quarters:



|                   |  | New Investments       |       |  | Debt Repayments       |   |       | Sales of Securities   | 
|------------------ |  | --------------------- | ----- |  | --------------------- | - | ----- | --------------------- | 
|Quarter ended      |  | (dollars in millions) |       |  | (dollars in millions) |   |       | (dollars in millions) | 
|September 30, 2012 |  | $                     | 128.0 |  |                       | $ | 45.3  |                       | 
|June 30, 2012      |  |                       | 62.1  |  |                       |   | 66.2  |                       | 
|March 31, 2012     |  |                       | 57.5  |  |                       |   | 4.4   |                       | 
|Total              |  | $                     | 247.6 |  |                       | $ | 115.9 |                       | 
|                   |  |                       |       |  |                       |   |       |                       | 
|December 31, 2011  |  | $                     | 60.3  |  |                       | $ | 28.5  |                       | 
|September 30, 2011 |  |                       | 81.0  |  |                       |   | 9.0   |                       | 
|June 30, 2011      |  |                       | 30.6  |  |                       |   | 12.6  |                       | 
|March 31, 2011     |  |                       | 100.6 |  |                       |   | 57.8  |                       | 
|Total              |  | $                     | 272.5 |  |                       | $ | 107.9 |                       | 



41







The following table shows the fair value
of our portfolio of investments by asset class as of September 30, 2012 and December 31, 2011:



|                     |  | September 30, 2012            |       |  | December 31, 2011                 | 
|-------------------- |  | ----------------------------- | ----- |  | --------------------------------- | 
|                     |  | Investments at
    Fair Value |       |  | Percentage of
    Total Portfolio | 
|                     |  | (dollars in millions)         |       |  |                                   | 
|Senior Secured Notes |  | $                             | 355.3 |  |                                   | 
|CLO Debt             |  |                               | 87.7  |  |                                   | 
|CLO Equity           |  |                               | 82.8  |  |                                   | 
|Subordinated Notes   |  |                               | 4.9   |  |                                   | 
|Common Stock         |  |                               | 4.6   |  |                                   | 
|Preferred Shares     |  |                               | 1.4   |  |                                   | 
|Warrants             |  |                               | 1.0   |  |                                   | 
|                     |  |                               |       |  |                                   | 
|Total                |  | $                             | 537.7 |  |                                   | 



The following table shows our portfolio
of investments by industry at fair value, as of September 30, 2012 and December 31, 2011:





|                                     |  | September 30, 2012        |       |  | December 31, 2011        | 
|------------------------------------ |  | ------------------------- | ----- |  | ------------------------ | 
|                                     |  |                           |       |  |                          | 
|                                     |  | Investments at Fair Value |       |  | Percentage of Fair Value | 
|Structured finance                   |  | $                         | 170.5 |  |                          | 
|Software                             |  |                           | 37.7  |  |                          | 
|Enterprise software                  |  |                           | 37.3  |  |                          | 
|Telecommunication services           |  |                           | 34.8  |  |                          | 
|Healthcare                           |  |                           | 32.1  |  |                          | 
|Retail                               |  |                           | 31.8  |  |                          | 
|Financial intermediaries             |  |                           | 30.4  |  |                          | 
|Business services                    |  |                           | 27.9  |  |                          | 
|Web hosting                          |  |                           | 24.7  |  |                          | 
|IT consulting                        |  |                           | 20.9  |  |                          | 
|Education                            |  |                           | 13.6  |  |                          | 
|Printing and publishing              |  |                           | 12.1  |  |                          | 
|Auto parts manufacturer              |  |                           | 11.8  |  |                          | 
|Cable/satellite television           |  |                           | 10.7  |  |                          | 
|Computer hardware                    |  |                           | 9.0   |  |                          | 
|Logistics                            |  |                           | 7.9   |  |                          | 
|Food products manufacturer           |  |                           | 4.5   |  |                          | 
|Gorcery                              |  |                           | 3.9   |  |                          | 
|Shipping and transportation          |  |                           | 3.5   |  |                          | 
|Digital media                        |  |                           | 2.9   |  |                          | 
|Advertising                          |  |                           | 2.9   |  |                          | 
|Building and development             |  |                           | 2.9   |  |                          | 
|Utlities                             |  |                           | 2.5   |  |                          | 
|IT value-added reseller              |  |                           | 1.4   |  |                          | 
|Semiconductor capital equipment      |  |                           | 0.0   |  |                          | 
|Packaging and glass                  |  |                           | 0.0   |  |                          | 
|Interactive voice messaging services |  |                           | 0.0   |  |                          | 
|                                     |  |                           |       |  |                          | 
|Total                                |  | $                         | 537.7 |  |                          | 



42







PORTFOLIO GRADING



We have adopted a credit grading system
to monitor the quality of our debt investment portfolio. As of September 30, 2012 and December 31, 2011, our portfolio had a weighted
average grade of 2.2 and 2.2, respectively, based upon the fair value of the debt investments in the portfolio. Equity securities
are not graded.



At September 30, 2012, and December 31,
2011, our debt investment portfolio was graded as follows:



43







|      |  |                                                                                                                                  |  | September 30, 2012    |      
|----- |  | -------------------------------------------------------------------------------------------------------------------------------- |  | --------------------- | -----
|Grade |  | Summary Description                                                                                                              |  | Principal Value       |      
|      |  |                                                                                                                                  |  | (dollars in millions) |      
|1     |  | Company is
    ahead of expectations and/or outperforming financial covenant requirements and such trend is expected to continue |  | $                     | —    
|2     |  | Full repayment of principal
    and interest is expected                                                                         |  |                       | 397.0
|3     |  | Closer monitoring is required.
    Full repayment of principal and interest is expected                                          |  |                       | 73.0 
|4     |  | A reduction of interest
    income has occurred or is expected to occur. No loss of principal is expected                        |  |                       | —    
|5     |  | A
    loss of some portion of principal is expected                                                                              |  |                       | 10.2 
|      |  |                                                                                                                                  |  |                       |      
|      |  |                                                                                                                                  |  | $                     | 480.2



|      |  |                                                                                                                                  |  | December 31, 2011     |      
|----- |  | -------------------------------------------------------------------------------------------------------------------------------- |  | --------------------- | -----
|Grade |  | Summary Description                                                                                                              |  | Principal Value       |      
|      |  |                                                                                                                                  |  | (dollars in millions) |      
|1     |  | Company is
    ahead of expectations and/or outperforming financial covenant requirements and such trend is expected to continue |  | $                     | 13.2 
|2     |  | Full repayment of principal
    and interest is expected                                                                         |  |                       | 301.9
|3     |  | Closer monitoring is required.
    Full repayment of principal and interest is expected                                          |  |                       | 67.2 
|4     |  | A reduction of interest
    income has occurred or is expected to occur. No loss of principal is expected                        |  |                       | —    
|5     |  | A
    loss of some portion of principal is expected                                                                              |  |                       | 3.5  
|      |  |                                                                                                                                  |  |                       |      
|      |  |                                                                                                                                  |  | $                     | 385.8



We expect that a portion of our investments
will be in the grades 3, 4 or 5 categories from time to time, and, as such, we will be required to work with troubled portfolio
companies to improve their business and protect our investment. The number and amount of investments included in grades 3, 4 or
5 may fluctuate from period to period.



Further discussion regarding the other
investments which experienced significant unrealized depreciation is presented in “Results of Operations.”



44







RESULTS OF OPERATIONS



Set forth below is a comparison of our results of operations
for the three months ended September 30, 2012 to the three months ended September 30, 2011.



Investment Income



As of September 30, 2012, our debt investments
had stated interest rates of between 3.81% and 16.00% (excluding our investment in GenuTec Business Solutions, Inc. which carries
a zero interest rate through October 30, 2014) and maturity dates of between 5 and 144 months. In addition, our total portfolio
had a weighted average yield on debt investments of approximately 10.3% including GenuTec Business Solutions, Inc., compared with
11.4% as of September 30, 2011.



Investment income for the three months
ended September 30, 2012 was approximately $15.6 million compared to approximately $11.1 million for the three months ended September
30, 2011. This increase was due in part to an increase in the amount of distributions from the equity interests in our CLO vehicle
investments and the amount of performing assets in the portfolio. The total principal value of income producing debt investments
as of September 30, 2012 and September 30, 2011 was approximately $474.9 million and $356.0 million, respectively. For the quarter
ended September 30, 2012, investment income consisted of approximately $7.7 million in cash interest from portfolio investments,
approximately $1.4 million in amortization of original issue and market discount, approximately $31,000 of discount income derived
from unscheduled principal cash remittances at par on discounted debt securities, approximately $6.0 million in distributions
from the equity interest in securitized vehicle investments and an equity investment, as well as approximately $0.2 million in
PIK interest income.



For the quarter ended September 30, 2012,
fee income of approximately $279,000 was recorded, compared to fee income of approximately $61,000 for the quarter ended September
30, 2011. Fee income consists of non-recurring fees in connection with our investments in portfolio companies, including commitment
fees, origination fees and amendment fees.



Operating Expenses



Total expenses for the quarter ended
September 30, 2012 were $11.0 million, which includes the increase of the accrued capital gains incentive fee of approximately
$4.6 million.



Expenses before incentive fees,
for the quarter ended September 30, 2012, were approximately $5.3 million. This amount consisted of investment advisory
fees, interest expense and other debt financing expenses, professional fees, compensation expense, and general and
administrative expenses. Expenses before incentive fees increased approximately $2.1 million from the quarter ended September
30, 2011, attributable primarily to higher investment advisory fees (consisting of the base management fee), interest
expense associated with the senior notes issued under our debt securitization transactions and
convertible notes issued in September 2012, as well as increased professional fees associated with our audit and legal
expenses. Expenses before incentive fees for the quarter ended September 30, 2011 were approximately $3.2 million.



The investment advisory fee for the third
quarter of 2012 was approximately $2.8 million, representing the base fee as provided for in the Investment Advisory Agreement.
The investment advisory fee in the comparable period in 2011 was approximately $1.9 million. The increase of approximately $854,000
is due to an increase in average gross assets. At each of September 30, 2012 and December 31, 2011, respectively, approximately
$2.8 million and $1.9 million of investment advisory fees remained payable to TICC Management, including the net investment income
incentive fee discussed below.



Interest expense and other debt financing
expenses for the third quarter of 2012 was approximately $1.4 million, which was directly related to our debt securitization financing
transactions as well as our convertible note transaction. Interest expense for the third quarter of 2011 was approximately $434,000.



TICC CLO LLC



In August 2011, senior notes in the amount
of $101,250,000 were issued by a newly formed special purpose vehicle in which a wholly-owned subsidiary of TICC owns all of the
equity. Under this structure, the notes bear interest, after the effective date, at three-month London Inter Bank Offered Rate
(“LIBOR”) plus 2.25% (prior to the effective date, the Class A Notes bear interest at five-month LIBOR plus 2.25%).
The accrued interest payable on these notes during the third quarter of 2012 was approximately $517,000. Additionally, for the
quarter ended September 30, 2012, the amortization of discount on the issued notes was approximately $40,000 and the amortization
of deferred debt issuance costs was approximately $76,000. At December 31, 2011, interest expense of approximately $1.1 million
remained payable.



45







TICC CLO 2012-1 LLC



On August 23, 2012, the Company
completed a $160 million debt securitization financing transaction. The secured and subordinated notes offered in the debt
securitization were issued by TICC CLO 2012-1 LLC (“2012 Securitization Issuer” or “TICC CLO
2012-1”), a newly formed special purpose vehicle that is a wholly-owned subsidiary of the Company. The secured notes of
the 2012 Securitization Issuer have an aggregate face amount of $120 million and were issued in four classes. The class A-1
notes have an initial face amount of $88 million, are rated AAA(sf)/Aaa(sf)by Standard & Poor’s
Ratings Services (S&P) and Moody’s Investors Service, Inc. (Moody’s), respectively, and bear interest at
three-month LIBOR plus 1.75%. The class B-1 notes have an initial face amount of $10 million, are rated
AA(sf)/Aa2(sf)by S&P and Moody’s, respectively, and bear interest at three-month LIBOR plus 3.50%.
The class C-1 notes have an initial face amount of $11.5 million, are rated A(sf)/A2(sf) by S&P and
Moody’s, respectively, and bear interest at three-month LIBOR plus 4.75%. The class D-1 notes have an initial face
amount of $10.5 million, are rated BBB(sf)/Baa2(sf)by S&P and Moody’s, respectively, and bear
interest at three-month LIBOR plus 5.75%. TICC presently owns all of the subordinated notes, which totaled $40 million, and
$3 million of the class D-1 notes issued in this CLO transaction. For further information on this securitization, see
Note 4.



The aggregate accrued interest payable
on the notes of the 2012 Securitization Issuer during the third quarter of 2012 was approximately $402,000. Additionally, for
the quarter ended September 30, 2012, the aggregate amortization of discount on the issued notes of the 2012 Securitization Issuer
was approximately $41,000 and the amortization of deferred debt issuance costs was approximately $25,000.



2017 Convertible Notes



On September 26, 2012, we issued $105,000,000
aggregate principal amount of the Convertible Notes. The Convertible Notes mature on November 1, 2017. The Convertible Notes bear
interest at a rate of 7.50% per year, payable semi-annually in arrears on May 1 and November 1 of each year, commencing on May
1, 2013. The accrued interest payable on the Convertible Notes during the third quarter of 2012 was approximately $109,000. Additionally,
for the quarter ended September 30, 2012, the amortization of deferred issuance costs was approximately $6,000.



The table below summarizes the components
of interest expense for the three months ended September 30, 2012 and 2011:



|                                              |  | Three Months Ended September 30, 2012 |         |  | Three Months Ended September 30, 2011 |  
|--------------------------------------------- |  | ------------------------------------- | ------- |  | ------------------------------------- | -
|(dollars in thousands)                        |  | StatedInterestExpense                 |         |  | NoteDiscount 
Expense                 |  
|TICC CLO LLC Class A Notes                    |  | $                                     | 699.9   |  |                                       | $
|TICC CLO 2012-1 LLC Class A-1 Notes           |  |                                       | 235.3   |  |                                       |  
|TICC CLO 2012-1 LLC Class B-1 Notes           |  |                                       | 45.7    |  |                                       |  
|TICC CLO 2012-1 LLC Class C-1 Notes           |  |                                       | 68.1    |  |                                       |  
|TICC CLO 2012-1 LLC Class D-1 Notes           |  |                                       | 52.6    |  |                                       |  
|TICC CLO 2012-1 amortization of deferred debt |  |                                       | -       |  |                                       |  
|2017 Convertible Notes                        |  |                                       | 109.4   |  |                                       |  
|Total                                         |  | $                                     | 1,211.0 |  |                                       | $



Professional fees, consisting of legal,
valuation, audit and tax fees, were approximately $421,000 for the quarter ended September 30, 2012, compared to approximately
$386,000 for the quarter ended September 30, 2011. This was the result of an increase in audit fees
which was partially offset by lower legal and valuation costs.



Compensation expenses were approximately
$289,000 for the quarter ended September 30, 2012, compared to approximately $218,000 for the quarter ended September 30, 2011,
reflecting the allocation of compensation expenses for the services of our chief financial officer, chief compliance officer,
controller and senior accountants, and other administrative support personnel. At September 30, 2012 and December 31, 2011, respectively,
approximately $450,000 and $605,000 of compensation expenses remained payable.



General and administrative expenses,
consisting primarily of directors’ fees, insurance, listing fees, transfer agent and custodian fees, office supplies, facilities
costs and other expenses, were approximately $424,000 for the three months ended September 30, 2012 compared to approximately
$186,000 for the same period in 2011. The increase was due largely to charges for excise tax and costs incurred directly by TICC
CLO. Office supplies, facilities costs and other expenses are allocated to us under the terms of the Administration Agreement.



Incentive Fees



The net investment income incentive fee
for the third quarter of 2012 was approximately $1.0 million compared to $456,000 in the third quarter of 2011. The net investment
income incentive fee is calculated and payable quarterly in arrears based on our “Pre-Incentive Fee Net Investment Income”
for the immediately preceding calendar quarter subject to a hurdle rate which is determined as of December 31 of the preceding
year. For this purpose, “Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other
income accrued during the calendar quarter minus our operating expenses for the quarter (including the base fee, expenses payable
under the Administration Agreement with BDC Partners, and any interest expense and dividends paid on any issued and outstanding
preferred stock, but excluding the incentive fee). For the quarter ended September 30, 2012, the investment adviser permanently
waived $5,000 of the net investment income incentive fee.



46







The capital gains incentive fee expense
for the third quarter ended September 30, 2012 was approximately $4.6 million. The capital gains incentive fee expense, as reported
under generally accepted accounting principles, is calculated on the basis of net realized and unrealized gains and losses at
the end of each period. The expense related to the hypothetical liquidation of the portfolio (and assuming no other changes in
realized or unrealized gains and losses) would only become payable to our investment adviser in the event of a complete liquidation
of our portfolio as of period end and the termination of the Investment Advisory Agreement on such date. The $4.6 million capital
gains incentive fee accrual as of September 30, 2012 relates entirely to this hypothetical liquidation calculation. For the quarter
ended September 30, 2011, a reversal of approximately $4.2 million was recorded.



The amount of the capital
gains incentive fee which will actually be payable is determined in accordance with the terms of the Investment Advisory
Agreement and is calculated as of the end of each calendar year (or, upon termination of the Investment Advisory Agreement, as
of the termination date). The terms of the Investment Advisory Agreement state that the capital gains incentive fee calculation
is based on net realized gains, if any, offset by gross unrealized depreciation for the calendar year. No effect is given to
gross unrealized appreciation in this calculation. For the year ended December 31, 2011, such an accrual was not required
under the terms of the Investment Advisory Agreement.



Realized and Unrealized Gains/Losses on Investments



For the quarter ended September 30, 2012,
we recorded net realized gains on investments of approximately $1.8 million, which primarily represents the gain on the repayments
of several of our investment including American Integration Technologies, LLC ($1.4 million.)



Based upon the fair value determinations
made in good faith by the Board of Directors, during the quarter ended September 30, 2012, we had net unrealized appreciation
of approximately $21.5 million, comprised of $25.4 million in gross unrealized appreciation, $2.4 million in gross unrealized
depreciation and approximately $1.5 million relating to the reversal of prior period net unrealized appreciation as an investment
was realized. The most significant changes in net unrealized appreciation and depreciation during the quarter ended September
30, 2012 were as follows (in millions):



|Portfolio Company                      |  | Unrealized appreciation
    (depreciation) |     
|-------------------------------------- |  | ------------------------------------------ | ----
|Jersey Street 2006-1A CLO LTD.         |  | $                                          | 1.5 
|Canaras CLO Equity - 2007-1A, 1X       |  |                                            | 1.4 
|Emporia CLO 2007 3A E                  |  |                                            | 1.2 
|Stone Tower CLO LTD 2007 7X            |  |                                            | 1.1 
|ACA CLO 2007-1a sub                    |  |                                            | 1.1 
|Muir Grove CLO LTD 2007 1X E           |  |                                            | 1.0 
|GSC Partners 2007-8X Sub CDO           |  |                                            | 0.9 
|Rampart 2007-1A CLO Equity             |  |                                            | 0.7 
|OCT11 2007-1A CLO                      |  |                                            | 0.7 
|ACA CLO 2006-2, Limited                |  |                                            | 0.7 
|Merrill Communications, LLC            |  |                                            | 0.6 
|Fusionstorm, Inc. 2                    |  |                                            | 0.6 
|Prospero CLO II BV                     |  |                                            | 0.6 
|Band Digital Inc.                      |  |                                            | (0.7
|American Integration Technologies, LLC |  |                                            | (1.4
|Net all other                          |  |                                            | 11.5
|                                       |  |                                            |     
|Total                                  |  | $                                          | 21.5



47







For the quarter ended September 30, 2011,
we recorded net realized gains on investments of approximately $83,000.



Based upon the fair value determinations
made in good faith by the Board of Directors, during the quarter ended September 30, 2011, we had net unrealized depreciation
of approximately $20.1 million, comprised of $284,000 in gross unrealized appreciation, $20.3 million in gross unrealized depreciation
and approximately $0.1 million relating to the reversal of prior period net unrealized appreciation as an investment was realized.
The most significant changes in net unrealized appreciation and depreciation during the quarter ended September 30, 2011
were as follows (in millions):



|                                 |  | Unrealized     |      
|-------------------------------- |  | -------------- | -----
|                                 |  | appreciation   |      
|Portfolio Company                |  | (depreciation) |      
|Vision Solutions, Inc.           |  | $              | (0.4 
|CIFC CLO - 2006-1A B2L           |  |                | (0.4 
|Ocean Trails CLO II 2007-2a-d    |  |                | (0.4 
|Hewetts Island CDO 2007 - 1RA E  |  |                | (0.4 
|Nextag, Inc.                     |  |                | (0.4 
|Primus 2007 2X Class E CLO       |  |                | (0.4 
|GXS Worldwide Inc.               |  |                | (0.4 
|Canaras CLO Equity - 2007-1A, 1X |  |                | (0.4 
|Latitude II CLO 2006 2A D        |  |                | (0.4 
|RBS Holding Company              |  |                | (0.4 
|Loomis Sayles CLO 2006-1AE       |  |                | (0.5 
|Pegasus Solutions, Inc.          |  |                | (0.5 
|Hewetts Island CDO III 2005-1A D |  |                | (0.5 
|Jersey Straits 2006-1A CLO LTD   |  |                | (0.5 
|Avenue CLO V LTD 2007-5A D1      |  |                | (0.5 
|SourceHov, LLC                   |  |                | (0.6 
|Lightpoint CLO 2007-8a           |  |                | (0.6 
|ACA CLO 2006-2, Limited          |  |                | (0.6 
|Latitude III CLO 2007-3A         |  |                | (0.6 
|Landmark V CDO LTD               |  |                | (0.6 
|Emporia CLO 2007 3A E            |  |                | (0.7 
|Harch 2005-2A BB CLO             |  |                | (0.7 
|Integra Telecomm, Inc.           |  |                | (0.9 
|Hewetts Island CDO IV 2006-4     |  |                | (1.0 
|Prospero CLO II BV               |  |                | (2.0 
|Net all other                    |  |                | (5.3 
|                                 |  |                |      
|Total                            |  | $              | (20.1



Please see “—Portfolio Grading” for more
information.



Net Increase in Net Assets Resulting from Net Investment
Income



Net investment income for the quarter
ended September 30, 2012 and 2011 was $4.6 million and $11.6 million, respectively. This decrease was due to a greater hypothetical
capital gains incentive fee, increased management fees (which is comprised of the base management fee and the net investment income
incentive fee) as well as increased interest expense. These were partially offset by an increase in the amount of performing assets
in the portfolio and distributions from the CLO equity investments in our portfolio.



Excluding the impact of the capital gains
incentive fee of approximately $4.6 million, net investment income for the quarter ended September 30, 2012 was approximately
$9.3 million compared to approximately $7.5 million for the same period in 2011.



Based on weighted-average shares
outstanding of 39,383,076 (basic) and 39,880,940 (diluted), the net increase in net assets resulting from net investment
income per common share for the quarter ended September 30, 2012 was approximately $0.12 (basic and diluted), compared to
approximately $0.36 per share (basic and diluted) for the same period in 2011.



48











Excluding the impact of the accrued capital
gains incentive fee, the net increase in net assets resulting from core net investment income per common share would have been
$0.24, (basic) and $0.23 (diluted), compared to $0.23 per share (basic and diluted), for the same period in 2011.



Please see “—Supplemental
Information Regarding Core Net Investment Income and Core Net Increase in Net Assets Resulting from Operations” below for
more information.



Net Increase in Net Assets Resulting from Operations



We had a net increase in net assets
resulting from operations of approximately $27.9 million for the quarter ended September 30, 2012, compared to a net decrease
of approximately $8.4 million for the comparable period in 2011. This increase was attributable to greater unrealized
appreciation and realized gains as well as an increase in the amount of performing assets in the portfolio and distributions
from the CLO equity investments in our portfolio. This increase was partially offset by greater hypothetical capital gains incentive
fee, increased management fees as well as higher interest expense.



Based on weighted-average
shares outstanding of 39,383,076 (basic) and 39,880,940 (diluted), the net increase in net assets
resulting from operations per common share for the quarter ended September 30, 2012 was approximately $0.71  (basic) and
approximately $0.70  (diluted), compared to a net increase in net assets resulting from operations of approximately $0.36
per share (basic and diluted) for the same period in 2011.



Excluding the impact of the accrued capital
gains incentive fee, the core net increase in net assets resulting from operations per common share would have been approximately
$0.83 for basic and $0.82 for diluted, compared to a decrease of $0.39 per share for the same period in 2011.



Set forth below is a comparison of our results of operations
for the nine months ended September 30, 2012 to the nine months ended September 30, 2011.



Investment Income



As of September 30, 2012, our debt investments
had stated interest rates of between 3.81% and 16.00% (excluding our investment in GenuTec Business Solutions, Inc. which carries
a zero interest rate through October 30, 2014) and maturity dates of between 5 and 144 months. In addition, our total portfolio
had a weighted average yield on debt investments of approximately 10.3% including GenuTec Business Solutions, Inc., compared with
11.4% as of September 30, 2011.



Investment income for the nine
months ended September 30, 2012 was approximately $50.8 million compared to approximately $32.0 million for the nine months
ended September 30, 2011. This increase was due in part to an increase in the distributions from the equity interests in our
CLO vehicle investments and the amount of performing assets in the portfolio as well as a one-time fee of approximately $3.4
million associated with our investment in American Integration Technologies, LLC. The total principal value of income
producing debt investments as of September 30, 2012 and September 30, 2011 was approximately $474.9 million and $356.0
million, respectively. For the nine months ended September 30, 2012, investment income consisted of approximately $22.5
million in cash interest from portfolio investments, approximately $4.3 million in amortization of original issue and market
discount, approximately $0.5 million of discount income derived from unscheduled principal cash remittances at par on
discounted debt securities, approximately $18.0 million in distributions from the equity interest in securitized vehicle
investments and an equity investment, as well as approximately $1.0 million in PIK interest income.



For the nine months ended September 30,
2012, fee income of approximately $4.5 million was recorded, compared to fee income of approximately $507,000 for the nine months
ended September 30, 2011. Fee income consists of non-recurring fees in connection with our investments in portfolio companies,
including commitment fees, origination fees and amendment fees. During the nine months ended September 30, 2012, we recorded approximately
$3.4 million of PIK fee income in association with our investment in AIT.



Operating Expenses



Total expenses for the nine months ended
September 30, 2012 were $23.0 million, which includes the accrued capital gains incentive fee of approximately $4.6 million.



Expenses before incentive fees, for the
nine months ended September 30, 2012, were approximately $14.1 million. This amount consisted of investment advisory fees, interest
expense and other debt financing expenses, professional fees, compensation expense, and general and administrative expenses. Expenses
before incentive fees increased approximately $6.1 million from the nine months ended September 30, 2011, attributable primarily
to higher interest expense associated with the senior notes issued under our collateralized loan obligation transaction, higher
investment advisory fees (consisting of the base management fee) as well as increased professional fees associated with our legal
and audit expenses. Expenses before incentive fees for the nine months ended September 30, 2011 were approximately $8.0 million.



49







The investment advisory fee for the nine
months of 2012 was approximately $7.4 million, representing the base fee as provided for in the Investment Advisory Agreement.
The investment advisory fee in the comparable period in 2011 was approximately $5.2 million. The increase of approximately $2.2
million is due to an increase in average gross assets. At each of September 30, 2012 and December 31, 2011, respectively, approximately
$2.8 million and $1.9 million of investment advisory fees remained payable to TICC Management, including the net investment income
incentive fee discussed below.



Interest expense and other debt financing
expenses for the nine months ended of 2012 was approximately $3.1 million, which was directly related to our debt securitization
financing transaction compared with interest expense of approximately $434,000 for the nine months ending September 30, 2011.



TICC CLO LLC



In August 2011, senior notes in the amount
of $101,250,000 were issued by a newly formed special purpose vehicle in which a whole-owned subsidiary of TICC owns all of the
equity. Under this structure, the notes bear interest, after the effective date, at three-month London Inter Bank Offered Rate
(“LIBOR”) plus 2.25% (prior to the effective date, the Class A Notes bear interest at five-month LIBOR plus 2.25%).
The accrued interest payable on these notes during the third quarter of 2012 was approximately $517,000. Additionally, for the
nine months ended September 30, 2012, the amortization of discount on the issued notes was approximately $132,000 and the amortization
of deferred debt issuance costs was approximately $227,000. At December 31, 2011, interest expense of approximately $1.1 million
remained payable.



TICC CLO 2012-1 LLC



On August 23, 2012, the Company
completed a $160 million debt securitization financing transaction. The secured and subordinated notes offered in the debt
securitization were issued by TICC CLO 2012-1 LLC (“2012 Securitization Issuer” or “TICC CLO
2012-1”), a newly formed special purpose vehicle that is a wholly-owned subsidiary of the Company. The secured notes of
the 2012 Securitization Issuer have an aggregate face amount of $120 million and were issued in four classes. The class A-1
notes have an initial face amount of $88 million, are rated AAA(sf)/Aaa(sf)by Standard & Poor’s
Ratings Services (S&P) and Moody’s Investors Service, Inc. (Moody’s), respectively, and bear interest at
three-month LIBOR plus 1.75%. The class B-1 notes have an initial face amount of $10 million, are rated
AA(sf)/Aa2(sf)by S&P and Moody’s, respectively, and bear interest at three-month LIBOR plus 3.50%.
The class C-1 notes have an initial face amount of $11.5 million, are rated A(sf)/A2(sf) by S&P and
Moody’s, respectively, and bear interest at three-month LIBOR plus 4.75%. The class D-1 notes have an initial face
amount of $10.5 million, are rated BBB(sf)/Baa2(sf)by S&P and Moody’s, respectively, and bear
interest at three-month LIBOR plus 5.75%. TICC presently owns all of the subordinated notes, which totaled $40 million, and
$3 million of the class D-1 notes issued in this CLO transaction. For further information on this securitization, see Note
4.



The aggregate accrued interest payable
on the notes of the 2012 Securitization Issuer during the third quarter of 2012 was approximately $402,000. Additionally, for
the nine months ended September 30, 2012, the aggregate amortization of discount on the issued notes of the 2012 Securitization
Issuer was approximately $41,000 and the amortization of deferred debt issuance costs was approximately $25,000.



2017 Convertible Notes



On September 26, 2012, we issued $105.0
million aggregate principal amount of the Convertible Notes. The Convertible Notes mature on November 1, 2017. The Convertible
Notes bear interest at a rate of 7.50% per year, payable semi-annually in arrears on May 1 and November 1 of each year, commencing
on May 1, 2013. The accrued interest payable on the Convertible Notes during the third quarter of 2012 was approximately $109,000.
Additionally, for the nine months ended September 30, 2012, the amortization of deferred issuance costs was approximately $6,000.



The table below summarizes the components
of interest expense for the nine months ended September 30, 2012 and 2011:



|                                              |  | Nine Months Ended September 30, 2012 |         |  | Nine Months Ended September 30, 2011 |  
|--------------------------------------------- |  | ------------------------------------ | ------- |  | ------------------------------------ | -
|(dollars in thousands)                        |  | StatedInterestExpense                |         |  | NoteDiscount Expense                 |  
|TICC CLO LLC Class A Notes                    |  | $                                    | 2,110.2 |  |                                      | $
|TICC CLO 2012-1 LLC Class A-1 Notes           |  |                                      | 235.3   |  |                                      |  
|TICC CLO 2012-1 LLC Class B-1 Notes           |  |                                      | 45.7    |  |                                      |  
|TICC CLO 2012-1 LLC Class C-1 Notes           |  |                                      | 68.1    |  |                                      |  
|TICC CLO 2012-1 LLC Class D-1 Notes           |  |                                      | 52.6    |  |                                      |  
|TICC CLO 2012-1 amortization of deferred debt |  |                                      | -       |  |                                      |  
|2017 Convertible Notes                        |  |                                      | 109.4   |  |                                      |  
|Total                                         |  | $                                    | 2,621.3 |  |                                      | $



50







Professional fees, consisting of legal,
valuation, audit and tax fees, were approximately $1.6 million for the nine months ended September 30, 2012, compared to approximately
$847,000 for the nine months ended September 30, 2011. This was the result of an increase in audit fees and legal services which
were approximately $977,000 and $545,000, respectively.



Compensation expenses were approximately
$839,000 for the nine months ended September 30, 2012, compared to approximately $713,000 for the nine months ended September
30, 2011, reflecting the allocation of compensation expenses for the services of our chief financial officer, chief compliance
officer, controller and senior accountants, and other administrative support personnel. At September 30, 2012 and December 31,
2011, respectively, approximately $450,000 and $605,000 of compensation expenses remained payable.



General and administrative expenses,
consisting primarily of directors’ fees, insurance, listing fees, transfer agent and custodian fees, office supplies, facilities
costs and other expenses, were approximately $1.2 million for the nine months ended September 30, 2012 compared to approximately
$761,000 for the same period in 2011. Office supplies, facilities costs and other expenses are allocated to us under the terms
of the Administration Agreement.



Incentive Fees



The net investment income
incentive fee for the nine months of 2012 was approximately $4.4 million compared to $1.4 million for the nine months ended
September 30, 2011. The net investment income incentive fee is calculated and payable quarterly in arrears based on
our “Pre-Incentive Fee Net Investment Income” for the immediately preceding calendar quarter subject to a hurdle
rate which is determined as of December 31 of the preceding year. For this purpose, “Pre-Incentive Fee Net
Investment Income” means interest income, dividend income and any other income accrued during the calendar quarter
minus our operating expenses for the quarter (including the base fee, expenses payable under the Administration Agreement
with BDC Partners, and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding
the incentive fee). For the nine months ending September 30, 2012, the investment adviser permanently waived $5,000 of this
incentive fee.



The capital gains incentive fee expense
for the nine months ended September 30, 2012 was approximately $4.6 million. The capital gains incentive fee expense, as reported
under generally accepted accounting principles, is calculated on the basis of net realized and unrealized gains and losses at
the end of each period. The expense related to the hypothetical liquidation of the portfolio (and assuming no other changes in
realized or unrealized gains and losses) would only become payable to our investment adviser in the event of a complete liquidation
of our portfolio as of period end and the termination of the Investment Advisory Agreement on such date. The $4.6 million capital
gains incentive fee accrual as of September 30, 2012 relates entirely to this hypothetical liquidation calculation. For the nine
months ended September 30, 2011, an expense of approximately $873,000 was recorded.



The amount of the capital gains incentive
fee which will actually be payable is determined in accordance with the terms of the Investment Advisory Agreement and is calculated
as of the end of each calendar year (or upon termination of the Investment Advisory Agreement). The terms of the Investment Advisory
Agreement state that the capital gains incentive fee calculation is based on net realized gains, if any, offset by gross unrealized
depreciation for the calendar year. No effect is given to gross unrealized appreciation in this calculation. For the year ended
December 31, 2011, such an accrual was not required under the terms of the Investment Advisory Agreement.



Realized and Unrealized Gains/Losses on Investments



For the nine months ended September 30,
2012, we recorded net realized gains on investments of approximately $3.6 million, which represents the gains on the sale and
repayments of several of our investments, principally in American Integration Technologies, LLC ($1.4 million), GRD Holding III
($370,000), Liberty CDO LTD 2005-1AC ($216,000), Power Tools, Inc. ($204,000), Attachmate Corporation ($135,000), Syniverse Holdings,
Inc. ($137,000), Sonic Wall, Inc. ($140,000) and Shield Finance Co. ($115,000).



Based upon the fair value determinations
made in good faith by the Board of Directors, during the nine months ended September 30, 2012, we had net unrealized appreciation
of approximately $22.8 million, comprised of $44.1 million in gross unrealized appreciation, $19.2 million in gross unrealized
depreciation and approximately $2.1 million relating to the reversal of prior period net unrealized appreciation as an investment
was realized. The most significant changes in net unrealized appreciation and depreciation during the nine months ended September
30, 2012 were as follows (in millions):



51







|Portfolio Company                      |  | Unrealized appreciation
    (depreciation) |     
|-------------------------------------- |  | ------------------------------------------ | ----
|Jersey Street 2006-1A CLO LTD.         |  | $                                          | 1.7 
|Canaras CLO Equity - 2007-1A, 1X       |  |                                            | 1.6 
|Harbourview - 2006A CLO Equity         |  |                                            | 1.5 
|GSC Partners 2007-8X Sub CDO           |  |                                            | 1.4 
|Emporia CLO 2007 3A E                  |  |                                            | 1.4 
|Prospero CLO II BV                     |  |                                            | 1.3 
|Integra Telecom Holdings, Inc.         |  |                                            | 1.2 
|Hewetts Island CDO IV 2006-4 E         |  |                                            | 1.2 
|Muir Grove CLO LTD 2007 1X E           |  |                                            | 1.0 
|Algorithmic Implementations, Inc.      |  |                                            | 1.0 
|SourceHOV, LLC                         |  |                                            | 1.0 
|Power Tools, Inc.                      |  |                                            | 0.9 
|GALE 2007-4A CLO                       |  |                                            | 0.8 
|Stone Tower CLO LTD 2007 7X            |  |                                            | 0.8 
|Rampart 2007-1A CLO Equity             |  |                                            | 0.8 
|Lightpoint CLO 2007-8A                 |  |                                            | 0.8 
|ACA CLO 2007-1a sub                    |  |                                            | 0.8 
|Harch 2005-2A BB CLO                   |  |                                            | 0.8 
|ACA CLO 2006-2, Limited                |  |                                            | 0.8 
|RBS Holding Company                    |  |                                            | (0.9
|Stratus Technologies, Inc.             |  |                                            | (1.0
|American Integration Technologies, LLC |  |                                            | (1.5
|Merrill Communications, LLC            |  |                                            | (1.5
|GenuTec Business Solutions, Inc.       |  |                                            | (2.0
|Pegasus Solutions, Inc.                |  |                                            | (2.5
|Net all other                          |  |                                            | 11.4
|                                       |  |                                            |     
|Total                                  |  | $                                          | 22.8



For the nine months ended September 30,
2011, we recorded net realized gains on investments of approximately $2.7 million, which largely represents relatively small gains
on several different investments including the realized gains on the repayment of our investment in Prodigy Health Group ($0.7
million) and the sale of our investment in Del Mar CLO I Ltd. 2006-1 ($0.4 million).



Based upon the fair value determinations
made in good faith by the Board of Directors, during the nine months ended September 30, 2011, we had net unrealized losses
of approximately $17.1 million, comprised of $18.2 million in gross unrealized appreciation, $32.9 million in gross unrealized
depreciation and approximately $2.4 million relating to the reversal of prior period net unrealized appreciation as certain investments
were realized. The most significant changes in net unrealized appreciation and depreciation during the nine months ended September 30,
2011 were as follows (in millions):





|Portfolio Company                        |  | YTD Unrealized appreciation
    (depreciation) |     
|---------------------------------------- |  | ---------------------------------------------- | ----
|American Integration Technologies, LLC   |  |                                                | 1.7 
|ACA CLO 2006-2, Limited                  |  |                                                | 1.1 
|Pegasus Solutions, Inc. common stock     |  |                                                | 1.0 
|Fusionstorm, Inc.                        |  |                                                | 0.5 
|Sargas CLO 2006 -1A                      |  |                                                | 0.5 
|Pegasus Solutions, Inc. preferred equity |  |                                                | 0.4 
|Vision Solutions, Inc.                   |  |                                                | (0.4
|CIFC CLO - 2006-1A B2L                   |  |                                                | (0.4
|Hewetts Island CDO 2007 - 1RA E          |  |                                                | (0.4
|Nextag, Inc.                             |  |                                                | (0.4





52









|Portfolio Company                |  | YTD Unrealized appreciation
    (depreciation) |      
|-------------------------------- |  | ---------------------------------------------- | -----
|Harbourview - 2006A CLO Equity   |  |                                                | (0.4 
|Primus 2007 2X Class E CLO       |  |                                                | (0.4 
|GXS Worldwide Inc.               |  |                                                | (0.4 
|Canaras CLO Equity - 2007-1A, 1X |  |                                                | (0.4 
|Del Mar CLO I Ltd. 2006-1        |  |                                                | (0.4 
|RBS Holding Company              |  |                                                | (0.4 
|Loomis Sayles CLO 2006-1AE       |  |                                                | (0.5 
|Pegasus Solutions, Inc.          |  |                                                | (0.5 
|Jersey Straits 2006-1A CLO LTD   |  |                                                | (0.5 
|SourceHov, LLC                   |  |                                                | (0.6 
|Emporia CLO 2007 3A E            |  |                                                | (0.7 
|Ocean Trails CLO II 2007-2a-d    |  |                                                | (0.7 
|Prodigy Health Group             |  |                                                | (0.8 
|Lightpoint CLO 2007-8a           |  |                                                | (0.9 
|Hewetts Island CDO III 2005-1A D |  |                                                | (1.0 
|Prospero CLO II BV               |  |                                                | (1.3 
|Hewetts Island CDO IV 2006-4     |  |                                                | (1.6 
|Integra Telecomm, Inc.           |  |                                                | (1.9 
|Net all other                    |  |                                                | (7.3 
|                                 |  |                                                |      
|Total                            |  | $                                              | (17.1





Please see “—Portfolio Grading” for more
information.



Net Increase in Net Assets Resulting from Net Investment
Income



Net investment income for the nine
months ended September 30, 2012 and 2011 was approximately $27.8 million and $21.7 million, respectively. This increase was
due in part to an increase in the amount of performing assets in the portfolio and distributions from the CLO equity
investments in our portfolio, as well as the non-recurrence of a one-time fee of approximately $3.4 million associated with
our investment in American Integration Technologies, LLC.



Excluding the impact of the capital gains
incentive fee of approximately $4.6 million, net investment income for the nine months ended September 30, 2012 was approximately
$32.4 million compared to approximately $22.6 million for the same period in 2011.



Based on  weighted-average
shares outstanding of 36,859,005 (basic) and 37,026,172 (diluted), the net increase in net assets
resulting from net investment income per common share for the nine months ended September 30, 2012 was approximately $0.75
 (basic and diluted), compared to approximately $0.67 per share (basic and diluted) for the same period in 2011. Excluding
the impact of the accrued capital gains incentive fee, the net increase in net assets resulting from core net investment
income per common share would have been approximately $0.88 (basic) and approximately $0.87 (diluted), compared to $0.70 per
share (basic and diluted) for the same period in 2011.



Please see “—Supplemental
Information Regarding Core Net Investment Income and Core Net Increase in Net Assets Resulting from Operations” below for
more information.



Net Increase in Net Assets Resulting from Operations



We had a net increase in net assets resulting
from operations of approximately $54.2 million for the nine months ended September 30, 2012, compared to a net increase of approximately
$7.3 million for the comparable period in 2011. This increase was attributable to greater net investment income and was partially
offset set by the expense accrual for the capital gains incentive fee of approximately $4.6 million as of September 30, 2012.



Based on weighted-average shares
outstanding of 36,859,005 (basic) and 37,026,172 (diluted), the net increase in net assets resulting from
operations per common share for the nine months ended September 30, 2012 was approximately $1.47 (basic) and approximately
$1.47 (diluted), compared to a net increase in net assets resulting from operations of approximately $0.23 per share (basic
and diluted) for the same period in 2011.



Excluding the impact of the accrued capital
gains incentive fee, the core net increase in net assets resulting from operations per common share would have been approximately
$1.59 (basic) and approximately $1.59 (diluted), compared to an increase of $0.25 per share (basic and diluted) for the same
period in 2011.



53







Please see “—Portfolio Grading”
above for more information.



Please see “—Supplemental
Information Regarding Core Net Investment Income and Core Net Increase in Net Assets Resulting from Operations” below for
more information.



On a supplemental basis, we provide information
relating to core net investment income, its ratio to net assets, and core net increase in net assets resulting from operations,
which are non-GAAP measures. These measures are provided in addition to, but not as a substitute for, net investment income and
net increase in net assets resulting from operations. The Company’s non-GAAP measures may differ from similar measures by
other companies, even if similar terms are used to identify such measures. Core net investment income represents net investment
income excluding our capital gains incentive fee. Core net increase in net assets resulting from operations represents net increase
in net assets resulting from operations excluding the capital gains incentive fee. As the capital gains incentive fee is based
on a hypothetical event that did not occur, we believe that core net investment income and core net increase in net assets resulting
from operations are useful indicators of performance during this period. Further, as the capital gains incentive fee is not a
currently tax deductible expense and as the RIC requirements are to distribute taxable earnings, the core net investment income
provides an indication of taxable income for the year to date.



The following tables provide a reconciliation
of net investment income to core net investment income (for the three and nine months ended September 30, 2012 and 2011, respectively):



|                            |  | Three Months Ended September 30, 2012 |           |  | Nine Months Ended September 30, 2012 |  
|--------------------------- |  | ------------------------------------- | --------- |  | ------------------------------------ | -
|                            |  | Amount                                |           |  | Per Share Amounts                    |  
|Net investment income       |  | $                                     | 4,607,574 |  |                                      | $
|Capital gains incentive fee |  |                                       | 4,649,814 |  |                                      |  
|Core net investment income  |  | $                                     | 9,257,388 |  |                                      | $



|                            |  | Three Months Ended September 30, 2011 |            |   | Nine Months Ended September 30, 2011 |  
|--------------------------- |  | ------------------------------------- | ---------- | - | ------------------------------------ | -
|                            |  | Amount                                |            |   | Per Share Amounts                    |  
|Net investment income       |  | $                                     | 11,615,785 |   |                                      | $
|Capital gains incentive fee |  |                                       | (4,153,198 | ) |                                      |  
|                            |  |                                       |            |   |                                      |  
|Core net investment income  |  | $                                     | 7,462,587  |   |                                      | $



The following tables provide a reconciliation
of net increase in net assets resulting from operations to core net increase in net assets resulting from operations (for the
three and nine months ended September 30, 2012 and 2011, respectively):



|                                                          |  | Three Months Ended September 30, 2012 |            |  | Nine Months Ended September 30, 2012 |  
|--------------------------------------------------------- |  | ------------------------------------- | ---------- |  | ------------------------------------ | -
|                                                          |  | Amount                                |            |  | Per Share Amounts                    |  
|Net increase in net assets resulting from operations      |  | $                                     | 27,856,644 |  |                                      | $
|Capital gains incentive fee                               |  |                                       | 4,649,814  |  |                                      | $
|Core net increase in net assets resulting from operations |  | $                                     | 32,506,458 |  |                                      | $



|                                                                         |  | Three Months Ended September 30, 2011 |             |   | Nine Months Ended September 30, 2011 |  
|------------------------------------------------------------------------ |  | ------------------------------------- | ----------- | - | ------------------------------------ | -
|                                                                         |  | Amount                                |             |   | Per Share Amounts                    |  
|Net (decrease) increase
    in net assets resulting from operations      |  | $                                     | (8,415,279  | ) |                                      | $
|Capital gains incentive fee                                              |  |                                       | (4,153,198  | ) |                                      |  
|                                                                         |  |                                       |             |   |                                      |  
|Core net (decrease) increase in net assets
    resulting from operations |  | $                                     | (12,568,477 | ) |                                      | $



54







In addition, the following ratio is presented
to supplement the financial highlights included in Note 10 to the financial statements:



|                                                                                                                                                    |  | 2012                                      |      |   | 2011                                     | 
|--------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------- | ---- | - | ---------------------------------------- | 
|                                                                                                                                                    |  | Three Months Ended
    September 30, 2012 |      |   | Nine Months Ended
    September 30, 2012 | 
|                                                                                                                                                    |  |                                           |      |   |                                          | 
|Ratio of core net investment income to average net assets, for the three
    and nine month periods ended September 30, 2012 and 2011, respectively |  |                                           | 9.88 | % |                                          | 



The following table provides a reconciliation
of the ratio of net investment income to average net assets to the ratio of core net investment income to average net assets,
for the three and nine month periods ended September 30, 2012 and 2011, respectively.



|                                                          |  | 2012                                      |      |   | 2011                                     | 
|--------------------------------------------------------- |  | ----------------------------------------- | ---- | - | ---------------------------------------- | 
|                                                          |  | Three Months Ended September 30,
    2012 |      |   | Nine Months Ended September 30,
    2012 | 
|Ratio of net investment income to average net assets      |  |                                           | 4.92 | % |                                          | 
|Ratio of capital gain incentive fee to average net assets |  |                                           | 4.96 | % |                                          | 
|Ratio of core net investment income to average net assets |  |                                           | 9.88 | % |                                          | 



55







LIQUIDITY AND CAPITAL RESOURCES



During the nine months ended September
30, 2012, we issued approximately 8.3 million shares in two equity offerings, raising approximately $78.4 million in net proceeds.



During the nine months ended September
30, 2012, cash and cash equivalents increased from approximately $4.5 million at the beginning of the period to approximately
$122.9 million at the end of the period. Net cash used by operating activities for the period, consisting primarily of the items
described in “—Results of Operations,” was approximately $67.7 million, largely reflecting purchases of new
investments of approximately $226.4 million partially offset by proceeds from principal repayments and sales of investments of
approximately $135.9 million. Net cash used by investing activities reflects the change in restricted cash in the debt securitization
entity. During the period, net cash provided by financing activities was approximately $259.6 million reflecting primarily the
net proceeds of approximately $109.9 million borrowed under our debt securitization financing transaction completed in August
2012, $102.1 million borrowed under our issuance of the Convertible Notes and $78.4 million resulting from two equity offerings,
partially offset by the distribution of dividends.



Contractual Obligations



We have certain obligations with respect
to the investment advisory and administration services we receive. See “–Overview”. We incurred approximately
$7.4 million for investment advisory services, excluding pre-incentive net investment income incentive fees and approximately
$1.2 million for administrative services for the nine months ended September 30, 2012.



TICC CLO is obligated to repay the notes
issued in connection with the debt securitization financing that we completed in August 2011. The notes of the 2011 Securitization
Issuer mature in 2021, in the total amount of $101,250,000. There are no amortization payments due on the notes of the 2011 Securitization
Issuer prior to maturity. See “Borrowings” below.



TICC CLO 2012-1 is obligated to repay
the notes issued in connection with the debt securitization financing that we completed in August 2012. The notes of the 2012
Securitization Issuer mature in 2023, in the total amount of $120,000,000. There are no amortization payments due on the notes
of the 2012 Securitization Issuer prior to maturity. See “Borrowings” below.



TICC is obligated to repay the Convertible
Notes, which mature in 2017, in the total amount of $105,000,000, unless previously converted in accordance with their terms.



Off-Balance Sheet Arrangements



We currently have no off-balance sheet
arrangements, including any risk management of commodity pricing or other hedging practices.



Borrowings



On August 10, 2011, the Company completed
a $225.0 million debt securitization financing transaction. The Class A Notes offered in the securitization were issued by TICC
CLO, and are secured by the assets held by the trustee on behalf of the 2011 Securitization Issuer. The notes are an obligation
of TICC CLO. The securitization was executed through a private placement of $101.25 million of Aaa/AAA Class A Notes which bear
interest, after the effective date, at three-month LIBOR plus 2.25% (prior to the effective date, the Class A Notes bear interest
at five-month LIBOR plus 2.25%). The notes were sold at a discount to par, and the amount of the discount is being amortized over
the term of the notes. The Class A Notes are included in the September 30, 2012 consolidated statements of assets and liabilities.
For the nine months period ended September 30, 2012, the Class A note holders were paid interest on the Class A notes of approximately
$2.7 million. Holdings retained all of the 2011 Subordinated Notes totaling $123.75 million and all of the membership interests
in the 2011 Securitization Issuer. The 2011 Subordinated Notes do not bear interest, but are entitled to the residual economic
interest in the 2011 Securitization Issuer.



On
August 23, 2012, the Company completed a $160 million debt securitization financing transaction. The secured and subordinated
notes offered in the debt securitization were issued by TICC CLO 2012-1 LLC (“2012 Securitization Issuer” or
“TICC CLO 2012-1”), a newly formed special purpose vehicle that is a wholly-owned subsidiary of the Company. The
secured notes of the 2012 Securitization Issuer have an aggregate face amount of $120 million and were issued in four
classes. The class A-1 notes have an initial face amount of $88 million, are rated AAA(sf)/Aaa(sf)by Standard
& Poor’s Ratings Services (S&P) and Moody’s Investors Service, Inc. (Moody’s), respectively, and
bear interest at three-month LIBOR plus 1.75%. The class B-1 notes have an initial face amount of $10 million, are rated
AA(sf)/Aa2(sf)by S&P and Moody’s, respectively, and bear interest at three-month LIBOR plus 3.50%.
The class C-1 notes have an initial face amount of $11.5 million, are rated A(sf)/A2(sf) by S&P and
Moody’s, respectively, and bear interest at three-month LIBOR plus 4.75%. The class D-1 notes have an initial face
amount of $10.5 million, are rated BBB(sf)/Baa2(sf)by S&P and Moody’s, respectively, and bear
interest at three-month LIBOR plus 5.75%. TICC presently owns all of the subordinated notes, which totaled $40 million, and
$3 million of the class D-1 notes issued in this CLO transaction. The TICC CLO 2012-1 debt securitization financing
transaction has an “accordion” feature which allows, under certain circumstances and subject to the satisfaction
of certain conditions, for an increase in the amount of secured and subordinated notes issued by the special purpose vehicle.
If the same classes of secured notes are to be issued, the increase must be pro rata to the existing secured and subordinated
notes, and is limited to a total increase of $160 million in total size. Alternatively, the special purpose vehicle may issue
a class of secured notes that is pari passu to the class D-1 notes or junior to all secured classes, without a cap on the
amount of the notes. It is not necessary that the Company own all or any of the notes permitted by this feature, which may
affect the accounting treatment of the debt securitization financing transaction.





56







On September 26, 2012, the Company issued
$105,000,000 aggregate principal amount of the Convertible Notes. The Convertible Notes are convertible into shares of our common
stock based on an initial conversion rate of 87.2448 shares of our common stock per $1,000 principal amount of Convertible Notes,
which is equivalent to an initial conversion price of approximately $11.46 per share of common stock. The conversion price for
the Convertible Notes will be reduced for quarterly cash dividends paid to common shares to the extent that the quarterly dividend
exceeds $0.29 cents per share, subject to adjustment. The Convertible
Notes mature on November 1, 2017, unless previously converted in accordance with their terms. The Convertible Notes are our general
unsecured obligations, rank equally in right of payment with our future senior unsecured debt, and rank senior in right of payment
to any potential subordinated debt, should any be issued in the future.



Distributions



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.



57







The following table reflects the cash
distributions, including dividends and returns of capital, if any, per share that we have declared on our common stock to date:



|Date Declared     |  | Record Date        |  | Payment Date       |  | Amount |     
|----------------- |  | ------------------ |  | ------------------ |  | ------ | ----
|                  |  |                    |  |                    |  |        |     
|Fiscal 2012       |  |                    |  |                    |  |        |     
|November 1 , 2012 |  | December 17, 2012  |  | December 31, 2012  |  | $      | 0.29
|July 26, 2012     |  | September 14, 2012 |  | September 28, 2012 |  |        | 0.29
|May 2, 2012       |  | June 15, 2012      |  | June 29, 2012      |  |        | 0.27
|March 1, 2012     |  | March 21, 2012     |  | March 30, 2012     |  |        | 0.27
|                  |  |                    |  |                    |  |        |     
|Total (2012)      |  |                    |  |                    |  |        | 1.12
|                  |  |                    |  |                    |  |        |     
|Fiscal 2011       |  |                    |  |                    |  |        |     
|November 3, 2011  |  | December 16, 2011  |  | December 30, 2011  |  |        | 0.25
|July 28, 2011     |  | September 16, 2011 |  | September 30, 2011 |  |        | 0.25
|May 3, 2011       |  | June 16, 2011      |  | June 30, 2011      |  |        | 0.25
|March 3, 2011     |  | March 21, 2011     |  | March 31, 2011     |  |        | 0.24
|                  |  |                    |  |                    |  |        |     
|Total (2011)      |  |                    |  |                    |  |        | 0.99
|                  |  |                    |  |                    |  |        |     
|Fiscal 2010       |  |                    |  |                    |  |        |     
|November 2, 2010  |  | December 10, 2010  |  | December 31, 2010  |  |        | 0.24
|July 29, 2010     |  | September 10, 2010 |  | September 30, 2010 |  |        | 0.22
|April 29, 2010    |  | June 10, 2001      |  | June 30, 2010      |  |        | 0.20
|March 4, 2010     |  | March 24, 2010     |  | March 31, 2010     |  |        | 0.15
|                  |  |                    |  |                    |  |        |     
|Total (2010)      |  |                    |  |                    |  |        | 0.81
|                  |  |                    |  |                    |  |        |     
|Fiscal 2009       |  |                    |  |                    |  |        |     
|October 29, 2009  |  | December 10, 2009  |  | December 31, 2009  |  |        | 0.15
|July 30, 2009     |  | September 10, 2009 |  | September 30, 2009 |  |        | 0.15
|May 5, 2009       |  | June 10, 2009      |  | June 30, 2009      |  |        | 0.15
|March 5, 2009     |  | March 17, 2009     |  | March 31, 2009     |  |        | 0.15
|                  |  |                    |  |                    |  |        |     
|Total (2009)      |  |                    |  |                    |  |        | 0.60



58







|Date Declared        |  | Record Date        |  | Payment Date       |  | Amount |     
|-------------------- |  | ------------------ |  | ------------------ |  | ------ | ----
|Fiscal 2008          |  |                    |  |                    |  |        |     
|October 30, 2008     |  | December 10, 2008  |  | December 31, 2008  |  |        | 0.20
|July 31, 2008        |  | September 10, 2008 |  | September 30, 2008 |  |        | 0.20
|May 1, 2008          |  | June 16, 2008      |  | June 30, 2008      |  |        | 0.30
|March 11, 2008       |  | March 21, 2008     |  | March 31, 2008     |  |        | 0.36
|                     |  |                    |  |                    |  |        |     
|Total (2008)         |  |                    |  |                    |  |        | 1.06
|                     |  |                    |  |                    |  |        |     
|Fiscal 2007          |  |                    |  |                    |  |        |     
|October 25, 2007     |  | December 10, 2007  |  | December 31, 2007  |  |        | 0.36
|July 26, 2007        |  | September 7, 2007  |  | September 28, 2007 |  |        | 0.36
|April 30, 2007       |  | June 8, 2007       |  | June 29, 2007      |  |        | 0.36
|February 27, 2007    |  | March 9, 2007      |  | March 30, 2007     |  |        | 0.36
|                     |  |                    |  |                    |  |        |     
|Total (2007)         |  |                    |  |                    |  |        | 1.44
|                     |  |                    |  |                    |  |        |     
|Fiscal 2006          |  |                    |  |                    |  |        |     
|December 20, 2006    |  | December 29, 2006  |  | January 17, 2007   |  |        | 0.12
|October 26, 2006     |  | December 8, 2006   |  | December 29, 2006  |  |        | 0.34
|July 26, 2006        |  | September 8, 2006  |  | September 29, 2006 |  |        | 0.32
|April 26, 2006       |  | June 9, 2006       |  | June 30, 2006      |  |        | 0.30
|February 9, 2006     |  | March 10, 2006     |  | March 31, 2006     |  |        | 0.30
|                     |  |                    |  |                    |  |        |     
|Total (2006)         |  |                    |  |                    |  |        | 1.38
|                     |  |                    |  |                    |  |        |     
|Fiscal 2005          |  |                    |  |                    |  |        |     
|December 7, 2005     |  | December 30, 2005  |  | January 18, 2006   |  |        | 0.12
|October 27, 2005     |  | December 9, 2005   |  | December 30, 2005  |  |        | 0.30
|July 27, 2005        |  | September 10, 2005 |  | September 30, 2005 |  |        | 0.25
|April 27, 2005       |  | June 10, 2005      |  | June 30, 2005      |  |        | 0.20
|February 9, 2005     |  | March 10, 2005     |  | March 31, 2005     |  |        | 0.14
|                     |  |                    |  |                    |  |        |     
|Total (2005)         |  |                    |  |                    |  |        | 1.01
|                     |  |                    |  |                    |  |        |     
|Fiscal 2004          |  |                    |  |                    |  |        |     
|October 27, 2004     |  | December 10, 2004  |  | December 31, 2004  |  |        | 0.11
|July 28, 2004        |  | September 10, 2004 |  | September 30, 2004 |  |        | 0.11
|May 5, 2004          |  | June 10, 2004      |  | June 30, 2004      |  |        | 0.11
|February 2, 2004     |  | March 15, 2004     |  | April 5, 2004      |  |        | 0.10
|                     |  |                    |  |                    |  |        |     
|Total (2004)         |  |                    |  |                    |  |        | 0.43
|                     |  |                    |  |                    |  |        |     
|Total Distributions: |  |                    |  |                    |  | $      | 8.84












| | (1) | Distributions
                                                                                  for the fiscal years ended December 31, 2011,
                                                                                  2010 and 2009 were funded from undistributed
                                                                                  net investment income.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Includes a return
                                                                                  of capital of approximately $0.08 per share
                                                                                  for tax purposes.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Includes a return
                                                                                  of capital of approximately $0.02 per share
                                                                                  for tax purposes.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Includes a return
                                                                                  of capital of approximately $0.10 per share
                                                                                  for tax purposes.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | We did not declare
                                                                                  a dividend for the period ended December 31,
                                                                                  2003.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



59









Related Parties



We have a number of business relationships
with affiliated or related parties, including the following:



| | • | We have entered into the Investment Advisory Agreement with
                                                                 TICC Management. TICC Management is controlled by BDC Partners,
                                                                 its managing member. Charles M. Royce, as the non-managing member,
                                                                 holds a minority, non-controlling interest in TICC Management.
                                                                 BDC Partners, as the managing member of TICC Management, manages
                                                                 the business and internal affairs of TICC Management. In addition,
                                                                 BDC Partners provides us with office facilities and administrative
                                                                 services pursuant to the Administration Agreement.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Messrs. Cohen and Rosenthal currently serve as Chief Executive
                                                                 Officer and President, respectively, for T2 Advisers, LLC, the
                                                                 investment adviser to Greenwich Loan Income Fund Limited (f/k/a
                                                                 T2 Income Fund Limited) (“GLIF”), a Guernsey fund
                                                                 established and operated for the purpose of investing in bilateral
                                                                 transactions and syndicated loans across a variety of industries
                                                                 globally. BDC Partners is the managing member of T2 Advisers,
                                                                 LLC. In addition, Mr. Conroy serves as the Chief Financial Officer
                                                                 of GLIF and the Chief Financial Officer, Chief Compliance Officer
                                                                 and Treasurer of T2 Advisers, LLC.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Messrs. Cohen and Rosenthal currently serve as Chief Executive
                                                                 Officer and President, respectively, of Oxford Lane Capital Corp.,
                                                                 a non-diversified closed-end management investment company that
                                                                 invests primarily in leveraged corporate loans, and its investment
                                                                 adviser, Oxford Lane Management, LLC (“Oxford Lane Management”).
                                                                 BDC Partners provides Oxford Lane Capital Corp. with office facilities
                                                                 and administrative services pursuant to an administration agreement
                                                                 and also serves as the managing member of Oxford Lane Management.
                                                                 In addition, Patrick F. Conroy serves as the Chief Financial
                                                                 Officer, Chief Compliance Officer and Corporate Secretary of
                                                                 Oxford Lane Capital Corp. and Chief Financial Officer, Chief
                                                                 Compliance Officer and Treasurer of Oxford Lane Management.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | BDC Partners is the managing member of Oxford Gate Capital,
                                                                 LLC, a private fund in which Messrs. Cohen, Rosenthal and Conroy,
                                                                 along with certain investment and administrative personnel of
                                                                 TICC Management, are invested.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



BDC Partners has adopted a written policy
with respect to the allocation of investment opportunities among TICC, Oxford Lane Capital Corp., GLIF and Oxford Gate Capital,
LLC in view of the potential conflicts of interest raised by the relationships described above.



In the ordinary course of business, we
may enter into transactions with portfolio companies that may be considered related party transactions. In order to ensure that
we do not engage in any prohibited transactions with any persons affiliated with us, we have implemented certain policies and
procedures whereby our executive officers screen each of our transactions for any possible affiliations between the proposed portfolio
investment, us, companies controlled by us and our employees and directors. We will not enter into any agreements unless and until
we are satisfied that doing so will not raise concerns under the 1940 Act or, if such concerns exist, we have taken appropriate
actions to seek board review and approval or exemptive relief for such transaction. Our Board of Directors reviews these procedures
on an annual basis.



We have also adopted a Code of Ethics
which applies to, among others, our senior officers, including our Chief Executive Officer and Chief Financial Officer, as well
as all of our officers, directors and employees. Our Code of Ethics requires that all employees and directors avoid any conflict,
or the appearance of a conflict, between an individual’s personal interests and our interests. Pursuant to our Code of Ethics,
each employee and director must disclose any conflicts of interest, or actions or relationships that might give rise to a conflict,
to our Chief Compliance Officer. Our Audit Committee is charged with approving any waivers under our Code of Ethics. As required
by the NASDAQ Global Select Market corporate governance listing standards, the Audit Committee of our Board of Directors is also
required to review and approve any transactions with related parties (as such term is defined in Item 404 of Regulation S-K).



RECENT DEVELOPMENTS



On November 1, 2012, the Board of Directors
declared a distribution of $0.29 per share for the fourth quarter, payable on December 31, 2012 to shareholders of record as of
December 17, 2012.





60







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, 2012, three debt investments in our portfolio were at a fixed rate, and
the remaining eighty debt investments were at variable rates, representing approximately $24.2 million and $456.0 million in principal
debt, respectively. At September 30, 2012, $450.7 million of our variable rate investments were income producing. The variable
rates are based upon the five-year Treasury note, the Prime rate or LIBOR, and, in the case of our bilateral investments, are
generally reset annually, whereas our non-bilateral investments generally reset quarterly. We expect that future debt investments
will generally be made at variable rates. Many of the variable rate investments contain floors.



To illustrate the potential impact
of a change in the underlying interest rate on our net increase in net assets resulting from operations, we have assumed a 1%
increase or decrease in the underlying five-year Treasury note, the Prime rate or LIBOR, and no other change in our portfolio
as of September 30, 2012. We have also assumed outstanding borrowings, which bear interest at variable rates,
of $218,250,000. Under this analysis, net investment income would be essentially unchanged on an annual basis, due to the
amount of investments in our portfolio which have implied floors that would be unaffected by a 1% change in the underlying
interest rate. However, if the increase in rates was more significant, such as 5%, the net effect on the net increase in net
assets resulting from operations would be an increase of approximately $7.4 million. To the extent that the rate underlying
certain investments, as well as our borrowings, is at an historic low, it may not be possible for the underlying rate to
decrease by 1% or 5%, and the impact of that reality is reflected in this analysis. It should also be noted that as the
available cash is invested, the impact of this analysis will change. Although management believes that this analysis is
indicative of our existing interest rate sensitivity, it does not adjust for changes in the credit quality, size and
composition of our portfolio, and other business developments, including a change in the level of our borrowings, that could
affect the net increase in net assets resulting from operations. Accordingly, no assurances can be given that actual results
would not differ materially from the results under this hypothetical analysis.



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 the investments in our portfolio with fixed interest rates.



ITEM 4. CONTROLS AND PROCEDURES.



As of September 30, 2012, we, including
our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based on that evaluation, 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 SEC filings.



There have been no changes in our internal
control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that occurred during
the quarter ended September 30, 2012 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, we do not expect that
these proceedings will have a material effect upon our business, financial condition or results of operations.



Item 1A. Risk Factors



An investment in our securities involves
certain risks relating to our structure and investment objectives. The risks set forth below are not the only risks we face, and
we face other risks which we have not yet identified, which we do not currently deem material or which are not yet predictable.
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



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 subject us to substantially
more regulatory restrictions under the 1940 Act and correspondingly decrease our operating flexibility.



61







We are dependent upon TICC Management’s
key management personnel for our future success, particularly Jonathan H. Cohen and Saul B. Rosenthal.



We depend on the diligence, skill and
network of business contacts of the senior management of TICC Management. The senior management, together with other investment
professionals, will 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 TICC Management, and Saul B. Rosenthal, the President and Chief Operating Officer of TICC Management.
Neither Mr. Cohen nor Mr. Rosenthal will devote all of their business time to our operations, and both will have other demands
on their time as a result of their other activities. Neither Mr. Cohen nor Mr. Rosenthal is subject to an employment contract.
The departure of either of these individuals 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 existing portfolio and future growth effectively.



Our ability to achieve our investment
objective will depend on our ability to manage our existing investment portfolio and 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, and
our ability to raise and retain debt and equity capital. 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.



We and TICC Management, through its managing
member, BDC Partners, will need to continue 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. We compete with a large number of hedge funds and CLO investment vehicles, other
equity and non-equity based investment funds, including other business development companies, 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 than us 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 and maintenance of strong referral relationships with private equity and venture capital funds and investment banking
firms.



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
may acquire warrants or other equity securities as well. 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 our investments are generally not in publicly traded
securities, there is uncertainty regarding the fair value of our investments, which could adversely affect the determination of
our net asset value.



Our portfolio investments are generally
not 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 the Board’s
Valuation Committee. In connection with that determination, members of TICC Management’s portfolio management team prepare
portfolio company valuations using the most recent portfolio company financial statements and forecasts. We utilize the services
of a third party valuation firm which prepares valuations for each of our bilateral portfolio securities that, when combined with
all other investments in the same portfolio company (i) have a value as of the previous quarter of greater than or equal to 2.5%
of our total assets as of the previous quarter, and (ii) have a value as of the current quarter of greater than or equal to 2.5%
of our total assets as of the previous quarter, after taking into account any repayment of principal during the current quarter.
In addition, the frequency of the third party valuations of our bilateral portfolio securities is based upon the grade assigned
to each such security under our credit grading system as follows: Grade 1, at least annually; Grade 2, at least semi-annually;
Grades 3, 4, and 5, at least quarterly.



62







TICC Management also retains the authority
to seek, on our behalf, additional third party valuations with respect to both our bilateral portfolio securities and our syndicated
loan investments. On April 9, 2009, the FASB issued additional guidelines under ASC 820-10-35, “ Determining Fair Value
When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That
Are Not Orderly ,” which provides guidance on factors that should be considered in determining when a previously active
market becomes inactive and whether a transaction is orderly. In accordance with ASC 820-10-35, our valuation procedures specifically
provide for the review of indicative quotes supplied by the large agent banks that make a market for each security. However, the
marketplace from which we obtain indicative bid quotes for purposes of determining the fair value of our syndicated loan investments
have shown these attributes of illiquidity as described by ASC-820-10-35. Due to limited market liquidity in the syndicated loan
market, TICC believes that the non-binding indicative bids received from agent banks for certain syndicated investments that we
own may not be determinative of their fair value and therefore alternative valuation procedures may need to be undertaken. As
a result, TICC has engaged third-party valuation firms to provide assistance in valuing certain syndicated investments that we
own. In addition, TICC Management prepares an analysis of each syndicated loan, including a financial summary, covenant compliance
review, recent trading activity in the security, if known, and other business developments related to the portfolio company. All
available information, including non-binding indicative bids which may not be determinative of fair value, is presented to the
Valuation Committee to consider in its determination of fair value. In some instances, there may be limited trading activity in
a security even though the market for the security is considered not active. In such cases the Valuation Committee will consider
the number of trades, the size and timing of each trade, and other circumstances around such trades, to the extent such information
is available, in its determination of fair value. The Valuation Committee will evaluate the impact of such additional information,
and factor it into its consideration of the fair value that is indicated by the analysis provided by third-party valuation firms.
We have considered the factors described in ASC 820-10 and have determined that we are properly valuing the securities in our
portfolio.



Our Board of Directors retains ultimate
authority as to the third-party review cycle as well as the appropriate valuation of each investment. The types of factors that
the Valuation Committee takes into account in providing its fair value recommendation to our 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 generally
not 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, because we generally invest
in debt securities with a term of up to seven years and generally intend to hold such investments 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 operating results
for any period, and as a result, our financial results for any period should not be relied upon as being indicative of performance
in future periods.



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.



63







Capital markets have recently been in a period of disruption
and instability. These market conditions have materially and adversely affected debt and equity capital markets in the U.S. and
abroad, which had, and may in the future have, a negative impact on our business and operations.



The global capital markets have recently
been in a period of disruption as evidenced by a lack of liquidity in the debt capital markets, significant write-offs in the
financial services sector, the re-pricing of credit risk in the broadly syndicated credit market and the failure of certain major
financial institutions. Despite actions of the U.S. federal government and foreign governments, these events contributed to worsening
general economic conditions that materially and adversely impacted the broader financial and credit markets and reduced the availability
of debt and equity capital for the market as a whole and financial services firms in particular. These conditions could return
in the future. Should these conditions return, we and other companies in the financial services sector may have to access, if
available, alternative markets for debt and equity capital. Equity capital may be difficult to raise because, subject to some
limited exceptions which apply to us, as a BDC we are generally not able to issue additional shares of our common stock at a price
less than net asset value. In addition, our ability to incur indebtedness (including by issuing preferred stock) is limited by
applicable regulations such that our asset coverage, as defined in the 1940 Act, must equal at least 200% immediately after each
time we incur indebtedness. The debt capital that will be available, if at all, may be at a higher cost and on less favorable
terms and conditions in the future. Any inability to raise capital could have a negative effect on our business, financial condition
and results of operations.



The illiquidity of our investments may
make it difficult for us to sell such investments if required. As a result, we may realize significantly less than the value at
which we have recorded our investments. In addition, significant changes in the capital markets, including the recent period of
extreme volatility and disruption, have had, and may in the future have, a negative effect on the valuations of our investments
and on the potential for liquidity events involving our investments. An inability to raise capital, and any required sale of our
investments for liquidity purposes, could have a material adverse impact on our business, financial condition or results of operations.



Economic recessions or downturns could impair our portfolio
companies and harm our operating results.



Many of our portfolio companies may be
susceptible to economic slowdowns or recessions and may be unable to repay our loans during these periods. Therefore, our non-performing
assets may increase and the value of our portfolio may decrease during these periods as we are required to record the values of
our investments. Adverse economic conditions also may decrease the value of collateral securing some of our loans and the value
of our equity investments at fair value. Economic slowdowns or recessions could lead to financial losses in our portfolio and
a decrease in revenues, net income and assets. Unfavorable economic conditions also could increase our funding costs, limit our
access to the capital markets or result in a decision by lenders not to extend credit to us. These events could prevent us from
increasing investments and harm our operating results.



A portfolio company’s failure to
satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, acceleration
of the time when the loans are due and foreclosure on its secured assets, which could trigger cross-defaults under other agreements
and jeopardize the portfolio company’s ability to meet its obligations under the debt that we hold. We may incur additional
expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting portfolio company.
In addition, if one of our portfolio companies were to go bankrupt, 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. These events could harm our financial
condition and operating results.



The downgrade of the U.S. credit rating and the economic
crisis in Europe could negatively impact our business, financial condition and results of operations.



U.S. debt ceiling and budget deficit concerns,
together with signs of deteriorating sovereign debt conditions in Europe, have increased the possibility of additional credit-rating
downgrades and economic slowdowns. Although U.S. lawmakers passed legislation to raise the federal debt ceiling, Standard &
Poor’s Ratings Services lowered its long-term sovereign credit rating on the United States from “AAA” to “AA+”
in August 2011. The impact of this or any further downgrades to the U.S. government’s sovereign credit rating, or its perceived
creditworthiness, and the impact of the current crisis in Europe with respect to the ability of certain European Union countries
to continue to service their sovereign debt obligations is inherently unpredictable and could adversely affect the U.S. and global
financial markets and economic conditions. There can be no assurance that governmental or other measures to aid economic recovery
will be effective. These developments, and the government’s credit concerns in general, could cause interest rates and borrowing
costs to rise, which may negatively impact our ability to access the capital markets on favorable terms. In addition, the decreased
credit rating could create broader financial turmoil and uncertainty, which may weigh heavily on our stock price. Continued adverse
economic conditions could have a material adverse effect on our business, financial condition and results of operations.



The effect of global climate change may impact the operations
of our portfolio companies.



There may be evidence of global climate
change. Climate change creates physical and financial risk and some of our portfolio companies may be adversely affected by climate
change. For example, the needs of customers of energy companies vary with weather conditions, primarily temperature and humidity.
To the extent weather conditions are affected by climate change, energy use could increase or decrease depending on the duration
and magnitude of any changes. Increases in the cost of energy could adversely affect the cost of operations of our portfolio companies
if the use of energy products or services is material to their business. A decrease in energy use due to weather changes may affect
some of our portfolio companies’ financial condition, through decreased revenues. Extreme weather conditions in general
require more system backup, adding to costs, and can contribute to increased system stresses, including service interruptions.



64







The impact of recent financial reform legislation on us
is uncertain.



In light of recent conditions in the U.S.
and global financial markets and the U.S. and global economy, legislators, the presidential administration and regulators have
increased their focus on the regulation of the financial services industry. The Dodd-Frank Wall Street Reform and Consumer Protection
Act (the “Dodd-Frank Reform Act”) became effective on July 21, 2010, although many provisions of the Dodd-Frank Reform
Act have delayed effectiveness or will not become effective until the relevant federal agencies issue new rules to implement the
Dodd-Frank Reform Act. Nevertheless, the Dodd-Frank Reform Act may have a material adverse impact on the financial services industry
as a whole and on our business, results of operations and financial condition. Accordingly, we cannot predict the effect the Dodd-Frank
Act or its implementing regulations will have on our business, results of operations or financial condition.



A disruption in the capital markets and the credit markets
could negatively affect our business.



As a BDC, we seek to maintain our ability
to raise additional capital for investment purposes. Without sufficient access to the capital markets or credit markets, we may
not be able to pursue new business opportunities. Disruptive conditions in the financial industry and the impact of new legislation
in response to those conditions could restrict our business operations and could adversely impact our results of operations and
financial condition.



Our ability to grow our business could
be impaired by an inability to access the capital markets or to enter into new credit facilities. At various times over the past
three years, reflecting concern about the stability of the financial markets, many lenders and institutional investors have reduced
or ceased providing funding to borrowers. This market disruption and tightening of credit has led to increased market volatility
and widespread reduction of business activity generally. If we are unable to raise additional equity capital or consummate new
credit facilities on terms that are acceptable to us, we may not be able to initiate significant originations.



These situations may arise due to circumstances
that we may be unable to control, such as access to the credit markets, a severe decline in the value of the U.S. dollar, a further
economic downturn or an operational problem that affects third parties or us, and could materially damage our business. Even though
if such conditions have improved broadly and significantly over the short-term, adverse conditions in particular sectors of the
financial markets could adversely impact our business over the long-term.



Price declines and illiquidity in the corporate debt markets
have adversely affected, and may continue to adversely affect, the fair value of our portfolio investments, reducing our net asset
value through increased net unrealized depreciation.



As a BDC, we are required to carry our
investments at fair value as determined in good faith by or under the direction of our Board of Directors. Decreases in fair values
of our investments are recorded as unrealized depreciation. Depending on market conditions, we may incur substantial losses in
future periods, which could have a material adverse impact on our business, financial condition and results of operations.



Even in the event the value of your investment declines,
the management fee and, in certain circumstances, the incentive fee will still be payable.



The management fee is calculated as 2.0%
of the value of our gross assets at a specific time. Accordingly, the management fee will be payable regardless of whether the
value of our gross assets and/or your investment have decreased. Moreover, a portion of the incentive fee is payable if our net
investment income for a calendar quarter exceeds a designated hurdle rate. This portion of the incentive fee is payable without
regard to any capital gain, capital loss or unrealized depreciation that may occur during the quarter. Accordingly, this portion
of our adviser’s incentive fee may also be payable notwithstanding a decline in net asset value that quarter. In addition,
in the event we recognize deferred loan interest income in excess of our available capital as a result of our receipt of payment-in-kind,
or “PIK” interest, we may be required to liquidate assets in order to pay a portion of the incentive fee. TICC Management,
however, is not required to reimburse us for the portion of any incentive fees attributable to deferred loan interest income in
the event of a subsequent default.



We are permitted to borrow money, which magnifies the potential
for gain or loss on amounts invested and may increase the risk of investing in us.



On August 10, 2011, we completed
a $225,000,000 debt securitization financing transaction. In  connection therewith, secured notes were issued by a newly
formed special purpose vehicle in which our wholly-owned subsidiary owns all of the equity. The notes have an initial face
amount of $101,250,000,  and bear interest, at three-month London Inter Bank Offered Rate
(“LIBOR”) plus 2.25%.



65









On August 23, 2012, we completed
a $160,000,000 debt securitization financing transaction. In connection therewith, secured notes were issued by TICC CLO
2012-1, which is a newly formed special purpose vehicle that is a wholly-owned subsidiary of TICC. The secured notes of the
2012 Securitization Issuer have an aggregate face amount of $120,000,000 and were issued in four classes. The class A-1 notes
have an initial face amount of $88,000,000, and bear interest at three-month LIBOR plus 1.75%. The class B-1 notes have an
initial face amount of $10,000,000, and bear interest at three-month LIBOR plus 3.50%. The class C-1 notes have an initial
face amount of $11,500,000, and bear interest at three-month LIBOR plus 4.75%. The class D-1 notes have an initial face
amount of $10,500,000, and bear interest at three-month LIBOR plus 5.75%.



On September 26, 2012, we completed a private
placement of the Convertible Notes. A total of $105 million aggregate principal amount of the Convertible Notes were issued at
the closing. An additional $10 million aggregate principal amount of the Convertible Notes were issued on October 22, 2012 pursuant
to the exercise of the initial purchasers’ option to purchase additional Convertible Notes. The Convertible Notes are convertible
into shares of our common stock based on an initial conversion rate of 87.2448 shares of our common stock per $1,000 principal
amount of Convertible Notes. The Convertible Notes bear interest at an annual rate of 7.50% payable semiannually in arrears on
May 1 and November 1 of each year, beginning May 1, 2013.



Borrowings (including through the securitization
transactions described above, which are consolidated in our financial statements), also known as leverage, magnify the potential
for gain or loss on amounts invested and, therefore, increase the risks associated with investing in our securities. We may borrow
from and issue senior debt securities to banks, insurance companies, and other lenders. Lenders of these senior securities have
fixed dollar claims on our assets that are superior to the claims of our common stockholders. If the value of our assets increases,
then leveraging would cause the net asset value attributable to our common stock to increase more sharply than it would have had
we not leveraged. Conversely, if the value of our assets decreases, leveraging would cause net asset value to decline more sharply
than it otherwise would have had we not leveraged. Similarly, any increase in our income in excess of interest payable on the
borrowed funds would cause our net income to increase more than it would without the leverage, while any decrease in our income
would cause net income to decline more sharply than it would have had we not borrowed. Such a decline could negatively affect
our ability to make common stock dividend payments. Leverage is generally considered a speculative investment technique. Our ability
to service any debt that we incur will depend largely on our financial performance and will be subject to prevailing economic
conditions and competitive pressures. Moreover, as the management fee payable to TICC Management will be payable on our gross
assets, including those assets acquired through the use of leverage, TICC Management may have a financial incentive to incur leverage
which may not be consistent with our stockholders’ interests. In addition, our common stockholders will bear the burden
of any increase in our expenses as a result of leverage, including any increase in the management fee payable to TICC Management.



Illustration. The following table
illustrates the effect of leverage on returns from an investment in our common stock assuming various annual returns on the portfolio,
net of expenses. The calculations in the table below are hypothetical and actual returns may be higher or lower than those appearing
in the table below.



|                                       |  | Assumed total return on our portfolio
    (net of expenses) |      
|-------------------------------------- |  | ----------------------------------------------------------- | -----
|                                       |  |                                                             | (10.0
|Corresponding return to stockholder(1) |  |                                                             | (21.0



| | (1) | Assumes $770 million
                                                                                in total assets and $333 million in total debt
                                                                                outstanding, which reflects our total assets and
                                                                                total debt outstanding as of September 30, 2012
                                                                                (adjusted to include our sale of $10.0 million
                                                                                aggregate principal amount of the Convertible
                                                                                Notes on October 22, 2012), and a cost of funds
                                                                                of 4.43%.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Pending legislation may allow us to incur additional leverage.



As a BDC, under the 1940 Act generally we
are not permitted to incur indebtedness unless immediately after such borrowing we have an asset coverage for total borrowings
of at least 200% (i.e., the amount of debt may not exceed 50% of the value of our assets). On June 8, 2012, legislation was introduced
in the U.S. House of Representatives intended to revise certain regulations applicable to BDCs. The legislation, among other things,
provides for increasing the amount of funds BDCs may borrow by reducing asset to debt limitations from 2:1 to 3:2. As a result,
we may be able to incur additional indebtedness in the future and therefore your risk of an investment in shares of our common
stock may increase.



66







We are subject to risks associated with our debt securitization
financing transactions.



As a result of the debt securitization financing
transactions that we completed on August 10, 2011 and August 23, 2012, we are subject to a variety of risks, including those set
forth below:



We are subject to certain risks as a result of our indirect
interests in the subordinated notes and membership interests of the 2011 Securitization Issuer and our direct interests in the
subordinated notes and membership interests of the 2012 Securitization Issuer.



Under the terms of the master loan sale
agreement governing the TICC CLO, (1) we sold and/or contributed to Holdings all of our ownership interest in our portfolio loans
and participations for the purchase price and other consideration set forth in the master loan sale agreement and (2) Holdings,
in turn, sold and/or contributed to the 2011 Securitization Issuer all of its ownership interest in such portfolio loans and participations
for the purchase price and the consideration set forth in the master loan sale agreement. Under the terms of the master loan sale
agreement governing the TICC CLO 2012-1, we sold directly to the 2012 Securitization Issuer all of our ownership interest in our
portfolio loans and participations for the purchase price and other consideration set forth in the master loan sale agreement.
Following these transfers, the 2011 Securitization Issuer and the 2012 Securitization Issuer (collectively, the “Securitization
Issuers”), and not Holdings or us, held all of the ownership interest in such portfolio loans and participations. As a result
of the TICC CLO, we hold indirectly through Holdings the 2011 Subordinated Notes as well as membership interests, which comprise
100% of the equity interests, in the 2011 Securitization Issuer. As a result of the TICC CLO 2012-1, we hold directly the 2012
Subordinated Notes as well as membership interests, which comprise 100% of the equity interests, in the 2012 Securitization Issuer.
As a result, we consolidate the financial statements of Holdings and the Securitization Issuers in our consolidated financial
statements. Because Holdings and each Securitization Issuer is disregarded as an entity separate from its owner for U.S. federal
income tax purposes, each of the sale or contribution of portfolio loans by us to Holdings, the sale of portfolio loans by Holdings
to the 2011 Securitization Issuer, and the sale of portfolio loans by us to the 2012 Securitization Issuer, did not constitute
a taxable event for U.S. federal income tax purposes. If the U.S. Internal Revenue Service were to take a contrary position, there
could be a material adverse effect on our business, financial condition, results of operations or cash flows. The securities issued
by the Securitization Issuers, or by any securitization vehicle we sponsor in the future, could be acquired by another business
development company or securitization vehicle subject to the satisfaction of certain conditions. We may also, from time to time,
hold asset-backed securities, or the economic equivalent thereof, issued by a securitization vehicle sponsored by another business
development company to the extent permitted under the 1940 Act.



The 2011 Subordinated Notes, the 2012 Subordinated Notes
and membership interests of each Securitization Issuer are subordinated obligations of such Securitization Issuer.



The 2011 Subordinated Notes and the 2012
Subordinated Notes (collectively, the “Subordinated Notes”) are the junior class of notes issued by each Securitization
Issuer, are subordinated in priority of payment to the secured notes issued by the 2011 Securitization Issuer and the 2012 Securitization
Issuer (collectively, the “Secured Notes”), respectively, and are subject to certain payment restrictions set forth
in the respective indentures governing the notes of each Securitization Issuer. Therefore, for the TICC CLO, Holdings only receives
cash distributions on the 2011 Subordinated Notes if the 2011 Securitization Issuer has made all cash interest payments on the
Secured Notes it has issued, and we only receive cash distributions in respect of our indirect ownership of the 2011 Securitization
Issuer to the extent that Holdings receives any cash distributions in respect of its direct ownership of the 2011 Securitization
Issuer. For the TICC CLO 2012-1, we only receive cash distributions on the 2012 Subordinated Notes if the 2012 Securitization
Issuer has made all cash interest payments on the Secured Notes it has issued, and we only receive cash distributions in respect
of our ownership of the 2012 Securitization Issuer to the extent that funds are available therefor. The Subordinated Notes of
a Securitization Issuer are also unsecured and rank behind all of the secured creditors, known or unknown, of such Securitization
Issuer, including the holders of the Secured Notes it has issued. Consequently, to the extent that the value of either Securitization
Issuer’s portfolio of loan investments has been reduced as a result of conditions in the credit markets, or as a result
of defaulted loans or individual fund assets, the value of the Subordinated Notes of such Securitization Issuer at their redemption
could be reduced. Accordingly, our investment in each Securitization Issuer may be subject to complete loss.



The membership interests in each Securitization
Issuer represent all of the equity interest in such Securitization Issuer. As such, the holder of the membership interests of
a Securitization Issuer is the residual claimant on distributions, if any, made by such Securitization Issuer after holders of
all classes of notes issued by such Securitization Issuer have been paid in full on each payment date or upon maturity of such
notes under the debt securitization financing transaction documents. Such payments may be made by each Securitization Issuer only
to the extent permitted under such documents on any payment date or upon payment in full of the notes issued by such Securitization
Issuer. We cannot assure you that distributions on the assets held by the Securitization Issuers will be sufficient to make any
distributions to us or that such distributions will meet our expectations.



The interests of holders of the senior class of securities
issued by each Securitization Issuer may not be aligned with our interests.



The Secured Notes of each Securitization
Issuer are the debt obligations ranking senior in right of payment to the Subordinated Notes of such Securitization Issuer. As
such, there are circumstances in which the interests of holders of the Secured Notes may not be aligned with the interests of
holders of the Subordinated Notes and the membership interests of a Securitization Issuer. For example, under the terms of the
Secured Notes of each Securitization Issuer, holders of the Secured Notes have the right to receive payments of principal and
interest prior to holders of the Subordinated Notes and the membership interests of such Securitization Issuer.



67







For as long as the Secured Notes of a Securitization
Issuer remain outstanding, holders of the Secured Notes have the right to act, in certain circumstances, with respect to the portfolio
loans in ways that may benefit their interests but not the interests of holders of Subordinated Notes and membership interests
of such Securitization Issuer, including by exercising remedies under the indenture in the debt securitization financing transaction.



If an event of default has occurred and
acceleration occurs in accordance with the terms of an indenture, the Secured Notes of the applicable Securitization Issuer then
outstanding will be paid in full before any further payment or distribution on the Subordinated Notes of such Securitization Issuer.
In addition, if an event of default occurs, holders of a majority of the most senior class of Secured Notes then outstanding will
be entitled to determine the remedies to be exercised under the indenture, subject to the terms of the indenture. For example,
upon the occurrence of an event of default with respect to the notes issued by a Securitization Issuer, the trustee or holders
of a majority of the most senior class of Secured Notes of such Securitization Issuer then outstanding may declare the principal,
together with any accrued interest, of all the notes of such class and any junior classes to be immediately due and payable. This
would have the effect of accelerating the principal on such notes, triggering a repayment obligation on the part of the Securitization
Issuer. If at such time the portfolio loans of a Securitization Issuer were not performing well, such Securitization Issuer may
not have sufficient proceeds available to enable the trustee under the indenture to repay the obligations of holders of the Subordinated
Notes of such Securitization Issuer, or to pay a dividend to holders of the membership interests of such Securitization Issuer.



Remedies pursued by the holders of the Secured
Notes of a Securitization Issuer could be adverse to the interests of the holders of the Subordinated Notes of such Securitization
Issuer, and the holders of such Secured Notes will have no obligation to consider any possible adverse effect on such other interests.
Thus, any remedies pursued by the holders of the Secured Notes of a Securitization Issuer may not be in our best interests and
we may not receive payments or distributions upon an acceleration of the applicable Secured Notes. Any failure of a Securitization
Issuer to make distributions on the Subordinated Notes we hold, directly or indirectly, whether as a result of an event of default
or otherwise, could have a material adverse effect on our business, financial condition, results of operations and cash flows
and may result in an inability of us to make distributions sufficient to allow our qualification as a RIC.



The Securitization Issuers may fail to meet certain asset
coverage tests.



Under the documents governing each debt
securitization financing transaction, there are two coverage tests applicable to the Secured Notes. The first such test compares
the amount of interest received on the portfolio loans held by the Securitization Issuer to the amount of interest payable in
respect of the Secured Notes of such Securitization Issuer. For the TICC CLO, to meet this test at any time, interest received
on the portfolio loans must equal at least 200% or greater (based upon a graduated scale provided for in the indenture) of the
interest payable in respect of the Secured Notes of the 2011 Securitization Issuer. For the TICC CLO 2012-1, to meet this test
at any time, interest received on the portfolio loans must equal at least 120% to 160% (based upon a graduated scale for the class
of Secured Notes to which such test is applied as provided for in the indenture) of the interest payable in respect of the Secured
Notes of the 2012 Securitization Issuer. The second such test compares the principal amount of the portfolio loans held by the
Securitization Issuer to the aggregate outstanding principal amount of the Secured Notes of such Securitization Issuer. For the
TICC CLO, to meet this test at any time, the aggregate principal amount of the portfolio loans held by the 2011 Securitization
Issuer must equal at least 135% of the outstanding principal amount of the Secured Notes of the 2011 Securitization Issuer. For
the TICC CLO 2012-1, to meet this test at any time, the aggregate principal amount of the portfolio loans held by the 2012 Securitization
Issuer must equal at least 126% to 152.50% (based upon a graduated scale for the class of Secured Notes to which such test is
applied as provided for in the indenture) of the outstanding principal amount of the Secured Notes of the 2012 Securitization
Issuer. If either coverage test is not satisfied, interest and principal received by the Securitization Issuer are diverted on
the following payment date to pay the most senior class or classes of Secured Notes to the extent necessary to cause all coverage
tests to be satisfied on a pro forma basis after giving effect to all payments made in respect of the notes, which, with respect
to the payment of any principal amount of the Secured Notes, we refer to as a mandatory redemption. For the TICC CLO, if any asset
coverage test with respect to the Secured Notes is not met, proceeds from the portfolio of loan investments that otherwise would
have been distributed to the 2011 Securitization Issuer and the holders of the 2011 Subordinated Notes will instead be used to
redeem first the Secured Notes of the 2011 Securitization Issuer, to the extent necessary to satisfy the applicable asset coverage
tests. For the TICC CLO 2012-1, if any asset coverage test with respect to the Secured Notes is not met or if the 2012 Securitization
Issuer fails to obtain a confirmation of the initial ratings of the Secured Notes after the effective date (defined under the
indenture as the earlier to occur of January 7, 2013 or the time that the 2012 Securitization Issuer has acquired (or committed
to acquire) at least $160 million in assets), proceeds from the portfolio of loan investments that otherwise would have been distributed
to the 2012 Securitization Issuer and the holders of the 2012 Subordinated Notes will instead be used to first to redeem the Secured
Notes and pay interest and deferred interest (if any) on the Secured Notes, to the extent necessary to satisfy the applicable
asset coverage tests or to obtain the necessary ratings confirmation.



68







We may not receive cash on our equity interests in the Securitization
Issuers.



We receive cash from the Securitization
Issuers only to the extent that we or Holdings, as applicable, receives payments on the Subordinated Notes or membership interests
of the Securitization Issuers. The Securitization Issuers may only make payments on such securities to the extent permitted by
the payment priority provisions of the respective indentures governing the notes, which generally provide that principal payments
on the Subordinated Notes may not be made on any payment date unless all amounts owing under the Secured Notes issued under such
indenture are paid in full. In addition, if a Securitization Issuer does not meet the asset coverage tests set forth in the documents
governing the debt securitization financing transaction, cash would be diverted from the Subordinated Notes of such Securitization
Issuer to first pay the Secured Notes of such Securitization Issuer in amounts sufficient to cause such tests to be satisfied.
In the event that we fail to directly or indirectly receive cash from a Securitization Issuer, we could be unable to make such
distributions in amounts sufficient to maintain our status as a RIC, or at all. We also could be forced to sell investments in
portfolio companies at less than their fair value in order to continue making such distributions. However, the indentures place
significant restrictions on the Securitization Issuers’ ability to sell investments. As a result, there may be times or
circumstances during which the Securitization Issuers are unable to sell investments or take other actions that might be in our
best interests.



We may incur liability to the 2011 Securitization Issuer
and to the 2012 Securitization Issuer.



As part of the TICC CLO, we entered into
a master loan sale agreement under which we would be required to repurchase any loan (or participation interest therein) which
was sold to the 2011 Securitization Issuer in breach of any representation or warranty made by us with respect to such loan on
the date such loan was sold. To the extent we fail to satisfy any such repurchase obligation, the trustee may, on behalf of the
2011 Securitization Issuer, bring an action against us to enforce these repurchase obligations. As part of the TICC CLO 2012-1,
we entered into a master loan sale agreement under which we may incur liability to the 2012 Securitization Issuer for a breach
of any representation or warranty made by us on the closing date with respect to any loan (or participation interest therein)
sold to the 2012 Securitization Issuer thereunder.



In connection with our two debt securitization
financing transactions, we transferred all of our interests in certain portfolio loans to the 2011 Securitization Issuer and the
2012 Securitization Issuer, respectively. In doing so, we transferred any right we previously had to the payments made on such
portfolio loans in exchange for 100% of the residual interests in such securitization issuers. As a result, we face a hightened
risk of loss due to the impact of leverage utilized by both the 2011 Securitization Issuer and the 2012 Securitization Issuer,
which would have the effect of magnifying the impact on us of a loss on any portfolio loan held by such securitization issuers.
In addition, while we serve as the collateral manager for both the 2011 Securitization Issuer and the 2012 Securitization Issuer,
which provides us with the authority to enforce payment obligations and loan covenants of the portfolio loans that we transferred
to such securitization issuers, we are required to exercise such authority for the interests of the securitization issuers, rather
than for our own interests alone.



The structure of the debt securitization
financing transactions is intended to prevent, in the event of our bankruptcy or, in the case of the TICC CLO, the bankruptcy
of Holdings, the consolidation for purposes of such bankruptcy proceedings of the Securitization Issuers with our operations or,
in the case of the TICC CLO, those of Holdings. If the true sale of these assets were not respected in the event of our insolvency,
a trustee or debtor-in-possession might reclaim the assets of the Securitization Issuers for our estate. However, in doing so,
we would become directly liable for all of the indebtedness then outstanding under the debt securitization financing transactions,
which would equal the full amount of debt of the Securitization Issuers reflected on our consolidated balance sheet. In addition,
we cannot assure that the recovery in the event we were consolidated with the Securitization Issuers for purposes of any bankruptcy
proceeding would exceed the amount to which we would otherwise be entitled as a direct or indirect holder of the Subordinated
Notes had we not been consolidated with the Securitization Issuers.



Regulations governing our operation as a BDC 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 ability to grow our business requires
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 ratio, as defined in the 1940 Act, equals at least
200% of gross assets less all liabilities and indebtedness not represented by senior securities, after each issuance of senior
securities. This requirement of sustaining a 200% asset coverage ratio limits the amount that we may borrow. Because we will continue
to need capital to grow our loan and investment portfolio, this limitation may prevent us from incurring debt. Further additional
debt financing may not be available on favorable terms, if at all, or may be restricted by the terms of our debt facilities. If
we are unable to incur additional debt, we may be required to raise additional equity at a time when it may be disadvantageous
to do so.



69







As a result of the issuance of senior securities,
including preferred stock and debt securities, we are exposed to typical risks associated with leverage, including an increased
risk of loss and an increase in expenses, which are ultimately borne by our common stockholders. Because we may 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. When 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.



On August 10, 2011, we completed
a $225,000,000 debt securitization financing transaction. In  connection therewith, secured notes were issued by a newly
formed special purpose vehicle in which our wholly-owned subsidiary owns all of the equity. The notes have an initial face
amount of $101,250,000,  and bear interest, at three-month London Inter Bank Offered Rate
(“LIBOR”) plus 2.25%.



On August 23, 2012, we completed
a $160,000,000 debt securitization financing transaction. In connection therewith, secured notes were issued by TICC CLO
2012-1, which is a newly formed special purpose vehicle that is a wholly-owned subsidiary of TICC. The secured notes of the
2012 Securitization Issuer have an aggregate face amount of $120,000,000 and were issued in four classes. The class A-1 notes
have an initial face amount of $88,000,000, and bear interest at three-month LIBOR plus 1.75%. The class B-1 notes have an
initial face amount of $10,000,000, and bear interest at three-month LIBOR plus 3.50%. The class C-1 notes have an initial
face amount of $11,500,000, and bear interest at three-month LIBOR plus 4.75%. The class D-1 notes have an initial face
amount of $10,500,000, and bear interest at three-month LIBOR plus 5.75%.



On September 26, 2012, we completed a private
placement of the Convertible Notes. A total of $105 million aggregate principal amount of the Convertible Notes were issued at
the closing. An additional $10 million aggregate principal amount of the Convertible Notes were issued on October 22, 2012 pursuant
to the exercise of the initial purchasers’ option to purchase additional Convertible Notes. The Convertible Notes are convertible
into shares of our common stock based on an initial conversion rate of 87.2448 shares of our common stock per $1,000 principal
amount of Convertible Notes. The Convertible Notes bear interest at an annual rate of 7.50% payable semiannually in arrears on
May 1 and November 1 of each year, beginning May 1, 2013.



Our ability to pay dividends or issue additional
senior securities would be restricted if our asset coverage ratio was 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. In certain limited
circumstances, pursuant to an SEC staff interpretation, we may also issue shares at a price below net asset value in connection
with a transferable rights offering so long as: (1) the offer does not discriminate among stockholders; (2) we use our best efforts
to ensure an adequate trading market exists for the rights; and (3) the ratio of the offering does not exceed one new share for
each three rights held. 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.



70







Our Board of Directors is authorized to reclassify any unissued
shares of common stock into one or more classes of preferred stock, which could convey special rights and privileges to its owners.



Our charter permits our Board of Directors
to reclassify any authorized but unissued shares of stock into one or more classes of preferred stock. We are currently authorized
to issue up to 100,000,000 shares of common stock, of which 41,312,780 shares are issued and outstanding as of November 8, 2012.
In the event our Board of Directors opts to reclassify a portion of our unissued shares of common stock into a class of preferred
stock, those preferred shares would have a preference over our common stock with respect to dividends and liquidation. The cost
of any such reclassification would be borne by our existing common stockholders. The class voting rights of any preferred shares
we may issue could make it more difficult for us to take some actions that may, in the future, be proposed by our Board of Directors
and/or the holders of our common stock, such as a merger, exchange of securities, liquidation, or alteration of the rights of
a class of our securities, if these actions were perceived by the holders of preferred shares as not in their best interests.
The issuance of preferred shares convertible into shares of common stock might also reduce the net income and net asset value
per share of our common stock upon conversion. These effects, among others, could have an adverse effect on your investment in
our common stock.



A change in interest rates may adversely affect our profitability.



On August 10, 2011, we completed
a $225,000,000 debt securitization financing transaction. In  connection therewith, secured notes were issued by a newly
formed special purpose vehicle in which our wholly-owned subsidiary owns all of the equity. The notes have an initial face
amount of $101,250,000,  and bear interest, at three-month London Inter Bank Offered Rate
(“LIBOR”) plus 2.25%.



On August 23, 2012, we completed
a $160,000,000 debt securitization financing transaction. In connection therewith, secured notes were issued by TICC CLO
2012-1, which is a newly formed special purpose vehicle that is a wholly-owned subsidiary of TICC. The secured notes of the
2012 Securitization Issuer have an aggregate face amount of $120,000,000 and were issued in four classes. The class A-1 notes
have an initial face amount of $88,000,000, and bear interest at three-month LIBOR plus 1.75%. The class B-1 notes have an
initial face amount of $10,000,000, and bear interest at three-month LIBOR plus 3.50%. The class C-1 notes have an initial
face amount of $11,500,000, and bear interest at three-month LIBOR plus 4.75%. The class D-1 notes have an initial face
amount of $10,500,000, and bear interest at three-month LIBOR plus 5.75%.



On September 26, 2012, we completed a private
placement of the Convertible Notes. A total of $105 million aggregate principal amount of the Convertible Notes were issued at
the closing. An additional $10 million aggregate principal amount of the Convertible Notes were issued on October 22, 2012 pursuant
to the exercise of the initial purchasers’ option to purchase additional Convertible Notes. The Convertible Notes are convertible
into shares of our common stock based on an initial conversion rate of 87.2448 shares of our common stock per $1,000 principal
amount of Convertible Notes. The Convertible Notes bear interest at an annual rate of 7.50% payable semiannually in arrears on
May 1 and November 1 of each year, beginning May 1, 2013.



Currently, only three of the debt investments
in our investment portfolio are at a fixed rate, while the others are at variable rates. Although we have not done so in the past,
we may in the future choose 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 if we choose to employ hedging strategies in the future.



We will be subject to corporate-level income tax if we are
unable to qualify as a RIC for federal income tax purposes.



To remain entitled to the tax benefits accorded
to RICs under the Code, we must meet certain income source, asset diversification and annual distribution requirements. In order
to qualify as a RIC, we must derive each taxable year at least 90% of our gross income from dividends, interest, payments with
respect to certain securities loans, gains from the sale of stock or other securities, or other income derived with respect to
our business of investing in such stock or securities. 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 use debt financing, we are 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 satisfy the annual distribution requirement. 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 of our income.



71







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.



Our investments in CLOs may be subject to special anti-deferral
provisions that could result in us incurring tax or recognizing income prior to receive cash distributions related to such income.



We have purchased and may in the future
purchase residual or subordinated interests in CLOs that are treated for U.S. federal income tax purposes as shares in a “passive
foreign investment company” (a “PFIC”). If we acquire shares in a PFIC (including equity tranche investments
in CLOs that are PFICs), we may be subject to federal income tax on a portion of any “excess distribution” or gain
from the disposition of such shares even if such income is distributed as a taxable dividend by us to our stockholders. Certain
elections may be available to mitigate or eliminate such tax on excess distributions, but such elections (if available) will generally
require us to recognize our share of the PFICs income for each year regardless of whether we receive any distributions from such
PFICs. We must nonetheless distribute such income to maintain our status as a RIC.



If we hold more than 10% of the shares in
a foreign corporation that is treated as a controlled foreign corporation (“CFC”) (including equity tranche investments
in a CLO treated as CFC), we may be treated as receiving a deemed distribution (taxable as ordinary income) each year from such
foreign corporation in an amount equal to our pro rata share of the corporation’s income for the tax year (including both
ordinary earnings and capital gains). If we are required to include such deemed distributions from a CFC in our income, we will
be required to distribute such income to maintain our RIC status regardless of whether or not the CFC makes an actual distribution
during such year.



If we are required to include amounts in
income prior to receiving distributions representing such income, we may have to sell some of our investments at times and/or
at prices we would not consider advantageous, raise additional debt or equity capital or forgo new investment opportunities for
this purpose. If we are not able to obtain cash from other sources, we may fail to qualify for RIC tax treatment and thus become
subject to corporate-level income tax. For additional discussion regarding the tax implications of a RIC, please see “Material
U.S. Federal Income Tax Considerations — Taxation as a Regulated Investment Company.”



The CLOs in which we invest may be subject to withholding
tax if they fail to comply with certain reporting requirements.



Legislation enacted in 2010 and Internal
Revenue Service guidance impose a withholding tax of 30% on payments of U.S. source interest and dividends paid after December
31, 2013, or gross proceeds from the disposition of an instrument that produces U.S. source interest or dividends paid after December
31, 2014, to certain non-U.S. entities, including certain non-U.S. financial institutions and investment funds, unless such non-U.S.
entity complies with certain reporting requirements regarding its United States account holders and its United States owners.
Most CLO vehicles in which we invest will be treated as non-U.S. financial entities for this purpose, and therefore will be required
to comply with these reporting requirements to avoid the 30% withholding. If a CLO vehicle in which we invest fails to properly
comply with these reporting requirements, it could reduce the amounts available to distribute to equity and junior debt holders
in such CLO vehicle, which could materially and adversely affect our operating results and cash flows.



We may choose to pay dividends in our own common stock,
in which case, our stockholders may be required to pay federal income taxes in excess of the cash dividends they receive.



We may distribute taxable dividends that
are payable in cash or shares of our common stock at the election of each stockholder. Under certain applicable provisions of
the Code and the Treasury regulations, distributions payable in cash or in shares of stock at the election of stockholders are
treated as taxable dividends. The Internal Revenue Service has issued private rulings indicating that this rule will apply even
where the total amount of cash that may be distributed is limited to no more than 20% of the total distribution. Under these rulings,
if too many stockholders elect to receive their distributions in cash, each such stockholder would receive a pro rata share of
the total cash to be distributed and would receive the remainder of their distribution in shares of stock. If we decide to make
any distributions consistent with these rulings that are payable in part in our stock, taxable stockholders receiving such dividends
will be required to include the full amount of the dividend (whether received in cash, our stock, or a combination thereof) as
ordinary income (or as long-term capital gain to the extent such distribution is properly reported as a capital gain dividend)
to the extent of our current and accumulated earnings and profits for United States federal income tax purposes. As a result,
a U.S. stockholder may be required to pay tax with respect to such dividends in excess of any cash received. If a U.S. stockholder
sells the stock it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in
income with respect to the dividend, depending on the market price of our stock at the time of the sale. Furthermore, with respect
to non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such dividends, including in respect of all
or a portion of such dividend that is payable in stock. In addition, if a significant number of our stockholders determine to
sell shares of our stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price of our stock.



72







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 PIK interest, which
represents contractual interest added to the loan balance and due at the end of the loan term. In addition, we may be required
to accrue for federal income tax purposes amounts attributable to our investment in CLOs that may differ from the distributions
received in respect of such investments. We also may be required to include in income certain other amounts that we will not receive
in cash.



Because in certain cases we may recognize
income before or without receiving cash representing such income, we may have difficulty satisfying the annual distribution requirement
applicable to RICs. Accordingly, we may have to sell some of our investments at times we would not consider advantageous, raise
additional debt or equity capital, reduce new investments or make taxable distributions of our stock or debt securities to meet
that distribution requirement. If we are not able to obtain cash from other sources, we may fail to qualify for RIC tax treatment
and thus be subject to corporate-level income tax.



In addition, original issue discount income for certain portfolio
investments may or may not be included as a factor in the determination of the fair value of such investments.



There are significant
potential conflicts of interest between TICC and our management team.



In the course of our investing activities,
we pay management and incentive fees to TICC Management, and reimburse BDC Partners for certain expenses it incurs. As a result,
investors in our common stock invest on a “gross” basis and receive distributions on a “net” basis after
expenses, resulting in, among other things, a lower rate of return than one might achieve through direct investments. As a result
of this arrangement, there may be times when the management team of TICC Management has interests that differ from those of our
stockholders, giving rise to a conflict.



TICC Management receives a quarterly incentive
fee based, in part, on our “Pre-Incentive Fee Net Investment Income,” if any, for the immediately preceding calendar
quarter. This incentive fee is subject to a quarterly hurdle rate before providing an incentive fee return to TICC Management.
To the extent we or TICC Management are able to exert influence over our portfolio companies, the quarterly pre-incentive fee
may provide TICC Management with an incentive to induce our portfolio companies to accelerate or defer interest or other obligations
owed to us from one calendar quarter to another.



In addition, our executive officers and
directors, and the executive officers of TICC Management, and its managing member, BDC Partners, serve or may serve as officers
and directors of entities that operate in a line of business similar to our own. 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. Charles M. Royce, the
non-executive Chairman of our Board of Directors, holds a minority, non-controlling interest in our investment adviser. BDC Partners
is the managing member of Oxford Gate Capital, LLC, a private fund in which Messrs. Cohen, Rosenthal and Conroy, along with certain
investment and administrative personnel of TICC Management, are invested.



73







Messrs. Cohen and Rosenthal also currently
serve as Chief Executive Officer and President, respectively, for T2 Advisers, LLC, the investment adviser to Greenwich Loan Income
Fund Limited (f/k/a T2 Income Fund Limited) (“GLIF”), a Guernsey fund investing in syndicated loans across a variety
of industries globally. BDC Partners is the managing member of T2 Advisers, LLC. Further, Messrs. Cohen and Rosenthal currently
serve as Chief Executive Officer and President, respectively, of Oxford Lane Capital Corp., a non-diversified closed-end management
investment company that currently invests primarily in CLO debt and equity tranches, and its investment adviser, Oxford Lane Management.
BDC Partners provides Oxford Lane Capital Corp. with office facilities and administrative services pursuant to an administration
agreement and also serves as the managing member of Oxford Lane Management. In addition, Patrick F. Conroy, the Chief Financial
Officer, Chief Compliance Officer and Corporate Secretary of TICC Management, BDC Partners and TICC, serves in the same capacities
for Oxford Lane Capital Corp. and Oxford Lane Management and also serves as the Chief Financial Officer of GLIF and as the Chief
Financial Officer, Chief Compliance Officer and Treasurer of T2 Advisers, LLC. Because of these possible conflicts of interest,
these individuals may direct potential business and investment opportunities to other entities rather than to us or such individuals
may undertake or otherwise engage in activities or conduct on behalf of such other entities that is not in, or which may be adverse
to, our best interests.



BDC Partners has adopted a written policy
with respect to the allocation of investment opportunities among TICC, Oxford Lane Capital Corp., Greenwich Loan Income Fund Limited
and Oxford Gate Capital, LLC in view of the potential conflicts of interest raised by the relationships described above.



In the ordinary course of business, we
may enter into transactions with portfolio companies that may be considered related party transactions. In order to ensure that
we do not engage in any prohibited transactions with any persons affiliated with us, we have implemented certain policies and
procedures whereby our executive officers screen each of our transactions for any possible affiliations between the proposed portfolio
investment, us, companies controlled by us and our employees and directors. We will not enter into any agreements unless and until
we are satisfied that doing so will not raise concerns under the 1940 Act or, if such concerns exist, we have taken appropriate
actions to seek board review and approval or exemptive relief for such transaction. Our Board of Directors reviews these procedures
on an annual basis.



We have also adopted a Code of Ethics
which applies to, among others, our senior officers, including our Chief Executive Officer and Chief Financial Officer, as well
as all of our officers, directors and employees. Our Code of Ethics requires that all employees and directors avoid any conflict,
or the appearance of a conflict, between an individual’s personal interests and our interests. Pursuant to our Code of Ethics,
each employee and director must disclose any conflicts of interest, or actions or relationships that might give rise to a conflict,
to our Chief Compliance Officer. Our Audit Committee is charged with approving any waivers under our Code of Ethics. As required
by the NASDAQ Global Select Market corporate governance listing standards, the Audit Committee of our Board of Directors is also
required to review and approve any transactions with related parties (as such term is defined in Item 404 of Regulation S-K).



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 levels. These laws and regulations, as well as their interpretation, may
be changed from time to time. Any change in these laws or regulations could have a material adverse effect on our business. In
particular, legislative initiatives relating to climate change, healthcare reform and similar public policy matters may impact
the portfolio companies in which we invest to the extent they operate in industries that may be subject to such changes.



If we do not invest a sufficient portion of our assets in
qualifying assets, we could fail to qualify as a business development company or be precluded from investing according to our
current business strategy.



As a business development company, we
may 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.



We believe that most of our portfolio
investments will constitute qualifying assets. However, we may be precluded from investing in what we believe are attractive investments
if such investments are not qualifying assets for purposes of the 1940 Act. If we do not invest a sufficient portion of our assets
in qualifying assets, we could lose our status as a BDC, which would have a material adverse effect on our business, financial
condition and results of operations. Similarly, these rules could prevent us from making follow-on investments in existing portfolio
companies (which could result in the dilution of our position) or could require us to dispose of investments at inappropriate
times in order to comply with the 1940 Act. If we need to dispose of such investments quickly, it would be difficult to dispose
of such investments on favorable terms. For example, we may have difficulty in finding a buyer and, even if we do find a buyer,
we may have to sell the investments at a substantial loss.



Provisions of the Maryland General Corporation Law and of
our charter and bylaws could deter takeover attempts and have an adverse impact on the price of our common stock.



Our charter and bylaws, as well as certain
statutory and regulatory requirements, contain certain provisions that may have the effect of discouraging a third party from
making an acquisition proposal for us. These anti-takeover provisions may inhibit a change of control in circumstances that could
give the holders of our common stock the opportunity to realize a premium over the market price for our common stock.



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RISKS RELATED TO OUR INVESTMENTS



Our investment portfolio may be concentrated in a limited
number of portfolio companies, 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 sectors in which we invest experience a market downturn.



A consequence of our 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. On December
3, 2007, we changed our name from Technology Investment Capital Corp. to TICC Capital Corp. While we have historically focused
on the technology sector, we expect to actively seek new investment opportunities outside this sector that otherwise meet our
investment criteria. As a result, a market downturn, including a downturn in the sectors in which we invest, could materially
adversely affect us.



Most of our debt investments will not fully amortize during
their lifetime, which may subject us to the risk of loss of our principal in the event a portfolio company is unable to repay
us prior to maturity.



Most of our debt investments are not structured
to fully amortize during their lifetime. Accordingly, if a portfolio company has not previously pre-paid its debt investment to
us, a significant portion of the principal amount due on such a debt investment may be due at maturity. In order to create liquidity
to pay the final principal payment, a portfolio company typically must raise additional capital. If they are unable to raise sufficient
funds to repay us, the debt investment may go into default, which may compel us to foreclose on the borrower’s assets, even
if the debt investment was otherwise performing prior to maturity. This may deprive us from immediately obtaining full recovery
on the debt investment and may prevent or delay the reinvestment of the investment proceeds in other, possibly more profitable
investments.



The sectors in which we invest are subject to many risks,
including volatility, intense competition, decreasing life cycles and periodic downturns which could result in a heightened risk
of loss on your investment.



We invest in companies which may have
relatively short operating histories. The revenues, income (or losses) and valuations of these companies can and often do fluctuate
suddenly and dramatically. Also, the technology-related sector, on which we have historically focused, in particular, is generally
characterized by abrupt business cycles and intense competition. The recent cyclical economic downturn has resulted in substantial
decreases in the market capitalization of many 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 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, on which we have historically
focused, have historically decreased over their productive lives. As a result, the average selling prices of products and services
offered by some of 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 companies that we target may be extremely
risky and we could lose all or part of our investments.



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 investment
decisions primarily on the liquidation value of a company’s balance sheet assets. Instead, given the nature of the companies
that we invest 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 our 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 for these additional risks, any of which could cause
us to lose part or all of our investment.



Specifically, investment in certain of
the companies that we are invested in involves a number of significant risks, including:



| | • | 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 value from the liquidation of such collateral;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



| | • | because many of them tend to be privately owned, there
                                                                   is generally little publicly available information about these
                                                                   businesses; therefore, although TICC Management’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;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



75







| | • | some of these companies 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;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | some of these companies may 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; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | many of these companies may be more susceptible to economic
                                                                   recessions or downturns than other better capitalized companies
                                                                   that operate in less capital intensive industries.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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 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 failure to make follow-on investments in our portfolio
companies could impair the value of our investment portfolio.



Following an initial investment in a portfolio
company, we may make additional investments in that portfolio company as “follow-on” investments, in order to: (i)
increase or maintain in whole or in part our equity ownership percentage; (ii) exercise warrants, options or convertible securities
that were acquired in the original or subsequent financing; or (iii) attempt to preserve or enhance the value of our investment.



We may elect not to make follow-on investments
or otherwise lack sufficient funds to make those investments. We have the discretion to make any follow-on investments, subject
to the availability of capital resources. The failure to make follow-on investments may, in some circumstances, jeopardize the
continued viability of a portfolio company and our initial investment, or may result in a missed opportunity for us to increase
our participation in a successful operation. Even if we have sufficient capital to make a desired follow-on investment, we may
elect not to make a follow-on investment because we may not want to increase our concentration of risk, because we prefer other
opportunities, or because we are inhibited by compliance with business development company requirements or the desire to maintain
our tax status.



Our incentive fee may induce TICC Management to use leverage
and to make speculative investments.



The incentive fee payable by us to TICC
Management may create an incentive for TICC Management to use leverage and 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 on
“Pre-Incentive Fee Net Investment Income” is determined, which is calculated as a percentage of the return on invested
capital, may encourage TICC Management 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
TICC Management may also receive an 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 an economic downturn.



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 obligations 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.



76







Because we generally do not hold controlling equity interests
in our portfolio companies, we may not be in a position to exercise control over our portfolio companies or to prevent decisions
by the managements of our portfolio companies that could decrease the value of our investments.



Although we have taken and may in the
future take controlling equity positions in our portfolio companies from time to time, we generally do not do so. As a result,
we are subject to the risk that a portfolio company may make business decisions with which we disagree, and the stockholders and
management of a portfolio company may take risks or otherwise act in ways that are adverse to our interests. Due to the lack of
liquidity for the debt and equity investments that we typically hold in our portfolio companies, we may not be able to dispose
of our investments in the event we disagree with the actions of a portfolio company, and may therefore suffer a decrease in the
value of our investments.



Our investments in CLO vehicles may be riskier and less
transparent than direct investments in portfolio companies.



From time to time we have invested and
may in the future invest in debt and residual value interests of CLO vehicles. Generally, there may be less information available
to us regarding the underlying debt investments held by such CLOs than if we had invested directly in the underlying companies.
Our CLO investments will also be subject to the risk of leverage associated with the debt issued by such CLOs and the repayment
priority of debt holders senior to us in such CLOs.



Some instruments issued by CLO vehicles
may not be readily marketable and may be subject to restrictions on resale. Securities issued by CLO vehicles are generally not
listed on any U.S. national securities exchange and no active trading market may exist for the securities of CLO vehicles in which
we may invest. Although a secondary market may exist for our investments in CLO vehicles, the market for our investments in CLO
vehicles may be subject to irregular trading activity, wide bid/ask spreads and extended trade settlement periods. As a result,
these types of investments may be more difficult to value.



Failure by a CLO vehicle in which we are invested to satisfy
certain tests will harm our operating results.



The failure by a CLO vehicle in which
we invest to satisfy financial covenants, including with respect to adequate collateralization and/or interest coverage tests,
could lead to a reduction in its payments to us. In the event that a CLO vehicle fails certain tests, holders of debt senior to
us may be entitled to additional payments that would, in turn, reduce the payments we would otherwise be entitled to receive.
Separately, we may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms, with a defaulting
CLO vehicle or any other investment we may make. If any of these occur, it could materially and adversely affect our operating
results and cash flows.



Our financial results may be affected adversely if one or
more of our significant equity or junior debt investments in a CLO vehicle defaults on its payment obligations or fails to perform
as we expect or if the market price fluctuates significantly in such illiquid investments.



Up to 30% of our portfolio may consist
of equity and junior debt investments in CLO vehicles, which involves a number of significant risks. CLO vehicles that we invest
in are typically very highly levered (10-14 times), and therefore, the junior debt and equity tranches that we invest in are subject
to a higher degree of risk of total loss. In particular, investors in CLO vehicles indirectly bear risks of the underlying debt
investments held by such CLO vehicles. We will generally have the right to receive payments only from the CLO vehicles, and will
generally not have direct rights against the underlying borrowers or the entity that sponsored the CLO vehicle. While the CLO
vehicles we have and continue to target generally enable the investor to acquire interests in a pool of leveraged corporate loans
without the expenses associated with directly holding the same investments, when we invest in an equity tranche of a CLO vehicle
we will generally pay a proportionate share of the CLO vehicles’ administrative and other expenses. Although it is difficult
to predict whether the prices of indices and securities underlying CLO vehicles will rise or fall, these prices (and, therefore,
the prices of the CLO vehicles) will be influenced by the same types of political and economic events that affect issuers of securities
and capital markets generally.



The interests we intend to acquire in
CLO vehicles will likely be thinly traded or have only a limited trading market. CLO vehicles are typically privately offered
and sold, even in the secondary market. As a result, investments in CLO vehicles may be characterized as illiquid securities.
In addition to the general risks associated with investing in debt securities, CLO vehicles carry additional risks, including,
but not limited to: (i) the possibility that distributions from collateral securities will not be adequate to make interest or
other payments; (ii) the quality of the collateral may decline in value or default; (iii) the fact that our investments in CLO
tranches will likely be subordinate to other senior classes of note tranches thereof; and (iv) the complex structure of the security
may not be fully understood at the time of investment and may produce disputes with the CLO vehicle or unexpected investment results.



Investments in structured vehicles, including
equity and junior debt instruments issued by CLO vehicles, involve risks, including credit risk and market risk. Changes in interest
rates and credit quality may cause significant price fluctuations. Additionally, changes in the underlying leveraged corporate
loans held by a CLO vehicle may cause payments on the instruments we hold to be reduced, either temporarily or permanently.



Structured investments, particularly the
subordinated interests in which we intend to invest, are less liquid than many other types of securities and may be more volatile
than the leveraged corporate loans underlying the CLO vehicles we intend to target. Fluctuations in interest rates may also cause
payments on the tranches of CLO vehicles that we hold to be reduced, either temporarily or permanently.



77







Investments in foreign securities may involve significant
risks in addition to the risks inherent in U.S. investments.



Our investment strategy involves investments
in securities issued by foreign entities, including foreign CLO vehicles. Investing in foreign entities may expose us to additional
risks not typically associated with investing in U.S. issues. These risks include changes in exchange control regulations, political
and social instability, expropriation, imposition of foreign taxes, less liquid markets and less available information than is
generally the case in the U.S., higher transaction costs, less government supervision of exchanges, brokers and issuers, less
developed bankruptcy laws, difficulty in enforcing contractual obligations, lack of uniform accounting and auditing standards
and greater price volatility. Further, we, and the CLO vehicles in which we invest, may have difficulty enforcing creditor’s
rights in foreign jurisdictions. In addition, the underlying companies of the CLO vehicles in which we invest may be foreign,
which may create greater exposure for us to foreign economic developments.



Although we expect that most of our investments
will be U.S. dollar-denominated, any investments denominated in a foreign currency will be subject to the risk that the value
of a particular currency will change in relation to one or more other currencies. Among the factors that may affect currency values
are trade balances, the level of short-term interest rates, differences in relative values of similar assets in different currencies,
long-term opportunities for investment and capital appreciation, and political developments. We may employ hedging techniques
to minimize these risks, but we can offer no assurance that we will, in fact, hedge currency risk, or that if we do, such strategies
will be effective.



RISKS RELATED TO AN INVESTMENT IN OUR SECURITIES



Our common stock price may be volatile.



The trading price of our common stock
may fluctuate substantially depending on many factors, some of which are beyond our control and may not be directly related to
our operating performance. These factors include, but are not limited to, the following:



| | • | price and volume fluctuations in the overall stock market
                                                                   from time to time;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------



| | • | significant volatility in the market price and trading
                                                                   volume of securities of regulated investment companies, business
                                                                   development companies or other financial services companies;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | changes in regulatory policies or tax guidelines with respect
                                                                   to regulated investment companies or business development companies;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | actual or anticipated changes in our earnings or fluctuations
                                                                   in our operating results or changes in the expectations of
                                                                   securities analysts;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | general economic conditions and trends;
| | - | ---------------------------------------



| | • | loss of a major funding source; or
| | - | ----------------------------------



| | • | departures of key personnel.
| | - | ----------------------------



In the past, following periods of volatility
in the market price of a company’s securities, securities class action litigation has often been brought against that company.
Due to the potential volatility of our stock price, we may therefore be the target of securities litigation in the future. Securities
litigation could result in substantial costs and divert management’s attention and resources from our business.



Our shares of common stock have traded at a discount from
net asset value and may do so in the future.



Shares of closed-end investment companies
have frequently traded at a market price that is less than the net asset value that is attributable to those shares. In part as
a result of adverse economic conditions and increasing pressure within the financial sector of which we are a part, our common
stock consistently traded below our net asset value per share throughout 2009 and during some periods in 2010, 2011 and 2012.
Our common stock could trade at a discount to net asset value at any time in the future. The possibility that our shares of common
stock may trade at a discount from net asset value over the long term is separate and distinct from the risk that our net asset
value will decrease. We cannot predict whether shares of our common stock will trade above, at or below our net asset value. If
our common stock trades below its net asset value, we will generally not be able to issue additional shares of our common stock
at its market price without first obtaining the approval for such issuance from our stockholders and our independent directors.
If additional funds are not available to us, we could be forced to curtail or cease our new lending and investment activities,
and our net asset value could decrease and our level of distributions could be impacted. Our net asset value may also decline
over time if our principal recovery with respect to CLO equity investments is less than the price that we paid for those investments.



78







You may not receive dividends or our dividends may decline
or may not grow over time.



We cannot assure you that we will achieve
investment results or maintain a tax status that will allow or require any specified level of cash distributions or year-to-year
increases in cash distributions. In particular, our future dividends are dependent upon the investment income we receive on our
portfolio investments, including our higher-yielding CLO equity investments. To the extent such investment income, including income
from our CLO equity investments (which we expect to decline as those vehicles de-leverage after the end of their respective re-investment
periods), declines or if we transition our portfolio into lower-yielding investments, our ability to pay future dividends may
be harmed.



Your interest in us may be diluted if you do not fully exercise
your subscription rights in any rights offering.



In the event we issue subscription rights
to purchase shares of our common stock, stockholders who do not fully exercise their rights should expect that they will, at the
completion of the offer, own a smaller proportional interest in us than would otherwise be the case if they fully exercised their
rights. We cannot state precisely the amount of any such dilution in share ownership because we do not know at this time what
proportion of the shares will be purchased as a result of the offer.



In addition, if the subscription price
is less than our net asset value per share, then our stockholders would experience an immediate dilution of the aggregate net
asset value of their shares as a result of the offer. The amount of any decrease in net asset value is not predictable because
it is not known at this time what the subscription price and net asset value per share will be on the expiration date of the rights
offering or what proportion of the shares will be purchased as a result of the offer. Such dilution could be substantial.



If we issue preferred stock, the net asset value and market
value of our common stock will likely become more volatile.



We cannot assure you that the issuance
of preferred stock would result in a higher yield or return to the holders of the common stock. The issuance of preferred stock
would likely cause the net asset value and market value of the common stock to become more volatile. If the dividend rate on the
preferred stock were to approach the net rate of return on our investment portfolio, the benefit of leverage to the holders of
the common stock would be reduced. If the dividend rate on the preferred stock were to exceed the net rate of return on our portfolio,
the leverage would result in a lower rate of return to the holders of common stock than if we had not issued preferred stock.
Any decline in the net asset value of our investments would be borne entirely by the holders of common stock. Therefore, if the
market value of our portfolio were to decline, the leverage would result in a greater decrease in net asset value to the holders
of common stock than if we were not leveraged through the issuance of preferred stock. This greater net asset value decrease would
also tend to cause a greater decline in the market price for the common stock. We might be in danger of failing to maintain the
required asset coverage of the preferred stock or of losing our ratings, if any, on the preferred stock or, in an extreme case,
our current investment income might not be sufficient to meet the dividend requirements on the preferred stock. In order to counteract
such an event, we might need to liquidate investments in order to fund a redemption of some or all of the preferred stock. In
addition, we would pay (and the holders of common stock would bear) all costs and expenses relating to the issuance and ongoing
maintenance of the preferred stock, including higher advisory fees if our total return exceeds the dividend rate on the preferred
stock. Holders of preferred stock may have different interests than holders of common stock and may at times have disproportionate
influence over our affairs.



Holders of any preferred stock we might issue would have
the right to elect members of our Board of Directors and class voting rights on certain matters.



Holders of any preferred stock we might
issue, voting separately as a single class, would have the right to elect two members of our Board of Directors at all times and
in the event dividends become two full years in arrears would have the right to elect a majority of the directors until such arrearage
is completely eliminated. In addition, preferred stockholders have class voting rights on certain matters, including changes in
fundamental investment restrictions and conversion to open-end status, and accordingly can veto any such changes. Restrictions
imposed on the declarations and payment of dividends or other distributions to the holders of our common stock and preferred stock,
both by the 1940 Act and by requirements imposed by rating agencies, if any, or the terms of our credit facilities, if any, might
impair our ability to maintain our qualification as a RIC for federal income tax purposes. While we would intend to redeem our
preferred stock to the extent necessary to enable us to distribute our income as required to maintain our qualification as a RIC,
there can be no assurance that such actions could be effected in time to meet the tax requirements.



79







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



While we did not engage in unregistered
sales of equity securities during the nine months ended September 30, 2012, we issued a total of 156,852 shares of common stock
under our dividend reinvestment plan. This issuance was not subject to the registration requirements of the Securities Act of
1933, as amended. The aggregate valuation price for the shares of common stock issued under the dividend reinvestment plan was
approximately $1,508,158.



ITEM 3. DEFAULTS UPON SENIOR SECURITIES.



None.



ITEM 4. MINE SAFETY DISCLOSURES



Not applicable.



ITEM 5. OTHER INFORMATION.



None.



80







ITEM 6. EXHIBITS.



The following exhibits are filed as part
of this report or hereby incorporated by reference to exhibits previously filed with the SEC:



|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   | Articles of Amendment (Incorporated by reference to Current Report on Form 8-K (File No. 814-00638) filed December 3,
    2007).                                                                                                                                                              
|      |                                                                                                                                                                                                                                                                                               
|3.3   | 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).                                                                                                                          
|      |                                                                                                                                                                                                                                                                                               
|4.2   | Indenture, dated September 26, 2012, relating to the 7.50% Senior Convertible Notes due 2017, by and between the Registrant
    and the Bank of New York Mellon, as trustee (Incorporated by reference to Exhibit 4.1 to the Registrant’s report on
    Form 8-K filed on September 27, 2012).
|      |                                                                                                                                                                                                                                                                                               
|10.1  | Investment Advisory Agreement between Registrant and TICC Management, LLC (Incorporated by reference to Exhibit 10.1 to
    the Registrant’s report on Form 8-K filed on July 1, 2011).                                                                                                       
|      |                                                                                                                                                                                                                                                                                               
|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  | Amended and Restated Administration Agreement between Registrant and BDC Partners, LLC. (Incorporated by reference to
    Exhibit 10.3 to the Registrant’s quarterly report on Form 10-Q filed on May 10, 2012).                                                                              
|      |                                                                                                                                                                                                                                                                                               
|10.4  | Amended and Restated Dividend Reinvestment Plan (Incorporated by reference to Exhibit 4.1 to the Registrant’s report
    on Form 8-K filed on May 30, 2012).                                                                                                                                  
|      |                                                                                                                                                                                                                                                                                               
|10.5  | Purchase Agreement by and among the Registrant, TICC Capital Corp. 2011-1 Holdings, LLC, TICC CLO LCC and Guggenheim Securities,
    LLC (Incorporated by reference to Exhibit 10.1 to the Registrant’s report on Form 8-K filed on August 11, 2011).                                         
|      |                                                                                                                                                                                                                                                                                               
|10.6  | Master Loan Sale Agreement by and among the Registrant, TICC Capital Corp. 2011-1 Holdings, LLC and TICC CLO LLC (Incorporated
    by reference to Exhibit 10.2 to the Registrant’s report on Form 8-K filed on August 11, 2011).                                                             
|      |                                                                                                                                                                                                                                                                                               
|10.7  | Indenture by and between TICC CLO LLC and The Bank of New York Mellon Trust Company, National Association (Incorporated
    by reference to Exhibit 10.3 to the Registrant’s report on Form 8-K filed on August 11, 2011).                                                                    
|      |                                                                                                                                                                                                                                                                                               
|10.8  | Collateral Management Agreement by and between TICC CLO LLC and the Registrant (Incorporated by reference to Exhibit 10.4
    to the Registrant’s report on Form 8-K filed on August 11, 2011).                                                                                               
|      |                                                                                                                                                                                                                                                                                               
|10.9  | Collateral Administration Agreement by and among TICC CLO LLC, the Registrant and The Bank of New York Mellon Trust Company,
    National Association (Incorporated by reference to Exhibit 10.5 to the Registrant’s report on Form 8-K filed on August
    11, 2011).                        
|      |                                                                                                                                                                                                                                                                                               
|10.10 | Purchase Agreement, dated August 13, 2012, by and among TICC Capital Corp., TICC CLO 2012-1 LLC and Guggenheim Securities,
    LLC (Incorporated by reference to Exhibit 10.1 to the Registrant’s report on Form 8-K filed on August 23, 2012).                                               
|      |                                                                                                                                                                                                                                                                                               
|10.11 | Master Loan Sale Agreement, dated August 23, 2012, by and among TICC Capital Corp. and TICC CLO 2012-1 LLC (Incorporated
    by reference to Exhibit 10.2 to the Registrant’s report on Form 8-K filed on August 23, 2012).                                                                   
|      |                                                                                                                                                                                                                                                                                               
|10.12 | Indenture, dated August 23, 2012, by and between TICC CLO 2012-1 LLC and The Bank of New York Mellon Trust Company, National
    Association (Incorporated by reference to Exhibit 10.3 to the Registrant’s report on Form 8-K filed on August 23, 2012).                                     
|      |                                                                                                                                                                                                                                                                                               
|10.13 | Collateral Management Agreement, dated August 23, 2012, by and between TICC CLO 2012-1 LLC and TICC Capital Corp. (Incorporated
    by reference to Exhibit 10.4 to the Registrant’s report on Form 8-K filed on August 23, 2012).                                                            



81







|10.14 | Collateral Administration Agreement, dated August 23, 2012, by and among TICC CLO 2012-1 LLC, TICC
    Capital Corp. and The Bank of New York Mellon Trust Company, National Association (Incorporated by reference to Exhibit 10.5
    to the Registrant’s report on Form 8-K filed on August 23, 2012).
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                          
|11    | Computation of Per Share Earnings (included in the notes to the audited financial statements contained in this report).                                                                                                                                                                                  
|      |                                                                                                                                                                                                                                                                                                          
|31.1  | Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.                                                                                                                                                                                     
|      |                                                                                                                                                                                                                                                                                                          
|31.2  | Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.                                                                                                                                                                                     
|      |                                                                                                                                                                                                                                                                                                          
|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.                                                                                                                                                                                                      



3⁄43⁄43⁄43⁄43⁄43⁄43⁄43⁄43⁄43⁄43⁄43⁄43⁄43⁄43⁄4



82







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.



|                       |  | TICC CAPITAL C ORP .
|---------------------- |  | --------------------
|                       |  |                     
|Date: November 9, 2012 |  | By:                 
|                       |  |                     
|                       |  |                     
|                       |  |                     
|Date: November 9, 2012 |  | By:                 
|                       |  |                     
|                       |  |                     



83