##### Table of Contents





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 JUNE 30, 2011



| ̈ | 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.    Yes  x    No   ̈

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   |  |  ̈  (do not check if a smaller reporting company) |  | 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   ̈    No  x

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date. The
number of shares of the issuers Common Stock, $0.01 par value, outstanding as of August 4, 2011 was 32,671,485.









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##### Table of Contents

TICC CAPITAL CORP.

TABLE OF CONTENTS



|                              |  |                                                                                                                 |    |  |    | 
|----------------------------- |  | --------------------------------------------------------------------------------------------------------------- | -- |  | -- | 
|PART I. FINANCIAL INFORMATION |  |                                                                                                                 | 3  | 
|                              |  |                                                                                                                
|Item 1.                       |  | Financial Statements (Unaudited)                                                                                |    |  | 3  | 
|                              |  |                                                                                                                
|                              |  | Statements of Assets and Liabilities as of June 30, 2011 and December 31, 2010                                  |    |  | 3  | 
|                              |  |                                                                                                                
|                              |  | Schedule of Investments as of June 30, 2011                                                                     |    |  | 4  | 
|                              |  |                                                                                                                
|                              |  | Schedule of Investments as of December 31, 2010                                                                 |    |  | 8  | 
|                              |  |                                                                                                                
|                              |  | Statements of Operations for the three and six months ended June 30, 2011 and 2010                              |    |  | 12 | 
|                              |  |                                                                                                                
|                              |  | Statements of Changes in Net Assets for the six months ended June 30, 2011 and the year ended December 31, 2010 |    |  | 13 | 
|                              |  |                                                                                                                
|                              |  | Statements of Cash Flows for the six months ended June 30, 2011 and 2010                                        |    |  | 14 | 
|                              |  |                                                                                                                
|                              |  | Notes to Financial Statements                                                                                   |    |  | 15 | 
|                              |  |                                                                                                                
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of
Operations                           |    |  | 24 | 
|                              |  |                                                                                                                
|                              |  | Forward-Looking Statements                                                                                      |    |  | 24 | 
|                              |  |                                                                                                                
|                              |  | Overview                                                                                                        |    |  | 25 | 
|                              |  |                                                                                                                
|                              |  | Critical Accounting Policies                                                                                    |    |  | 28 | 
|                              |  |                                                                                                                
|                              |  | Portfolio Composition and Investment Activity                                                                   |    |  | 33 | 
|                              |  |                                                                                                                
|                              |  | Results of Operations                                                                                           |    |  | 36 | 
|                              |  |                                                                                                                
|                              |  | Liquidity and Capital Resources                                                                                 |    |  | 44 | 
|                              |  |                                                                                                                
|                              |  | Recent Developments                                                                                             |    |  | 46 | 
|                              |  |                                                                                                                
|Item 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk                                                      |    |  | 47 | 
|                              |  |                                                                                                                
|Item 4.                       |  | Controls and Procedures                                                                                         |    |  | 47 | 
|                              | 
|PART II. OTHER INFORMATION    |  |                                                                                                                 | 47 | 
|                              |  |                                                                                                                
|Item 1.                       |  | Legal Proceedings                                                                                               |    |  | 47 | 
|                              |  |                                                                                                                
|Item 1A.                      |  | Risk Factors                                                                                                    |    |  | 47 | 
|                              |  |                                                                                                                
|Item 2                        |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                     |    |  | 61 | 
|                              |  |                                                                                                                
|Item 3.                       |  | Defaults Upon Senior Securities                                                                                 |    |  | 61 | 
|                              |  |                                                                                                                
|Item 4.                       |  | Reserved                                                                                                        |    |  | 61 | 
|                              |  |                                                                                                                
|Item 5.                       |  | Other Information                                                                                               |    |  | 61 | 
|                              |  |                                                                                                                
|Item 6.                       |  | Exhibits                                                                                                        |    |  | 62 | 
|                              | 
|SIGNATURES                    |  |                                                                                                                 | 63 | 



2



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PART IFINANCIAL INFORMATION



|ITEM 1. | FINANCIAL STATEMENTS (UNAUDITED)
|------- | --------------------------------

TICC CAPITAL CORP.

STATEMENTS OF ASSETS AND
LIABILITIES

(unaudited)



|                                                                                                                                 |  |               |             |   |                   |   |             |  
|-------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ----------- | - | ----------------- | - | ----------- | -
|                                                                                                                                 |  | June 30, 2011 |             |   | December 31, 2010 |  
|ASSETS                                                                                                                           |  |               |             |   |                   |   |             |  
|Investments, at fair value (cost: $284,375,854 @ 6/30/11; $226,200,687 @ 12/31/10)                                               |  |               |             |   |                   |   |             |  
|Non-affiliated/non-control investments (cost: $266,783,907 @ 6/30/11; $207,854,154 @ 12/31/10)                                   |  | $             | 291,423,362 |   |                   | $ | 229,385,715 |  
|Control investments (cost: $17,591,947 @ 6/30/11; $18,346,533 @ 12/31/10)                                                        |  |               | 17,350,000  |   |                   |   | 18,150,000  |  
|                                                                                                                                 |  |               |             |   |                   |   |             |  
|Total investments at fair value                                                                                                  |  |               | 308,773,362 |   |                   |   | 247,535,715 |  
|                                                                                                                                 |  |               |             |   |                   |   |             |  
|Cash and cash equivalents                                                                                                        |  |               | 18,853,293  |   |                   |   | 68,780,866  |  
|Interest receivable                                                                                                              |  |               | 1,461,085   |   |                   |   | 1,488,984   |  
|Distributions receivable from securitization vehicles                                                                            |  |               | 374,234     |   |                   |   |            |  
|Prepaid expenses and other assets                                                                                                |  |               | 90,146      |   |                   |   | 94,518      |  
|                                                                                                                                 |  |               |             |   |                   |   |             |  
|Total assets                                                                                                                     |  | $             | 329,552,120 |   |                   | $ | 317,900,083 |  
|                                                                                                                                 |  |               |             |   |                   |   |             |  
|LIABILITIES                                                                                                                      |  |               |             |   |                   |   |             |  
|Investment advisory fee payable to affiliate                                                                                     |  | $             | 2,272,114   |   |                   | $ | 1,760,896   |  
|Accrued capital gains incentive fee to affiliate                                                                                 |  |               | 5,026,486   |   |                   |   |            |  
|Securities purchased not settled                                                                                                 |  |               |            |   |                   |   | 1,837,500   |  
|Accrued expenses                                                                                                                 |  |               | 477,117     |   |                   |   | 184,146     |  
|                                                                                                                                 |  |               |             |   |                   |   |             |  
|Total liabilities                                                                                                                |  |               | 7,775,717   |   |                   |   | 3,782,542   |  
|                                                                                                                                 |  |               |             |   |                   |   |             |  
|NET ASSETS                                                                                                                       |  |               |             |   |                   |   |             |  
|Common stock, $0.01 par value, 100,000,000 shares authorized, and 32,671,485 and 31,886,367 issued and outstanding,
respectively |  |               | 326,715     |   |                   |   | 318,864     |  
|Capital in excess of par value                                                                                                   |  |               | 371,845,536 |   |                   |   | 369,163,104 |  
|Net unrealized appreciation on investments                                                                                       |  |               | 24,397,508  |   |                   |   | 21,335,028  |  
|Accumulated net realized losses on investments                                                                                   |  |               | (71,914,686 | ) |                   |   | (74,545,034 | )
|Distributions in excess of investment income                                                                                     |  |               | (2,878,670  | ) |                   |   | (2,154,421  | )
|                                                                                                                                 |  |               |             |   |                   |   |             |  
|Total net assets                                                                                                                 |  |               | 321,776,403 |   |                   |   | 314,117,541 |  
|                                                                                                                                 |  |               |             |   |                   |   |             |  
|Total liabilities and net assets                                                                                                 |  | $             | 329,552,120 |   |                   | $ | 317,900,083 |  
|                                                                                                                                 |  |               |             |   |                   |   |             |  
|Net asset value per common share                                                                                                 |  | $             | 9.85        |   |                   | $ | 9.85        |  

See Accompanying Notes.



3



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TICC CAPITAL CORP.

SCHEDULE OF INVESTMENTS

JUNE 30, 2011



|                                                       |  |                                 |  |                                                                          |  |                 |            |  |      |   |            |                |  |   |            | 
|------------------------------------------------------ |  | ------------------------------- |  | ------------------------------------------------------------------------ |  | --------------- | ---------- |  | ---- | - | ---------- | -------------- |  | - | ---------- | 
|COMPANY(1)                                             |  | INDUSTRY                        |  | INVESTMENT                                                               |  | PRINCIPALAMOUNT |            |  | COST |   |            | FAIR 
VALUE(2) | 
|                                                       |  |                                 |  |                                                                          | 
|ACA CLO 2006-2, Limited                                |  | structured finance              |  | CLO preferred equity                                                     |  | $               |           |  |      | $ | 2,200,000  |                |  | $ | 4,550,000  | 
|                                                       |  |                                 |  |                                                                          | 
|Airvana Network Solutions, Inc.                        |  | telecommunicationservices       |  | senior secured notes(4)(5)
(10.00%, due March 25, 2015)                  |  |                 | 10,029,762 |  |      |   | 9,839,438  |                |  |   | 10,130,060 | 
|                                                       |  |                                 |  |                                                                          | 
|AKQA, Inc.                                             |  | advertising                     |  | senior secured notes(4)(6)
(4.91%, due March 20, 2013)                   |  |                 | 7,797,778  |  |      |   | 7,797,778  |                |  |   | 7,797,778  | 
|                                                       |  |                                 |  |                                                                          | 
|Algorithmic Implementations, Inc.
(d/b/a Ai Squared) |  | software                        |  | senior secured notes(4)(5)(6)
(9.84%, due September 11, 2013)            |  |                 | 14,750,000 |  |      |   | 14,591,947 |                |  |   | 14,750,000 | 
|                                                       |  |                                 |  | common stock                                                             |  |                 |           |  |      |   | 3,000,000  |                |  |   | 2,600,000  | 
|                                                       |  |                                 |  |                                                                          | 
|American IntegrationTechnologies, LLC                  |  | semiconductor capital equipment |  | senior secured notes(4)(5) (11.75%,
due December 31, 2013)               |  |                 | 23,401,906 |  |      |   | 20,576,801 |                |  |   | 23,986,954 | 
|                                                       |  |                                 |  |                                                                          | 
|Avenue CLO V LTD 2007-5A D1                            |  | structured finance              |  | CLO secured notes(4)(5) (3.72%,
due April 25, 2019)                      |  |                 | 3,659,804  |  |      |   | 1,764,107  |                |  |   | 2,525,266  | 
|                                                       |  |                                 |  |                                                                          | 
|Band Digital Inc.
(F/K/A WHITTMANHART, Inc.)         |  | IT consulting                   |  | senior secured notes(4)(6)
(15.58%, due December 31, 2012)               |  |                 | 2,050,000  |  |      |   | 2,050,000  |                |  |   | 2,050,000  | 
|                                                       |  |                                 |  | warrants to purchasecommon stock(7)                                      |  |                 |           |  |      |   | 0          |                |  |   | 0          | 
|                                                       |  |                                 |  |                                                                          | 
|BNY Convergex                                          |  | financial intermediaries        |  | second lien senior
securednotes(4)(5)(8.75%, due December 17,
2017)      |  |                 | 1,875,000  |  |      |   | 1,847,148  |                |  |   | 1,903,913  | 
|                                                       |  |                                 |  |                                                                          | 
|Canaras CLO  2007-1A E                                |  | structured finance              |  | CLO secured notes(4)(5)
(4.60%, due June 19, 2021)                       |  |                 | 3,500,000  |  |      |   | 1,843,144  |                |  |   | 2,555,000  | 
|                                                       |  |                                 |  |                                                                          | 
|Canaras CLO Equity  2007-1A, 1X                       |  | structured finance              |  | CLO income notes                                                         |  |                 |           |  |      |   | 4,355,000  |                |  |   | 4,117,500  | 
|                                                       |  |                                 |  |                                                                          | 
|CIFC CLO  2006-1A B2L                                 |  | structured finance              |  | CLO secured notes(4)(5)
(4.27%, due October 20, 2020)                    |  |                 | 3,247,284  |  |      |   | 1,634,934  |                |  |   | 2,338,044  | 
|                                                       |  |                                 |  |                                                                          | 
|Decision Resources, LLC                                |  | healthcare                      |  | first lien senior securednotes(4)(5)(6)
(7.00%, due December 28, 2016)   |  |                 | 4,975,000  |  |      |   | 4,910,839  |                |  |   | 4,954,254  | 
|                                                       |  |                                 |  | second lien senior securednotes(4)(5) (9.50%,
due May 13, 2018)          |  |                 | 5,333,333  |  |      |   | 5,280,735  |                |  |   | 5,280,000  | 
|                                                       |  |                                 |  |                                                                          | 
|Diversified Machine, Inc.                              |  | autoparts manufacturer          |  | first lien senior securednotes(4)(5)(6)
(10.50%, due September 30, 2015) |  |                 | 5,362,500  |  |      |   | 5,214,749  |                |  |   | 5,201,625  | 
|                                                       |  |                                 |  |                                                                          | 
|Emporia CLO 2007 3A E                                  |  | structured finance              |  | CLO secured notes(4)(5)
(3.97%, due April 23, 2021)                      |  |                 | 5,391,000  |  |      |   | 4,094,968  |                |  |   | 3,935,430  | 
|                                                       |  |                                 |  |                                                                          | 
|Flagship 2005-4A D                                     |  | structured finance              |  | CLO secured notes(4)(5)
(5.00%, due June 1, 2017)                        |  |                 | 2,612,988  |  |      |   | 1,590,203  |                |  |   | 2,116,520  | 
|                                                       |  |                                 |  |                                                                          | 
|Flexera Software                                       |  | enterprise software             |  | senior secured notes(4)(5)(6)
(7.50%, due January 20, 2017)              |  |                 | 4,875,000  |  |      |   | 4,780,897  |                |  |   | 4,875,000  | 
|                                                       |  |                                 |  |                                                                          | 
|Fusionstorm, Inc.                                      |  | IT value-added reseller         |  | subordinated notes(4)(5)(6)
(11.74%, due February 28, 2013)              |  |                 | 1,472,500  |  |      |   | 1,466,959  |                |  |   | 1,420,742  | 
|                                                       |  |                                 |  | warrants to purchasecommon 
stock(7)                                     |  |                 |           |  |      |   | 725,000    |                |  |   | 578,000    | 

(Continued on next page)



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TICC CAPITAL CORP.

SCHEDULE OF INVESTMENTS  (Continued)

JUNE 30, 2011



|                                 |  |                                      |  |                                                                          |  |                 |           |  |      |  |           |                |  |  |           | 
|-------------------------------- |  | ------------------------------------ |  | ------------------------------------------------------------------------ |  | --------------- | --------- |  | ---- |  | --------- | -------------- |  |  | --------- | 
|COMPANY(1)                       |  | INDUSTRY                             |  | INVESTMENT                                                               |  | PRINCIPALAMOUNT |           |  | COST |  |           | FAIR 
VALUE(2) | 
|                                 |  |                                      |  |                                                                          | 
|GenuTec Business Solutions, Inc. |  | interactive voice messaging services |  | senior secured notes(4)(5)(7)
(0.0%, due October 30, 2014)               |  |                 | 3,476,000 |  |      |  | 3,128,798 |                |  |  | 2,000,000 | 
|                                 |  |                                      |  | convertible preferred stock(7)                                           |  |                 |          |  |      |  | 1,500,000 |                |  |  | 0         | 
|                                 |  |                                      |  |                                                                          | 
|GXS Worldwide Inc.               |  | business services                    |  | senior secured notes(5) (9.75%,
due June 15, 2015)                       |  |                 | 8,000,000 |  |      |  | 7,895,912 |                |  |  | 8,000,000 | 
|                                 |  |                                      |  |                                                                          | 
|Harbourview  2006A CLO Equity   |  | structured finance                   |  | CDO subordinates notes                                                   |  |                 |          |  |      |  | 3,639,870 |                |  |  | 3,016,650 | 
|                                 |  |                                      |  |                                                                          | 
|Harch 2005-2A BB CLO             |  | structured finance                   |  | CDO secured notes(4)(5)
(5.27%, due October 22, 2017)                    |  |                 | 4,819,262 |  |      |  | 2,476,548 |                |  |  | 3,759,024 | 
|                                 |  |                                      |  |                                                                          | 
|Hewetts Island CDO 20071RA E    |  | structured finance                   |  | CDO secured notes(4)(5)(6)
(7.01%, due November 12, 2019)                |  |                 | 3,132,057 |  |      |  | 1,852,602 |                |  |  | 2,693,569 | 
|                                 |  |                                      |  |                                                                          | 
|Hewetts Island CDO III 2005-1A D |  | structured finance                   |  | CDO secured notes(4)(5)(6)
(6.02%, due August 9, 2017)                   |  |                 | 6,568,918 |  |      |  | 3,558,463 |                |  |  | 5,319,181 | 
|                                 |  |                                      |  |                                                                          | 
|Hewetts Island CDO IV 2006-4     |  | structured finance                   |  | CDO secured notes(4)(5)
(4.82%, due May 9, 2018)                         |  |                 | 7,897,268 |  |      |  | 5,468,839 |                |  |  | 5,990,078 | 
|                                 |  |                                      |  |                                                                          | 
|HHI Holdings LLC                 |  | auto parts manufacturer              |  | senior secured notes(4)(5)(6)
(7.00%, due March 21, 2017)                |  |                 | 4,488,750 |  |      |  | 4,456,198 |                |  |  | 4,488,750 | 
|                                 |  |                                      |  |                                                                          | 
|Hudson Straits CLO 2004-1A E     |  | structured finance                   |  | CLO secured notes(4)(5)
(7.03%, due October 15, 2016)                    |  |                 | 2,244,290 |  |      |  | 1,330,929 |                |  |  | 1,997,418 | 
|                                 |  |                                      |  |                                                                          | 
|InfoNXX Inc.                     |  | telecommunication services           |  | second lien senior securednotes(4)(5) (6.50%,
due December 1, 2013)      |  |                 | 7,000,000 |  |      |  | 6,580,000 |                |  |  | 6,515,810 | 
|                                 |  |                                      |  |                                                                          | 
|Integra Telecomm, Inc.           |  | telecommunication services           |  | common stock(7)                                                          |  |                 |          |  |      |  | 1,712,397 |                |  |  | 2,125,818 | 
|                                 |  |                                      |  |                                                                          | 
|Jersey Street 2006-1A CLO LTD    |  | structured finance                   |  | CLO income notes                                                         |  |                 |          |  |      |  | 4,924,238 |                |  |  | 4,791,150 | 
|                                 |  |                                      |  |                                                                          | 
|Landmark V CDO LTD               |  | structured finance                   |  | CDO senior secured notes(4)(5)(6)
(5.50%, due June 1, 2017)              |  |                 | 3,646,669 |  |      |  | 2,168,034 |                |  |  | 3,052,627 | 
|                                 |  |                                      |  |                                                                          | 
|Latitude II CLO 2006 2A D        |  | structured finance                   |  | CLO senior secured notes(4)(5)(6)(4.00%, due December 15, 2018)          |  |                 | 2,828,018 |  |      |  | 1,523,687 |                |  |  | 1,979,613 | 
|                                 |  |                                      |  |                                                                          | 
|Latitude III CLO 2007-3A         |  | structured finance                   |  | CLO secured notes(4)(5)
(4.04%, due April 11, 2021)                      |  |                 | 4,000,000 |  |      |  | 1,883,083 |                |  |  | 2,940,000 | 
|                                 |  |                                      |  |                                                                          | 
|Liberty CDO LTD 2005-1A C        |  | structured finance                   |  | CLO secured notes(4)(5)(6)(2.17%, due November 1, 2017)                  |  |                 | 1,986,259 |  |      |  | 1,110,473 |                |  |  | 1,370,519 | 
|                                 |  |                                      |  |                                                                          | 
|Lightpoint CLO 2007-8a           |  | structured finance                   |  | CLO secured notes(4)(5)
(6.78%, due July 25, 2018)                       |  |                 | 5,000,000 |  |      |  | 2,813,721 |                |  |  | 4,300,000 | 
|                                 |  |                                      |  |                                                                          | 
|Lightpoint CLO 2005-3X           |  | structured finance                   |  | CLO income notes                                                         |  |                 |          |  |      |  | 3,330,000 |                |  |  | 3,600,000 | 
|                                 |  |                                      |  |                                                                          | 
|Lightpoint CLO VII LTD 2007-7X   |  | structured finance                   |  | CLO subordinated notes                                                   |  |                 |          |  |      |  | 1,192,500 |                |  |  | 1,170,000 | 
|                                 |  |                                      |  |                                                                          | 
|Loomis Sayles CLO 2006-1AE       |  | structured finance                   |  | CLO secured notes(4)(5)
(4.12%, due October 26, 2020)                    |  |                 | 3,322,992 |  |      |  | 1,859,448 |                |  |  | 2,492,244 | 
|                                 |  |                                      |  |                                                                          | 
|Merrill Communications, LLC      |  | printing and publishing              |  | second lien senior securednotes(3)(4)(5)
(13.76%, due November 15, 2013) |  |                 | 6,142,027 |  |      |  | 6,093,888 |                |  |  | 6,123,602 | 
|                                 |  |                                      |  |                                                                          | 
|MLM Holdings, Inc.               |  | business services                    |  | senior secured notes(4)(5) (6)
(7.00%, due December 1, 2016)             |  |                 | 4,962,500 |  |      |  | 4,893,353 |                |  |  | 4,950,094 | 

(Continued on next page)

See Accompanying Notes.



5



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##### Table of Contents

TICC CAPITAL CORP.

SCHEDULE OF INVESTMENTS  (Continued)

JUNE 30, 2011



|                              |  |                            |  |                                                                |  |                 |            |  |      |   |             |               |  |   |             | 
|----------------------------- |  | -------------------------- |  | -------------------------------------------------------------- |  | --------------- | ---------- |  | ---- | - | ----------- | ------------- |  | - | ----------- | 
|COMPANY(1)                    |  | INDUSTRY                   |  | INVESTMENT                                                     |  | PRINCIPALAMOUNT |            |  | COST |   |             | FAIR VALUE(2) | 
|                              |  |                            |  |                                                                | 
|Nextag, Inc.                  |  | retail                     |  | senior secured notes(4)(5)(6)                                  |  |                 | 11,050,000 |  |      |   | 10,363,117  |               |  |   | 10,552,750  | 
|                              |  |                            |  | (7.00%, due January 27, 2016)                                  |  |                 |            |  |      |   |             |               |  |   |             | 
|                              |  |                            |  |                                                                | 
|Ocean Trails CLO II 2007-2a-d |  | structured finance         |  | CLO subordinated secured notes(4)(5)                           |  |                 | 3,649,700  |  |      |   | 2,025,648   |               |  |   | 2,591,287   | 
|                              |  |                            |  | (4.78%, due June 27, 2022)                                     |  |                 |            |  |      |   |             |               |  |   |             | 
|                              |  |                            |  |                                                                | 
|OCT11 2007-1A CLO             |  | structured finance         |  | CLO income notes                                               |  |                 |           |  |      |   | 2,434,162   |               |  |   | 2,227,500   | 
|                              |  |                            |  |                                                                | 
|Pegasus Solutions, Inc.       |  | enterprise software        |  | first lien senior
securednotes(4)(5)(6)                        |  |                 | 2,737,797  |  |      |   | 2,563,448   |               |  |   | 2,677,921   | 
|                              |  |                            |  | (7.75%, due April 17, 2013)                                    |  |                 |            |  |      |   |             |               |  |   |             | 
|                              |  |                            |  | second lien senior secured
notes(3)(5)(6)                      |  |                 | 5,634,590  |  |      |   | 3,687,923   |               |  |   | 5,634,590   | 
|                              |  |                            |  | (13.00%, due April 15, 2014)                                   |  |                 |            |  |      |   |             |               |  |   |             | 
|                              |  |                            |  | common equity(7)                                               |  |                 |           |  |      |   | 62,595      |               |  |   | 1,105,663   | 
|                              |  |                            |  | preferred equity(3)                                            |  |                 |           |  |      |   | 973,714     |               |  |   | 2,090,505   | 
|                              |  |                            |  |                                                                | 
|Power Tools, Inc.             |  | software                   |  | senior secured notes(4)(5)(6)                                  |  |                 | 8,500,000  |  |      |   | 8,430,219   |               |  |   | 7,820,000   | 
|                              |  |                            |  | (12.00%, due May 16, 2014)                                     |  |                 |            |  |      |   |             |               |  |   |             | 
|                              |  |                            |  | warrants to purchase common stock(7)                           |  |                 |           |  |      |   | 350,000     |               |  |   | 290,000     | 
|                              |  |                            |  |                                                                | 
|Primus 2007 2X Class E CLO    |  | structured finance         |  | CLO notes(4)(5)                                                |  |                 | 2,834,633  |  |      |   | 2,146,351   |               |  |   | 2,125,975   | 
|                              |  |                            |  | (5.03%, due July 15, 2021)                                     |  |                 |            |  |      |   |             |               |  |   |             | 
|                              |  |                            |  |                                                                | 
|Prospero CLO II BV            |  | structured finance         |  | CLO senior secured notes(4)(5)                                 |  |                 | 9,900,000  |  |      |   | 4,287,032   |               |  |   | 6,930,000   | 
|                              |  |                            |  | (4.22%, due October 20, 2022)                                  |  |                 |            |  |      |   |             |               |  |   |             | 
|                              |  |                            |  |                                                                | 
|RBS Holding Company           |  | printing andpublishing     |  | term B senior securednotes(4)(5)(6)(6.50%, due March 23, 2017) |  |                 | 4,987,500  |  |      |   | 4,939,246   |               |  |   | 4,887,750   | 
|                              |  |                            |  |                                                                | 
|Rampart 2007-1A CLO Equity    |  | structured finance         |  | CLO subordinated notes                                         |  |                 |           |  |      |   | 3,412,500   |               |  |   | 3,062,500   | 
|                              |  |                            |  |                                                                | 
|Sargas CLO 2006 -1A           |  | structured finance         |  | CLO subordinated notes                                         |  |                 |           |  |      |   | 4,945,500   |               |  |   | 6,514,500   | 
|                              |  |                            |  |                                                                | 
|Securus Technologies          |  | telecommunication services |  | second lien senior secured notes(4)(5)                         |  |                 | 5,400,000  |  |      |   | 5,292,710   |               |  |   | 5,298,750   | 
|                              |  |                            |  | (10.00%, due May 18, 2018)                                     |  |                 |            |  |      |   |             |               |  |   |             | 
|                              |  |                            |  |                                                                | 
|Shearers Food Inc.           |  | food products manufacturer |  | subordinated notes(3)(4)(5)
(15.50%, due March 31, 2016)       |  |                 | 4,143,003  |  |      |   | 4,057,178   |               |  |   | 4,101,573   | 
|                              |  |                            |  |                                                                | 
|Shield Finance Co.            |  | software                   |  | first lien term notes(4)(5)                                    |  |                 | 3,850,457  |  |      |   | 3,711,396   |               |  |   | 3,860,083   | 
|                              |  |                            |  | (7.75%, due June 15, 2016)                                     |  |                 |            |  |      |   |             |               |  |   |             | 
|                              |  |                            |  |                                                                | 
|SonicWall, Inc.               |  | software                   |  | first lien senior
securednotes(4)(5)(6)                        |  |                 | 1,394,355  |  |      |   | 1,357,303   |               |  |   | 1,394,355   | 
|                              |  |                            |  | (8.25%, due January 23, 2016)                                  |  |                 |            |  |      |   |             |               |  |   |             | 
|                              |  |                            |  | second lien senior secured notes(4)(5)                         |  |                 | 5,000,000  |  |      |   | 4,864,919   |               |  |   | 5,050,000   | 
|                              |  |                            |  | (12.00%, due January 23, 2017)                                 |  |                 |            |  |      |   |             |               |  |   |             | 
|                              |  |                            |  |                                                                | 
|SourceHov, LLC                |  | business services          |  | second lien senior secured notes(4)(5)                         |  |                 | 8,000,000  |  |      |   | 7,644,081   |               |  |   | 7,615,040   | 
|                              |  |                            |  | (10.50%, due May 19, 2018)                                     |  |                 |            |  |      |   |             |               |  |   |             | 
|                              |  |                            |  |                                                                | 
|Stratus Technologies, Inc.    |  | computer hardware          |  | first lien high yield notes(5)(6)                              |  |                 | 9,753,000  |  |      |   | 9,020,697   |               |  |   | 9,753,000   | 
|                              |  |                            |  | (12.00%, due March 29, 2015)                                   |  |                 |            |  |      |   |             |               |  |   |             | 
|                              |  |                            |  | common equity(7)                                               |  |                 |           |  |      |   | 377,928     |               |  |   | 0           | 
|                              |  |                            |  | preferred equity(7)                                            |  |                 |           |  |      |   | 186,622     |               |  |   | 409,437     | 
|                              |  |                            |  |                                                                | 
|Teleguam Holdings, LLC        |  | telecommunication services |  | second lien senior secured notes(4)(5)                         |  |                 | 4,687,500  |  |      |   | 4,640,880   |               |  |   | 4,687,500   | 
|                              |  |                            |  | (10.25%, due June 9, 2017)                                     |  |                 |            |  |      |   |             |               |  |   |             | 
|                              |  |                            |  |                                                                | 
|Unitek Global Services, Inc.  |  | IT consulting              |  | tranche B term loan(4)(5)(6)                                   |  |                 | 7,980,000  |  |      |   | 7,740,049   |               |  |   | 7,800,450   | 
|                              |  |                            |  | (9.00%, due April 15, 2018)                                    |  |                 |            |  |      |   |             |               |  |   |             | 
|                              |  |                            |  |                                                                | 
|Vision Solutions, Inc         |  | software                   |  | second lien senior secured notes(4)(5)                         |  |                 | 10,000,000 |  |      |   | 9,903,008   |               |  |   | 9,950,000   | 
|                              |  |                            |  | (9.50%, due July 23, 2017)                                     |  |                 |            |  |      |   |             |               |  |   |             | 
|                              |  |                            |  |                                                                |  |                 |            |  |      |   |             |               |  |   |             | 
|                              |  |                            |  |                                                                | 
|Total Investments             |  |                            |  |                                                                |  |                 |            |  |      | $ | 284,375,854 |               |  | $ | 308,773,362 | 
|                              |  |                            |  |                                                                |  |                 |            |  |      |   |             |               |  |   |             | 

(Continued on next page)

See Accompanying Notes.



6



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##### Table of Contents



|(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) | Investment includes payment-in-kind interest.
|--- | ---------------------------------------------

|(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) | As a percentage of net assets at June 30, 2011, investments at fair value are categorized as follows: senior secured notes (62.2%), subordinated notes (1.7%), CLO
debt (19.0%), CLO equity (10.3%), common stock (1.8%), preferred shares (0.8%) and warrants to purchase equity securities (0.3%).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | Aggregate gross unrealized appreciation for federal income tax purposes is $30,686,470; aggregate gross unrealized depreciation for federal income tax purposes is
$21,181,632. Net unrealized appreciation is $9,504,838 based upon a tax cost basis of $299,268,524.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See
Accompanying Notes.



7



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##### Table of Contents

TICC CAPITAL CORP.

SCHEDULE OF INVESTMENTS

DECEMBER 31, 2010



|                                                       |  |                                 |  |                                                                     |  |                 |            |  |      |   |            |               |  |   |            | 
|------------------------------------------------------ |  | ------------------------------- |  | ------------------------------------------------------------------- |  | --------------- | ---------- |  | ---- | - | ---------- | ------------- |  | - | ---------- | 
|COMPANY(1)                                             |  | INDUSTRY                        |  | INVESTMENT                                                          |  | PRINCIPALAMOUNT |            |  | COST |   |            | FAIR VALUE(2) | 
|                                                       |  |                                 |  |                                                                     | 
|ACA CLO 2006-2, Limited                                |  | structured finance              |  | CLO preferred equity                                                |  |                 |           |  |      | $ | 2,200,000  |               |  | $ | 2,850,000  | 
|Airvana Network Solutions, Inc.                        |  | telecommunication services      |  | senior secured notes(4)(6)(11.00%, due August 27, 2014)             |  | $               | 8,847,171  |  |      |   | 8,700,153  |               |  |   | 8,858,230  | 
|AKQA, Inc.                                             |  | advertising                     |  | senior secured notes(4)(6)(4.96%, due March 20, 2013)               |  |                 | 7,865,342  |  |      |   | 7,865,342  |               |  |   | 7,857,477  | 
|Algorithmic Implementations, Inc. (d/b/a Ai Squared) |  | software                        |  | senior secured notes(4)(5)(6)(9.84%, due September 11, 2013)        |  |                 | 15,550,000 |  |      |   | 15,346,533 |               |  |   | 15,550,000 | 
|                                                       |  |                                 |  | common stock                                                        |  |                 |           |  |      |   | 3,000,000  |               |  |   | 2,600,000  | 
|American Integration Technologies, LLC                 |  | semiconductor capital equipment |  | senior secured notes(4)(5)(11.75%, due December 31, 2013)           |  |                 | 23,401,906 |  |      |   | 20,059,705 |               |  |   | 21,763,773 | 
|Avenue CLO V LTD 2007-5A D1                            |  | structured finance              |  | CLO secured notes(4)(5)(3.73%, due April 25, 2019)                  |  |                 | 3,659,805  |  |      |   | 1,702,855  |               |  |   | 2,049,491  | 
|Band Digital Inc. (F/K/A WHITTMANHART, Inc.)         |  | IT consulting                   |  | senior secured notes(4)(6) (15.58%,
due December 31, 2011)          |  |                 | 2,425,000  |  |      |   | 2,425,000  |               |  |   | 2,425,000  | 
|                                                       |  |                                 |  | warrants to purchase common stock(7)                                |  |                 |           |  |      |   |           |               |  |   |           | 
|Birch Communications, Inc.                             |  | telecommunication services      |  | senior secured notes(4) (15.00%,
due June 21, 2015)                 |  |                 | 5,000,000  |  |      |   | 5,000,000  |               |  |   | 5,000,000  | 
|BNY Convergex                                          |  | financial intermediaries        |  | second lien senior securednotes(4)(8.75%, due December 17, 2017)    |  |                 | 1,875,000  |  |      |   | 1,837,500  |               |  |   | 1,837,500  | 
|Canaras CLO2007-1A E                                  |  | structured finance              |  | CLO secured notes(4)(5)(4.65%, due June 19, 2021)                   |  |                 | 3,500,000  |  |      |   | 1,804,206  |               |  |   | 2,660,000  | 
|CIFC CLO2006-1A B2L                                   |  | structured finance              |  | CLO secured notes(4)(5)(4.29%, due October 20, 2020)                |  |                 | 3,247,284  |  |      |   | 1,593,673  |               |  |   | 2,273,099  | 
|Decision Resources, LLC                                |  | healthcare                      |  | first lien senior
securednotes(4)(5)(7.75%, due December 28,
2016)  |  |                 | 4,500,000  |  |      |   | 4,432,525  |               |  |   | 4,432,500  | 
|Del Mar CLO I Ltd. 2006-1                              |  | structured finance              |  | CLO secured notes(4)(5)(6)(4.29%, due July 25, 2018)                |  |                 | 1,831,690  |  |      |   | 934,388    |               |  |   | 1,373,768  | 
|Diversified Machine, Inc.                              |  | autoparts manufacturer          |  | first lien senior secured notes(4)(5)(10.50%, due October 28, 2015) |  |                 | 5,500,000  |  |      |   | 5,339,007  |               |  |   | 5,335,000  | 
|Drew Marine Partners, L.P.                             |  | shipping & transportation       |  | first lien senior
securednotes(4)(5)(6)(9.50%, due August 31,
2014) |  |                 | 4,468,750  |  |      |   | 4,371,448  |               |  |   | 4,424,063  | 
|Fairway Group Acquisition Company                      |  | grocery                         |  | first lien senior
securednotes(4)(5)(12.00%, due October 1,
2014)   |  |                 | 4,950,008  |  |      |   | 4,832,815  |               |  |   | 4,956,196  | 
|Flagship 2005-4A D                                     |  | structured finance              |  | CLO secured notes(4)(5)(5.05%, due June 1, 2017)                    |  |                 | 2,612,988  |  |      |   | 1,538,260  |               |  |   | 1,959,741  | 
|Fusionstorm, Inc.                                      |  | IT value-added reseller         |  | subordinated notes(4)(5)(6)(11.74%, due February 28, 2013)          |  |                 | 1,922,500  |  |      |   | 1,903,984  |               |  |   | 1,840,794  | 
|                                                       |  |                                 |  | warrants to purchase common stock(7)                                |  |                 |           |  |      |   | 725,000    |               |  |   | 150,000    | 

(Continued on next page)

See Accompanying Notes.



8



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##### Table of Contents

TICC CAPITAL CORP.

SCHEDULE OF INVESTMENTS  (Continued)

DECEMBER 31, 2010



|                                   |  |                                      |  |                                                                          |  |        |           |  |      |   |           |               |  |   |           | 
|---------------------------------- |  | ------------------------------------ |  | ------------------------------------------------------------------------ |  | ------ | --------- |  | ---- | - | --------- | ------------- |  | - | --------- | 
|COMPANY(1)                         |  | INDUSTRY                             |  | INVESTMENT                                                               |  | AMOUNT |           |  | COST |   |           | FAIR VALUE(2) | 
|                                   |  |                                      |  |                                                                          | 
|GenuTec Business Solutions, Inc.   |  | interactive voice messaging services |  | senior secured notes(4)(5)(7)
(0.0%, due October 30, 2014)               |  | $      | 3,476,000 |  |      | $ | 3,079,396 |               |  | $ | 2,000,000 | 
|                                   |  |                                      |  | convertible preferred stock(7)                                           |  |        |          |  |      |   | 1,500,000 |               |  |   |          | 
|GXS Worldwide Inc.                 |  | business software                    |  | senior secured notes(5) (9.75%, due
June 15, 2015)                       |  |        | 8,000,000 |  |      |   | 7,885,499 |               |  |   | 7,900,000 | 
|Harch CLO II LTD 2005-2a e         |  | structured finance                   |  | CDO secured notes(4)(5) (5.29%,
due October 22, 2017)                    |  |        | 4,819,262 |  |      |   | 2,382,248 |               |  |   | 3,325,290 | 
|Hewetts Island CDO 20071RA E      |  | structured finance                   |  | CDO secured notes(4)(5)(6)
(7.04%, due November 12, 2019)                |  |        | 3,193,918 |  |      |   | 1,859,658 |               |  |   | 2,746,769 | 
|Hewetts Island CDO III 2005-1A D   |  | structured finance                   |  | CDO secured notes(4)(5) (6.04%,
due August 9, 2017)                      |  |        | 6,640,478 |  |      |   | 3,503,885 |               |  |   | 5,578,002 | 
|Hewetts Island CDO IV 2006-4X E BB |  | structured finance                   |  | CDO secured notes(4)(5) (4.84%,
due May 9, 2018)                         |  |        | 3,251,816 |  |      |   | 1,491,511 |               |  |   | 2,438,862 | 
|HHI Holdings LLC                   |  | auto parts manufacturer              |  | senior secured notes(4)(5) (10.50%,
due March 30, 2015)                  |  |        | 3,381,236 |  |      |   | 3,292,190 |               |  |   | 3,415,049 | 
|Hudson Straits CLO 2004-1A E       |  | structured finance                   |  | CLO secured notes(4)(5) (7.04%,
due October 15, 2016)                    |  |        | 2,244,290 |  |      |   | 1,283,620 |               |  |   | 1,907,647 | 
|Hyland Software, Inc.              |  | enterprise software                  |  | first lien senior securednotes(4)(5) (6.75%,
due December 19, 2016)      |  |        | 3,818,182 |  |      |   | 3,780,029 |               |  |   | 3,822,955 | 
|Integra Telecomm, Inc.             |  | telecommunication services           |  | common stock(7)                                                          |  |        |          |  |      |   | 1,712,397 |               |  |   | 3,115,022 | 
|Krispy Kreme Doughnut Corporation  |  | retail food products                 |  | first lien senior securednotes(4)(5)(6)
(10.75% , due February 16, 2014) |  |        | 3,899,005 |  |      |   | 3,683,115 |               |  |   | 3,899,005 | 
|Landmark V CDO LTD                 |  | structured finance                   |  | CDO senior secured notes(4)(5)(6)
(5.55%, due June 1, 2017)              |  |        | 3,722,086 |  |      |   | 2,153,441 |               |  |   | 2,887,222 | 
|Latitude II CLO 2006 2A D          |  | structured finance                   |  | CLO senior secured notes(4)(5)(6)
(4.05%, due December 15, 2018)         |  |        | 2,828,018 |  |      |   | 1,475,855 |               |  |   | 1,630,635 | 
|Latitude III CLO 2007-3A           |  | structured finance                   |  | CLO secured notes(4)(5) (4.04%,
due April 11, 2021)                      |  |        | 4,000,000 |  |      |   | 1,834,131 |               |  |   | 2,200,000 | 
|Liberty CDO LTD 2005-1A C          |  | structured finance                   |  | CLO secured notes(4)(5)(6)
(2.19%, due November 1, 2017)                 |  |        | 2,371,953 |  |      |   | 1,283,845 |               |  |   | 1,470,611 | 
|Lightpoint CLO 2007-8a             |  | structured finance                   |  | CLO secured notes(4)(5) (6.79%,
due July 25, 2018)                       |  |        | 5,000,000 |  |      |   | 2,738,631 |               |  |   | 4,500,000 | 
|Loomis Sayles CLO 2006-1AE         |  | structured finance                   |  | CLO secured notes(4)(5) (4.14%,
due October 26, 2020)                    |  |        | 3,322,992 |  |      |   | 1,818,151 |               |  |   | 2,359,324 | 
|MLM Holdings, Inc.                 |  | business services                    |  | senior secured notes(4)(5) (7.00%,
due December 1, 2016)                 |  |        | 4,987,500 |  |      |   | 4,913,231 |               |  |   | 4,912,688 | 

(Continued on next page)

See Accompanying Notes.



9



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##### Table of Contents

TICC CAPITAL CORP.

SCHEDULE OF INVESTMENTS  (Continued)

DECEMBER 31, 2010



|                             |  |                           |  |                                                                       |  |        |            |  |      |   |             |              |  |   |             | 
|---------------------------- |  | ------------------------- |  | --------------------------------------------------------------------- |  | ------ | ---------- |  | ---- | - | ----------- | ------------ |  | - | ----------- | 
|COMPANY(1)                   |  | INDUSTRY                  |  | INVESTMENT                                                            |  | AMOUNT |            |  | COST |   |             | FAIRVALUE(2) | 
|Ocean Trails CLO II2007-2a-d |  | structured finance        |  | CLO subordinated secured
notes(4)(5)
(4.79%, due June 27, 2022)       |  | $      | 3,649,700  |  |      | $ | 1,974,935   |              |  | $ | 2,737,275   | 
|Pegasus Solutions, Inc.      |  | enterprise software       |  | first lien senior secured notes(4)(5)(6)(7.75%, due April 17, 2013)   |  |        | 2,950,461  |  |      |   | 2,722,247   |              |  |   | 2,768,506   | 
|                             |  |                           |  | second lien senior secured
notes(3)(5)(6)(13.00%, due April 15,
2014) |  |        | 5,290,695  |  |      |   | 3,153,479   |              |  |   | 4,936,219   | 
|                             |  |                           |  | common equity(7)                                                      |  |        |           |  |      |   | 62,595      |              |  |   | 112,238     | 
|                             |  |                           |  | preferred equity(7)                                                   |  |        |           |  |      |   | 657,247     |              |  |   | 1,530,949   | 
|Power Tools, Inc.            |  | software                  |  | senior secured notes(4)(5)(6)(12.00%,
due May 16, 2014)               |  |        | 9,000,000  |  |      |   | 8,912,088   |              |  |   | 8,235,000   | 
|                             |  |                           |  | warrants to purchase common stock(7)                                  |  |        |            |  |      |   | 350,000     |              |  |   | 370,000     | 
|Presidio Inc.                |  | business services         |  | first lien senior secured notes(4)(5)(7.50%, due December 16, 2015)   |  |        | 9,375,000  |  |      |   | 9,141,699   |              |  |   | 9,140,625   | 
|Prodigy Health Group         |  | healthcare                |  | second lien senior secured
notes(4)(5)
(8.27%, due November 29,
2013) |  |        | 3,013,333  |  |      |   | 2,153,283   |              |  |   | 2,968,133   | 
|Prospero II-XD BB CLO        |  | structured finance        |  | CLO senior secured notes(4)(5)(4.24%, due October 20, 2022)           |  |        | 9,900,000  |  |      |   | 4,191,843   |              |  |   | 6,336,000   | 
|QA Direct Holdings, LLC      |  | printing and publishing   |  | first lien senior secured notes(4)(5)(6)(8.25%, due August 10, 2014)  |  |        | 5,488,999  |  |      |   | 5,150,835   |              |  |   | 5,205,381   | 
|Sargas CLO 2006 -1A          |  | structured finance        |  | CLO subordinated notes                                                |  |        |           |  |      |   | 4,945,500   |              |  |   | 6,060,000   | 
|Shearers Food Inc.          |  | food productsmanufacturer |  | subordinated notes(3)(4)(5)(15.50%, due March 31, 2016)               |  |        | 4,071,049  |  |      |   | 3,979,305   |              |  |   | 4,111,759   | 
|Shield Finance Co.           |  | software                  |  | first lien term notes(4)(5)(6)(7.75%, due June 15, 2016)              |  |        | 5,910,000  |  |      |   | 5,681,659   |              |  |   | 5,880,450   | 
|SonicWall, Inc.              |  | software                  |  | first lien senior secured notes(4)(5)(8.25%, due January 23, 2016)    |  |        | 1,794,355  |  |      |   | 1,743,235   |              |  |   | 1,803,327   | 
|                             |  |                           |  | second lien senior secured notes(4)(5)(12.00%, due January 23, 2017)  |  |        | 5,000,000  |  |      |   | 4,856,725   |              |  |   | 5,000,000   | 
|Stratus Technologies, Inc.   |  | computer hardware         |  | first lien high yield
notes(5)(12.00%, due March 29, 2015)            |  |        | 10,000,000 |  |      |   | 9,175,912   |              |  |   | 9,885,000   | 
|                             |  |                           |  | common equity(7)                                                      |  |        |           |  |      |   | 377,928     |              |  |   | 0           | 
|                             |  |                           |  | preferred equity(7)                                                   |  |        |           |  |      |   | 186,622     |              |  |   | 431,480     | 
|U.S. Telepacific Corp.       |  | telecommunicationservices |  | senior secured notes(4)(5)(9.25%, due August 4, 2011)                 |  |        | 3,970,000  |  |      |   | 3,946,073   |              |  |   | 4,000,410   | 
|Vision Solutions, Inc        |  | software                  |  | senior secured notes(4)(5)(7.75%, due July 23, 2016)                  |  |        | 5,775,000  |  |      |   | 5,554,250   |              |  |   | 5,717,250   | 
|                             |  |                           |  |                                                                       |  |        |            |  |      |   |             |              |  |   |             | 
|Total Investments            |  |                           |  |                                                                       |  |        |            |  |      | $ | 226,200,687 |              |  | $ | 247,535,715 | 
|                             |  |                           |  |                                                                       |  |        |            |  |      |   |             |              |  |   |             | 

(Continued on next page)

See Accompanying Notes.



10



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##### Table of Contents



|(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) | Investment includes payment-in-kind interest.
|--- | ---------------------------------------------

|(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) | As a percentage of net assets at December 31, 2010, investments at fair value are categorized as follows: senior secured notes (55.4%), subordinated notes (1.9%),
CLO debt (16.1%), CLO equity (2.8%), common stock (1.9%), preferred shares (0.6%) and warrants to purchase equity securities (0.2%).
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | Aggregate gross unrealized appreciation for federal income tax purposes is $26,128,474; aggregate gross unrealized depreciation for federal income tax purposes is
$19,686,116. Net unrealized appreciation is $6,442,358 based upon a tax cost basis of $241,093,357.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See
Accompanying Notes.



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TICC CAPITAL CORP.

STATEMENTS OF OPERATIONS

(unaudited)



|                                                                                 |  |                                |            |   |                                |   |            |                              |  |   |                              |  |  |   |             |  
|-------------------------------------------------------------------------------- |  | ------------------------------ | ---------- | - | ------------------------------ | - | ---------- | ---------------------------- |  | - | ---------------------------- |  |  | - | ----------- | -
|                                                                                 |  | Three MonthsEndedJune 30, 2011 |            |   | Three MonthsEndedJune 30, 2010 |   |            | Six MonthsEndedJune 30, 2011 |  |   | Six MonthsEndedJune 30, 2010 | 
|INVESTMENT INCOME                                                                |  |                                |            |   |                                |   |            |                              |  |   |                              |  |  |   |             |  
|From non-affiliated/non-control investments:                                     |  |                                |            |   |                                |   |            |                              |  |   |                              |  |  |   |             |  
|Interest income  debt investments                                               |  | $                              | 6,896,080  |   |                                | $ | 6,888,136  |                              |  | $ | 13,762,724                   |  |  | $ | 12,093,583  |  
|Distributions from securitization vehicles and equity investments                |  |                                | 3,554,407  |   |                                |   | 949,504    |                              |  |   | 5,883,257                    |  |  |   | 1,710,487   |  
|Commitment, amendment fee income and other income                                |  |                                | 286,918    |   |                                |   | 460,739    |                              |  |   | 446,019                      |  |  |   | 477,304     |  
|                                                                                 |  |                                |            |   |                                |   |            |                              |  |   |                              |  |  |   |             |  
|Total investment income from non-affiliated/non-control investments              |  |                                | 10,737,405 |   |                                |   | 8,298,379  |                              |  |   | 20,092,000                   |  |  |   | 14,281,374  |  
|                                                                                 |  |                                |            |   |                                |   |            |                              |  |   |                              |  |  |   |             |  
|From control investments:                                                        |  |                                |            |   |                                |   |            |                              |  |   |                              |  |  |   |             |  
|Interest income  debt investments                                               |  |                                | 396,892    |   |                                |   | 432,173    |                              |  |   | 802,422                      |  |  |   | 1,005,269   |  
|                                                                                 |  |                                |            |   |                                |   |            |                              |  |   |                              |  |  |   |             |  
|Total investment income                                                          |  |                                | 11,134,297 |   |                                |   | 8,730,552  |                              |  |   | 20,894,422                   |  |  |   | 15,286,643  |  
|                                                                                 |  |                                |            |   |                                |   |            |                              |  |   |                              |  |  |   |             |  
|EXPENSES                                                                         |  |                                |            |   |                                |   |            |                              |  |   |                              |  |  |   |             |  
|Compensation expense                                                             |  |                                | 257,788    |   |                                |   | 239,484    |                              |  |   | 495,852                      |  |  |   | 479,196     |  
|Investment advisory fees                                                         |  |                                | 1,661,673  |   |                                |   | 1,316,047  |                              |  |   | 3,276,116                    |  |  |   | 2,458,845   |  
|Professional fees                                                                |  |                                | 167,942    |   |                                |   | 166,138    |                              |  |   | 461,214                      |  |  |   | 451,348     |  
|General and administrative                                                       |  |                                | 355,859    |   |                                |   | 256,874    |                              |  |   | 574,743                      |  |  |   | 415,817     |  
|                                                                                 |  |                                |            |   |                                |   |            |                              |  |   |                              |  |  |   |             |  
|Total expenses before incentive fees                                             |  |                                | 2,443,262  |   |                                |   | 1,978,543  |                              |  |   | 4,807,925                    |  |  |   | 3,805,206   |  
|                                                                                 |  |                                |            |   |                                |   |            |                              |  |   |                              |  |  |   |             |  
|Net investment income incentive fees                                             |  |                                | 610,441    |   |                                |   | 433,521    |                              |  |   | 988,551                      |  |  |   | 517,773     |  
|Capital gains incentive fees                                                     |  |                                | (1,442,843 | ) |                                |   |           |                              |  |   | 5,026,486                    |  |  |   |            |  
|                                                                                 |  |                                |            |   |                                |   |            |                              |  |   |                              |  |  |   |             |  
|Total incentive fees                                                             |  |                                | (832,402   | ) |                                |   | 433,521    |                              |  |   | 6,015,037                    |  |  |   | 517,773     |  
|                                                                                 |  |                                |            |   |                                |   |            |                              |  |   |                              |  |  |   |             |  
|Total expenses                                                                   |  |                                | 1,610,860  |   |                                |   | 2,412,064  |                              |  |   | 10,822,962                   |  |  |   | 4,322,979   |  
|                                                                                 |  |                                |            |   |                                |   |            |                              |  |   |                              |  |  |   |             |  
|Net investment income                                                            |  |                                | 9,523,437  |   |                                |   | 6,318,488  |                              |  |   | 10,071,460                   |  |  |   | 10,963,664  |  
|                                                                                 |  |                                |            |   |                                |   |            |                              |  |   |                              |  |  |   |             |  
|Net change in unrealized appreciation (depreciation) on investments              |  |                                | (6,053,718 | ) |                                |   | 2,124,885  |                              |  |   | 3,062,480                    |  |  |   | 46,591,881  |  
|                                                                                 |  |                                |            |   |                                |   |            |                              |  |   |                              |  |  |   |             |  
|Net realized gains (losses) on investments                                       |  |                                | 734,927    |   |                                |   | 1,158,583  |                              |  |   | 2,630,348                    |  |  |   | (29,969,743 | )
|                                                                                 |  |                                |            |   |                                |   |            |                              |  |   |                              |  |  |   |             |  
|Net increase in net assets resulting from operations                             |  | $                              | 4,204,646  |   |                                | $ | 9,601,956  |                              |  | $ | 15,764,288                   |  |  | $ | 27,585,802  |  
|                                                                                 |  |                                |            |   |                                |   |            |                              |  |   |                              |  |  |   |             |  
|Net increase in net assets resulting from net investment income percommon
share: |  |                                |            |   |                                |   |            |                              |  |   |                              |  |  |   |             |  
|Basic and diluted                                                                |  | $                              | 0.29       |   |                                | $ | 0.24       |                              |  | $ | 0.31                         |  |  | $ | 0.41        |  
|Net increase in net assets resulting from operations per common share:           |  |                                |            |   |                                |   |            |                              |  |   |                              |  |  |   |             |  
|Basic and diluted                                                                |  | $                              | 0.13       |   |                                | $ | 0.36       |                              |  | $ | 0.49                         |  |  | $ | 1.03        |  
|Weighted average shares of common stock outstanding:                             |  |                                |            |   |                                |   |            |                              |  |   |                              |  |  |   |             |  
|Basic and diluted                                                                |  |                                | 32,387,993 |   |                                |   | 26,875,554 |                              |  |   | 32,151,738                   |  |  |   | 26,844,898  |  

See Accompanying Notes.



12



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TICC CAPITAL CORP.

STATEMENTS OF CHANGES IN NET ASSETS

(unaudited)



|                                                                                                                          |  |                               |             |   |                             |   |             |  
|------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------- | ----------- | - | --------------------------- | - | ----------- | -
|                                                                                                                          |  | Six Months EndedJune 30, 2011 |             |   | Year EndedDecember 31, 2010 |  
|Increase in net assets from operations:                                                                                   |  |                               |             |   |                             |   |             |  
|Net investment income                                                                                                     |  | $                             | 10,071,460  |   |                             | $ | 24,243,497  |  
|Net realized gains (losses) on investments                                                                                |  |                               | 2,630,348   |   |                             |   | (42,132,660 | )
|Net change in unrealized appreciation on investments                                                                      |  |                               | 3,062,480   |   |                             |   | 81,836,604  |  
|                                                                                                                          |  |                               |             |   |                             |   |             |  
|Net increase in net assets resulting from operations                                                                      |  |                               | 15,764,288  |   |                             |   | 63,947,441  |  
|                                                                                                                          |  |                               |             |   |                             |   |             |  
|Distributions to shareholders                                                                                             |  |                               | (15,822,195 | ) |                             |   | (22,959,856 | )
|                                                                                                                          |  |                               |             |   |                             |   |             |  
|Capital share transactions:                                                                                               |  |                               |             |   |                             |   |             |  
|Issuance of common stock (net of offering costs of $318,630 and $2,817,408, respectively)                                 |  |                               | 6,360,019   |   |                             |   | 46,859,868  |  
|Reinvestment of dividends                                                                                                 |  |                               | 1,356,750   |   |                             |   | 2,178,093   |  
|                                                                                                                          |  |                               |             |   |                             |   |             |  
|Net increase in net assets from capital share transactions                                                                |  |                               | 7,716,769   |   |                             |   | 49,037,961  |  
|                                                                                                                          |  |                               |             |   |                             |   |             |  
|Total increase in net assets                                                                                              |  |                               | 7,658,862   |   |                             |   | 90,025,546  |  
|Net assets at beginning of period                                                                                         |  |                               | 314,117,541 |   |                             |   | 224,091,995 |  
|                                                                                                                          |  |                               |             |   |                             |   |             |  
|Net assets at end of period (including over distributed net investment income of $2,878,670 and $2,154,421,
respectively) |  | $                             | 321,776,403 |   |                             | $ | 314,117,541 |  
|                                                                                                                          |  |                               |             |   |                             |   |             |  
|Capital share activity:                                                                                                   |  |                               |             |   |                             |   |             |  
|Shares sold                                                                                                               |  |                               | 651,599     |   |                             |   | 4,834,651   |  
|Shares issued from reinvestment of dividends                                                                              |  |                               | 133,519     |   |                             |   | 238,500     |  
|                                                                                                                          |  |                               |             |   |                             |   |             |  
|Net increase in capital share activity                                                                                    |  |                               | 785,118     |   |                             |   | 5,073,151   |  
|                                                                                                                          |  |                               |             |   |                             |   |             |  

See Accompanying Notes.



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TICC CAPITAL CORP.

STATEMENTS OF CASH FLOWS

(unaudited)



|                                                                                                                        |  |                               |              |   |                               |   |             |  
|----------------------------------------------------------------------------------------------------------------------- |  | ----------------------------- | ------------ | - | ----------------------------- | - | ----------- | -
|                                                                                                                        |  | Six Months EndedJune 30, 2011 |              |   | Six Months EndedJune 30, 2010 |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                                    |  |                               |              |   |                               |   |             |  
|Net increase in net assets resulting from operations                                                                    |  | $                             | 15,764,288   |   |                               | $ | 27,585,802  |  
|Adjustments to reconcile net increase in net assets resulting from operations to net cash used by operating
activities: |  |                               |              |   |                               |   |             |  
|Amortization of discounts                                                                                               |  |                               | (2,380,176   | ) |                               |   | (2,746,346  | )
|Increase in investments due to PIK                                                                                      |  |                               | (805,325     | ) |                               |   | (285,849    | )
|Purchases of investments                                                                                                |  |                               | (133,030,853 | ) |                               |   | (52,801,072 | )
|Repayments of principal and reductions to investment cost value                                                         |  |                               | 70,426,939   |   |                               |   | 28,616,633  |  
|Proceeds from the sale of investments                                                                                   |  |                               | 8,407,096    |   |                               |   | 11,716,543  |  
|Net realized (gain) losses on investments                                                                               |  |                               | (2,630,348   | ) |                               |   | 29,969,743  |  
|Net change in unrealized appreciation on investments                                                                    |  |                               | (3,062,480   | ) |                               |   | (46,591,881 | )
|Decrease (increase) in interest receivable                                                                              |  |                               | 27,899       |   |                               |   | (721,595    | )
|Increase in distributions of securitization vehicles receivable                                                         |  |                               | (374,234     | ) |                               |   |            |  
|Decrease in prepaid expenses and other assets                                                                           |  |                               | 4,372        |   |                               |   | 201,531     |  
|Increase in investment advisory fee payable                                                                             |  |                               | 511,218      |   |                               |   | 630,024     |  
|Increase in capital gains incentive fee                                                                                 |  |                               | 5,026,486    |   |                               |   |            |  
|Increase in accrued expenses                                                                                            |  |                               | 292,971      |   |                               |   | 282,893     |  
|                                                                                                                        |  |                               |              |   |                               |   |             |  
|Net cash used by operating activities                                                                                   |  |                               | (41,822,147  | ) |                               |   | (4,143,574  | )
|                                                                                                                        |  |                               |              |   |                               |   |             |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                                                    |  |                               |              |   |                               |   |             |  
|Proceeds from the issuance of common stock                                                                              |  |                               | 6,678,649    |   |                               |   |            |  
|Offering expenses from the issuance of common stock                                                                     |  |                               | (318,630     | ) |                               |   |            |  
|Distributions paid (net of stock issued under dividend reinvestment plan of $1,356,750 and $888,955,
respectively)      |  |                               | (14,465,445  | ) |                               |   | (8,508,012  | )
|                                                                                                                        |  |                               |              |   |                               |   |             |  
|Net cash used by financing activities                                                                                   |  |                               | (8,105,426   | ) |                               |   | (8,508,012  | )
|                                                                                                                        |  |                               |              |   |                               |   |             |  
|Net decrease in cash and cash equivalents                                                                               |  |                               | (49,927,573  | ) |                               |   | (12,651,586 | )
|Cash and cash equivalents, beginning of period                                                                          |  |                               | 68,780,866   |   |                               |   | 23,972,885  |  
|                                                                                                                        |  |                               |              |   |                               |   |             |  
|Cash and cash equivalents, end of period                                                                                |  | $                             | 18,853,293   |   |                               | $ | 11,321,299  |  
|                                                                                                                        |  |                               |              |   |                               |   |             |  
|NON-CASH FINANCING ACTIVITIES                                                                                           |  |                               |              |   |                               |   |             |  
|Value of shares issued in connection with dividend reinvestment plan                                                    |  | $                             | 1,356,750    |   |                               | $ | 888,955     |  
|SUPPLEMENTAL DISCLOSURES                                                                                                |  |                               |              |   |                               |   |             |  
|Securities purchased not settled                                                                                        |  | $                             |             |   |                               | $ | 1,500,919   |  
|Securities sold not settled                                                                                             |  | $                             |             |   |                               | $ | 1,095,982   |  

See Accompanying Notes.



14



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TICC CAPITAL CORP.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2011

NOTE 1. UNAUDITED INTERIM FINANCIAL STATEMENTS

Interim financial statements of TICC Capital Corp. (TICC or Company) are prepared in accordance with generally
accepted accounting principles (GAAP) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial
statements prepared in accordance with GAAP are omitted. In the opinion of management, all adjustments, consisting solely of normal recurring accruals, necessary for the fair presentation of financial statements for the interim periods have been
included. The current periods results of operations are not necessarily indicative of results that may be achieved for the year. The interim financial statements and notes thereto should be read in conjunction with the financial statements and
notes thereto included in the Companys Form 10-K for the year ended December 31, 2010, as filed with the Securities and Exchange Commission (SEC).

Certain amounts have been reclassified in the 2010 financial statements to conform to the 2011 presentation.

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. The Company has elected to be treated as a business development company under the Investment Company Act of 1940, as amended (the 1940
Act). In addition, the Company has elected to be treated for tax purposes as a regulated investment company, or 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, principally by investing in the debt and/or equity securities of technology-related companies.

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.

NOTE 3. INVESTMENT
VALUATION

The most significant estimate inherent in the preparation of the Companys financial statements is the
valuation of investments and the related amounts of unrealized appreciation and depreciation of investments recorded. There is no single 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. The Company is required to specifically fair value each individual
investment on a quarterly basis.

In May 2011, the FASB issued an update to requirements relating to 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 with early adoption prohibited. We do not believe the adoption of
this update will have a material impact on our financial statements.

The Company 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. The Company has determined that due to the general illiquidity of the market for the Companys investment
portfolio, whereby little or no market data exists, all of the Companys investments are based upon Level 3 inputs as of June 30, 2011.

The Companys Board of Directors determines the value of TICCs 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, the Company has engaged third-party valuation firms to provide assistance in valuing its bilateral investments
and, more recently, for certain of its syndicated loans, although the Board of Directors ultimately determines the appropriate valuation of each such investment.

The Company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 the Company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 the Company exits a private investment is generally the sale,
the recapitalization or, in some cases, the initial public offering of the portfolio company.



15



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##### Table of Contents

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. The Company also uses industry valuation benchmarks and public market comparables. The Company also considers other events, including private mergers and acquisitions, a purchase
transaction, public offering or subsequent debt or equity sale or restructuring, and includes these events in the enterprise valuation process. The Company generally requires portfolio companies to provide annual audited and quarterly unaudited
financial statements, as well as annual projections for the upcoming fiscal year.

Typically, the Company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 the Company 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 the Company has a minority position, when there are restrictions on resale,
specific concerns about the receptivity of the capital markets to a specific company at a certain time, or other factors.

The
Company will record unrealized depreciation on bilateral investments when it believes that an investment has become impaired, including where collection of a loan or realization of an equity security is doubtful. The Company will record unrealized
appreciation if it believes that the underlying portfolio company has appreciated in value and the Companys equity security has also appreciated in value. Changes in fair value are recorded in the statement of operations as net change in
unrealized appreciation or depreciation.

Under the valuation procedures approved by the Board of Directors, upon the
recommendation of the Valuation Committee, a third-party valuation firm will prepare valuations for each of the Company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 TICCs 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 TICCs 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 TICCs 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 the Companys behalf, additional third party valuations with respect to both the Companys bilateral portfolio securities and the Companys syndicated loan investments. The Board of Directors retains ultimate authority as to
the third-party review cycle as well as the appropriate valuation of each investment.

Given the recent economic volatility,
the market for syndicated loans had become increasingly illiquid with limited or no transactions for many of those securities which the Company holds. 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, the Company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, although there has been improvement, since 2010, in transaction volume, the liquidity of the markets and the quality of the indicative quotes, the marketplace for which the Company
obtains indicative bid quotes for purposes of determining the fair value of its syndicated loan investments still have shown, at various times, some of the attributes of illiquidity as described by ASC-820-10-35. The Company has determined that the
current agent bank non-binding indicative bids for the substantial majority of its syndicated loans may not be considered reliable, and alternative valuation procedures would need to be performed until liquidity returns to the marketplace. As such,
the Company has engaged third-party valuation firms to provide assistance in valuing certain of its syndicated investments. 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 considered reliable, 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



16



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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. The Company has considered the factors described in ASC 820-10 and has determined that it is properly valuing the securities in its portfolio.

During the past several quarters, the Company 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, the Company 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, the Company considers 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 the 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 June 30, 2011, were as follows:



|                            |  |                                                             |      |  |                                            |   |     |                                        |  |   |       |  |  |   |       | 
|--------------------------- |  | ----------------------------------------------------------- | ---- |  | ------------------------------------------ | - | --- | -------------------------------------- |  | - | ----- |  |  | - | ----- | 
|($ in millions)             |  | Fair Value Measurements at Reporting Date Using             |      |  |                                            |  
|Assets                      |  | Quoted Prices inActive Markets forIdentical Assets(Level 1) |      |  | SignificantOther ObservableInputs(Level 2) |   |     | SignificantUnobservableInputs(Level 3) |  |   | Total | 
|Cash equivalents            |  | $                                                           | 18.5 |  |                                            | $ | 0.0 |                                        |  | $ | 0.0   |  |  | $ | 18.5  | 
|Senior Secured Notes        |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 200.0 |  |  |   | 200.0 | 
|CLO Debt                    |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 61.0  |  |  |   | 61.0  | 
|CLO Equity                  |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 33.1  |  |  |   | 33.1  | 
|Subordinated Notes          |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 5.5   |  |  |   | 5.5   | 
|Common Stock                |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 5.8   |  |  |   | 5.8   | 
|Preferred Shares            |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 2.5   |  |  |   | 2.5   | 
|Warrants to purchase equity |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 0.9   |  |  |   | 0.9   | 
|                            |  |                                                             |      |  |                                            |   |     |                                        |  |   |       |  |  |   |       | 
|Total                       |  | $                                                           | 18.5 |  |                                            | $ | 0.0 |                                        |  | $ | 308.8 |  |  | $ | 327.3 | 
|                            |  |                                                             |      |  |                                            |   |     |                                        |  |   |       |  |  |   |       | 

A reconciliation of the fair value of investments for three months ending June 30, 2011, utilizing
significant unobservable inputs, is as follows:



|                                                                                                                                                                                                                                                                                                                |  |                               |       |   |                                              |   |      |                                                |  |   |                             |   |  |                        |      |   |                                  |   |      |                                            |  |   |       |   |  |   |      |   |  |   |       |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------- | ----- | - | -------------------------------------------- | - | ---- | ---------------------------------------------- |  | - | --------------------------- | - |  | ---------------------- | ---- | - | -------------------------------- | - | ---- | ------------------------------------------ |  | - | ----- | - |  | - | ---- | - |  | - | ----- | -
|($ in millions)                                                                                                                                                                                                                                                                                                 |  | SeniorSecured NoteInvestments |       |   | CollateralizedLoanObligationDebt
Investments |   |      | CollateralizedLoanObligationEquity
Investments |  |   | SubordinatedNoteInvestments |   |  | CommonStockInvestments |      |   | PreferredShare EquityInvestments |   |      | Warrants 
toPurchaseCommonStockInvestments |  |   | Total |  
|Balance at March 31, 2011                                                                                                                                                                                                                                                                                       |  | $                             | 180.0 |   |                                              | $ | 63.9 |                                                |  | $ | 34.7                        |   |  | $                      | 5.8  |   |                                  | $ | 6.5  |                                            |  | $ | 2.3   |   |  | $ | 1.0  |   |  | $ | 294.2 |  
|Realized Gains included in earnings                                                                                                                                                                                                                                                                             |  |                               | 0.7   |   |                                              |   | 0.0  |                                                |  |   | 0.0                         |   |  |                        | 0.0  |   |                                  |   | 0.0  |                                            |  |   | 0.0   |   |  |   | 0.0  |   |  |   | 0.7   |  
|Unrealized appreciation included in earnings                                                                                                                                                                                                                                                                    |  |                               | (0.1  | ) |                                              |   | (3.3 | )                                              |  |   | (1.6                        | ) |  |                        | (0.1 | ) |                                  |   | (0.7 | )                                          |  |   | (0.1  | ) |  |   | (0.1 | ) |  |   | (6.0  | )
|Accretion of discount                                                                                                                                                                                                                                                                                           |  |                               | 0.7   |   |                                              |   | 0.5  |                                                |  |   | 0.0                         |   |  |                        | 0.0  |   |                                  |   | 0.0  |                                            |  |   | 0.0   |   |  |   | 0.0  |   |  |   | 1.2   |  
|Purchases                                                                                                                                                                                                                                                                                                       |  |                               | 30.6  |   |                                              |   | 0.0  |                                                |  |   | 0.0                         |   |  |                        | 0.0  |   |                                  |   | 0.0  |                                            |  |   | 0.0   |   |  |   | 0.0  |   |  |   | 30.6  |  
|Repayments and Sales(1)                                                                                                                                                                                                                                                                                         |  |                               | (11.9 | ) |                                              |   | (0.1 | )                                              |  |   | 0.0                         |   |  |                        | (0.2 | ) |                                  |   | 0.0  |                                            |  |   | 0.3   |   |  |   | 0.0  |   |  |   | (11.9 | )
|Transfers in and/or out of level 3                                                                                                                                                                                                                                                                              |  |                               | 0.0   |   |                                              |   | 0.0  |                                                |  |   | 0.0                         |   |  |                        | 0.0  |   |                                  |   | 0.0  |                                            |  |   | 0.0   |   |  |   | 0.0  |   |  |   | 0.0   |  
|                                                                                                                                                                                                                                                                                                                |  |                               |       |   |                                              |   |      |                                                |  |   |                             |   |  |                        |      |   |                                  |   |      |                                            |  |   |       |   |  |   |      |   |  |   |       |  
|Balance at June 30, 2011                                                                                                                                                                                                                                                                                        |  | $                             | 200.0 |   |                                              | $ | 61.0 |                                                |  | $ | 33.1                        |   |  | $                      | 5.5  |   |                                  | $ | 5.8  |                                            |  | $ | 2.5   |   |  | $ | 0.9  |   |  | $ | 308.8 |  
|                                                                                                                                                                                                                                                                                                                |  |                               |       |   |                                              |   |      |                                                |  |   |                             |   |  |                        |      |   |                                  |   |      |                                            |  |   |       |   |  |   |      |   |  |   |       |  
|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 |  | $                             | 0.7   |   |                                              | $ | (3.4 | )                                              |  | $ | (1.6                        | ) |  | $                      | (0.6 | ) |                                  | $ | (0.1 | )                                          |  | $ | (0.2  | ) |  | $ | (0.1 | ) |  | $ | (5.3  | )
|                                                                                                                                                                                                                                                                                                                |  |                               |       |   |                                              |   |      |                                                |  |   |                             |   |  |                        |      |   |                                  |   |      |                                            |  |   |       |   |  |   |      |   |  |   |       |  



|(1) | Includes PIK interest of approximately $733,000.
|--- | ------------------------------------------------



17



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##### Table of Contents

A reconciliation of the fair value of investments for six months ending June 30, 2011,
utilizing significant unobservable inputs, is as follows:



|                                                                                                                                                                                                                                                                                                                |  |                               |       |   |                                              |   |      |                                                |  |   |                             |  |  |                        |      |   |                                  |   |     |                                            |  |   |       |  |  |   |     |  |  |   |       |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------- | ----- | - | -------------------------------------------- | - | ---- | ---------------------------------------------- |  | - | --------------------------- |  |  | ---------------------- | ---- | - | -------------------------------- | - | --- | ------------------------------------------ |  | - | ----- |  |  | - | --- |  |  | - | ----- | -
|($ in millions)                                                                                                                                                                                                                                                                                                 |  | SeniorSecured NoteInvestments |       |   | CollateralizedLoanObligationDebt
Investments |   |      | CollateralizedLoanObligationEquity
Investments |  |   | SubordinatedNoteInvestments |  |  | CommonStockInvestments |      |   | PreferredShare EquityInvestments |   |     | Warrants 
toPurchaseCommonStockInvestments |  |   | Total | 
|Balance at December 31, 2010                                                                                                                                                                                                                                                                                    |  | $                             | 173.9 |   |                                              | $ | 50.4 |                                                |  | $ | 8.9                         |  |  | $                      | 6.0  |   |                                  | $ | 5.8 |                                            |  | $ | 2.0   |  |  | $ | 0.5 |  |  | $ | 247.5 |  
|Realized Gains included in earnings                                                                                                                                                                                                                                                                             |  |                               | 2.2   |   |                                              |   | 0.4  |                                                |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                            |  |   | 0.0   |  |  |   | 0.0 |  |  |   | 2.6   |  
|Unrealized appreciation included in earnings                                                                                                                                                                                                                                                                    |  |                               | 0.9   |   |                                              |   | 0.8  |                                                |  |   | 0.9                         |  |  |                        | (0.1 | ) |                                  |   | 0.0 |                                            |  |   | 0.2   |  |  |   | 0.4 |  |  |   | 3.1   |  
|Accretion of discount                                                                                                                                                                                                                                                                                           |  |                               | 1.4   |   |                                              |   | 1.0  |                                                |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                            |  |   | 0.0   |  |  |   | 0.0 |  |  |   | 2.4   |  
|Purchases                                                                                                                                                                                                                                                                                                       |  |                               | 97.8  |   |                                              |   | 10.1 |                                                |  |   | 23.3                        |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                            |  |   | 0.0   |  |  |   | 0.0 |  |  |   | 131.2 |  
|Repayments and Sales(1)                                                                                                                                                                                                                                                                                         |  |                               | (76.2 | ) |                                              |   | (1.7 | )                                              |  |   | 0.0                         |  |  |                        | (0.4 | ) |                                  |   | 0.0 |                                            |  |   | 0.3   |  |  |   | 0.0 |  |  |   | (78.0 | )
|Transfers in and/or out of level 3                                                                                                                                                                                                                                                                              |  |                               | 0.0   |   |                                              |   | 0.0  |                                                |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                            |  |   | 0.0   |  |  |   | 0.0 |  |  |   | 0.0   |  
|                                                                                                                                                                                                                                                                                                                |  |                               |       |   |                                              |   |      |                                                |  |   |                             |  |  |                        |      |   |                                  |   |     |                                            |  |   |       |  |  |   |     |  |  |   |       |  
|Balance at June 3, 2011                                                                                                                                                                                                                                                                                         |  | $                             | 200.0 |   |                                              | $ | 61.0 |                                                |  | $ | 33.1                        |  |  | $                      | 5.5  |   |                                  | $ | 5.8 |                                            |  | $ | 2.5   |  |  | $ | 0.9 |  |  | $ | 308.8 |  
|                                                                                                                                                                                                                                                                                                                |  |                               |       |   |                                              |   |      |                                                |  |   |                             |  |  |                        |      |   |                                  |   |     |                                            |  |   |       |  |  |   |     |  |  |   |       |  
|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 |  | $                             | 2.8   |   |                                              | $ | 1.1  |                                                |  | $ | 1.0                         |  |  | $                      | (0.1 | ) |                                  | $ | 0.0 |                                            |  | $ | 0.2   |  |  | $ | 0.4 |  |  | $ | 5.4   |  
|                                                                                                                                                                                                                                                                                                                |  |                               |       |   |                                              |   |      |                                                |  |   |                             |  |  |                        |      |   |                                  |   |     |                                            |  |   |       |  |  |   |     |  |  |   |       |  



|(1) | Includes PIK interest of approximately $805,000.
|--- | ------------------------------------------------



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Our assets measured at fair value on a recurring basis subject to the disclosure
requirements of ASC 820-10-35 at December 31, 2010, were as follows:



|                            |  |                                                             |      |  |                                            |   |     |                                        |  |   |       |  |  |   |       | 
|--------------------------- |  | ----------------------------------------------------------- | ---- |  | ------------------------------------------ | - | --- | -------------------------------------- |  | - | ----- |  |  | - | ----- | 
|($ in millions)             |  | Fair Value Measurements at Reporting Date Using             |      |  |                                            |  
|Assets                      |  | Quoted Prices inActive Markets forIdentical Assets(Level 1) |      |  | SignificantOther ObservableInputs(Level 2) |   |     | SignificantUnobservableInputs(Level 3) |  |   | Total | 
|Cash equivalents            |  | $                                                           | 68.5 |  |                                            | $ | 0.0 |                                        |  | $ | 0.0   |  |  | $ | 68.5  | 
|Senior Secured Notes        |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 173.9 |  |  |   | 173.9 | 
|CLO Debt                    |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 50.4  |  |  |   | 50.4  | 
|CLO Equity                  |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 8.9   |  |  |   | 8.9   | 
|Subordinated Notes          |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 6.0   |  |  |   | 6.0   | 
|Common Stock                |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 5.8   |  |  |   | 5.8   | 
|Preferred Shares            |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 2.0   |  |  |   | 2.0   | 
|Warrants to purchase equity |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 0.5   |  |  |   | 0.5   | 
|                            |  |                                                             |      |  |                                            |   |     |                                        |  |   |       |  |  |   |       | 
|Total                       |  | $                                                           | 68.5 |  |                                            | $ | 0.0 |                                        |  | $ | 247.5 |  |  | $ | 316.0 | 
|                            |  |                                                             |      |  |                                            |   |     |                                        |  |   |       |  |  |   |       | 

A reconciliation of the fair value of investments for the year ended December 31, 2010, utilizing
significant unobservable inputs, is as follows:



|                                                                                                                                                                                                                                                                                                                |  |                               |        |   |                                              |   |      |                                                |  |   |                             |  |  |                        |      |   |                                  |    |      |                                            |  |   |       |  |  |   |     |  |  |   |        |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------- | ------ | - | -------------------------------------------- | - | ---- | ---------------------------------------------- |  | - | --------------------------- |  |  | ---------------------- | ---- | - | -------------------------------- | -- | ---- | ------------------------------------------ |  | - | ----- |  |  | - | --- |  |  | - | ------ | -
|($ in millions)                                                                                                                                                                                                                                                                                                 |  | SeniorSecured NoteInvestments |        |   | CollateralizedLoanObligationDebt
Investments |   |      | CollateralizedLoanObligationEquity
Investments |  |   | SubordinatedNoteInvestments |  |  | CommonStockInvestments |      |   | PreferredShare EquityInvestments |    |      | Warrants 
toPurchaseCommonStockInvestments |  |   | Total | 
|Balance at December 31, 2009                                                                                                                                                                                                                                                                                    |  | $                             | 180.1  |   |                                              | $ | 4.9  |                                                |  | $ | 2.2                         |  |  | $                      | 2.7  |   |                                  | $  | 5.5  |                                            |  | $ | 0.0   |  |  | $ | 0.5 |  |  | $ | 195.9  |  
|Realized Losses included in earnings                                                                                                                                                                                                                                                                            |  |                               | (42.4  | ) |                                              |   | 0.0  |                                                |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |    | 0.0  |                                            |  |   | 0.0   |  |  |   | 0.0 |  |  |   | (42.4  | )
|Unrealized appreciation included in earnings                                                                                                                                                                                                                                                                    |  |                               | 63.7   |   |                                              |   | 15.0 |                                                |  |   | 1.8                         |  |  |                        | 0.8  |   |                                  |    | (0.1 | )                                          |  |   | 1.2   |  |  |   | 0.0 |  |  |   | 82.4   |  
|Accretion of discount                                                                                                                                                                                                                                                                                           |  |                               | 4.5    |   |                                              |   | 1.1  |                                                |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |    | 0.0  |                                            |  |   | 0.0   |  |  |   | 0.0 |  |  |   | 5.6    |  
|Purchases                                                                                                                                                                                                                                                                                                       |  |                               | 88.1   |   |                                              |   | 31.5 |                                                |  |   | 4.9                         |  |  |                        | 3.9  |   |                                  |    | 0.4  |                                            |  |   | 0.8   |  |  |   | 0.0 |  |  |   | 129.6  |  
|Repayments and Sales(1)                                                                                                                                                                                                                                                                                         |  |                               | (120.1 | ) |                                              |   | (2.1 | )                                              |  |   | 0.0                         |  |  |                        | (1.4 | ) |                                  |    | 0.0  |                                            |  |   | 0.0   |  |  |   | 0.0 |  |  |   | (123.6 | )
|Transfers in and/or out of level 3                                                                                                                                                                                                                                                                              |  |                               | 0.0    |   |                                              |   | 0.0  |                                                |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |    | 0.0  |                                            |  |   | 0.0   |  |  |   | 0.0 |  |  |   | 0.0    |  
|                                                                                                                                                                                                                                                                                                                |  |                               |        |   |                                              |   |      |                                                |  |   |                             |  |  |                        |      |   |                                  |    |      |                                            |  |   |       |  |  |   |     |  |  |   |        |  
|Balance at December 31, 2010                                                                                                                                                                                                                                                                                    |  | $                             | 173.9  |   |                                              | $ | 50.4 |                                                |  | $ | 8.9                         |  |  | $                      | 6.0  |   |                                  | $  | 5.8  |                                            |  | $ | 2.0   |  |  | $ | 0.5 |  |  | $ | 247.5  |  
|                                                                                                                                                                                                                                                                                                                |  |                               |        |   |                                              |   |      |                                                |  |   |                             |  |  |                        |      |   |                                  |    |      |                                            |  |   |       |  |  |   |     |  |  |   |        |  
|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 |  | $                             | 18.7   |   |                                              | $ | 15.0 |                                                |  | $ | 1.8                         |  |  | $                      | 0.9  |   |                                  | ($ | 0.1  | )                                          |  | $ | 1.1   |  |  | $ | 0.1 |  |  | $ | 37.5   |  
|                                                                                                                                                                                                                                                                                                                |  |                               |        |   |                                              |   |      |                                                |  |   |                             |  |  |                        |      |   |                                  |    |      |                                            |  |   |       |  |  |   |     |  |  |   |        |  



|(1) | PIK interest of approximately $710,000 and rounding adjustments to reconcile period balances.
|--- | ---------------------------------------------------------------------------------------------



19



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NOTE 4. 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 and six months ended June 30, 2011 and 2010,
respectively:



|                                                                                                             |  |                                 |            |  |                                 |   |            |                               |  |   |                               |  |  |   |            | 
|------------------------------------------------------------------------------------------------------------ |  | ------------------------------- | ---------- |  | ------------------------------- | - | ---------- | ----------------------------- |  | - | ----------------------------- |  |  | - | ---------- | 
|                                                                                                             |  | Three Months EndedJune 30, 2011 |            |  | Three Months EndedJune 30, 2010 |   |            | Six Months EndedJune 30, 2011 |  |   | Six Months EndedJune 30, 2010 | 
|Numerator for basic and diluted income per sharenet increase in net assets resulting from investment income |  | $                               | 9,523,437  |  |                                 | $ | 6,318,488  |                               |  | $ | 10,071,460                    |  |  | $ | 10,963,664 | 
|                                                                                                             |  |                                 |            | 
|Numerator for basic and diluted income per sharenet increase in net assets resulting from operations        |  | $                               | 4,204,646  |  |                                 | $ | 9,601,956  |                               |  | $ | 15,764,288                    |  |  | $ | 27,585,802 | 
|                                                                                                             |  |                                 |            | 
|Denominator for basic and diluted income per shareweighted average shares                                   |  |                                 | 32,387,993 |  |                                 |   | 26,875,554 |                               |  |   | 32,151,738                    |  |  |   | 26,844,898 | 
|                                                                                                             |  |                                 |            | 
|Basic and diluted net investment income per common share                                                     |  | $                               | 0.29       |  |                                 | $ | 0.24       |                               |  | $ | 0.31                          |  |  | $ | 0.41       | 
|                                                                                                             |  |                                 |            | 
|Basic and diluted net increase in net assets resulting from operations per common share                      |  | $                               | 0.13       |  |                                 | $ | 0.36       |                               |  | $ | 0.49                          |  |  | $ | 1.03       | 

NOTE 5. RELATED PARTY TRANSACTIONS

The Company has entered into an investment advisory agreement with TICC Management. TICC Management is controlled by BDC Partners, its managing member. In addition to BDC Partners, TICC Management is
owned by Charles M. Royce, a non-managing member. 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 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.

The Company has also entered into the Administration Agreement
with BDC Partners under which 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 June 30, 2011 and 2010, TICC incurred investment advisory fees consisting
of the base management fee of approximately $1,662,000 and $1,316,000, respectively; for the first two quarters ended June 30, 2011 and 2010, TICC incurred investment advisory fees of approximately $3,276,000 and $2,459,000, respectively. The
net investment income incentive fee payable to TICC Management for the second quarter of 2011 was approximately $610,000 compared to approximately $434,000 in the second quarter of 2010. The investment advisory fee payable, including the base
management fee and the net investment income incentive fee, to TICC Management was $2,272,000 and $1,749,000 at June 30, 2011 and 2010, respectively.

Due to significant net unrealized appreciation in our portfolio, we recorded a capital gains incentive fee of approximately $6.5 million for the quarter ended March 31, 2011 based on a hypothetical
liquidation of our portfolio on March 31, 2011. There was no such fee accrued for the same period in 2010. The capital gains incentive fee expense, as reported under generally accepted accounting principles, is calculated on the basis of net
realized gains/losses and net unrealized appreciation/depreciation at the end of each period. For the quarter ending June 30, 2011, TICC recorded unrealized depreciation of approximately $6.0 million and, as a result, the capital gains



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incentive fee liability was reduced by approximately $1.5 million. For the first two quarters of 2011, the capital gains incentive fee was approximately $5.0 million and there was no such fee for
the same period in 2010. 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 our portfolio as of period end and the termination of the Investment Advisory Agreement on such date. The $6.5 million capital gains incentive fee expense, and associated accrual, for the first
quarter of 2011 as well as the $1.5 million reduction for the quarter ended June 30, 2011 relate entirely to the hypothetical liquidation calculation. Also, it should be noted that the capital gains incentive fee expense fluctuates with our
overall investment results.

Pursuant to the terms of its administration agreement with BDC Partners, for the quarters ended
June 30, 2011 and 2010 respectively, TICC incurred $257,800 and $239,500 in compensation expenses for employees allocated to the administrative activities of TICC; for the six months ended June 30, 2011 and 2010, TICC incurred
approximately $495,900 and $479,200, respectively, in such expenses, of which approximately $267,000 and $246,200 remained payable at the end of each respective quarter. TICC also incurred approximately $17,300 and $20,200 for reimbursement of
facility costs for the three months ended June 30, 2011 and 2010, respectively; for the six months ended June 30, 2011 and 2010, TICC incurred $34,700 and $40,190, of which amounts $6,000 and $0 remained payable at the end of each
respective period.

NOTE 6. 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 earnings fall 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.

On June 30, 2011, the Company paid a dividend of $0.25 per share. For the six month period ended June 30, 2010, the Company distributed $0.49 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.

NOTE 7. NET ASSET VALUE PER SHARE

The Companys net asset value per share at June 30, 2011 was $9.85, and at December 31, 2010 was $9.85. 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 8. PAYMENT-IN-KIND INTEREST

The Company may have investments in its
portfolio which contain a payment-in-kind, or PIK, provision. The PIK interest 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 6 above), this non-cash source
of income must be paid out to stockholders in the form of dividends, even though the Company has not yet collected the cash. Amounts necessary to pay these dividends may come from available cash or the liquidation of certain investments. For the
three months ended June 30, 2011 and 2010, the Company recorded approximately $733,000 and $204,000 in PIK interest, respectively. For the six months ended June 30, 2011 and 2010, the Company recorded approximately $805,000 and $286,000 in
PIK interest, respectively.

In addition, the Company recorded discount income of approximately $1.2 million and $1.4 million
for the three months ended June 30, 2011 and 2010, 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 $2.4 million and $2.7 million for the six months ended June 30, 2011 and 2010, respectively.

NOTE 9. 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.

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 ended June 30, 2011 and 2010, respectively, the Company received no fee income for managerial
assistance.



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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 received approximately $3.6 million in such distributions during the quarter ended June 30, 2011, compared to $949,500 for the same period last year. The Company received
distribution of approximately $5.9 million and $1.7 million for the six months ended June 30, 2011 and 2010, respectively.



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NOTE 10. FINANCIAL HIGHLIGHTS

Financial highlights for the three months ending June 30, 2011 and 2010, respectively, are as follows:



|                                                        |  |                                             |            |    |                                             |   |            |                                           |  |   |                                           |    |  |   |            |  
|------------------------------------------------------- |  | ------------------------------------------- | ---------- | -- | ------------------------------------------- | - | ---------- | ----------------------------------------- |  | - | ----------------------------------------- | -- |  | - | ---------- | -
|                                                        |  | Three Months 
EndedJune 30, 2011(unaudited) |            |    | Three Months 
EndedJune 30, 2010(unaudited) |   |            | Six Months 
EndedJune 30, 2011(unaudited) |  |   | Six Months 
EndedJune 30, 2010(unaudited) |   
|                                                        |  |                                             |           
|                                                        |  |                                             |           
|Per Share Data                                          |  |                                             |            |    |                                             |   |            |                                           |  |   |                                           |    |  |   |            |  
|Net asset value at beginning of period                  |  | $                                           | 9.97       |    |                                             | $ | 8.87       |                                           |  | $ | 9.85                                      |    |  | $ | 8.36       |  
|                                                        |  |                                             |            |    |                                             |   |            |                                           |  |   |                                           |    |  |   |            |  
|Net investment income(1)                                |  |                                             | 0.29       |    |                                             |   | 0.24       |                                           |  |   | 0.31                                      |    |  |   | 0.41       |  
|Net realized and unrealized capital gains (losses)(2)   |  |                                             | (0.16      | )  |                                             |   | 0.12       |                                           |  |   | 0.18                                      |    |  |   | 0.62       |  
|                                                        |  |                                             |            |    |                                             |   |            |                                           |  |   |                                           |    |  |   |            |  
|Total from investment operations                        |  |                                             | 0.13       |    |                                             |   | 0.36       |                                           |  |   | 0.49                                      |    |  |   | 1.03       |  
|                                                        |  |                                             |            |    |                                             |   |            |                                           |  |   |                                           |    |  |   |            |  
|Total distributions(3)                                  |  |                                             | (0.25      | )  |                                             |   | (0.20      | )                                         |  |   | (0.49                                     | )  |  |   | (0.35      | )
|                                                        |  |                                             |            |    |                                             |   |            |                                           |  |   |                                           |    |  |   |            |  
|Effect of shares issued, net of offering expenses       |  |                                             | 0.00       |    |                                             |   | 0.00       |                                           |  |   | 0.00                                      |    |  |   | (0.01      | )
|                                                        |  |                                             |            |    |                                             |   |            |                                           |  |   |                                           |    |  |   |            |  
|Net asset value at end of period                        |  | $                                           | 9.85       |    |                                             | $ | 9.03       |                                           |  | $ | 9.85                                      |    |  | $ | 9.03       |  
|                                                        |  |                                             |            |    |                                             |   |            |                                           |  |   |                                           |    |  |   |            |  
|Per share market value at beginning of period           |  | $                                           | 10.87      |    |                                             | $ | 6.59       |                                           |  | $ | 11.21                                     |    |  | $ | 6.05       |  
|Per share market value at end of period                 |  | $                                           | 9.60       |    |                                             | $ | 8.40       |                                           |  | $ | 9.60                                      |    |  | $ | 8.40       |  
|Total return(4)                                         |  |                                             | (9.38      | %) |                                             |   | 30.50      | %                                         |  |   | (10.19                                    | %) |  |   | 45.38      | %
|Shares outstanding at end of period                     |  |                                             | 32,671,485 |    |                                             |   | 26,932,340 |                                           |  |   | 32,671,485                                |    |  |   | 26,932,340 |  
|Ratios/Supplemental Data                                |  |                                             |            |    |                                             |   |            |                                           |  |   |                                           |    |  |   |            |  
|Net assets at end of period (000s)                     |  |                                             | 321,776    |    |                                             |   | 243,170    |                                           |  |   | 321,776                                   |    |  |   | 243,170    |  
|Average net assets (000s)                              |  |                                             | 321,805    |    |                                             |   | 240,404    |                                           |  |   | 318,218                                   |    |  |   | 233,010    |  
|Ratio of expenses to average net assets:                |  |                                             |            |    |                                             |   |            |                                           |  |   |                                           |    |  |   |            |  
|Expenses before incentive fees                          |  |                                             | 3.03       | %  |                                             |   | 3.29       | %                                         |  |   | 3.02                                      | %  |  |   | 3.27       | %
|Net investment income incentive fees                    |  |                                             | 0.76       | %  |                                             |   | 0.72       | %                                         |  |   | 0.62                                      | %  |  |   | 0.44       | %
|Capital gains incentive fees                            |  |                                             | (1.79      | %) |                                             |   | 0.00       | %                                         |  |   | 3.16                                      | %  |  |   | 0.00       | %
|                                                        |  |                                             |            |    |                                             |   |            |                                           |  |   |                                           |    |  |   |            |  
|Total ratio of expenses to average net assets(5)        |  |                                             | 2.00       | %  |                                             |   | 4.01       | %                                         |  |   | 6.80                                      | %  |  |   | 3.71       | %
|                                                        |  |                                             |            |    |                                             |   |            |                                           |  |   |                                           |    |  |   |            |  
|Ratio of net investment income to average net assets(5) |  |                                             | 11.84      | %  |                                             |   | 10.51      | %                                         |  |   | 6.33                                      | %  |  |   | 9.41       | %



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

|(2) | Net realized and unrealized capital gains include rounding adjustments to reconcile change in net asset value per share.
|--- | ------------------------------------------------------------------------------------------------------------------------

|(3) | 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 June 30, 2011, none of the distributions for 2011 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.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|(5) | Annualized.
|--- | -----------



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NOTE 11. CASH AND CASH EQUIVALENTS

At June 30, 2011 and December 31, 2010, respectively, cash and cash equivalents consisted of:



|                                                               |  |              |            |  |                  |   |            | 
|-------------------------------------------------------------- |  | ------------ | ---------- |  | ---------------- | - | ---------- | 
|                                                               |  | June 30,2011 |            |  | December 31,2010 |  
|Eurodollar Time Deposit (due 7/01/11 and 1/3/11, respectively) |  | $            | 18,502,400 |  |                  | $ | 68,513,869 | 
|                                                               |  |              |            |  |                  |   |            | 
|Total Cash Equivalents                                         |  |              | 18,502,400 |  |                  |   | 68,513,869 | 
|Cash                                                           |  |              | 350,893    |  |                  |   | 266,997    | 
|                                                               |  |              |            |  |                  |   |            | 
|Cash and Cash Equivalents                                      |  | $            | 18,853,293 |  |                  | $ | 68,780,866 | 
|                                                               |  |              |            |  |                  |   |            | 

NOTE 12. COMMITMENTS

As of June 30, 2011, the Company had not issued any commitment to purchase additional debt investments and/or warrants from any portfolio companies.

NOTE 13. SUBSEQUENT EVENTS

On July 28, 2011, the Board of Directors declared a distribution of $0.25 per share for the third quarter, payable on September 30, 2011 to shareholders of record as of September 16, 2011.

On August 4, 2011, the Company priced the senior notes in a $225,000,000 collateralized loan obligation (CLO) transaction.
The senior notes will be issued by a newly formed special purpose vehicle in which a wholly-owned subsidiary of the Company owns all of the equity. The senior notes will have an initial face amount of $101,250,000, are expected to be rated AAA/Aaa
by Standard & Poors Ratings Services and Moodys Investors Service, Inc., respectively, and will bear interest at three-month LIBOR plus 2.25%. The senior notes will have a stated maturity date of July 25, 2021 and will be subject to
a three year non-call period. The CLO will have a three year reinvestment period. The anticipated closing date of the transaction is August 10, 2011.



|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

FORWARD-LOOKING STATEMENTS

The information contained in this section should be read in conjunction with our financial statements and related notes and schedules thereto appearing elsewhere in this Quarterly Report on Form 10-Q, as
well as the sections entitled Selected Financial Data and Managements Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and related notes and schedules thereto
included in our Annual Report on Form 10-K for the year ended December 31, 2010.

This Quarterly Report on Form 10-Q,
including the Managements Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical
facts, but rather are based on current expectations, estimates and projections about our industry, our beliefs, and our assumptions. Words such as anticipates, expects, intends, plans,
believes, seeks, and estimates and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject
to risks, uncertainties, and other factors, some of which are beyond our control and 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 customers ability to repay our loans and increase our non-performing assets,
| | - |  | -------------------------------------------------------------------------------------------------------------------



| |  |  | an economic downturn could disproportionately impact the technology-related industry in which we concentrate causing us to suffer losses in our
portfolio and experience diminished demand for capital in this industry sector,
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 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,
| | - |  | ------------------------------------------------------------



| |  |  | 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 annual report 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 as otherwise specified, references to TICC, the Company, we, us and our refer to TICC Capital Corp.



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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.

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, or 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, LLC (TICC Management), a registered
investment adviser under the Investment Advisers Act of 1940, as amended. TICC Management is owned by BDC Partners, LLC (BDC Partners), its managing member, and Mr. Charles M. Royce. Jonathan H. Cohen, our Chief Executive
Officer, and Saul B. Rosenthal, our President and Chief Operating Officer, are the members of BDC Partners, and Charles M. Royce, our non-executive chairman, is the President of Royce & Associates. 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 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.

We currently concentrate our investments in companies having annual revenues of less than $200 million and/or an equity capitalization of
less than $300 million. While the structure of our investments will vary, we invest primarily 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.

We expect that our investments will generally range
between $5 million and $30 million each, 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. As of June 30, 2011, our debt
investments had stated interest rates of between 2.17% and 15.58% (excluding our investment in GenuTec Business Solutions, Inc. which carries a zero interest rate through October 30, 2014) and maturity dates of between 18 and 136 months. In
addition, our total portfolio had a weighted average yield on debt investments of approximately 12.9% including GenuTec Business Solutions, Inc.

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 June 30, 2011, we recognized
approximately $773,000 of interest income attributable to PIK associated with our investments in Pegasus Solutions, Inc., Merrill Communications, LLC. and Shearers Food, Inc., compared to PIK interest of approximately $204,000 for the quarter ended
June 30, 2010.

We have historically and may continue to borrow funds to make investments. As a result, we may be 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 business development company under the 1940 Act, we are required to make available significant managerial assistance,
for which we may receive fees, to our portfolio companies. These fees 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.



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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 June 30, 2011, we closed approximately $30.6 million in new portfolio investments. During the quarter
ended June 30, 2011, we recognized a total of $12.6 million from principal repayments on debt investments. We realized net gains on investments during the quarter ended June 30, 2011 in the amount of approximately $734,000.



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Based upon the fair value determinations made in good faith by the Board of Directors,
during the quarter ended June 30, 2011, we had net unrealized depreciation of approximately $6.0 million, comprised of $1.9 million in gross unrealized appreciation, $7.1 million in gross unrealized depreciation and approximately $0.8 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 quarter ended June 30, 2011 were as follows (in
millions):



|                                       |  |                                      |      |  
|-------------------------------------- |  | ------------------------------------ | ---- | -
|Portfolio Company                      |  | Unrealizedappreciation(depreciation) |     
|American Integration Technologies, LLC |  | $                                    | 0.9  |  
|Pegasus Solutions, LLC                 |  |                                      | 0.4  |  
|Lightpoint CLO 2007-8a                 |  |                                      | (0.3 | )
|Ocean Trails CLO II 2007-2a-d          |  |                                      | (0.3 | )
|Harbourview  2006A CLO Equity         |  |                                      | (0.4 | )
|Hewetts Island CDO III 2005-1A D       |  |                                      | (0.5 | )
|Hewetts Island CDO IV 2006-4           |  |                                      | (0.6 | )
|Sargas CLO 2006 -1A                    |  |                                      | (0.8 | )
|Prodigy Health Group                   |  |                                      | (0.8 | )
|Integra Telecomm, Inc                  |  |                                      | (1.0 | )
|Net all other                          |  |                                      | (2.6 | )
|                                       |  |                                      |      |  
|Total                                  |  | $                                    | (6.0 | )
|                                       |  |                                      |      |  

For the quarter ended June 30, 2010, we recorded net realized gains on investments of approximately
$1.2 million, which largely represent the gains associated with the repayment of our debt investments in Stratus Technology, Inc. (approximately $766,000) and Punch Software, LLC (approximately $400,000).

Based upon the fair value determinations made in good faith by the Board of Directors, during the quarter ended June 30, 2010, we
had net unrealized gains of approximately $2.1 million, comprised of $9.5 million in gross unrealized appreciation, $7.0 million in gross unrealized depreciation and approximately $0.4 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 quarter ended June 30, 2010 were as follows (in millions):



|                                           |  |                                      |      |  
|------------------------------------------ |  | ------------------------------------ | ---- | -
|Portfolio Company                          |  | Unrealizedappreciation(depreciation) |     
|American Integration Technologies, LLC     |  | $                                    | 4.4  |  
|Palm, Inc.                                 |  |                                      | 2.3  |  
|Stratus Technolgies, Inc. preferred equity |  |                                      | 0.3  |  
|Cavtel Holdings, LLC                       |  |                                      | (0.3 | )
|First Data Corporation                     |  |                                      | (0.3 | )
|Stratus Technologies, Inc. common equity   |  |                                      | (0.3 | )
|Sargas CLO 2006-1A                         |  |                                      | (0.4 | )
|Stratus Technolgies, Inc.                  |  |                                      | (0.8 | )
|Integra Telecomm, Inc.                     |  |                                      | (0.9 | )
|WAICCS Las Vegas, LLC                      |  |                                      | (1.5 | )
|Net all other                              |  |                                      | (0.4 | )
|                                           |  |                                      |      |  
|Total                                      |  | $                                    | 2.1  |  
|                                           |  |                                      |      |  

Current Market and Economic Conditions

Beginning in mid-2007, global credit and other financial markets suffered substantial stress, volatility, illiquidity and disruption. These developments caused a series of failures and restructurings
among a large number of financial institutions, which either participated in the origination and distribution of structured finance or syndicated loan credit products, or invested in them. The debt and equity capital markets in the United States
have been impacted by significant write-offs in the financial services sector relating to these products and the re-pricing of credit risk in the loan market, among other things.



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These events constrained the availability of capital for the market as a whole, and the
financial services sector in particular. During 2009, the syndicated corporate loans market experienced both unprecedented price declines and volatility. While prices remained depressed across many sectors and ratings categories through most of
2009, we witnessed a strong upward move during the second half of 2009, which has continued through 2010 and into 2011. Although corporate loan prices may still be below historical averages, our view is that certain, primarily larger-issuer, broadly
syndicated corporate loans still may not adequately reflect the spreads necessary to compensate investors for the risks involved. In view of the above circumstances, we continue to focus more heavily on middle market issuers and to a limited extent
larger issuers, and opportunistically, on certain structured finance investments, including CLO investment vehicles. We have and continue to review a large number of middle market loans and CLO investment vehicles, and have recently made a number of
selective purchases in these 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 estimate inherent in the
preparation of our financial statements is the valuation of investments and the related amounts of unrealized appreciation and depreciation of investments recorded. There is no single 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 an update to
requirements relating to 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 with early
adoption prohibited. We do not believe the adoption of this update will have a material impact on our financial statements.

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, all of our investments are based upon Level 3 inputs.

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 the 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.



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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.

Under the valuation procedures approved by the 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. The Board of Directors retains ultimate authority as to the third-party review cycle as well as the appropriate valuation of each investment.

Given the recent economic downturn, the market for syndicated loans has become increasingly illiquid with limited or no transactions for
many of those securities which we hold. 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 the market illiquidity and the lack of transactions since 2008, we determined that the current agent bank non-binding
indicative bids for the substantial majority of our syndicated investments may not be considered reliable, and alternative valuation procedures would need to be performed until liquidity returns to the marketplace. As such, we have engaged
third-party valuation firms to provide assistance in valuing certain of our syndicated investments. 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 considered reliable, 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.



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During the past several quarters, the Company has acquired a number of debt and equity
positions in CLO investment vehicles. These investments are special purpose financing vehicles. In valuing such investments, the Company 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, the Company considers 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 the 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 June 30, 2011, were as follows:



|                            |  |                                                             |      |  |                                            |   |     |                                        |  |   |       |  |  |   |       | 
|--------------------------- |  | ----------------------------------------------------------- | ---- |  | ------------------------------------------ | - | --- | -------------------------------------- |  | - | ----- |  |  | - | ----- | 
|($ in millions)             |  | Fair Value Measurements at Reporting Date Using             |      |  |                                            |  
|Assets                      |  | Quoted Prices inActive Markets forIdentical Assets(Level 1) |      |  | SignificantOther ObservableInputs(Level 2) |   |     | SignificantUnobservableInputs(Level 3) |  |   | Total | 
|Cash equivalents            |  | $                                                           | 18.5 |  |                                            | $ | 0.0 |                                        |  | $ | 0.0   |  |  | $ | 18.5  | 
|Senior Secured Notes        |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 200.0 |  |  |   | 200.0 | 
|CLO Debt                    |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 61.0  |  |  |   | 61.0  | 
|CLO Equity                  |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 33.1  |  |  |   | 33.1  | 
|Subordinated Notes          |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 5.5   |  |  |   | 5.5   | 
|Common Stock                |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 5.8   |  |  |   | 5.8   | 
|Preferred Shares            |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 2.5   |  |  |   | 2.5   | 
|Warrants to purchase equity |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 0.9   |  |  |   | 0.9   | 
|                            |  |                                                             |      |  |                                            |   |     |                                        |  |   |       |  |  |   |       | 
|Total                       |  | $                                                           | 18.5 |  |                                            | $ | 0.0 |                                        |  | $ | 308.8 |  |  | $ | 327.3 | 
|                            |  |                                                             |      |  |                                            |   |     |                                        |  |   |       |  |  |   |       | 

A reconciliation of the fair value of investments for three months ending June 30, 2011, utilizing
significant unobservable inputs, is as follows:



|                                                                                                                                                                                                                                                                                                                |  |                               |       |   |                                              |   |      |                                                |  |   |                             |   |  |                        |      |   |                                  |   |      |                                            |  |   |       |   |  |   |      |   |  |   |       |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------- | ----- | - | -------------------------------------------- | - | ---- | ---------------------------------------------- |  | - | --------------------------- | - |  | ---------------------- | ---- | - | -------------------------------- | - | ---- | ------------------------------------------ |  | - | ----- | - |  | - | ---- | - |  | - | ----- | -
|($ in millions)                                                                                                                                                                                                                                                                                                 |  | SeniorSecured NoteInvestments |       |   | CollateralizedLoanObligationDebt
Investments |   |      | CollateralizedLoanObligationEquity
Investments |  |   | SubordinatedNoteInvestments |   |  | CommonStockInvestments |      |   | PreferredShare EquityInvestments |   |      | Warrants 
toPurchaseCommonStockInvestments |  |   | Total |  
|Balance at March 31, 2011                                                                                                                                                                                                                                                                                       |  | $                             | 180.0 |   |                                              | $ | 63.9 |                                                |  | $ | 34.7                        |   |  | $                      | 5.8  |   |                                  | $ | 6.5  |                                            |  | $ | 2.3   |   |  | $ | 1.0  |   |  | $ | 294.2 |  
|Realized Gains included in earnings                                                                                                                                                                                                                                                                             |  |                               | 0.7   |   |                                              |   | 0.0  |                                                |  |   | 0.0                         |   |  |                        | 0.0  |   |                                  |   | 0.0  |                                            |  |   | 0.0   |   |  |   | 0.0  |   |  |   | 0.7   |  
|Unrealized appreciation included in earnings                                                                                                                                                                                                                                                                    |  |                               | (0.1  | ) |                                              |   | (3.3 | )                                              |  |   | (1.6                        | ) |  |                        | (0.1 | ) |                                  |   | (0.7 | )                                          |  |   | (0.1  | ) |  |   | (0.1 | ) |  |   | (6.0  | )
|Accretion of discount                                                                                                                                                                                                                                                                                           |  |                               | 0.7   |   |                                              |   | 0.5  |                                                |  |   | 0.0                         |   |  |                        | 0.0  |   |                                  |   | 0.0  |                                            |  |   | 0.0   |   |  |   | 0.0  |   |  |   | 1.2   |  
|Purchases                                                                                                                                                                                                                                                                                                       |  |                               | 30.6  |   |                                              |   | 0.0  |                                                |  |   | 0.0                         |   |  |                        | 0.0  |   |                                  |   | 0.0  |                                            |  |   | 0.0   |   |  |   | 0.0  |   |  |   | 30.6  |  
|Repayments and Sales(1)                                                                                                                                                                                                                                                                                         |  |                               | (11.9 | ) |                                              |   | (0.1 | )                                              |  |   | 0.0                         |   |  |                        | (0.2 | ) |                                  |   | 0.0  |                                            |  |   | 0.3   |   |  |   | 0.0  |   |  |   | (11.9 | )
|Transfers in and/or out of level 3                                                                                                                                                                                                                                                                              |  |                               | 0.0   |   |                                              |   | 0.0  |                                                |  |   | 0.0                         |   |  |                        | 0.0  |   |                                  |   | 0.0  |                                            |  |   | 0.0   |   |  |   | 0.0  |   |  |   | 0.0   |  
|                                                                                                                                                                                                                                                                                                                |  |                               |       |   |                                              |   |      |                                                |  |   |                             |   |  |                        |      |   |                                  |   |      |                                            |  |   |       |   |  |   |      |   |  |   |       |  
|Balance at June 30, 2011                                                                                                                                                                                                                                                                                        |  | $                             | 200.0 |   |                                              | $ | 61.0 |                                                |  | $ | 33.1                        |   |  | $                      | 5.5  |   |                                  | $ | 5.8  |                                            |  | $ | 2.5   |   |  | $ | 0.9  |   |  | $ | 308.8 |  
|                                                                                                                                                                                                                                                                                                                |  |                               |       |   |                                              |   |      |                                                |  |   |                             |   |  |                        |      |   |                                  |   |      |                                            |  |   |       |   |  |   |      |   |  |   |       |  
|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 |  | $                             | 0.7   |   |                                              | $ | (3.4 | )                                              |  | $ | (1.6                        | ) |  | $                      | (0.6 | ) |                                  | $ | (0.1 | )                                          |  | $ | (0.2  | ) |  | $ | (0.1 | ) |  | $ | (5.3  | )
|                                                                                                                                                                                                                                                                                                                |  |                               |       |   |                                              |   |      |                                                |  |   |                             |   |  |                        |      |   |                                  |   |      |                                            |  |   |       |   |  |   |      |   |  |   |       |  



|(1) | Includes PIK interest of approximately $733,000.
|--- | ------------------------------------------------



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A reconciliation of the fair value of investments for six months ending June 30, 2011,
utilizing significant unobservable inputs, is as follows:



|                                                                                                                                                                                                                                                                                                                |  |                               |       |   |                                              |   |      |                                                |  |   |                             |  |  |                        |      |   |                                  |   |     |                                            |  |   |       |  |  |   |     |  |  |   |       |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------- | ----- | - | -------------------------------------------- | - | ---- | ---------------------------------------------- |  | - | --------------------------- |  |  | ---------------------- | ---- | - | -------------------------------- | - | --- | ------------------------------------------ |  | - | ----- |  |  | - | --- |  |  | - | ----- | -
|($ in millions)                                                                                                                                                                                                                                                                                                 |  | SeniorSecured NoteInvestments |       |   | CollateralizedLoanObligationDebt
Investments |   |      | CollateralizedLoanObligationEquity
Investments |  |   | SubordinatedNoteInvestments |  |  | CommonStockInvestments |      |   | PreferredShare EquityInvestments |   |     | Warrants 
toPurchaseCommonStockInvestments |  |   | Total | 
|Balance at December 31, 2010                                                                                                                                                                                                                                                                                    |  | $                             | 173.9 |   |                                              | $ | 50.4 |                                                |  | $ | 8.9                         |  |  | $                      | 6.0  |   |                                  | $ | 5.8 |                                            |  | $ | 2.0   |  |  | $ | 0.5 |  |  | $ | 247.5 |  
|Realized Gains included in earnings                                                                                                                                                                                                                                                                             |  |                               | 2.2   |   |                                              |   | 0.4  |                                                |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                            |  |   | 0.0   |  |  |   | 0.0 |  |  |   | 2.6   |  
|Unrealized appreciation included in earnings                                                                                                                                                                                                                                                                    |  |                               | 0.9   |   |                                              |   | 0.8  |                                                |  |   | 0.9                         |  |  |                        | (0.1 | ) |                                  |   | 0.0 |                                            |  |   | 0.2   |  |  |   | 0.4 |  |  |   | 3.1   |  
|Accretion of discount                                                                                                                                                                                                                                                                                           |  |                               | 1.4   |   |                                              |   | 1.0  |                                                |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                            |  |   | 0.0   |  |  |   | 0.0 |  |  |   | 2.4   |  
|Purchases                                                                                                                                                                                                                                                                                                       |  |                               | 97.8  |   |                                              |   | 10.1 |                                                |  |   | 23.3                        |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                            |  |   | 0.0   |  |  |   | 0.0 |  |  |   | 131.2 |  
|Repayments and Sales(1)                                                                                                                                                                                                                                                                                         |  |                               | (76.2 | ) |                                              |   | (1.7 | )                                              |  |   | 0.0                         |  |  |                        | (0.4 | ) |                                  |   | 0.0 |                                            |  |   | 0.3   |  |  |   | 0.0 |  |  |   | (78.0 | )
|Transfers in and/or out of level 3                                                                                                                                                                                                                                                                              |  |                               | 0.0   |   |                                              |   | 0.0  |                                                |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |   | 0.0 |                                            |  |   | 0.0   |  |  |   | 0.0 |  |  |   | 0.0   |  
|                                                                                                                                                                                                                                                                                                                |  |                               |       |   |                                              |   |      |                                                |  |   |                             |  |  |                        |      |   |                                  |   |     |                                            |  |   |       |  |  |   |     |  |  |   |       |  
|Balance at June 3, 2011                                                                                                                                                                                                                                                                                         |  | $                             | 200.0 |   |                                              | $ | 61.0 |                                                |  | $ | 33.1                        |  |  | $                      | 5.5  |   |                                  | $ | 5.8 |                                            |  | $ | 2.5   |  |  | $ | 0.9 |  |  | $ | 308.8 |  
|                                                                                                                                                                                                                                                                                                                |  |                               |       |   |                                              |   |      |                                                |  |   |                             |  |  |                        |      |   |                                  |   |     |                                            |  |   |       |  |  |   |     |  |  |   |       |  
|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 |  | $                             | 2.8   |   |                                              | $ | 1.1  |                                                |  | $ | 1.0                         |  |  | $                      | (0.1 | ) |                                  | $ | 0.0 |                                            |  | $ | 0.2   |  |  | $ | 0.4 |  |  | $ | 5.4   |  
|                                                                                                                                                                                                                                                                                                                |  |                               |       |   |                                              |   |      |                                                |  |   |                             |  |  |                        |      |   |                                  |   |     |                                            |  |   |       |  |  |   |     |  |  |   |       |  



|(1) | Includes PIK interest of approximately $805,000.
|--- | ------------------------------------------------



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Our assets measured at fair value on a recurring basis subject to the disclosure
requirements of ASC 820-10-35 at December 31, 2010, were as follows:



|                            |  |                                                             |      |  |                                            |   |     |                                        |  |   |       |  |  |   |       | 
|--------------------------- |  | ----------------------------------------------------------- | ---- |  | ------------------------------------------ | - | --- | -------------------------------------- |  | - | ----- |  |  | - | ----- | 
|($ in millions)             |  | Fair Value Measurements at Reporting Date Using             |      |  |                                            |  
|Assets                      |  | Quoted Prices inActive Markets forIdentical Assets(Level 1) |      |  | SignificantOther ObservableInputs(Level 2) |   |     | SignificantUnobservableInputs(Level 3) |  |   | Total | 
|Cash equivalents            |  | $                                                           | 68.5 |  |                                            | $ | 0.0 |                                        |  | $ | 0.0   |  |  | $ | 68.5  | 
|Senior Secured Notes        |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 173.9 |  |  |   | 173.9 | 
|CLO Debt                    |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 50.4  |  |  |   | 50.4  | 
|CLO Equity                  |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 8.9   |  |  |   | 8.9   | 
|Subordinated Notes          |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 6.0   |  |  |   | 6.0   | 
|Common Stock                |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 5.8   |  |  |   | 5.8   | 
|Preferred Shares            |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 2.0   |  |  |   | 2.0   | 
|Warrants to purchase equity |  |                                                             | 0.0  |  |                                            |   | 0.0 |                                        |  |   | 0.5   |  |  |   | 0.5   | 
|                            |  |                                                             |      |  |                                            |   |     |                                        |  |   |       |  |  |   |       | 
|Total                       |  | $                                                           | 68.5 |  |                                            | $ | 0.0 |                                        |  | $ | 247.5 |  |  | $ | 316.0 | 
|                            |  |                                                             |      |  |                                            |   |     |                                        |  |   |       |  |  |   |       | 

A reconciliation of the fair value of investments for the year ended December 31, 2010, utilizing
significant unobservable inputs, is as follows:



|                                                                                                                                                                                                                                                                                                                |  |                               |        |   |                                              |   |      |                                                |  |   |                             |  |  |                        |      |   |                                  |    |      |                                            |  |   |       |  |  |   |     |  |  |   |        |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------- | ------ | - | -------------------------------------------- | - | ---- | ---------------------------------------------- |  | - | --------------------------- |  |  | ---------------------- | ---- | - | -------------------------------- | -- | ---- | ------------------------------------------ |  | - | ----- |  |  | - | --- |  |  | - | ------ | -
|($ in millions)                                                                                                                                                                                                                                                                                                 |  | SeniorSecured NoteInvestments |        |   | CollateralizedLoanObligationDebt
Investments |   |      | CollateralizedLoanObligationEquity
Investments |  |   | SubordinatedNoteInvestments |  |  | CommonStockInvestments |      |   | PreferredShare EquityInvestments |    |      | Warrants 
toPurchaseCommonStockInvestments |  |   | Total | 
|Balance at December 31, 2009                                                                                                                                                                                                                                                                                    |  | $                             | 180.1  |   |                                              | $ | 4.9  |                                                |  | $ | 2.2                         |  |  | $                      | 2.7  |   |                                  | $  | 5.5  |                                            |  | $ | 0.0   |  |  | $ | 0.5 |  |  | $ | 195.9  |  
|Realized Losses included in earnings                                                                                                                                                                                                                                                                            |  |                               | (42.4  | ) |                                              |   | 0.0  |                                                |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |    | 0.0  |                                            |  |   | 0.0   |  |  |   | 0.0 |  |  |   | (42.4  | )
|Unrealized appreciation included in earnings                                                                                                                                                                                                                                                                    |  |                               | 63.7   |   |                                              |   | 15.0 |                                                |  |   | 1.8                         |  |  |                        | 0.8  |   |                                  |    | (0.1 | )                                          |  |   | 1.2   |  |  |   | 0.0 |  |  |   | 82.4   |  
|Accretion of discount                                                                                                                                                                                                                                                                                           |  |                               | 4.5    |   |                                              |   | 1.1  |                                                |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |    | 0.0  |                                            |  |   | 0.0   |  |  |   | 0.0 |  |  |   | 5.6    |  
|Purchases                                                                                                                                                                                                                                                                                                       |  |                               | 88.1   |   |                                              |   | 31.5 |                                                |  |   | 4.9                         |  |  |                        | 3.9  |   |                                  |    | 0.4  |                                            |  |   | 0.8   |  |  |   | 0.0 |  |  |   | 129.6  |  
|Repayments and Sales(1)                                                                                                                                                                                                                                                                                         |  |                               | (120.1 | ) |                                              |   | (2.1 | )                                              |  |   | 0.0                         |  |  |                        | (1.4 | ) |                                  |    | 0.0  |                                            |  |   | 0.0   |  |  |   | 0.0 |  |  |   | (123.6 | )
|Transfers in and/or out of level 3                                                                                                                                                                                                                                                                              |  |                               | 0.0    |   |                                              |   | 0.0  |                                                |  |   | 0.0                         |  |  |                        | 0.0  |   |                                  |    | 0.0  |                                            |  |   | 0.0   |  |  |   | 0.0 |  |  |   | 0.0    |  
|                                                                                                                                                                                                                                                                                                                |  |                               |        |   |                                              |   |      |                                                |  |   |                             |  |  |                        |      |   |                                  |    |      |                                            |  |   |       |  |  |   |     |  |  |   |        |  
|Balance at December 31, 2010                                                                                                                                                                                                                                                                                    |  | $                             | 173.9  |   |                                              | $ | 50.4 |                                                |  | $ | 8.9                         |  |  | $                      | 6.0  |   |                                  | $  | 5.8  |                                            |  | $ | 2.0   |  |  | $ | 0.5 |  |  | $ | 247.5  |  
|                                                                                                                                                                                                                                                                                                                |  |                               |        |   |                                              |   |      |                                                |  |   |                             |  |  |                        |      |   |                                  |    |      |                                            |  |   |       |  |  |   |     |  |  |   |        |  
|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 |  | $                             | 18.7   |   |                                              | $ | 15.0 |                                                |  | $ | 1.8                         |  |  | $                      | 0.9  |   |                                  | ($ | 0.1  | )                                          |  | $ | 1.1   |  |  | $ | 0.1 |  |  | $ | 37.5   |  
|                                                                                                                                                                                                                                                                                                                |  |                               |        |   |                                              |   |      |                                                |  |   |                             |  |  |                        |      |   |                                  |    |      |                                            |  |   |       |  |  |   |     |  |  |   |        |  



|(1) | PIK interest of approximately $710,000 and rounding adjustments to reconcile period balances.
|--- | ---------------------------------------------------------------------------------------------



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PORTFOLIO COMPOSITION AND INVESTMENT ACTIVITY

The total fair value of our investment portfolio was approximately $308.8 million and $247.5 million as of June 30, 2011 and
December 31, 2010, respectively. The increase in investments during the six month period was due to the net deployment of cash of approximately $52.4 million, comprised of the net impact of portfolio investments of approximately $131.2 million
and debt repayments and sales of securities of approximately $78.8 million, as well as by the fair value adjustments on our portfolio.

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 June 30, 2011, we received proceeds of approximately $12.6 million resulting primarily
from repayments and amortization payments on outstanding balances on our debt investments, whereas, for the year ended December 31, 2010, we had repayments and amortization payments of approximately $73.8 million. The repayments on our debt
investments during the quarter ended June 30, 2011, largely consisted of repayment of our original investment in senior secured notes issued by Prodigy Health Group ($3.0 million) and Birch Communications, Inc. ($5.0 million) as well as partial
repayments on our investment in Airvana Network Solutions, Inc. ($2.5 million). During the quarter ended June 30, 2011, we did not sell any of our investments, where as for the year ended December 31, 2010, we recognized proceeds of
approximately $54.8 million from the sales of securities.

As of June 30, 2011, we had investments in debt securities of,
or loans to, 48 portfolio companies, with a fair value of approximately $266.5 million, and equity investments in 17 portfolio companies, with a fair value of approximately $42.3 million. As of December 31, 2010, we had investments in debt
securities of, or loans to, 47 portfolio companies, with a fair value of approximately $230.3 million, and equity investments in 10 portfolio companies, with a fair value of approximately $17.2 million.

A reconciliation of the investment portfolio for the six months ended June 30, 2011 and the year ended December 31, 2010
follows:



|                               |  |                       |       |   |                       |   |       |  
|------------------------------ |  | --------------------- | ----- | - | --------------------- | - | ----- | -
|                               |  | June 30, 2011         |       |   | December 31, 2010     |  
|                               |  | (dollars in millions) |       |   | (dollars in millions) |  
|Beginning Investment Portfolio |  | $                     | 247.5 |   |                       | $ | 200.3 |  
|Portfolio Investments Acquired |  |                       | 131.2 |   |                       |   | 129.8 |  
|Debt repayments                |  |                       | (70.4 | ) |                       |   | (73.8 | )
|Sales of securities            |  |                       | (8.4  | ) |                       |   | (54.8 | )
|Payment in Kind                |  |                       | 0.8   |   |                       |   | 0.7   |  
|Original Issue Discount        |  |                       | 2.4   |   |                       |   | 5.6   |  
|Net Unrealized Appreciation    |  |                       | 3.1   |   |                       |   | 81.8  |  
|Net Realized Gains (Losses)    |  |                       | 2.6   |   |                       |   | (42.1 | )
|                               |  |                       |       |   |                       |   |       |  
|Ending Investment Portfolio    |  | $                     | 308.8 |   |                       | $ | 247.5 |  
|                               |  |                       |       |   |                       |   |       |  

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



|                   |  |                       |       |  |                       |   |      |                       |  |   |      | 
|------------------ |  | --------------------- | ----- |  | --------------------- | - | ---- | --------------------- |  | - | ---- | 
|                   |  | New Investments       |       |  | Debt Repayments       |   |      | Sales of Securities   | 
|                   |  | (dollars in millions) |       |  | (dollars in millions) |   |      | (dollars in millions) | 
|Quarter ended      |  |                       |       |  |                       |   |      |                       |  |   |      | 
|June 30, 2011      |  | $                     | 30.6  |  |                       | $ | 12.6 |                       |  | $ | 0.0  | 
|March 31, 2011     |  |                       | 100.6 |  |                       |   | 57.8 |                       |  |   | 8.4  | 
|                   |  |                       |       |  |                       |   |      |                       |  |   |      | 
|Total              |  | $                     | 131.2 |  |                       | $ | 70.4 |                       |  | $ | 8.4  | 
|                   |  |                       |       |  |                       |   |      |                       |  |   |      | 
|December 31, 2010  |  | $                     | 30.8  |  |                       | $ | 31.8 |                       |  | $ | 7.5  | 
|September 30, 2010 |  |                       | 44.7  |  |                       |   | 13.4 |                       |  |   | 34.5 | 
|June 30, 2010      |  |                       | 15.0  |  |                       |   | 10.8 |                       |  |   | 6.6  | 
|March 31, 2010     |  |                       | 39.3  |  |                       |   | 17.8 |                       |  |   | 6.2  | 
|                   |  |                       |       |  |                       |   |      |                       |  |   |      | 
|Total              |  | $                     | 129.8 |  |                       | $ | 73.8 |                       |  | $ | 54.8 | 
|                   |  |                       |       |  |                       |   |      |                       |  |   |      | 



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##### Table of Contents

The following table shows the fair value of our portfolio of investments by asset class as
of June 30, 2011 and December 31, 2010:



|                     |  |                          |       |  |                              |  |       |                          |  |   |                              |  |  |  |       |  
|-------------------- |  | ------------------------ | ----- |  | ---------------------------- |  | ----- | ------------------------ |  | - | ---------------------------- |  |  |  | ----- | -
|                     |  | June 30, 2011            |       |  | December 31, 2010            | 
|                     |  | Investments atFair Value |       |  | Percentage ofTotal Portfolio |  |       | Investments atFair Value |  |   | Percentage ofTotal Portfolio | 
|                     |  | (dollars in millions)    |       |  |                              |  |       | (dollars in millions)    |  |   |                              | 
|Senior Secured Notes |  | $                        | 200.0 |  |                              |  | 64.8  | %                        |  | $ | 173.9                        |  |  |  | 70.3  | %
|CLO Debt             |  |                          | 61.0  |  |                              |  | 19.7  | %                        |  |   | 50.4                         |  |  |  | 20.4  | %
|CLO Equity           |  |                          | 33.1  |  |                              |  | 10.7  | %                        |  |   | 8.9                          |  |  |  | 3.6   | %
|Subordinated Notes   |  |                          | 5.5   |  |                              |  | 1.8   | %                        |  |   | 6.0                          |  |  |  | 2.4   | %
|Common Stock         |  |                          | 5.8   |  |                              |  | 1.9   | %                        |  |   | 5.8                          |  |  |  | 2.3   | %
|Preferred Shares     |  |                          | 2.5   |  |                              |  | 0.8   | %                        |  |   | 2.0                          |  |  |  | 0.8   | %
|Warrants             |  |                          | 0.9   |  |                              |  | 0.3   | %                        |  |   | 0.5                          |  |  |  | 0.2   | %
|                     |  |                          |       |  |                              |  |       |                          |  |   |                              |  |  |  |       |  
|Total                |  | $                        | 308.8 |  |                              |  | 100.0 | %                        |  | $ | 247.5                        |  |  |  | 100.0 | %
|                     |  |                          |       |  |                              |  |       |                          |  |   |                              |  |  |  |       |  

The following table shows our portfolio of investments by industry at fair value, as of June 30,
2011 and December 31, 2010:



|                                     |  |                          |       |  |                         |  |       |                          |  |   |                         |  |  |  |       |  
|------------------------------------ |  | ------------------------ | ----- |  | ----------------------- |  | ----- | ------------------------ |  | - | ----------------------- |  |  |  | ----- | -
|                                     |  | June 30, 2011            |       |  | December 31, 2010       | 
|                                     |  | Investments atFair Value |       |  | Percentage ofFair Value |  |       | Investments atFair Value |  |   | Percentage ofFair Value | 
|                                     |  | (dollars inmillions)     |       |  |                         |  |       | (dollars inmillions)     |  |   |                         | 
|Structured finance                   |  | $                        | 94.1  |  |                         |  | 30.5  | %                        |  | $ | 59.3                    |  |  |  | 24.0  | %
|Software                             |  |                          | 45.7  |  |                         |  | 14.8  | %                        |  |   | 45.0                    |  |  |  | 18.2  | %
|Telecommunication services           |  |                          | 28.8  |  |                         |  | 9.3   | %                        |  |   | 21.0                    |  |  |  | 8.5   | %
|Semiconductor capital equipment      |  |                          | 24.0  |  |                         |  | 7.8   | %                        |  |   | 21.8                    |  |  |  | 8.8   | %
|Business services                    |  |                          | 20.6  |  |                         |  | 6.7   | %                        |  |   | 22.0                    |  |  |  | 8.9   | %
|Enterprise software                  |  |                          | 16.4  |  |                         |  | 5.3   | %                        |  |   | 13.2                    |  |  |  | 5.3   | %
|Printing and publishing              |  |                          | 11.0  |  |                         |  | 3.6   | %                        |  |   | 5.2                     |  |  |  | 2.1   | %
|Retail                               |  |                          | 10.5  |  |                         |  | 3.4   | %                        |  |   | 0.0                     |  |  |  | 0.0   | %
|Computer hardware                    |  |                          | 10.2  |  |                         |  | 3.3   | %                        |  |   | 10.3                    |  |  |  | 4.2   | %
|Healthcare                           |  |                          | 10.2  |  |                         |  | 3.3   | %                        |  |   | 7.4                     |  |  |  | 3.0   | %
|IT consulting                        |  |                          | 9.8   |  |                         |  | 3.2   | %                        |  |   | 2.4                     |  |  |  | 1.0   | %
|Auto parts manufacturer              |  |                          | 9.7   |  |                         |  | 3.2   | %                        |  |   | 8.8                     |  |  |  | 3.5   | %
|Advertising                          |  |                          | 7.8   |  |                         |  | 2.5   | %                        |  |   | 7.9                     |  |  |  | 3.2   | %
|Food products manufacturer           |  |                          | 4.1   |  |                         |  | 1.3   | %                        |  |   | 4.1                     |  |  |  | 1.6   | %
|IT value-added reseller              |  |                          | 2.0   |  |                         |  | 0.6   | %                        |  |   | 2.0                     |  |  |  | 0.8   | %
|Interactive voice messaging services |  |                          | 2.0   |  |                         |  | 0.6   | %                        |  |   | 2.0                     |  |  |  | 0.8   | %
|Financial intermediaries             |  |                          | 1.9   |  |                         |  | 0.6   | %                        |  |   | 1.8                     |  |  |  | 0.7   | %
|Grocery                              |  |                          | 0.0   |  |                         |  | 0.0   | %                        |  |   | 5.0                     |  |  |  | 2.0   | %
|Shipping & transportation            |  |                          | 0.0   |  |                         |  | 0.0   | %                        |  |   | 4.4                     |  |  |  | 1.8   | %
|Retail food products                 |  |                          | 0.0   |  |                         |  | 0.0   | %                        |  |   | 3.9                     |  |  |  | 1.6   | %
|                                     |  |                          |       |  |                         |  |       |                          |  |   |                         |  |  |  |       |  
|Total                                |  | $                        | 308.8 |  |                         |  | 100.0 | %                        |  | $ | 247.5                   |  |  |  | 100.0 | %
|                                     |  |                          |       |  |                         |  |       |                          |  |   |                         |  |  |  |       |  

PORTFOLIO GRADING

We have adopted a credit grading system to monitor the quality of our debt investment portfolio. As of June 30, 2011 and December 31, 2010, 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.



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##### Table of Contents

At June 30, 2011, and December 31, 2010, our debt investment portfolio was graded
as follows:



|      |  |                                                                                                                               |  |                       |       |  |                              |  |       |                        |  |   |                              |  |  |  |       |  
|----- |  | ----------------------------------------------------------------------------------------------------------------------------- |  | --------------------- | ----- |  | ---------------------------- |  | ----- | ---------------------- |  | - | ---------------------------- |  |  |  | ----- | -
|      |  |                                                                                                                               |  | June 30, 2011         |      
|Grade |  | Summary Description                                                                                                           |  | Principal Value       |       |  | Percentage ofTotal Portfolio |  |       | Portfolio atFair Value |  |   | Percentage ofTotal Portfolio | 
|      |  |                                                                                                                               |  | (dollars in millions) |       |  |                              |  |       | (dollars in millions)  |  |   |                              | 
|1     |  | Company is ahead of expectations and/or outperforming financial covenant requirements and such trend is expected to
continue. |  | $                     | 7.8   |  |                              |  | 2.7   | %                      |  | $ | 7.8                          |  |  |  | 2.9   | %
|2     |  | Full repayment of principal and interest is expected.                                                                         |  |                       | 214.9 |  |                              |  | 74.3  | %                      |  |   | 194.4                        |  |  |  | 72.9  | %
|3     |  | Closer monitoring is required. Full repayment of principal and interest is expected.                                          |  |                       | 63.2  |  |                              |  | 21.8  | %                      |  |   | 62.3                         |  |  |  | 23.4  | %
|4     |  | A reduction of interest income has occurred or is expected to occur. No loss of principal is expected.                        |  |                       |      |  |                              |  | 0.0   | %                      |  |   |                             |  |  |  | 0.0   | %
|5     |  | A loss of some portion of principal is expected.                                                                              |  |                       | 3.5   |  |                              |  | 1.2   | %                      |  |   | 2.0                          |  |  |  | 0.8   | %
|      |  |                                                                                                                               |  |                       |       |  |                              |  |       |                        |  |   |                              |  |  |  |       |  
|      |  |                                                                                                                               |  | $                     | 289.4 |  |                              |  | 100.0 | %                      |  | $ | 266.5                        |  |  |  | 100.0 | %
|      |  |                                                                                                                               |  |                       |       |  |                              |  |       |                        |  |   |                              |  |  |  |       |  
|      |  |                                                                                                                              
|      |  |                                                                                                                               |  | December 31, 2010     |      
|Grade |  | Summary Description                                                                                                           |  | Principal Value       |       |  | Percentage ofTotal Portfolio |  |       | Portfolio atFair Value |  |   | Percentage ofTotal Portfolio | 
|      |  |                                                                                                                               |  | (dollars in millions) |       |  |                              |  |       | (dollars in millions)  |  |   |                              | 
|1     |  | Company is ahead of expectations and/or outperforming financial covenant requirements and such trend is expected to
continue. |  | $                     | 11.8  |  |                              |  | 4.6   | %                      |  | $ | 11.8                         |  |  |  | 5.1   | %
|2     |  | Full repayment of principal and interest is expected.                                                                         |  |                       | 184.9 |  |                              |  | 72.4  | %                      |  |   | 163.0                        |  |  |  | 70.8  | %
|3     |  | Closer monitoring is required. Full repayment of principal and interest is expected.                                          |  |                       | 55.1  |  |                              |  | 21.6  | %                      |  |   | 53.5                         |  |  |  | 23.2  | %
|4     |  | A reduction of interest income has occurred or is expected to occur. No loss of principal is expected.                        |  |                       |      |  |                              |  | 0.0   | %                      |  |   |                             |  |  |  | 0.0   | %
|5     |  | A loss of some portion of principal is expected.                                                                              |  |                       | 3.5   |  |                              |  | 1.4   | %                      |  |   | 2.0                          |  |  |  | 0.9   | %
|      |  |                                                                                                                               |  |                       |       |  |                              |  |       |                        |  |   |                              |  |  |  |       |  
|      |  |                                                                                                                               |  | $                     | 255.3 |  |                              |  | 100.0 | %                      |  | $ | 230.3                        |  |  |  | 100.0 | %
|      |  |                                                                                                                               |  |                       |       |  |                              |  |       |                        |  |   |                              |  |  |  |       |  

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.



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##### Table of Contents

RESULTS OF OPERATIONS

Set forth below is a comparison of our results of operations for the three months ended June 30, 2011 to the three months ended June 30,
2010.

Investment Income

As of June 30, 2011, our debt investments had stated interest rates of between 2.17% and 15.58% (excluding our investment in GenuTec Business Solutions, Inc. which carries a zero interest rate
through October 30, 2014) and maturity dates of between 18 and 136 months. In addition, our total portfolio had a weighted average yield on debt investments of approximately 12.9% including GenuTec Business Solutions, Inc., compared to 13.0% as
of June 30, 2010.

Investment income for the three months ended June 30, 2011 was approximately $11.1 million
compared to approximately $8.7 million for the three months ended June 30, 2010. This increase was due largely to an increase in the principal value of income producing investments and greater distributions from the equity interests in our
securitization vehicle investments. The total principal value of income producing investments for the period ending June 30, 2011 and 2010 was approximately $285.9 million and $249.2 million, respectively. For the three months ended
June 30, 2011, investment income consisted of approximately $5.2 million in cash interest from portfolio investments, approximately $1.2 million in amortization of original issue and market discount, approximately $152,000 of discount income
derived from unscheduled principal cash remittances at par on discounted securities, $3.6 million in distributions from securitized vehicles and approximately $733,000 of interest income attributable to PIK associated with our investments in Pegasus
Solutions, Inc., Merrill Communications, LLC. and Shearers Food, Inc., compared to PIK interest of approximately $204,000 for the quarter ended June 30, 2010.

For the three months ended June 30, 2011, other income of approximately $287,000 was recorded, compared to other income of approximately $461,000 for the same period in 2010. Other income consists
primarily of non-recurring amendment fees earned in connection with existing portfolio investments.

Operating Expenses

Total expenses for the quarter ended June 30, 2011 were $1.6 million, which includes a reduction of approximately $1.4 million to the
capital gains incentive fee accrual.

Expenses before incentive fees, for the quarter ended June 30, 2011 were
approximately $2.4 million. This amount consisted of investment advisory fees, professional fees, compensation expense, and general and administrative expenses. Expenses before incentive fees increased approximately $465,000 from the quarter ended
June 30, 2010, attributable primarily to higher investment advisory fees (consisting of the base management fee). Expenses before incentive fees for the quarter ended June 30, 2010 were approximately $2.0 million.

The investment advisory fee for the second quarter of 2011 was approximately $1.7 million, representing the base fee as provided for in
the Investment Advisory Agreement. The investment advisory fee in the comparable period in 2010 was approximately $1.3 million. The increase of approximately $346,000 is due to an increase in average gross assets. At each of June 30, 2011 and
December 31, 2010, respectively, approximately $2.3 million and $1.8 million of investment advisory fees remained payable to TICC Management, including the net investment income incentive fee discussed below.

Professional fees, consisting of legal, valuation, audit and consulting fees, were approximately $168,000 for the quarter ended
June 30, 2011, compared to approximately $166,000 for the quarter ended June 30, 2010. This was the result of an increase in valuations services of approximately $20,000, partially offset by a decrease in audit fees of approximately
$18,000 incurred during the quarter ended June 30, 2011.

Compensation expenses were approximately $258,000 for the
quarter ended June 30, 2011, compared to approximately $240,000 for the quarter ended June 30, 2010, reflecting the allocation of compensation expenses for the services of our chief financial officer, chief compliance officer, controller
and senior accountant, and other administrative support personnel. At June 30, 2011 and December 31, 2010, respectively, approximately $267,000 and $0 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 $356,000 for the three months ended June 30, 2011 compared to approximately $257,000 for the same period in 2010. This increase was due largely to costs associated
with regulatory filing fees and proxy materials. Office supplies, facilities costs and other expenses are allocated to us under the terms of the Administration Agreement.



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##### Table of Contents

Incentive Fees

The net investment income incentive fee for the second quarter of 2011 was approximately $610,000 compared to $434,000 in the second quarter of 2010. The increase is the result of the increase in
pre-incentive fee net investment income. The net investment income incentive fee is calculated and payable quarterly in arrears based on the Companys 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 the Companys 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).

Due to significant net unrealized appreciation in our portfolio, we
recorded a capital gains incentive fee of approximately $6.5 million for the quarter ended March 31, 2011 based on a hypothetical liquidation of our portfolio on March 31, 2011. There was no such fee accrued for the same period in 2010.
The capital gains incentive fee expense, as reported under generally accepted accounting principles, is calculated on the basis of net realized gains/losses and net unrealized appreciation/depreciation at the end of each period. For the quarter
ending June 30, 2011, TICC recorded unrealized depreciation of approximately $6.0 million and, as a result, the capital gains incentive fee liability was reduced by approximately $1.5 million. For the six months ended June 30, 2011, the
capital gains incentive fee was approximately $5.0 million and there was no such fee for the same period in 2010. 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 our portfolio as of period end and the termination of the Investment Advisory Agreement on such date. The $6.5
million capital gains incentive fee expense accrual for the first quarter of 2011, as well as the $1.5 million reduction for the quarter ended June 30, 2011, relate entirely to the hypothetical liquidation calculation. Also, it should be noted
that the capital gains incentive fee expense fluctuates with our overall investment results.

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 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.

Realized and Unrealized Gains/Losses on Investments

For the quarter ended June 30, 2011, we recorded net realized gains on investments of approximately $0.8 million, which represents the gain on the repayment of our investment in Prodigy Health Group.



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Based upon the fair value determinations made in good faith by the Board of Directors,
during the quarter ended June 30, 2011, we had net unrealized depreciation of approximately $6.0 million, comprised of $1.9 million in gross unrealized appreciation, $7.1 million in gross unrealized depreciation and approximately $0.8 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 quarter ended June 30, 2011 were as follows (in
millions):



|                                       |  |                                      |      |  
|-------------------------------------- |  | ------------------------------------ | ---- | -
|Portfolio Company                      |  | Unrealizedappreciation(depreciation) |     
|American Integration Technologies, LLC |  | $                                    | 0.9  |  
|Pegasus Solutions, LLC                 |  |                                      | 0.4  |  
|Lightpoint CLO 2007-8a                 |  |                                      | (0.3 | )
|Ocean Trails CLO II 2007-2a-d          |  |                                      | (0.3 | )
|Harbourview  2006A CLO Equity         |  |                                      | (0.4 | )
|Hewetts Island CDO III 2005-1A D       |  |                                      | (0.5 | )
|Hewetts Island CDO IV 2006-4           |  |                                      | (0.6 | )
|Sargas CLO 2006 -1A                    |  |                                      | (0.8 | )
|Prodigy Health Group                   |  |                                      | (0.8 | )
|Integra Telecomm, Inc                  |  |                                      | (1.0 | )
|Net all other                          |  |                                      | (2.6 | )
|                                       |  |                                      |      |  
|Total                                  |  | $                                    | (6.0 | )
|                                       |  |                                      |      |  

For the quarter ended June 30, 2010, we recorded net realized gains on investments of approximately
$1.2 million, which largely represent the gains associated with the repayment of our debt investments in Stratus Technology, Inc. (approximately $766,000) and Punch Software, LLC (approximately $400,000).

Based upon the fair value determinations made in good faith by the Board of Directors, during the quarter ended June 30, 2010, we
had net unrealized gains of approximately $2.1 million, comprised of $9.5 million in gross unrealized appreciation, $7.0 million in gross unrealized depreciation and approximately $0.4 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 quarter ended June 30, 2010 were as follows (in millions):



|                                           |  |                                      |      |  
|------------------------------------------ |  | ------------------------------------ | ---- | -
|Portfolio Company                          |  | Unrealizedappreciation(depreciation) |     
|American Integration Technologies, LLC     |  | $                                    | 4.4  |  
|Palm, Inc.                                 |  |                                      | 2.3  |  
|Stratus Technolgies, Inc. preferred equity |  |                                      | 0.3  |  
|Cavtel Holdings, LLC                       |  |                                      | (0.3 | )
|First Data Corporation                     |  |                                      | (0.3 | )
|Stratus Technologies, Inc. common equity   |  |                                      | (0.3 | )
|Sargas CLO 2006-1A                         |  |                                      | (0.4 | )
|Stratus Technolgies, Inc.                  |  |                                      | (0.8 | )
|Integra Telecomm, Inc.                     |  |                                      | (0.9 | )
|WAICCS Las Vegas, LLC                      |  |                                      | (1.5 | )
|Net all other                              |  |                                      | (0.4 | )
|                                           |  |                                      |      |  
|Total                                      |  | $                                    | 2.1  |  
|                                           |  |                                      |      |  

Please see Portfolio Grading for more information.



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##### Table of Contents

Net Increase in Net Assets Resulting from Net Investment Income

Net investment income for the quarter ended June 30, 2011 and 2010 was $9.5 million and $6.3 million, respectively. This increase was
due largely to increased distributions from the equity interests in our securitization vehicle investments and the accrual reduction for the capital gains incentive fee.

Excluding the impact of the capital gains incentive fee accrual reversal of approximately $1.5 million, net investment income for the quarter ended June 30, 2011 was approximately $8.0 million
compared to approximately $6.3 million for the same period in 2010.

Based on a weighted-average of 32,387,993 shares
outstanding (basic and diluted), the net increase in net assets resulting from net investment income per common share for the quarter ended June 30, 2011 was approximately $0.29 for basic and diluted, compared to approximately $0.24 per share
for the same period in 2010. Excluding the impact of the accrued capital gains incentive fee reduction, the net increase in net assets resulting from core net investment income per common share would have been $0.25, basic and diluted, compared to
$0.24 per share for the same period in 2010.

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 $4.2 million for
the quarter ended June 30, 2011, compared to a net increase of approximately $9.6 million for the comparable period in 2010. This decrease was attributable directly to greater net unrealized depreciation on investments and lower realized gains
partially offset by the impact of the accrual reduction of the capital gains incentive fee.

Based on a weighted-average of
32,387,993 shares outstanding (basic and diluted), the net increase in net assets resulting from operations per common share for the quarter ended June 30, 2011 was approximately $0.13 for basic and diluted, compared to a net increase in net
assets resulting from operations of approximately $0.36 per share for the same period in 2010.

Excluding the impact of the
accrued capital gains incentive fee reduction, the core net increase in net assets resulting from operations per common share would have been $0.09, basic and diluted, compared to $0.36 per share for the same period in 2010.

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.

Set forth below is a comparison of our results of operations for the six months ended
June 30, 2011 to the six months ended June 30, 2010.

Investment Income

As of June 30, 2011, our debt investments had stated interest rates of between 2.17% and 15.58% (excluding our investment in GenuTec
Business Solutions, Inc. which carries a zero interest rate through October 30, 2014) and maturity dates of between 18 and 136 months. In addition, our total portfolio had a weighted average yield on debt investments of approximately 12.9%
including GenuTec Business Solutions, Inc., compared to 13.0% as of June 30, 2010.

Investment income for the six months
ended June 30, 2011 was approximately $20.9 million compared to approximately $15.3 million for the six months ended June 30, 2010. This increase was due largely to an increase in the principal value on income producing investments,
greater return on our investment portfolio due to market discounts on new debt investments and greater distributions from the equity interests in our securitization vehicle investments. The total principal value of income producing investments for
the period ending June 30, 2011 and 2010 was approximately $285.9 million and $249.2 million, respectively. For the six months ended June 30, 2011, investment income consisted of approximately $11.0 million in cash interest from portfolio
investments, approximately $2.4 million in amortization of original issue and market discount, approximately $376,000 of discount income derived from unscheduled principal cash remittances at par on discounted securities, $5.9 million in
distributions from securitized vehicles and approximately $805,000 of interest income attributable to PIK associated with our investments in Pegasus Solutions, Inc., Merrill Communications, LLC. and Shearers Food, Inc., compared to PIK interest of
approximately $286,000 for the six months ended June 30, 2010.

For the six months ended June 30, 2011, fee income
of approximately $446,000 was recorded, compared to fee income of approximately $477,000 for the same period in 2010. Fee income consists of non-recurring fees in connection with our investments in portfolio companies, including commitment fees,
origination fees and amendment fees.



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##### Table of Contents

Operating Expenses

Total expenses for the six months ended June 30, 2011 were $10.8 million, which includes an accrual of approximately $5.0 million for a capital gains incentive fee.

Expenses before incentive fees, for the six ended June 30, 2011 were approximately $4.8 million. This amount consisted of investment
advisory fees, professional fees, compensation expense, and general and administrative expenses. Expenses before incentive fees increased approximately $1.0 million from the comparable period in 2010, attributable primarily to higher investment
advisory fees (consisting of the base management fee). Expenses before incentive fees for the six months ended June 30, 2010 were approximately $3.8 million.

The investment advisory fee for the first six months of 2011 was approximately $3.3 million, representing the base fee as provided for in the Investment Advisory Agreement. The investment advisory fee in
the comparable period in 2010 was approximately $2.5 million. The increase of approximately $817,000 is due to an increase in average gross assets. At each of June 30, 2011 and December 31, 2010, respectively, approximately $2.3 million
and $1.8 million of investment advisory fees remained payable to TICC Management, including the net investment income incentive fee discussed below.

Professional fees, consisting of legal, valuation, audit and consulting fees, were approximately $461,000 for the six months ended June 30, 2011, compared to approximately $451,000 for the same
period in 2010. This was the result of an increase in audit fees of approximately $39,000 and legal fees of approximately $18,000, partially offset by a decrease in valuations services of approximately $25,000 and consulting expenses of $21,000
incurred during the six months ended June 30, 2011.

Compensation expenses were approximately $496,000 for the six months
ended June 30, 2011, compared to approximately $479,000 for the six months ended June 30, 2010, reflecting the allocation of compensation expenses for the services of our chief financial officer, chief compliance officer, controller and
senior accountant, and other administrative support personnel. At June 30, 2011 and December 31, 2010, respectively, approximately $267,000 and $0 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 $575,000 for the six months ended June 30, 2011 compared to approximately $416,000 for the same period in 2010. This increase was due largely to costs associated
with regulatory filing fees, proxy materials and listing fees. Office supplies, facilities costs and other expenses are allocated to us under the terms of the Administration Agreement.

Realized and Unrealized Gains/Losses on Investments

For the six months
ended June 30, 2011, we recorded net realized gains on investments of approximately $2.6 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).



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##### Table of Contents

Based upon the fair value determinations made in good faith by the Board of Directors,
during the six months ended June 30, 2011, we had net unrealized gains of approximately $3.1 million, comprised of $17.9 million in gross unrealized appreciation, $12.5 million in gross unrealized depreciation and approximately $2.3 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 six months ended June 30, 2011 were as follows
(in millions):



|                                       |  |                                      |      |  
|-------------------------------------- |  | ------------------------------------ | ---- | -
|Portfolio Company                      |  | Unrealizedappreciation(depreciation) |     
|American Integration Technologies, LLC |  | $                                    | 1.7  |  
|ACA CLO 20062, Limited                |  |                                      | 1.7  |  
|Pegasus Solutions, LLC                 |  |                                      | 1.4  |  
|Prospero CLO II BV                     |  |                                      | 0.7  |  
|Latitude III CLO 20073A               |  |                                      | 0.7  |  
|Harch CLO II LTD 20052a e             |  |                                      | 0.6  |  
|Fusionstorm, Inc                       |  |                                      | 0.5  |  
|Sargas CLO 20061A                     |  |                                      | 0.5  |  
|Avenue CLO V LTD 20075A D1            |  |                                      | 0.4  |  
|Latitude II CLO 2006 2A D              |  |                                      | 0.4  |  
|Landmark V CDO LTD                     |  |                                      | 0.3  |  
|Lightpoint CLO 20078a                 |  |                                      | (0.3 | )
|Ocean Trails CLO II 20072a-d          |  |                                      | (0.3 | )
|Harbourview  2006A CLO Equity         |  |                                      | (0.4 | )
|Del Mar CLO I Ltd. 20061              |  |                                      | (0.4 | )
|Hewetts Island CDO III 20051A D       |  |                                      | (0.5 | )
|Hewetts Island CDO IV 20064           |  |                                      | (0.6 | )
|Prodigy Health Group                   |  |                                      | (0.8 | )
|Integra Telecomm, Inc                  |  |                                      | (1.0 | )
|Net all other                          |  |                                      | (1.5 | )
|                                       |  |                                      |      |  
|Total                                  |  | $                                    | 3.1  |  
|                                       |  |                                      |      |  

For the six months ended June 30, 2010, we recorded net realized losses on investments of
approximately $30.0 million, which largely represents the loss of approximately $22.9 million on our investment in The CAPS Group as well as the loss of approximately $7.8 million on our investment in Box Services, LLC.

Based upon the fair value determinations made in good faith by the Board of Directors, during the six months ended June 30, 2010, we
had net unrealized gains of approximately $46.6 million, comprised of $24.6 million in gross unrealized appreciation, $8.7 million in gross unrealized depreciation and approximately $30.7 million relating to the reversal of prior period net
unrealized depreciation as certain investments were realized. The most significant changes in net unrealized appreciation and depreciation during the six months ended June 30, 2010 were as follows (in millions):



|                                                |  |                                      |      |  
|----------------------------------------------- |  | ------------------------------------ | ---- | -
|Portfolio Company                               |  | Unrealizedappreciation(depreciation) |     
|The CAPS Group                                  |  | $                                    | 22.9 |  
|American Integration Technologies, LLC          |  |                                      | 10.4 |  
|Box Services, LLC                               |  |                                      | 7.8  |  
|Pegasus Solutions, Inc.                         |  |                                      | 1.7  |  
|Palm, Inc.                                      |  |                                      | 1.7  |  
|SCS Holdings II, Inc.                           |  |                                      | 1.2  |  
|Algorithmic Implementations, Inc.               |  |                                      | 0.9  |  
|Pegasus Solutions, Inc. preferred equity        |  |                                      | 0.7  |  
|Stratus Technologies, Inc. high yield notes     |  |                                      | 0.7  |  
|Fusionstorm, Inc.                               |  |                                      | 0.7  |  
|Questia Media, Inc.                             |  |                                      | 0.6  |  
|Hyland Software, Inc.                           |  |                                      | 0.5  |  
|Power Tools, Inc.                               |  |                                      | 0.4  |  
|Cavtel Holdings, LLC                            |  |                                      | (0.5 | )
|Integra Telecomm, Inc.                          |  |                                      | (0.6 | )
|Stratus Technologies, Inc. senior secured notes |  |                                      | (0.7 | )
|Sargas CLO 2006-1A                              |  |                                      | (0.7 | )
|WAICCS Las Vegas, LLC                           |  |                                      | (1.5 | )
|Net all other                                   |  |                                      | 0.4  |  
|                                                |  |                                      |      |  
|Total                                           |  | $                                    | 46.6 |  
|                                                |  |                                      |      |  



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##### Table of Contents

Net Increase in Net Assets Resulting from Net Investment Income

Net investment income for the six months ended June 30, 2011 and 2010 was $10.1 million and $11.0 million, respectively. This
decrease was due largely to the accrual of a capital gains incentive fee in the first quarter of 2011, offset by an increase in the principal value of income producing investments, greater return on our investment portfolio due to market discounts
on new debt investments and greater distributions from the equity interests in our securitization vehicle investments.

Excluding the impact of the capital gains incentive fee accrual of approximately $5.0 million, core net investment income would have
increased from $11.0 million to $15.1 million over the same period in the prior year.

Based on a weighted-average of
32,151,738 shares outstanding (basic and diluted), the net increase in net assets resulting from net investment income per common share for the quarter ended June 30, 2011 was approximately $0.31 for basic and diluted, compared to approximately
$0.41 per share for the same period in 2010. Excluding the impact of the capital gains incentive fee, the net increase in net assets resulting from core net investment income per common share would have been $0.47, basic and diluted, compared to
$0.41 per share for the same period in 2010.

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 $15.8 million for
the six months ended June 30, 2011, compared to a net increase of approximately $27.6 million for the comparable period in 2010. This decrease was attributable directly to decreased net unrealized appreciation on investments as well as the
impact of the accrual of a capital gains incentive fee, partially offset by greater net realized gains.

Based on a
weighted-average of 32,151,738 shares outstanding (basic and diluted), the net increase in net assets resulting from operations per common share for the six months ended June 30, 2011 was approximately $0.49 for basic and diluted, compared to a
net increase in net assets resulting from operations of approximately $1.03 per share for the same period in 2010. Excluding the impact of the capital gains incentive fee reduction, the core net increase in net assets resulting from operations per
common share would have been $0.65, basic and diluted, compared to $1.03 per share for the same period in 2010.

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.

Supplemental
Information Regarding Core Net Investment Income and Core Net Increase in Net Assets Resulting from Operations

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. TICC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



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##### Table of Contents

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 table provides a reconciliation of net investment income to core net investment
income (for the three and six months ended June 30, 2011):



|                            |  |                                 |            |   |                               |   |       |        |  |   |                  |  |  |   |      | 
|--------------------------- |  | ------------------------------- | ---------- | - | ----------------------------- | - | ----- | ------ |  | - | ---------------- |  |  | - | ---- | 
|                            |  | Three Months EndedJune 30, 2011 |            |   | Six Months EndedJune 30, 2011 |  
|                            |  | Amount                          |            |   | Per ShareAmounts              |   |       | Amount |  |   | Per ShareAmounts | 
|Net investment income       |  | $                               | 9,523,437  |   |                               | $ | 0.29  |        |  | $ | 10,071,460       |  |  | $ | 0.31 | 
|Capital gains incentive fee |  |                                 | (1,442,843 | ) |                               |   | (0.04 | )      |  |   | 5,026,486        |  |  |   | 0.16 | 
|                            |  |                                 |            |   |                               |   |       |        |  |   |                  |  |  |   |      | 
|Core net investment income  |  | $                               | 8,080,594  |   |                               | $ | 0.25  |        |  | $ | 15,097,946       |  |  | $ | 0.47 | 
|                            |  |                                 |            |   |                               |   |       |        |  |   |                  |  |  |   |      | 

The following table provides 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 six months ended June 30, 2011):



|                                                          |  |                                 |            |   |                               |   |       |        |  |   |                  |  |  |   |      | 
|--------------------------------------------------------- |  | ------------------------------- | ---------- | - | ----------------------------- | - | ----- | ------ |  | - | ---------------- |  |  | - | ---- | 
|                                                          |  | Three Months EndedJune 30, 2011 |            |   | Six Months EndedJune 30, 2011 |  
|                                                          |  | Amount                          |            |   | Per ShareAmounts              |   |       | Amount |  |   | Per ShareAmounts | 
|Net increase in net assets resulting from operations      |  | $                               | 4,204,646  |   |                               | $ | 0.13  |        |  | $ | 15,764,288       |  |  | $ | 0.49 | 
|Capital gains incentive fee                               |  |                                 | (1,442,843 | ) |                               |   | (0.04 | )      |  |   | 5,026,486        |  |  |   | 0.16 | 
|                                                          |  |                                 |            |   |                               |   |       |        |  |   |                  |  |  |   |      | 
|Core net increase in net assets resulting from operations |  | $                               | 2,761,803  |   |                               | $ | 0.09  |        |  | $ | 20,790,774       |  |  | $ | 0.65 | 
|                                                          |  |                                 |            |   |                               |   |       |        |  |   |                  |  |  |   |      | 

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



|                                                                                                                                          |  |                                 |       |   |                               |  |      |                                |  |  |                               |   |  |  |      |  
|----------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ----- | - | ----------------------------- |  | ---- | ------------------------------ |  |  | ----------------------------- | - |  |  | ---- | -
|                                                                                                                                          |  | 2011                            |       |   | 2010                          | 
|                                                                                                                                          |  | Three MonthsEndedJune 30, 
2011 |       |   | Six MonthsEndedJune 30, 
2011 |  |      | Three MonthsEndedJune 30,
2010 |  |  | Six MonthsEndedJune 30, 
2010 |  
|Ratio of core net investment income to average net assets, for the three month and six periods ended June 30, 2011 and 2010,
respectively |  |                                 | 10.05 | % |                               |  | 9.49 | %                              |  |  | 9.49                          | % |  |  | 9.41 | %
|                                                                                                                                          |  |                                 |       |   |                               |  |      |                                |  |  |                               |   |  |  |      |  

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 six month periods ended June, 2011 and 2010, respectively.



|                                                          |  |                                |       |    |                               |  |      |                                |  |  |                               |   |  |  |      |  
|--------------------------------------------------------- |  | ------------------------------ | ----- | -- | ----------------------------- |  | ---- | ------------------------------ |  |  | ----------------------------- | - |  |  | ---- | -
|                                                          |  | 2011                           |       |    | 2010                          | 
|                                                          |  | Three MonthsEndedJune 30,
2011 |       |    | Six MonthsEndedJune 30, 
2011 |  |      | Three MonthsEndedJune 30,
2010 |  |  | Six MonthsEndedJune 30, 
2010 |  
|Ratio of net investment income to average net assets      |  |                                | 11.84 | %  |                               |  | 6.33 | %                              |  |  | 6.33                          | % |  |  | 9.41 | %
|Ratio of capital gain incentive fee to average net assets |  |                                | (1.79 | %) |                               |  | 3.16 | %                              |  |  | 3.16                          | % |  |  |     |  
|                                                          |  |                                |       |    |                               |  |      |                                |  |  |                               |   |  |  |      |  
|Ratio of core net investment income to average net assets |  |                                | 10.05 | %  |                               |  | 9.49 | %                              |  |  | 9.49                          | % |  |  | 9.41 | %
|                                                          |  |                                |       |    |                               |  |      |                                |  |  |                               |   |  |  |      |  



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##### Table of Contents

LIQUIDITY AND CAPITAL RESOURCES

During the six months ended June 30, 2011, cash and cash equivalents decreased from approximately $68.8 million at the beginning of
the period to approximately $18.9 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 $41.8 million,
largely reflecting purchases of new investments of approximately $133.0 million offset by proceeds from principal repayments and sales of investments of approximately $78.8 million. During the period, net cash used in financing activities was
approximately $8.1 million reflecting primarily the distribution of dividends offset by proceeds from the issuance of common stock.

At-the-Market Share Issuance Plan

During the six months ended June 30, 2011, we sold 651,599 shares of our common stock pursuant to an at-the-market share issuance plan. Wells Fargo Securities, LLC acted as the sales
agent for the at-the-market share issuance plan. The total amount of capital raised under these issuances was approximately $6.7 million and net proceeds were approximately $6.4 million, after deducting approximately $319,000 of
underwriters discounts and miscellaneous expenses. We have used, and will continue to use, the net proceeds from these offerings for investing in debt or equity securities, and other general corporate purposes, including working capital
requirements.

Share Repurchase Program

On July 30, 2009, the Board of Directors authorized a share repurchase program which provides for the purchase of up to $10 million worth of shares to be implemented at the discretion of our
management team. Under the repurchase program, we may, but are not obligated to, repurchase our outstanding common stock in the open market from time to time. The timing and number of shares to be repurchased in the open market will depend on a
number of factors, including market conditions and alternative investment opportunities. In addition, any repurchases will be conducted in accordance with the 1940 Act. There were no share repurchases during the first six months of fiscal 2011.

Contractual Obligations

We have certain obligations with respect to the investment advisory and administration services we receive. See Overview. We incurred approximately $3.3 million for investment advisory
services, excluding pre-incentive net investment income incentive fees and $574,700 for administrative services for the six months ended June 30, 2011.

Off-Balance Sheet Arrangements

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

Borrowings

We currently have no borrowings.

Collateralized Loan Obligation Transaction

On August 4, 2011, we priced the senior notes in a $225,000,000 collateralized loan obligation (CLO) transaction. The senior notes will be issued by a newly formed special purpose vehicle in which our
wholly-owned subsidiary, which will be consolidated on our balance sheet, owns all of the equity. The senior notes will have an initial face amount of $101,250,000, are expected to be rated AAA/Aaa by Standard & Poors Ratings Services and
Moodys Investors Service, Inc., respectively, and will bear interest at three-month LIBOR plus 2.25%. The senior notes will have a stated maturity date of July 25, 2021 and will be subject to a three year non-call period. The CLO will have a
three year reinvestment period. The anticipated closing date of the transaction is August 10, 2011.

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.

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 2011      |  |             |                    |  |              |  |                    |        |  |   |      |    
|July 28, 2011    |  |             | September16, 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)     |  |             |                    |  |              |  |                    |        |  |   | 0.74 |    
|                 |  |             |                    |  |              |  |                    |        |  |   |      |    
|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 | (1)
|                 |  |             |                    |  |              |  |                    |        |  |   |      |    
|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 | (1)
|                 |  |             |                    |  |              |  |                    |        |  |   |      |    



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|                     |  |                    |  |                    |  |        |      |    
|-------------------- |  | ------------------ |  | ------------------ |  | ------ | ---- | ---
|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 | (2)
|                     |  |                    |  |                    |  |        |      |    
|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 | (3)
|                     |  |                    |  |                    |  |        |      |    
|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 | (4)
|                     |  |                    |  |                    |  |        |      |    
|Total Distributions: |  |                    |  |                    |  | $      | 7.47 | (5)
|                     |  |                    |  |                    |  |        |      |    



|(1) | Distributions for the fiscal years ended December 31, 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.
|--- | ---------------------------------------------------------------------

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. In
addition to BDC Partners, TICC Management is owned by Charles Royce, a non-managing member. 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.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | 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 investing in syndicated loans. 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. 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.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Both we, GLIF and Oxford Lane
Capital Corp. have adopted a policy with respect to the allocation of investment opportunities in view of these potential conflicts of interest. Bilateral investment opportunities are those negotiated directly between us or GLIF and a prospective
portfolio company. Our general policy is to allocate bilateral U.S.-based opportunities to us and bilateral non-U.S.-based opportunities to GLIF; provided, that in instances involving bilateral investment opportunities where there is significant
question as to a prospective portfolio companys primary base of operation (by virtue, for instance, of it conducting business in many countries, including the United States, with no clear principal center of operation or legal domicile), and
where that question leads to doubt with regard to an investment in that company representing a qualified asset for the purpose of compliance with the 70% test for qualifying assets for BDCs under Section 55(a) of the
1940 Act, that bilateral investment opportunity will be allocated to GLIF.

Either we, GLIF or Oxford Lane Capital Corp. may
also purchase syndicated loans (i.e., those transactions in which an agent bank syndicates loans to four or more investors) or investments in CLO vehicles provided that the purchases are not made directly from the other fund or the issuer of the
acquired syndicated loans or the CLO vehicle. In instances where both we and GLIF or Oxford Lane Capital Corp. desire to either purchase or sell the same position at the same time, such purchases or sales will generally be allocated on a pro rata
basis between us and GLIF or Oxford Lane Capital Corp. based on order size as determined by each funds investment adviser in good faith.

Notwithstanding the foregoing policy with respect to the allocation of investment opportunities, any opportunity to invest a sum of less than or equal to $500,000 (an amount generally considered below our
or GLIFs or Oxford Lane Capital Corp.s minimum investment threshold) will be allocated to Oxford Gate Capital, LLC.

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 July 28, 2011, the Board of Directors declared a distribution of $0.25 per share for the third quarter, payable
on September 30, 2011 to shareholders of record as of September 16, 2011.

On August 4, 2011, we priced the senior
notes in a $225,000,000 collateralized loan obligation (CLO) transaction. The senior notes will be issued by a newly formed special purpose vehicle in which our wholly-owned subsidiary owns all of the equity. The senior notes will have an initial
face amount of $101,250,000, are expected to be rated AAA/Aaa by Standard & Poors Ratings Services and Moodys Investors Service, Inc., respectively, and will bear interest at three-month LIBOR plus 2.25%. The senior notes will have a
stated maturity date of July 25, 2021 and will be subject to a three year non-call period. The CLO will have a three year reinvestment period. The anticipated closing date of the transaction is August 10, 2011.



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|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------

We are subject to financial market risks, including changes in interest rates. As of June 30, 2011, three debt investments in our portfolio were at a fixed rate, and the remaining forty-eight debt
investments were at variable rates, representing approximately $23.4 million and $266.0 million in principal debt, respectively. At June 30, 2011, $262.5 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 in the underlying five-year Treasury note, the Prime rate or LIBOR, and no other change in our portfolio as
of June 30, 2011. We have also assumed no outstanding borrowings. Under this analysis, net investment income would increase by approximately $942,000 annually, based upon the implied floors in our portfolio. Conversely, if we had instead assumed a
1% decrease in the underlying five-year Treasury note, the Prime rate or LIBOR, net investment income would decrease by approximately $242,000 annually. 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 borrowing under a credit facility, that could affect the net increase in net assets resulting from
operations. It should be noted, also, that to the extent that certain investments may be based on a rate which is historically low at the current time, it may not be possible for the underlying rate to decrease by 1%, 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 June 30, 2011, 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 June 30, 2011 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.



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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.

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 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 private equity and venture capital funds, 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.



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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.

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. The 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 the Board of Directors includes, as relevant, the nature and value of any collateral, the portfolio companys ability to make payments and its earnings, the markets in which the
portfolio company does business, comparison to valuations of publicly traded companies, comparisons to recent sales of comparable companies, the discounted value of the cash flows of the portfolio company and other relevant factors. Because such
valuations are inherently uncertain and may be based on estimates, our determinations of fair value may differ materially from the values that would be assessed if a readily available market for these securities existed.

The lack of liquidity in our investments may adversely affect our business.

As stated above, our investments are 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 quarterly results.

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

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 United States 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 United States 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.



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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.

During portions of 2010, the economy was in the midst of a
recession and in a difficult part of a credit cycle. 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 affect 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.

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 business development company, we are required to carry our investments at market value or, if no market value is ascertainable, at
fair value as determined in good faith by or under the direction of our Board of Directors. Decreases in the market values or fair values of our investments are recorded as unrealized depreciation. The unprecedented declines in prices and liquidity
in the corporate debt markets from 2008 through mid-2010 have resulted in significant net unrealized depreciation in our portfolio, reducing our net asset value. Depending on market conditions, we could continue to 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.



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

On August 4, 2011, we priced the senior notes in a $225,000,000 collateralized loan
obligation (CLO) transaction. The senior notes will be issued by a newly formed special purpose vehicle in which our wholly-owned subsidiary owns all of the equity. The senior notes will have an initial face amount of $101,250,000, are expected to
be rated AAA/Aaa by Standard & Poors Ratings Services and Moodys Investors Service, Inc., respectively, and will bear interest at three-month LIBOR plus 2.25%. The senior notes will have a stated maturity date of July 25, 2021 and
will be subject to a three year non-call period. The CLO will have a three year reinvestment period. The anticipated closing date of the transaction is August 10, 2011.

Borrowings, 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 shareholders. 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.

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

As a business development company, 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 turmoil and tightening of credit have 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 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.



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Regulations governing our operation as a business development company affect our ability to, and the way
in which we raise additional capital, which may expose us to risks, including the typical risks associated with leverage.

Our 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.

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 4, 2011, we priced the senior notes in a $225,000,000 collateralized loan obligation (CLO) transaction. The senior notes will
be issued by a newly formed special purpose vehicle in which our wholly-owned subsidiary owns all of the equity. The senior notes will have an initial face amount of $101,250,000, are expected to be rated AAA/Aaa by Standard & Poors
Ratings Services and Moodys Investors Service, Inc., respectively, and will bear interest at three-month LIBOR plus 2.25%. The senior notes will have a stated maturity date of July 25, 2021 and will be subject to a three year non-call period.
The CLO will have a three year reinvestment period. The anticipated closing date of the transaction is August 10, 2011.

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 shareholders; (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.

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

In light of current 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.



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Our Board of Directors is authorized to reclassify any unissued shares of 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 32,671,485 shares are issued and outstanding as
of June 30, 2011. 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 the 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.

Currently, we do not have a credit facility in place and do not have any other outstanding borrowings.
However, to the extent we employ leverage in the future, a portion of our income will depend upon the difference between the rate at which we borrow funds and the interest rate on the debt securities in which we invest.

Currently, only three of our debt investments 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.

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 may use debt financing in the future, we may be subject to certain asset coverage ratio requirements under the 1940 Act and
financial covenants under loan and credit agreements that could, under certain circumstances, restrict us from making distributions necessary to 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. 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.



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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. IRS Revenue Procedure 2010-12 temporarily allows a RIC whose stock is publicly traded on an established securities market in the United States to distribute its own
stock as a dividend for the purpose of fulfilling its distribution requirements. Pursuant to this revenue procedure, a RIC may treat a distribution of its own stock as fulfilling its distribution requirements if (i) the distribution is declared
on or before December 31, 2012, with respect to a taxable year ending on or before December 31, 2011, and (ii) each shareholder may elect to receive his or her entire distribution in either cash or stock of the RIC subject to a
limitation on the aggregate amount of cash to be distributed to all shareholders, which limitation must be at least 10% of the aggregate declared distribution. Under Revenue Procedure 2010-12, if too many shareholders elect to receive cash, each
shareholder electing to receive cash will receive a pro rata amount of cash (with the balance of the distribution paid in stock). In no event will any shareholder, electing to receive cash, receive less than 10% of his or her entire distribution in
cash. If the requirements of Revenue Procedure 2010-12 are met, for U.S federal income tax purposes, the amount of the dividend paid in stock will be equal to the amount of cash that could have been received instead of stock.

Where Revenue Procedure 2010-12 is not currently applicable, the Internal Revenue Service has also issued private letter rulings on
cash/stock dividends paid by RICs and real estate investment trusts using a 20% cash standard (and, more recently, the 10% cash standard of Revenue Procedure 2010-12) if certain requirements are satisfied. Stockholders receiving such dividends will
be required to include the full amount of the dividend (including the portion payable in stock) as ordinary income (or, in certain circumstances, long-term capital gain) to the extent of our current and accumulated earnings and profits for federal
income tax purposes. As a result, stockholders may be required to pay income taxes with respect to such dividends in excess of the cash dividends received. If a U.S. stockholder sells the common stock that 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 common 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 common stock. In addition, if a significant number of our stockholders determine to sell shares of our common
stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price of our common stock. It is unclear whether and to what extent we will be able to pay taxable dividends of the type described in this paragraph (whether
pursuant to Revenue Procedure 2010-12, a private letter ruling or otherwise).

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, which could impact our investment returns.

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.



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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, is the non-managing member of 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.

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 invests primarily in leveraged corporate loans, 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.

Both we, GLIF and Oxford Lane Capital Corp. have adopted a policy with respect to the allocation of investment opportunities in view of
these potential conflicts of interest. Bilateral investment opportunities are those negotiated directly between us or GLIF and a prospective portfolio company. Our general policy is to allocate bilateral U.S.-based opportunities to us and bilateral
non-U.S.-based opportunities to GLIF; provided, that in instances involving bilateral investment opportunities where there is significant question as to a prospective portfolio companys primary base of operation (by virtue, for instance, of it
conducting business in many countries, including the United States, with no clear principal center of operation or legal domicile), and where that question leads to doubt with regard to an investment in that company representing a qualified
asset for the purpose of compliance with the 70% test for qualifying assets for BDCs under Section 55(a) of the 1940 Act, that bilateral investment opportunity will be allocated to GLIF.

Either we, GLIF or Oxford Lane Capital Corp. may also purchase syndicated loans (i.e., those transactions in which an agent bank
syndicates loans to four or more investors) or investments in CLO vehicles provided that the purchases are not made directly from the other fund or the issuer of the acquired syndicated loans or the CLO vehicle. In instances where both we and GLIF
or Oxford Lane Capital Corp. desire to either purchase or sell the same position at the same time, such purchases or sales will generally be allocated on a pro rata basis between us and GLIF or Oxford Lane Capital Corp. based on order size as
determined by each funds investment adviser in good faith.

Notwithstanding the foregoing policy with respect to the
allocation of investment opportunities, any opportunity to invest a sum of less than or equal to $500,000 (an amount generally considered below our or GLIFs or Oxford Lane Capital Corp.s minimum investment threshold) will be allocated to
Oxford Gate Capital, LLC.

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.



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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. See BusinessRegulation as a
Business Development Company.

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 business development company, 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.

RISKS RELATED TO OUR INVESTMENTS

Our 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.



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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.

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 are targeting 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 an investment decision 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.

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;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 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
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | many of these companies may be more susceptible to adverse economic conditions 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 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 make speculative investments.

The incentive fee payable by us to TICC Management may create an incentive for TICC Management 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.



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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 and may 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 such CLO vehicles defaults on its payment obligations or fails to perform as we expect.

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.



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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.

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 United States, 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 COMMON STOCK

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 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 the current 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 had remained below our net asset value per share through the first two quarters of 2010. Our shares could revert to trading at a discount to net asset value. 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.



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There is a risk that you may not receive dividends or that our dividends may decline or that our
dividends 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 addition, as a result of de-levering our portfolio, our net investment income is now and will continue to be less than it might
otherwise be on a more fully levered portfolio.



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

While we did not engage in unregistered sales of equity securities during the six months ended June 30, 2011, we issued a total of 133,519 shares of common stock under our dividend reinvestment plan.
This issuance was not subject to the registration requirements of the Securities Act of 1933. The aggregate valuation price for the shares of common stock issued under the dividend reinvestment plan was approximately $1,356,750.



|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES.
|------- | --------------------------------

Not applicable.



|ITEM 4. | RESERVED.
|------- | ---------

[Intentionally
left blank]



|ITEM 5. | OTHER INFORMATION.
|------- | ------------------

Not
applicable.



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|ITEM 6. | EXHIBITS.
|------- | ---------

(a)
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).                                                                                     
|      | 
|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  |  | Administration Agreement between Registrant and BDC Partners, LLC (Incorporated by reference to Pre-Effective Amendment No. 2 to the Registrants Registration Statement on Form
N-2 (File No. 333-109055), filed on November 19, 2003).             
|      | 
|10.4  |  | Dividend Reinvestment Plan (Incorporated by reference to Pre-Effective Amendment No. 1 to the Registrants Registration Statement on Form N-2 (File No. 333-109055), filed on
November 6, 2003).                                                     
|      | 
|11    |  | Computation of Per Share Earnings (included in 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.                                                                                                                                                  



|* | Filed herewith
|- | --------------



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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 CORP.
|                     |  |  | 
|Date: August 5, 2011 |  |  |  | By:                |  | /S/    JONATHAN H.
COHEN                                                
|                     |  |  |  |                    |  | Jonathan H. Cohen Chief Executive Officer                               
|                     |  |  | 
|Date: August 5, 2011 |  |  |  | By:                |  | /S/    PATRICK F.
CONROY                                                
|                     |  |  |  |                    |  | Patrick F. Conroy Chief Financial Officer (Principal Accounting
Officer)



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