##### 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, 2010



| ̈ | 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 5, 2010 was 26,932,340.









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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, 2010 and December 31, 2009                                  |  | 3 
|                              |  |                                                                                                                
|                              |  | Schedule of Investments as of June 30, 2010                                                                     |  | 4 
|                              |  |                                                                                                                
|                              |  | Schedule of Investments as of December 31, 2009                                                                 |  | 7 
|                              |  |                                                                                                                
|                              |  | Statements of Operations for the three months and six months ended June 30, 2010 and
2009                       |  | 10
|                              |  |                                                                                                                
|                              |  | Statements of Changes in Net Assets for the six months ended June 30, 2010 and the year ended December 31, 2009 |  | 11
|                              |  |                                                                                                                
|                              |  | Statements of Cash Flows for the six months ended June 30, 2010 and 2009                                        |  | 12
|                              |  |                                                                                                                
|                              |  | Notes to Financial Statements                                                                                   |  | 13
|                              |  |                                                                                                                
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of
Operations                           |  | 21
|                              |  |                                                                                                                
|                              |  | Forward-Looking Statements                                                                                      |  | 21
|                              |  |                                                                                                                
|                              |  | Overview                                                                                                        |  | 22
|                              |  |                                                                                                                
|                              |  | Critical Accounting Policies                                                                                    |  | 25
|                              |  |                                                                                                                
|                              |  | Portfolio Composition and Investment Activity                                                                   |  | 30
|                              |  |                                                                                                                
|                              |  | Results of Operations                                                                                           |  | 35
|                              |  |                                                                                                                
|                              |  | Liquidity and Capital Resources                                                                                 |  | 41
|                              |  |                                                                                                                
|                              |  | Recent Developments                                                                                             |  | 44
|                              |  |                                                                                                                
|Item 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk                                                      |  | 44
|                              |  |                                                                                                                
|Item 4.                       |  | Controls and Procedures                                                                                         |  | 44
|                              | 
|PART II. OTHER INFORMATION    |  | 45                                                                                                             
|                              |  |                                                                                                                
|Item 1.                       |  | Legal Proceedings                                                                                               |  | 45
|                              |  |                                                                                                                
|Item 1A.                      |  | Risk Factors                                                                                                    |  | 45
|                              |  |                                                                                                                
|Item 2                        |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                     |  | 55
|                              |  |                                                                                                                
|Item 3.                       |  | Defaults Upon Senior Securities                                                                                 |  | 55
|                              |  |                                                                                                                
|Item 4.                       |  | Reserved                                                                                                        |  | 56
|                              |  |                                                                                                                
|Item 5.                       |  | Other Information                                                                                               |  | 56
|                              |  |                                                                                                                
|Item 6.                       |  | Exhibits                                                                                                        |  | 56
|                              | 
|SIGNATURES                    |  | 57                                                                                                             



2



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##### Table of Contents

PART IFINANCIAL INFORMATION



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

TICC CAPITAL CORP.

STATEMENTS OF ASSETS AND LIABILITIES

(unaudited)



|                                                                                                                                 |  |               |             |   |                   |   |             |  
|-------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ----------- | - | ----------------- | - | ----------- | -
|                                                                                                                                 |  | June 30, 2010 |             |   | December 31, 2009 |  
|                                                                                                                                 |  |              
|ASSETS                                                                                                                           |  |               |             |   |                   |   |             |  
|Investments, at fair value (cost: $246,697,816 @ 6/30/10; $260,752,699 @ 12/31/09)                                               |  |               |             |   |                   |   |             |  
|Non-affiliated/non-control investments (cost: $227,776,883 @ 6/30/10; $241,169,345 @ 12/31/09)                                   |  | $             | 212,713,121 |   |                   | $ | 180,226,123 |  
|Control investments (cost: $18,920,933 @ 6/30/10; $19,583,354 @ 12/31/09)                                                        |  |               | 20,075,000  |   |                   |   | 20,025,000  |  
|                                                                                                                                 |  |               |             |   |                   |   |             |  
|Total investments at fair value                                                                                                  |  |               | 232,788,121 |   |                   |   | 200,251,123 |  
|                                                                                                                                 |  |               |             |   |                   |   |             |  
|Cash and cash equivalents                                                                                                        |  |               | 11,321,299  |   |                   |   | 23,972,885  |  
|Interest receivable                                                                                                              |  |               | 1,593,382   |   |                   |   | 860,271     |  
|Securities sold not settled                                                                                                      |  |               | 1,095,982   |   |                   |   |            |  
|Prepaid expenses and other assets                                                                                                |  |               | 54,481      |   |                   |   | 256,012     |  
|                                                                                                                                 |  |               |             |   |                   |   |             |  
|Total assets                                                                                                                     |  | $             | 246,853,265 |   |                   | $ | 225,340,291 |  
|                                                                                                                                 |  |               |             |   |                   |   |             |  
|                                                                                                                                 |  |              
|LIABILITIES                                                                                                                      |  |               |             |   |                   |   |             |  
|Investment advisory fee payable to affiliate                                                                                     |  | $             | 1,749,568   |   |                   | $ | 1,119,544   |  
|Securities purchased not settled                                                                                                 |  |               | 1,500,919   |   |                   |   |            |  
|Accrued expenses                                                                                                                 |  |               | 432,993     |   |                   |   | 128,752     |  
|                                                                                                                                 |  |               |             |   |                   |   |             |  
|Total liabilities                                                                                                                |  |               | 3,683,480   |   |                   |   | 1,248,296   |  
|                                                                                                                                 |  |               |             |   |                   |   |             |  
|                                                                                                                                 |  |              
|NET ASSETS                                                                                                                       |  |               |             |   |                   |   |             |  
|Common stock, $0.01 par value, 100,000,000 shares authorized, and 26,932,340 and 26,813,216 issued and outstanding, respectively |  |               | 269,323     |   |                   |   | 268,132     |  
|Capital in excess of par value                                                                                                   |  |               | 321,063,638 |   |                   |   | 320,175,874 |  
|Net unrealized depreciation on investments                                                                                       |  |               | (13,909,695 | ) |                   |   | (60,501,576 | )
|Accumulated net realized losses on investments                                                                                   |  |               | (62,382,117 | ) |                   |   | (32,412,374 | )
|Distributions in excess of investment income                                                                                     |  |               | (1,871,364  | ) |                   |   | (3,438,061  | )
|                                                                                                                                 |  |               |             |   |                   |   |             |  
|Total net assets                                                                                                                 |  |               | 243,169,785 |   |                   |   | 224,091,995 |  
|                                                                                                                                 |  |               |             |   |                   |   |             |  
|                                                                                                                                 |  |              
|Total liabilities and net assets                                                                                                 |  | $             | 246,853,265 |   |                   | $ | 225,340,291 |  
|                                                                                                                                 |  |               |             |   |                   |   |             |  
|                                                                                                                                 |  |              
|Net asset value per common share                                                                                                 |  | $             | 9.03        |   |                   | $ | 8.36        |  

See Accompanying
Notes.



3



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##### Table of Contents

TICC CAPITAL CORP.

SCHEDULE OF INVESTMENTS

JUNE 30, 2010

(unaudited)



|                                                       |  |                                      |  |                                                                             |  |                 |            |      |   |              |  |   |           
|------------------------------------------------------ |  | ------------------------------------ |  | --------------------------------------------------------------------------- |  | --------------- | ---------- | ---- | - | ------------ |  | - | ----------
|COMPANY(1)                                             |  | INDUSTRY                             |  | INVESTMENT                                                                  |  | PRINCIPALAMOUNT |            | COST |   | FAIRVALUE(2)
|ACA CLO 2006-2, Limited                                |  | structured finance                   |  | CLO preferred equity                                                        |  |                 |           |      | $ | 2,200,000    |  | $ | 2,287,500 
|                                                       |  |                                      |  |                                                                             | 
|AKQA, Inc.                                             |  | advertising                          |  | senior secured notes(4)(6)
(4.93%, due March 20, 2013)                      |  | $               | 8,424,284  |      |   | 8,424,284    |  |   | 8,272,647 
|                                                       |  |                                      |  |                                                                             | 
|Algorithmic Implementations, Inc.
(d/b/a Ai Squared) |  | software                             |  | senior secured notes(4)(5)(6)
(9.84%, due September 11, 2013)               |  |                 | 16,175,000 |      |   | 15,920,933   |  |   | 16,175,000
|                                                       |  |                                      |  | common stock                                                                |  |                 |           |      |   | 3,000,000    |  |   | 3,900,000 
|                                                       |  |                                      |  |                                                                             | 
|Allen Systems Group, Inc.                              |  | software                             |  | second lien senior secured notes(3)(4)(5)
(13.00%, due April 19, 2014)      |  |                 | 3,548,938  |      |   | 3,418,595    |  |   | 3,473,523 
|                                                       |  |                                      |  |                                                                             | 
|American Integration Technologies, LLC                 |  | semiconductor capital equipment      |  | senior secured notes(4)(5)
(11.75%, due December 31, 2013)                  |  |                 | 25,401,906 |      |   | 21,217,592   |  |   | 19,051,430
|                                                       |  |                                      |  |                                                                             | 
|Attachmate Corporation                                 |  | enterprise software                  |  | second lien senior secured notes(4)(5)
(7.10%, due October 13, 2013)        |  |                 | 2,000,000  |      |   | 1,463,509    |  |   | 1,735,000 
|                                                       |  |                                      |  |                                                                             | 
|Band Digital Inc. (F/K/A
WHITTMANHART, Inc.)         |  | IT consulting                        |  | senior secured notes(4)(6)
(13.58%, due December 31, 2010)                  |  |                 | 2,625,000  |      |   | 2,625,000    |  |   | 2,625,000 
|                                                       |  |                                      |  | warrants to purchase common stock(7)                                        |  |                 |           |      |   | 0            |  |   | 0         
|                                                       |  |                                      |  |                                                                             | 
|Birch Communications, Inc.                             |  | telecommunication services           |  | senior secured notes(4)
(15.00%, due June 21, 21015)                        |  |                 | 4,090,909  |      |   | 4,090,909    |  |   | 4,090,909 
|                                                       |  |                                      |  |                                                                             | 
|Canaras CLO - 2007-1A E                                |  | structured finance                   |  | CLO secured notes(4)(5)
(4.62%, due June 19, 2021)                          |  |                 | 3,500,000  |      |   | 1,767,501    |  |   | 1,680,000 
|                                                       |  |                                      |  |                                                                             | 
|Cavtel Holdings, LLC                                   |  | telecommunication services           |  | first lien senior secured notes(3)(4)(5)(6)
(10.50%, due December 31, 2012) |  |                 | 6,040,321  |      |   | 4,248,449    |  |   | 5,967,837 
|                                                       |  |                                      |  |                                                                             | 
|Del Mar CLO I Ltd. 2006-1                              |  | structured finance                   |  | CLO secured notes(4)(5)(6)
(4.25%, due July 25, 2018)                       |  |                 | 1,831,690  |      |   | 904,174      |  |   | 1,016,588 
|                                                       |  |                                      |  |                                                                             | 
|Drew Marine Partners, L.P.                             |  | shipping & transportation            |  | first lien senior secured notes(4)(5)(6)
(9.50%, due August 31, 2014)       |  |                 | 4,718,750  |      |   | 4,601,620    |  |   | 4,671,563 
|                                                       |  |                                      |  |                                                                             | 
|Fairway Group Acquisition Company                      |  | grocery                              |  | first lien senior secured notes(4)(5)
(12.00%, due October 1, 2014)         |  |                 | 4,975,000  |      |   | 4,841,937    |  |   | 4,956,344 
|                                                       |  |                                      |  |                                                                             | 
|First Data Corporation                                 |  | business services                    |  | first lien senior secured notes(4)(5)(6)
(3.10%, due September 24, 2014)    |  |                 | 4,936,548  |      |   | 3,816,736    |  |   | 4,145,910 
|                                                       |  |                                      |  |                                                                             | 
|Flagship 2005-4A D                                     |  | structured finance                   |  | CLO secured notes(4)(5)
(5.29%, due June 1, 2017)                           |  |                 | 2,612,988  |      |   | 1,489,403    |  |   | 1,476,338 
|                                                       |  |                                      |  |                                                                             | 
|Fusionstorm, Inc.                                      |  | IT value-added reseller              |  | subordinated notes(4)(5)(6)
(11.74%, due October 2, 2011)                   |  |                 | 2,650,000  |      |   | 2,611,768    |  |   | 2,524,390 
|                                                       |  |                                      |  | warrants to purchase common stock(7)                                        |  |                 |           |      |   | 725,000      |  |   | 150,000   
|                                                       |  |                                      |  |                                                                             | 
|GenuTec Business Solutions, Inc.                       |  | interactive voice messaging services |  | senior secured notes(4)(5)(7)
(0.0%, due October 30, 2014)                  |  |                 | 3,476,000  |      |   | 2,998,124    |  |   | 2,000,000 
|                                                       |  |                                      |  | convertible preferred stock(7)                                              |  |                 |           |      |   | 1,500,000    |  |   | 0         

See Accompanying Notes.



4



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##### Table of Contents

TICC CAPITAL CORP.

SCHEDULE OF INVESTMENTS  (Continued)

JUNE 30, 2010

(unaudited)





|                                  |  |                             |  |                                                                           |  |                 |  |            |  |             
|--------------------------------- |  | --------------------------- |  | ------------------------------------------------------------------------- |  | --------------- |  | ---------- |  | ------------
|COMPANY(1)                        |  | INDUSTRY                    |  | INVESTMENT                                                                |  | PRINCIPALAMOUNT |  | COST       |  | FAIRVALUE(2)
|                                  |  |                             |  |                                                                           | 
|GXS Worldwide Inc.                |  | software                    |  | senior secured notes(5)
(9.75%, due June 15, 2015)                        |  | 8,000,000       |  | 7,875,344  |  | 7,540,000   
|                                  |  |                             |  |                                                                           | 
|Hewetts Island CDO 2007-1RA E     |  | structured finance          |  | CDO secured notes(4)(5)(6)
(7.17%, due November 12, 2019)                 |  | 3,312,729       |  | 1,902,871  |  | 1,954,510   
|                                  |  |                             |  |                                                                           | 
|Hewetts Island CDO III 2005-1A D  |  | structured finance          |  | CDO secured notes(4)(5)
(6.07%, due August 9, 2017)                       |  | 6,641,328       |  | 3,388,406  |  | 3,519,904   
|                                  |  |                             |  |                                                                           | 
|HHI Holdings LLC                  |  | auto parts manufacturer     |  | senior secured notes(4)(5)
(10.50%, due March 30, 2015)                   |  | 2,962,500       |  | 2,876,007  |  | 2,962,500   
|                                  |  |                             |  |                                                                           | 
|Hudson Straits CLO 2004-1A E      |  | structured finance          |  | CLO secured notes(4)(5)
(7.01%, due October 15, 2016)                     |  | 2,380,140       |  | 1,323,427  |  | 1,380,481   
|                                  |  |                             |  |                                                                           | 
|Hyland Software, Inc.             |  | enterprise software         |  | second lien senior secured notes(4)(5)
(6.94%, due July 31, 2014)         |  | 11,000,000      |  | 10,943,141 |  | 10,978,000  
|                                  |  |                             |  |                                                                           | 
|Integra Telecomm, Inc.            |  | telecommunications services |  | common stock(7)                                                           |  |                |  | 1,712,397  |  | 1,819,359   
|                                  |  |                             |  |                                                                           | 
|Krispy Kreme Doughnut Corporation |  | retail food products        |  | first lien senior secured notes(4)(5)(6)
(10.75% , due February 16, 2014) |  | 4,634,137       |  | 4,284,419  |  | 4,541,453   
|                                  |  |                             |  |                                                                           | 
|Landmark V CDO LTD                |  | structured finance          |  | CDO senior secured notes(4)(5)(6)
(5.79%, due June 1, 2017)               |  | 3,722,086       |  | 2,087,118  |  | 2,084,368   
|                                  |  |                             |  |                                                                           | 
|Latitude II CLO 2006 2A D         |  | structured finance          |  | CLO senior secured notes(4)(5)(6)
(4.29%, due August 15, 2018)            |  | 2,828,018       |  | 1,431,230  |  | 1,428,149   
|                                  |  |                             |  |                                                                           | 
|Latitude III CLO 2007-3A          |  | structured finance          |  | CLO secured notes(4)(5)
(4.04%, due April 11, 2021)                       |  | 4,000,000       |  | 1,788,090  |  | 1,720,000   
|                                  |  |                             |  |                                                                           | 
|Lightpoint CLO 2007-8a            |  | structured finance          |  | CLO secured notes(4)(5)
(6.80%, due July 25, 2018)                        |  | 5,000,000       |  | 2,670,103  |  | 2,925,000   
|                                  |  |                             |  |                                                                           | 
|Loomis Sayles CLO 2006-1AE        |  | structured finance          |  | CLO secured notes(4)(5)
(4.17%, due October 26, 2020)                     |  | 3,322,992       |  | 1,778,703  |  | 1,827,646   
|                                  |  |                             |  |                                                                           | 
|NetQuote, Inc.                    |  | web-based services          |  | senior secured notes(4)(6)
(9.50%, due May 1, 2011)                       |  | 19,000,000      |  | 19,000,000 |  | 19,000,000  
|                                  |  |                             |  |                                                                           | 
|Ocean Trails CLO II 2007-2a-d     |  | structured finance          |  | CLO subordinated secured notes(4)(5)
(4.80%, due June 27, 2022)           |  | 3,649,700       |  | 1,928,463  |  | 1,897,844   
|                                  |  |                             |  |                                                                           | 
|Palm, Inc.                        |  | consumer electronics        |  | first lien senior secured notes(4)(5)(6)
(5.75%, due April 24, 2014)      |  | 9,513,712       |  | 8,974,055  |  | 9,513,712   
|                                  |  |                             |  |                                                                           | 
|Pegasus Solutions, Inc.           |  | enterprise software         |  | second lien senior secured notes(3)(5)(6)
(13.00%, due April 15, 2014)    |  | 4,967,789       |  | 2,667,615  |  | 4,361,719   
|                                  |  |                             |  | common equity(7)                                                          |  |                |  | 62,595     |  | 142,444     
|                                  |  |                             |  | preferred equity(7)                                                       |  |                |  | 657,247    |  | 1,375,504   
|                                  |  |                             |  |                                                                           | 
|Power Tools, Inc.                 |  | software                    |  | senior secured notes(4)(5)(6)
(12.00%, due May 16, 2014)                  |  | 9,500,000       |  | 9,392,945  |  | 7,885,000   
|                                  |  |                             |  | warrants to purchase common stock(7)                                      |  |                |  | 350,000    |  | 270,000     
|                                  |  |                             |  |                                                                           | 
|Prodigy Health Group              |  | healthcare                  |  | second lien senior secured notes(4)(5)
(8.35%, due November 29, 2013)     |  | 4,000,000       |  | 2,696,082  |  | 3,764,000   

See Accompanying
Notes.



5



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##### Table of Contents

TICC CAPITAL CORP.

SCHEDULE OF INVESTMENTS  (Continued)

JUNE 30, 2010

(unaudited)



|                           |  |                                |  |                                                                            |  |                 |  |      |             |              |   |            
|-------------------------- |  | ------------------------------ |  | -------------------------------------------------------------------------- |  | --------------- |  | ---- | ----------- | ------------ | - | -----------
|COMPANY(1)                 |  | INDUSTRY                       |  | INVESTMENT                                                                 |  | PRINCIPALAMOUNT |  | COST |             | FAIRVALUE(2)
|                           |  |                                |  |                                                                            | 
|QA Direct Holdings, LLC    |  | printing and publishing        |  | first lien senior secured notes(4)(5)(6)
(8.25%, due August 10, 2014)      |  | 5,521,426       |  |      | 5,147,647   |              |   | 5,176,337  
|                           |  |                                |  |                                                                            | 
|Sargas CLO 2006 -1A        |  | structured finance             |  | CLO subordinated notes                                                     |  |                |  |      | 4,945,500   |              |   | 4,242,000  
|                           |  |                                |  |                                                                            | 
|SCS Holdings II, Inc.      |  | IT value-added reseller        |  | second lien senior secured notes(4)
(6.53%, due May 30, 2013)              |  | 14,500,000      |  |      | 14,509,003  |              |   | 13,050,000 
|                           |  |                                |  |                                                                            | 
|Shearers Food Inc.        |  | food products manufacturer     |  | subordinated notes(3)(4)(5)
(15.00%, due March 31, 2016)                   |  | 4,010,000       |  |      | 3,912,676   |              |   | 3,949,850  
|                           |  |                                |  |                                                                            | 
|Stratus Technologies, Inc. |  | computer hardware              |  | first lien high yield notes(5)
(12.00%, due March 29, 2015)                |  | 10,000,000      |  |      | 9,106,700   |              |   | 9,820,000  
|                           |  |                                |  | common equity(7)                                                           |  |                |  |      | 377,928     |              |   | 86,562     
|                           |  |                                |  | preferred equity(7)                                                        |  |                |  |      | 186,622     |              |   | 509,334    
|                           |  |                                |  |                                                                            | 
|U.S. Telepacific Corp.     |  | telecommunication services     |  | senior secured notes(4)(5)
(9.25%, due August 4, 2011)                     |  | 3,990,000       |  |      | 3,964,030   |              |   | 3,964,065  
|                           |  |                                |  |                                                                            | 
|WAICCS Las Vegas, LLC      |  | real estate development        |  | second lien senior secured notes(4)(7)(10)(11)
(9.31%, due July 31, 2009)  |  | 15,000,000      |  |      | 15,000,000  |              |   | 0          
|                           |  |                                |  |                                                                            | 
|Workflow Management, Inc.  |  | printing & document management |  | first lien senior secured notes(3)(4)(5)(6)
(8.00%, due November 30, 2011) |  | 5,625,167       |  |      | 4,694,720   |              |   | 5,552,040  
|                           |  |                                |  |                                                                            | 
|X-Rite Incorporated        |  | software                       |  | first lien senior secured notes(4)(5)(6)
(7.49%, due October 24, 2012)     |  | 3,593,408       |  |      | 3,197,198   |              |   | 3,346,361  
|                           |  |                                |  |                                                                            |  |                 |  |      |             |              |   |            
|                           |  |                                |  |                                                                            | 
|Total Investments          |  |                                |  |                                                                            |  |                 |  | $    | 246,697,816 |              | $ | 232,788,121
|                           |  |                                |  |                                                                            |  |                 |  |      |             |              |   |            



|(1) | Other than Algorithmic Implementation, Inc. (d/b/a Ai Squared), which TICC may be deemed to control, TICC does not control and is not an
affiliate of any of its portfolio companies, each as defined in the Investment Company Act of 1940 (the 1940 Act). In general, under the 1940 Act, TICC would be presumed to control a portfolio company if TICC
owned 25% or more of its voting securities and would be an affiliate of a portfolio company if TICC 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, 2010, investments at fair value are categorized as follows: senior secured notes (77.5%), subordinated notes (2.7%), CLO
debt (9.4%), CLO equity (2.7%), common stock (2.4%), preferred shares (0.8%) and warrants to purchase equity securities (0.2%).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | Aggregate gross unrealized appreciation for federal income tax purposes is $11,258,200; aggregate gross unrealized depreciation for federal income tax purposes is
$25,060,566. Net unrealized depreciation is $13,802,366 based upon a tax cost basis of $246,590,486.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) | Debt investment on non-accrual status at the relevant period end.
|---- | -----------------------------------------------------------------

|(11) | During the quarter ended June 30, 2009, the maturity date on our investment in WAICCS Las Vegas, LLC was set to July 31, 2009 as a result of the failure of
the companys equity sponsor to pre-fund interest reserves as required to extend the maturity beyond July 31, 2009. During July 2009, this investment was placed on non-accrual status and, as of June 30 2010, the maturity date has not
been revised as the interest reserves have not yet been pre-funded.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See Accompanying Notes.



6



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##### Table of Contents

TICC CAPITAL CORP.

SCHEDULE OF INVESTMENTS

DECEMBER 31, 2009



|                                                       |  |                                      |  |                                                                             |  |                 |            |      |   |                 |  |   |           
|------------------------------------------------------ |  | ------------------------------------ |  | --------------------------------------------------------------------------- |  | --------------- | ---------- | ---- | - | --------------- |  | - | ----------
|COMPANY(1)                                             |  | INDUSTRY                             |  | INVESTMENT                                                                  |  | PRINCIPALAMOUNT |            | COST |   | FAIRVALUE(2)(8)
|                                                       |  |                                      |  |                                                                             | 
|ACA CLO 2006-2, Limited                                |  | structured finance                   |  | CLO preferred equity                                                        |  |                 |           |      | $ | 2,200,000       |  | $ | 2,200,000 
|                                                       |  |                                      |  |                                                                             | 
|AKQA, Inc.                                             |  | advertising                          |  | senior secured notes(4)(6)
(4.75%, due March 20, 2013)                      |  | $               | 8,491,848  |      |   | 8,491,848       |  |   | 8,143,682 
|                                                       |  |                                      |  |                                                                             | 
|Algorithmic Implementations, Inc. (d/b/a Ai Squared) |  | software                             |  | senior secured notes(4)(5)(6)
(9.84%, due September 11, 2013)               |  |                 | 17,025,000 |      |   | 16,583,354      |  |   | 17,025,000
|                                                       |  |                                      |  | common stock                                                                |  |                 |           |      |   | 3,000,000       |  |   | 3,000,000 
|                                                       |  |                                      |  |                                                                             | 
|Allen Systems Group, Inc.                              |  | software                             |  | second lien senior secured notes(3)(4)(5)
(13.00%, due April 19, 2014)      |  |                 | 3,514,000  |      |   | 3,361,190       |  |   | 3,393,927 
|                                                       |  |                                      |  |                                                                             | 
|American Integration Technologies, LLC                 |  | semiconductor capital equipment      |  | senior secured notes(4)(6)(7)(10)
(13.75%, due April 29, 2011)              |  |                 | 20,950,000 |      |   | 20,950,000      |  |   | 8,380,000 
|                                                       |  |                                      |  |                                                                             | 
|Attachmate Corporation                                 |  | enterprise software                  |  | second lien senior secured notes(4)(5)
(7.00%, due October 13, 2013)        |  |                 | 2,000,000  |      |   | 1,396,221       |  |   | 1,615,000 
|                                                       |  |                                      |  |                                                                             | 
|Box Services, LLC                                      |  | digital imaging                      |  | senior secured notes(4)(6)
(9.50%, due April 30, 2012)                      |  |                 | 11,915,170 |      |   | 11,915,170      |  |   | 4,106,563 
|                                                       |  |                                      |  |                                                                             | 
|Cavtel Holdings, LLC                                   |  | telecommunication services           |  | first lien senior secured notes(3)(4)(5)(6)
(10.50%, due December 31, 2012) |  |                 | 6,438,805  |      |   | 4,208,627       |  |   | 6,390,515 
|                                                       |  |                                      |  |                                                                             | 
|Del Mar CLO I Ltd. 2006-1                              |  | structured finance                   |  | CLO secured notes(4)(5)
(4.28%, due July 25, 2018)                          |  |                 | 1,876,262  |      |   | 903,895         |  |   | 891,224   
|                                                       |  |                                      |  |                                                                             | 
|Drew Marine Partners, L.P.                             |  | shipping & transportation            |  | first lien senior secured notes(4)(5)(6)
(9.50%, due August 31, 2014)       |  |                 | 4,906,250  |      |   | 4,769,087       |  |   | 4,832,656 
|                                                       |  |                                      |  |                                                                             | 
|Fairway Group Acquisition Company                      |  | grocery                              |  | first lien senior secured notes(4)(5)
(12.00%, due October 1, 2014)         |  |                 | 5,000,000  |      |   | 4,851,296       |  |   | 4,900,000 
|                                                       |  |                                      |  |                                                                             | 
|First Data Corporation                                 |  | business services                    |  | first lien senior secured notes(4)(5)(6)
(3.00%, due September 24, 2014)    |  |                 | 4,961,929  |      |   | 3,725,801       |  |   | 4,398,899 
|                                                       |  |                                      |  |                                                                             | 
|Fusionstorm, Inc.                                      |  | IT value-added reseller              |  | senior subordinated unsecured notes(4)(5)(6)
(11.74%, due October 2, 2011)  |  |                 | 3,550,000  |      |   | 3,483,268       |  |   | 2,680,250 
|                                                       |  |                                      |  | warrants to purchase common stock(7)                                        |  |                 |            |      |   | 725,000         |  |   | 250,000   
|                                                       |  |                                      |  |                                                                             | 
|GenuTec Business Solutions, Inc.                       |  | interactive voice messaging services |  | senior secured notes(4)(5)(7)
(0.0%, due October 30, 2014)                  |  |                 | 3,476,000  |      |   | 2,906,779       |  |   | 2,000,000 
|                                                       |  |                                      |  | convertible preferred stock(7)                                              |  |                 |           |      |   | 1,500,000       |  |   | 0         



7



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##### Table of Contents

TICC CAPITAL CORP.

SCHEDULE OF INVESTMENTS

DECEMBER 31, 2009



|                                        |  |                             |  |                                                                          |  |                 |  |            |  |                
|--------------------------------------- |  | --------------------------- |  | ------------------------------------------------------------------------ |  | --------------- |  | ---------- |  | ---------------
|COMPANY(1)                              |  | INDUSTRY                    |  | INVESTMENT                                                               |  | PRINCIPALAMOUNT |  | COST       |  | FAIRVALUE(2)(8)
|                                        |  |                             |  |                                                                          | 
|Group 329, LLC (d/b/a
The CAPS Group) |  | digital imaging             |  | senior secured term A notes(4)(5)(7)(10)
(11.89%, due February 28, 2012) |  | 5,467,804       |  | 5,406,561  |  | 0              
|                                        |  |                             |  | warrants to purchase common stock(7)                                     |  |                |  | 110,000    |  | 0              
|                                        |  |                             |  |                                                                          | 
|                                        |  |                             |  | senior secured term B notes(4)(5)(7)(10)
(12.39%, due February 28, 2013) |  | 17,485,000      |  | 17,250,655 |  | 0              
|                                        |  |                             |  | warrants to purchase common stock(7)                                     |  |                |  | 90,000     |  | 0              
|                                        |  |                             |  |                                                                          | 
|GXS Worldwide Inc.                      |  | software                    |  | senior secured notes(5)
(9.75%, due June 15, 2015)                       |  | 8,000,000       |  | 7,865,888  |  | 7,870,000      
|                                        |  |                             |  |                                                                          | 
|Hyland Software, Inc.                   |  | enterprise software         |  | second lien senior secured notes(4)(5)
(6.77%, due July 31, 2014)        |  | 11,000,000      |  | 10,936,317 |  | 10,461,000     
|                                        |  |                             |  |                                                                          | 
|Integra Telecomm, Inc.                  |  | telecommunications services |  | common stock(7)                                                          |  |                |  | 1,712,397  |  | 2,454,450      
|                                        |  |                             |  |                                                                          | 
|Krispy Kreme Doughnut Corporation       |  | retail food products        |  | first lien senior secured notes(4)(5)(6)
(10.75%, due February 16, 2014) |  | 4,980,973       |  | 4,534,476  |  | 4,738,151      
|                                        |  |                             |  |                                                                          | 
|Lightpoint CLO 2007-8a                  |  | structured finance          |  | CLO secured notes(4)(5)
(6.78%, due July 25, 2018)                       |  | 5,000,000       |  | 2,621,122  |  | 2,575,000      
|                                        |  |                             |  |                                                                          | 
|NetQuote, Inc.                          |  | web-based services          |  | senior secured notes(4)(6)
(9.50%, due May 1, 2011)                      |  | 21,000,000      |  | 21,000,000 |  | 20,790,000     
|                                        |  |                             |  |                                                                          | 
|Ocean Trails CLO II 2007-2a-d           |  | structured finance          |  | CLO subordinated secured notes(4)(5)
(4.78%, due June 27, 2022)          |  | 2,838,656       |  | 1,490,894  |  | 1,447,714      
|                                        |  |                             |  |                                                                          | 
|Palm, Inc.                              |  | consumer electronics        |  | first lien senior secured notes(4)(5)(6)
(3.76%, due April 24, 2014)     |  | 14,575,446      |  | 13,609,015 |  | 12,462,006     
|                                        |  |                             |  |                                                                          | 
|Power Tools, Inc.                       |  | software                    |  | senior secured notes(4)(5)(6)
(12.00%, due May 16, 2014)                 |  | 10,000,000      |  | 9,872,792  |  | 7,825,000      
|                                        |  |                             |  | warrants to purchase common stock(7)                                     |  |                |  | 350,000    |  | 220,000        
|                                        |  |                             |  |                                                                          | 
|Prodigy Health Group                    |  | healthcare                  |  | second lien senior secured notes(4)(5)
(8.24%, due November 29, 2013)    |  | 4,000,000       |  | 2,546,288  |  | 3,386,000      
|                                        |  |                             |  |                                                                          | 
|Punch Software LLC                      |  | software                    |  | senior secured notes(4)(7)
(0.00%, due October 31, 2012)                 |  | 2,100,000       |  | 1,595,643  |  | 1,625,400      
|                                        |  |                             |  |                                                                          | 
|QA Direct Holdings, LLC                 |  | printing and publishing     |  | first lien senior secured notes(4)(5)(6)
(8.00%, due August 10, 2014)    |  | 3,632,149       |  | 3,342,189  |  | 3,232,613      
|                                        |  |                             |  |                                                                          | 
|Questia Media, Inc.                     |  | digital media               |  | senior secured notes(3)
(11.00%, due Jan. 29, 2010)                      |  | 14,358,128      |  | 14,358,128 |  | 13,767,127     
|                                        |  |                             |  |                                                                          | 
|SCS Holdings II, Inc.                   |  | IT value-added reseller     |  | second lien senior secured notes(4)
(6.25%, due May 30, 2013)            |  | 14,500,000      |  | 14,510,534 |  | 11,890,000     



8



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##### Table of Contents

TICC CAPITAL CORP.

SCHEDULE OF INVESTMENTS

DECEMBER 31, 2009



|                                  |  |                                |  |                                                                            |  |                 |  |      |             |                 |   |            
|--------------------------------- |  | ------------------------------ |  | -------------------------------------------------------------------------- |  | --------------- |  | ---- | ----------- | --------------- | - | -----------
|COMPANY(1)                        |  | INDUSTRY                       |  | INVESTMENT                                                                 |  | PRINCIPALAMOUNT |  | COST |             | FAIRVALUE(2)(8)
|                                  |  |                                |  |                                                                            | 
|Springboard Finance (aka Skype) |  | telecommunication services     |  | first lien senior secured notes(4)(5)
(9.00%, due November 19, 2014)       |  | 2,000,000       |  |      | 1,950,873   |                 |   | 2,080,000  
|                                  |  |                                |  |                                                                            | 
|Stratus Technologies, Inc.        |  | computer hardware              |  | first lien senior secured notes(4)(5)(6)
(4.01%, due March 29, 2011)       |  | 4,721,536       |  |      | 3,767,988   |                 |   | 4,459,491  
|                                  |  |                                |  |                                                                            | 
|WAICCS Las Vegas, LLC             |  | real estate development        |  | second lien senior secured notes(4)(7)(9)(10)
(9.31%, due July 31, 2009)   |  | 15,000,000      |  |      | 15,000,000  |                 |   | 1,500,000  
|                                  |  |                                |  |                                                                            | 
|WHITTMANHART, Inc.                |  | IT consulting                  |  | senior secured notes(4)(6)
(13.58%, due December 31, 2010)                 |  | 3,125,000       |  |      | 3,125,000   |                 |   | 3,125,000  
|                                  |  |                                |  | warrants to purchase common stock(7)                                       |  |                |  |      | 0           |                 |   | 0          
|                                  |  |                                |  |                                                                            | 
|Workflow Management, Inc.         |  | printing & document management |  | first lien senior secured notes(3)(4)(5)(6)
(9.50%, due November 30, 2011) |  | 6,626,109       |  |      | 5,263,940   |                 |   | 6,311,369  
|                                  |  |                                |  |                                                                            | 
|X-Rite Incorporated               |  | software                       |  | first lien senior secured notes(4)(5)(6)
(7.47%, due October 24, 2012)     |  | 3,994,865       |  |      | 3,470,463   |                 |   | 3,823,086  
|                                  |  |                                |  |                                                                            |  |                 |  |      |             |                 |   |            
|                                  |  |                                |  |                                                                            | 
|Total Investments                 |  |                                |  |                                                                            |  |                 |  | $    | 260,752,699 |                 | $ | 200,251,123
|                                  |  |                                |  |                                                                            |  |                 |  |      |             |                 |   |            



|(1) | Other than Algorithmic Implementation, Inc. (d/b/a Ai Squared), which TICC may be deemed to control, TICC does not control and is not an
affiliate of any of its portfolio companies, each as defined in the Investment Company Act of 1940 (the 1940 Act). In general, under the 1940 Act, TICC would be presumed to control a portfolio company if TICC
owned 25% or more of its voting securities and would be an affiliate of a portfolio company if TICC 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, 2009, investments at fair value are categorized as follows: senior secured notes (82.38%), CLO
subordinated secured notes (2.2%), senior subordinated unsecured notes (1.2%), CLO preference shares (1.0%), common stock (2.4%), and warrants to purchase equity securities (0.2%).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | During the quarter ended June 30, 2009, the maturity date on TICCs investment in WAICCS Las Vegas, LLC was set to July 31, 2009 as a
result of the failure of the companys equity sponsor to pre-fund interest reserves as required to extend the maturity beyond July 31, 2009. During July 2009, this investment was placed on non-accrual status and, as of December 31,
2009, the maturity date has not been revised as the interest reserves have not yet been pre-funded.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) | Debt investment on non-accrual status at the relevant period end.
|---- | -----------------------------------------------------------------

|(11) | Aggregate gross unrealized appreciation for federal income tax purposes is $7,807,742; aggregate gross unrealized depreciation for federal income tax
purposes is $68,201,988. Net unrealized depreciation is $60,394,246 based upon a tax cost basis of $260,645,369.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See Accompanying Notes.



9



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##### Table of Contents

TICC CAPITAL CORP.

STATEMENTS OF OPERATIONS

(unaudited)



|                                                                                  |  |                                |            |                                |   |            |                              |  |   |                              |   |  |   |            |  
|--------------------------------------------------------------------------------- |  | ------------------------------ | ---------- | ------------------------------ | - | ---------- | ---------------------------- |  | - | ---------------------------- | - |  | - | ---------- | -
|                                                                                  |  | Three MonthsEndedJune 30, 2010 |            | Three MonthsEndedJune 30, 2009 |   |            | Six MonthsEndedJune 30,
2010 |  |   | Six MonthsEndedJune 30, 2009 |  
|INVESTMENT INCOME                                                                 |  |                                |            |                                |   |            |                              |  |   |                              |   |  |   |            |  
|From non-affiliated/non-control investments:                                      |  |                                |            |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Interest income - debt investments                                                |  | $                              | 6,888,136  |                                | $ | 4,269,217  |                              |  | $ | 12,093,583                   |   |  | $ | 8,718,758  |  
|Distributions from securitization vehicles - equity investments                   |  |                                | 949,504    |                                |   |           |                              |  |   | 1,710,487                    |   |  |   |           |  
|Commitment and amendment fee income                                               |  |                                | 460,514    |                                |   | 18,793     |                              |  |   | 460,514                      |   |  |   | 56,293     |  
|Other income                                                                      |  |                                | 225        |                                |   | 3,236      |                              |  |   | 16,790                       |   |  |   | 5,736      |  
|                                                                                  |  |                                |            |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Total investment income from non-affiliated/non-control investments               |  |                                | 8,298,379  |                                |   | 4,291,246  |                              |  |   | 14,281,374                   |   |  |   | 8,780,787  |  
|                                                                                  |  |                                |            |                                |   |            |                              |  |   |                              |   |  |   |            |  
|From control investments:                                                         |  |                                |            |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Interest income - debt investments                                                |  |                                | 432,173    |                                |   | 628,953    |                              |  |   | 1,005,269                    |   |  |   | 1,262,720  |  
|                                                                                  |  |                                |            |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Total investment income from control investments                                  |  |                                | 432,173    |                                |   | 628,953    |                              |  |   | 1,005,269                    |   |  |   | 1,262,720  |  
|                                                                                  |  |                                |            |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Total investment income                                                           |  |                                | 8,730,552  |                                |   | 4,920,199  |                              |  |   | 15,286,643                   |   |  |   | 10,043,507 |  
|                                                                                  |  |                                |            |                                |   |            |                              |  |   |                              |   |  |   |            |  
|EXPENSES                                                                          |  |                                |            |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Compensation expense                                                              |  |                                | 239,484    |                                |   | 225,953    |                              |  |   | 479,196                      |   |  |   | 451,905    |  
|Investment advisory fees                                                          |  |                                | 1,749,568  |                                |   | 983,984    |                              |  |   | 2,976,618                    |   |  |   | 1,925,035  |  
|Professional fees                                                                 |  |                                | 166,138    |                                |   | 266,812    |                              |  |   | 451,348                      |   |  |   | 570,217    |  
|General and administrative                                                        |  |                                | 256,874    |                                |   | 200,656    |                              |  |   | 415,817                      |   |  |   | 335,320    |  
|                                                                                  |  |                                |            |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Total expenses                                                                    |  |                                | 2,412,064  |                                |   | 1,677,405  |                              |  |   | 4,322,979                    |   |  |   | 3,282,477  |  
|                                                                                  |  |                                |            |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Net investment income                                                             |  |                                | 6,318,488  |                                |   | 3,242,794  |                              |  |   | 10,963,664                   |   |  |   | 6,761,030  |  
|                                                                                  |  |                                |            |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Net change in unrealized depreciation on investments                              |  |                                | 2,124,885  |                                |   | 9,793,597  |                              |  |   | 46,591,881                   |   |  |   | 4,810,353  |  
|                                                                                  |  |                                |            |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Net realized gains (losses) on investments                                        |  |                                | 1,158,583  |                                |   | (3,337,183 | )                            |  |   | (29,969,743                  | ) |  |   | (3,315,156 | )
|                                                                                  |  |                                |            |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Net increase in net assets resulting from operations                              |  | $                              | 9,601,956  |                                | $ | 9,699,208  |                              |  | $ | 27,585,802                   |   |  | $ | 8,256,227  |  
|                                                                                  |  |                                |            |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Net increase in net assets resulting from net investment income per common share: |  |                                |            |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Basic and diluted                                                                 |  | $                              | 0.24       |                                | $ | 0.12       |                              |  | $ | 0.41                         |   |  | $ | 0.25       |  
|Net increase in net assets resulting from operations per common share:            |  |                                |            |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Basic and diluted                                                                 |  | $                              | 0.36       |                                | $ | 0.36       |                              |  | $ | 1.03                         |   |  | $ | 0.31       |  
|Weighted average shares of common stock outstanding:                              |  |                                |            |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Basic and diluted                                                                 |  |                                | 26,875,554 |                                |   | 26,585,951 |                              |  |   | 26,844,898                   |   |  |   | 26,535,592 |  

SEE ACCOMPANYING
NOTES.



10



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##### Table of Contents

TICC CAPITAL CORP.

STATEMENTS OF CHANGES IN NET ASSETS

(unaudited)



|                                                                                                                              |  |                               |             |   |                             |   |             |  
|----------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------- | ----------- | - | --------------------------- | - | ----------- | -
|                                                                                                                              |  | Six Months EndedJune 30, 2010 |             |   | Year EndedDecember 31, 2009 |  
|Increase (decrease) in net assets from operations:                                                                            |  |                               |             |   |                             |   |             |  
|Net investment income                                                                                                         |  | $                             | 10,963,664  |   |                             | $ | 13,491,984  |  
|Net realized losses on investments                                                                                            |  |                               | (29,969,743 | ) |                             |   | (10,513,051 | )
|Net change in unrealized appreciation on investments                                                                          |  |                               | 46,591,881  |   |                             |   | 32,203,525  |  
|                                                                                                                              |  |                               |             |   |                             |   |             |  
|Net increase in net assets resulting from operations                                                                          |  |                               | 27,585,802  |   |                             |   | 35,182,458  |  
|                                                                                                                              |  |                               |             |   |                             |   |             |  
|Dividends from net investment income                                                                                          |  |                               | (9,396,967  | ) |                             |   | (15,973,470 | )
|Distributions from net realized capital gains                                                                                 |  |                               |            |   |                             |   |            |  
|Tax return of capital distributions                                                                                           |  |                               |            |   |                             |   |            |  
|                                                                                                                              |  |                               |             |   |                             |   |             |  
|Distributions to shareholders                                                                                                 |  |                               | (9,396,967  | ) |                             |   | (15,973,470 | )
|                                                                                                                              |  |                               |             |   |                             |   |             |  
|Capital share transactions:                                                                                                   |  |                               |             |   |                             |   |             |  
|Reinvestment of dividends                                                                                                     |  |                               | 888,955     |   |                             |   | 1,516,257   |  
|                                                                                                                              |  |                               |             |   |                             |   |             |  
|Net increase in net assets from capital share transactions                                                                    |  |                               | 888,955     |   |                             |   | 1,516,257   |  
|                                                                                                                              |  |                               |             |   |                             |   |             |  
|Total increase in net assets                                                                                                  |  |                               | 19,077,790  |   |                             |   | 20,725,245  |  
|Net assets at beginning of period                                                                                             |  |                               | 224,091,995 |   |                             |   | 203,366,750 |  
|                                                                                                                              |  |                               |             |   |                             |   |             |  
|Net assets at end of period (including over distributed net investment income of ($1,871,364) and ($3,438,061), respectively) |  | $                             | 243,169,785 |   |                             | $ | 224,091,995 |  
|                                                                                                                              |  |                               |             |   |                             |   |             |  
|Capital share activity:                                                                                                       |  |                               |             |   |                             |   |             |  
|Shares issued from reinvestment of dividends                                                                                  |  |                               | 119,124     |   |                             |   | 329,670     |  
|                                                                                                                              |  |                               |             |   |                             |   |             |  
|Net increase in capital share activity                                                                                        |  |                               | 119,124     |   |                             |   | 329,670     |  
|                                                                                                                              |  |                               |             |   |                             |   |             |  

SEE ACCOMPANYING NOTES.



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TICC CAPITAL CORP.

STATEMENTS OF CASH FLOWS

(unaudited)



|                                                                                                                                      |  |                               |             |   |                               |   |            |  
|------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------- | ----------- | - | ----------------------------- | - | ---------- | -
|                                                                                                                                      |  | Six Months EndedJune 30, 2010 |             |   | Six Months EndedJune 30, 2009 |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                                                  |  |                               |             |   |                               |   |            |  
|Net increase in net assets resulting from operations                                                                                  |  | $                             | 27,585,802  |   |                               | $ | 8,256,227  |  
|Adjustments to reconcile net increase in net assets resulting from operations to net cash (used by) provided by operating
activities: |  |                               |             |   |                               |   |            |  
|Purchases of investments                                                                                                              |  |                               | (52,801,072 | ) |                               |   | (5,709,024 | )
|Repayments of principal and reductions to investment cost value                                                                       |  |                               | 28,616,633  |   |                               |   | 20,297,112 |  
|Proceeds from the sale of investments                                                                                                 |  |                               | 11,716,543  |   |                               |   | 3,760,037  |  
|Increase in investments due to PIK                                                                                                    |  |                               | (285,849    | ) |                               |   | (11,160    | )
|Net realized losses on investments                                                                                                    |  |                               | 29,969,743  |   |                               |   | 3,315,156  |  
|Net change in unrealized appreciation on investments                                                                                  |  |                               | (46,591,881 | ) |                               |   | (4,810,353 | )
|(Increase) decrease in interest receivable                                                                                            |  |                               | (721,595    | ) |                               |   | 510,422    |  
|Decrease (increase) in prepaid expenses and other assets                                                                              |  |                               | 201,531     |   |                               |   | (11,512    | )
|Amortization of discounts                                                                                                             |  |                               | (2,746,346  | ) |                               |   | (853,481   | )
|Increase (decrease) in investment advisory fee payable                                                                                |  |                               | 630,024     |   |                               |   | (303,467   | )
|Increase in accrued expenses                                                                                                          |  |                               | 282,893     |   |                               |   | 118,647    |  
|                                                                                                                                      |  |                               |             |   |                               |   |            |  
|Net cash (used by) provided by operating activities                                                                                   |  |                               | (4,143,574  | ) |                               |   | 24,558,604 |  
|                                                                                                                                      |  |                               |             |   |                               |   |            |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                                                                  |  |                               |             |   |                               |   |            |  
|Distributions paid (net of stock issued under dividend reinvestment plan of $888,955 and $746,869, respectively)                      |  |                               | (8,508,012  | ) |                               |   | (7,213,409 | )
|                                                                                                                                      |  |                               |             |   |                               |   |            |  
|Net cash used by financing activities                                                                                                 |  |                               | (8,508,012  | ) |                               |   | (7,213,409 | )
|                                                                                                                                      |  |                               |             |   |                               |   |            |  
|Net (decrease) increase in cash and cash equivalents                                                                                  |  |                               | (12,651,586 | ) |                               |   | 17,345,195 |  
|Cash and cash equivalents, beginning of period                                                                                        |  |                               | 23,972,885  |   |                               |   | 14,069,251 |  
|                                                                                                                                      |  |                               |             |   |                               |   |            |  
|Cash and cash equivalents, end of period                                                                                              |  | $                             | 11,321,299  |   |                               | $ | 31,414,446 |  
|                                                                                                                                      |  |                               |             |   |                               |   |            |  
|NON-CASH FINANCING ACTIVITIES                                                                                                         |  |                               |             |   |                               |   |            |  
|Value of shares issued in connection with dividend reinvestment plan                                                                  |  | $                             | 888,955     |   |                               | $ | 746,869    |  
|                                                                                                                                      |  |                              
|SUPPLEMENTAL DISCLOSURES                                                                                                              |  |                               |             |   |                               |   |            |  
|Securities purchased not settled                                                                                                      |  | $                             | 1,500,919   |   |                               | $ | 3,640,736  |  
|Securities sold not settled                                                                                                           |  | $                             | 1,095,982   |   |                               | $ |           |  

SEE ACCOMPANYING
NOTES.



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##### Table of Contents

TICC CAPITAL CORP.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2010

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, 2009, as filed with the Securities and Exchange Commission (SEC).

NOTE 2. ORGANIZATION

TICC was incorporated under the General Corporation Laws of the State of Maryland on July 21, 2003 as a closed-end management
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 the Internal Revenue Code of 1986, as amended (the Code). The Companys investment objective is to maximize its total return.

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.

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, substantially all of the
Companys investments are based upon Level 3 inputs. Approximately $4.1 million of the Companys investments are based upon Level 2 inputs as of June 30, 2010.

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 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 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.



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TICC CAPITAL CORP.

NOTES TO FINANCIAL STATEMENTS(Continued)

JUNE 30, 2010



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, 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
continued economic downturn, the market for syndicated loans has 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, the marketplace for which the Company obtains indicative bid quotes for purposes of determining the fair value of its syndicated loan investments have shown these
attributes of illiquidity as described by ASC-820-10-35. Due to the market illiquidity and the lack of transactions since 2008, the Company has determined that the current agent bank non-binding indicative bids for the substantial majority of its
syndicated investments 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 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.



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TICC CAPITAL CORP.

NOTES TO FINANCIAL STATEMENTS(Continued)

JUNE 30, 2010



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, 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            |  | $                                                           | 11.3 |                                            | $ | 0.0                                    |  | $     | 0.0   |  | $ | 11.3 
|Senior Secured Notes        |  |                                                             | 0.0  |                                            |   | 4.1                                    |  |       | 184.5 |  |   | 188.6
|CLO Debt                    |  |                                                             | 0.0  |                                            |   | 0.0                                    |  |       | 22.9  |  |   | 22.9 
|CLO Equity                  |  |                                                             | 0.0  |                                            |   | 0.0                                    |  |       | 6.5   |  |   | 6.5  
|Common Stock                |  |                                                             | 0.0  |                                            |   | 0.0                                    |  |       | 6.0   |  |   | 6.0  
|Subordinated Notes          |  |                                                             | 0.0  |                                            |   | 0.0                                    |  |       | 6.5   |  |   | 6.5  
|Preferred Shares            |  |                                                             | 0.0  |                                            |   | 0.0                                    |  |       | 1.9   |  |   | 1.9  
|Warrants to purchase equity |  |                                                             | 0.0  |                                            |   | 0.0                                    |  |       | 0.4   |  |   | 0.4  
|                            |  |                                                             |      |                                            |   |                                        |  |       |       |  |   |      
|Total                       |  | $                                                           | 11.3 |                                            | $ | 4.1                                    |  | $     | 228.7 |  | $ | 244.1
|                            |  |                                                             |      |                                            |   |                                        |  |       |       |  |   |      



15



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##### Table of Contents

TICC CAPITAL CORP.

NOTES TO FINANCIAL STATEMENTS(Continued)

JUNE 30, 2010



A reconciliation of the fair value of investments for three months ending June 30,
2010, utilizing significant unobservable inputs, is as follows:



|                                             |  |                               |       |   |                                               |   |      |                                                |  |   |                        |   |  |                             |      |   |                                  |   |                                            |   |       |   |     |  |   |     |  |   |       |  
|-------------------------------------------- |  | ----------------------------- | ----- | - | --------------------------------------------- | - | ---- | ---------------------------------------------- |  | - | ---------------------- | - |  | --------------------------- | ---- | - | -------------------------------- | - | ------------------------------------------ | - | ----- | - | --- |  | - | --- |  | - | ----- | -
|($ in millions)                              |  | Senior SecuredNoteInvestments |       |   | CollateralizedLoan ObligationDebt Investments |   |      | CollateralizedLoan ObligationEquityInvestments |  |   | CommonStockInvestments |   |  | SubordinatedNoteInvestments |      |   | PreferredShare EquityInvestments |   | Warrants toPurchaseCommon StockInvestments |   | Total |  
|Balance at March 31, 2010                    |  | $                             | 188.8 |   |                                               | $ | 14.2 |                                                |  | $ | 7.1                    |   |  | $                           | 7.1  |   |                                  | $ | 6.9                                        |   |       | $ | 1.3 |  | $ | 0.4 |  | $ | 225.8 |  
|Realized gains included in earnings          |  |                               | 1.2   |   |                                               |   | 0.0  |                                                |  |   | 0.0                    |   |  |                             | 0.0  |   |                                  |   | 0.0                                        |   |       |   | 0.0 |  |   | 0.0 |  |   | 1.2   |  
|Unrealized appreciation included in earnings |  |                               | 3.4   |   |                                               |   | 0.1  |                                                |  |   | (0.6                   | ) |  |                             | (1.1 | ) |                                  |   | 0.0                                        |   |       |   | 0.6 |  |   | 0.0 |  |   | 2.4   |  
|Accretion of discount                        |  |                               | 1.3   |   |                                               |   | 0.2  |                                                |  |   | 0.0                    |   |  |                             | 0.0  |   |                                  |   | 0.0                                        |   |       |   | 0.0 |  |   | 0.0 |  |   | 1.5   |  
|Purchases                                    |  |                               | 5.1   |   |                                               |   | 9.9  |                                                |  |   | 0.0                    |   |  |                             | 0.0  |   |                                  |   | 0.0                                        |   |       |   | 0.0 |  |   | 0.0 |  |   | 15.0  |  
|Repayments and
Sales(1)                      |  |                               | (15.3 | ) |                                               |   | (1.5 | )                                              |  |   | 0.0                    |   |  |                             | 0.0  |   |                                  |   | (0.4                                       | ) |       |   | 0.0 |  |   | 0.0 |  |   | (17.2 | )
|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, 2010                     |  | $                             | 184.5 |   |                                               | $ | 22.9 |                                                |  | $ | 6.5                    |   |  | $                           | 6.0  |   |                                  | $ | 6.5                                        |   |       | $ | 1.9 |  | $ | 0.4 |  | $ | 228.7 |  
|                                             |  |                               |       |   |                                               |   |      |                                                |  |   |                        |   |  |                             |      |   |                                  |   |                                            |   |       |   |     |  |   |     |  |   |       |  

The increase in unrealized appreciation for level 3 investments still held as of June 30, 2010 is
approximately $2.3 million.



|(1) | Includes PIK interest of approximately $200,000.
|--- | ------------------------------------------------

A reconciliation of the fair value of investments for six months ending June 30, 2010, utilizing significant unobservable inputs, is
as follows:



|                                             |  |                               |       |   |                                               |   |      |                                                |  |   |                        |   |                             |   |     |                                  |   |                                            |   |  |       |     |  |   |      |   |  |   |       |  
|-------------------------------------------- |  | ----------------------------- | ----- | - | --------------------------------------------- | - | ---- | ---------------------------------------------- |  | - | ---------------------- | - | --------------------------- | - | --- | -------------------------------- | - | ------------------------------------------ | - |  | ----- | --- |  | - | ---- | - |  | - | ----- | -
|($ in millions)                              |  | Senior SecuredNoteInvestments |       |   | CollateralizedLoan ObligationDebt Investments |   |      | CollateralizedLoan ObligationEquityInvestments |  |   | CommonStockInvestments |   | SubordinatedNoteInvestments |   |     | PreferredShare EquityInvestments |   | Warrants toPurchaseCommon StockInvestments |   |  | Total |    
|Balance at December 31, 2009                 |  | $                             | 180.1 |   |                                               | $ | 4.9  |                                                |  | $ | 2.2                    |   |                             | $ | 5.5 |                                  | $ | 2.7                                        |   |  | $     | 0.0 |  | $ | 0.5  |   |  | $ | 195.9 |  
|Realized Losses included in earnings         |  |                               | (29.9 | ) |                                               |   | 0.0  |                                                |  |   | 0.0                    |   |                             |   | 0.0 |                                  |   | 0.0                                        |   |  |       | 0.0 |  |   | 0.0  |   |  |   | (29.9 | )
|Unrealized appreciation included in earnings |  |                               | 45.1  |   |                                               |   | 0.6  |                                                |  |   | (0.6                   | ) |                             |   | 0.1 |                                  |   | 0.7                                        |   |  |       | 1.1 |  |   | (0.1 | ) |  |   | 46.9  |  
|Accretion of discount                        |  |                               | 2.5   |   |                                               |   | 0.3  |                                                |  |   | 0.0                    |   |                             |   | 0.0 |                                  |   | 0.0                                        |   |  |       | 0.0 |  |   | 0.0  |   |  |   | 2.8   |  
|Purchases(1)                                 |  |                               | 25.3  |   |                                               |   | 18.8 |                                                |  |   | 4.9                    |   |                             |   | 0.4 |                                  |   | 3.9                                        |   |  |       | 0.8 |  |   | 0.0  |   |  |   | 54.1  |  
|Repayments and
Sales(2)                      |  |                               | (38.6 | ) |                                               |   | (1.7 | )                                              |  |   | 0.0                    |   |                             |   | 0.0 |                                  |   | (0.8                                       | ) |  |       | 0.0 |  |   | 0.0  |   |  |   | (41.1 | )
|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, 2010                     |  | $                             | 184.5 |   |                                               | $ | 22.9 |                                                |  | $ | 6.5                    |   |                             | $ | 6.0 |                                  | $ | 6.5                                        |   |  | $     | 1.9 |  | $ | 0.4  |   |  | $ | 228.7 |  
|                                             |  |                               |       |   |                                               |   |      |                                                |  |   |                        |   |                             |   |     |                                  |   |                                            |   |  |       |     |  |   |      |   |  |   |       |  

The increase in unrealized appreciation for level 3 investments still held as of June 30, 2010 is
approximately $15.4 million.



|(1) | Purchases include rounding adjustments to reconcile period end balances.
|--- | ------------------------------------------------------------------------

|(2) | Includes PIK interest of approximately $280,000.
|--- | ------------------------------------------------



16



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##### Table of Contents

TICC CAPITAL CORP.

NOTES TO FINANCIAL STATEMENTS(Continued)

JUNE 30, 2010



The Companys assets measured at fair value on a recurring basis subject to the
disclosure requirements of ASC 820-10-35 at December 31, 2009, 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                           |  | $                                                           | 23.8 |                                            | $ | 0.0                                    |  | $     | 0.0   |  | $ | 23.8 
|Bilateral investments                      |  |                                                             | 0.0  |                                            |   | 0.0                                    |  |       | 84.8  |  |   | 84.8 
|Syndicated investments                     |  |                                                             | 0.0  |                                            |   | 4.4                                    |  |       | 104.0 |  |   | 108.4
|Collateralized loan obligation investments |  |                                                             | 0.0  |                                            |   | 0.0                                    |  |       | 7.1   |  |   | 7.1  
|                                           |  |                                                             |      |                                            |   |                                        |  |       |       |  |   |      
|Total                                      |  | $                                                           | 23.8 |                                            | $ | 4.4                                    |  | $     | 195.9 |  | $ | 224.1
|                                           |  |                                                             |      |                                            |   |                                        |  |       |       |  |   |      

The following table shows the fair value of
TICCs portfolio of investments by asset class as of June 30, 2010 and December 31, 2009:



|                     |  |                          |       |                              |       |   |                          |   |                              |  |       |  
|-------------------- |  | ------------------------ | ----- | ---------------------------- | ----- | - | ------------------------ | - | ---------------------------- |  | ----- | -
|                     |  | 2010                     |       |                              | 2009  |  
|                     |  | Investments atFair Value |       | Percentage ofTotal Portfolio |       |   | Investments atFair Value |   | Percentage ofTotal Portfolio | 
|                     |  | (dollars in millions)    |       |                              |       |   | (dollars in millions)    |   |                              | 
|Senior Secured Notes |  | $                        | 188.6 |                              | 81.0  | % |                          | $ | 184.6                        |  | 92.1  | %
|CLO Debt             |  |                          | 22.9  |                              | 9.8   | % |                          |   | 4.9                          |  | 2.5   | %
|CLO Equity           |  |                          | 6.5   |                              | 2.8   | % |                          |   | 2.2                          |  | 1.1   | %
|Common Stock         |  |                          | 6.0   |                              | 2.6   | % |                          |   | 5.4                          |  | 2.7   | %
|Subordinated Notes   |  |                          | 6.5   |                              | 2.8   | % |                          |   | 2.7                          |  | 1.4   | %
|Preferred Stock      |  |                          | 1.9   |                              | 0.8   | % |                          |   | 0.0                          |  | 0.0   | %
|Warrants             |  |                          | 0.4   |                              | 0.2   | % |                          |   | 0.5                          |  | 0.2   | %
|                     |  |                          |       |                              |       |   |                          |   |                              |  |       |  
|Total                |  | $                        | 232.8 |                              | 100.0 | % |                          | $ | 200.3                        |  | 100.0 | %
|                     |  |                          |       |                              |       |   |                          |   |                              |  |       |  

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 ending June 30, 2010 and 2009, respectively:



|                                                                                                               |  |                                 |            |                                 |   |                               |  |                               |            |  |   |           
|-------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ---------- | ------------------------------- | - | ----------------------------- |  | ----------------------------- | ---------- |  | - | ----------
|                                                                                                               |  | Three Months EndedJune 30, 2010 |            | Three Months EndedJune 30, 2009 |   | Six Months EndedJune 30, 2010 |  | Six Months EndedJune 30, 2009
|                                                                                                               |  | (Unaudited)                     |            | (Unaudited)                     |   | (Unaudited)                   |  | (Unaudited)                  
|Numerator for basic and diluted income per share  net increase in net assets resulting from investment
income |  | $                               | 6,318,488  |                                 | $ | 3,242,794                     |  | $                             | 10,963,664 |  | $ | 6,761,030 
|Numerator for basic and diluted income per sharenet increase in net assets resulting from operations          |  | $                               | 9,601,956  |                                 | $ | 9,699,208                     |  | $                             | 27,585,802 |  | $ | 8,256,227 
|Denominator for basic and diluted income per shareweighted average shares                                     |  |                                 | 26,875,554 |                                 |   | 26,585,951                    |  |                               | 26,844,898 |  |   | 26,535,592
|Basic and diluted net investment income per common share                                                       |  | $                               | 0.24       |                                 | $ | 0.12                          |  | $                             | 0.41       |  | $ | 0.25      
|Basic and diluted net increase in net assets resulting from operations per common share                        |  | $                               | 0.36       |                                 | $ | 0.36                          |  | $                             | 1.03       |  | $ | 0.31      



17



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##### Table of Contents

TICC CAPITAL CORP.

NOTES TO FINANCIAL STATEMENTS(Continued)

JUNE 30, 2010



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 Royce & Associates, LLC (Royce & Associates) as the 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, is President and Chief Investment Officer of
Royce & Associates. Royce & Associates, as the non-managing member of TICC Management, does not take part in the management or participate in the operations of TICC Management; however, Royce & Associates has agreed to
make Mr. Royce or certain other portfolio managers available to TICC Management to provide certain consulting services without compensation. Royce & Associates is a wholly owned subsidiary of Legg Mason, Inc. 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. In addition, Mr. Cohen currently serves as Chief
Executive Officer and Mr. Rosenthal currently serves as President of Oxford Lane Capital Corp., a non-diversified closed-end management investment company that intends to invest primarily in leveraged corporate loans, and its investment
adviser, Oxford Lane Management, LLC (Oxford Lane Management). BDC Partners provides Oxford Lane Capital Corp. with office facilities and administrative services pursuant to an administration agreement and also serves as the managing
member of Oxford Lane Management.

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 conflicts of interest that the Board of Directors must monitor.

For the quarters ended June 30, 2010 and
2009, TICC incurred investment advisory fees of $1,749,568 and $983,984, respectively; for the six months ended June 30, 2010 and 2009, TICC incurred investment advisory fees of $2,976,618 and $1,925,035, respectively, of which $1,749,568 and
$983,984 remained payable to TICC Management at the end of each respective period. Pursuant to the terms of its administration agreement with BDC Partners, for the quarters ended June 30, 2010 and 2009 respectively, TICC incurred $239,484 and
$225,953 in compensation expenses for employees allocated to the administrative activities of TICC; for the six months ended June 30, 2010 and 2009, TICC incurred $479,196 and $451,905, respectively, in such expenses, of which $246,164 and
$220,992 remained payable at the end of each respective period. TICC also incurred $20,162 and $19,645 for reimbursement of facility costs for the three months ended June 30, 2010 and 2009, respectively; for the six months ended June 30,
2010 and 2009, TICC incurred $40,190 and $39,779, of which amounts $6,810 and $6,550 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.



18



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##### Table of Contents

TICC CAPITAL CORP.

NOTES TO FINANCIAL STATEMENTS(Continued)

JUNE 30, 2010



On June 30, 2010, the Company paid a dividend of $0.20 per share. For the six month
period ended June 30, 2010, the Company distributed $0.35 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, 2010 was $9.03, and at December 31, 2009 was $8.36. 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, 2010 and 2009, the Company received approximately $204,000 and
$11,200 in PIK interest, respectively. For the six months ended June 30, 2010 and 2009, the Company recorded PIK interest of $286,000 and $11,200, respectively.

In addition, the Company recorded discount income of approximately $2.0 million and $439,900 for the three months ended June 30,
2010 and 2009, respectively, representing the amortization of discount attributed to certain debt securities purchased by the Company, including original issue discount (OID). The Company had discount income of approximately $3.5 million
and $853,000 for the six months ended June 30, 2010 and 2009, respectively.

NOTE 9. OTHER INCOME

The Company receives various fees in connection with its investments in portfolio companies, including commitment fees, origination fees
and amendment fees. Such fees are normally paid at closing of the Companys investments, are fully earned and non-refundable, and are generally non-recurring. The Company recorded fee income of approximately $461,000 and $19,000 for the three
months ended June 30, 2010 and 2009, respectively. For the six months ended June 30, 2010 and 2009, the Company recorded fee income of approximately $461,000 and $56,000, respectively.

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 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 $949,500 in such distributions during the quarter ended June 30, 2010, compared to $0 for the same period last year. The Company received distributions of approximately $1.7 million and $0 for the six months
ended June 30, 2010 and 2009, respectively.

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, 2010 and 2009,
respectively, the Company received no fee income for managerial assistance.



19



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##### Table of Contents

TICC CAPITAL CORP.

NOTES TO FINANCIAL STATEMENTS(Continued)

JUNE 30, 2010



NOTE 10. FINANCIAL HIGHLIGHTS

Financial highlights for the three and six months ending June 30, 2010 and 2009, respectively, are as follows:



|                                                                        |  |                                            |            |   |                                            |   |            |                                          |  |   |                                          |   |  |   |            |  
|----------------------------------------------------------------------- |  | ------------------------------------------ | ---------- | - | ------------------------------------------ | - | ---------- | ---------------------------------------- |  | - | ---------------------------------------- | - |  | - | ---------- | -
|                                                                        |  | Three Months EndedJune 30, 2010(unaudited) |            |   | Three Months EndedJune 30, 2009(unaudited) |   |            | Six Months EndedJune 30, 2010(unaudited) |  |   | Six Months EndedJune 30, 2009(unaudited) |  
|Per Share Data                                                          |  |                                            |            |   |                                            |   |            |                                          |  |   |                                          |   |  |   |            |  
|Net asset value at beginning of period                                  |  | $                                          | 8.87       |   |                                            | $ | 7.46       |                                          |  | $ | 8.36                                     |   |  | $ | 7.68       |  
|                                                                        |  |                                            |            |   |                                            |   |            |                                          |  |   |                                          |   |  |   |            |  
|Net investment
income(1)                                                |  |                                            | 0.24       |   |                                            |   | 0.12       |                                          |  |   | 0.41                                     |   |  |   | 0.25       |  
|Net realized and unrealized capital gains
(losses)(2)                   |  |                                            | 0.12       |   |                                            |   | 0.24       |                                          |  |   | 0.62                                     |   |  |   | 0.06       |  
|                                                                        |  |                                            |            |   |                                            |   |            |                                          |  |   |                                          |   |  |   |            |  
|Total from investment operations                                        |  |                                            | 0.36       |   |                                            |   | 0.36       |                                          |  |   | 1.03                                     |   |  |   | 0.31       |  
|                                                                        |  |                                            |            |   |                                            |   |            |                                          |  |   |                                          |   |  |   |            |  
|Total
distributions(3)                                                  |  |                                            | (0.20      | ) |                                            |   | (0.15      | )                                        |  |   | (0.35                                    | ) |  |   | (0.30      | )
|                                                                        |  |                                            |            |   |                                            |   |            |                                          |  |   |                                          |   |  |   |            |  
|Effect of shares issued, net of offering expenses                       |  |                                            | 0.00       |   |                                            |   | (0.01      | )                                        |  |   | (0.01                                    | ) |  |   | (0.03      | )
|                                                                        |  |                                            |            |   |                                            |   |            |                                          |  |   |                                          |   |  |   |            |  
|Net asset value at end of period                                        |  | $                                          | 9.03       |   |                                            | $ | 7.66       |                                          |  | $ | 9.03                                     |   |  | $ | 7.66       |  
|                                                                        |  |                                            |            |   |                                            |   |            |                                          |  |   |                                          |   |  |   |            |  
|Per share market value at beginning of period                           |  | $                                          | 6.59       |   |                                            | $ | 3.51       |                                          |  | $ | 6.05                                     |   |  | $ | 3.80       |  
|Per share market value at end of period                                 |  | $                                          | 8.40       |   |                                            | $ | 4.41       |                                          |  | $ | 8.40                                     |   |  | $ | 4.41       |  
|Total
return(4)                                                         |  |                                            | 30.50      | % |                                            |   | 29.91      | %                                        |  |   | 45.38                                    | % |  |   | 25.13      | %
|Shares outstanding at end of period                                     |  |                                            | 26,932,340 |   |                                            |   | 26,673,718 |                                          |  |   | 26,932,340                               |   |  |   | 26,673,718 |  
|Ratios/Supplemental Data                                                |  |                                            |            |   |                                            |   |            |                                          |  |   |                                          |   |  |   |            |  
|Net assets at end of period (000s)                                     |  | $                                          | 243,170    |   |                                            | $ | 204,410    |                                          |  | $ | 243,170                                  |   |  | $ | 204,410    |  
|Average net assets (000s)                                              |  | $                                          | 240,404    |   |                                            | $ | 199,114    |                                          |  | $ | 233,010                                  |   |  | $ | 201,479    |  
|Ratio of expenses to average net
assets(5)                              |  |                                            | 4.01       | % |                                            |   | 3.37       | %                                        |  |   | 3.71                                     | % |  |   | 3.26       | %
|Ratio of expenses, excluding interest expense, to average net
assets(5) |  |                                            | 4.01       | % |                                            |   | 3.37       | %                                        |  |   | 3.71                                     | % |  |   | 3.26       | %
|Ratio of net investment income to average net
assets(5)                 |  |                                            | 10.51      | % |                                            |   | 6.51       | %                                        |  |   | 9.41                                     | % |  |   | 6.71       | %



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

|(2) | Net realized and unrealized capital gains (losses) include rounding adjustment 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, 2010, none of the distributions for 2010 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.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



20



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##### Table of Contents

TICC CAPITAL CORP.

NOTES TO FINANCIAL STATEMENTS(Continued)

JUNE 30, 2010



|(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.
|--- | -----------

NOTE 11.
CASH AND CASH EQUIVALENTS

At June 30, 2010 and December 31, 2009, respectively, cash and cash equivalents
consisted of:



|                                                |  |               |            |                   |   |           
|----------------------------------------------- |  | ------------- | ---------- | ----------------- | - | ----------
|                                                |  | June 30, 2010 |            | December 31, 2009
|Eurodollar Time Deposit (due 7/1/10 and 1/4/10) |  | $             | 11,300,000 |                   | $ | 23,759,409
|                                                |  |               |            |                   |   |           
|Total Cash Equivalents                          |  |               | 11,300,000 |                   |   | 23,759,409
|Cash                                            |  |               | 21,299     |                   |   | 213,476   
|                                                |  |               |            |                   |   |           
|Cash and Cash Equivalents                       |  | $             | 11,321,299 |                   | $ | 23,972,885
|                                                |  |               |            |                   |   |           

For the six month period ending June 30, 2010 and
throughout the twelve months ending December 31, 2009, the Company elected to maintain most of its available cash in a non-interest bearing demand deposit.

NOTE 12. COMMITMENTS

As
of June 30, 2010, the Company had issued a commitment to purchase an additional debt investment of approximately $909,100 on its debt investment in Birch Communications, Inc.

NOTE 13. SUBSEQUENT EVENTS

On July 1, 2010, the investment in the debt of Palm, Inc. of approximately $9.5 million was repaid at par as a result of the acquisition
by Hewlett Packard, Inc.

As of July 13, 2010, the investment in the debt of NetQuote, Inc. of approximately $19.0 million was
repaid at par.

On July 29, 2010, the Board of Directors declared a distribution of $0.22 per share for the third
quarter, payable on September 30, 2010 to shareholders of record as of September 10, 2010.





|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, 2009.

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 industries 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, 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.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------



21



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##### Table of Contents

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.

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
non-public debt securities. We also seek to provide our stockholders with long-term capital growth through appreciation in the value of warrants or other equity instruments that we may receive when we make debt or equity investments in
technology-related companies. 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 Royce & Associates, LLC (Royce &
Associates) as a non-managing member. 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 the Company. 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 established businesses. 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, 2010, our debt investments had stated interest rates of between 3.10% and 15.00% (excluding
our investment in GenuTec Business Solutions, Inc. which carries a zero interest rate through October 30, 2014) and maturity dates of between 6 and 144 months (excluding our investment in WAICCS Las Vegas, LLC). In addition, our total portfolio
had a weighted average yield on debt investments of approximately 13.0% including all investments in our portfolio.



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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, 2010, we recognized approximately $204,000 of interest income attributable to PIK associated with our investments in Cavtel Holdings, LLC, Allen Systems
Group, Inc., Pegasus Solutions, Inc. and Workflow Management, Inc., compared to PIK income of approximately $11,200 during the quarter ended June 30, 2009.

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

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, 2010, we closed approximately $15.0 million in portfolio investments, including additional
investments of approximately $1.5 million in an existing portfolio company and approximately $13.5 million of investments in new portfolio companies. During the quarter ended June 30, 2010, we recognized a total of $10.8 million from principal
repayments on debt investments, and we recognized approximately $6.6 million from the sale of portfolio investments. We realized net gains on investments during the quarter ended June 30, 2010 in the amount of approximately $1.2 million.



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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, 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 | )
|Other                                      |  |                                      | (0.4 | )
|                                           |  |                                      |      |  
|Total                                      |  | $                                    | 2.1  |  
|                                           |  |                                      |      |  

During the quarter ended June 30, 2009, we recorded net realized losses of approximately $3.3 million
due largely to losses associated with the partial sale of our debt investment in AKQA, Inc., of approximately $1.3 million, and the restructuring of our debt investment in Punch Software, LLC, of approximately $1.7 million.

Based upon the fair value determinations made in good faith by the Board of Directors, during the quarter ended June 30, 2009, we
had net unrealized gains of approximately $9.8 million comprised of $14.6 million in unrealized appreciation, $7.7 million in unrealized depreciation and approximately $2.9 million relating to the reversal of prior period net unrealized
depreciation. The most significant changes in net unrealized appreciation and depreciation during the three months ended June 30, 2009 were as follows (in millions):



|                                       |  |                                      |      |  
|-------------------------------------- |  | ------------------------------------ | ---- | -
|Portfolio Company                      |  | Unrealizedappreciation(depreciation) |     
|Punch Software, LLC                    |  | $                                    | 2.2  |  
|AKQA, Inc.                             |  |                                      | 2.2  |  
|Palm, Inc.                             |  |                                      | 1.9  |  
|Questia Media, Inc.                    |  |                                      | 1.4  |  
|Cavtel Holdings, LLC                   |  |                                      | 1.4  |  
|GXS Worldwide Inc.                     |  |                                      | 1.3  |  
|Hyland Software, Inc.                  |  |                                      | 1.1  |  
|Segovia, Inc.                          |  |                                      | 1.1  |  
|NetQuote, Inc.                         |  |                                      | 0.8  |  
|SCS Holdings II, Inc.                  |  |                                      | 0.7  |  
|Power Tools, Inc.                      |  |                                      | 0.7  |  
|American Integration Technologies, LLC |  |                                      | (1.6 | )
|Box Services, LLC                      |  |                                      | (2.2 | )
|WAICCS Las Vegas, LLC                  |  |                                      | (3.2 | )
|Other                                  |  |                                      | 2.0  |  
|                                       |  |                                      |      |  
|Total                                  |  | $                                    | 9.8  |  
|                                       |  |                                      |      |  



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Current Market and Economic Conditions

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

These events, along with the deterioration of the housing market, have significantly diminished overall confidence in the debt and equity
markets and constrained the availability of debt and equity capital for the market as a whole, and the financial services sector in particular. Further, these and other events have also led to rising unemployment, deteriorating consumer confidence
and a general reduction in spending by both consumers and businesses. During 2009 the syndicated corporate loans market experienced both unprecedented price declines and unprecedented volatility. While prices remain depressed across most sectors and
ratings categories, we witnessed a strong upward move during the second half of 2009, which has now continued into the first half of 2010. Despite continued discounts from par values, and largely as a result of the recent increase in loan prices
combined with broadly worrisome macroeconomic fundamentals, our view is that certain larger-issuer broadly syndicated corporate loans do not adequately reflect the spreads necessary to compensate investors for the risks involved. As such, we
continue to focus more heavily on middle-market issues and, opportunistically, on certain structured finance investments, including collateralized loan obligation (CLO) investment vehicles, where we believe greater opportunity currently
resides. We have and continue to track a large number of loans and CLO investment vehicles, and note that the overall health of the middle-market sector seems to have improved meaningfully over the past year. We have recently made a number of
selective purchases and continue to favor those lower-leveraged companies which stand to benefit from long-tailed revenue streams attached to lower-risk counterparties. We believe that, especially in the case of less-liquid middle-market loans,
supply and demand issues will likely continue to outweigh issuer operating fundamentals creating opportunities to acquire certain middle-market loans at attractive prices. In view of the more permanent nature of our asset base (relative to many
other investors active in the syndicated corporate loan market), and given our strong current cash position, we regard that as a potentially beneficial dynamic.

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.

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



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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, substantially all of our
investments are based upon Level 3 inputs. Approximately $4.1 million of our investments are based upon Level 2 inputs as of June 30, 2010.

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 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 on
the enterprise value at which the portfolio company could be sold in an orderly disposition over a reasonable period of time between willing parties other than in a forced or liquidation sale. The liquidity event whereby we exit a private investment
is generally the sale, the recapitalization or, in some cases, the initial public offering of the portfolio company.

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

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

We will
record unrealized depreciation on bilateral investments when we believe that an investment has become impaired, including where collection of a loan or realization of an equity security is doubtful. 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 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.



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Given the continued 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.

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, 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            |  | $                                                           | 11.3 |                                            | $ | 0.0                                    |  | $     | 0.0   |  | $ | 11.3 
|Senior Secured Notes        |  |                                                             | 0.0  |                                            |   | 4.1                                    |  |       | 184.5 |  |   | 188.6
|CLO Debt                    |  |                                                             | 0.0  |                                            |   | 0.0                                    |  |       | 22.9  |  |   | 22.9 
|CLO Equity                  |  |                                                             | 0.0  |                                            |   | 0.0                                    |  |       | 6.5   |  |   | 6.5  
|Common Stock                |  |                                                             | 0.0  |                                            |   | 0.0                                    |  |       | 6.0   |  |   | 6.0  
|Subordinated Notes          |  |                                                             | 0.0  |                                            |   | 0.0                                    |  |       | 6.5   |  |   | 6.5  
|Preferred Shares            |  |                                                             | 0.0  |                                            |   | 0.0                                    |  |       | 1.9   |  |   | 1.9  
|Warrants to purchase equity |  |                                                             | 0.0  |                                            |   | 0.0                                    |  |       | 0.4   |  |   | 0.4  
|                            |  |                                                             |      |                                            |   |                                        |  |       |       |  |   |      
|Total                       |  | $                                                           | 11.3 |                                            | $ | 4.1                                    |  | $     | 228.7 |  | $ | 244.1
|                            |  |                                                             |      |                                            |   |                                        |  |       |       |  |   |      



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A reconciliation of the fair value of investments for three months ending June 30,
2010, utilizing significant unobservable inputs, is as follows:



|                                             |  |                                |       |   |                                                |   |      |                                                 |  |   |                        |   |  |                             |      |   |                                   |   |                                             |   |       |   |     |  |   |     |  |   |       |  
|-------------------------------------------- |  | ------------------------------ | ----- | - | ---------------------------------------------- | - | ---- | ----------------------------------------------- |  | - | ---------------------- | - |  | --------------------------- | ---- | - | --------------------------------- | - | ------------------------------------------- | - | ----- | - | --- |  | - | --- |  | - | ----- | -
|($ in millions)                              |  | Senior 
SecuredNoteInvestments |       |   | CollateralizedLoan 
ObligationDebt Investments |   |      | CollateralizedLoan 
ObligationEquityInvestments |  |   | CommonStockInvestments |   |  | SubordinatedNoteInvestments |      |   | PreferredShare 
EquityInvestments |   | Warrants toPurchaseCommon 
StockInvestments |   | Total |  
|Balance at March 31, 2010                    |  | $                              | 188.8 |   |                                                | $ | 14.2 |                                                 |  | $ | 7.1                    |   |  | $                           | 7.1  |   |                                   | $ | 6.9                                         |   |       | $ | 1.3 |  | $ | 0.4 |  | $ | 225.8 |  
|Realized gains included in earnings          |  |                                | 1.2   |   |                                                |   | 0.0  |                                                 |  |   | 0.0                    |   |  |                             | 0.0  |   |                                   |   | 0.0                                         |   |       |   | 0.0 |  |   | 0.0 |  |   | 1.2   |  
|Unrealized appreciation included in earnings |  |                                | 3.4   |   |                                                |   | 0.1  |                                                 |  |   | (0.6                   | ) |  |                             | (1.1 | ) |                                   |   | 0.0                                         |   |       |   | 0.6 |  |   | 0.0 |  |   | 2.4   |  
|Accretion of discount                        |  |                                | 1.3   |   |                                                |   | 0.2  |                                                 |  |   | 0.0                    |   |  |                             | 0.0  |   |                                   |   | 0.0                                         |   |       |   | 0.0 |  |   | 0.0 |  |   | 1.5   |  
|Purchases                                    |  |                                | 5.1   |   |                                                |   | 9.9  |                                                 |  |   | 0.0                    |   |  |                             | 0.0  |   |                                   |   | 0.0                                         |   |       |   | 0.0 |  |   | 0.0 |  |   | 15.0  |  
|Repayments and
Sales(1)                      |  |                                | (15.3 | ) |                                                |   | (1.5 | )                                               |  |   | 0.0                    |   |  |                             | 0.0  |   |                                   |   | (0.4                                        | ) |       |   | 0.0 |  |   | 0.0 |  |   | (17.2 | )
|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, 2010                     |  | $                              | 184.5 |   |                                                | $ | 22.9 |                                                 |  | $ | 6.5                    |   |  | $                           | 6.0  |   |                                   | $ | 6.5                                         |   |       | $ | 1.9 |  | $ | 0.4 |  | $ | 228.7 |  
|                                             |  |                                |       |   |                                                |   |      |                                                 |  |   |                        |   |  |                             |      |   |                                   |   |                                             |   |       |   |     |  |   |     |  |   |       |  

The increase in unrealized appreciation for level 3 investments still held as of June 30, 2010 is
approximately $2.3 million.



|1. | Includes PIK interest of approximately $200,000.
|-- | ------------------------------------------------



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A reconciliation of the fair value of investments for six months ending June 30, 2010,
utilizing significant unobservable inputs, is as follows:



|                                             |  |                                |       |   |                                                |   |      |                                                |  |   |                        |   |                             |   |     |                                   |   |                                             |   |  |       |     |  |   |      |   |  |   |       |  
|-------------------------------------------- |  | ------------------------------ | ----- | - | ---------------------------------------------- | - | ---- | ---------------------------------------------- |  | - | ---------------------- | - | --------------------------- | - | --- | --------------------------------- | - | ------------------------------------------- | - |  | ----- | --- |  | - | ---- | - |  | - | ----- | -
|($ in millions)                              |  | Senior 
SecuredNoteInvestments |       |   | CollateralizedLoan 
ObligationDebt Investments |   |      | CollateralizedLoan ObligationEquityInvestments |  |   | CommonStockInvestments |   | SubordinatedNoteInvestments |   |     | PreferredShare 
EquityInvestments |   | Warrants 
toPurchaseCommon StockInvestments |   |  | Total |    
|Balance at December 31, 2009                 |  | $                              | 180.1 |   |                                                | $ | 4.9  |                                                |  | $ | 2.2                    |   |                             | $ | 5.5 |                                   | $ | 2.7                                         |   |  | $     | 0.0 |  | $ | 0.5  |   |  | $ | 195.9 |  
|Realized Losses included in earnings         |  |                                | (29.9 | ) |                                                |   | 0.0  |                                                |  |   | 0.0                    |   |                             |   | 0.0 |                                   |   | 0.0                                         |   |  |       | 0.0 |  |   | 0.0  |   |  |   | (29.9 | )
|Unrealized appreciation included in earnings |  |                                | 45.1  |   |                                                |   | 0.6  |                                                |  |   | (0.6                   | ) |                             |   | 0.1 |                                   |   | 0.7                                         |   |  |       | 1.1 |  |   | (0.1 | ) |  |   | 46.9  |  
|Accretion of discount                        |  |                                | 2.5   |   |                                                |   | 0.3  |                                                |  |   | 0.0                    |   |                             |   | 0.0 |                                   |   | 0.0                                         |   |  |       | 0.0 |  |   | 0.0  |   |  |   | 2.8   |  
|Purchases(1)                                 |  |                                | 25.3  |   |                                                |   | 18.8 |                                                |  |   | 4.9                    |   |                             |   | 0.4 |                                   |   | 3.9                                         |   |  |       | 0.8 |  |   | 0.0  |   |  |   | 54.1  |  
|Repayments and
Sales(2)                      |  |                                | (38.6 | ) |                                                |   | (1.7 | )                                              |  |   | 0.0                    |   |                             |   | 0.0 |                                   |   | (0.8                                        | ) |  |       | 0.0 |  |   | 0.0  |   |  |   | (41.1 | )
|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, 2010                     |  | $                              | 184.5 |   |                                                | $ | 22.9 |                                                |  | $ | 6.5                    |   |                             | $ | 6.0 |                                   | $ | 6.5                                         |   |  | $     | 1.9 |  | $ | 0.4  |   |  | $ | 228.7 |  
|                                             |  |                                |       |   |                                                |   |      |                                                |  |   |                        |   |                             |   |     |                                   |   |                                             |   |  |       |     |  |   |      |   |  |   |       |  

The increase in unrealized appreciation for level 3 investments still held as of June 30, 2010 is
approximately $15.4 million.



|(1) | Purchases include rounding adjustments to reconcile period end balances.
|--- | ------------------------------------------------------------------------

|(2) | Includes PIK interest of approximately $280,000.
|--- | ------------------------------------------------

The Companys assets measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820-10-35 at
December 31, 2009, 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                           |  | $                                                           | 23.8 |                                            | $ | 0.0                                    |  | $     | 0.0   |  | $ | 23.8 
|Bilateral investments                      |  |                                                             | 0.0  |                                            |   | 0.0                                    |  |       | 84.8  |  |   | 84.8 
|Syndicated investments                     |  |                                                             | 0.0  |                                            |   | 4.4                                    |  |       | 104.0 |  |   | 108.4
|Collateralized loan obligation investments |  |                                                             | 0.0  |                                            |   | 0.0                                    |  |       | 7.1   |  |   | 7.1  
|                                           |  |                                                             |      |                                            |   |                                        |  |       |       |  |   |      
|Total                                      |  | $                                                           | 23.8 |                                            | $ | 4.4                                    |  | $     | 195.9 |  | $ | 224.1
|                                           |  |                                                             |      |                                            |   |                                        |  |       |       |  |   |      

The following table shows the fair value of
TICCs portfolio of investments by asset class as of June 30, 2010 and December 31, 2009:



|                     |  |                          |       |                              |       |   |                          |   |                              |  |       |  
|-------------------- |  | ------------------------ | ----- | ---------------------------- | ----- | - | ------------------------ | - | ---------------------------- |  | ----- | -
|                     |  | 2010                     |       |                              | 2009  |  
|                     |  | Investments atFair Value |       | Percentage ofTotal Portfolio |       |   | Investments atFair Value |   | Percentage ofTotal Portfolio | 
|                     |  | (dollars in millions)    |       |                              |       |   | (dollars in millions)    |   |                              | 
|Senior Secured Notes |  | $                        | 188.6 |                              | 81.0  | % |                          | $ | 184.6                        |  | 92.1  | %
|CLO Debt             |  |                          | 22.9  |                              | 9.8   | % |                          |   | 4.9                          |  | 2.5   | %
|CLO Equity           |  |                          | 6.5   |                              | 2.8   | % |                          |   | 2.2                          |  | 1.1   | %
|Common Stock         |  |                          | 6.0   |                              | 2.6   | % |                          |   | 5.4                          |  | 2.7   | %
|Subordinated Notes   |  |                          | 6.5   |                              | 2.8   | % |                          |   | 2.7                          |  | 1.4   | %
|Preferred Stock      |  |                          | 1.9   |                              | 0.8   | % |                          |   | 0.0                          |  | 0.0   | %
|Warrants             |  |                          | 0.4   |                              | 0.2   | % |                          |   | 0.5                          |  | 0.2   | %
|                     |  |                          |       |                              |       |   |                          |   |                              |  |       |  
|Total                |  | $                        | 232.8 |                              | 100.0 | % |                          | $ | 200.3                        |  | 100.0 | %
|                     |  |                          |       |                              |       |   |                          |   |                              |  |       |  



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PORTFOLIO COMPOSITION AND INVESTMENT ACTIVITY

The total fair value of our investment portfolio was approximately $232.8 million and $200.3 million as of June 30, 2010 and
December 31, 2009, respectively. The increase in investments during the six month period was due primarily to new portfolio investments of approximately $54.3 million and net unrealized appreciation of approximately $46.6 million. These
increases were partially offset by debt repayments and sales of securities totaling approximately $41.4 million, and net realized losses of approximately $30.0 million.

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, 2010, we
received proceeds of approximately $10.8 million resulting primarily from repayments and recurring amortization payments on outstanding balances on our debt investments, whereas for the year ended December 31, 2009, we had repayments and
amortization payments of approximately $68.9 million. The repayments on our debt investments during the quarter ended June 30, 2010, of approximately $10.8 million, largely consisted of repayment of our original investment in senior secured
notes issued by Stratus Technologies, Inc. of approximately $4.7 million and repayment of our senior secured notes issued by Punch Software, LLC of approximately $2.1 million. Also, during the quarter ended June 30, 2010, we recognized proceeds
of approximately $6.6 million from the sale of investments, primarily in Palm, Inc. for approximately $4.5 million. For the year ended December 31, 2009, we recognized proceeds of approximately $14.0 million from the sales of investments.

As of June 30, 2010, we had investments in debt securities of, or loans to, 42 portfolio companies, with a fair value of
approximately $211.5 million, and equity investments in 10 portfolio companies, with a fair value of approximately $21.3 million. As of December 31, 2009, we had investments in debt securities of, or loans to, 33 portfolio companies, with a
fair value of approximately $192.2 million, and equity investments in 8 portfolio companies, with a fair value of approximately $8.1 million.

A reconciliation of the investment portfolio for the six months ended June 30, 2010 and the year ended December 31, 2009
follows:



|                               |  |                       |       |   |                       |   |       |  
|------------------------------ |  | --------------------- | ----- | - | --------------------- | - | ----- | -
|                               |  | June 30, 2010         |       |   | December 31, 2009     |  
|                               |  | (dollars in millions) |       |   | (dollars in millions) |  
|Beginning Investment Portfolio |  | $                     | 200.3 |   |                       | $ | 189.6 |  
|Portfolio Investments Acquired |  |                       | 54.3  |   |                       |   | 68.9  |  
|Debt Repayments                |  |                       | (28.6 | ) |                       |   | (68.9 | )
|Sales of Securities            |  |                       | (12.8 | ) |                       |   | (14.0 | )
|Payment in Kind                |  |                       | 0.3   |   |                       |   | 0.2   |  
|Original Issue Discount        |  |                       | 2.7   |   |                       |   | 2.8   |  
|Net Unrealized Appreciation    |  |                       | 46.6  |   |                       |   | 32.2  |  
|Net Realized Losses            |  |                       | (30.0 | ) |                       |   | (10.5 | )
|                               |  |                       |       |   |                       |   |       |  
|Ending Investment Portfolio    |  | $                     | 232.8 |   |                       | $ | 200.3 |  
|                               |  |                       |       |   |                       |   |       |  



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The following table indicates the quarterly portfolio investment activity for each quarter
in the period ended June 30, 2010 and the year ended December 31, 2009:



|                   |  |                       |      |                       |   |                       |  |   |     
|------------------ |  | --------------------- | ---- | --------------------- | - | --------------------- |  | - | ----
|                   |  | NewInvestments        |      | DebtRepayments        |   | Sales ofSecurities   
|                   |  | (dollars in
millions) |      | (dollars in
millions) |   | (dollars in
millions)
|Quarter ended      |  |                       |      |                       |   |                       |  |   |     
|June 30, 2010      |  | $                     | 15.0 |                       | $ | 10.8                  |  | $ | 6.6 
|March 31, 2010     |  |                       | 39.3 |                       |   | 17.8                  |  |   | 6.2 
|                   |  |                       |      |                       |   |                       |  |   |     
|Total              |  | $                     | 54.3 |                       | $ | 28.6                  |  | $ | 12.8
|                   |  |                       |      |                       |   |                       |  |   |     
|December 31, 2009  |  | $                     | 33.0 |                       | $ | 23.3                  |  | $ | 6.0 
|September 30, 2009 |  |                       | 24.5 |                       |   | 23.2                  |  |   | 4.2 
|June 30, 2009      |  |                       | 11.4 |                       |   | 18.9                  |  |   | 3.8 
|March 31, 2009     |  |                       | 0.0  |                       |   | 3.5                   |  |   | 0.0 
|                   |  |                       |      |                       |   |                       |  |   |     
|Total              |  | $                     | 68.9 |                       | $ | 68.9                  |  | $ | 14.0
|                   |  |                       |      |                       |   |                       |  |   |     

The following table shows the fair value of our
portfolio of investments by asset class as of June 30, 2010 and December 31, 2009:



|                     |  |                          |       |                              |                   |   |                          |   |                              |  |       |  
|-------------------- |  | ------------------------ | ----- | ---------------------------- | ----------------- | - | ------------------------ | - | ---------------------------- |  | ----- | -
|                     |  | June 30, 2010            |       |                              | December 31, 2009 |  
|                     |  | Investments atFair Value |       | Percentage ofTotal Portfolio |                   |   | Investments atFair Value |   | Percentage ofTotal Portfolio | 
|                     |  | (dollars in millions)    |       |                              |                   |   | (dollars in millions)    |   |                              | 
|Senior Secured Notes |  | $                        | 188.6 |                              | 81.0              | % |                          | $ | 184.6                        |  | 92.1  | %
|CLO Debt             |  |                          | 22.9  |                              | 9.8               | % |                          |   | 4.9                          |  | 2.5   | %
|CLO Equity           |  |                          | 6.5   |                              | 2.8               | % |                          |   | 2.2                          |  | 1.1   | %
|Common Stock         |  |                          | 6.0   |                              | 2.6               | % |                          |   | 5.4                          |  | 2.7   | %
|Subordinated Notes   |  |                          | 6.5   |                              | 2.8               | % |                          |   | 2.7                          |  | 1.4   | %
|Preferred Shares     |  |                          | 1.9   |                              | 0.8               | % |                          |   | 0.0                          |  | 0.0   | %
|Warrants             |  |                          | 0.4   |                              | 0.2               | % |                          |   | 0.5                          |  | 0.2   | %
|                     |  |                          |       |                              |                   |   |                          |   |                              |  |       |  
|Total                |  | $                        | 232.8 |                              | 100.0             | % |                          | $ | 200.3                        |  | 100.0 | %
|                     |  |                          |       |                              |                   |   |                          |   |                              |  |       |  



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The following table shows our portfolio of investments by industry at fair value, as of
June 30, 2010 and December 31, 2009:



|                                    |  |                          |       |                         |                   |   |                          |   |                         |  |       |  
|----------------------------------- |  | ------------------------ | ----- | ----------------------- | ----------------- | - | ------------------------ | - | ----------------------- |  | ----- | -
|                                    |  | June 30, 2010            |       |                         | December 31, 2009 |  
|                                    |  | Investments atFair Value |       | Percentage ofFair Value |                   |   | Investments atFair Value |   | Percentage ofFair Value | 
|                                    |  | (dollars inmillions )    |       |                         |                   |   | (dollars inmillions )    |   |                         | 
|Software                            |  | $                        | 42.6  |                         | 18.3              | % |                          | $ | 44.8                    |  | 22.4  | %
|Structured finance                  |  |                          | 29.4  |                         | 12.6              | % |                          |   | 7.1                     |  | 3.5   | %
|Web-based services                  |  |                          | 19.0  |                         | 8.2               | % |                          |   | 20.8                    |  | 10.4  | %
|Enterprise software                 |  |                          | 18.6  |                         | 8.0               | % |                          |   | 12.1                    |  | 6.0   | %
|Semiconductor capital equipment     |  |                          | 19.1  |                         | 8.2               | % |                          |   | 8.4                     |  | 4.2   | %
|Telecommunications services         |  |                          | 15.8  |                         | 6.8               | % |                          |   | 10.9                    |  | 5.5   | %
|IT value-added reseller             |  |                          | 15.7  |                         | 6.7               | % |                          |   | 14.8                    |  | 7.4   | %
|Computer hardware                   |  |                          | 10.4  |                         | 4.5               | % |                          |   | 4.5                     |  | 2.2   | %
|Consumer electronics                |  |                          | 9.5   |                         | 4.1               | % |                          |   | 12.5                    |  | 6.2   | %
|Advertising                         |  |                          | 8.3   |                         | 3.5               | % |                          |   | 8.2                     |  | 4.1   | %
|Printing and document management    |  |                          | 5.6   |                         | 2.4               | % |                          |   | 6.3                     |  | 3.1   | %
|Printing and publishing             |  |                          | 5.2   |                         | 2.2               | % |                          |   | 3.2                     |  | 1.6   | %
|Grocery                             |  |                          | 5.0   |                         | 2.1               | % |                          |   | 4.9                     |  | 2.4   | %
|Shipping and transportation         |  |                          | 4.7   |                         | 2.0               | % |                          |   | 4.8                     |  | 2.4   | %
|Retail food products                |  |                          | 4.5   |                         | 2.0               | % |                          |   | 4.7                     |  | 2.4   | %
|Business services                   |  |                          | 4.1   |                         | 1.8               | % |                          |   | 4.4                     |  | 2.2   | %
|Food products manufacturer          |  |                          | 3.9   |                         | 1.7               | % |                          |   | 0.0                     |  | 0.0   | %
|Healthcare                          |  |                          | 3.8   |                         | 1.6               | % |                          |   | 3.4                     |  | 1.7   | %
|Auto Parts manufacturer             |  |                          | 3.0   |                         | 1.3               | % |                          |   | 0.0                     |  | 0.0   | %
|IT consulting                       |  |                          | 2.6   |                         | 1.1               | % |                          |   | 3.1                     |  | 1.6   | %
|Interactive voice messaging service |  |                          | 2.0   |                         | 0.9               | % |                          |   | 2.0                     |  | 1.0   | %
|Real estate development             |  |                          | 0.0   |                         | 0.0               | % |                          |   | 1.5                     |  | 0.7   | %
|Digital media                       |  |                          | 0.0   |                         | 0.0               | % |                          |   | 13.8                    |  | 6.9   | %
|Digital imaging                     |  |                          | 0.0   |                         | 0.0               | % |                          |   | 4.1                     |  | 2.1   | %
|                                    |  |                          |       |                         |                   |   |                          |   |                         |  |       |  
|                                    |  | $                        | 232.8 |                         | 100.0             | % |                          | $ | 200.3                   |  | 100.0 | %
|                                    |  |                          |       |                         |                   |   |                          |   |                         |  |       |  

PORTFOLIO GRADING

We have adopted a credit grading system to monitor the quality of our debt investment portfolio. As of June 30, 2010 and
December 31, 2009, our portfolio had a weighted average grade of 2.5 and 2.5, respectively, based upon the fair value of the debt investments in the portfolio. Equity securities are not graded.



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At June 30, 2010 and December 31, 2009, our debt investment portfolio was graded
as follows:



|      |  |                                                                                                                               |  |                       |       |                              |       |   |                        |   |                              |  |       |  
|----- |  | ----------------------------------------------------------------------------------------------------------------------------- |  | --------------------- | ----- | ---------------------------- | ----- | - | ---------------------- | - | ---------------------------- |  | ----- | -
|      |  |                                                                                                                               |  | June 30, 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. |  | $                     | 23.6  |                              | 8.8   | % |                        | $ | 23.5                         |  | 10.8  | %
|      |  |                                                                                                                               |  |                       |      
|2     |  | Full repayment of principal and interest is expected.                                                                         |  |                       | 132.4 |                              | 49.5  | % |                        |   | 110.7                        |  | 50.8  | %
|      |  |                                                                                                                               |  |                       |      
|3     |  | Closer monitoring is required. Full repayment of principal and interest is expected.                                          |  |                       | 93.2  |                              | 34.8  | % |                        |   | 81.8                         |  | 37.5  | %
|      |  |                                                                                                                               |  |                       |      
|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.                                                                              |  |                       | 18.5  |                              | 6.9   | % |                        |   | 2.0                          |  | 0.9   | %
|      |  |                                                                                                                               |  |                       |       |                              |       |   |                        |   |                              |  |       |  
|      |  |                                                                                                                               |  | $                     | 267.7 |                              | 100.0 | % |                        | $ | 218.0                        |  | 100.0 | %
|      |  |                                                                                                                               |  |                       |       |                              |       |   |                        |   |                              |  |       |  
|      |  |                                                                                                                              
|      |  |                                                                                                                               |  | December 31, 2009     |      
|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. |  | $                     | 26.0  |                              | 9.7   | % |                        | $ | 25.5                         |  | 13.3  | %
|      |  |                                                                                                                               |  |                       |      
|2     |  | Full repayment of principal and interest is expected.                                                                         |  |                       | 94.3  |                              | 35.1  | % |                        |   | 84.9                         |  | 44.2  | %
|      |  |                                                                                                                               |  |                       |      
|3     |  | Closer monitoring is required. Full repayment of principal and interest is expected.                                          |  |                       | 73.9  |                              | 27.5  | % |                        |   | 65.7                         |  | 34.2  | %
|      |  |                                                                                                                               |  |                       |      
|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.                                                                              |  |                       | 74.3  |                              | 27.7  | % |                        |   | 16.0                         |  | 8.3   | %
|      |  |                                                                                                                               |  |                       |       |                              |       |   |                        |   |                              |  |       |  
|      |  |                                                                                                                               |  | $                     | 268.5 |                              | 100.0 | % |                        | $ | 192.1                        |  | 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.

American Integration Technologies, LLC (AIT) was rated a 5 as of the end of 2008. Throughout 2009 and the first
six months of 2010, business conditions improved and AIT resumed cash interest payments to TICC starting in April 2010. TICCs investment rating of the AIT debt was changed to a 3 as of June 30, 2010.



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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, 2010 to the three months ended June 30,
2009.

Investment Income

As of June 30, 2010, our debt investments had stated interest rates of between 3.10% and 15.00% (excluding our investment in GenuTec
Business Solutions, Inc. which carries a zero interest rate through October 30, 2014) and maturity dates of between 6 and 144 months (excluding our investment in WAICCS Las Vegas, LLC). In addition, our total portfolio had a weighted average
yield on debt investments of approximately 13.0% including all investments in the portfolio, compared to 7.3% as of June 30, 2009.

Investment income for the three months ended June 30, 2010 was approximately $8.7 million compared to approximately $4.9 million for
the three months ended June 30, 2009. This increase was due largely to an increase in the principal value on income producing investments, greater return on our investment portfolio due to the amortization of discounts on new debt investments
and distributions from the equity interests in our securitization vehicle investments. The total principal value of income producing investments as of June 30, 2010 and 2009 was approximately $249.2 million and $202.4 million, respectively. For
the three months ended June 30, 2010, investment income consisted of approximately $5.1 million in cash interest from portfolio investments, approximately $1.5 million in amortization of original issue and market discount, approximately
$493,000 of discount income derived from unscheduled principal cash remittances at par on discounted debt securities, approximately $950,000 distributions from the equity interest in securitized vehicle investments and approximately $204,000 in PIK
interest.

For the three months ended June 30, 2010, fee income of approximately $461,000 was recorded, compared to fee
income of approximately $19,000 for the same period in 2009. Fee income consists of non-recurring fees in connection with our investments in portfolio companies, including commitment fees, origination fees and amendment fees.

Operating Expenses

Operating expenses for the quarter ended June 30, 2010 were approximately $2.4 million. This amount consisted of investment advisory
fees, compensation expense, professional fees, and general and administrative expenses. Expenses increased approximately $700,000 from the quarter ended June 30, 2009, attributable primarily to higher investment advisory fees. Operating
expenses for the quarter ended June 30, 2009 were approximately $1.7 million.

The investment advisory fee for the second
quarter of 2010 was approximately $1.7 million, representing primarily the base fee as provided for in the Investment Advisory Agreement, as well as an investment advisory incentive fee of approximately $433,000. The investment advisory fee in the
comparable period in 2009 was approximately $1.0 million, which represented only the base fee for the period. The increase of approximately $766,000 is due to an increase in average gross assets and an increase in pre-incentive fee net investment
income. At each of June 30, 2010 and December 31, 2009, respectively, approximately $1.7 million and $1.1 million of investment advisory fees remained payable to TICC Management.

Compensation expenses were approximately $239,000 for the quarter ended June 30, 2010, compared to approximately $226,000 for the
quarter ended June 30, 2009, reflecting the allocation of compensation expenses for the services of our chief financial officer, our chief compliance officer and our controller, and other administrative support personnel. At June 30, 2010
and December 31, 2009, respectively, approximately $246,000 and $0 of compensation expenses remained payable.

Professional fees, consisting of legal, valuation, audit and consulting fees, were approximately $166,000 for the quarter ended
June 30, 2010, compared to approximately $267,000 for the quarter ended June 30, 2009. This was the result of a decrease in fees for valuation services of approximately $71,000 and lower legal costs of approximately $22,000 incurred during
the quarter ended June 30, 2010.

General and administrative expenses, consisting primarily of directors fees,
insurance, transfer agent and custodian fees, office supplies, facilities costs and other expenses, were approximately $257,000 for the three months ended June 30, 2010 compared to approximately $201,000 for the same period in 2009. This
increase was a result of greater proxy related costs of approximately $58,000. 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

Realized and Unrealized Gains/Losses on Investments

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 Technologies, 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 | )
|Other                                       |  |                                      | (0.4 | )
|                                            |  |                                      |      |  
|                                            | 
|Total                                       |  | $                                    | 2.1  |  
|                                            |  |                                      |      |  

During the quarter ended June 30, 2009, we recorded net realized losses of approximately $3.3 million
due largely to losses associated with the partial sale of our debt investment in AKQA, Inc. of approximately $1.3 million, and the restructuring of our debt investment in Punch Software, LLC, of approximately $1.7 million.

Based upon the fair value determinations made in good faith by the Board of Directors, during the quarter ended June 30, 2009, we
had net unrealized gains of approximately $9.8 million comprised of $14.6 million in unrealized appreciation, $7.7 million in unrealized depreciation and approximately $2.9 million relating to the reversal of prior period net unrealized
depreciation. The most significant changes in net unrealized appreciation and depreciation during the quarter ended June 30, 2009 were as follows (in millions):



|                      |  |                                      |    
|--------------------- |  | ------------------------------------ | ---
|Portfolio Company     |  | Unrealizedappreciation(depreciation)
|                      | 
|Punch Software, LLC   |  | $                                    | 2.2
|AKQA, Inc.            |  |                                      | 2.2
|Palm, Inc.            |  |                                      | 1.9
|Questia Media, Inc.   |  |                                      | 1.4
|Cavtel Holdings, LLC  |  |                                      | 1.4
|GXS Worldwide Inc.    |  |                                      | 1.3
|Hyland Software, Inc. |  |                                      | 1.1
|Segovia, Inc.         |  |                                      | 1.1



36



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|                                       |  |                                      |      |  
|-------------------------------------- |  | ------------------------------------ | ---- | -
|Portfolio Company                      |  | Unrealizedappreciation(depreciation) |     
|                                       | 
|NetQuote, Inc.                         |  |                                      | 0.8  |  
|SCS Holdings II, Inc.                  |  |                                      | 0.7  |  
|Power Tools, Inc.                      |  |                                      | 0.7  |  
|American Integration Technologies, LLC |  |                                      | (1.6 | )
|Box Services, LLC                      |  |                                      | (2.2 | )
|WAICCS Las Vegas, LLC                  |  |                                      | (3.2 | )
|Other                                  |  |                                      | 2.0  |  
|                                       |  |                                      |      |  
|                                       | 
|Total                                  |  | $                                    | 9.8  |  
|                                       |  |                                      |      |  

Please see Portfolio Grading above for more information.

Net Increase in Net Assets Resulting from Net Investment Income

Net investment income for the quarter ended June 30, 2010 and 2009 was $6.3 million and $3.2 million, respectively. This increase was
due largely to a greater return on our investment portfolio due to amortization of discounts on new debt investments, distributions from the equity interests in our securitization vehicle investments as well as from an increase of the principal
value of income producing investments.

Based on a weighted-average of 26,875,554 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, 2010 was approximately $0.24 for basic and diluted, compared to approximately $0.12 per share for the same period in 2009.

Net Increase in Net Assets Resulting from Operations

We had a net increase in net assets resulting from operations of approximately $9.6 million for the quarter ended June 30, 2010,
compared to a net increase of approximately $9.7 million for the comparable period in 2009. The increase from net investment income and realized gains on investments in 2010 was offset by lower net unrealized appreciation on investments.

Based on a weighted-average of 26,875,554 shares outstanding (basic and diluted), the net increase in net assets resulting from
operations per common share for the quarter ended June 30, 2010 was approximately $0.36 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 2009.

Please see Portfolio Grading above for more information.

Set forth below is a comparison of our results of operations for the six months ended June 30, 2010 to the six months ended June 30, 2009.

Investment Income

As of June 30, 2010, our debt investments had stated interest rates of between 3.10% and 15.00% (excluding our investment in GenuTec
Business Solutions, Inc. which carries a zero interest rate through October 30, 2014) and maturity dates of between 6 and 144 months (excluding our investment in WAICCS Las Vegas, LLC). In addition, our total portfolio had a weighted average
yield on debt investments of approximately 13.0% including all investments in the portfolio, compared to 7.3% as of June 30, 2009.

Investment income for the six months ended June 30, 2010 was approximately $15.3 million compared to approximately $10.0 million for
the six months ended June 30, 2009. This increase was due largely to an increase in the principal value of income producing investments, an increase in the amortization of discounts on new debt investments and distributions from the equity
interests in our securitization vehicle investments. The total principal value of income producing investments for the six months ended June 30, 2010 and 2009 was approximately $249.2 million and $202.4 million, respectively. For the six months
ended June 30, 2010, investment income consisted of approximately $9.4 million in cash interest from portfolio investments, approximately $2.7 million in amortization of original issue discount, approximately $709,000 of market discount income,
approximately $1.7 million in distribution income and approximately $286,000 in PIK interest income.



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For the six months ended June 30, 2010, fee income of approximately $461,000 was
recorded, compared to fee income of approximately $56,000 for the same period in 2009. Fee income consists of non-recurring fees in connection with our investments in portfolio companies, including commitment fees, origination fees and amendment
fees.

Operating Expenses

Operating expenses for the six months ended June 30, 2010 were approximately $4.3 million. This amount consisted of investment
advisory fees, compensation expense, professional fees, and general and administrative expenses. Expenses increased approximately $1.0 million from the six months ended June 30, 2009, attributable primarily to higher investment advisory fees.
Operating expenses for the six months ended June 30, 2009 were approximately $3.3 million.

The investment advisory fee
for the six months ended June 30, 2010 was approximately $3.0 million, representing the base fee for the period as provided for in the investment advisory agreement as well as income incentive fees earned of approximately $518,000. The
investment advisory fee in the comparable period in 2009 was approximately $1.9 million which consisted of the base fee for the period as well as incentive fees of approximately $47,000. The increase of approximately $1.1 million is due to an
increase in average gross assets and the increase in pre-incentive fee net investment income. At each of June 30, 2010 and December 31, 2009, respectively, approximately $1.7 million and $1.1 million of investment advisory fees remained
payable to TICC Management.

Compensation expenses were approximately $479,000 for the six months ended June 30, 2010,
compared to approximately $452,000 for the comparable period in 2009, reflecting the allocation of compensation expenses for the services of our chief financial officer, our chief compliance officer, our controller, and other administrative support
personnel. At June 30, 2010 and December 31, 2009, respectively, approximately $246,000 and $0 of compensation expenses remained payable.

Professional fees, consisting of legal, valuation, audit and consulting fees, were approximately $451,000 for the six months ended
June 30, 2010, compared to approximately $570,000 for the comparable period in 2009. This was primarily the result of decreases in fees for valuation services of approximately $58,000 as well as legal costs of approximately $109,000 incurred
during the six months ended June 30, 2010. These costs were partially offset by increased consulting fees of approximately $40,000 incurred during the six months ended June 30, 2010.

General and administrative expenses, consisting primarily of directors fees, insurance, transfer agent and custodian fees, office
supplies, facilities costs and other expenses, were approximately $416,000 for the six months ended June 30, 2010 compared to approximately $335,000 for the same period in 2009. This increase was primarily the result of greater proxy related
costs of approximately $58,000. 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

Realized and Unrealized Gains/Losses on Investments

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 | )
|Other                                           |  |                                      | 0.4  |  
|                                                |  |                                      |      |  
|                                                | 
|Total                                           |  | $                                    | 46.6 |  
|                                                |  |                                      |      |  

For the six months ended June 30, 2009, we had a net realized loss on investments of approximately $3.3
million, which is primarily comprised of the loss on the partial sale of our debt investment in AKQA, Inc., of approximately $1.3 million, as well as approximately $1.9 million resulting from the repayment of notes held in, and sale of warrants
issued by, Punch Software, LLC. New notes were subsequently issued by Punch Software, LLC with an amended interest rate and maturity date.

Based upon the fair value determinations made in good faith by the Board of Directors, during the six months ended June 30, 2009, we
had net unrealized gains of approximately $4.8 million comprised of $17.6 million in unrealized appreciation, $15.7 million in unrealized depreciation and approximately $2.9 million relating to the reversal of prior period net unrealized
depreciation. The most significant changes in net unrealized appreciation and depreciation during the six months ended June 30, 2009 were as follows (in millions):



|                    |  |                                      |    
|------------------- |  | ------------------------------------ | ---
|Portfolio Company   |  | Unrealizedappreciation(depreciation)
|                    | 
|Palm, Inc.          |  | $                                    | 2.8
|Punch Software, LLC |  |                                      | 2.4
|AKQA, Inc.          |  |                                      | 2.2



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##### Table of Contents

|                                       |  |                                      |      |  
|-------------------------------------- |  | ------------------------------------ | ---- | -
|Portfolio Company                      |  | Unrealizedappreciation(depreciation) |     
|                                       | 
|Segovia, Inc.                          |  |                                      | 2.0  |  
|Cavtel Holdings, LLC                   |  |                                      | 1.4  |  
|NetQuote, Inc.                         |  |                                      | 1.3  |  
|GXS Worldwide Inc.                     |  |                                      | 1.2  |  
|Hyland Software, Inc.                  |  |                                      | 1.1  |  
|SCS Holdings II, Inc.                  |  |                                      | 0.7  |  
|Power Tools, Inc.                      |  |                                      | 0.7  |  
|Questia Media, Inc.                    |  |                                      | 0.7  |  
|Fusionstorm, Inc.                      |  |                                      | 0.6  |  
|Krispy Kreme Doughnut Corporation      |  |                                      | 0.5  |  
|WHITTMANHART, Inc.                     |  |                                      | 0.4  |  
|Arise Virtual Solutions, Inc.          |  |                                      | 0.4  |  
|Stratus Technologies, Inc.             |  |                                      | 0.3  |  
|Ai Squared                             |  |                                      | (0.4 | )
|The CAPS Group term A notes            |  |                                      | (1.4 | )
|Box Services, LLC                      |  |                                      | (2.2 | )
|American Integration Technologies, LLC |  |                                      | (3.1 | )
|WAICCS Las Vegas, LLC                  |  |                                      | (6.9 | )
|Other                                  |  |                                      | 0.1  |  
|                                       |  |                                      |      |  
|                                       | 
|                                       |  | $                                    | 4.8  |  
|                                       |  |                                      |      |  

Please see Portfolio Grading above for more information.

Net Increase in Net Assets Resulting from Net Investment Income

Net investment income for the six months ended June 30, 2010 and 2009 was $11.0 million and $6.8 million, respectively. This increase
was due largely to a greater return on our investment portfolio due to market discounts on new debt investments, distributions from the equity interests in our securitization vehicle investments as well as from an increase of the principal balance
on income producing assets.

Based on a weighted-average of 26,844,898 shares outstanding (basic and diluted), the net
increase in net assets resulting from net investment income per common share for the six months ended June 30, 2010 was approximately $0.41 for basic and diluted, compared to approximately $0.25 per share for the same period in 2009.

Net Increase in Net Assets Resulting from Operations

We had a net increase in net assets resulting from operations of approximately $27.6 million for the six months ended June 30, 2010,
compared to a net increase of approximately $8.3 million for the comparable period in 2009. This net increase in net assets was attributable to greater net unrealized appreciation on investments and increased net investment income, partially offset
by net realized losses on investments.



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##### Table of Contents

Based on a weighted-average of 26,844,898 shares outstanding (basic and diluted), the net
increase in net assets resulting from operations per common share for the six months ended June 30, 2010 was approximately $1.03 for basic and diluted, compared to a net increase in net assets of approximately $0.31 per share for the same
period in 2009.

Please see Portfolio Grading above for more information.

LIQUIDITY AND CAPITAL RESOURCES

During the six months ended June 30, 2010, cash and cash equivalents decreased from approximately $24.0 million at the beginning of
the period to approximately $11.3 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 $4.1 million, largely
reflecting net investment income (approximately $11.0 million) as well as proceeds from principal repayments and sales of investments (approximately $40.3 million), offset by the purchases of new investments (approximately $52.8 million). During the
period, net cash used in financing activities was approximately $8.5 million reflecting the distribution of dividends.

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.

Contractual Obligations

We have certain obligations with respect to the investment advisory and administration services we receive. See
Overview. We incurred approximately $3.0 million for investment advisory services and $416,000 for administrative services for the six months ended June 30, 2010.

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.

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 2010    |  |                    |  |                    |  |        |     
|July 29, 2010  |  | September 10, 2010 |  | September 30, 2010 |  | $      | 0.22
|April 29, 2010 |  | June 10, 2010      |  | June 30, 2010      |  |        | 0.20
|March 4, 2010  |  | March 24, 2010     |  | March 31, 2010     |  |        | 0.15
|               |  |                    |  |                    |  |        |     
|Total (2010)   |  |                    |  |                    |  |        | 0.57
|               |  |                    |  |                    |  |        |     



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|                  |  |                    |  |                    |  |        |    
|----------------- |  | ------------------ |  | ------------------ |  | ------ | ---
|Date Declared     |  | Record Date        |  | Payment Date       |  | Amount |    
|                  |  |                    | 
|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)
|                  |  |                    |  |                    |  |        |    
|                  |  |                    | 
|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   |    



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|                     |  |                    |  |                    |  |        |      |    
|-------------------- |  | ------------------ |  | ------------------ |  | ------ | ---- | ---
|Date Declared        |  | Record Date        |  | Payment Date       |  | Amount |     
|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: |  |                    |  |                    |  | $      | 6.49 | (5)
|                     |  |                    |  |                    |  |        |      |    



|(1) | Distributions for the fiscal year ended December 31, 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 Royce & Associates as the 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.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



| |  |  | 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 currently serve as Chief Executive Officer and President, respectively, of Oxford Lane Capital Corp., a non-diversified
closed-end management investment company that intends to invest primarily in leveraged corporate loans, and its investment adviser, Oxford Lane Management, LLC (Oxford Lane Management). BDC Partners provides Oxford Lane Capital Corp.
with office facilities and administrative services pursuant to an administration agreement and also serves as the managing member of Oxford Lane Management.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Both we and GLIF 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.



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Either we or GLIF may also purchase syndicated loans (i.e., those transactions in which an
agent bank syndicates loans to four or more investors) of issuers in which the other fund holds no position, or has held a position (and has made no further investment) for a period greater than 30 calendar days and the purchases are not made
directly from the other fund or the issuer of the acquired syndicated loans. In instances where both we and GLIF 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 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 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 1, 2010, the investment in the debt of Palm, Inc. of approximately $9.5 million was repaid at par as a result of
the acquisition by Hewlett Packard, Inc.

As of July 13, 2010, the investment in the debt of NetQuote, Inc. of approximately
$19.0 million was repaid at par.

On July 29, 2010, the Board of Directors declared a distribution of $0.22 per share for
the third quarter, payable on September 30, 2010 to shareholders of record as of September 10, 2010.



|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, 2010, three debt investments in our
portfolio were at a fixed rate, and the remaining thirty-nine debt investments were at variable rates, representing approximately $23.0 million and $244.7 million in principal debt, respectively. At June 30, 2010, $226.2 million of our variable
rate investments were income producing. The variable rates are based upon LIBOR, and generally reset each year. We expect that future debt investments will generally be made at variable rates.

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 rate, and no other change in our portfolio as of June 30, 2010. We have also assumed no outstanding borrowings. Under this analysis, net investment income would increase approximately
$2.3 million 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. 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, 2010, 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.



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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, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART IIOTHER INFORMATION



|ITEM 1. | LEGAL PROCEEDINGS.
|------- | ------------------

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



|Item 1A. | Risk Factors
|-------- | ------------

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

RISKS RELATING TO OUR BUSINESS AND
STRUCTURE

Any failure on our part to maintain our status as a business development company would reduce our
operating flexibility.

If we do not remain a business development company, we might be regulated as a closed-end
investment company under the 1940 Act, which would subject us to substantially more regulatory restrictions under the 1940 Act and correspondingly decrease our operating flexibility.

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,



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

Our business model depends
upon the development and maintenance of strong referral relationships with private equity and venture capital funds and investment banking firms.

If we fail to maintain our relationships with key firms, or if we fail to establish strong referral relationships with other firms or
other sources of investment opportunities, we will not be able to grow our portfolio of loans and achieve our investment objective. In addition, persons with whom we have informal relationships are not obligated to provide us with investment
opportunities, and therefore there is no assurance that such relationships will lead to the origination of debt or other investments.

We may not realize gains from our equity investments.

When we invest in debt securities, we may acquire warrants or other equity securities as well. However, the equity interests we receive
may not appreciate in value and, in fact, may decline in value. Accordingly, we may not be able to realize gains from our equity interests, and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset
any other losses we experience.

Because our investments are generally not in publicly traded securities, there is
uncertainty regarding the fair value of our investments, which could adversely affect the determination of our net asset value.

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

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.



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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.

We are currently in a period of capital markets disruption and we do not expect these conditions to improve in the near future.

The U.S. capital markets have been experiencing high levels of volatility and disruption for more than two years, and the
U.S. economy may still be in a period of recession or slow growth. Disruptions in the capital markets have increased the spreads between the yields realized on risk-free and higher risk securities, resulting in illiquidity in parts of the capital
markets. We believe these conditions may continue for a prolonged period of time or worsen in the future. A prolonged period of market illiquidity may have an adverse effect on our business, financial condition and results of operations. Unfavorable
economic conditions could also 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 limit our investment originations, limit our ability to grow and
negatively impact our operating results.

The current adverse economic conditions could impair our portfolio companies and
harm our operating results.

Many of the companies in which we have made or will make investments may be susceptible to
the current adverse economic conditions, which may affect the ability of a company to repay our loans or engage in a liquidity event such as a sale, recapitalization, or initial public offering. Therefore, our nonperforming assets may increase, and
the value of our portfolio may decrease during this period. Adverse economic conditions also may decrease the value of any collateral securing some of our loans and the value of our equity investments. The current adverse economic conditions could
lead to financial losses in our portfolio and a decrease in our revenues, net income, and the value of our assets. Since 2008, we have experienced significant losses on our portfolio investments, which was in part attributable to the current adverse
economic conditions in the industries in which those portfolio companies operate.

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 the portfolio companys loans 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 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 investment as senior debt or secured debt, depending on the facts and circumstances, including the extent to which we actually provided
significant managerial assistance, if any, to that portfolio company, a bankruptcy court might re-characterize 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.

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 continuing unprecedented declines in prices and
liquidity in the corporate debt markets 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



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quarter. Accordingly, this portion of our advisers incentive fee may also be payable notwithstanding a decline in net asset value that quarter. In addition, in the event we recognize
deferred loan interest income in excess of our available capital as a result of our receipt of payment-in-kind, or PIK interest, we may be required to liquidate assets in order to pay a portion of the incentive fee. TICC Management,
however, is not required to reimburse us for the portion of any incentive fees attributable to deferred loan interest income in the event of a subsequent default.

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

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.

Our portfolio is currently, and may continue to be, unlevered.

Since mid-2007, global credit and other financial markets have suffered substantial stress, volatility, illiquidity and disruption. These
events have significantly diminished overall confidence in the debt and equity markets and caused increasing economic uncertainty. A further deterioration in the credit markets or a prolonged period of illiquidity without improvement could
materially impair the availability of credit on commercially reasonable terms.

In view of tightened credit markets, since the
end of the first quarter of 2008, and in the absence of having received a written offer for extension of our credit facility from our existing lenders, we took steps to reduce our borrowings under our credit facility and, effective December 30,
2008, we had fully repaid any amounts borrowed and terminated our credit facility. On a risk-adjusted basis, we believe that, until leverage can be obtained at appropriate pricing and terms with a longer maturity that more closely matches the
maturity of our investments, we are better served by having an unlevered portfolio. However, 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.

An extended continuation of the 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. Ongoing 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.
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. Moreover, we are unable to predict when economic and market conditions may become more
favorable. Even if such conditions improve broadly and significantly over the long term, adverse conditions in particular sectors of the financial markets could adversely impact our business.



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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 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.

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.

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 26,932,340 shares are issued and outstanding as of June 30, 2010. 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
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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.

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. 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 or reduce new investments to meet these
distribution requirements. 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.

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.

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.



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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 President and Chief Investment Officer of Royce & Associates, 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, an investment adviser to Greenwich Loan Income Fund Limited (f/k/a T2 Income Fund Limited) (GLIF), a Guernsey fund, established and operated for the purpose of investing in bilateral transactions and syndicated loans across a
variety of industries globally. BDC Partners is the managing member of T2 Advisers, LLC. 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 intends to invest 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, TICC, Oxford Lane Capital Corp. and Oxford Lane Management 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 and GLIF 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 or GLIF may also purchase syndicated loans (i.e., those transactions in which an agent bank
syndicates loans to four or more investors) of issuers in which the other fund holds no position, or has held a position (and has made no further investment) for a period greater than 30 calendar days and the purchases are not made directly from the
other fund or the issuer of the acquired syndicated loans. In instances where both we and GLIF 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 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 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).



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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.

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 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.



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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 the companies that we are targeting 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 typically have limited operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them
more vulnerable to competitors actions and market conditions, as well as general economic downturns;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | because they 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;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



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



| |  |  | these companies may be more susceptible to the current 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.



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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 the current 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.

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 collateralized loan obligation
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 collateralized loan obligation, or 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.



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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 seven months of 2010. We cannot assure you when or if this trend will change. 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.

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, 2010, we issued a total of
119,124 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 $889,000.



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

Not applicable.



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

[Intentionally
left blank]



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

Not
applicable.



|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  |  | Form of Amended and Restated Investment Advisory Agreement between Registrant and Technology Investment Management, LLC (Incorporated by reference to Appendix B to the
Registrants Proxy Materials on Schedule 14A (File No. 000-50398) filed on May 18, 2004).
|      | 
|10.2  |  | Custodian Agreement between Registrant and State Street Bank and Trust Company (Incorporated by reference to Pre-Effective Amendment No. 2 to the Registrants Registration
Statement on Form N-2 (File No. 333-109055), filed on November 19, 2003).            
|      | 
|10.3  |  | Administration Agreement between Registrant and BDC Partners, LLC (Incorporated by reference to Pre-Effective Amendment No. 2 to the Registrants Registration Statement on Form
N-2 (File No. 333-109055), filed on November 19, 2003).                         
|      | 
|10.4  |  | 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 6, 2010 |  | By:                |  | /S/    JONATHAN H.
COHEN                                                
|                     |  |                    |  | Jonathan H. Cohen
Chief Executive Officer                               
|                     |  |                   
|Date: August 6, 2010 |  | By:                |  | /S/    PATRICK F.
CONROY                                                
|                     |  |                    |  | Patrick F. Conroy
Chief Financial Officer
(Principal Accounting Officer)



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