##### 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 MARCH 31, 2009



| ̈ | 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 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 May 7, 2009 was 26,584,976.









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##### Table of Contents

TICC CAPITAL CORP.

TABLE OF CONTENTS



|                              |  |                                                                                                                     |  |   
|----------------------------- |  | ------------------------------------------------------------------------------------------------------------------- |  | --
|PART I. FINANCIAL INFORMATION |  | 2                                                                                                                  
|                              |  |                                                                                                                    
|Item 1.                       |  | Financial Statements (Unaudited)                                                                                    |  | 2 
|                              |  |                                                                                                                    
|                              |  | Statements of Assets and Liabilities as of March 31, 2009 and December 31, 2008                                     |  | 2 
|                              |  |                                                                                                                    
|                              |  | Schedule of Investments as of March 31, 2009                                                                        |  | 3 
|                              |  |                                                                                                                    
|                              |  | Schedule of Investments as of December 31, 2008                                                                     |  | 5 
|                              |  |                                                                                                                    
|                              |  | Statements of Operations for the three months ended March 31, 2009 and 2008                                         |  | 7 
|                              |  |                                                                                                                    
|                              |  | Statements of Changes in Net Assets for the three months ended March 31, 2009 and the year ended December 
31, 2008 |  | 8 
|                              |  |                                                                                                                    
|                              |  | Statements of Cash Flows for the three months ended March 31, 2009 and 2008                                         |  | 9 
|                              |  |                                                                                                                    
|                              |  | Notes to Financial Statements                                                                                       |  | 10
|                              |  |                                                                                                                    
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                               |  | 16
|                              |  |                                                                                                                    
|                              |  | Forward-Looking Statements                                                                                          |  | 16
|                              |  |                                                                                                                    
|                              |  | Overview                                                                                                            |  | 16
|                              |  |                                                                                                                    
|                              |  | Critical Accounting Policies                                                                                        |  | 18
|                              |  |                                                                                                                    
|                              |  | Portfolio Composition and Investment Activity                                                                       |  | 21
|                              |  |                                                                                                                    
|                              |  | Results of Operations                                                                                               |  | 23
|                              |  |                                                                                                                    
|                              |  | Liquidity and Capital Resources                                                                                     |  | 25
|                              |  |                                                                                                                    
|                              |  | Recent Developments                                                                                                 |  | 28
|                              |  |                                                                                                                    
|Item 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk                                                          |  | 28
|                              |  |                                                                                                                    
|Item 4.                       |  | Controls and Procedures                                                                                             |  | 28
|                              | 
|PART II. OTHER INFORMATION    |  | 28                                                                                                                 
|                              |  |                                                                                                                    
|Item 1.                       |  | Legal Proceedings                                                                                                   |  | 28
|                              |  |                                                                                                                    
|Item 1A.                      |  | Risk Factors                                                                                                        |  | 28
|                              |  |                                                                                                                    
|Item 2                        |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                         |  | 38
|                              |  |                                                                                                                    
|Item 3.                       |  | Defaults Upon Senior Securities                                                                                     |  | 38
|                              |  |                                                                                                                    
|Item 4.                       |  | Submission of Matters to a Vote of Security Holders                                                                 |  | 38
|                              |  |                                                                                                                    
|Item 5.                       |  | Other Information                                                                                                   |  | 39
|                              |  |                                                                                                                    
|Item 6.                       |  | Exhibits                                                                                                            |  | 40
|                              | 
|SIGNATURES                    |  | 41                                                                                                                 



1



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##### Table of Contents

PART IFINANCIAL INFORMATION



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

TICC CAPITAL CORP.

STATEMENTS OF ASSETS AND LIABILITIES



|                                                                                                                                 |  |                |             |   |                   |   |             |  
|-------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ----------- | - | ----------------- | - | ----------- | -
|                                                                                                                                 |  | March 31, 2009 |             |   | December 31, 2008 |  
|                                                                                                                                 |  | (unaudited)    |             |   |                   |  
|ASSETS                                                                                                                           |  |                |             |   |                   |   |             |  
|Investments, at fair value (cost: $279,184,674 @ 03/31/09; $282,299,228 @ 12/31/08)                                              |  |                |             |   |                   |   |             |  
|Non-affiliated/non-control investments (cost: $258,977,832 @ 03/31/09; $261,923,603 @ 12/31/08)                                  |  | $              | 160,346,329 |   |                   | $ | 168,094,127 |  
|Control investments (cost: $20,206,842 @ 03/31/09; $20,375,625 @ 12/31/08)                                                       |  |                | 21,150,000  |   |                   |   | 21,500,000  |  
|                                                                                                                                 |  |                |             |   |                   |   |             |  
|Total investments at fair value                                                                                                  |  |                | 181,496,329 |   |                   |   | 189,594,127 |  
|                                                                                                                                 |  |                |             |   |                   |   |             |  
|Cash and cash equivalents                                                                                                        |  |                | 17,104,029  |   |                   |   | 14,069,251  |  
|Interest receivable                                                                                                              |  |                | 809,151     |   |                   |   | 1,151,703   |  
|Prepaid expenses and other assets                                                                                                |  |                | 94,613      |   |                   |   | 147,806     |  
|                                                                                                                                 |  |                |             |   |                   |   |             |  
|Total assets                                                                                                                     |  | $              | 199,504,122 |   |                   | $ | 204,962,887 |  
|                                                                                                                                 |  |                |             |   |                   |   |             |  
|                                                                                                                                 |  |               
|LIABILITIES                                                                                                                      |  |                |             |   |                   |   |             |  
|Investment advisory fee payable to affiliate                                                                                     |  | $              | 941,052     |   |                   | $ | 1,287,451   |  
|Accrued expenses                                                                                                                 |  |                | 256,309     |   |                   |   | 308,686     |  
|                                                                                                                                 |  |                |             |   |                   |   |             |  
|Total liabilities                                                                                                                |  |                | 1,197,361   |   |                   |   | 1,596,137   |  
|                                                                                                                                 |  |                |             |   |                   |   |             |  
|                                                                                                                                 |  |               
|NET ASSETS                                                                                                                       |  |                |             |   |                   |   |             |  
|Common stock, $0.01 par value, 100,000,000 shares authorized, and 26,584,976 and 26,483,546 issued and outstanding,
respectively |  |                | 265,850     |   |                   |   | 264,835     |  
|Capital in excess of par value                                                                                                   |  |                | 319,017,413 |   |                   |   | 318,662,914 |  
|Net unrealized depreciation on investments                                                                                       |  |                | (97,688,345 | ) |                   |   | (92,705,101 | )
|Accumulated net realized losses on investments                                                                                   |  |                | (21,877,286 | ) |                   |   | (21,899,323 | )
|Distributions in excess of investment income                                                                                     |  |                | (1,410,871  | ) |                   |   | (956,575    | )
|                                                                                                                                 |  |                |             |   |                   |   |             |  
|Total net assets                                                                                                                 |  |                | 198,306,761 |   |                   |   | 203,366,750 |  
|                                                                                                                                 |  |                |             |   |                   |   |             |  
|Total liabilities and net assets                                                                                                 |  | $              | 199,504,122 |   |                   | $ | 204,962,887 |  
|                                                                                                                                 |  |                |             |   |                   |   |             |  
|                                                                                                                                 |  |               
|Net asset value per common share                                                                                                 |  | $              | 7.46        |   |                   | $ | 7.68        |  

SEE ACCOMPANYING NOTES.



2



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##### Table of Contents

TICC CAPITAL CORP.

SCHEDULE OF INVESTMENTS

MARCH 31, 2009

(unaudited)



|                                                                |  |                                      |  |                                                      |  |                 |            |      |   |              |  |   |           
|--------------------------------------------------------------- |  | ------------------------------------ |  | ---------------------------------------------------- |  | --------------- | ---------- | ---- | - | ------------ |  | - | ----------
|COMPANY(1)                                                      |  | INDUSTRY                             |  | INVESTMENT                                           |  | PRINCIPALAMOUNT |            | COST |   | FAIRVALUE(2)
|Questia Media, Inc.                                             |  | digital media                        |  | senior secured notes(3)(11)                          |  | $               | 14,358,128 |      | $ | 14,358,128   |  | $ | 7,179,063 
|                                                                |  |                                      |  | (11.00%, due Jan. 28, 2009)                          |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  |                                                      | 
|TrueYou.com Inc.                                                |  | medical services                     |  | preferred stock series E(7)                          |  |                 |            |      |   | 1,297,115    |  |   | 0         
|                                                                |  |                                      |  |                                                      | 
|Segovia, Inc.                                                   |  | satellite communications             |  | senior secured notes(4)(5)(6)                        |  |                 | 20,250,000 |      |   | 20,205,279   |  |   | 19,946,250
|                                                                |  |                                      |  | (9.00%, due Feb. 8, 2010)                            |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  | warrants to purchase common stock(7)                 |  |                 |            |      |   | 600,000      |  |   | 3,300,000 
|                                                                |  |                                      |  |                                                      | 
|WHITTMANHART, Inc.                                              |  | IT consulting                        |  | senior secured notes(4)                              |  |                 | 4,750,000  |      |   | 4,750,000    |  |   | 4,275,000 
|                                                                |  |                                      |  | (11.58%, due March 23, 2010)                         |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  | warrants to purchase common stock(7)                 |  |                 |            |      |   | 0            |  |   | 0         
|                                                                |  |                                      |  |                                                      | 
|Falcon Communications, Inc.                                     |  | satellite communications             |  | senior unsecured notes(4)(7)(10)                     |  |                 | 10,500,000 |      |   | 10,500,000   |  |   | 1,000,000 
|                                                                |  |                                      |  | (10.96%, due March 31, 2011)                         |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  |                                                      | 
|Arise Virtual Solutions, Inc. (f/k/a Willow CSN Incorporated) |  | virtual workforce services           |  | senior secured notes(4)(5)                           |  |                 | 10,500,000 |      |   | 10,450,519   |  |   | 10,447,500
|                                                                |  |                                      |  | (10.25%, due June 30, 2010)                          |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  | warrants to purchase convertible preferred stock (7) |  |                 |            |      |   | 200,000      |  |   | 128,000   
|                                                                |  |                                      |  |                                                      | 
|NetQuote, Inc.                                                  |  | web-based services                   |  | senior secured notes(4)                              |  |                 | 23,250,000 |      |   | 23,250,000   |  |   | 21,564,375
|                                                                |  |                                      |  | (9.50%, due May 1, 2011)                             |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  |                                                      | 
|GenuTec Business Solutions, Inc.                                |  | interactive voice messaging services |  | senior secured notes(4)(5)(7)                        |  |                 | 3,476,000  |      |   | 2,750,629    |  |   | 2,000,000 
|                                                                |  |                                      |  | (0.0%, due October 30, 2014)                         |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  | convertible preferred stock(7)                       |  |                 |            |      |   | 1,500,000    |  |   | 0         
|                                                                |  |                                      |  |                                                      | 
|Group 329, LLC (d/b/a The CAPS Group)                         |  | digital imaging                      |  | senior secured term A notes(4)(5)(7)(10)             |  |                 | 5,467,804  |      |   | 5,402,071    |  |   | 0         
|                                                                |  |                                      |  | (11.89%, due February 28, 2012)                      |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  | warrants to purchase common stock(7)                 |  |                 |            |      |   | 110,000      |  |   | 0         
|                                                                |  |                                      |  | senior secured term B notes(4)(5)(7)(10)             |  |                 | 17,485,000 |      |   | 17,239,944   |  |   | 0         
|                                                                |  |                                      |  | (12.39%, due February 28, 2013)                      |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  | warrants to purchase common stock(7)                 |  |                 |            |      |   | 90,000       |  |   | 0         
|                                                                |  |                                      |  |                                                      | 
|American Integration Technologies, LLC.                         |  | semiconductor capital equipment      |  | senior secured notes(4)(6)(7)(10)                    |  |                 | 20,950,000 |      |   | 20,950,000   |  |   | 4,713,750 
|                                                                |  |                                      |  | (10.75%, due October 31, 2010)                       |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  |                                                      | 
|Power Tools, Inc.                                               |  | software                             |  | senior secured notes(4)(5)(6)                        |  |                 | 10,187,500 |      |   | 10,028,964   |  |   | 5,272,031 
|                                                                |  |                                      |  | (12.00%, due May 16, 2014)                           |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  | warrants to purchase common stock(7)                 |  |                 |            |      |   | 350,000      |  |   | 0         
|                                                                |  |                                      |  |                                                      | 
|Algorithmic Implementations, Inc. (d/b/a Ai Squared)          |  | software                             |  | senior secured notes(4)(5)(6)                        |  |                 | 18,150,000 |      |   | 17,206,832   |  |   | 18,150,000
|                                                                |  |                                      |  | (9.84%, due September 11, 2010)                      |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  | common stock                                         |  |                 |            |      |   | 3,000,000    |  |   | 3,000,000 
|                                                                |  |                                      |  |                                                      | 
|Fusionstorm, Inc.                                               |  | IT value-added reseller              |  | senior subordinated unsecured notes(4)(5)(6)         |  |                 | 12,000,000 |      |   | 11,697,184   |  |   | 10,230,000
|                                                                |  |                                      |  | (14.46%, due October 2, 2011)                        |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  | warrants to purchase common stock(7)                 |  |                 |            |      |   | 725,000      |  |   | 400,000   

(Continued on next page)

SEE ACCOMPANYING NOTES.



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##### Table of Contents

TICC CAPITAL CORP.

SCHEDULE OF INVESTMENTS

MARCH 31, 2009

(unaudited)



|                       |  |                             |  |                                           |  |                 |  |      |             |              |   |            
|---------------------- |  | --------------------------- |  | ----------------------------------------- |  | --------------- |  | ---- | ----------- | ------------ | - | -----------
|COMPANY(1)             |  | INDUSTRY                    |  | INVESTMENT                                |  | PRINCIPALAMOUNT |  | COST |             | FAIRVALUE(2)
|Punch Software LLC     |  | software                    |  | senior secured notes(4)(5)(7)(10)         |  | 6,450,000       |  |      | 6,195,416   |              |   | 3,547,500  
|                       |  |                             |  | (9.42%, due October 30, 2011)             |  |                 |  |      |             |              |   |            
|                       |  |                             |  | warrants to purchase Class A-1 units(7)   |  |                 |  |      | 200,000     |              |   | 0          
|                       |  |                             |  |                                           | 
|SCS Holdings II, Inc.  |  | IT value-added reseller     |  | second lien senior secured notes(4)       |  | 14,500,000      |  |      | 14,512,859  |              |   | 10,875,000 
|                       |  |                             |  | (7.22%, due May 30, 2013)                 |  |                 |  |      |             |              |   |            
|                       |  |                             |  |                                           | 
|AKQA, Inc.             |  | advertising                 |  | senior secured notes(4)(6)                |  | 14,575,949      |  |      | 14,575,949  |              |   | 10,931,962 
|                       |  |                             |  | (5.73%, due March 20, 2013)               |  |                 |  |      |             |              |   |            
|                       |  |                             |  |                                           | 
|Box Services, LLC      |  | digital imaging             |  | senior secured notes(4)(6)                |  | 12,312,053      |  |      | 12,312,053  |              |   | 10,372,905 
|                       |  |                             |  | (5.77%, due April 30, 2012)               |  |                 |  |      |             |              |   |            
|                       |  |                             |  |                                           | 
|Hyland Software, Inc.  |  | enterprise software         |  | second lien senior secured notes(4)(5)    |  | 11,000,000      |  |      | 10,925,980  |              |   | 7,700,000  
|                       |  |                             |  | (7.35%, due July 31, 2014)                |  |                 |  |      |             |              |   |            
|                       |  |                             |  |                                           | 
|WAICCS Las Vegas, LLC  |  | real estate development     |  | second lien senior secured notes(4)       |  | 15,000,000      |  |      | 15,000,000  |              |   | 5,250,000  
|                       |  |                             |  | (9.52%, due August 1, 2009)               |  |                 |  |      |             |              |   |            
|                       |  |                             |  |                                           | 
|Integra Telecomm, Inc. |  | telecommunications software |  | second lien senior secured notes(4)(5)    |  | 3,000,000       |  |      | 2,907,418   |              |   | 1,470,000  
|                       |  |                             |  | (9.97%, due February 28, 2014)            |  |                 |  |      |             |              |   |            
|                       |  |                             |  |                                           | 
|GXS Worldwide Inc.     |  | software                    |  | first lien senior secured notes (4)(5)(6) |  | 7,832,884       |  |      | 7,737,373   |              |   | 5,952,993  
|                       |  |                             |  | (5.23%, due March 31, 2013)               |  |                 |  |      |             |              |   |            
|                       |  |                             |  |                                           | 
|Palm, Inc.             |  | consumer electronics        |  | first lien senior secured notes (4)(5)(6) |  | 19,700,000      |  |      | 18,155,961  |              |   | 13,790,000 
|                       |  |                             |  | (4.02%, due April 24, 2014)               |  |                 |  |      |             |              |   |            
|                       |  |                             |  |                                           |  |                 |  |      |             |              |   |            
|                       |  |                             |  |                                           | 
|Total Investments      |  |                             |  |                                           |  |                 |  | $    | 279,184,674 |              | $ | 181,496,329
|                       |  |                             |  |                                           |  |                 |  |      |             |              |   |            



|(1) | Other than Algorithmic Implementation, Inc. (d/b/a Ai Squared), which we may be deemed to control, we do not control and are not an affiliate of any of our
portfolio companies, each as defined in the Investment Company Act of 1940 (the 1940 Act). In general, under the 1940 Act, we would be presumed to control a portfolio company if we owned 25% or more of its voting securities
and would be an affiliate of a portfolio company if we owned 5% or more of its voting securities.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Fair value is determined in good faith by the Board of Directors of the Company.
|--- | --------------------------------------------------------------------------------

|(3) | Investment includes payment-in-kind interest.
|--- | ---------------------------------------------

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

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

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

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

|(8) | As a percentage of net assets at March 31, 2009, investments at fair value are categorized as follows: senior secured notes (82.4%), senior unsecured notes (0.5%), senior
subordinated unsecured notes (5.2%), preferred stock (0.0%), common stock (1.5%), and warrants to purchase equity securities (1.9%).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | Aggregate gross unrealized appreciation for federal income tax purposes is $3,750,498; aggregate gross unrealized depreciation for federal income tax purposes is $101,331,513. Net
unrealized depreciation is $97,581,015 based upon a tax cost basis of $279,077,344.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|(11) | In January 2009, Questia Media, Inc. (Questia) failed to pay the principal amount then currently due under its outstanding senior secured notes. However, through
March 31, 2009, Questia has continued to make monthly payments to the Company equal to the coupon rate of such notes. The Company is in the process of exercising certain legal rights available to it under the guarantee that was issued to the
Company at the time it acquired such notes from Questia. In addition, the Company continues to reserve its right to pursue any additional legal remedies that may be available to it, either directly against Questia or otherwise. The Company cannot
assure you, though, when or if it will receive payment, from Questia or otherwise, of the outstanding principal amount to which the Company is currently entitled.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

SEE ACCOMPANYING NOTES.



4



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##### Table of Contents

TICC CAPITAL CORP.

SCHEDULE OF INVESTMENTS

DECEMBER 31, 2008



|                                                                |  |                                      |  |                                                          |  |                 |            |      |   |              |  |   |           
|--------------------------------------------------------------- |  | ------------------------------------ |  | -------------------------------------------------------- |  | --------------- | ---------- | ---- | - | ------------ |  | - | ----------
|Company(1)                                                      |  | Industry                             |  | Investment                                               |  | PrincipalAmount |            | Cost |   | FairValue(2)
|Questia Media, Inc.                                             |  | digital media                        |  | senior secured notes(3)                                  |  | $               | 14,358,128 |      | $ | 14,358,128   |  | $ | 7,896,970 
|                                                                |  |                                      |  | (11.00%, due Jan. 28, 2009)                              |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  |                                                          | 
|TrueYou.com Inc.                                                |  | medical services                     |  | preferred stock series E(7)                              |  |                 |            |      |   | 1,297,115    |  |   | 0         
|                                                                |  |                                      |  |                                                          | 
|Avue Technologies Corp.                                         |  | software                             |  | warrants to purchase common units(7)                     |  |                 |            |      |   | 13,000       |  |   | 25,000    
|                                                                |  |                                      |  |                                                          | 
|Segovia, Inc.                                                   |  | satellite communications             |  | senior secured notes(4)(5)(6)                            |  |                 | 21,000,000 |      |   | 20,942,204   |  |   | 20,475,000
|                                                                |  |                                      |  | (9.32%, due Feb. 8, 2010)                                |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  | warrants to purchase common stock(7)                     |  |                 |            |      |   | 600,000      |  |   | 2,700,000 
|                                                                |  |                                      |  |                                                          | 
|WHITTMANHART, Inc.                                              |  | IT consulting                        |  | senior secured notes(4)                                  |  |                 | 5,125,000  |      |   | 5,125,000    |  |   | 4,715,000 
|                                                                |  |                                      |  | (11.58%, due March 23, 2010)                             |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  | warrants to purchase common stock(7)                     |  |                 |            |      |   | 0            |  |   | 0         
|                                                                |  |                                      |  |                                                          | 
|Falcon Communications, Inc.                                     |  | satellite communications             |  | senior unsecured notes(4)(7)(10)                         |  |                 | 10,500,000 |      |   | 10,500,000   |  |   | 1,000,000 
|                                                                |  |                                      |  | (10.96%, due March 31, 2011)                             |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  |                                                          | 
|Arise Virtual Solutions, Inc. (f/k/a Willow CSN Incorporated) |  | virtual workforce services           |  | senior secured notes(4)(5)                               |  |                 | 10,500,000 |      |   | 10,440,452   |  |   | 10,132,500
|                                                                |  |                                      |  | (10.25%, due June 30, 2010)                              |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  | warrants to purchase                                     |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  | convertible preferred stock(7)                           |  |                 |            |      |   | 200,000      |  |   | 115,000   
|                                                                |  |                                      |  |                                                          | 
|NetQuote, Inc.                                                  |  | web-based services                   |  | senior secured notes(4)                                  |  |                 | 24,000,000 |      |   | 24,000,000   |  |   | 21,780,000
|                                                                |  |                                      |  | (9.50%, due May 1, 2011)                                 |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  |                                                          | 
|GenuTec Business Solutions, Inc.                                |  | interactive voice messaging services |  | senior secured notes(4)(5)(7)                            |  |                 | 3,480,000  |      |   | 2,703,391    |  |   | 2,000,000 
|                                                                |  |                                      |  | (0.0%, due October 30, 2014)                             |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  | convertible preferred stock(7)                           |  |                 |            |      |   | 1,500,000    |  |   | 0         
|                                                                |  |                                      |  |                                                          | 
|Group 329, LLC (d/b/a The CAPS Group)                         |  | digital imaging                      |  | senior secured term A notes(4)(5)(7)(10)                 |  |                 | 5,467,804  |      |   | 5,400,407    |  |   | 1,366,951 
|                                                                |  |                                      |  | (11.89%, due February 28, 2012)                          |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  | warrants to purchase common stock(7)                     |  |                 |            |      |   | 110,000      |  |   | 0         
|                                                                |  |                                      |  | senior secured term B notes(4)(5)(7)(10)                 |  |                 | 17,485,000 |      |   | 17,236,514   |  |   | 0         
|                                                                |  |                                      |  | (12.39%, due February 28, 2013)                          |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  | warrants to purchase common stock(7)                     |  |                 |            |      |   | 90,000       |  |   | 0         
|                                                                |  |                                      |  |                                                          | 
|American Integration Technologies, LLC.                         |  | semiconductor capital equipment      |  | senior secured notes(4)(6)(10.75%, due October 31, 2010) |  |                 | 20,950,000 |      |   | 20,950,000   |  |   | 6,285,000 
|                                                                |  |                                      |  |                                                          | 
|Power Tools, Inc.                                               |  | software                             |  | senior secured notes(4)(5)(6)                            |  |                 | 10,250,000 |      |   | 10,080,911   |  |   | 5,304,375 
|                                                                |  |                                      |  | (12.00%, due May 16, 2014)                               |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  | warrants to purchase common stock(7)                     |  |                 |            |      |   | 350,000      |  |   | 0         
|                                                                |  |                                      |  |                                                          | 
|Algorithmic Implementations, Inc. (d/b/a Ai Squared)          |  | software                             |  | senior secured notes(4)(5)(6)                            |  |                 | 18,500,000 |      |   | 17,375,625   |  |   | 18,500,000
|                                                                |  |                                      |  | (9.84%, due September 11, 2010)                          |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  | common stock                                             |  |                 |            |      |   | 3,000,000    |  |   | 3,000,000 
|                                                                |  |                                      |  |                                                          | 
|Fusionstorm, Inc.                                               |  | IT value-added reseller              |  | senior subordinated unsecured notes(4)(5)(6)             |  |                 | 12,375,000 |      |   | 12,034,357   |  |   | 10,395,000
|                                                                |  |                                      |  | (14.46%, due October 2, 2011)                            |  |                 |            |      |   |              |  |   |           
|                                                                |  |                                      |  | warrants to purchase common stock(7)                     |  |                 |            |      |   | 725,000      |  |   | 400,000   

(Continued on next page)

SEE ACCOMPANYING NOTES.



5



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##### Table of Contents

DECEMBER 31, 2008

TICC CAPITAL CORP.

SCHEDULE OF INVESTMENTS



|                       |  |                             |  |                                                                      |  |                 |  |      |             |              |   |            
|---------------------- |  | --------------------------- |  | -------------------------------------------------------------------- |  | --------------- |  | ---- | ----------- | ------------ | - | -----------
|Company(1)             |  | Industry                    |  | Investment                                                           |  | PrincipalAmount |  | Cost |             | FairValue(2)
|Punch Software LLC     |  | software                    |  | senior secured notes(4)(5)                                           |  | 6,900,000       |  |      | 6,809,180   |              |   | 3,967,500  
|                       |  |                             |  | (10.42%, due October 30, 2011)                                       |  |                 |  |      |             |              |   |            
|                       |  |                             |  | warrants to purchase Class A-1 units(7)                              |  |                 |  |      | 200,000     |              |   | 0          
|                       |  |                             |  |                                                                      | 
|SCS Holdings II, Inc.  |  | IT value-added reseller     |  | second lien senior secured notes(4)(7.46%, due May 30, 2013)         |  | 14,500,000      |  |      | 14,513,622  |              |   | 10,875,000 
|                       |  |                             |  |                                                                      | 
|AKQA, Inc.             |  | advertising                 |  | senior secured notes(4)(6)                                           |  | 14,613,133      |  |      | 14,613,133  |              |   | 10,959,850 
|                       |  |                             |  | (6.00%, due March 20, 2013)                                          |  |                 |  |      |             |              |   |            
|                       |  |                             |  |                                                                      | 
|Box Services, LLC      |  | digital imaging             |  | senior secured notes(4)(6)                                           |  | 12,427,833      |  |      | 12,427,833  |              |   | 10,532,588 
|                       |  |                             |  | (7.13%, due April 30, 2012)                                          |  |                 |  |      |             |              |   |            
|                       |  |                             |  |                                                                      | 
|Hyland Software, Inc.  |  | enterprise software         |  | second lien senior secured notes(4)(5)                               |  | 11,000,000      |  |      | 10,922,605  |              |   | 7,700,000  
|                       |  |                             |  | (9.31%, due July 31, 2014)                                           |  |                 |  |      |             |              |   |            
|                       |  |                             |  |                                                                      | 
|WAICCS Las Vegas, LLC  |  | real estate development     |  | second lien senior secured notes(4)(10.44%, due August 1, 2009)      |  | 15,000,000      |  |      | 15,000,000  |              |   | 9,000,000  
|                       |  |                             |  |                                                                      | 
|Integra Telecomm, Inc. |  | telecommunications software |  | second lien senior secured notes(4)(5)(9.97%, due February 28, 2014) |  | 3,000,000       |  |      | 2,903,122   |              |   | 1,545,000  
|                       |  |                             |  |                                                                      | 
|GXS Worldwide Inc.     |  | software                    |  | first lien senior secured notes(4)(5)(6)                             |  | 7,852,765       |  |      | 7,752,446   |              |   | 6,085,893  
|                       |  |                             |  | (8.06%, due March 31, 2013)                                          |  |                 |  |      |             |              |   |            
|                       |  |                             |  |                                                                      | 
|Palm, Inc.             |  | consumer electronics        |  | first lien senior secured notes(4)(5)(6)(3.97%, due April 24, 2014)  |  | 19,750,000      |  |      | 18,125,183  |              |   | 12,837,500 
|                       |  |                             |  |                                                                      |  |                 |  |      |             |              |   |            
|                       |  |                             |  |                                                                      | 
|Total Investments      |  |                             |  |                                                                      |  |                 |  | $    | 282,299,228 |              | $ | 189,594,127
|                       |  |                             |  |                                                                      |  |                 |  |      |             |              |   |            



|(1) | Other than Algorithmic Implementation, Inc. (d/b/a Ai Squared), which we may be deemed to control, we do not
control and are not an affiliate of any of our portfolio companies, each as defined in the Investment Company Act of 1940 (the 1940 Act). In general, under the 1940 Act, we would be presumed to control
a portfolio company if we owned 25% or more of its voting securities and would be an affiliate of a portfolio company if we owned 5% or more of its voting securities.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Fair value is determined in good faith by the Board of Directors of the Company.
|--- | --------------------------------------------------------------------------------

|(3) | Investment includes payment-in-kind interest.
|--- | ---------------------------------------------

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

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

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

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

|(8) | As a percentage of net assets at December 31, 2008, investments at fair value are categorized as follows: senior
secured notes (84.6%), senior unsecured notes (0.5%), senior subordinated unsecured notes (5.1%), preferred stock (0.0%), common stock (1.5%), and warrants to purchase equity securities (1.6%).
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | Aggregate gross unrealized appreciation for federal income tax purposes is $3,343,705; aggregate gross unrealized
depreciation for federal income tax purposes is $95,941,476. Net unrealized depreciation is $92,597,771 based upon a tax cost basis of $282,191,897.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

SEE ACCOMPANYING NOTES.



6



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##### Table of Contents

TICC CAPITAL CORP.

STATEMENTS OF OPERATIONS

(unaudited)



|                                                                                  |  |                                 |            |   |                                 |   |             |  
|--------------------------------------------------------------------------------- |  | ------------------------------- | ---------- | - | ------------------------------- | - | ----------- | -
|                                                                                  |  | Three MonthsEndedMarch 31, 2009 |            |   | Three MonthsEndedMarch 31, 2008 |  
|INVESTMENT INCOME                                                                 |  |                                 |            |   |                                 |   |             |  
|From non-affiliated/non-control investments:                                      |  |                                 |            |   |                                 |   |             |  
|Interest income - debt investments                                                |  | $                               | 4,449,541  |   |                                 | $ | 10,449,524  |  
|Interest income - cash and cash equivalents                                       |  |                                 | 0          |   |                                 |   | 55,992      |  
|Other income                                                                      |  |                                 | 40,000     |   |                                 |   | 207,780     |  
|                                                                                  |  |                                 |            |   |                                 |   |             |  
|Total investment income from non-affiliated/non-control investments               |  |                                 | 4,489,541  |   |                                 |   | 10,713,296  |  
|                                                                                  |  |                                 |            |   |                                 |   |             |  
|From control investments:                                                         |  |                                 |            |   |                                 |   |             |  
|Interest income - debt investments                                                |  |                                 | 633,767    |   |                                 |   | 766,527     |  
|                                                                                  |  |                                 |            |   |                                 |   |             |  
|Total investment income from control investments                                  |  |                                 | 633,767    |   |                                 |   | 766,527     |  
|                                                                                  |  |                                 |            |   |                                 |   |             |  
|Total investment income                                                           |  |                                 | 5,123,308  |   |                                 |   | 11,479,823  |  
|                                                                                  |  |                                 |            |   |                                 |   |             |  
|EXPENSES                                                                          |  |                                 |            |   |                                 |   |             |  
|Compensation expense                                                              |  |                                 | 225,952    |   |                                 |   | 222,000     |  
|Investment advisory fees                                                          |  |                                 | 941,052    |   |                                 |   | 2,179,855   |  
|Professional fees                                                                 |  |                                 | 303,405    |   |                                 |   | 349,927     |  
|Interest expense                                                                  |  |                                 | 0          |   |                                 |   | 2,297,434   |  
|General and administrative                                                        |  |                                 | 134,663    |   |                                 |   | 159,951     |  
|                                                                                  |  |                                 |            |   |                                 |   |             |  
|Total expenses                                                                    |  |                                 | 1,605,072  |   |                                 |   | 5,209,167   |  
|                                                                                  |  |                                 |            |   |                                 |   |             |  
|Net investment income                                                             |  |                                 | 3,518,236  |   |                                 |   | 6,270,656   |  
|                                                                                  |  |                                 |            |   |                                 |   |             |  
|Net change in unrealized appreciation or depreciation on investments              |  |                                 | (4,983,244 | ) |                                 |   | (22,399,396 | )
|                                                                                  |  |                                 |            |   |                                 |   |             |  
|Net realized gains (losses) on investments                                        |  |                                 | 22,037     |   |                                 |   | (33,819     | )
|                                                                                  |  |                                 |            |   |                                 |   |             |  
|Net decrease in net assets resulting from operations                              |  | $                               | (1,442,971 | ) |                                 | $ | (16,162,559 | )
|                                                                                  |  |                                 |            |   |                                 |   |             |  
|                                                                                  |  |                                
|Net increase in net assets resulting from net investment income per common share: |  |                                 |            |   |                                 |   |             |  
|Basic and diluted(1)                                                              |  | $                               | 0.13       |   |                                 | $ | 0.28        |  
|Net decrease in net assets resulting from operations per common share:            |  |                                 |            |   |                                 |   |             |  
|Basic and diluted(1)                                                              |  | $                               | (0.05      | ) |                                 | $ | (0.73       | )
|Weighted average shares of common stock outstanding:                              |  |                                 |            |   |                                 |   |             |  
|Basic and diluted(1)                                                              |  |                                 | 26,484,673 |   |                                 |   | 22,018,041  |  



|(1) | In accordance with SFAS 128-Earnings per Share, the weighted-average shares of common stock outstanding used in
computing basic and diluted earnings per share for the three months ended March 31, 2008 were increased retroactively by a factor of 1.021 to recognize the bonus element associated with rights to acquire shares of common stock that were issued
to stockholders on May 23, 2008. See Note 4Earnings Per Share for additional information about the rights offering and the calculation of the associated bonus element.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

SEE ACCOMPANYING NOTES.



7



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##### Table of Contents

TICC CAPITAL CORP.

STATEMENTS OF CHANGES IN NET ASSETS



|                                                                                                                           |  |                                  |             |   |                             |   |             |  
|-------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------- | ----------- | - | --------------------------- | - | ----------- | -
|                                                                                                                           |  | Three Months EndedMarch 31, 2009 |             |   | Year EndedDecember 31, 2008 |  
|                                                                                                                           |  | (unaudited)                      |             |   |                             |  
|Decrease in net assets from operations:                                                                                    |  |                                  |             |   |                             |   |             |  
|Net investment income                                                                                                      |  | $                                | 3,518,236   |   |                             | $ | 22,191,163  |  
|Net realized gains (losses) on investments                                                                                 |  |                                  | 22,037      |   |                             |   | (8,509,814  | )
|Net change in unrealized depreciation on investments                                                                       |  |                                  | (4,983,244  | ) |                             |   | (66,947,503 | )
|                                                                                                                           |  |                                  |             |   |                             |   |             |  
|Net decrease in net assets resulting from operations                                                                       |  |                                  | (1,442,971  | ) |                             |   | (53,266,154 | )
|                                                                                                                           |  |                                  |             |   |                             |   |             |  
|                                                                                                                           |  |                                 
|Dividends from net investment income                                                                                       |  |                                  | (3,972,532  | ) |                             |   | (22,870,147 | )
|Tax return of capital distributions(1)                                                                                     |  |                                  |            |   |                             |   | (1,898,860  | )
|                                                                                                                           |  |                                  |             |   |                             |   |             |  
|Distributions to shareholders                                                                                              |  |                                  | (3,972,532  | ) |                             |   | (24,769,007 | )
|                                                                                                                           |  |                                  |             |   |                             |   |             |  
|                                                                                                                           |  |                                 
|Capital share transactions:                                                                                                |  |                                  |             |   |                             |   |             |  
|Issuance of common stock (net of offering costs of $1,629,542)                                                             |  |                                  |            |   |                             |   | 20,934,434  |  
|Reinvestment of dividends                                                                                                  |  |                                  | 355,514     |   |                             |   | 3,097,974   |  
|                                                                                                                           |  |                                  |             |   |                             |   |             |  
|Net increase in net assets from capital share transactions                                                                 |  |                                  | 355,514     |   |                             |   | 24,032,408  |  
|                                                                                                                           |  |                                  |             |   |                             |   |             |  
|Total decrease in net assets                                                                                               |  |                                  | (5,059,989  | ) |                             |   | (54,002,753 | )
|Net assets at beginning of period                                                                                          |  |                                  | 203,366,750 |   |                             |   | 257,369,503 |  
|                                                                                                                           |  |                                  |             |   |                             |   |             |  
|Net assets at end of period (including overdistributed net investment income of $(1,410,871) and $(956,575), respectively) |  | $                                | 198,306,761 |   |                             | $ | 203,366,750 |  
|                                                                                                                           |  |                                  |             |   |                             |   |             |  
|Capital share activity:                                                                                                    |  |                                  |             |   |                             |   |             |  
|Shares sold                                                                                                                |  |                                  | 0           |   |                             |   | 4,339,226   |  
|Shares issued from reinvestment of dividends                                                                               |  |                                  | 101,430     |   |                             |   | 580,603     |  
|                                                                                                                           |  |                                  |             |   |                             |   |             |  
|Net increase in capital share activity                                                                                     |  |                                  | 101,430     |   |                             |   | 4,919,829   |  
|                                                                                                                           |  |                                  |             |   |                             |   |             |  



|(1) | 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 March 31, 2009, distributions for 2009 would
not 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.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

SEE ACCOMPANYING NOTES.



8



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##### Table of Contents

TICC CAPITAL CORP.

STATEMENTS OF CASH FLOWS

(unaudited)



|                                                                                                                                       |  |                                 |            |   |                                 |   |             |  
|-------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ---------- | - | ------------------------------- | - | ----------- | -
|                                                                                                                                       |  | Three MonthsEndedMarch 31, 2009 |            |   | Three MonthsEndedMarch 31, 2008 |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                                                   |  |                                 |            |   |                                 |   |             |  
|Net decrease in net assets resulting from operations                                                                                   |  | $                               | (1,442,971 | ) |                                 | $ | (16,162,559 | )
|Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by operating
activities: |  |                                 |            |   |                                 |   |             |  
|Purchases of investments                                                                                                               |  |                                 |           |   |                                 |   | (17,290,000 | )
|Repayments of principal and reductions to investment cost value                                                                        |  |                                 | 3,515,116  |   |                                 |   | 19,418,096  |  
|Proceeds from the sale of investments                                                                                                  |  |                                 | 35,037     |   |                                 |   |            |  
|Net realized (gains) losses on investments                                                                                             |  |                                 | (22,037    | ) |                                 |   | 33,819      |  
|Net change in unrealized appreciation or depreciation on investments                                                                   |  |                                 | 4,983,244  |   |                                 |   | 22,399,396  |  
|Decrease in interest receivable                                                                                                        |  |                                 | 342,552    |   |                                 |   | 345,588     |  
|Decrease (increase) in prepaid expenses and other assets                                                                               |  |                                 | 53,193     |   |                                 |   | (259,547    | )
|Amortization of discounts                                                                                                              |  |                                 | (413,562   | ) |                                 |   | (528,774    | )
|(Decrease) increase in investment advisory fee payable                                                                                 |  |                                 | (346,399   | ) |                                 |   | 56,688      |  
|Decrease in accrued interest payable                                                                                                   |  |                                 |           |   |                                 |   | (85,572     | )
|(Decrease) increase in accrued expenses                                                                                                |  |                                 | (52,377    | ) |                                 |   | 194,186     |  
|                                                                                                                                       |  |                                 |            |   |                                 |   |             |  
|Net cash provided by operating activities                                                                                              |  |                                 | 6,651,796  |   |                                 |   | 8,121,321   |  
|                                                                                                                                       |  |                                 |            |   |                                 |   |             |  
|                                                                                                                                       |  |                                
|CASH FLOWS FROM FINANCING ACTIVITIES                                                                                                   |  |                                 |            |   |                                 |   |             |  
|Amounts borrowed under revolving credit facility                                                                                       |  |                                 |           |   |                                 |   | 10,333,334  |  
|Amounts paid back under revolving credit facility                                                                                      |  |                                 |           |   |                                 |   | (5,500,000  | )
|Distributions paid (net of stock issued under dividend reinvestment plan of $355,514 and $995,769, respectively)                       |  |                                 | (3,617,018 | ) |                                 |   | (6,767,169  | )
|                                                                                                                                       |  |                                 |            |   |                                 |   |             |  
|Net cash used by financing activities                                                                                                  |  |                                 | (3,617,018 | ) |                                 |   | (1,933,835  | )
|                                                                                                                                       |  |                                 |            |   |                                 |   |             |  
|                                                                                                                                       |  |                                
|Net increase in cash and cash equivalents                                                                                              |  |                                 | 3,034,778  |   |                                 |   | 6,187,486   |  
|                                                                                                                                       |  |                                
|Cash and cash equivalents, beginning of year                                                                                           |  |                                 | 14,069,251 |   |                                 |   | 7,944,608   |  
|                                                                                                                                       |  |                                 |            |   |                                 |   |             |  
|                                                                                                                                       |  |                                
|Cash and cash equivalents, end of year                                                                                                 |  | $                               | 17,104,029 |   |                                 | $ | 14,132,094  |  
|                                                                                                                                       |  |                                 |            |   |                                 |   |             |  
|                                                                                                                                       |  |                                
|NON-CASH FINANCING ACTIVITIES                                                                                                          |  |                                 |            |   |                                 |   |             |  
|Value of Shares issued in connection with dividend reinvestment plan                                                                   |  | $                               | 355,514    |   |                                 | $ | 995,769     |  
|                                                                                                                                       |  |                                
|SUPPLEMENTAL DISCLOSURES                                                                                                               |  |                                 |            |   |                                 |   |             |  
|Cash paid for interest                                                                                                                 |  | $                               |           |   |                                 | $ | 2,147,012   |  

SEE ACCOMPANYING NOTES.



9



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##### Table of Contents

TICC CAPITAL CORP.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2009

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, 2008, as
filed with the Securities and Exchange Commission (SEC).

Certain amounts have been reclassified in the 2008 financial
statements to conform to the 2009 presentation.

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, principally by investing in the debt and equity securities of technology-related companies.

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

NOTE 3. INVESTMENT VALUATION

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

There is no single method for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently
applied valuation process for the types of investments we make. The Company is required to specifically fair value each individual investment on a quarterly basis.

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.

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 the Company derives a single estimate of enterprise value. To determine the enterprise value of a portfolio
company, the Company analyzes its 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.

Enterprise value represents a significant element in the fair value determination process. Typically, the Companys 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.



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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.

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) 157,
Fair Value Measurements, which clarifies 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. SFAS 157 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. SFAS 157 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 where there is little or no activity in the market; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to
develop its own assumptions. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company has adopted the provisions of SFAS 157 as of
January 1, 2008. The Company has determined that due to the illiquidity of the market for the investment portfolio, whereby little or no market data exists, all investments are considered as Level 3 investments.

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 October 10, 2008, the FASB issued FASB Staff Position 157-3 (FSP 157-3), Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active, which provides guidance
on the use of a discounted cash flow (DCF) methodology to value investments in an illiquid market. Under FSP 157-3, indications of an illiquid market include cases where the volume and level of trading activity in the asset have declined
significantly, the available prices vary significantly over time or among market participants, or the prices are not current. In accordance with SFAS 157, 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 market place 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.
Due to the market illiquidity and the lack of transactions during 2008 and through the three months ended March 31, 2009, we determined that the current agent bank non-binding indicative bids for the majority of our syndicated investments were
unreliable and alternative valuation procedures would need to be performed until liquidity returns to the market place. As such, the Company engaged a third-party valuation firm 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 indicative bids which may not be considered reliable, is presented to the Valuation Committee to consider in its determination of fair value.

On April 9, 2009, the FASB issued FSP FAS 157-4 (FSP 157-4), 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. The Company has considered the factors described in FSP 157-4 and has determined that it is properly valuing the securities in its portfolio. In addition, FASB issued FSP No. FAS 107-1 and APB 28-1, Interim Disclosures
About Fair Value of Financial Instruments (FSP 107-1), which require additional disclosures related to inputs and valuation techniques for interim and annual periods. The Company has elected to early adopt the provisions of FSP
157-4 and FSP 107-1 for the quarter ended March 31, 2009.

The Companys Board of Directors determines the value of the
Company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 our bilateral investments and, more recently, for the Companys syndicated loans, although the Board of Directors ultimately
determines the appropriate valuation of each such investment.

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 book value as of the previous quarter of greater than or equal to 2.5% of the Companys total assets as of the previous quarter, and (ii) have a book value as of the current quarter of greater than or
equal to 2.5% of the Company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 the Companys 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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The Companys assets measured at fair value on a recurring basis subject to the disclosure
requirements of SFAS 157 at March 31, 2009, were as follows:



|                           |  |       |       |                                                             |   |                                            |  |                                        |     |  |   |      
|-------------------------- |  | ----- | ----- | ----------------------------------------------------------- | - | ------------------------------------------ |  | -------------------------------------- | --- |  | - | -----
|                           |  |       |       | Fair Value Measurements at Reporting Date Using            
|($ in millions)            |  | Total |       | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   | SignificantOther ObservableInputs(Level 2) |  | SignificantUnobservableInputs(Level 3)
|Cash equivalents           |  | $     | 15.1  |                                                             | $ | 15.1                                       |  | $                                      | 0.0 |  | $ | 0.0  
|Investments, at fair value |  |       | 181.5 |                                                             |   | 0.0                                        |  |                                        | 0.0 |  |   | 181.5
|                           |  |       |       |                                                             |   |                                            |  |                                        |     |  |   |      
|Total                      |  | $     | 196.6 |                                                             | $ | 15.1                                       |  | $                                      | 0.0 |  | $ | 181.5
|                           |  |       |       |                                                             |   |                                            |  |                                        |     |  |   |      

A reconciliation of the fair value of investments for the quarter ending March 31, 2009,
utilizing significant unobservable inputs, is as follows:



|                                                                                                                                                                                                               |  |                      |       |   |                       |   |      |       |  |   |       |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------- | ----- | - | --------------------- | - | ---- | ----- |  | - | ----- | -
|($ in millions)                                                                                                                                                                                                |  | BilateralInvestments |       |   | SyndicatedInvestments |   |      | Total | 
|Beginning balance                                                                                                                                                                                              |  | $                    | 130.6 |   |                       | $ | 59.0 |       |  | $ | 189.6 |  
|Total losses (realized/unrealized) included in earnings                                                                                                                                                        |  |                      | (2.0  | ) |                       |   | (3.0 | )     |  |   | (5.0  | )
|Purchases, sales and repayments, issuances and settlements(1)                                                                                                                                                  |  |                      | (3.0  | ) |                       |   | (0.1 | )     |  |   | (3.1  | )
|Transfers in and/or out of Level 3                                                                                                                                                                             |  |                      | 0.0   |   |                       |   | 0.0  |       |  |   | 0.0   |  
|                                                                                                                                                                                                               |  |                      |       |   |                       |   |      |       |  |   |       |  
|Ending balance                                                                                                                                                                                                 |  | $                    | 125.6 |   |                       | $ | 55.9 |       |  | $ | 181.5 |  
|                                                                                                                                                                                                               |  |                      |       |   |                       |   |      |       |  |   |       |  
|The amount of total appreciation or depreciation for the period included in earnings attributable to the change in unrealized appreciation or
depreciation relating to assets still held at the reporting date |  | $                    | (2.0  | ) |                       | $ | (3.0 | )     |  | $ | (5.0  | )
|                                                                                                                                                                                                               |  |                      |       |   |                       |   |      |       |  |   |       |  



|(1) | Includes amortization of discounts of approximately $0.4 million.
|--- | -----------------------------------------------------------------

The Companys assets measured at fair value on a recurring basis subject to the disclosure requirements of SFAS 157 at December 31, 2008,
were as follows:



|                           |  |       |       |                                                             |   |                                            |  |                                        |     |  |   |      
|-------------------------- |  | ----- | ----- | ----------------------------------------------------------- | - | ------------------------------------------ |  | -------------------------------------- | --- |  | - | -----
|                           |  |       |       | Fair Value Measurements at Reporting Date Using            
|($ in millions)            |  | Total |       | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   | SignificantOther ObservableInputs(Level 2) |  | SignificantUnobservableInputs(Level 3)
|Investments, at fair value |  | $     | 189.6 |                                                             | $ | 0.0                                        |  | $                                      | 0.0 |  | $ | 189.6
|                           |  |       |       |                                                             |   |                                            |  |                                        |     |  |   |      

A reconciliation of the fair value of investments for the quarter ending March 31, 2008, utilizing
significant unobservable inputs, is as follows:



|                                                                                                                                                                                     |  |                      |       |   |                  |   |       |       |  |   |       |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------------- | ----- | - | ---------------- | - | ----- | ----- |  | - | ----- | -
|($ in millions)                                                                                                                                                                      |  | BilateralInvestments |       |   | OtherInvestments |   |       | Total | 
|Beginning balance                                                                                                                                                                    |  | $                    | 257.7 |   |                  | $ | 127.7 |       |  | $ | 385.4 |  
|Total losses (realized/unrealized) included in earnings                                                                                                                              |  |                      | (12.1 | ) |                  |   | (10.3 | )     |  |   | (22.4 | )
|Purchases, issuances and settlements(1)                                                                                                                                              |  |                      | (5.4  | ) |                  |   | 3.7   |       |  |   | (1.7  | )
|Transfers in and/or out of Level 3                                                                                                                                                   |  |                      | 0.0   |   |                  |   | 0.0   |       |  |   | 0.0   |  
|                                                                                                                                                                                     |  |                      |       |   |                  |   |       |       |  |   |       |  
|Ending balance                                                                                                                                                                       |  | $                    | 240.2 |   |                  | $ | 121.1 |       |  | $ | 361.3 |  
|                                                                                                                                                                                     |  |                      |       |   |                  |   |       |       |  |   |       |  
|The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to
assets still held at the reporting date |  | $                    | (12.1 | ) |                  | $ | (10.3 | )     |  | $ | (22.4 | )
|                                                                                                                                                                                     |  |                      |       |   |                  |   |       |       |  |   |       |  



|(1) | Includes amortization of discounts of approximately $0.5 million.
|--- | -----------------------------------------------------------------

The following table shows the fair value of our level 3 portfolio of investments by asset class as of March 31, 2009 and
December 31, 2008:



|                                    |  |                          |       |                              |                   |   |                          |   |                              |  |       |  
|----------------------------------- |  | ------------------------ | ----- | ---------------------------- | ----------------- | - | ------------------------ | - | ---------------------------- |  | ----- | -
|                                    |  | March 31, 2009           |       |                              | December 31, 2008 |  
|                                    |  | Investments atFair Value |       | Percentage ofTotal Portfolio |                   |   | Investments atFair Value |   | Percentage ofTotal Portfolio | 
|                                    |  | (dollars inmillions)     |       |                              |                   |   | (dollars inmillions)     |   |                              | 
|Senior Secured Notes                |  | $                        | 163.5 |                              | 90.1              | % |                          | $ | 172.0                        |  | 90.7  | %
|Senior Unsecured Notes              |  |                          | 1.0   |                              | 0.6               | % |                          |   | 1.0                          |  | 0.5   | %
|Senior Subordinated Unsecured Notes |  |                          | 10.2  |                              | 5.6               | % |                          |   | 10.4                         |  | 5.5   | %
|Common Stock                        |  |                          | 3.0   |                              | 1.6               | % |                          |   | 3.0                          |  | 1.6   | %
|Warrants                            |  |                          | 3.8   |                              | 2.1               | % |                          |   | 3.2                          |  | 1.7   | %
|                                    |  |                          |       |                              |                   |   |                          |   |                              |  |       |  
|Total                               |  | $                        | 181.5 |                              | 100.0             | % |                          | $ | 189.6                        |  | 100.0 | %
|                                    |  |                          |       |                              |                   |   |                          |   |                              |  |       |  



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NOTE 4. NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS

The following table sets forth the computation of basic and diluted net decrease in net assets resulting from operations per share for the three months
March 31, 2009 and 2008, respectively:



|                                                                                                        |  |                                  |            |   |                                  |   |             |  
|------------------------------------------------------------------------------------------------------- |  | -------------------------------- | ---------- | - | -------------------------------- | - | ----------- | -
|                                                                                                        |  | Three Months EndedMarch 31, 2009 |            |   | Three Months EndedMarch 31, 2008 |  
|Numerator for basic and diluted income per share - net increase in net investment income                |  | $                                | 3,518,236  |   |                                  | $ | 6,270,656   |  
|Numerator for basic and diluted income per share - net decrease in net assets resulting from operations |  | $                                | (1,442,971 | ) |                                  | $ | (16,162,559 | )
|Denominator for basic and diluted income per share - weighted average shares(1)                         |  |                                  | 26,484,673 |   |                                  |   | 22,018,041  |  
|Basic and diluted net investment income per common share(1)                                             |  | $                                | 0.13       |   |                                  | $ | 0.28        |  
|Basic and diluted net decrease in net assets resulting from operations per common share(1)              |  | $                                | (0.05      | ) |                                  | $ | (0.73       | )



|(1) | TICC issued transferable rights to stockholders of record on May 23, 2008. The rights entitled rights holders to
subscribe for an aggregate of 4,339,226 of the Companys common stock. Record date stockholders received one right for every outstanding share of common stock owned on the record date. The rights entitled the holders to purchase one new share
of common stock for every five rights held. The subscription price equaled 88% of the volume-weighted average of the sales price of TICCs common stock on the Nasdaq Global Select Market on the five trading days that ended on the expiration
date, which was June 13, 2008. On June 18, 2008 all 4,339,226 shares of common stock were issued.Accordingly, as required by Statement of
Financial Accounting Standards No. 128Earnings per Share, or SFAS 128, the number of weighted average shares of common stock outstanding for basic and diluted earnings per share have been increased retroactively by a factor of 1.021
for all periods presented before the date of June 18, 2008. This factor represents the impact of the bonus element of the rights offering on the Companys common stock, based upon the closing price of the stock immediately prior to the
rights trading separately from the stock on May 20, 2008 ($6.76 per share), and the expected proceeds from the rights offering (assuming an exercise price of 88% of the closing price).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 5. RELATED PARTY TRANSACTIONS

The Company has
entered into an investment advisory agreement with TICC Management (the Investment Advisory Agreement). 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. 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.
Mr. Royce is also 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.

The Company has also entered into an Administration Agreement with BDC Partners under which BDC
Partners provides administrative services for TICC. The Company pays BDC Partners an allocable portion of overhead and other expenses incurred by BDC Partners in performing its obligations under the administration agreement, including a portion of
the rent and the compensation of the chief financial officer, chief compliance officer, controller and other administrative support personnel, which creates conflicts of interest that the Board of Directors must monitor.

For the quarters ended March 31, 2009 and 2008, TICC incurred investment advisory fees of $941,052 and $2,179,855, respectively of which $941,052
and $2,179,856 remained payable to TICC Management at the end of each respective quarter. Pursuant to the terms of its administration agreement payable with BDC Partners, for the quarters ended March 31, 2009 and 2008 respectively, TICC
incurred $225,952 and $222,000 in compensation expenses for employees allocated to the administrative activities of TICC, of which $120,992 and $102,191 remained payable at the end of each respective quarter. TICC also incurred $20,134 and $19,126
for reimbursement of facility costs for the three months ended March 31, 2009 and 2008, respectively, of which amounts $6,555 and $0 remained payable at the end of each respective period.



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##### Table of Contents

NOTE 6. DIVIDENDS

The Company intends to continue to operate so as to qualify to be taxed as a RIC under the Code and, as such, the Company would not be subject to federal income tax on the portion of its taxable income and gains
distributed to stockholders. To qualify as a RIC, the Company is required, among other requirements, to distribute at least 90% of its annual investment company taxable income, as defined by the Code. The amount to be paid out as a dividend is
determined by the Board of Directors each quarter and is based upon the annual earnings estimated by the management of the Company. To the extent that the Companys earnings fall below the amount of dividends declared, however, a portion of the
total amount of the Companys dividends for the fiscal year may be deemed a return of capital for tax purposes to the Companys stockholders.

On March 31, 2009, the Company paid a dividend of $0.15 per share. For tax purposes, the Company expects that dividends for the fiscal year ended December 31, 2009 will be funded primarily from net
investment income. However, for the three months ended March 31, 2009, for financial reporting purposes, the Company had net investment income of approximately $0.13 per share, compared to aggregate distributions to stockholders of $0.15 per
share during the period. 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 March 31, 2009, no portion of the Companys distributions would have been characterized as a tax return of capital to the Companys
stockholders; this calculation of tax return of capital may differ from the return of capital calculated with reference to net investment income for financial reporting purposes.

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 March 31, 2009 was $7.46, and at December 31, 2008 was $7.68. 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 March 31, 2009 and 2008, the Company did not
receive PIK interest.

In addition, the Company recorded original issue discount income (OID) of approximately $414,000 and
$529,000 for the three months ended March 31, 2009 and 2008, respectively, representing the amortization of the discounted cost attributed to certain debt securities purchased by the Company in connection with the concurrent purchase of
warrants or stock.

NOTE 9. OTHER INCOME

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

The 1940 Act requires that a business development company make available managerial assistance to its portfolio
companies. The Company may receive fee income for managerial assistance it renders to portfolio companies in connection with its investments. For the three months ended March 31, 2009 and 2008, respectively, the Company received no fee income
for managerial assistance.



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##### Table of Contents

NOTE 10. FINANCIAL HIGHLIGHTS

Financial highlights for the three months ending March 31, 2009 and 2008, respectively, are as follows:



|                                                                        |  |                                             |            |    |                                             |   |            |   
|----------------------------------------------------------------------- |  | ------------------------------------------- | ---------- | -- | ------------------------------------------- | - | ---------- | --
|                                                                        |  | Three Months EndedMarch 31,
2009(unaudited) |            |    | Three Months EndedMarch 31,
2008(unaudited) |  
|Per Share Data                                                          |  |                                             |            |    |                                             |   |            |   
|Net asset value at beginning of period                                  |  | $                                           | 7.68       |    |                                             | $ | 11.94      |   
|                                                                        |  |                                             |            |    |                                             |   |            |   
|Net investment income(1)                                                |  |                                             | 0.13       |    |                                             |   | 0.29       |   
|Net realized and unrealized capital losses(2)                           |  |                                             | (0.18      | )  |                                             |   | (1.03      | ) 
|                                                                        |  |                                             |            |    |                                             |   |            |   
|Total from investment operations                                        |  |                                             | (0.05      | )  |                                             |   | (0.74      | ) 
|                                                                        |  |                                             |            |    |                                             |   |            |   
|Total distributions(3)                                                  |  |                                             | (0.15      | )  |                                             |   | (0.36      | ) 
|                                                                        |  |                                             |            |    |                                             |   |            |   
|Effect of shares issued, net of offering expenses                       |  |                                             | (0.02      | )  |                                             |   | (0.03      | ) 
|                                                                        |  |                                             |            |    |                                             |   |            |   
|Net asset value at end of period                                        |  | $                                           | 7.46       |    |                                             | $ | 10.81      |   
|                                                                        |  |                                             |            |    |                                             |   |            |   
|Per share market value at beginning of period                           |  | $                                           | 3.80       |    |                                             | $ | 9.23       |   
|Per share market value at end of period                                 |  | $                                           | 3.51       |    |                                             | $ | 7.52       |   
|Total return(4)                                                         |  |                                             | (3.68      | )% |                                             |   | (14.63     | )%
|Shares outstanding at end of period                                     |  |                                             | 26,584,976 |    |                                             |   | 21,696,133 |   
|                                                                        |  |                                            
|Ratios/Supplemental Data                                                |  |                                             |            |    |                                             |   |            |   
|Net assets at end of period (000s)                                     |  | $                                           | 198,307    |    |                                             | $ | 234,440    |   
|Average net assets (000s)                                              |  | $                                           | 203,844    |    |                                             | $ | 260,134    |   
|Ratio of expenses to average net assets(5)                              |  |                                             | 3.15       | %  |                                             |   | 8.01       | % 
|Ratio of expenses, excluding interest expense, to average net assets(5) |  |                                             | 3.15       | %  |                                             |   | 4.84       | % 
|Ratio of net investment income to average net assets(5)                 |  |                                             | 6.90       | %  |                                             |   | 9.64       | % 



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

|(2) | Net realized and unrealized capital losses includes 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 March 31, 2009, distributions for 2009 would
not have been characterized as a tax return of capital to the Companys stockholders; this tax return of capital may differ from the return of capital calculated with reference to net investment income for financial reporting purposes.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Total return equals the increase or decrease of ending market value over beginning market value, plus distributions,
divided by the beginning market value, assuming dividend reinvestment prices obtained under the Companys dividend reinvestment plan. Total return is not annualized.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Annualized. Effective December 30, 2008, the Company had fully repaid all amounts under the revolving credit facility
and reduced the commitment amount thereunder to zero, effectively terminating the facility.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 11. CASH AND CASH EQUIVALENTS

At March 31, 2009 and December 31, 2008, respectively, cash and cash equivalents consisted of:



|                                     |  |                |            |                   |   |           
|------------------------------------ |  | -------------- | ---------- | ----------------- | - | ----------
|                                     |  | March 31, 2009 |            | December 31, 2008
|Eurodollar Time Deposit (due 4/1/09) |  | $              | 15,053,998 |                   | $ | 0         
|                                     |  |                |            |                   |   |           
|Total Cash Equivalents               |  |                | 15,053,998 |                   |   | 0         
|Cash                                 |  |                | 2,050,031  |                   |   | 14,069,251
|                                     |  |                |            |                   |   |           
|Cash and Cash Equivalents            |  | $              | 17,104,029 |                   | $ | 14,069,251
|                                     |  |                |            |                   |   |           

As of December 31, 2008 and throughout most of the first quarter of 2009, the Company elected
to maintain most of its available cash in a non-interest bearing demand deposit in order to obtain the benefit of the Federal Deposit Insurance Corporations unlimited guarantee on such deposits.

NOTE 12. COMMITMENTS

As of March 31, 2009, the
Company had not issued any commitment to purchase additional debt investments and/or warrants from any portfolio companies.



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NOTE 13. REVOLVING CREDIT AGREEMENT

During the quarter ending March 31, 2009, the Company did not have a revolving credit facility (the Credit Facility) agreement. However, during 2008, the Company had a credit facility with the Royal
Bank of Canada (RBC), as an agent and a lender, and Branch Banking and Trust Company (BB&T) as an additional lender. The Company amended the Credit Facility during the year ended December 31, 2008, whereby, the total
commitment of $150 million (which was a reduction from $180 million as a result of the removal of Commerzbank AG as a lender) was reduced periodically and effective December 30, 2008, the Company had fully repaid all amounts under the Credit
Facility and reduced the commitment amount thereunder to zero, effectively terminating the credit facility.

NOTE 14. SUBSEQUENT EVENTS

On May 5, 2009, the Board of Directors declared a distribution of $0.15 per share for the second quarter, payable on June 30, 2009 to
shareholders of record as of June 10, 2009.



|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, 2008.

This Quarterly Report on Form 10-Q, including the Managements Discussion and Analysis of Financial Condition
and Results of Operations, contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about
our industry, our beliefs, and our assumptions. Words such as anticipates, expects, intends, plans, believes, seeks, and estimates and variations of these words and
similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to
predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements including without limitation:



| |  |  | an economic downturn could impair our customers ability to repay our loans and increase our non-performing assets,
| | - |  | -------------------------------------------------------------------------------------------------------------------



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



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



| |  |  | interest rate volatility could adversely affect our results, and
| | - |  | ----------------------------------------------------------------



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

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

Except as otherwise specified,
references to TICC, the Company, we, us and our refer to TICC Capital Corp.

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, principally by investing in the debt and/or equity securities of technology-related companies. Our primary focus is to seek current income by investing in non-public
debt securities. We also seek



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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), its 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 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, 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. Historically, our investments have typically ranged from $5 million to $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. We focus on companies that create products or provide services requiring technology and on companies that compete in industries characterized by such products or services, including companies in the following
businesses: Internet, IT services, media, telecommunications, semiconductors, hardware, software and technology-enabled services.

On
December 3, 2007, we changed our name from Technology Investment Capital Corp. to TICC Capital Corp. While we continue to maintain our primary focus on the technology sector, we expect to actively seek new investment opportunities outside this
sector that otherwise meet our investment criteria.

While the structure of our investments will vary, we invest primarily in the debt of
technology-related companies. We seek to invest in entities that, as a general matter, have been operating for at least one year prior to the date of our investment and that will, at the time of our investment, have employees and revenues, and are
cash flow positive. Many of these companies will have financial backing provided by private equity or venture capital funds or other financial or strategic sponsors at the time we make an investment.

We expect that our investments will generally range between $5 million and $30 million each, although this investment size may vary proportionately as
the size of our capital base changes and market conditions warrant, and accrue interest at fixed or variable rates. As of March 31, 2009, our debt investments had stated interest rates of between 4.02% and 14.46% (excluding GenuTec which
carries a zero interest rate through November 1, 2009) and maturity dates of between 4 and 67 months (excluding Questia Media, Inc. (Questia)). In addition, our total portfolio had a weighted average yield on debt investments of
approximately 7.4%, including GenuTec and all investments on non-accrual status.

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. There was no income attributable to PIK during the quarter ended March 31, 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.



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

During the quarter ended March 31, 2009, we received a total of $3.5 million of proceeds from principal repayments on debt investments and we
recognized approximately $35,000 from the sale of portfolio investments.

We realized net capital gains on investments during the quarter
ended March 31, 2009 in the amount of approximately $22,000. Based upon the fair value determinations made in good faith by the Board of Directors, during the quarter ended March 31, 2009, we incurred net unrealized depreciation of
approximately $5.0 million resulting from write-downs of our debt investments held in American Integration Technologies, LLC ($1.6 million), CAPS Group term A notes ($1.4 million) and Questia Media, Inc. ($0.7 million), as well as unrealized
depreciation on our debt investment held in WAICCS Las Vegas, LLC ($3.8 million). These unrealized losses were partially offset by write-ups of approximately $3.0 million, which was largely due to our debt and equity investments in Segovia, Inc.
($0.2 million and $0.6 million, respectively) and our debt investments held in NetQuote, Inc. ($0.5 million), Palm, Inc. ($0.9 million) and in Arise Virtual Solutions, Inc. ($0.3 million). For the three months ended March 31, 2008, we recorded
net unrealized depreciation of approximately $22.4 million. For further discussion, please refer to Results of OperationsRealized and Unrealized Gains/Losses on Investments.

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.

In particular, the equity markets declined
significantly during these turbulent times, with both the S&P 500 and the Nasdaq Global Select Market declining by over 30% during 2008, with further deterioration during the quarter ending March 31, 2009. 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, all of which we believe reflects an ongoing recession.

The federal government has responded to this financial crisis in unprecedented ways in an effort to infuse liquidity back into the capital
markets, including injecting capital into distressed institutions, curtailing the ability of investors to short certain securities, purchasing certain illiquid assets and lowering interest rates to record lows. Nevertheless, we believe that the U.S.
economy could continue to remain in a period of recession through 2009. As a result of the continuing credit crisis, the spread between the yields realized on risk-free and higher risk securities has increased, 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 materially impair the availability of credit to us on commercially reasonable terms. These events could limit our
investment originations, limit our ability to grow and negatively impact our operating results.

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 income and
expenses during the periods reported. Actual results could materially differ from those estimates. We have identified our investment valuation policy as our only critical accounting policy.

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 we make. The Company is required to specifically fair value each individual investment on a quarterly basis.



18



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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.

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 the Company derives a single estimate of enterprise value. To determine the enterprise value of a portfolio company, the Company analyzes its 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.

Enterprise value represents a significant element in the fair value determination process. Typically, the
Companys 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.

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.

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting
Standards (SFAS) 157, Fair Value Measurements, which clarifies 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. SFAS 157 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. SFAS 157 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 where there is little or no activity in the market; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore
requiring an entity to develop its own assumptions. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company has adopted the provisions
of SFAS 157 as of January 1, 2008. The Company has determined that due to the illiquidity of the market for the investment portfolio, whereby little or no market data exists, all investments are considered as Level 3 investments.

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. FASB Staff Position 157-3 (FSP 157-3), Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active, provides guidance on the use of a discounted
cash flow (DCF) methodology to value investments in an illiquid market. Under FSP 157-3, indications of an illiquid market include cases where the volume and level of trading activity in the asset have declined significantly, the
available prices vary significantly over time or among market participants, or the prices are not current. In accordance with SFAS 157, 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 market place 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. Due to the
market illiquidity and the lack of transactions during 2008 and through the three months ended March 31, 2009, we determined that the current agent bank non-binding indicative bids for the majority of our syndicated investments were unreliable
and alternative valuation procedures would need to be performed until liquidity returns to the market place. As such, the Company engaged a third-party valuation firm 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 indicative bids which may not be considered reliable, is presented to the Valuation Committee to consider in its determination of fair value.



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On April 9, 2009, the FASB issued FSP FAS 157-4 (FSP 157-4), 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 market
previously active becomes inactive and whether a transaction is orderly. The Company has considered the factors described in FSP 157-4 and has determined that it is properly valuing the securities in its portfolio. In addition, FASB issued FSP No.
FAS 107-1 and APB 28-1, Interim Disclosures About Fair Value of Financial Instruments (FSP 107-1), which require additional disclosures related to inputs and valuation techniques for interim and annual periods. The Company
has elected to early adopt the provisions of FSP 157-4 and FSP 107-1 for the quarter ended March 31, 2009.

The Companys Board
of Directors determines the value of the Company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 our bilateral investments and, more recently, for our syndicated loans, although the Board
of Directors ultimately determines the appropriate valuation of each such investment.

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 book value as of the previous quarter of greater than or equal to 2.5% of the Companys total assets as of the previous quarter, and (ii) have a book value as of the current
quarter of greater than or equal to 2.5% of the Company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
the Companys 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 Companys assets measured at fair value on a
recurring basis subject to the disclosure requirements of SFAS 157 at March 31, 2009, were as follows:

A reconciliation of the
fair value of investments for the quarter ending March 31, 2009, utilizing significant unobservable inputs, is as follows:



|                           |  |       |       |                                                             |   |                                            |  |                                        |     |  |   |      
|-------------------------- |  | ----- | ----- | ----------------------------------------------------------- | - | ------------------------------------------ |  | -------------------------------------- | --- |  | - | -----
|                           |  |       |       | Fair Value Measurements at Reporting Date Using            
|($ in millions)            |  | Total |       | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   | SignificantOther ObservableInputs(Level 2) |  | SignificantUnobservableInputs(Level 3)
|Cash equivalents           |  | $     | 15.1  |                                                             | $ | 15.1                                       |  | $                                      | 0.0 |  | $ | 0.0  
|Investments, at fair value |  |       | 181.5 |                                                             |   | 0.0                                        |  |                                        | 0.0 |  |   | 181.5
|                           |  |       |       |                                                             |   |                                            |  |                                        |     |  |   |      
|Total                      |  | $     | 196.6 |                                                             | $ | 15.1                                       |  | $                                      | 0.0 |  | $ | 181.5
|                           |  |       |       |                                                             |   |                                            |  |                                        |     |  |   |      



|                                                                                                                                                                                                               |  |                      |       |   |                       |   |      |       |  |   |       |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------- | ----- | - | --------------------- | - | ---- | ----- |  | - | ----- | -
|($ in millions)                                                                                                                                                                                                |  | BilateralInvestments |       |   | SyndicatedInvestments |   |      | Total | 
|Beginning balance                                                                                                                                                                                              |  | $                    | 130.6 |   |                       | $ | 59.0 |       |  | $ | 189.6 |  
|Total losses (realized/unrealized) included in earnings                                                                                                                                                        |  |                      | (2.0  | ) |                       |   | (3.0 | )     |  |   | (5.0  | )
|Purchases, sales and repayments, issuances and settlements(1)                                                                                                                                                  |  |                      | (3.0  | ) |                       |   | (0.1 | )     |  |   | (3.1  | )
|Transfers in and/or out of Level 3                                                                                                                                                                             |  |                      | 0.0   |   |                       |   | 0.0  |       |  |   | 0.0   |  
|                                                                                                                                                                                                               |  |                      |       |   |                       |   |      |       |  |   |       |  
|Ending balance                                                                                                                                                                                                 |  | $                    | 125.6 |   |                       | $ | 55.9 |       |  | $ | 181.5 |  
|                                                                                                                                                                                                               |  |                      |       |   |                       |   |      |       |  |   |       |  
|The amount of total appreciation or depreciation for the period included in earnings attributable to the change in unrealized appreciation or
depreciation relating to assets still held at the reporting date |  | $                    | (2.0  | ) |                       | $ | (3.0 | )     |  | $ | (5.0  | )
|                                                                                                                                                                                                               |  |                      |       |   |                       |   |      |       |  |   |       |  



|(1) | Includes amortization of discounts of approximately $0.4 million.
|--- | -----------------------------------------------------------------

The Companys assets measured at fair value on a recurring basis subject to the disclosure requirements of SFAS 157 at December 31, 2008,
were as follows:



|                           |  |       |       |                                                             |   |                                            |  |                                        |     |  |   |      
|-------------------------- |  | ----- | ----- | ----------------------------------------------------------- | - | ------------------------------------------ |  | -------------------------------------- | --- |  | - | -----
|                           |  |       |       | Fair Value Measurements at Reporting Date Using            
|($ in millions)            |  | Total |       | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   | SignificantOther ObservableInputs(Level 2) |  | SignificantUnobservableInputs(Level 3)
|Investments, at fair value |  | $     | 189.6 |                                                             | $ | 0.0                                        |  | $                                      | 0.0 |  | $ | 189.6
|                           |  |       |       |                                                             |   |                                            |  |                                        |     |  |   |      

A reconciliation of the fair value of investments for the quarter ending March 31, 2008, utilizing
significant unobservable inputs, is as follows:



|                                                                                                                                                                                     |  |                      |       |   |                  |   |       |       |  |   |       |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------------- | ----- | - | ---------------- | - | ----- | ----- |  | - | ----- | -
|($ in millions)                                                                                                                                                                      |  | BilateralInvestments |       |   | OtherInvestments |   |       | Total | 
|Beginning balance                                                                                                                                                                    |  | $                    | 257.7 |   |                  | $ | 127.7 |       |  | $ | 385.4 |  
|Total losses (realized/unrealized) included in earnings                                                                                                                              |  |                      | (12.1 | ) |                  |   | (10.3 | )     |  |   | (22.4 | )
|Purchases, issuances and settlements(1)                                                                                                                                              |  |                      | (5.4  | ) |                  |   | 3.7   |       |  |   | (1.7  | )
|Transfers in and/or out of Level 3                                                                                                                                                   |  |                      | 0.0   |   |                  |   | 0.0   |       |  |   | 0.0   |  
|                                                                                                                                                                                     |  |                      |       |   |                  |   |       |       |  |   |       |  
|Ending balance                                                                                                                                                                       |  | $                    | 240.2 |   |                  | $ | 121.1 |       |  | $ | 361.3 |  
|                                                                                                                                                                                     |  |                      |       |   |                  |   |       |       |  |   |       |  
|The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to
assets still held at the reporting date |  | $                    | (12.1 | ) |                  | $ | (10.3 | )     |  | $ | (22.4 | )
|                                                                                                                                                                                     |  |                      |       |   |                  |   |       |       |  |   |       |  



|(1) | Includes amortization of discounts of approximately $0.5 million.
|--- | -----------------------------------------------------------------

The following table shows the fair value of our level 3 portfolio of investments by asset class as of March 31, 2009 and
December 31, 2008:



|                                    |  |                          |       |                              |                   |   |                          |   |                              |  |       |  
|----------------------------------- |  | ------------------------ | ----- | ---------------------------- | ----------------- | - | ------------------------ | - | ---------------------------- |  | ----- | -
|                                    |  | March 31, 2009           |       |                              | December 31, 2008 |  
|                                    |  | Investments atFair Value |       | Percentage ofTotal Portfolio |                   |   | Investments atFair Value |   | Percentage ofTotal Portfolio | 
|                                    |  | (dollars inmillions)     |       |                              |                   |   | (dollars inmillions)     |   |                              | 
|Senior Secured Notes                |  | $                        | 163.5 |                              | 90.1              | % |                          | $ | 172.0                        |  | 90.7  | %
|Senior Unsecured Notes              |  |                          | 1.0   |                              | 0.6               | % |                          |   | 1.0                          |  | 0.5   | %
|Senior Subordinated Unsecured Notes |  |                          | 10.2  |                              | 5.6               | % |                          |   | 10.4                         |  | 5.5   | %
|Common Stock                        |  |                          | 3.0   |                              | 1.6               | % |                          |   | 3.0                          |  | 1.6   | %
|Warrants                            |  |                          | 3.8   |                              | 2.1               | % |                          |   | 3.2                          |  | 1.7   | %
|                                    |  |                          |       |                              |                   |   |                          |   |                              |  |       |  
|Total                               |  | $                        | 181.5 |                              | 100.0             | % |                          | $ | 189.6                        |  | 100.0 | %
|                                    |  |                          |       |                              |                   |   |                          |   |                              |  |       |  



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PORTFOLIO COMPOSITION AND INVESTMENT ACTIVITY

The total fair value of our investment portfolio was approximately $181.5 million and $189.6 million as of March 31, 2009 and December 31,
2008, respectively. The decrease in investments during the three month period was due primarily to debt repayments totaling approximately $3.5 million and net unrealized depreciation of approximately $5.0 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 March 31, 2009 we received proceeds
of approximately $3.5 million resulting primarily from recurring amortization payments on outstanding balances on our debt investments, whereas, for the year ended December 31, 2008, we had repayments and amortization payments of approximately
$90.5 million. Also, during the quarter ended March 31, 2009, we recognized approximately $25,000 from the sale of our equity investment held in Avue Technologies Corp. and realized a capital gain of approximately $12,000 on that transaction.
For the year ended December 31, 2008, we recognized proceeds of approximately $50.2 million from the sales of securities.

As of
March 31, 2009, we had investments in debt securities of, or loans to, 21 portfolio companies, with a fair value of approximately $174.7 million, and equity investments in 10 portfolio companies, with a fair value of approximately $6.8 million.
As of December 31, 2008, we had investments in debt securities of, or loans to, 21 portfolio companies, with a fair value of approximately $183.4 million, and equity investments in 11 portfolio companies, with a fair value of approximately $6.2
million.

In January 2009, Questia failed to pay the principal amount then currently due under its outstanding senior secured notes.
However, through March 31, 2009, Questia has continued to make monthly payments to us equal to the coupon rate of such notes. We are in the process of exercising certain legal rights available to us under the guarantee that was issued to us at
the time we acquired such notes from Questia. In addition, we continue to reserve our right to pursue any additional legal remedies that may be available to us, either directly against Questia or otherwise. We cannot assure you, though, when or if
we will receive payment, from Questia or otherwise, of the outstanding principal amount to which we are currently entitled.

A
reconciliation of the investment portfolio for the three months ended March 31, 2009 and the year ended December 31, 2008:



|                                           |  |                      |       |   |                      |   |       |  
|------------------------------------------ |  | -------------------- | ----- | - | -------------------- | - | ----- | -
|                                           |  | March 31, 2009       |       |   | December 31, 2008    |  
|                                           |  | (dollars inmillions) |       |   | (dollars inmillions) |  
|Beginning Investment Portfolio             |  | $                    | 189.6 |   |                      | $ | 385.4 |  
|Portfolio Investments Acquired             |  |                      | 0.0   |   |                      |   | 18.3  |  
|Debt Repayments                            |  |                      | (3.5  | ) |                      |   | (90.5 | )
|Sales of Securities                        |  |                      | 0.0   |   |                      |   | (50.2 | )
|Payment in Kind                            |  |                      | 0.0   |   |                      |   | 0.2   |  
|Original Issue Discount                    |  |                      | 0.4   |   |                      |   | 1.8   |  
|Net Unrealized (Depreciation) Appreciation |  |                      | (5.0  | ) |                      |   | (66.9 | )
|Net Realized Gains (Losses)                |  |                      | 0.0   |   |                      |   | (8.5  | )
|                                           |  |                      |       |   |                      |   |       |  
|Ending Investment Portfolio                |  | $                    | 181.5 |   |                      | $ | 189.6 |  
|                                           |  |                      |       |   |                      |   |       |  

The following table indicates the quarterly portfolio investment activity for each quarter in the
period ended March 31, 2009 and the year ended December 31, 2008:



|                   |  |                       |      |                       |   |                       |  |   |     
|------------------ |  | --------------------- | ---- | --------------------- | - | --------------------- |  | - | ----
|                   |  | NewInvestments        |      | DebtRepayments        |   | Sales ofSecurities   
|                   |  | (dollars in millions) |      | (dollars in millions) |   | (dollars in millions)
|Quarter ended      |  |                       |      |                       |   |                       |  |   |     
|March 31, 2009     |  | $                     | 0.0  |                       | $ | 3.5                   |  | $ | 0.0 
|                   |  |                       |      |                       |   |                       |  |   |     
|December 31, 2008  |  |                       | 0.0  |                       |   | 31.3                  |  |   | 1.7 
|September 30, 2008 |  |                       | 0.0  |                       |   | 21.3                  |  |   | 16.1
|June 30, 2008      |  |                       | 1.0  |                       |   | 20.4                  |  |   | 30.5
|March 31, 2008     |  |                       | 17.3 |                       |   | 17.5                  |  |   | 1.9 
|                   |  |                       |      |                       |   |                       |  |   |     
|Total              |  | $                     | 18.3 |                       | $ | 90.5                  |  | $ | 50.2
|                   |  |                       |      |                       |   |                       |  |   |     



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##### Table of Contents

The following table shows the fair value of our portfolio of investments by asset class as of
March 31, 2009 and December 31, 2008:



|                                    |  |                          |       |                              |                   |   |                          |   |                              |  |       |  
|----------------------------------- |  | ------------------------ | ----- | ---------------------------- | ----------------- | - | ------------------------ | - | ---------------------------- |  | ----- | -
|                                    |  | March 31, 2009           |       |                              | December 31, 2008 |  
|                                    |  | Investments atFair Value |       | Percentage ofTotal Portfolio |                   |   | Investments atFair Value |   | Percentage ofTotal Portfolio | 
|                                    |  | (dollars inmillions)     |       |                              |                   |   | (dollars inmillions)     |   |                              | 
|Senior Secured Notes                |  | $                        | 163.5 |                              | 90.1              | % |                          | $ | 172.0                        |  | 90.7  | %
|Senior Unsecured Notes              |  |                          | 1.0   |                              | 0.6               | % |                          |   | 1.0                          |  | 0.5   | %
|Senior Subordinated Unsecured Notes |  |                          | 10.2  |                              | 5.6               | % |                          |   | 10.4                         |  | 5.5   | %
|Common Stock                        |  |                          | 3.0   |                              | 1.6               | % |                          |   | 3.0                          |  | 1.6   | %
|Warrants                            |  |                          | 3.8   |                              | 2.1               | % |                          |   | 3.2                          |  | 1.7   | %
|                                    |  |                          |       |                              |                   |   |                          |   |                              |  |       |  
|Total                               |  | $                        | 181.5 |                              | 100.0             | % |                          | $ | 189.6                        |  | 100.0 | %
|                                    |  |                          |       |                              |                   |   |                          |   |                              |  |       |  

The following table shows our portfolio of investments by industry at fair value, as of
March 31, 2009 and December 31, 2008:



|                                    |  |                          |       |                         |                   |   |                          |   |                         |  |       |  
|----------------------------------- |  | ------------------------ | ----- | ----------------------- | ----------------- | - | ------------------------ | - | ----------------------- |  | ----- | -
|                                    |  | March 31, 2009           |       |                         | December 31, 2008 |  
|                                    |  | Investments atFair Value |       | Percentage ofFair Value |                   |   | Investments atFair Value |   | Percentage ofFair Value | 
|                                    |  | (dollars inmillions)     |       |                         |                   |   | (dollars inmillions)     |   |                         | 
|Software                            |  | $                        | 35.9  |                         | 19.8              | % |                          | $ | 36.9                    |  | 19.5  | %
|Satellite communications            |  |                          | 24.2  |                         | 13.4              | % |                          |   | 24.2                    |  | 12.8  | %
|Web-based services                  |  |                          | 21.6  |                         | 11.9              | % |                          |   | 21.8                    |  | 11.5  | %
|IT value-added reseller             |  |                          | 21.5  |                         | 11.8              | % |                          |   | 21.7                    |  | 11.4  | %
|Consumer electronics                |  |                          | 13.8  |                         | 7.6               | % |                          |   | 12.8                    |  | 6.7   | %
|Advertising                         |  |                          | 10.9  |                         | 6.0               | % |                          |   | 11.0                    |  | 5.8   | %
|Virtual workforce services          |  |                          | 10.6  |                         | 5.8               | % |                          |   | 10.2                    |  | 5.4   | %
|Digital imaging                     |  |                          | 10.4  |                         | 5.7               | % |                          |   | 11.9                    |  | 6.3   | %
|Digital media                       |  |                          | 7.2   |                         | 4.0               | % |                          |   | 7.9                     |  | 4.2   | %
|Enterprise software                 |  |                          | 7.7   |                         | 4.2               | % |                          |   | 7.7                     |  | 4.1   | %
|Real estate                         |  |                          | 5.2   |                         | 2.9               | % |                          |   | 9.0                     |  | 4.7   | %
|Semiconductor capital equipment     |  |                          | 4.7   |                         | 2.6               | % |                          |   | 6.3                     |  | 3.3   | %
|IT consulting                       |  |                          | 4.3   |                         | 2.4               | % |                          |   | 4.7                     |  | 2.5   | %
|Interactive voice messaging service |  |                          | 2.0   |                         | 1.1               | % |                          |   | 2.0                     |  | 1.0   | %
|Telecommunications services         |  |                          | 1.5   |                         | 0.8               | % |                          |   | 1.5                     |  | 0.8   | %
|                                    |  |                          |       |                         |                   |   |                          |   |                         |  |       |  
|                                    |  | $                        | 181.5 |                         | 100.0             | % |                          | $ | 189.6                   |  | 100.0 | %
|                                    |  |                          |       |                         |                   |   |                          |   |                         |  |       |  

Since our inception in 2003, our portfolio has consisted primarily of senior loans to companies
operating in the technology-related sector. We may also invest in publicly traded debt and/or equity securities or take controlling interests in portfolio companies in certain limited circumstances. On December 3, 2007, we changed our name from
Technology Investment Capital Corp. to TICC Capital Corp. While we continue to maintain our primary focus on the technology sector, we expect to actively seek new investment opportunities outside this sector that otherwise meet our investment
criteria.

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. However, we believe that we may begin to see opportunities to generate higher returns on individual
investments than we have historically, given the changes in the credit environment during 2008 and 2009. At the same time, we recognize that it may be difficult to raise capital in the near future in light of our stock price and the current state of
the debt and equity markets. We are also sensitive to the negative implications of maintaining a larger, fully-drawn credit facility given the uncertainty currently existing in the credit markets. In view of these developments, since the end of the
first quarter of 2008, and in the absence of having received a written offer for extension of our previously existing credit facility from our prior lenders thereunder, we took steps to reduce our level of borrowings under our revolving credit
facility and, effective December 30, 2008, we had fully repaid all outstanding obligations under the credit facility and the facility was terminated. As a result, on a risk-adjusted basis, we believe that, until leverage can be obtained at
appropriate pricing and on terms with a longer maturity that more closely matches the maturity of our investments, we are better served by remaining fully unlevered. 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.



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##### Table of Contents

PORTFOLIO GRADING

We have adopted a credit grading system to monitor the quality of our debt investment portfolio. As of March 31, 2009 and December 31, 2008, our portfolio had a weighted average grade of 2.4 and 2.3,
respectively, based upon the fair value of the debt investments in the portfolio. Equity securities are not graded.

At March 31, 2009
and December 31, 2008, our debt investment portfolio was graded as follows:



|      |  |                                                                                                                               |  |                       |       |                              |       |   |                        |   |                              |  |       |  
|----- |  | ----------------------------------------------------------------------------------------------------------------------------- |  | --------------------- | ----- | ---------------------------- | ----- | - | ---------------------- | - | ---------------------------- |  | ----- | -
|      |  |                                                                                                                               |  | March 31, 2009        |      
|Grade |  | Summary Description                                                                                                           |  | Principal Value       |       | Percentage ofTotal Portfolio |       |   | Portfolio atFair Value |   | Percentage ofTotal Portfolio | 
|      |  |                                                                                                                               |  | (dollars in millions) |       |                              |       |   | (dollars inmillions)   |   |                              | 
|1     |  | Company is ahead of expectations and/or outperforming financial covenant requirements and such trend is expected to
continue. |  | $                     | 54.0  |                              | 19.6  | % |                        | $ | 52.0                         |  | 29.7  | %
|2     |  | Full repayment of principal and interest is expected.                                                                         |  |                       | 37.0  |                              | 13.4  | % |                        |   | 31.8                         |  | 18.2  | %
|3     |  | Closer monitoring is required. Full repayment of principal and interest is expected.                                          |  |                       | 120.4 |                              | 43.7  | % |                        |   | 79.6                         |  | 45.6  | %
|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.                                                                              |  |                       | 64.3  |                              | 23.3  | % |                        |   | 11.3                         |  | 6.5   | %
|      |  |                                                                                                                               |  |                       |       |                              |       |   |                        |   |                              |  |       |  
|      |  |                                                                                                                               |  | $                     | 275.7 |                              | 100.0 | % |                        | $ | 174.7                        |  | 100.0 | %
|      |  |                                                                                                                               |  |                       |       |                              |       |   |                        |   |                              |  |       |  
|      |  |                                                                                                                              
|      |  |                                                                                                                               |  | December 31, 2008     |      
|Grade |  | Summary Description                                                                                                           |  | Principal Value       |       | Percentage ofTotal Portfolio |       |   | Portfolio atFair Value |   | Percentage ofTotal Portfolio | 
|      |  |                                                                                                                               |  | (dollars in millions) |       |                              |       |   | (dollars inmillions)   |   |                              | 
|1     |  | Company is ahead of expectations and/or outperforming financial covenant requirements and such trend is expected to
continue. |  | $                     | 55.5  |                              | 19.9  | % |                        | $ | 52.4                         |  | 28.6  | %
|2     |  | Full repayment of principal and interest is expected.                                                                         |  |                       | 54.9  |                              | 19.7  | % |                        |   | 47.6                         |  | 25.9  | %
|3     |  | Closer monitoring is required. Full repayment of principal and interest is expected.                                          |  |                       | 103.8 |                              | 37.2  | % |                        |   | 68.8                         |  | 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.                                                                              |  |                       | 64.8  |                              | 23.2  | % |                        |   | 14.6                         |  | 8.0   | %
|      |  |                                                                                                                               |  |                       |       |                              |       |   |                        |   |                              |  |       |  
|      |  |                                                                                                                               |  | $                     | 279.0 |                              | 100.0 | % |                        | $ | 183.4                        |  | 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.

During the quarter ending March 31, 2009, we determined that the liquidity of American Integration Technologies, LLC
(AIT) had severely deteriorated. As a result, we recorded unrealized depreciation of approximately $1.6 million on our senior secured notes and the investment rating was maintained as a grade 5. Additionally, during the first quarter of
2009 we recorded unrealized depreciation on our debt investment in The CAPS Group of approximately $1.4 million, effectively reducing the fair value of the notes to zero. This write-down was due primarily to the continued deterioration in the
companys operations and the investment rating was also maintained as a grade 5. Additionally, during 2008, our debt investments in Falcon Communications, Inc and The CAPS Group had been placed on non-accrual status. As previously announced in
our press release dated March 12, 2009, our debt investments in AIT and Punch Software, LLC were placed on non-accrual status as of January 1, 2009. Further discussion regarding the other investments which experienced significant
unrealized depreciation is presented in Results of Operations.

RESULTS OF OPERATIONS

Set forth below is a comparison of our results of operations for the three months ended March 31, 2009 to the three months ended
March 31, 2008.



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Investment Income

Investment income for the three months ended March 31, 2009 was approximately $5.1 million compared to approximately $11.5 million for the three months ended March 31, 2008. This decrease resulted from lower
interest income due to the decrease of the size of our debt investment portfolio over the past year, as well as a lower return on our debt investment portfolio. Interest income on our debt investments for the three month period ended March 31,
2009 was approximately $5.1 million compared to approximately $11.3 million for the same period in 2008 as the principal value on our debt investment portfolio decreased from $409.0 million to $275.7 million.

For the quarter ended March 31, 2009, investment income consisted of approximately $4.7 million in cash interest from portfolio investments and
approximately $414,000 in amortization of original issue discount. There was no interest income attributable to cash and cash equivalents or from PIK interest.

For the quarter ended March 31, 2008, investment income consisted of approximately $10.7 million in cash interest from portfolio investments, approximately $529,000 in amortization of original issue discount, and
approximately $56,000 in cash interest from cash and cash equivalents.

As of
March 31, 2009, our debt investments had stated interest rates of between 4.02% and 14.46% (excluding GenuTec which carries a zero interest rate through November 1, 2009) and maturity dates of between 4 and 67 months (excluding Questia).
In addition, our total portfolio had a weighted average yield on debt investments of approximately 7.4%, including GenuTec and all investments on non-accrual status.

As of March 31, 2008, our debt investments had stated interest rates of between 6.21% and 15.48% (excluding GenuTec) and maturity dates of between 4 and 80 months. In addition, as of March 31, 2008, our total
portfolio had a weighted average yield of approximately 10.5%.

For the quarter ended March 31, 2009, other income of approximately
$40,000 was recorded, consisting primarily of non-recurring dividend income and amendment fees earned in connection with existing portfolio investments, compared to other income of approximately $208,000 for the same period in 2008, which also
consisted primarily of non-recurring amendment fees earned in connection with existing portfolio investments.

Operating Expenses

Operating expenses for the quarter ended March 31, 2009 were approximately $1.6 million. This amount consisted of investment advisory fees,
professional fees, compensation expense, and general and administrative expenses. Expenses decreased approximately $3.6 million from the quarter ended March 31, 2008, attributable primarily to a decrease of approximately $2.3 million in
interest expense as well as lower investment advisory fees of approximately $1.2 million. Operating expenses for the quarter ended March 31, 2008 were approximately $5.2 million.

The investment advisory fee for the first quarter of 2009 was approximately $0.9 million, representing the base fee for the period as provided for in the
investment advisory agreement as well as incentive fees earned of approximately $47,000. The investment advisory fee in the comparable period in 2008 was approximately $2.2 million which includes incentive fees of approximately $208,000. The
decrease of approximately $1.2 million is due to a decrease in average gross assets and the decrease in pre-incentive fee net investment income compared to the incentive fee hurdle. At each of March 31, 2009 and December 31, 2008,
respectively, approximately $0.9 million and $1.3 million of investment advisory fees remained payable to TICC Management.

Interest
expense was not incurred during the quarter ended March 31, 2009. During the same quarter in the prior year however, interest expense was approximately $2.3 million as a result of the average level of borrowings outstanding under our credit
facility during that period. At March 31, 2009 and December 31, 2008, respectively, there was no outstanding accrued interest expense.

Professional fees, consisting of legal, valuation, audit and consulting fees, were approximately $303,000 for the quarter ended March 31, 2009, compared to approximately $350,000 for the quarter ended March 31, 2008. This was the
result of decreases in fees for valuation services of approximately $58,000 partially offset by increased legal costs of approximately $28,000 incurred during the quarter ended March 31, 2009.

Compensation expenses were approximately $226,000 for the quarter ended March 31, 2009, compared to approximately $222,000 for the quarter ending
March 31, 2008, reflecting the allocation of compensation expenses for the services of our Chief Financial Officer, our Controller, and other administrative support personnel. At March 31, 2009 and December 31, 2008, respectively,
approximately $121,000 and $0 of compensation expenses remained payable.

General and administrative expenses, consisting primarily of
directors fees, insurance, transfer agent and custodian fees, office supplies, facilities costs and other expenses, were approximately $135,000 for the three months ended March 31, 2009 compared to approximately $160,000 for the same
period in 2008. This decrease was due primarily to lower administrative costs in general. Office supplies, facilities costs and other expenses are allocated to us under the terms of the administration agreement with BDC Partners.

Realized and Unrealized Gains/Losses on Investments

For the quarter ended March 31, 2009, we had a net realized gain on investments of approximately $22,000, which is comprised of the gain on the sale of our warrants held in Avue Technologies Corp. of approximately $12,000, as well as
approximately $10,000 received as additional consideration for our warrants in The Endurance International Group, Inc., which were sold in December 2008. For the three months ended March 31, 2008, we recorded net realized losses of
approximately $34,000.



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##### Table of Contents

During the quarter ended March 31, 2009, we incurred net unrealized depreciation of approximately
$5.0 million resulting from write-downs of our bilateral investments, specifically related to our debt investments held in American Integration Technologies, LLC ($1.6 million), CAPS Group term A notes ($1.4 million) and Questia Media, Inc. ($0.7
million), as well as unrealized depreciation on our syndicated debt investments due to our debt investment held in WAICCS Las Vegas, LLC ($3.8 million). These unrealized losses were partially offset by write-ups of approximately $3.0 million, which
was largely due to our debt and equity investments in Segovia, Inc. ($0.2 million and $0.6 million, respectively) and our debt investments held in NetQuote, Inc. ($0.5 million), Palm, Inc. ($0.9 million) and in Arise Virtual Solutions, Inc. ($0.3
million).

During the quarter ended March 31, 2008, we recorded net unrealized depreciation on investments of approximately $22.4
million, largely due to write-downs of our debt investments in CAPS term A and B notes ($7.0 million) and WHITTMANHART, Inc. ($3.6 million). We also recorded unrealized depreciation on our non-bilateral investments of approximately $10.3 million for
the quarter ended March 31, 2008 as a result of changes in the current interest rate environment and the credit markets generally. In addition, we experienced unrealized depreciation on other bilateral investments in an aggregate amount of
approximately $1.5 million. This was comprised largely of unrealized appreciation of approximately $4.6 million, which included the recovery of $1.7 million from Pulvermedia, Inc. which was placed on non-accrual status as of December 31, 2007.
(The recovery of approximately $1.7 million resulted in a cost reduction in the investment and an unrealized gain of the same amount.) Additionally, we had unrealized appreciation on our debt investment in Algorithmic Implementations, Inc. of
approximately $1.7 million. We also had unrealized appreciation on other investments in the amount of approximately $1.2 million for the three months ended March 31, 2008. The unrealized appreciation was offset by unrealized depreciation of
$6.1 million across several other bilateral investments.

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

Net Decrease in Net Assets Resulting from Operations

We had a net decrease in net assets resulting from operations of approximately $1.4 million for the quarter ended March 31, 2009, compared to a net decrease of approximately $16.2 million for the comparable
period in 2008. This decline in loss was attributable directly to less net unrealized depreciation on investments, partially offset by lower investment income.

Based on a weighted-average of 26,484,673 shares outstanding (basic and diluted), the net decrease in net assets resulting from operations per common share for the quarter ended March 31, 2009 was approximately
$0.05 for basic and diluted, compared to a net decrease in net assets of approximately $0.73 per share for the same period in 2008.

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

LIQUIDITY AND CAPITAL RESOURCES

During the three months ended March 31, 2009, cash and cash equivalents increased from approximately $14.1 million at the
beginning of the period to approximately $17.1 million at the end of the period. Net cash provided by operating activities for the period, consisting primarily of the items described in Results of Operations, was approximately $6.7
million, largely reflecting principal repayments of approximately $3.5 million, and net investment income. During the period, net cash used in financing activities was approximately $3.6 million, reflecting the distribution of dividends.

Contractual Obligations

Effective
December 30, 2008, we had fully repaid all amounts outstanding under our then outstanding revolving credit facility and reduced the commitment thereunder to zero, effectively terminating the facility.

In addition, we have certain obligations with respect to the investment advisory and administration services we receive. See Overview.
We incurred approximately $0.9 million for investment advisory services and $135,000 for administrative services for the three months ended March 31, 2009.

Off-Balance Sheet Arrangements

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



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Borrowings

For the quarter ending March 31, 2009, the Company did not have a revolving credit facility (the Credit Facility) agreement. However, during 2008, the Company had a credit facility with the Royal Bank
of Canada (RBC) as an agent and a lender, and Branch Banking and Trust Company (BB&T) as an additional lender. The Company amended the Credit Facility during the year ended December 31, 2008, whereby, the total
commitment of $150 million (which was a reduction from $180 million as a result of the removal of Commerzbank AG as a lender) was reduced periodically and effective December 30, 2008, the Company had fully repaid all amounts under the Credit
Facility and reduced the commitment amount thereunder to zero, effectively terminating the credit facility.

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 2009          |  |                    |  |                    |  |        |      |    
|May 5, 2009          |  | June 10, 2009      |  | June 30, 2009      |  | $      | 0.15 |    
|March 5, 2009        |  | March 17, 2009     |  | March 31, 2009     |  |        | 0.15 |    
|                     |  |                    |  |                    |  |        |      |    
|Total (2009)         |  |                    |  |                    |  |        | 0.30 |    
|                     |  |                    |  |                    |  |        |      |    
|Fiscal 2008          |  |                    |  |                    |  |        |      |    
|October 30, 2008     |  | December 10, 2008  |  | December 31, 2008  |  |        | 0.20 |    
|July 31, 2008        |  | September 10, 2008 |  | September 30, 2008 |  |        | 0.20 |    
|May 1, 2008          |  | June 16, 2008      |  | June 30, 2008      |  |        | 0.30 |    
|March 11, 2008       |  | March 21, 2008     |  | March 31, 2008     |  |        | 0.36 |    
|                     |  |                    |  |                    |  |        |      |    
|Total (2008)         |  |                    |  |                    |  |        | 1.06 | (2)
|                     |  |                    |  |                    |  |        |      |    
|Fiscal 2007          |  |                    |  |                    |  |        |      |    
|October 25, 2007     |  | December 10, 2007  |  | December 31, 2007  |  |        | 0.36 |    
|July 26, 2007        |  | September 7, 2007  |  | September 28, 2007 |  |        | 0.36 |    
|April 30, 2007       |  | June 8, 2007       |  | June 29, 2007      |  |        | 0.36 |    
|February 27, 2007    |  | March 9, 2007      |  | March 30, 2007     |  |        | 0.36 |    
|                     |  |                    |  |                    |  |        |      |    
|Total (2007)         |  |                    |  |                    |  |        | 1.44 | (3)
|                     |  |                    |  |                    |  |        |      |    
|Fiscal 2006          |  |                    |  |                    |  |        |      |    
|December 20, 2006    |  | December 29, 2006  |  | January 17, 2007   |  |        | 0.12 |    
|October 26, 2006     |  | December 8, 2006   |  | December 29, 2006  |  |        | 0.34 |    
|July 26, 2006        |  | September 8, 2006  |  | September 29, 2006 |  |        | 0.32 |    
|April 26, 2006       |  | June 9, 2006       |  | June 30, 2006      |  |        | 0.30 |    
|February 9, 2006     |  | March 10, 2006     |  | March 31, 2006     |  |        | 0.30 |    
|                     |  |                    |  |                    |  |        |      |    
|Total (2006)         |  |                    |  |                    |  |        | 1.38 |    
|                     |  |                    |  |                    |  |        |      |    
|Fiscal 2005          |  |                    |  |                    |  |        |      |    
|December 7, 2005     |  | December 30, 2005  |  | January 18, 2006   |  |        | 0.12 |    
|October 27, 2005     |  | December 9, 2005   |  | December 30, 2005  |  |        | 0.30 |    
|July 27, 2005        |  | September 10, 2005 |  | September 30, 2005 |  |        | 0.25 |    
|April 27, 2005       |  | June 10, 2005      |  | June 30, 2005      |  |        | 0.20 |    
|February 9, 2005     |  | March 10, 2005     |  | March 31, 2005     |  |        | 0.14 |    
|                     |  |                    |  |                    |  |        |      |    
|Total (2005)         |  |                    |  |                    |  |        | 1.01 |    
|                     |  |                    |  |                    |  |        |      |    
|Fiscal 2004          |  |                    |  |                    |  |        |      |    
|October 27, 2004     |  | December 10, 2004  |  | December 31, 2004  |  |        | 0.11 |    
|July 28, 2004        |  | September 10, 2004 |  | September 30, 2004 |  |        | 0.11 |    
|May 5, 2004          |  | June 10, 2004      |  | June 30, 2004      |  |        | 0.11 |    
|February 2, 2004     |  | March 15, 2004     |  | April 5, 2004      |  |        | 0.10 |    
|                     |  |                    |  |                    |  |        |      |    
|Total (2004)         |  |                    |  |                    |  |        | 0.43 | (4)
|                     |  |                    |  |                    |  |        |      |    
|Total Distributions: |  |                    |  |                    |  | $      | 5.62 | (5)
|                     |  |                    |  |                    |  |        |      |    



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|(1) | On March 31, 2009, we paid a dividend of $0.15 per share. For tax purposes, we expect that dividends for the fiscal
year ended December 31, 2009 will be funded primarily from undistributed net investment income. However, for the three months ended March 31, 2009, for financial reporting purposes, we had net investment income of approximately $0.13 per
share, compared to aggregate distributions to stockholders of $0.15 per share during the period. 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 our taxable earnings fall below the total amount of our distributions for that fiscal year, a portion of those distributions may be deemed a tax return of capital to our 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 March 31, 2009, there would been no tax return of capital to our stockholders; this tax return of capital may
differ from the return of capital calculated with reference to net investment income for financial reporting purposes.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(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 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 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 T2 Income Fund
Limited, 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, and Royce & Associates is a
non-managing member, of T2 Advisers, LLC. In addition, Mr. Conroy serves as Chief Financial Officer, Chief Compliance Officer and Treasurer for both T2 Income Fund Limited and T2 Advisers, LLC. Messrs. Rosenthal and Conroy also each serve as a
non-independent director of T2 Income Fund Limited.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Both we and T2 Income Fund Limited 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 T2 Income Fund Limited and a prospective portfolio company. Our
general policy is to allocate bilateral US-based opportunities to TICC and bilateral non-US opportunities to T2 Income Fund Limited; 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 T2 Income Fund Limited.

Either TICC or T2 Income Fund Limited 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 TICC and T2 Income Fund Limited 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 TICC and T2 Income Fund Limited based on order size as determined by each funds investment adviser in good faith.

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



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We have also adopted a Code of Ethics which applies to, among others, our senior officers, including our
Chief Executive Officer and Chief Financial Officer, as well as every officer, director and employee of TICC. 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 the interests of TICC. 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 Stock 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 May 5, 2009, the Board of Directors declared a distribution of $0.15 per share for the second quarter, payable on June 30, 2009 to shareholders of record as of June 10, 2009.



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

We are subject to financial market risks, including changes in interest rates. As of March 31, 2009, one debt investment in our portfolio was at a fixed rate, and the remaining twenty-one debt investments were at variable rates,
representing approximately $14.4 million and $261.3 million in principal debt, respectively. At March 31, 2009, $197.0 million of our variable rate investments were income producing. The variable rates are based upon the five-year Treasury note
or 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 five-year Treasury note, and no other change in our portfolio as of
March 31, 2009. We have also assumed no outstanding borrowings. Under this analysis, net investment income would increase approximately $2.0 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 March 31,
2009, we, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934).
Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective in timely alerting management, including the Chief Executive Officer and Chief Financial Officer,
of material information about us required to be included in periodic SEC filings.

There have been no changes in our internal control over
financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that occurred during the quarter ended March 31, 2009 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.



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RISKS RELATING TO OUR BUSINESS AND STRUCTURE

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

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

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

We depend on the diligence, skill and network of business contacts of the senior
management of TICC Management. The senior management, together with other investment professionals, will evaluate, negotiate, structure, close, monitor and service our investments. Our future success will depend to a significant extent on the
continued service and coordination of the senior management team, particularly Jonathan H. Cohen, the Chief Executive Officer of TICC Management, and Saul B. Rosenthal, the President and Chief Operating Officer of TICC Management. Neither
Mr. Cohen nor Mr. Rosenthal will devote all of their business time to our operations, and both will have other demands on their time as a result of their other activities. Neither Mr. Cohen nor Mr. Rosenthal is subject to an
employment contract. The departure of either of these individuals could have a material adverse effect on our ability to achieve our investment objective.

Our financial condition and results of operations will depend on our ability to manage our existing portfolio and future growth effectively.

Our ability to achieve our investment objective will depend on our ability to manage our existing portfolio and to grow, which will depend, in turn, on our investment advisers ability to identify, analyze,
invest in and finance companies that meet our investment criteria, and our ability to raise and retain debt and equity capital. Accomplishing this result on a cost-effective basis is largely a function of our investment advisers structuring of
the investment process, its ability to provide competent, attentive and efficient services to us and our access to financing on acceptable terms.

We and TICC Management, through its managing member, BDC Partners, will need to continue to hire, train, supervise and manage new employees. Failure to manage our future growth effectively could have a material adverse effect on our
business, financial condition and results of operations.

We operate in a highly competitive market for investment opportunities.

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

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

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

We may not realize gains from our equity investments.

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



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

Our portfolio investments are generally not
in publicly traded securities. As a result, the fair value of these securities is not readily determinable. We value these securities at fair value as determined in good faith by our Board of Directors based upon the recommendation of the
Boards Valuation Committee. In connection with that determination, members of TICC Managements portfolio management team prepare portfolio company valuations using the most recent portfolio company financial statements and forecasts. We
utilize the services of a third party valuation firm which prepares valuations for each of our bilateral portfolio securities that, when combined with all other investments in the same portfolio company (i) have a book 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 book value as of the current quarter of greater than or equal to 2.5% of our total assets as of the previous quarter, after taking into
account any repayment of principal during the current quarter. In addition, the frequency of the third party valuations of our bilateral portfolio securities is based upon the grade assigned to each such security under our credit grading system as
follows: Grade 1, at least annually; Grade 2, at least semi-annually; Grades 3, 4, and 5, at least quarterly. TICC Management also retains the authority to seek, on our behalf, additional third party valuations with respect to both our bilateral
portfolio securities and our syndicated loan investments. The Board of Directors retains ultimate authority as to the third-party review cycle as well as the appropriate valuation of each investment. The types of factors that the Valuation Committee
takes into account in providing its fair value recommendation to the Board of Directors includes, as relevant, the nature and value of any collateral, the portfolio companys ability to make payments and its earnings, the markets in which the
portfolio company does business, comparison to valuations of publicly traded companies, comparisons to recent sales of comparable companies, the discounted value of the cash flows of the portfolio company and other relevant factors. Because such
valuations are inherently uncertain and may be based on estimates, our determinations of fair value may differ materially from the values that would be assessed if a readily available market for these securities existed.

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

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

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

We may experience fluctuations in our quarterly results.

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

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

The U.S. capital markets have been experiencing extreme volatility and disruption for more than 15 months and we believe that the U.S. economy has
entered into a period of recession. Disruptions in the capital markets have increased the spread 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 economic recession 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 recession, 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



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offering. Therefore, our nonperforming assets are likely to increase and the value of our portfolio is likely to 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 economic recession could lead to financial losses in our portfolio and a decrease in our revenues, net
income, and the value of our assets. During 2008, we experienced significant losses on our portfolio investments, which was in part attributable to worsening 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 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.



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Our portfolio is currently, and may continue to be, unlevered, which may reduce our net investment income.

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.

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.



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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 26,584,976 shares are issued and outstanding as
of March 31, 2009. In the event our Board of Directors opts to reclassify a portion of our unissued shares of common stock into a class of preferred stock, those preferred shares would have a preference over our common stock with respect to
dividends and liquidation. The cost of any such reclassification would be borne by our existing common stockholders. The class voting rights of any preferred shares we may issue could make it more difficult for us to take some actions that may, in
the future, be proposed by the Board of Directors and/or the holders of our common stock, such as a merger, exchange of securities, liquidation, or alteration of the rights of a class of our securities, if these actions were perceived by the holders
of preferred shares as not in their best interests. The issuance of preferred shares convertible into shares of common stock might also reduce the net income and net asset value per share of our common stock upon conversion. These effects, among
others, could have an adverse effect on your investment in our common stock.

A change in interest rates may adversely affect our profitability.

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. As of March 31, 2009, we did not have any borrowings outstanding and we did not have a credit facility established.

Currently, only one of our debt investments is at a fixed rate, while the others are at variable rates. Although we have not done so in the past, we may
in the future choose to hedge against interest rate fluctuations by using standard hedging instruments such as futures, options and forward contracts, subject to applicable legal requirements. These activities may limit our ability to participate in
the benefits of lower interest rates with respect to the hedged portfolio. Adverse developments resulting from changes in interest rates or hedging transactions could have a material adverse effect on our business, financial condition and results of
operations. Also, we have limited experience in entering into hedging transactions, and we will initially have to purchase or develop such expertise if we choose to employ hedging strategies in the future.

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

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



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We may 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.

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. For example, Steven P. Novak, one of our independent directors, is the President of Palladio Capital Management, LLC, the manager of an equity-oriented hedge fund. Charles M. Royce, the non-executive Chairman of our Board of
Directors, is the President and Chief Investment Officer of Royce & Associates, the non-managing member of our investment adviser.

Messrs. Cohen and Rosenthal also currently serve as Chief Executive Officer and President, respectively, for T2 Advisers, LLC, an investment adviser to T2 Income Fund Limited, 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, and Royce & Associates is a non-managing member, of T2 Advisers, LLC. In addition, Patrick F.
Conroy, the Chief Financial Officer, Chief Compliance Officer and Corporate Secretary of TICC Management, BDC Partners and TICC, serves as Chief Financial Officer, Chief Compliance Officer and Treasurer for both T2 Income Fund Limited and
T2 Advisers, LLC. Messrs. Rosenthal and Conroy also each serve as a non-independent director of T2 Income Fund Limited. 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 T2 Income Fund Limited 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 T2 Income Fund Limited and a prospective portfolio company. Our general policy is to allocate bilateral US-based opportunities to TICC and bilateral non-US
opportunities to T2 Income Fund Limited; 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 T2 Income Fund Limited.

Either TICC or T2 Income Fund Limited 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 TICC and T2 Income Fund Limited 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 TICC and T2
Income Fund Limited based on order size as determined by each funds investment adviser in good faith.



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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 every officer, director and employee of TICC. 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 the
interests of TICC. 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 Stock Market corporate governance listing standards, the Audit Committee of our Board of Directors is also required to review and approve any transactions with related
parties (as such term is defined in Item 404 of Regulation S-K).

Changes in laws or regulations governing our operations may adversely affect
our business.

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

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 continue to maintain our
primary focus 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 technology-related sector,
could materially adversely affect us.



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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, 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
have historically decreased over their productive lives. As a result, the average selling prices of products and services offered by some of our portfolio companies may decrease over time, which could adversely affect their operating results and
their ability to meet their obligations under their debt securities, as well as the value of any equity securities, that we may hold. This could, in turn, materially adversely affect our business, financial condition and results of operations.

Our investments in the companies that we are targeting may be extremely risky and we could lose all or part of our investments.

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

Specifically, investment in 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 economic recession 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.



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

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

The incentive fee payable by us to TICC Management may create an incentive for TICC Management to make investments on our behalf that are risky or more
speculative than would be the case in the absence of such compensation arrangement. The way in which the incentive fee payable to TICC Management 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
will receive the incentive fee based, in part, upon the capital gains realized on our investments, the investment adviser may invest more than would otherwise be appropriate in companies whose securities are likely to yield capital gains, as
compared to income producing securities. Such a practice could result in our investing in more speculative securities than would otherwise be the case, which could result in higher investment losses, particularly during 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.

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



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| |  |  | 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 currently trade at a substantial discount from net asset value and may continue to do so over the long term.

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 economic environment
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 2008, and has remained below our net asset value per share through the first three months
of 2009. We cannot assure you when or if this trend will change. The possibility that our shares of common stock will continue to trade at a substantial 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 three months ended March 31, 2009, we issued a total of 101,430 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 $356,000.



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

Not applicable.



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

Not applicable.



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

Not applicable.



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

(a) EXHIBITS

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



|      |  |                                                                                                                                                                                                                                                                  
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1   |  | Articles of Incorporation (Incorporated by reference to the Registrants Registration Statement on Form N-2 (File No. 333-109055), filed on September 23, 2003).                                                                                                 
|      | 
|3.2   |  | Articles of Amendment (Incorporated by reference to Current Report on Form 8-K (File No. 814-00638) filed December 3, 2007).                                                                                                                                     
|      | 
|3.3   |  | Amended and Restated Bylaws (Incorporated by reference to Pre-Effective Amendment No. 2 to the Registrants Registration Statement on Form N-2 (File No. 333-109055), filed on
November 19, 2003).                                                               
|      | 
|4.1   |  | Form of Share Certificate (Incorporated by reference to the Registrants Registration Statement on Form N-2 (File No. 333-109055), filed on September 23, 2003).                                                                                                 
|      | 
|10.1  |  | 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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##### Table of Contents

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: May 8, 2009 |  | By: |  | /S/ JONATHAN H. COHEN                                 
|                  |  |     |  | Jonathan H. Cohen                                     
|                  |  |     |  | Chief Executive Officer                               
|                  |  |    
|Date: May 8, 2009 |  | By: |  | /S/ PATRICK F. CONROY                                 
|                  |  |     |  | Patrick F. Conroy                                     
|                  |  |     |  | Chief Financial Officer (Principal Accounting Officer)



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